RNS Number:9081O
Barclays PLC
3 August 2000
PART 1
BARCLAYS PLC 2000 HALF YEAR RESULTS
HIGHLIGHTS
- Operating income rose by 13% to #4,676 million from #4,146 million in
1999
- Operating profit after provisions rose by 24% to #1,770 million from
#1,431 million in 1999*
- Profit before tax rose to #1,842 million from #967 million in 1999.
This year's profit before tax was boosted by #178m gain on the sale of DIAL
(compared with a deficit in 1999 of #119m on the sale of Merck Finck).
Restructuring charges were #106m compared with #345m in 1999.
- Economic profit increased to #829 million from #379 million in 1999
- Earnings per share increased to 88.9p from 46.2p in 1999
- Dividend per share rose 14% to 20.0p from 17.5p in 1999
Barclays Group Chief Executive, Matthew Barrett commented: -
"We are engaged in a major transformation of the Bank, aimed at creating
benefits for customers in terms of superior products and services, thereby
creating value for shareholders. The results of this are beginning to show;
the first half of this year has been one of acquiring new customers,
increasing business from existing customers, and improving productivity.
"These results are also testament to the value we provide to a wide spectrum
of customer groups through a diverse range of products".
* Figures exclude the 1999 and 2000 restructuring charges
For further information please contact:
Media Relations
Leigh Bruce Maria Darby/Pam O'Keeffe
Director, Corporate Communications Group Media Relations
Tel: 020 7699 2658 Tel: 020 7699 2970/2659
Investor Relations
Ian Roundell
Head of Investor Relations
Tel: 020 7699 2961
Photographs of the Barclays Chairman, Chief Executive and Finance Director
will be available from www.newscast.co.uk from 1.00pm.
The full results document is available from: www.investor.barclays.com
BARCLAYS PLC - SUMMARY
RESULTS FOR SIX MONTHS TO 30TH JUNE 2000
Half-year ended
30.6.00 31.12.99 30.6.99
#m #m #m
Operating profit before 2,145 1,808 1,751
provisions*
Provisions for bad and doubtful (376) (301) (320)
debts
Operating profit* 1,770 1,506 1,431
Restructuring charge (106) 1 (345)
Exceptional items 178 (19) (119)
Profit before tax 1,842 1,488 967
Tax charge (488) (395) (249)
Profit attributable to 1,320 1,063 696
shareholders
Earnings per share 88.9p 71.3p 46.2p
Earnings per share (based on 81.9p 72.1p 70.7p
operating profit above)*
Dividend per share 20.0p 32.5p 17.5p
Economic profit 829 607 379
*Operating profit shown above excludes the 1999 and 2000 restructuring
charges. Earnings per share and post-tax return on average shareholders'
funds based on this operating profit also excludes exceptional items.
- Operating profit rose by 24% to #1,770 million (1999: #1,431 million).
Earnings per share increased to 81.9p (1999: 70.7p).
- Operating income increased 13% to #4,676 million (1999: #4,146 million)
and operating costs rose by 6% to #2,531 million (1999: #2,395 million).
- Total costs rose by 6% to #2,531 million (1999: #2,395 million) as a
result of increases in strategic investment and revenue related costs.
Business as usual costs were maintained at #2,099 million (1999: #2,090
million).
- The post-tax return on average shareholders' funds improved to 27.2%
(1999: 25.5%).
- The interim dividend increased by 14% to 20.0p (1999: 17.5p).
- Shareholders' funds were #9.2 billion at 30th June 2000 (31st December
1999: #8.5 billion) and the tier 1 ratio was 8.0% (31st December 1999:
7.5%). The Group's economic capital requirement is estimated to be around
#7.5 billion to support its current business requirements and to allow for
future growth.
- The Group returned #309 million of capital to shareholders in the first
half of 2000.
- Retail Financial Services increased operating profit by 32% to
#822 million (1999: #621 million). Net interest income improved by 7% as a
result of growth in UK consumer lending, mortgage lending and savings
balances. Net fees and commissions grew by 8% benefiting from increases in
both Retail Customers and Wealth Management. Total costs fell 3% despite an
increase in strategic investment expenditure.
