Barclays 2003 Annual Report Download - page 53

Barclays PLC Annual Report 2003 51
Risk Management
Potential Credit Risk Lendings
Potential Credit Risk Lendings
Potential credit risk lendings (PCRLs) comprise non-
performing loans (NPLs) and potential problem loans
(PPLs). NPLs are loans where the customers have failed to
meet their commitments, either in part or in whole. PPLs
are loans which are current as to payment of principal and
interest, but where there exists serious doubt as to the
ability of the borrowers to comply with repayment terms
in the near future.
UK non-performing loans decreased by 1% (£26m) to £3,311m
(2002: £3,337m). Other European Union non-performing loans
increased by 34% (£58m) from £173m to £231m, reflecting growth
in the portfolio, including acquisitions. US non-performing loans
decreased by 49% (£361m) to £383m as the exposures in this category
were written off, restructured, upgraded, sold or otherwise worked out
at a faster rate than new non-performing loans arose. In the Rest of the
World non-performing loans decreased by 15%, to £230m.
The table that follows presents an analysis of non-performing loans
consistent with both UK and US practice and US Securities and Exchange
Commission guidelines. In conformance with UK practice, accruing loans
where interest is being suspended (with or without provisions) and other
accruing loans where specific provisions have been raised are shown
separately from non-accrual loans. Normal US banking practice would be
to place such loans on non-accrual status as reflected in the sub-total in
the table below.
The amounts are stated before deduction of the value of security held,
the specific provisions carried or interest suspended, all of which might
reduce the impact of an eventual default, should it occur.
Non-performing loans
Potential problem loans
0
600
200
400
800
1,000
1999 2000 2001 2002£m
1,600
1,400
1,200
2003
UK offices
Foreign offices
648 728
968 994
1,139
63
379
434 310
338
711
1,107
1,402 1,304
1,477
0
2,000
1,000
3,000
1999 2000 2001 2002£m
5,000
4,000
2003
UK offices
Foreign offices
504
2,105
3,377
3,871
4,526 4,155
2,609 628
2,749
908
2,963
1,189
3,337
844
3,311
Non-performing loans summary
2003 2002 2001 2000 1999
£m £m £m £m £m
Non-accrual loans 2,261 2,542 1,923 1,539 1,251
Accruing loans where interest is being suspended with or without provisions 646 611 561 496 436
Other accruing loans against which no provisions have been made 669 677 734 623 553
Sub total 3,576 3,830 3,218 2,658 2,240
Accruing loans 90 days or more overdue, against which no provisions have been made 575 690 648 713 361
Reduced rate loans 46568
Total non-performing loans 4,155 4,526 3,871 3,377 2,609
A geographical analysis of this table appears on the next page.