Barclays 2005 Annual Report Download - page 63

Barclays PLC
Annual Report 2005 61
2.8
Industry Analysis
An industry analysis of customer loans is shown in the chart below.
These classifications have been prepared at the level of the borrowing
entity. This means that a loan to the subsidiary of a major corporation
is classified by the industry in which the subsidiary operates, even
though the parent’s predominant business may be in a different
industry.
(See also Table 6 on page 80.)
Excluding financial services, the chart shows that Barclays largest
sectoral exposures are to home loans, other personal and business &
other services. These categories are generally comprised of small loans,
have low volatility of credit risk outcomes, and are intrinsically highly
diversified.
The loan-to-value ratios (LTV) on the Group’s UK home loan portfolio
are indicated in the next chart.
<70%
Percentage of the mortgage portfolio
70-80% 80-90% >90%
65
19
12
4
70
60
50
40
30
20
10
0
Analysis of loan-to-value ratios of mortgages on the UK home
loan portfolio
(At most recent credit decision)
2005
2004(b)
66
19
11
4
02025105 15 30354045
Loans and advances to customers by industry –
(% of total)
Financial services
Other personal
Business & other
Wholesale & retail
Energy & water
Construction
Agriculture
Transport
Home loans
Property
Finance lease
Manufacturing
2004(a)(b)
2005
The valuations in the chart are those which applied at the last credit
decision on each loan, i.e. when the customer last requested an
increase in the limit or, if there has been no increase, at inception of the
loan and shows that the business flows (new business versus loans
redeemed) has not materially changed the risk profile of the portfolio.
The impact of house price inflation, despite having slowed over recent
months, will result in a reduction in LTV ratios within the mortgage
book on a current valuation basis. On this basis, LTV on the mortgage
book averaged 35% at the end of 2005 (2004: 35%). This ratio is a
point in time analysis of the stock with LTV updated to current house
prices by reference to an external price index and as a result may be
influenced by external market conditions as well as changes in the
stock of loans.
Maturity Analysis
The analysis by contractual maturity, shown in the chart below,
indicates that a third of loans to customers have a maturity of more
than five years, the majority of which are mortgages.
(See also Table 12 on page 83.)
2003 2004(b) 2005 Over five years
Over one year but not
more than five years
Over three months but
not more than one year
Not more than
three months
On demand
Maturity analysis of loans and advances to customers %
100
0
20
40
60
80
IFRSUK
GAAP
Notes
(a) 2004 has been restated to reflect location of the customer rather than
location of the office. As a result, overseas customers have been reclassified
into their correct industry allocation.
(b) Does not reflect the application of IAS 32, IAS 39 and IFRS 4 which became
effective from 1st January 2005. The 2004 analysis excludes reverse
repurchase agreements. Further explanation is provided on page 134.