Barclays 2011 Annual Report Download - page 98

Risk management
Credit risk continued
Retail credit risk
Gross loans and advances to customers in the retail portfolios increased 2% to £241,138m. In UK RBB, the increase of 6% to £120,312m primarily
reflected growth in mortgage balances. Barclaycard loans and advances increased 8% to £31,738m mainly due to the acquisition of credit card
portfolios in 2011, partially offset by balance run-offs in FirstPlus. Barclays Wealth loans and advances increased 24% to £16,784m reflecting growth
in collateralised lending to High Net Worth individuals. These increases were partially offset by a 19% decrease in Africa RBB to £26,363m primarily due
to the depreciation in the value of the Rand against Sterling and lower originations in South Africa Home Loans. Balances in Europe RBB remained
broadly stable at £44,488m as growth in Italian Home Loans was offset by lower balances in Spain as new mortgage business reduced.
Retail impairment allowances decreased 22% to £5,374m principally due to changes in the write-off policy, debt sales and lower severity.
The total loan impairment charge across the retail portfolios reduced 27% to £2,422m as a result of lower charges across all businesses. The loan
impairment charge at Barclaycard decreased 26% to £1,232m as a result of reduced delinquency rates and customer balance repayments, principally
in the US. The loan impairment charge at UK RBB decreased 34% to £491m mainly reflecting the low interest rate environment, low arrears rates and
lower flows in collections in UK personal loans. The Africa RBB loan impairment charge decreased 12% to £386m, mainly reflecting improved economic
conditions in South Africa and better recoveries across the continent.
Lower impairment charges coupled with higher loan balances led to a fall in the retail loan loss rate to 100bps (2010: 140bps).
CRLs in the retail portfolios decreased 17% to £10,416m reflecting the write-off of balances following a reduction in the period between accounting
charge-off and write-off from 18 months to 12-months across the majority of unsecured portfolios, as well as lower rate of inflows, debt sales and
customer repayments. The main exception was Europe RBB where the overall balance was largely unchanged as decreases in Spain, principally
resulting from a series of unsecured portfolio sales in 2011, were offset by increases, mainly in the mortgage portfolios as a consequence of higher
delinquent balances in deteriorating economic conditions.
Retail loans and advances at amortised cost
Gross L&A
£m
Impairment
allowance
£m
L&A net of
impairment
£m
Credit risk
loans
£m
CRLs % of
gross L&A
%
Loan
impairment
charges
£m
Loan loss
rates
bps
As at 31 December 2011
UK RBB 120,312 1,623 118,689 3,014 2.5 491 41
Europe RBBa 44,488 684 43,804 1,708 3.8 241 54
Africa RBB 26,363 731 25,632 2,362 9.0 386 146
Barclaycard 31,738 2,069 29,669 2,821 8.9 1,232 388
Barclays Corporateb 1,453 188 1,265 182 12.5 49 337
Barclays Wealth 16,784 79 16,705 329 2.0 23 14
Total 241,138 5,374 235,764 10,416 4.3 2,422 100
As at 31 December 2010
UK RBB 113,800 1,737 112,063 3,166 2.8 739 65
Europe RBBa 44,500 833 43,667 1,729 3.9 314 71
Africa RBB 32,499 1,002 31,497 3,367 10.4 439 135
Barclaycard 29,281 2,981 26,300 3,678 12.6 1,668 570
Barclays Corporateb 1,671 255 1,416 301 18.0 115 688
Barclays Wealth 13,584 75 13,509 330 2.4 21 15
Total 235,335 6,883 228,452 12,571 5.3 3,296 140
Notes
a Europe RBB includes loans and advances to business customers at amortised cost.
b Barclays Corporate primarily includes retail portfolios in India and UAE. For 2010 it also included retail portfolios in Russia which were sold in 2011.
96 Barclays PLC Annual Report 2011 www.barclays.com/annualreport