Barclays 2010 Annual Report Download - page 283

‘Funded/unfunded’ Exposures where the notional amount of the
transaction is either funded or unfunded. Represents exposures where
a commitment to provide future funding has been made and the funds
have been released/not released.
‘FX products’ As used in Note 41 ‘Fair value of financial instruments’,
these products are derivatives linked to the foreign exchange market. This
category includes FX spot and forward contracts; FX swaps; FX options.
‘Gain on acquisition’ The amount by which the acquirer’s interest in the
net fair value of the identifiable assets, liabilities and contingent liabilities,
recognised in a business combination, exceeds the cost of the acquisition.
‘Global Retail Banking (GRB)’ UK Retail Banking, Barclaycard, Western
Europe Retail Banking and Barclays Africa.
‘Gross new UK lending’ New lending advanced to UK customers during
the year.
‘Home Loans’ Loans to purchase a residential property which is then used
as collateral to guarantee repayment of the loan. The borrower gives the
lender a lien against the property, and the lender can foreclose on the
property if the borrower does not repay the loan per the agreed terms.
Also known as a residential mortgage.
‘Impaired loans’ Loans are reported as Credit Risk Loans (defined above)
and comprise loans where individual identified impairment allowance has
been raised and also include loans which are fully collateralised or where
indebtedness has already been written down to the expected realisable
value. The impaired loan category may include loans, which, while
impaired, are still performing.
‘Impairment allowances’ Provisions held on the balance sheet as a result
of the raising of a charge against profit for the incurred loss inherent in the
lending book. An impairment allowance may either be identified or
unidentified and individual or collective.
‘Income’ Total income net of insurance claims, unless otherwise specified.
‘Incremental Default Risk Charge (IDRC)’ The IDRC captures default risk.
This means the potential for a direct loss due to an obligor’s default as well
as the potential for indirect losses that may arise from a default event.
‘Individually/Collectively Assessed’ Impairment is measured individually
for assets that are individually significant, and collectively where a portfolio
comprises homogenous assets and where appropriate statistical
techniques are available.
‘Individual liquidity guidance (ILG)’ Guidance given to a firm about the
amount, quality and funding profile of liquidity resources that the FSA has
asked the firm to maintain.
‘Interchange income’ A fee that is paid to a credit card issuer in the clearing
and settlement of a sales or cash advance transaction.
‘Interest rate products’ As used in Note 41 ‘Fair value of financial
instruments’, these are products with a payoff linked to interest rates.
This category includes interest rate swaps, swaptions, caps and exotic
interest rate derivatives.
‘Internal funds pricing’ The Group’s mechanism for pricing intra-group
funding and liquidity.
‘Investment banking’ Fee generating businesses encompassing Advisory,
Debt and Equity Origination within Barclays Capital.
‘Investment grade’ A debt security, treasury bill or similar instrument with
a credit rating measured by external agencies of AAA to BBB.
‘Leveraged Finance’ Loans or other financing agreements provided to
companies whose overall level of debt is high in relation to their cash flow
(net debt: EBITDA) typically arising from private equity sponsor led
acquisitions of the businesses concerned.
‘Liabilities margin’ Interest paid on customer liabilities relative to the
average internal funding rate, divided by average customer liabilities.
Expressed as an annualised percentage.
‘Liquidity and Credit enhancements’ Credit enhancement facilities are used
to enhance the creditworthiness of financial obligations and cover losses
due to asset default. Two general types of credit enhancement are
third-party loan guarantees and self-enhancement through over
collateralization. Liquidity enhancement makes funds available if required,
for ther reasons than asset default, e.g. to ensure timely repayment of
maturing commercial paper.
‘Liquidity Coverage Ratio (LCR)’ The ratio of the stock of high quality liquid
assets to expected net cash outflows over the following 30 days. High-
quality liquid assets should be unencumbered, liquid in markets during
a time of stress and, ideally, be central bank eligible. These include, for
example, cash and claims on central governments and central banks.
The Basel III guidelines require this ratio to be at least 100% and it is
expected to apply from 2015.
‘Liquidity pool/buffer’ The Group liquidity pool comprises cash at central
banks and highly liquid collateral specifically held by the Group as
contingency to enable the bank to meet cash outflows in the event
of stressed market conditions.
‘Loan loss rate’ Defined as total credit impairment charge (excluding
available for sale assets and reverse repurchase agreements) divided by
gross loans and advances to customers and banks (at amortised cost).
‘Loan to deposit ratio’ The ratio of loans and advances to customer
accounts. This excludes certain liabilities issued by the retail business that
have characteristics comparable to retail deposits (for example, structured
CDs and retail bonds), which are included within debt securities in issue.
‘Loan to deposit and long term funding ratio’ The ratio of wholesale
and retail loans and advances to customers net of impairment allowance,
divided by the total of customer accounts, long term debt (due after
1 year) and equity.
‘Loan funding ratio’ The ratio of wholesale and retail loans and advances
to customers net of impairment allowance, divided by the total of
customer accounts, long-term debt (>1 yr) and equity.
‘Loan to value ratio (LTV)’ Expresses the amount borrowed against an
asset (e.g. a mortgage) as a percentage of the appraised value. The ratio is
used in assessing the appropriate level of risk for the loan and is generally
reported as an average for new mortgages or an entire portfolio.
‘Loan to value of new mortgage lending’ See Average LTV in new mortgage.
‘Loans past due’ Loans are past due when a counterparty has failed
to make a payment when contractually due.
‘Loss Given Default (LGD)’ The fraction of Exposure at Default (EAD)
(defined above) that will not be recovered following default. LGD
comprises the actual loss (the part that is not expected to be recovered),
together with the economic costs associated with the recovery process.
‘Medium Term Notes (MTNs)’ Corporate notes continuously offered by a
company to investors through a dealer. Investors can choose from differing
maturities, ranging from nine months to 30 years.
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