Key Information Group Results Year Ended 31.12.08 Year Ended 31.12.07 £m £m % Change
Total income net of insurance claims 23,115 23,000 1
Impairment charges and other credit provisions (5,419) (2,795) 94
Operating expenses (14,366) (13,199) 9
Gains on acquisitions 2,406 -
Profit before tax 6,077 7,076 (14)
Profit after tax 5,287 5,095 4
Profit attributable to equity holders of the parent 4,382 4,417 (1)
Economic profit 1,760 2,290 (23)
Basic earnings per share 59.3p 68.9p (14)
Diluted earnings per ordinary share 57.5p 66.7p (14)
Dividend per share 11.5p 34.0p (66)
Performance Ratios
Return on average shareholders' equity 16.5% 20.3%
Cost:income ratio 62% 57%
Cost:net income ratio 81% 65%
Profit Before Tax by Business1 £m £m % Change
UK Retail Banking 1,369 1,275 7
Barclays Commercial Bank 1,266 1,357 (7)
Barclaycard 789 603 31
GRCB - Western Europe 257 196 31
GRCB - Emerging Markets 134 100 34
GRCB - Absa 552 597 (8)
Barclays Capital 1,302 2,335 (44)
Barclays Global Investors 595 734 (19)
Barclays Wealth 671 307 119
Pro Forma2 As at As at
Capital and Balance Sheet 31.12.08 31.12.08 31.12.07
Equity Tier 1 ratio 6.7% 5.8% 5.1%
Tier 1 ratio 9.7% 8.6% 7.6%
Risk asset ratio 14.4% 13.6% 11.2%
Net asset value per share 332p 437p 353p
Total shareholders' equity £47.4bn £32.5bn
Total assets £2,053bn £1,227bn
Risk weighted assets £433bn £354bn
Adjusted gross leverage 24x 28x 33x

1 Summary excludes Head Office functions and other operations.
2 Reflects conversion of Mandatorily Convertible Notes and inclusion of all innovative instruments in Tier 1 capital.

Performance Highlights
“In a very difficult economic environment in 2008, Barclays has steered a course that has enabled us to be solidly profitable despite strong headwinds. We are well positioned to maintain Barclays competitive strengths through the
undoubted challenges that will come in 2009 and beyond.”

Marcus Agius, Chairman
"We thank our customers and clients for the business they directed to Barclays in 2008. High levels of activity on their behalf have enabled us to report substantial profit generation in difficult conditions. We benefited from a number of gains on acquisitions and disposals. These contributed to headline profit, and to capital, but the main driver of our results was a solid operating profit performance and record income generation. We commit to reducing the size of our balance sheet over time, and we will maintain our capital ratios at levels that are well ahead of regulatory
requirements. We intend to recommence dividend payments during the second half of 2009."

John Varley, Chief Executive
�� Group profit before tax was £6,077m, down 14% on 2007. Profit included:
– Gains on acquisitions of £2,406m, including £2,262m relating to Lehman Brothers North American business
– Profit on disposal of the closed life assurance book of £326m
– Gains on Visa IPO and sales of shares in MasterCard of £291m
– Gross credit market losses and impairment of £8,053m
– Gains on own credit of £1,663m
�� Global Retail and Commercial Banking profit before tax increased 6% to £4,367m
– UK lending increased to both retail and corporate customers
– Strengthened international presence in Barclaycard, Western Europe and Emerging Markets
�� Investment Banking and Investment Management profit before tax was £2,568m, down 24% reflecting significant gains on acquisition and disposal and the impact of credit market dislocation
– Barclays Capital’s strategy of diversification by geography and business accelerated through the acquisition of Lehman Brothers North American business
– There were strong net new asset flows into Barclays Wealth and Barclays Global Investors despite declines in equity markets
�� Group balance sheet growth driven by over £900bn derivative gross-up, growth in loans and advances of £124bn and impact of foreign exchange rates on non-Sterling assets
�� Risk weighted assets increased 22% (£79bn) to £433bn reflecting:
– the significant depreciation in Sterling relative to both the US Dollar and the Euro
– procyclicality: macroeconomic indicators generally, and corporate credit conditions specifically, deteriorated towards the end of 2008 leading to ratings declines
�� Capital ratios were strengthened through the raising of £13.6bn of Tier 1 capital. The year-end pro forma Tier 1
capital ratio was 9.7% and the pro forma Equity Tier 1 ratio was 6.7%
�� Barclays targets reduced adjusted gross leverage and capital ratios significantly ahead of regulatory requirements.

