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Table 18: Potential problem loans

IFRS UK GAAP

2006 2005 2004(a) 2003 2002

£m £m £m £m £m

United Kingdom 465 640 658 989 852

Other European Union 32 26 32 23 –

United States 21 12 27 259 241

Africa 240 248 67 53 63

Rest of the World 3314 3 6

Potential problem loans 761 929 798 1,327 1,162

(Also see chart on page 82.)

Table 19: Interest foregone on non-performing loans

2006 2005 2004

£m £m £m

Interest income that would have been recognised under the original contractual terms

United Kingdom 357 304 266

Rest of the World 70 52 52

Total 427 356 318

Interest income of approximately £72m (2005: £29m, 2004: £59m) from such loans was included in profit, of which £49m (2005: £20m, 2004: £54m)

related to domestic lending and the remainder related to foreign lending.

In addition, a further £98m (2005: £76m, 2004: £n/a) was recognised arising from impaired loans. Following impairment, interest income is

recognised using the original effective rate of interest which was used to discount the expected future cash flows for the purpose of measuring the

impairment loss. £88m (2005: £70m, 2004: £n/a) of this related to domestic impaired loans and the remainder related to foreign impaired loans.

Table 20: Analysis of impairment/provision charges

IFRS UK GAAP

2006 2005 2004(a) 2003 2002

£m £m £m £m £m

Impairment charge/net specific provisions charge

United Kingdom 1,880 1,382 1,021 1,132 1,041

Other European Union 92 75 102 37 14

United States 12 76 57 84 385

Africa 143 37 27 21 24

Rest of the World (53) 4 103 46 22

Impairment on loans and advances 2,074 1,574 n/a n/a n/a

Impairment on available for sale assets 86 4 n/a n/a n/a

Impairment charge 2,160 1,578 n/a n/a n/a

Total net specific provisions charge n/a n/a 1,310 1,320 1,486

General provisions (release)/charge n/a n/a (206) 27 (2)

Other credit provisions (6) (7) (11) – –

Impairment/provision charges 2,154 1,571 1,093 1,347 1,484

(Also see chart on page 84.)

Barclays PLC

Annual Report 2006 103

Operating review

Note

(a) Does not reflect the application of IAS 32, IAS 39 and IFRS 4 which became effective from 1st January 2005.