Barclays 2014 Annual Report Download - page 175

barclays.com/annualreport Barclays PLC Annual Report 2014 I 173
Impairment
Impairment allowances
Impairment allowances decreased 25% to £5,455m, primarily within corporate loans as a result of the reclassification of Spanish loans now held
for sale and a write-off of a single name exposure within BNC.
Movements in allowance for impairment by asset class (audited)
At beginning
of year
£m
Acquisitions
and
disposals
£m
Unwind of
discount
£m
Exchange
and other
adjustmentsa
£m
Amounts
written off
£m
Recoveries
£m
Amounts
charged to
income
statement
£m
Balance at
31 December
£m
2014
Home loans 788 – (23) (200) (191) 17 156 547
Credit cards, unsecured and other retail
lending 3,603 13 (116) (307) (1,679) 126 1,705 3,345
Corporate loans 2,867 – (14) (540) (1,167) 78 339 1,563
Total impairment allowance 7,258 13 (153) (1,047) (3,037) 221 2,200 5,455
2013
Home loans 855 – (38) (147) (199) 30 287 788
Credit cards, unsecured and other retail
lending 3,780 (5) (132) 50 (2,121) 123 1,908 3,603
Corporate loans 3,164 – (9) (163) (1,023) 48 850 2,867
Total impairment allowance 7,799 (5) (179) (260) (3,343) 201 3,045 7,258
Management adjustments to models for impairment
Management adjustments to models for impairment are applied in order to factor in certain conditions or changes in policy that are not
incorporated into the relevant impairment models, or to ensure that the impairment allowance reflects all known facts and circumstances at the
period end. Adjustments typically increase the model derived impairment allowance. Where applicable, management adjustments are reviewed
and incorporated into future model development.
Management adjustments to models of more than £10m with respect to impairment allowance in our principal portfolios are presented below.
Principal portfolios that have management adjustments greater than £10m (unaudited)
As at 31 December 2014
Total management
adjustments to
impairment stock,
including forbearance
£m
Proportion of total
impairment stock
%
PCB
UK home loans 52 55
UK personal loans 48 10
UK overdrafts 30 19
UK large corporate & business lending 98 14
Africa
South Africa home loans 22 11
Barclaycard
UK cards 62 5
UK home loans: Primarily to offset the benefits that recent increases in the House Price Index have had on impairment models, which may not be
sustainable, and to adjust for the emerging incidence of interest-only loans reaching maturity.
UK personal loans: Principally to incorporate impairment policy requirements that have not yet been fully embedded into the models, and to
increase coverage on older accounts that will be written off, once legacy remediation relating to the Consumer Credit Act concludes.
UK overdrafts: To increase coverage on dormant accounts and to incorporate impairment policy requirements that have not yet been fully
embedded into models.
UK large corporate & business lending: To increase coverage on higher risk business segments that are more susceptible to movements in macro
economic conditions.
South Africa home loans: Primarily to incorporate the uncertainty in the macroeconomic outlook.
UK cards: Predominantly to increase coverage on forbearance programmes and accounts in recoveries.
Note
a 2014 exchange and other adjustments includes the reclassification of impairments held against Spanish loans now held for sale.
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