Barclays 2004 Annual Report Download - page 222

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Notes to the accounts
For the year ended 31st December 2004
52 Differences between UK GAAP and US GAAP accounting principles (continued)
(q) Securitisations (continued)
2004 Mortgages
Total Delinquent Net
loans loans write-offs
£m £m £m
Total receivables managed 8,020 – –
Less: receivables securitised(c) (4,538) – –
Assets on US GAAP Balanced Sheet 3,482 – –
Notes
(a) Delinquent loans are loans 90 days or more past due.
(b) Net of recoveries during the year.
(c) Securitised and derecognised from the balance sheet under US GAAP.
(r) Collateral
Under a repo (sale and repurchase agreement), an asset is sold to a counterparty with a commitment to repurchase it at a future date at an
agreed price. The Group engages in repos and reverse repos, which are the same transaction in the opposite direction, i.e. the Group buying an
asset with a fixed commitment to resell.
The following amounts were included in the balance sheet for repos and reverse repos and are reported on a net basis where permitted:
2004 2003 2002
£m £m £m
Reverse repos (assets)
Loans and advances to banks 61,075 50,392 41,001
Loans and advances to customers 58,304 49,962 42,505
119,379 100,354 83,506
Repos (liabilities)
Deposits by banks 42,969 39,810 37,857
Customer accounts 35,382 23,661 24,580
78,351 63,471 62,437
The average and maximum amount of reverse repos for 2004 were £133,256m and £164,242m (2003: £109,315m and £137,025m,
2002: £76,215m and £103,895m) respectively. The average and maximum amount of repos for 2004 were £100,939m and £133,987m
(2003: £84,040m and £109,445m, 2002: £61,416m and £92,219m).
Reverse repos and stock borrowing transactions are accounted for as collateralised loans. It is the Group’s policy to seek collateral at the outset
equal to 100% to 105% of the loan amount. The level of collateral held is monitored daily and further collateral calls made to bring the level of
cash held and the market value of collateral in line with the loan balance.
Under certain transactions including reverse repo and stock borrowing transactions the Group is allowed to sell or repledge the collateral held.
At 31st December 2004, the fair value of collateral held was £167,033m (2003: £126,085m) of which £122,888m (2003: £91,280m) related to
items that have been sold or repledged.
Repos and stock lending transactions are accounted for as secured borrowings. At 31st December 2004, the Group had given £114,568m
(2003: £58,316m) of its assets as collateral in respect of these transactions. Of the total collateral given £85,611m (2003: £44,002m) was on
terms which gave the recipient the right to sell or repledge, comprising debt securities of £83,833m (2003: £43,665m) and equity securities of
£1,778m (2003: £337m). The residual £28,957m (2003: £14,314m) was on terms by which the counterparty cannot sell or repledge comprised
£28,957m (2003: £14,024m) of debt securities and £nil (2003: £290m) of equity securities.
For the pledge of collateral to secure on-balance sheet liabilities see Note 35.
(s) Provisions for bad and doubtful debts
During 2004, there was a net write-back of £10m (2003: £nil, 2002: £2m write-back) in respect of credit losses on derivatives. £20m of the year
end specific provisions related to credit losses on derivatives (2003: £nil).
During 2004, there was a net write-back of £nil (2003: £14m, 2002: £nil) of the general provision in the respect of off-balance sheet exposures
(including derivatives). At 31st December 2004, £62m of the general provision (2003: £nil) was held in respect of off-balance sheet exposures
(including derivatives).
The specific provision for contingent liabilities and commitments is £nil (2003: £12m).