Form 6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13A-16 OR 15D-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

27 April 2007

Barclays PLC and

Barclays Bank PLC

(Names of Registrants)

1 Churchill Place

London E14 5HP

England

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F   x    Form 40-F   ¨

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes   ¨    No   x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):

THIS REPORT ON FORM 6-K SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE IN THE REGISTRATION STATEMENTS ON FORM F-3 (NOS. 333-126811, 333-85646 AND 333-12384) AND FORM S-8 (NOS. 333-112796, 333-112797) OF BARCLAYS BANK PLC AND THE REGISTRATION STATEMENT ON FORM S-8 (NO. 333-12818) OF BARCLAYS PLC AND TO BE A PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS FURNISHED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.

This Report is a joint Report on Form 6-K filed by Barclays PLC and Barclays Bank PLC.  All of the issued ordinary share capital of Barclays Bank PLC is owned by Barclays PLC.

 


Future SEC Filings and this Filing: Important Information

In connection with the proposed transaction between Barclays PLC and ABN AMRO Holding N.V., Barclays expects it will file with the Securities and Exchange Commission (the “SEC”) a Registration Statement on Form F-4, which will constitute a prospectus, as well as a Tender Offer Statement on Schedule TO and other relevant materials. In addition, ABN AMRO expects that it will file with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9 and other relevant materials. Such documents, however, are not currently available. INVESTORS ARE URGED TO READ ANY DOCUMENTS REGARDING THE POTENTIAL TRANSACTION IF AND WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors will be able to obtain a free copy of such filings without charge, at the SEC’s website (http://www.sec.gov) once such documents are filed with the SEC. Copies of such documents may also be obtained from Barclays and ABN AMRO, without charge, once they are filed with the SEC. This filing shall not constitute an offer to sell or the solicitation of an offer to buy or sell any securities in such a proposed transaction, nor shall there be any sale of any such securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. This Current Report on Form 6-K is being filed in connection with the disclosure requirements applicable to Barclays Bank PLC’s shelf registration. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

Explanatory Note:

On April 23, 2007, the Registrants filed a report on Form 6-K containing (i) Barclays PLC and ABN AMRO Holding N.V.’s joint press release, dated April 23, 2007, (ii) ABN AMRO Holding N.V. audited consolidated financial statements for the year ended and as at December 31, 2006 and notes thereto as required by Rule 3-05 of Regulation S-X; (iii) Barclays PLC unaudited pro forma condensed consolidated financial statements for the year ended and as at December 31, 2006 and notes thereto as required by Article 11 of Regulation S-X; (iv) Consent of Ernst & Young Accountants, Independent Registered Public Accounting Firm and (v) ABN AMRO Holding N.V.’s press release containing a summary of first quarter 2007 results, dated April 16, 2007.

On April 26, 2007, ABN AMRO Holding N.V. published an Interim Financial Report for the 3 months ended March 31, 2007, which represents a part of the press release issued by ABN AMRO Holding N.V. on April 26, 2007 containing an analysis of its results for the 3 months ended March 31, 2007 and ABN AMRO Holding N.V. unaudited pro forma condensed financial statements for the year ended and as at December 31, 2006. Such Interim Financial Report covers a period more current than the period covered by the AMRO Holding N.V. audited consolidated financial statements for the year ended and as at December 31, 2006 and notes thereto previously filed; accordingly, the Registrants are filing the such Interim Financial Report pursuant to Item 8.A.5 of Form F-3 (and for no other purpose). The ABN AMRO Holding N.V. Interim Financial Report is unaudited and does not contain a reconciliation to US GAAP. Investors are urged to consider the Interim Financial Report in light of all the disclosures in the Annual Report on Form 20-F of ABN AMRO Holding N.V. for the year-ended December 31, 2006.


Exhibit      Item
Exhibit 99.1      ABN AMRO Holding N.V.’s Interim Financial Report for the 3 months ended March 31, 2007.


UNAUDITED

Annex 3

ABN AMRO Holding N.V.

Interim Financial Report for the 3 months

ended 31 March 2007

 

36

 



UNAUDITED

Consolidated income statement

 

     3 months
ended 31
March 2007
   3 months
ended 31
March 2006
     (in millions of euros)

Net interest income 4

   2,753    2,702

Net fee and commission income 5

   1,517    1,452

Net trading income 6

   1,033    841

Results from financial transactions 7

   387    83

Share of result in equity accounted investments 18

   69    50

Other operating income 8

   180    217

Income of consolidated private equity holdings 24

   1,393    1,246
         

Operating income

   7,332    6,591
         

Personnel expenses 9

   2,320    2,046

General and administrative expenses

   2,035    1,712

Depreciation and amortisation

   364    313

Goods and materials of consolidated private equity holdings 24

   970    852
         

Operating expenses

   5,689    4,923

Loan impairment and other credit risk provisions 17

   417    328
         

Total expenses

   6,106    5,251
         

Operating profit before taxes

   1,226    1,340

Income tax expense 10

   276    364
         

Profit from continuing operations

   950    976

Profit from discontinued operations net of tax 11

   114    62
         

Profit for the period

   1,064    1,038
         

Attributable to:

     

Shareholders of the parent company

   1,035    1,003

Minority interests

   29    35

Earnings per share attributable to the shareholders of the parent company (in euros) 12

     

From continuing operations

     

Basic

   0.50    0.50

Diluted

   0.49    0.50

From continuing and discontinued operations

     

Basic

   0.56    0.53

Diluted

   0.55    0.53

Numbers stated against items refer to the notes.

