Barclays 2009 Annual Report Download - page 109

www.barclays.com/annualreport09 Barclays PLC Annual Report 2009 107
– the speed and extent of possible rises in interest rates in the UK, US and
eurozone; and
– the possibility of any further falls in residential property prices in the UK,
South Africa and Spain.
Home Loans
The Group’s principal home loans portfolios continued largely to be in the UK
Retail Banking Home Finance business (59% of the Group’s total), GRCB –
Western Europe (23%) primarily Spain and Italy, and South Africa (14%).
The credit quality of the principal home loan portfolios reflected low LTV
lending. Using current valuations, the average LTV of the portfolios as at
31st December 2009 was 43% for UK Home Finance (31st December 2008:
40%), 51% for Spain (31st December 2008: 48%) and 42% for South Africa
(31st December 2008: 41%). The average LTV for new mortgage business
during 2009 at origination was 48% for UK Home Finance (31st December
2008: 47%), 55% for Spain (31st December 2008: 63%) and 53% for
South Africa (31st December 2008: 58%). The percentage of balances with
an LTV of over 85% based on current values was 14% for UK Home Finance
(31st December 2008: 10%), 7% for Spain (31st December 2008: 5%) and
27% for South Africa (31st December 2008: 25%). In the UK, buy-to-let
mortgages comprised 6% of the total stock as at 31st December 2009.
Impairment charges rose across the home loans portfolios, reflecting
the impact of lower house prices as well as some increases in arrears rates.
Three-month arrears as at 31st December 2009 were 1.04% for UK
mortgages (31st December 2008: 0.91%), 0.63% for Spain (31st December
2008: 0.51%), as credit conditions deteriorated and 4.07% for South Africa
(31st December 2008: 2.11%), due to consumer indebtedness and
increased debt counselling balances following the enactment of the 2007
National Credit Act.
Repossessions
The number of properties in repossession in UK Home Loans remained
very low during 2009. At the end of 2009 there were 196 properties in
repossession, 40 higher than the previous year (31st December 2008: 156).
Credit Cards and Unsecured Loans
The Group’s largest card and unsecured loan portfolios are in the UK (56% of
Group total). The US cards portfolio accounts for 20% of the total exposure,
where Barclaycard’s portfolio is largely prime credit quality (FICO score of
660 or more).
Arrears rates in the UK Cards portfolio rose during the year to 1.79%
(31st December 2008: 1.57%), reflecting the impact of the economic
downturn. Repayment Plan balances grew to support government initiatives
to supply relief to customers experiencing financial difficulty. As a
percentage of the portfolio, three-month arrears rates rose during 2009 to
2.74% for UK Loans (31st December 2008: 2.28%) and 3.31% for US Cards
(31st December 2008: 2.32%).
a
Home Loans – Distribution of Balances by Loan to Value (Current Valuations)a
UK SpainbSouth Africac
31.12.09 31.12.08 31.12.09 31.12.08 31.12.09 31.12.08
%%%%%%
<= 75% 74.5 78.3 83.2 86.7 57.8 60.5
> 75% and <= 80% 6.3 6.1 5.6 4.8 7.1 7.5
> 80% and <= 85% 5.4 5.5 4.4 3.7 7.7 7.2
> 85% and <= 90% 4.6 4.5 3.2 1.6 7.6 7.6
> 90% and <= 95% 3.4 2.5 1.7 1.3 7.8 6.7
> 95% 5.8 3.1 1.9 1.9 12.0 10.5
Mark to market LTV % 43 40 51 48 42 41
Average LTV on new mortgages 48 47 55 63 53 58
Number of Repossessions in UK Home Finance As at As at
31.12.09 31.12.08
Residential and buy-to-let mortgage portfolios 196 156
Notes
aBased on the following portfolios: UK: UKRB Residential Mortgages and Buy to Let portfolios;
Spain: GRCB – Western Europe Spanish retail home finance portfolio; and South Africa:
GRCB – Absa retail home finance portfolio.
bSpain mark to market methodology as per Bank of Spain requirements.
cSouth Africa mark to market methodology will be revised in 2010 to incorporate additional
granularity.
Home Loans – 3 Month Arrearsd
As at As at
31.12.09 31.12.08
%%
UK 1.04 0.91
Spain 0.63 0.51
South Africa 4.07 2.11
Unsecured Lending 3 Month Arrearse
As at As at
31.12.09 31.12.08
%%
UK Cardsf1.79 1.57
UK Loansg2.74 2.28
US Cardsh3.31 2.32
dDefined as total 90 day + delinquent balances as a percentage of outstandings.
eDefined as total 90 day + delinquent balances as a percentage of outstandings.
Includes accounts on repayment plans but excludes the balances in the legal book.
fUK Cards includes Branded Cards and Goldfish.
gUK Loans based on Barclayloans and Personal Loans from Barclaycard.
hExcludes Business Card; December 2009 includes US Airways.