Barclays 2007 Annual Report Download - page 127

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Business review
Barclays PLC Annual Report 2007 125
Table 30: Total impairment allowance/(provision) coverage of credit risk loans
IFRS UK GAAP
2007 2006 2005 2004a2003
%%%% %
United Kingdom 56.6 64.2 64.6 68.1 74.2
Other European Union 60.9 65.1 70.1 60.9 71.4
United States 9.5 64.9 52.8 57.0 39.2
Africa 62.1 73.2 74.3 68.4 54.5
Rest of the World 86.5 100.0 68.7 71.9 94.1
Total coverage of credit risk loans 39.1 65.6 66.2 66.9 71.5
Total coverage of credit risk loans excluding ABS CDO Super Senior exposure 55.6 65.6 66.2 66.9 71.5
Table 31: Total impairment allowance/(provision) coverage of potential credit risk lending (CRLs and PPLs)
IFRS UK GAAP
2007 2006 2005 2004a2003
%%%% %
United Kingdom 51.8 57.3 54.6 56.5 57.7
Other European Union 55.1 61.0 65.9 55.6 65.0
United States 7.6 57.1 50.4 52.3 23.4
Africa 43.4 51.5 57.8 43.5 39.9
Rest of the World 86.5 91.0 67.6 65.9 90.9
Total coverage of potential credit risk lending 33.0 57.0 56.2 56.0 54.6
Total coverage of potential credit risk lenders excluding ABS CDO
Super Senior exposure 49.0 57.0 56.2 56.0 54.6
Allowance coverage of credit risk loans and potential credit risk loans excluding the drawn ABS CDO Super Senior exposure decreased to 55.6%
(31st December 2006: 65.6%) and 49.0% (31st December 2006: 57.0%), respectively. The decrease in these ratios reflected a change in the mix of
credit risk loans and potential credit risk loans: unsecured retail exposures, where the recovery outlook is relatively low, decreased as a proportion of the
total as the collections and underwriting processes were improved. Secured retail and wholesale and corporate exposures, where the recovery outlook
is relatively high, increased as a proportion of credit risk loans and potential credit risk loans.
Allowance coverage of ABS CDO Super Senior credit risk loans was low relative to allowance coverage of other credit risk loans since substantial
protection against loss is also provided by subordination and hedges. On ABS CDO Super Senior exposures, the combination of subordination,
hedging and writedowns provide protection against loss levels to 72% on US sub-prime collateral as at 31st December 2007.
Note
aDoes not reflect the application of IAS 32, IAS 39 and IFRS 4 which became effective
from 1st January 2005.