Barclays 2005 Annual Report Download - page 168

17 Loans and advances to customers (continued)
The geographical analysis is based on the location of the customer to which the lendings are made.
Effective interest rates are included in Note 55.
Loans and advances to customers include the following finance lease receivables:
2005 2004
£m £m
Gross investment in finance lease receivables
Not more than one year 2,038 1,351
Over one year but not more than five years 5,345 2,995
Over five years 5,252 6,535
12,635 10,881
Less unearned future finance income on finance leases (3,547) (3,943)
Net investment in finance leases
Not more than one year 1,524 998
Over one year but not more than five years 4,123 1,914
Over five years 3,441 4,026
Total 9,088 6,938
Unguaranteed residual values included in finance lease receivables:
Not more than one year 61 4
Over one year but not more than five years 113 7
Over five years 31 7
Total 205 18
The allowance for uncollectable finance lease receivables included in the allowance for impairment amounted to £11m at 31st December 2005
(2004: £14m).
Assets acquired in the year for renting under finance leases amounted to £2,674m (2004: £1,572m).
Barclays Asset and Sales Finance (BASF) specialises in asset-based lending and works with a broad range of international technology, industrial
equipment and commercial companies and provides customised finance programmes to help manufacturers, dealers and distributors of assets.
During the year, Barclays Mercantile Business Finance Limited, (a wholly owned subsidiary of Barclays Bank PLC and the main operating entity
within BASF) acquired a 51% share in Iveco Finance Holdings Limited. Iveco Finance Holdings Limited is the holding company for the Iveco Finance
group of companies, whose principal activity is the provision of hire purchase, finance leasing, instalment loans and contract and contract hire
solutions for the Iveco commercial vehicle operations.
Securitisations
Loans and advances to customers include balances that have been securitised but not derecognised, comprising both UK and overseas residential
mortgages and commercial and credit card loans. Beneficial interests in the loans were transferred to special purpose entities which in turn issued
floating rate debt securities. Barclays PLC and its subsidiaries are not obliged to support any losses that may be suffered by the noteholders and do
not intend to offer such support. The floating rate noteholders only receive payments of interest and principal to the extent that the special purpose
vehicles have received sufficient funds from the transferred loans and after certain expenses have been met. In the event of a deficiency, they have
no recourse whatsoever to the Group.
A proportion of the Barclaycard personal credit card and charge card portfolio in the UK was also securitised. The noteholders in this securitisation
have a proportionate interest in each balance in the portfolio.
The total amounts of loans subject to securitisation are £18,594m (2004: £4,314m) and the related funding received is £18,420m (2004: £3,859m)
(see Note 33), included in Debt Securities in issue.
Of the total loans securitised in 2005, £5bn relates to the securitisation of commercial loans utilising a credit default swap. Noteholders have
exposure to the credit risk of the securitised commercial loan portfolio and in the event of a loss, have no recourse to the Group.
The Bank participates in the securitisation through the provision of administration and other services, the provision of interest rate and currency
swaps and in the form of unsecured loan financing which is subordinate to the interests of the floating rate noteholders.
Notes to the accounts
For the year ended 31st December 2005
Barclays PLC
Annual Report 2005
166