 

37

 



UNAUDITED

Consolidated balance sheet

 

     31 March
2007
    31 December
2006
 
     (in millions of euros)  

Assets

    

Cash and balances at central banks

   12,845     12,317  

Financial assets held for trading 13

   231,172     205,736  

Financial investments 14

   122,674     125,381  

Loans and receivables — banks 15

   159,311     134,819  

Loans and receivables — customers 16

   475,272     443,255  

Equity accounted investments 18

   1,565     1,527  

Property and equipment

   5,756     6,270  

Goodwill and other intangible assets 19

   9,408     9,407  

Assets of businesses held for sale

   1,588     11,850  

Accrued income and prepaid expenses

   9,328     9,290  

Other assets

   25,665     27,212  
            

Total assets

   1,054,584     987,064  
            

Liabilities

    

Financial liabilities held for trading 13

   151,458     145,364  

Due to banks

   222,234     187,989  

Due to customers

   384,119     362,383  

Issued debt securities 20

   207,891     202,046  

Provisions

   7,995     7,850  

Liabilities of businesses held for sale

   1,228     3,707  

Accrued expenses and deferred income

   9,364     10,640  

Other liabilities

   23,382     21,977  
            

Total liabilities (excluding subordinated liabilities)

   1,007,671     941,956  

Subordinated liabilities 21

   20,069     19,213  
            

Total liabilities

   1,027,740     961,169  
            

Equity

    

Share capital

   1,085     1,085  

Share premium

   5,294     5,245  

Treasury shares

   (1,993 )   (1,829 )

Retained earnings

   19,659     18,599  

Net gains not recognised in the income statement

   653     497  
            

Equity attributable to shareholders of the parent company

   24,698     23,597  

Equity attributable to minority interests

   2,146     2,298  
            

Total equity

   26,844     25,895  
            

Total equity and liabilities

   1,054,584     987,064  
            

Credit related contingent liabilities 22

   53,770     51,279  

Committed credit facilities 22

   145,403     145,418  

Numbers stated against items refer to the notes.

 

38

 



UNAUDITED

Consolidated statement of changes in equity

 

     3 months
ended 31
March 2007
    3 months
ended 31
March 2006
 
     (in millions of euros)  

Share capital

    

Balance at 1 January

   1,085     1,069  
            

Balance at 31 March

   1,085     1,069  
            

Share premium

    

Balance at 1 January

   5,245     5,269  

Share-based payments

   49     75  
            

Balance at 31 March

   5,294     5,344  
            

Treasury shares

    

Balance at 1 January

   (1,829 )   (600 )

Share buy back

   (441 )   (80 )

Utilised for exercise of options and performance share plans

   277     67  
            

Balance at 31 March

   (1,993 )   (613 )
            

Retained earnings

    

Balance at 1 January

   18,599     15,237  

Profit attributable to shareholders of the parent company

   1,035     1,003  

Other

   25     137  
            

Balance at 31 March

   19,659     16,377  
            

Net gains/(losses) not recognised in the income statement

    

Currency translation account

    

Balance at 1 January

   408     842  

Currency translation differences

   92     78  
            

Subtotal — Balance at 31 March

   500     920  
            

Net unrealised gains/(losses) on available-for-sale assets

    

Balance at 1 January

   364     1,199  

Net unrealised gains/(losses)

   102     (389 )

Net (gains)/losses reclassified to the income statement

   (106 )   (40 )
            

Subtotal — Balance at 31 March

   360     770  
            

Cash flow hedging reserve

    

Balance at 1 January

   (275 )   (795 )

Net unrealised gains/(losses)

   13     189  

Net (gains)/losses reclassified to the income statement

   55     47  
            

Subtotal — Balance at 31 March

   (207 )   (559 )
            

Net gains/(losses) not recognised in the income statement at 31 March

   653     1,131  
            

Equity attributable to shareholders of the parent company at 31 March

   24,698     23,308  
            

 

39

 



UNAUDITED

Consolidated Statement of changes in equity (continued)

 

      3 months
ended 31
March 2007
    3 months
ended 31
March 2006
 
     (in millions of euros)  

Minority interests

    

Balance at 1 January

   2,298     1,931  

Additions / reductions

   (158 )   70  

Acquisitions / disposals

   —       19  

Profit attributable to minority interests

   29     35  

Currency translation differences

   (22 )   (25 )

Other movements

   (1 )   (3 )
            

Equity attributable to minority interests at 31 March

   2,146     2,027  
            

Total equity at 31 March

   26,844     25,335  
            

 

40

 



UNAUDITED

Consolidated Cash Flow Statement

 

      3 months
ended 31
March 2007
    3 months
ended 31
March 2006
 
     (in millions of euros)  

Cash flows from operating activities

   (17,298 )   11,670  

Cash flows from investing activities

   9,756     (9,997 )