- Barclaycard's operating profit of #195 million was at the same level as
the first half of 1999. Net interest income rose by 12% and benefited from
increased extended credit balances. Fees and commissions grew 10% as a
result of increased transaction volumes. Total costs increased by 12% to
#218 million (1999: #195 million) primarily reflecting higher strategic
investment expenditure of #33 million (1999: #16 million).
- Corporate Banking produced a strong performance with an improvement in
operating profit of 18% to #541 million (1999: #458 million). Net interest
income rose 8% reflecting the growth in customer lending balances. Fees and
commissions increased 12% as a result of higher volumes of lending related
fees and foreign exchange related income.
- Overall banking margins fell to 3.17% (1999: 3.50%), reflecting the
impact of increased levels of wholesale business and some reductions in
overall UK margins in Retail Financial Services, Corporate Banking and
Barclaycard.
- Barclays Capital increased operating profit by 25% to #218 million
(1999: #175 million) reflecting strong performance in both the Rates and
Credit businesses.
- Barclays Global Investors' operating profit rose by 18% to #33 million
(1999: #28 million) benefiting from new business growth in assets under
management and increased sales of higher margin products. Total assets
under management increased to #529 billion (31st December 1999: #486
billion).
- Total provisions for bad and doubtful debts rose by #56 million to #376
million, primarily as a result of higher levels of new and increased
provisions reflecting increased volumes of new business in Retail Financial
Services and Barclaycard.
- The exceptional profit of #178 million reflected a #186 million profit
on the sale of the Dial business in June 2000.
- Economic profit increased to #829 million (1999: #379 million).
BARCLAYS PLC
HALF YEAR REVIEW
We have built on our 1999 performance with strong results in the first half
of 2000. Operating profit improved to #1,664 million. Earnings per share
increased to 88.9p from 46.2p and post tax return on equity rose to 29.6%.
As a result the interim dividend is being increased by 14% to 20p.
Total revenues were up 13% to #4,676 million. We have seen revenue growth
across all of our main businesses as they continue to build momentum.
The diversification of our portfolio of businesses, customer segments and
geographic coverage makes us less vulnerable as a Group to market
discontinuity in any one product line or market place.
Retail Financial Services profit improved by over 30% to #822 million
reflecting good performances in consumer lending, mortgages and savings.
Wealth Management is an important area of focus. In the last six months the
Wealth Management business made a good contribution, particularly in
Stockbrokers, Private Banking and Offshore Services.
Barclaycard's profit was flat at #195 million with an 11% increase in
revenues to #523 million partly offset by increased strategic investment
spend in developing information management capabilities, international
expansion and e-commerce initiatives.
Corporate Banking recorded an 18% rise in profit to #541 million. We
continue to develop the quality of our customer proposition in the United
Kingdom. Our improved customer service approach to the UK middle market is
generating record satisfaction levels with customers and helping us win new
customers and improve product penetration in an increasingly competitive
market.
Barclays Capital increased profits by 25% to #218 million, with both the
Rates and Credit Businesses performing well. Our unique debt-focused
approach and global model is gaining us new and repeat business from clients
in the United Kingdom, United States, Asia and the rest of Europe. As
European credit markets expand we benefit from a leading market position in
loans and bonds.
Barclays Global Investors (BGI) profit increased by 18% to #33 million,
reflecting strong new business volumes in the core United States and United
Kingdom businesses offset by continuing investment in key strategic
initiatives, including exchange traded funds. Assets under management
increased to #529 billion, from #486 billion at 31st December 1999.
The first six months saw good progress in the overhaul of everything we do
for customers to achieve superiority in service quality and product
proposition. Customers can expect to see continuing improvement in the
range of products and channels. We have gained new customers across all
businesses and our existing customers showed a trend of increased business
with us.
