Barclays 2011 Annual Report Download - page 107

For the purposes of the analysis of credit quality, the following internal measures of credit quality have been used:
Retail lending Wholesale lending
Financial statements description Probability
of default
Probability
of default
Default
grade
Strong 0.0-0.60% 0.0-0.05% 1-3
0.05-0.15% 4-5
0.15-0.30% 6-8
0.30-0.60% 9-11
Satisfactory 0.60-10.00% 0.60-2.15% 12-14
2.15-11.35% 15-19
Higher risk 10.00%+ 11.35%+ 20-21
Financial statement descriptions can be summarised as follows:
– Strong – there is a very high likelihood of the asset being recovered in full.
– Satisfactory – whilst there is a high likelihood that the asset will be recovered and therefore, of no cause for concern to the Group, the asset may
not be collateralised, or may relate to retail facilities, such as credit card balances and unsecured loans, which have been classified as satisfactory,
regardless of the fact that the output of internal grading models may have indicated a higher classification. At the lower end of this grade there are
customers that are being more carefully monitored, for example, corporate customers which are indicating some evidence of some deterioration,
mortgages with a high loan to value ratio, and unsecured retail loans operating outside normal product guidelines.
– Higher risk – there is concern over the obligor’s ability to make payments when due. However, these have not yet converted to actual delinquency.
There may also be doubts over value of collateral or security provided. However, the borrower or counterparty is continuing to make payments when
due and is expected to settle all outstanding amounts of principal and interest.
An age analysis of loans and advances that are past due but not impaired is set out below.
Loans and advances past due but not impaired (audited)
Past due
up to 1
month
£m
Past due
1-2
months
£m
Past due
2-3
months
£m
Past due
3-6
months
£m
Past due
6 months
and over
£m
Total
£m
As at 31 December 2011
Loans and advances designated at fair value 56 46 – 3 327 432
Home loans 35 5 22 31 21 114
Credit cards, unsecured and other retail lending 117 29 27 48 127 348
Wholesale 8,343 315 298 315 236 9,507
Total 8,551 395 347 397 711 10,401
As at 31 December 2010
Loans and advances designated at fair value – – 70 1 8 79
Home loans 164 22 28 29 224 467
Credit cards, unsecured and other retail lending 268 86 96 81 95 626
Wholesale 4,653 730 482 504 701 7,070
Total 5,085 838 676 615 1,028 8,242
Loans and advances assessed as impaired (audited)
Collectively assessed
As at 31 December 2011
Past due
up to 1
month
£m
Past due
1-2
months
£m
Past due
2-3
months
£m
Past due
3-6
months
£m
Past due
6 months
and over
£m
Total
£m
Individually
assessed
£m
Total
£m
Home loans 4,034 2,636 550 1,345 2,113 10,678 382 11,060
Credit cards, unsecured and other retail lending 1,390 1,117 357 885 3,585 7,334 702 8,036
Wholesale 138 71 71 81 455 816 9,607 10,423
Total 5,562 3,824 978 2,311 6,153 18,828 10,691 29,519
As at 31 December 2010
Home loans 4,751 1,853 889 1,352 2,393 11,238 296 11,534
Credit cards, unsecured and other retail lending 1,380 1,105 502 1,133 5,339 9,459 668 10,127
Wholesale 114 58 51 116 440 779 17,605 18,384
Total 6,245 3,016 1,442 2,601 8,172 21,476 18,569 40,045
Barclays PLC Annual Report 2011 www.barclays.com/annualreport 105
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