Cash flow from financing activities

   6,098     7,603  
            

Movement in cash and cash equivalents

   (1,444 )   9,276  

Cash and cash equivalents at 1 January

   4,872     6,043  

Currency translation differences

   142     177  
            

Cash and cash equivalents at 31 March

   3,570     15,496  
            
      31 March
2007
    31 March
2006
 

Determination of cash and cash equivalents:

    

Cash and balances at central banks

   12,845     20,077  

Loans and receivables – banks

   8,272     11,242  

Due to banks

   (17,547 )   (15,823 )
            

Cash and cash equivalents

   3,570     15,496  

 

41

 



UNAUDITED

Notes to the Consolidated Income Statement and Balance Sheet

(unless otherwise stated, all amounts are in millions of euros)

 

1 Basis of presentation

This interim financial report for the period ended 31 March 2007 is prepared in accordance with IAS 34 – Interim Financial Reporting. It does not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of ABN AMRO Holding N.V. for the year ended 31 December 2006 as included in the Annual Report 2006. ABN AMRO’s 2006 consolidated financial statements are prepared in accordance with International Financial Reporting Standards (‘IFRS’) as adopted by the European Union (‘EU’) and do not utilise the portfolio hedging carve out permitted by the EU. Accordingly, the accounting policies applied by the Group comply fully with IFRS. In preparing this interim financial report, the same accounting principles and methods of computation are applied as in the consolidated financial statements for the year ended 31 December 2006 except for the changes stated below. In the opinion of management, all adjustments necessary for a fair presentation of the results of operations for the interim periods have been made. This interim financial report is unaudited.

Changes in accounting policies

In this interim period we have revised the presentation of interest income and expense related to trading activities. Trading book interest will no longer be separated out and reported within the net interest income line, and will remain within the trading result line. The change in presentation reflects new guidance available in IFRS 7 Financial Instruments: Disclosure which replaces the disclosure requirements previously included in IAS 32 Financial Instruments: Presentation whereby the requirement to disclose interest data is now restricted to that relating to activities not held at fair value.

The change in the presentation of net interest relating to the trading book had an immaterial impact on the net interest and trading lines in this period and the comparatives provided. Accordingly, the comparatives are not restated.

 

2 Developments

Update on status of US Department of Justice investigation

As previously disclosed, the US Department of Justice has been conducting a criminal investigation into our dollar clearing activities, OFAC compliance procedures and other Bank Secrecy Act compliance matters. The Bank has cooperated with these investigations and is currently in active discussions to resolve these matters. Those discussions recently have advanced to the point where it is appropriate to take a provision of Euro 365 million. If outstanding issues are successfully resolved in these discussions, we believe that this amount will be sufficient to resolve the material financial consequences of the investigations. The Bank affirms that it takes very seriously its obligations to comply with US economic sanctions and regulations.

Main acquisitions

Prime Bank

On 5 March 2007 ABN AMRO entered into agreements to acquire a controlling interest of 93.4% in Prime Bank, Pakistan, for a cash consideration of EUR 172 million (PKR 13.8 billion). Through the subsequent tender offer for all remaining shares of Prime Bank that expired on 29 March 2007 ABN AMRO obtained additional shares representing 2.8%, bringing the total stake in Prime Bank to 96.2%. The transactions were closed on 5 April 2007.

Private Equity

Major new buy-out investments in the first quarter 2007 were:

 

Sdu (Netherlands, publishing)

 

Baarsma Wine Group (Netherlands, wine distribution)

 

Vetus den Ouden (Netherlands, nautical equipment)

 

T.G.I. Friday’s Ltd. (UK, restaurants)

Main Disposals

 

ABN AMRO Mortgage Group, Inc.

On 28 February 2007 ABN AMRO closed the sale of ABN AMRO Mortgage Group, Inc., its US-based residential mortgage broker origination platform and servicing business, which includes ABN AMRO Mortgage Group, InterFirst and Mortgage.com, to Citigroup. Citigroup purchased approximately EUR 7.8 billion of net assets, of which approximately EUR 2.1 billion consist of ABN AMRO Mortgage Group’s mortgage servicing rights associated with its EUR 170 billion mortgage servicing portfolio. The profit on the sale amounted to EUR 97 million after tax and is included in ‘Profit from discontinued operations net of tax’ (see note 11 for more details).

 

42

 



UNAUDITED

Private Equity

Major divestments in the first quarter 2007 were:

 

Holiday Park Ltd. / Beach Equity Ltd. (UK, leisure)

 

3 Segment reporting

Segment information is presented in respect of the Group’s business. The primary format, business segments, is consistent with the Group’s management and internal reporting structure applicable in the financial year.

Measurement of segment assets, liabilities, income and results is based on the Group’s accounting policies. Segment assets, liabilities, income and results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Transactions between segments are conducted at arm’s length.

As of 1 January 2007, the result of product BU Global Clients are being reported in the regional BUs. This has been done to further drive close cooperation and synergies between the product focused BU Global Clients and the regions. In addition Asset Management France and the International Diamonds and Jewelry Group have been transferred from BU Private Clients to BU Asset Management and Group Functions respectively. The comparative segment figures of 2006 have been restated.

Business segments

Below the business segments are described. In the ‘Business review’ chapter of the 2006 Annual Report more detailed descriptions of the activities of these segments are included.