I reported in our interim results that the conditions in the market in the preceding twelve months were as difficult as any that we had experienced in many years. In the six months since, we have seen the bankruptcy of Lehman
Brothers, substantial action taken by the UK and other governments, and a progressive deterioration in the consensus expectations for global economic prospects. The environment has been extraordinarily challenging for
nearly two years, and remains so.
We have managed Barclays carefully through this period. We have remained solidly profitable. Although the 2008 profit before tax of £6.1bn includes several individually significant and one-off items, our performance during the
year has mainly been driven by ongoing business. Where we have had the opportunity to generate non-recurring profits, we have done so, including a gain on the acquisition of Lehman Brothers North American business, a gain
on the acquisition of the Goldfish credit card business in the UK, gains on selling the UK Closed Life Fund and from the Visa IPO and sale of MasterCard shares. These items, combined with record income generation across the
Group, have enabled us to absorb substantial writedowns on our credit market assets and still post substantial profits.
But our shareholders have suffered a lot. Although we cannot control the price at which our shares trade in the market, we greatly regret the fact that the total return on our shares during 2008 has been heavily negative, and we
acknowledge with regret, also, our decision not to recommend the payment of a final dividend for 2008, which is one of the consequences of the increased capital requirements introduced by the UK Financial Services Authority in
October.
These facts have influenced significantly our compensation decisions in respect of 2008. This has resulted in the incentive payments across Barclays being significantly lower in 2008 than in 2007; in the application of high
differentiation in incentive pools, based both on business and individual performance; and in our delivering a significant proportion of compensation for the most senior individuals across Barclays over multiple years.
Executive Directors will receive no bonuses for 2008. For 2009 and beyond, we are reviewing our compensation policies and practices to ensure that they evolve appropriately. Our endeavour as we do this is to maximise the
alignment between these and the interests of our owners, as well as to ensure that our compensation policies and practices are appropriately benchmarked to changing best practice in the industry.
Our priorities in 2008 were (and remain): to stay close to customers and clients; to manage our risks; and to progress strategy.

2009 Strategic Framework
Our framework for moving the strategy forward in 2009 has the following features:
1. Responsible corporate citizenship. Governments in the UK and elsewhere have taken significant steps to address the impacts of the financial crisis and recession, and we must work with the authorities and, of course, with our customers, to deal with the crisis in a way which is consistent with our obligations to shareholders.
2. We have committed to recommencing dividend payments during the second half of 2009. Thereafter, and as previously announced, dividend payments will be made on a quarterly basis. We will set out our dividend policy
at the Annual General Meeting in April.
3. We must ensure that our capital position is robust and our balance sheet well-managed. We set out today in the Group Finance Director’s Review our approach to managing leverage in the balance sheet, and our expectations for capital ratios. For 2009, returns will rank ahead of growth.
4. To create good returns this time, we must preserve strategic and operational choice. As conditions remain very difficult in 2009, we expect that there will be considerable value at stake for our shareholders in decisions that we take relating to resource utilisation, capital allocation and risk management. Our objective over time is to ensure that the cost of the capital we raised last November is covered many times over by the benefits of
pursuing our strategy.
5. We must deliver solid profitability notwithstanding the global downturn. Our diversified income streams have served us well in recent years and have enabled us to absorb substantial costs from the financial crisis. We
expect them to continue to do so.
6. We will seek to manage the composition of our profits, and capital allocation, to ensure that we optimise returns from our universal banking business model. What does this mean? It is clear to us that in the future
there will be more capital in the banking system, and less leverage, particularly in capital markets businesses.
This will be true at Barclays too, and will govern our approach to capital allocation and expected returns. We expect to see balance sheet utilisation by Barclays Capital fall over time, which will help us to deliver
strengthening returns. We believe that the businesses that we have built from the integration of Lehman Brothers North American businesses and Barclays Capital will help in this regard, since the capital intensity of the advisory businesses in M&A and of the flow businesses in fixed income, currencies, equities and credit will be lower, once we have managed down our credit market exposures.

Goals
We set out last year our goals for economic profit for 2008 through 2011. Those were based on, amongst other things, the then regulatory capital requirements for the business and the then cost of equity. The regulatory capital requirements were significantly increased last year by the UK Financial Services Authority. The observed cost of equity has also increased. It is right, therefore, that we revisit our goals, to ensure that they are properly aligned with our new return and balance sheet objectives, and with the interests of our owners. We intend to publish revised goals in due course that reflect the changes to the environment in the past two years.

2009 Trading
Customer and client activity levels were high in the first month of 2009, and we have had a good start to the year.
In particular the operating performance of Barclays Capital, benefiting from the now complete integration of the Lehman Brothers North American businesses, was extremely strong. The trends that lie behind the strong operating performance in Global Retail and Commercial Banking in 2008 were again observable in its performance in January.