Technology will play an important part in our plans. We are bringing new
customer applications to market at scale. Our small business joint venture
with Freeserve provides a broad range of on-line information and services to
UK small businesses. In addition, Barclays B2B.com will provide a direct
channel for the sale and delivery of business services.
In the future, technology will enable us to provide much wider functionality
and information plus the capability to deliver our services over mobile
devices and interactive TV. WAP-enabled mobile phone services will be
operational for both Barclaycard and Stockbrokers by the end of the year.
The level of investment required over the next few years will be
substantial. We believe we have a proper fully integrated e-enablement
strategy which will be vital in determining success in this market.
As a foundation for implementing value-based management, we have identified
an initial structure of key lines of business in the Group, each of which
will be tasked with achieving the highest possible value within the Group.
Accordingly, each of these businesses and the corporate centre will
explicitly base decision making on the standard of maximising shareholder
value creation.
As we look forward to another challenging period ahead, we are immensely
encouraged by the continued dedication, support and sheer hard work of all
the Group's staff. Together we will continue to drive hard towards our goal
of doubling economic profit every four years.
SIR PETER MIDDLETON MATTHEW W. BARRETT
GROUP CHAIRMAN GROUP CHIEF EXECUTIVE
FINANCIAL HIGHLIGHTS
Half-year ended
30.6.00 31.12.99 30.6.99
RESULTS #m #m #m
Net interest income 2,471 2,349 2,278
Non-interest income 2,205 1,864 1,868
Operating income 4,676 4,213 4,146
Operating expenses* (2,531) (2,405) (2,395)
Operating profit before 2,145 1,808 1,751
provisions*
Provisions for bad and doubtful (376) (301) (320)
debts
Provisions for contingent 1 (1) -
liabilities and commitments
Operating profit* 1,770 1,506 1,431
Restructuring charge (106) 1 (345)
Exceptional items 178 (19) (119)
Profit before tax 1,842 1,488 967
Profit retained 1,025 579 434
Economic profit 829 607 379
BALANCE SHEET
Shareholders' funds 9,237 8,483 8,219
Loan capital 4,748 4,597 4,117
Total capital resources 14,750 13,432 12,685
Total assets 286,385 254,793 241,265
Weighted risk assets 123,483 115,878 113,994
PER ORDINARY SHARE P P P
Earnings 88.9 71.3 46.2
Earnings (based on operating 81.9 72.1 70.7
profit above)*
Dividend 20.0 32.5 17.5
Net asset value 626 568 547
PERFORMANCE RATIO % % %
Post-tax return on average 29.6 25.6 16.8
shareholders' funds
Post-tax return on average
shareholders' funds (based on 27.2 24.4 25.5
operating profit above)*
RISK ASSET RATIO
Tier 1 8.0 7.5 7.4
Total 11.5 11.3 10.9
GROUP YIELDS, SPREADS & MARGINS % % %
Gross yield 7.04 6.78 6.90
Interest spread 2.60 2.81 2.96
Interest margin 3.17 3.30 3.50
EXCHANGE RATES US$/# US$/# US$/#
Period end 1.51 1.62 1.58
Average 1.57 1.62 1.62
* Operating profit shown above excludes the 1999 and 2000 restructuring
charges. Earnings per share and post-tax return on average shareholders'
funds based on this operating profit also excludes exceptional items.