Netherlands

BU Netherlands serves a diverse client base that comprises consumer and commercial clients. BU Netherlands offers a broad range of investment, commercial and retail banking products and services via its multi-channel service model consisting of a network of branches, internet banking facilities, a customer contact center and ATMs throughout the Netherlands. BU Netherlands focuses increasingly on mass affluent customers and commercial mid-market clients. BU Netherlands also comprises the ABN AMRO Mortgage Group including the former Bouwfonds mortgage activities.

Europe (including Antonveneta)

BU Europe provides its consumer and commercial clients with a range of financial products and services.

BU Europe combines activities in 27 countries: 23 countries in Europe (excluding the Netherlands) along with Kazakhstan, Uzbekistan, Egypt and South Africa.

Antonveneta is rooted in north-eastern Italy, and focuses on consumer and commercial mid-market clients.

North America

The core of BU North America is LaSalle Bank, headquartered in Chicago, Illinois. BU North America serves a large number of clients, including small businesses, mid-market companies, larger corporates, institutions, non-profit entities and municipalities in the US and Canada. BU North America offers a broad range of investment, commercial and retail banking products and services through a network of branches and ATMs in Illinois, Michigan and Indiana. BU North America focuses increasingly on mass affluent customers and commercial mid-market clients. While based in the US Midwest, BU North America reaches further through an expanding network of regional commercial banking offices across the US. The activities of ABN AMRO Mortgage Group, Inc. were sold in the first quarter of 2007.

See note 25 – subsequent events – for recent developments regarding the sale of ABN AMRO North America Holding Company.

Latin America

BU Latin America has a presence in nine Latin American countries: Brazil, Argentina, Chile, Colombia, Ecuador, Mexico, Paraguay, Uruguay and Venezuela, with the presence of Banco Real representing the majority of the operations. In Brazil, Banco Real is a retail and commercial bank, offering full retail, corporate and investment banking products and services. It operates as a universal bank offering financial services through an extensive network of branches, points-of-sale and ATMs. BU Latin America also has a strong presence in the Brazilian consumer finance business through its Aymoré franchise, focused on vehicle and other consumer goods financing.

 

43

 



UNAUDITED

Asia

ABN AMRO has been operating for well over 100 years in several Asian countries including Indonesia, China, Singapore and Japan. BU Asia now covers 16 countries and territories and is extending its branches and offices network. BU Asia’s client base includes commercial clients as well as consumer and private banking clients.

Private Clients

BU Private Clients offers private banking services to wealthy individuals and institutions with EUR 1 million or more in net investable assets. In the past few years, BU Private Clients built up an onshore private banking network in continental Europe through organic growth in the Netherlands and France, and through the acquisition of Delbrück Bethmann Maffei in Germany and Bank Corluy in Belgium.

Asset Management

BU Asset Management is ABN AMRO’s global asset management business. BU Asset Management operates in 26 countries worldwide, offering investment products in all major regions and asset classes. Its products are distributed directly to institutional clients such as central banks, pension funds, insurance companies and leading charities. Funds for private investors are distributed through ABN AMRO’s consumer and private banking arms, as well as via third-party distributors such as insurance companies and other banks. The institutional client business represents just over half of the assets managed by BU Asset Management. Consumer and third-party clients account for a further 30%, and the remainder is in discretionary portfolios managed for BU Private Clients.

Private Equity

The business model of ABN AMRO’s Private Equity unit - branded as ABN AMRO Capital - involves providing capital and expertise to non-listed companies in a variety of sectors. By obtaining, in most cases, a majority stake, Private Equity gains the ability to influence the company’s growth strategy and increase its profitability. It then aims to sell its shareholding at a profit after a number of years. Private Equity specialises in European mid-market buyouts, but also manages a portfolio of investments in Australian buyouts, non-controlling and controlling shareholdings in small to medium sized Dutch companies (‘participaties’), and dedicated media and telecom sector investments. It operates from seven offices across Europe and Australia.

Group Functions, including Group Services

Group Functions provides guidance on ABN AMRO’s corporate strategy and supports the implementation of the strategy in accordance with our Managing for Value methodology, Corporate Values and Business Principles. By aligning and uniting functions across ABN AMRO’s BUs and geographical territories, Group Functions also facilitates Group-wide sharing of best practices, innovation and positioning to public authorities, and binds the bank together in both an operational and cultural sense.

Group Functions includes Group Asset and Liability Management, which manages an investment and derivatives portfolio in order to manage the liquidity and interest rate risks of the Group. Group Functions also holds the Group’s strategic investments, proprietary trading portfolio, the International Diamonds & Jewelry Group and records any related profits or losses.

