Barclays 2003 Annual Report Download - page 58
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Provisions balance ratios As at 31st December
2003 2002 2001 2000 1999
%% % % %
Excluding trading business
Provisions balance at end of year as a percentage of loans and advances
at end of year:
Specific provisions 1.19 1.29 1.22 1.06 1.19
General provisions 0.42 0.42 0.46 0.51 0.61
1.61 1.71 1.68 1.57 1.80
Including trading business
Provisions balance at end of year as a percentage of loans and advances
at end of year:
Specific provisions 0.77 0.86 0.85 0.79 0.83
General provisions 0.27 0.28 0.32 0.38 0.42
1.04 1.14 1.17 1.17 1.25
Treatment of interest on debts that have specific provisions
If the collection of interest is doubtful, it is credited to a suspense account and excluded from interest income in the profit and loss account. Although
interest continues to be charged to the customer’s account, the amount suspended is netted against the relevant loan. Loans on which interest is
suspended are not reclassified as accruing interest until interest and principal payments are up-to-date and future payments are reasonably assured.
If the collection of interest is considered remote, interest is no longer applied.
Treatment of collateral assets acquired in exchange for advances
Assets acquired in exchange for advances in order to achieve an orderly realisation continue to be reported as advances. The assets acquired are
recorded at the carrying value of the original advance as at the date of the exchange and any impairment is accounted for as a specific provision.
Movements in provisions for bad and doubtful debts
2003 2002 2001 2000 1999
£m £m £m £m £m
Provisions balance at beginning of year 2,998 2,716 2,353 1,983 1,943
Acquisitions and disposals 62 (11) 46 119 (10)
Exchange and other adjustments (18) (77) (1) 4 (13)
Amounts written off (1,474) (1,220) (973) (683) (651)
Recoveries 113 106 142 113 93
Provisions charged against profit 1,347 1,484 1,149 817 621
Provisions balance at end of year 3,028 2,998 2,716 2,353 1,983
A geographical analysis of the values in this summary table follows in the next three tables.
Risk Management
Provisions for Bad and Doubtful Debts
56