SUMMARY OF RESULTS
Half-year ended
PROFIT BEFORE TAX 30.6.00 31.12.99 30.6.99
#m #m #m
Retail Financial Services 822 691 621
Barclaycard 195 206 195
Corporate Banking 541 489 458
Barclays Capital 218 136 175
Barclays Global Investors 33 15 28
Other operations 6 23 (10)
Head office functions (39) (47) (30)
Goodwill amortisation (6) (7) (6)
Operating profit 1,770 1,506 1,431
Restructuring charge (106) 1 (345)
Exceptional items 178 (19) (119)
1,842 1,488 967
TOTAL ASSETS 30.6.00 31.12.99 30.6.99
#m #m #m
Retail Financial Services 42,799 41,383 39,375
Barclaycard 7,696 7,343 6,401
Corporate Banking 51,209 47,422 46,662
Barclays Capital 170,950 144,811 135,941
Barclays Global Investors 255 232 199
Other operations and Head office 5,462 5,562 5,174
functions
Retail life-fund assets 8,014 8,040 7,513
attributable to policyholders
286,385 254,793 241,265
WEIGHTED RISK ASSETS 30.6.00 31.12.99 30.6.99
#m #m #m
Retail Financial Services 27,503 26,152 25,354
Barclaycard 7,697 7,210 6,333
Corporate Banking 52,502 48,218 47,683
Barclays Capital 33,388 32,032 31,652
Barclays Global Investors 653 456 297
Other operations 1,740 1,810 2,675
123,483 115,878 113,994
CONSOLIDATED PROFIT AND LOSS ACCOUNT (UNAUDITED)
Half-year ended
30.6.00 31.12.99 30.6.99
#m #m #m
Interest receivable 5,491 4,823 4,497
Interest payable (3,022) (2,477) (2,219)
Profit on redemption/repurchase 2 3 -
of loan capital
Net interest income 2,471 2,349 2,278
Net fees and commissions 1,602 1,515 1,417
receivable
Dealing profits 415 234 322
Other operating income 188 115 129
Total non-interest income 2,205 1,864 1,868
Operating income 4,676 4,213 4,146
Administration expenses - staff (1,606) (1,389) (1,668)
costs
Administration expenses - other (902) (872) (935)
Depreciation and amortisation (129) (143) (137)
Operating expenses (2,637) (2,404) (2,740)
Operating profit before 2,039 1,809 1,406
provisions
Provisions for bad and doubtful (376) (301) (320)
debts
Provisions for contingent 1 (1) -
liabilities and commitments
Operating profit 1,664 1,507 1,086
Exceptional items 178 (19) (119)
Profit on ordinary activities 1,842 1,488 967
before tax
Tax on profit on ordinary (488) (395) (249)
activities
Profit on ordinary activities 1,354 1,093 718
after tax
Minority interests (equity and (34) (30) (22)
non-equity)
Profit for the period
attributable to the members of 1,320 1,063 696
Barclays PLC
Dividends (295) (484) (262)
Profit retained for the period 1,025 579 434
Earnings per ordinary share 88.9p 71.3p 46.2p
Earnings per ordinary share 72.1p
before restructuring charge and 81.9p 70.7p
exceptional items
Dividend per ordinary share:
First interim (payable 3rd 20.0p - 17.5p
October 2000)
Second interim - 32.5p -
CONSOLIDATED PROFIT AND LOSS ACCOUNT
BEFORE RESTRUCTURING CHARGE (UNAUDITED)
Half-year ended
30.6.00 31.12.99 30.6.99
#m #m #m
Interest receivable 5,491 4,823 4,497
Interest payable (3,022) (2,477) (2,219)
Profit on redemption/repurchase 2 3 -
of loan capital
Net interest income 2,471 2,349 2,278
Net fees and commissions 1,602 1,515 1,417
receivable
Dealing profits 415 234 322
Other operating income 188 115 129
Total non-interest income 2,205 1,864 1,868
Operating income 4,676 4,213 4,146
Administration expenses - staff (1,514) (1,444) (1,421)
costs
Administration expenses - other (888) (818) (837)
Depreciation and amortisation (129) (143) (137)
Operating expenses (2,531) (2,405) (2,395)
Operating profit before 2,145 1,808 1,751
provisions
Provisions for bad and doubtful (376) (301) (320)
debts
Provisions for contingent 1 (1) -
liabilities and commitments
Operating profit before 1,770 1,506 1,431
restructuring charge
Restructuring charge (106) 1 (345)
Exceptional items 178 (19) (119)
Profit on ordinary activities 1,842 1,488 967
before tax
The results shown on page 8 include the 1999 and 2000 restructuring charges
within operating expenses. The table above presents operating expenses
excluding the restructuring charge.