 

44

 



UNAUDITED

Business segment information – for the 3 months ended 31 March 2007

 

     Nether-
lands
   Europe    North
America
    Latin
America
   Asia    Private
Clients
    Asset
Manage-
ment
    Private
Equity
    GF/
GS
    Total
Group

Net interest income

   838    444    575     826    155    119     (4 )   (88 )   (112 )   2,753

Net fee and commission income

   257    278    258     140    209    168     219     3     (15 )   1,517

Net trading income

   190    516    90     22    152    20     2     1     40     1,033

Result from financial transactions

   13    13    8     31    43    1     8     153     117     387

Share of result in equity accounted investments

   15    1    1     10    17    —       2     (7 )   30     69

Other operating income

   47    18    63     21    4    19     4     1     3     180

Income of consolidated private equity holdings

   —      —      —       —      —      —       —       1,393     —       1,393
                                                      

Operating income

   1,360    1,270    995     1,050    580    327     231     1,456     63     7,332

Operating expenses

   871    965    662     584    396    224     151     1,359     477     5,689

Loan impairment and other credit risk provisions

   105    71    (1 )   190    53    (3 )   —       —       2     417
                                                      

Total expenses

   976    1,036    661     774    449    221     151     1,359     479     6,106
                                                      

Operating profit before taxes

   384    234    334     276    131    106     80     97     (416 )   1,226

Income tax expense

   85    46    96     99    24    30     22     (2 )   (124 )   276
                                                      

Profit from continuing operations

   299    188    238     177    107    76     58     99     (292 )   950

Profit from discontinued operations net of tax

   —      —      114     —      —      —       —       —       —       114
                                                      

Profit for the period

   299    188    352     177    107    76     58     99     (292 )   1,064
                                                      

 

45

 



UNAUDITED

Business segment information – for the 3 months ended 31 March 2006

 

      Nether-
lands
   Europe     North
America
    Latin
America
   Asia     Private
Clients
   Asset
Manage-
ment
    Private
Equity
    GF/
GS
   Total
Group

Net interest income

   797    368     589     736    147     129    (4 )   (69 )   9    2,702

Net fee and commission income

   270    286     202     151    167     161    180     7     28    1,452

Net trading income

   176    389     52     13    103     9    4     16     79    841

Result from financial transactions

   —      (32 )   (15 )   40    (20 )   4    1     95     10    83

Share of result in equity accounted investments

   8    —       2     13    22     —      —       —       5    50

Other operating income

   32    27     66     12    16     17    29     4     14    217

Income of consolidated private equity holdings

   —      —       —       —      —       —      —       1,246     —      1,246
                                                      

Operating income

   1,283    1,038     896     965    435     320    210     1,299     145    6,591

Operating expenses

   850    865     640     570    332     229    132     1,194     111    4,923

Loan impairment and other credit risk provisions

   85    32     (15 )   173    36     1    —       15     1    328
                                                      

Total expenses

   935    897     625     743    368     230    132     1,209     112    5,251
                                                      

Operating profit before taxes

   348    141     271     222    67     90    78     90     33    1,340

Income tax expense

   84    70     53     90    23     25    16     (2 )   5    364
                                                      

Profit from continuing operations

   264    71     218     132    44     65    62     92     28    976

Profit from discontinued operations net of tax

   50    —       12     —      —       —      —       —       —      62
                                                      

Profit for the period

   314    71     230     132    44     65    62     92     28    1,038
                                                      

 

46

 



UNAUDITED

 

4 Net interest income

 

       3 months
ended 31
March
2007
   3 months
ended 31
March
2006

Interest income

     10,750    9,194

Interest expense

     7,997    6,492
           

Total

     2,753    2,702
           

 

5 Net fee and commission income

 

      3 months
ended 31
March
2007
   3 months
ended 31
March
2006

Fee and commission income

     

Securities brokerage fees

   366    497

Payment and transaction services fees

   548    545

Asset management and trust fees

   402    373

Fees generated on financing arrangements

   71    41

Advisory fees

   138    94

Insurance related commissions

   50    47

Guarantee fees

   64    64

Other fees and commissions

   127    56
         

Subtotal

   1,766    1,717

Fee and commission expense

     

Securities brokerage

   22    97

Payment and transaction services

   79    64

Asset management and trust

   22    37

Other fee and commission

   126    67
         

Subtotal

   249    265
         

Total

   1,517    1,452
         

 

6 Net trading income

 

     3 months
ended 31
March
2007
   3 months
ended 31
March
2006

Interest instruments trading

   324    421

Foreign exchange trading

   234    124

Equity and commodities trading

   475    296
         

Total

   1,033    841
         

The impact of the change in the presentation of trading related interest as outlined in Note 1 - Basis of Presentation - for the 3 months ended 31 March 2006 was EUR 35 million (representing an increase in trading income with a corresponding decrease in interest income).

 

7 Results from financial transactions

 

     3 months
ended 31
March
2007
    3 months
ended 31
March
2006
 

Gains and losses from the disposal of available-for-sale debt securities

   143     54  

Gains and losses from the sale of available-for-sale equity investments

   6     2  

Dividend on available-for-sale equity investments

   14     12  

Gains and losses on other equity investments

   208     70  

Hedging ineffectiveness

   19     22  

Other

   (3 )   (77 )
            

Total

   387     83  
            

 

47

 



UNAUDITED

The net gains and losses on other equity investments includes those arising on investments held at fair value and the result on the sale of consolidated holdings of a private equity nature.

