Summary Press Release-Pt 2
Barclays PLC
8 February 2001
PART 2
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.
Administrative expenses - staff costs 2000 1999
£m £m
Salaries and accrued incentive payments 2,559 2,387
Social security costs 178 190
Pension costs (31) 38
Post-retirement health care 1 15
UK profit sharing 96 80
Other staff costs 416 347
3,219 3,057
Included above:
The Woolwich 42 -
Integration costs 1 -
Restructuring charge 171 192
Excluding The Woolwich, integration costs
and restructuring charge 3,005 2,865
Number of staff at period end:*
Retail Financial Services** 49,900 46,100
Barclaycard 3,900 3,600
Corporate Banking 9,700 11,400
Barclays Capital 4,300 4,000
Barclays Global Investors 2,100 1,700
Other operations 4,900 7,100
Head office functions 500 400
Group total world wide 75,300 74,300
of which United Kingdom 57,000 55,700
* Staff numbers do not include temporary and agency staff of 4,800
(31st December 1999: 3,600) whose costs are included in staff costs.
** Retail Financial Services figures include staff who represent a shared
resource with Corporate Banking, but exclude 1,000 regulated salesforce and
field sales managers (31st December 1999: 1,000) and 1,100 administrative
staff (31st December 1999: 1,300) whose costs are borne within the long-term
assurance fund. Retail Financial Services figures at 31st December 2000 also
include 6,500 staff of The Woolwich.
Staff costs
Staff costs excluding the restructuring charge and costs relating to The
Woolwich increased 5% to £3,005m. Salaries and accrued incentive payments
rose by 7% reflecting increased performance related payments in Barclays
Capital and BGI. Excluding performance related payments, salary costs across
the Group were flat compared with 1999. In Retail Financial Services,
Corporate Banking and Service Provision savings from job reductions offset the
impact of the annual UK pay award.
Pension costs include a £74m credit (1999: £nil) in respect of the Group's
main UK schemes following a review of the assumptions relating to the surplus
and the continued nil contribution. The Group expects similar credits in the
next two years.
Staff number reduction in 2000 Number
of staff
2000 restructuring programme 2,700
1999 restructuring programme 1,500
4,200
Sale of Dial 700
Outsourcing and other movements 600
5,500
Excluding The Woolwich, staff numbers decreased by 5,500 to 68,800, primarily
as a result of continuing job reductions in the UK. The reduction in staff
numbers relating to the 2000 restructuring programme amounted to 2,700 with a
further 1,500 attributable to the 1999 programme where the notice process was
underway at the end of 1999. The reduction in Corporate Banking staff numbers
includes 700 as a result of the sale of Dial. Staff numbers also reduced by a
net 600 as a result of outsourcing and other movements.
In addition to the 4,200 staff who have left the Group in 2000 under the 2000
and 1999 restructuring programmes, a further 2,100 staff were in the process
of being served notice at 31st December 2000 and are covered by the 2000
restructuring charge of £171m (total jobs affected 4,800).
The increases in Barclays Capital, Barclays Global Investors and Barclaycard
staff numbers reflected increased business volumes and investment in new
activities.
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