CONSOLIDATED BALANCE SHEET (UNAUDITED)
Half-year ended
30.6.00 31.12.99 30.6.99
Assets: #m #m #m
Cash and balances at central 588 1,166 780
banks
Items in course of collection 2,660 2,492 2,709
from other banks
Treasury bills and other eligible 9,584 7,176 8,321
bills
Loans and advances to banks
- banking 9,678 13,071 14,214
- trading 30,607 26,555 23,228
40,285 39,626 37,442
Loans and advances to customers
- banking 99,893 95,006 88,952
- trading 34,547 21,562 19,671
134,440 116,568 108,623
Debt securities 61,380 53,919 48,756
Equity shares 9,947 5,604 8,011
Interests in associated 97 106 131
undertakings and joint ventures
Intangible fixed assets - 188 183 209
goodwill
Tangible fixed assets 1,731 1,800 1,878
Other assets 17,471 18,113 16,892
278,371 246,753 233,752
Retail life-fund assets 8,014 8,040 7,513
attributable to policyholders
Total assets 286,385 254,793 241,265
Liabilities:
Deposits by banks - banking 39,624 26,915 24,863
- trading 19,908 17,571 14,213
59,532 44,486 39,076
Customer accounts - banking 112,464 105,027 98,629
- trading 27,875 18,939 18,316
140,339 123,966 116,945
Debt securities in issue 18,388 23,329 22,976
Items in course of collection due 1,252 1,400 1,308
to other banks
Other liabilities 44,110 40,140 40,762
Undated loan capital - 330 309 317
convertible to preference shares
Undated loan capital - non- 1,475 1,440 1,463
convertible
Dated loan capital - non- 2,943 2,848 2,337
convertible
268,369 237,918 225,184
Minority interests and
shareholders' funds:
Minority interests: equity 86 82 72
Minority interests: non-equity 679 270 277
Called up share capital 1,477 1,495 1,503
Reserves 7,760 6,988 6,716
Shareholders' funds: equity 9,237 8,483 8,219
10,002 8,835 8,568
278,371 246,753 233,752
Retail life-fund liabilities 8,014 8,040 7,513
attributable to policyholders
Total liabilities and 286,385 254,793 241,265
shareholders' funds
ADDITIONAL INFORMATION (UNAUDITED)
KEY FACTS
Half-year ended
30.6.00 31.12.99 30.6.99
RETAIL FINANCIAL SERVICES
Number of UK branches 1,728 1,899 1,945
Retail Customers
UK current account customers 8.1m 8.1m 8.0m
UK savings account customers 4.0m 3.8m 3.7m
UK Small Business customers 442,000 440,000 440,000
UK customers registered for 1,109,000 1,000,000 943,000
Barclaycall
UK customers registered for on- 1,110,000 500,000 342,000
line banking
Africa - number of countries 10 9 10
represented
Africa - customer deposits #1.7bn #1.6bn #1.5bn
Wealth Management
Customers in continental Europe 311,000 307,000 304,000
Total customer funds #69.3bn #66.0bn #61.2bn
Stockbrokers - deal volumes per 8,900 6,600 6,400
day
Caribbean - number of countries 14 14 14
represented
Caribbean - customer deposits #3.4bn #3.1bn #3.0bn
BARCLAYCARD
UK Barclaycards in issue 10.1m 9.7m 9.5m
International cards in issue 1.1m 1.0m 0.8m
Number of merchant transactions 560m 600m 500m
processed
Customers registered for internet 235,000 111,000 52,000
account services
CORPORATE BANKING
Number of UK Corporate Banking 112,000 112,000 112,000
connections
- Mid corporate connections 96,000 96,000 96,000
- Larger business connections 14,000 14,000 14,000
- Large corporate connections 2,400 2,200 2,100
Customers registered for 36,000 29,000 25,000
electronic banking
Number of current accounts 234,000 231,000 226,000
Number of deposit accounts 101,000 102,000 100,000
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