 

8 Other operating income

 

    

3 months

ended 31

March

2007

  

3 months

ended 31

March

2006

Insurance activities

   33    26

Leasing activities

   16    13

Result on disposal of operating activities and equity accounted investments

   4    40

Other

   127    138
         

Total

   180    217
         

 

9 Personnel expenses

 

    

3 months

ended 31

March

2007

    

3 months

ended 31

March

2006

Salaries (including bonuses and allowances)

   1,794      1,621

Social security expenses

   215      202

Other employee costs

   311      223
           

Total

   2,320      2,046
           

The increase in personnel expenses in the first quarter of 2007 is mainly caused by an increase in bonuses compared to the comparable period in 2006.

 

10 Income tax expense

The effective tax rate on operating profit from continuing operations for the first quarter 2007 is 22.5%. The effective tax rate on profit for the period for the first quarter 2007, taking into account the tax on discontinued operations, is 24.4% compared to a nominal tax rate in the Netherlands of 25.5%. Over the full year 2006 the effective tax rate was 17.7%.

The effective tax rate on the Group’s profit before tax differs from the nominal tax charge in the Netherlands. The reasons for the deviation in the first quarter 2007 are mainly tax credits received by the Group and tax exempt gains. The effective tax rate in the first quarter 2007 is higher than over the full year 2006 as a result of relatively higher tax credits and higher tax exempt income over the full year 2006 compared to the first quarter of 2007.

 

48

 



UNAUDITED

 

11 Profit from discontinued operations net of tax

For the 3 months ended 31 March 2007 ABN AMRO Mortgage Group, Inc. is presented as discontinued operations. In the table we provide a further breakdown of the profit from discontinued operations net of tax:

 

    

3 months

ended 31

March

2007

  

3 months

ended 31

March

2006

     (in millions of euros)

ABN AMRO Mortgage Group, Inc.

     

Operating income

   71    78

Operating expenses

   44    62
         

Operating profit before tax

   27    16

Gain recognised on disposal

   154    —  
         

Profit from discontinued operations before tax

   181    16

Income tax expense on operating profit

   10    4

Income tax expense on gain on disposal

   57    —  
         

Profit from discontinued operations net of tax

   114    12

Bouwfonds non-mortgage

     

Operating income

   —      145

Operating expenses

   —      70

Loan impairment and other credit risk provisions

   —      3
         

Operating profit before tax

   —      72

Income tax expense on operating profit

   —      22
         

Profit from discontinued operations net of tax

   —      50
         

Total profit from discontinued operation net of tax

   114    62
         

 

49

 



UNAUDITED

 

12 Earnings per share

The calculations for basic and diluted earnings per share are presented in the following table.

 

    

3 months

ended 31

March

2007

   

3 months

ended 31

March

2006

 

Profit for the period attributable to shareholders of the parent company

   1,035     1,003  

Profit from continuing operations attributable to shareholders of the parent company

   921     941  

Profit from discontinued operations attributable to shareholders of the parent company

   114     62  

Weighted average number of ordinary shares outstanding (in millions)

   1,855.0     1,878.6  

Dilutive effect of staff options (in millions)

   10.3     10.2  

Conditional share awards (in millions)

   5.5     1.5  
            

Diluted number of ordinary shares (in millions)

   1,870.8     1,890.3  

Earnings per share from continuing operations

    

Basic earnings per ordinary share (in euros)

   0.50     0.50  

Fully diluted earnings per ordinary share (in euros)

   0.49     0.50  

Earnings per share from continuing and discontinued operations

    

Basic earnings per ordinary share (in euros)

   0.56     0.53  

Fully diluted earnings per ordinary share (in euros)

   0.55     0.53  

Number of ordinary shares outstanding (in millions)

   1,852.9     1,878.6  

Net asset value per ordinary share (in euros)

   13.33     12.41  

Number of preference shares outstanding (in millions)

   1,369.8     1,369.8  

Return on average shareholders’ equity (in %)

   17.2 %   17.9 %

In the return on average shareholders’ equity the average shareholders’ equity is determined excluding net unrealised gains/(losses) on available-for-sale assets and cash flow hedging reserve not recognised in the income statement.

 

13 Financial assets and liabilities held for trading

 

     31 March
2007
   31 December
2006

Financial assets held for trading

     

Interest-earning securities

   72,961    60,290

Equity instruments

   49,250    40,112

Derivative financial instruments

   108,961    105,334
         

Total

   231,172    205,736
         

Financial liabilities held for trading

     

Short positions in financial assets

   49,557    45,861

Derivative financial instruments

   101,901    99,503
         

Total

   151,458    145,364
         

 

50

 



UNAUDITED

 

14 Financial investments

 

     31 March
2007
   31 December
2006

Interest-earning securities available-for-sale

   115,378    117,558

Interest-earning securities held-to-maturity

   2,919    3,729

Equity investments available-for-sale

   1,995    1,866

Equity investments designated at fair value through income

   2,382    2,228
         

Total

   122,674    125,381
         

 

15 Loans and receivables - banks

This item is comprised of amounts due from or deposited with banking institutions.

 

     31 March
2007
    31 December
2006
 

Current accounts

   8,427     9,473  

Time deposits placed

   13,906     15,396  

Professional securities transactions

   132,832     105,969  

Loans to banks

   4,152     3,986  
            

Subtotal

   159,317     134,824  

Allowances for impairment 17

   (6 )   (5 )
            

Total

   159,311     134,819  
            

The movements during the year are mainly due to an increase in professional securities transactions in the UK.

