Barclays 2008 Annual Report Download - page 92

90 Barclays PLC Annual Report 2008 |Find out more at www.barclays.com/annualreport08
based on location of customers. The majority of Barclays exposure is now
outside the UK, reflecting higher rates of growth in the international
portfolios as well as the effects of currency movements in 2008.
Barclays also actively monitors exposure and concentrations to sub-
investment grade countries (see country risk policy, page 86). Details of the
15 largest sub-investment grade countries, by limit, are shown in figure 3.
Contractual maturity represents a further area of potential
concentration. The analysis shown in figure 4 indicates that just over 40%
of loans to customers have a maturity of more than five years; the majority
of this segment comprises secured home loans.
Barclays risk is therefore spread across a large number of industries
and customers and in the case of home loans, for example, well secured.
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 through
the parent’s predominant sphere of activity may be in a different industry.
Corporate and wholesale loans and advances
Gross loans and advances to wholesale customers and banks grew 38%
to £314,508m (31st December 2007: £227,209m), largely due to Barclays
Capital where loans and advances increased £72,514m (53%).
Credit Risk Loans (CRLs) rose 59% to £8,192m (31st December
2007: £5,157m). As a percentage of gross loans and advances, CRLs
increased 13% to 2.6% (31st December 2007: 2.3%). CRL balances were
higher in all businesses, reflecting the downturn in economic conditions,
with some deterioration across default grades, higher levels of Early
Warning List balances and a rise in impairment and loan loss rates in most
wholesale portfolios. The largest rises were in Barclays Capital and GRCB
– Western Europe.
Impairment charges on loans and advances rose 119% (£1,403m) to
£2,580m (31st December 2007: £1,177m), primarily in Barclays Capital,
although all other businesses were higher than the previous year.
Impairment in Barclays Commercial Bank rose in both the Larger and
Table 2:Wholesale loans and advances to customers and banks
Gross Loans and CRLs%of
loans and Impairment advances net Credit risk gross loans Impairment Loan loss
advances allowance of impairment loans and advances charge rates
Asat 31st December 2008 £m £m £m £m %£m basis points
Barclays Commercial Bank 68,904 504 68,400 1,181 1.70 414 60
Barclaycard 301 2 299 20 6.60 11 365
GRCB – Western Europe 15,432 232 15,200 578 3.70 125 81
GRCB – Emerging Markets 7,551 122 7,429 191 2.50 36 48
GRCB – Absa 8,648 140 8,508 304 3.50 19 22
Barclays Capital 208,596 1,796 206,800 5,743 2.80 1,936 93
Barclays Global Investors 834 – 834 ––––
Barclays Wealth 3,282 28 3,254 174 5.30 28 85
Head office 960 11 949 1 0.10 11 115
Total 314,508 2,835 311,673 8,192 2.60 2,580 82
Asat 31st December 2007
Barclays Commercial Bank 65,535 483 65,052 956 1.50 292 45
Barclaycard 295 3 292 17 5.80 9 305
GRCB – Western Europe 10,927 63 10,864 93 0.90 19 17
GRCB – Emerging Markets 4,833 79 4,754 119 2.50 10 21
GRCB – Absa 5,321 112 5,209 97 1.80 11 21
Barclays Capital 136,082 514 135,568 3,791 2.80 833 61
Barclays Global Investors 211 – 211 ––––
Barclays Wealth 2,745 7 2,738 47 1.70 ––
Head office 1,260 51 1,209 37 2.90 3 24
Total 227,209 1,312 225,897 5,157 2.30 1,177 52
Risk management
Credit risk management
Loans and advances
Fig. 3: Credit exposure to sub-investment grade countries £m
Egypt
Brazil
Kenya
Ghana
Zambia
Pakistan
Ukraine
Uganda
Jordan
Turkey
Mozambique
Philippines
Indonesia
Tanzania
Angola
3,0002,5002,0001,5001,0005000
08
07
4,0003,500
Fig. 4:Maturity analysis of loans and advances to customers %
1
2
3
4
5
1
2
3
4
5
1On demand
2Not more than
three months
3Over three months
but not more than
one year
4Over one year but
not more than five
years
5Over five years
20072008