Barclays 2006 Annual Report Download - page 217

Barclays PLC
Annual Report 2006 213
Financial statements
3
39 Contingent liabilities and commitments (continued)
The following tables summarise the nominal principal amount of contingent liabilities and commitments with off-balance sheet risk:
2006 2005
£m £m
Acceptances and endorsements 287 283
Guarantees and letters of credit pledged as collateral security 31,252 38,035
Other contingent liabilities 7,880 8,825
Contingent liabilities 39,419 47,143
Documentary credits and other short-term trade related transactions 414 380
Undrawn note issuance and revolving underwriting facilities:
Forward asset purchases and forward deposits placed 360 43
Standby facilities, credit lines and other 204,730 203,362
Commitments 205,504 203,785
Capital commitments
At 31st December 2006 the commitments for capital expenditure under contract amounted to £9m (2005: £1m).
Assets pledged
Assets are pledged as collateral to secure liabilities under repurchase agreements, securitisations and stock lending agreements or as security
deposits relating to futures and options. The aggregate amount of secured liabilities is £108,928m (2005: £105,679m).
The following table summarises the nature and carrying amount of the assets pledged as security against these liabilities:
2006 2005
£m £m
Trading portfolio assets 77,255 79,648
Loans and advances to banks 5,952 4,480
Loans and advances to customers 17,763 14,094
Available for sale investments 20,495 26,818
Other 455
Assets pledged 121,469 125,095
40 Legal proceedings
Barclays has for some time been party to proceedings, including a class action, in the United States against a number of defendants following the
collapse of Enron; the class action claim is commonly known as the Newby litigation. On 20th July 2006 Barclays received an Order from the United
States District Court for the Southern District of Texas Houston Division (the 'Court') which dismissed the claims against Barclays PLC, Barclays Bank
PLC and Barclays Capital Inc. in the Newby litigation. On 4th December 2006, in response to the plaintiffs’ procedural objections, the Court stayed
Barclays dismissal from the proceedings and allowed the plaintiffs to file a supplemental complaint. The Court will consider the plaintiffs’
supplemental complaint in connection with consideration of a summary judgment motion filed by Barclays.
Barclays considers that the Enron related claims against it are without merit and is defending them vigorously. It is not possible to estimate Barclays
possible loss in relation to these matters, nor the effect that they might have upon operating results in any particular financial period.
Barclays has been in negotiations with the staff of the US Securities and Exchange Commission with respect to a settlement of the Commission’s
investigations of transactions between Barclays and Enron. Barclays does not expect that the amount of any settlement with the Commission would
have a significant adverse effect on its financial position or operating results.
On 3rd November 2006 Barclays announced that it had reached a settlement in principle with Enron in the Enron bankruptcy proceedings.
A settlement agreement was signed on 30th November 2006 and became effective on 3rd January 2007. The settlement has had no negative impact
on Barclays earnings as an adequate provision had already been made for the likely cost in prior periods. In reaching the settlement Barclays has
denied any wrongdoing or liability.
Barclays is engaged in various other litigation proceedings both in the United Kingdom and a number of overseas jurisdictions, including the United
States, involving claims by and against it which arise in the ordinary course of business. Barclays does not expect the ultimate resolution of any of the
proceedings to which Barclays is party to have a significant adverse effect on the financial position of the Group and Barclays has not disclosed the
contingent liabilities associated with these claims either because they cannot reasonably be estimated or because such disclosure could be
prejudicial to the conduct of the claims.