 

16 Loans and receivables - customers

This item is comprised of amounts receivable, regarding loans and mortgages balances with non-bank customers.

 

     31 March
2007
    31 December
2006
 

Public sector

   10,392     11,567  

Commercial

   189,054     180,262  

Consumer

   135,138     135,484  

Professional securities transactions

   114,596     93,716  

Multi-seller conduits

   29,657     25,872  
            

Subtotal

   478,837     446,901  

Allowances for impairment 17

   (3,565 )   (3,646 )
            

Total

   475,272     443,255  
            

The amount receivable held by multi-seller conduits is typically collateralised by a pool of customer receivables in excess of the amount advanced, such that the resulting credit risk is mitigated.

 

51

 



UNAUDITED

 

17 Loan impairment charges and allowances

 

     2007  

Balance at 1 January

   3,651  

Loan impairment charges:

  

New impairment allowances

   716  

Reversal of impairment allowances no longer required

   (225 )

Recoveries of amounts previously written off

   (74 )
      

Total loan impairment and other credit risk provisions

   417  

Amount recorded in interest income from unwinding of discounting

   (4 )

Currency translation differences

   20  

Amounts written off (net)

   (537 )

Unearned interest accrued on impaired loans

   24  
      

Balance at 31 March

   3,571  
      

All loans are assessed for potential impairment either individually and / or on a portfolio basis. The allowance for impairment is apportioned as follows:

 

     31 March
2007
   31 December
2006

Commercial loans

   2,338    2,344

Consumer loans

   1,227    1,302
         

Total allowance customers

   3,565    3,646

Loans to banks

   6    5
         

Total allowance

   3,571    3,651
         

 

18 Equity accounted investments

 

     31 March
2007
   31 December
2006
 

Banking institutions

   1,477    1,436  

Other activities

   88    91  
           

Total

   1,565    1,527  
           
          2007  

Balance at 1 January

      1,527  

Movements:

     

Purchases

      1  

Reclassifications

      (15 )

Sales

      (1 )

Share in results

      69  

Dividends received

      (3 )

Currency translation differences

      (2 )

Other

      (11 )
         

Balance at 31 March

      1,565  
         

 

52

 



UNAUDITED

 

19 Goodwill and other intangible assets

 

      31 March
2007
   31 December
2006

Goodwill

   4,786    4,714

Goodwill of private equity

   2,370    2,436

Software

   956    959

Other intangibles

   1,296    1,298
         

Total

   9,408    9,407
         

On 13 March 2007 Banco Real acquired the remaining outstanding shares (5.42%) in Banco Sudameris Brasil S.A. from its minority shareholders. The goodwill arising from this transaction amounting to EUR 63 million has been capitalised.

 

20 Issued debt securities

 

      31 March
2007
   31 December
2006

Bonds and notes issued

   120,536    117,122

Certificates of deposit and commercial paper

   54,486    56,375

Cash notes, savings certificates and bank certificates

   3,212    2,269
         

Subtotal

   178,234    175,766

Commercial paper issued by multi-seller conduits

   29,657    26,280
         

Total

   207,891    202,046
         

 

21 Subordinated liabilities

Issued liabilities qualify as subordinated debt if claims by the holders are subordinated to all other current and future liabilities of, respectively, ABN AMRO Holding N.V., ABN AMRO Bank N.V. and other Group companies. These liabilities qualify as capital, taking into account remaining maturities, for the purpose of determining the consolidated capital adequacy ratio for the Dutch central bank.

The maturity profile of subordinated liabilities is as follows:

 

      31 March
2007
   31 December
2006

Within one year

   1,581    1,384

After one and within two years

   696    726

After two and within three years

   1,984    2,165

After three and within four years

   812    811

After four and within five years

   22    21

After five years

   14,974    14,106
         

Total

   20,069    19,213
         

Total subordinated liabilities include EUR 6,079 million (2006: EUR 6,122 million) which qualify as tier 1 capital for capital adequacy purposes.

 

53

 



UNAUDITED

 

22 Commitments and contingent liabilities

Loan and banking commitments and contingencies

The contractual amounts of commitments and contingent liabilities are set out by category in the following table. The amounts for commitments are presented on a fully advanced basis. Guarantees and letters of credit represent the maximum accounting loss that would be recognised at the balance sheet date if the relevant contract parties completely failed to perform as contracted.

 

      31 March
2007
   31 December
2006

Contingent liabilities with respect to guarantees granted

   48,641    46,026

Contingent liabilities with respect to irrevocable letters of credit

   5,129    5,253

Committed credit facilities

   145,403    145,418

Many of the contingent liabilities and commitments will expire without being advanced in whole or in part. This means that the amounts stated do not represent expected future cash flows. Additionally, guarantees and letters of credit are supported by varying levels of collateral.

Other contingencies

Legal proceedings have been initiated against the Group in a number of jurisdictions, but on the basis of information currently available, and having taken legal counsel, the Group is of the opinion that the outcome of these proceedings net of any related insurance claims is unlikely to have a material adverse effect on the consolidated financial position and the consolidated profit of the Group.

Regarding the ongoing criminal investigations relating to our US dollar clearing activities, OFAC compliance procedures and other Bank Secrecy Act compliance matters, refer to footnote 2 - Developments.

