Barclays 2003 Annual Report Download - page 45

Barclays PLC Annual Report 2003 43
Analysis of Loans and Advances
Throughout the remainder of the risk management section, a regional
presentation of data will be found with disclosures by the United
Kingdom, other European Union countries, the United States and the rest
of the world. In all cases, unless otherwise indicated, the information
refers to the location of the office where the loan was booked.
Loans and advances grew over the year, increasing by £28.2bn (10.7%)
to £291.8bn at 31st December 2003.
The management of retail credit risk is different from wholesale credit
risk. In retail, where there are millions of loans and advances, both initial
and ongoing account maintenance decisions are driven by efficient,
smart systems which have been developed using the Group’s
considerable accumulated experience. In contrast, wholesale loans are
more complex and are individually considered, although analytical tools
still have a major role.
Outcomes also differ. Typically credit losses in retail portfolios are more
stable (though not necessarily lower) than those in wholesale portfolios
where the default of an individual large loan can have a significant
impact. The table below shows the Group’s retail and wholesale loan
exposures.
Loans and advances
2003 2002
£m £m
Retail businesses
Banks 1,495 1,748
Customers 100,774 90,625
Total retail businesses 102,269 92,373
Wholesale businesses
Banks 60,445 56,508
Customers 129,106 114,767
Total wholesale businesses 189,551 171,275
Total 291,820 263,648
The analysis above is based on the business unit in which the loans are
booked. Those businesses that deal primarily with personal customers,
such as Personal Financial Services and Barclaycard, are included under
retail businesses, even though they have some wholesale customers.
Similarly, businesses that deal primarily with corporate, institutional and
sovereign clients are included in wholesale businesses, even though they
may have some personal customers.
In subsequent pages, considerable detail on loans and advances is
provided. A principal segmentation is between exposures to banks and
to customers as introduced in the next table.
Loans and advances by banking and trading books
2003
Customers Banks Total
£m £m £m
Banking book 170,919 17,270 188,189
Trading book 58,961 44,670 103,631
Total 229,880 61,940 291,820
2002
Customers Banks Total
£m £m £m
Banking book 160,216 15,451 175,667
Trading book 45,176 42,805 87,981
Total 205,392 58,256 263,648
The amounts shown in the tables above are before deduction of
provisions and interest in suspense. The banking book comprises
loans and advances which are intended to be held to maturity or until
repayment by the customer. In contrast the loans and advances on the
trading book are held for sale.
Risk Management
Analysis of Loans and Advances