Barclays Capital 2010 Global Financial Services Conference
Net Interest Margin & Operating Expenses
R&C driving a recovery in NIM; tight cost control across the board
Group NIM Q210 vs Q110
-
Operating expenses
XRBS
bps
£bn
5
■ Q110 Q210
4.4
4.1
3
203
3.8
8
4
3.5
192
3
2
Q110
0
R&C
Rest of Group
Q210
Core
0.7
0.6
Non-Core
Total
Group NIM up 11bps to 2.03% driven by Retail &
Commercial margins, up 14bps
■ Benefit from higher earnings on capital in Q2 of 3bps,
no further impact anticipated
■ Expectation of modest underlying growth per quarter
retained for the remainder of 2010, absent any GBM
and Non-Core volatility
7% q-o-q reduction driven by lower staff costs,
primarily reflecting lower GBM revenues
GBM compensation ratio stable at c33%
Adjusted cost:income ratio improved 200bps to
52% in Core, Group also improved 200bps to 55%
Non-Core costs declined by 10% q-o-q benefitting
from disposal related headcount reductions
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