Barclays 2005 Annual Report Download - page 68

Barclays PLC
Annual Report 2005
66
Risk management
Allowances for Impairment
Impairment allowances/provisions stock coverage of non-
performing loans and potential credit risk loans (NPLs and PPLs)
(See also Table 31 on page 94.)
(See also Table 32 on page 94.)
Including Absa, the NPL and PCRL coverage ratios increased to 66.2%
and 56.2% respectively at the end of 2005. These ratios are higher
than those excluding Absa due to the fact that Absa has a higher
proportion of retail lending which, in general, tends to carry a higher
level of coverage than corporate lending.
Excluding Absa, coverage of NPLs and PCRLs by the stock of
impairment allowances, at 64.8% (2004: 66.9%) and 55.5%
(2004: 56.0%) were broadly in line with those reported at
31st December 2004.
Write-offs
Debts are written off to the extent that there is no realistic prospect
of a change in the customer’s condition, or where local conditions
dictate, and the whole or part of the debt is considered irrecoverable.
Total write-offs increased to £1,587m (2004: £1,582m).
UK GAAP IFRS
2001 2002 2003 2004(a) 2005
70
Impairment/provisions coverage of potential credit risk loans %
60
50
40
30
20
10
0
52.9 52.8 54.6 56.2
56.0
2001 2002 2003 2004(a) 2005
70.4 71.5
66.2
66.9
80
Impairment/provisions coverage of non-performing loans %
70
60
50
40
30
20
10
0
65.9
UK GAAP IFRS
Note
(a) Does not reflect the application of IAS 32, IAS 39 and IFRS 4 which became
effective from 1st January 2005. Further explanation is provided on page 134.