 

54

 



UNAUDITED

 

23 Capital adequacy

To monitor the adequacy of capital the Group uses ratios established by the Bank for International Settlements (BIS). These ratios measure capital adequacy (minimum 8% as required by BIS) by comparing the Group’s eligible capital with its balance sheet assets, off-balance sheet commitments and market and other risk positions at weighted amounts to reflect their relative risk. The market risk approach covers the general market risk and the risk of open positions in currencies and debt and equity securities primarily in the trading book. Assets are weighted according to broad categories of notional risk, being assigned a risk weighting according to the amount of capital deemed to be necessary to support them.

Tier 1 capital consists of shareholders’ equity and qualifying subordinated liabilities less goodwill and some intangible assets. Tier 2 capital represents additional qualifying subordinated liabilities, taking into account the remaining maturities.

Core tier 1 capital is tier 1 capital excluding preference shares.

The Group’s capital adequacy level was as follows:

 

     Balance sheet/
unweighted amount
   Risk weighted amount,
including effect of contractual
netting
      31 March
2007
   31 December
2006
   31 March
2007
   31 December
2006

Balance sheet assets (net of provisions):

           

Cash and balances at central banks

   12,845    12,317    369    296

Financial assets held for trading

   231,172    205,736    —      —  

Financial investments

   122,674    125,381    12,795    14,142

Loans and receivables - banks

   159,311    134,819    7,234    7,215

Loans and receivables - customers

   475,272    443,255    167,881    162,315

Equity accounted investments

   1,565    1,527    994    943

Property and equipment

   5,756    6,270    4,337    4,419

Goodwill and other intangible assets

   9,408    9,407    2,772    2,801

Assets of businesses held for sale

   1,588    11,850    2    6,433

Accrued income and prepaid expenses

   9,328    9,290    3,967    3,794

Other assets

   25,665    27,212    7,047    6,776
                   

(Sub)total

   1,054,584    987,064    207,398    209,134
                   

Off-balance sheet positions and derivatives:

           

Credit-related commitments and contingencies

   199,173    196,697    56,407    53,336

Credit equivalent of derivatives

         14,949    13,960

Insurance companies and other

         225    193
               

Subtotal

         71,581    67,489
               

Total credit risks

         278,979    276,623

Market risk requirements

         4,306    4,081
               

Total risk-weighted assets

         283,285    280,704
               

The following table compares actual capital with that required for supervisory purposes.

 

     31 March 2007     31 December 2006  
     Required     Actual     Required     Actual  

Total capital

   22,663     32,010     22,457     31,275  

Total capital ratio

   8.0 %   11.30 %   8.0 %   11.14 %

Tier 1 capital

   11,332     23,910     11,228     23,720  

Tier 1 capital ratio

   4.0 %   8.44 %   4.0 %   8.45 %

Core tier 1

     17,702       17,336  

Core tier 1 ratio

     6.25 %     6.18 %

 

55

 



UNAUDITED

 

24 Private equity investments

Private equity investments are either consolidated or held at fair value.

Consolidated private equity holdings

Investments of a private equity nature that are controlled by the Group are consolidated. Such holdings represent a wide range of non-banking activities. Personnel and other costs relating to production and manufacturing activities are presented within material expenses. The impact of consolidating on the income statement these investments is set out in the following table.

 

     3 months
ended 31
March
2007
    3 months
ended 31
March
2006
 

Income of consolidated private equity holdings

   1,393     1,246  

Other income included in operating income

   (89 )   (83 )
            

Total operating income of consolidated private equity holdings

   1,304     1,163  
            

Goods and material expenses of consolidated private equity holdings

   970     852  

Included in personnel expenses

   152     137  

Included in general and administrative expenses

   125     120  

Included in depreciation and amortisation

   88     50  
            

Total operating expenses

   1,335     1,159  
            

Operating profit before tax of consolidated private equity holdings

   (31 )   4  
            

Goods and material expense includes personnel costs relating to manufacturing and production activities.

The assets and liabilities of these consolidated holdings are included in the Group balance sheet. Given the non-banking nature of the underlying activities the main lines impacted are goodwill, property and equipment, other assets and issued debt securities. The total assets of these consolidated entities at 31 March 2007 were EUR 4,217 million (31 December 2006: EUR 4,537 million) excluding goodwill.

 

25 Subsequent events

Sale of ABN AMRO North America Holding Company

On 23 April 2007, ABN AMRO announced the sale of ABN AMRO North America Holding Company which principally consists of the retail and commercial banking activities of LaSalle Bank Corporation (“LaSalle”) to Bank of America. ABN AMRO’s North American Asset Management businesses and certain businesses within ABN AMRO’s North American Global Markets and Global Clients operations do not form part of the sale. This sale is expected to generate a significant gain.

 

56

 



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each of the registrants has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

        BARCLAYS PLC
    (Registrant)
Date: April 27, 2007     By:  

/s/ Patrick Gonsalves

      Name: Patrick Gonsalves
      Title: Deputy Secretary
    BARCLAYS BANK PLC
    (Registrant)
Date: April 27, 2007     By:  

/s/ Patrick Gonsalves

      Name: Patrick Gonsalves
      Title: Deputy Secretary