Barclays 2014 Annual Report Download - page 161

barclays.com/annualreport Barclays PLC Annual Report 2014 I 159
Exposure to interest-only owner-occupied home loans excluding P&P interest onlya
As at 31 December 2014 2013
Interest-only balances (£m) 35,328 37,268
Interest-only home loans maturity years (£m):
2015 649 738
2016 864 985
2017 1,180 1,323
2018 1,249 1,377
2019 1,195 1,284
2020-2024 7,218 7,581
Post 2024 22,694 23,119
Total Impairment coverage (bps) 8 2
Marked to market LTV: total balances (%)
Balance weighted 48.7 54.2
Valuation weighted 37.6 42.4
For >100% LTVs: (£m)
Balances 349 765
Marked to market collateral 302 669
Overview of performing portfolio
Performing balances (£m) 35,155 37,050
Marked to market LTV: performing balances (%)
Balance weighted 48.6 55.0
Valuation weighted 37.5 42.3
Overview of non-performing portfolio
Non-performing balances (£m) 173 218
Non-performing proportion of interest only balances excluding P&P IO (%) 0.5 0.6
Marked to market LTV: non-performing balances (%)
Balance weighted 66.2 71.7
Valuation weighted 54.1 56.5
The average balance weighted LTV for interest-only owner-occupied balances reduced to 48.7% (2013: 54.2%) as property prices appreciated.
The increase in impairment coverage to 8bps (2013: 2bps) was due to (i) enhancement in credit risk methodology wherein management
adjustments to impairment allowances were allocated more granularly to their appropriate segments; and (ii) a broadening of the ‘High Risk’
definition used on interest-only mortgages. The overall impairment coverage of the total home loans portfolio remained unchanged.
Exposures to mortgage current accounts (MCA) reserves
The MCA reserve is a secured overdraft facility previously available to home loan customers in the UK on either a fully amortising or interest-only
mortgage loan, which allows customers to borrow against the equity in their home. It permits draw-down up to an agreed available limit on a
separate but connected account to the main mortgage loan facility. The balance drawn must be repaid on redemption of the mortgage.
Of the total 944k home loan customers in the UK, 505k have MCA reserves, with total reserve limits of £17.9bn (2013: £18.3bn).
As at 31 December 2014 2013
Total outstanding of home loans with MCA reserve balances (£bn) 62.2 72.7
As a proportion of outstanding UK home loan balances (%) 49.1 59.2
Home loan customers with active reserves (000s) 505 573
Total reserve limits (£bn) 17.9 18.3
Utilisation rate (%) 32.3 31.9
Marked To market LTV: balance weighted (%) 47.7 53.9
Total outstanding balances reflect the aggregate of the mortgage account and the drawn reserve. The 14% decrease in balances to £62.2bn was
due to reductions in the main mortgage account following a withdrawal of the product from sale in December 2012. The rate of reduction was
consistent with the previous year.
Utilisation was broadly steady at 32.3% (2013: 31.9%), while the average balance weighted LTV reduced to 47.7% (2013: 53.9%) due to an
increase in average house prices and paydown of the main mortgage loan.
Although the product has been withdrawn from sale, existing customers can continue to draw against their available reserves.
Note
a Analysis excludes the interest only portion of the part and part book which contributes £6.6bn (2013: £7.3bn) to the total interest-only balance of £41.9bn (2013: £44.5bn). Total
exposure on the part and part book is £9.8bn (2013: £11bn) and represents 7% of total UK home loans portfolio.
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