Barclays 2009 Annual Report Download - page 36

34 Barclays PLC Annual Report 2009 www.barclays.com/annualreport09
Impairment charges and other credit provisions 2009 2008 2007
£m £m £m
Impairment charges on loans and advances
– New and increased impairment allowances 8,111 5,116 2,871
– Releases (631) (358) (338)
– Recoveries (150) (174) (227)
Impairment charges on loans and advances 7,330 4,584 2,306
Charge/(release) in respect of provision for undrawn
contractually committed facilities and guarantees provided 28 329 476
Impairment charges on loans and advances and other credit provisions 7,358 4,913 2,782
Impairment charges on reverse repurchase agreements 43 124 –
Impairment on available for sale assets 670 382 13
Impairment charges and other credit provisions 8,071 5,419 2,795
Impairment charges and other credit provisions on ABS CDO Super Senior and other credit market exposures
included above:
Impairment charges on loans and advances 1,205 1,218 300
Charges in respect of undrawn facilities and guarantees –299 469
Impairment charges on loans and advances and other credit provisions on ABS CDO Super Senior and other
credit market exposures 1,205 1,517 769
Impairment charges on reverse repurchase agreements –54 –
Impairment charges on available for sale assets 464 192 13
Impairment charges and other credit provisions on ABS CDO Super Senior and other credit market exposures 1,669 1,763 782
Financial review
Income statement commentary
continued
Net claims and benefits incurred under insurance contracts
2009/08
Net claims and benefits incurred under insurance contracts increased 251%
(£594m) to £831m (2008: £237m) reflecting the expansion in GRCB –
Western Europe and GRCB – Absa and a credit as a result of falls in equity
markets and the disposal of the closed life assurance business.
2008/07
Net claims and benefits incurred under insurance contracts decreased
52% (£255m) to £237m (2007: £492m), principally due to a decrease in
the value of unit linked insurance contracts in Barclays Wealth, explained by
falls in equity markets and the disposal of closed life business in October
2008. This was partially offset by the growth in GRCB – Western Europe.
Impairment charges and other credit provisions
2009/08
Impairment charges on loans and advances and other credit provisions
increased 50% (£2,445m) to £7,358m (2008: £4,913m). The increase was
primarily due to economic deterioration and portfolio maturation, currency
movements and methodology enhancements, partially offset by a
contraction in loan balances.
The impairment charge in Global Retail and Commercial Banking
increased by 85% (£2,473m) to £5,395m (2008: £2,922m) as charges rose
in all portfolios, reflecting deteriorating credit conditions across all regions.
In Investment Banking and Investment Management, impairment was
broadly unchanged at £1,949m (2008: £1,980m).
The impairment charge against available for sale assets and reverse
repurchase agreements increased by 41% (£207m) to £713m (2008:
£506m), driven by impairment against credit market exposures.
Further discussion of impairments is included in the analysis of results
by business on pages 58 to 79.
2008/07
Impairment charges on loans and advances and other credit provisions
increased 77% (£2,131m) to £4,913m (2007: £2,782m). The increase was
caused by charges against ABS CDO Super Senior and other credit market
positions and as a result of deteriorating economic conditions coupled with
growth in several portfolios.
The impairment charge in Global Retail and Commercial Banking
increased by 51% (£983m) to £2,922m (2007: £1,939m) resulting from
deteriorating economic conditions and growth in several portfolios.
In Investment Banking and Investment Management, impairment
increased by 136% (£1,140m) to £1,980m (2007: £840m). This included a
charge of £1,517m against ABS CDO Super Senior and other credit market
positions. The remaining movement primarily related to charges in the
private equity and other loans business.
The impairment charge against available for sale assets and reverse
repurchase agreements increased by £493m to £506m (2007: £13m)
driven by impairment against credit market exposures.
Net claims and benefits incurred 2009 2008 2007
on insurance contracts £m £m £m
Gross claims and benefits incurred
on insurance contracts
858 263 520
Reinsurers’ share of claims incurred (27) (26) (28)
Net claims and benefits incurred
on insurance contracts 831 237 492