Barclays 2008 Annual Report Download - page 93

1
Business review
Barclays PLC Annual Report 2008 91
Table 3: Analysis of wholesale loans and advances net of impairment allowances
Settlement balance and
Corporate Government cash collateral Other wholesale Total wholesale
2008 2007 2008 2007 2008 2007 2008 2007 2008 2007
Wholesale £m£m £m £m £m £m £m £m £m £m
BCB 67,741 64,773 659 279 ––––68,400 65,052
Barclaycard 299 292 ––––––299 292
GRCB – Western Europe 15,017 10,721 32 4––151 139 15,200 10,864
GRCB –EmergingMarkets 5,283 3,276 1,709 1,193 ––437 285 7,429 4,754
GRCB – Absa 8,480 5,204 28 5––––8,508 5,209
Barclays Capital 72,796 51,038 3,760 1,220 79,418 46,639 50,826 36,671 206,800 135,568
BGI 834 211 ––––––834 211
Barclays Wealth 3,254 2,738 ––––––3,254 2,738
Head office 949 1,209 ––––––949 1,209
Total 174,653 139,462 6,188 2,701 79,418 46,639 51,414 37,095 311,673 225,897
Table 4: Analysis of Barclays Capital’sloans and advances at amortised cost
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
Loans and advances bank
Cash collateral and settlement balances 19,264 – 19,264 ––––
Interbank lending 24,086 51 24,035 48 0.2 40 17
Loans and advances to customers
Corporate lending 77,042 486 76,556 1,100 1.4 305 40
ABS CDO Super Senior 4,117 1,013 3,104 4,117 100.0 1,383 3,359
Other wholesale lending 23,933 246 23,687 478 2.0 208 87
Cash collateral and settlement balances 60,154 – 60,154 ––––
Total 208,596 1,796 206,800 5,743 2.8 1,936 93
Medium Business divisions. Deterioration in the Spanish commercial
and residential property markets led to higher impairment in GRCB
– Western Europe, while in GRCB – Absa, wholesale credit impairment
began to rise from a low base and credit indicators began to show
deterioration. The loan loss rate on the wholesale and corporate
portfolio rose to 82bp (2007: 52bp).
In the wholesale and corporate portfolios impairment allowances
increased 116% to £2,835m (31st December 2007: £1,312m).
Barclays largest corporate loan portfolios continue to be in
Barclays Capital and Barclays Commercial Bank. Barclays Capital’s
corporate loan book grew 43% to £72,796m in 2008, driven by the
decline in the value of Sterling relative to other currencies as well as
drawdowns on existing loan facilities and the extension of new loans at
current terms to financial and manufacturing institutions. Loans and
advances at amortised cost grew 5% in Barclays Commercial Bank
and was focused in lower-risk portfolios in Larger Business.
Portfolio growth rates were higher in the international businesses,
where Global Retail and Commercial Banking’s wholesale portfolios in
Western Europe, Emerging Markets and Absa grew by 40%, 56% and
63%, respectively.
Analysis of Barclays Capital wholesale loans and advances net of
impairment allowances
Barclays Capital wholesale loans and advances increased 53% to
£208,596m (2007: £136,082m). This was driven by a decline in the value
of Sterling relative to other currencies, increased drawdowns on existing
corporate lending facilities and the extension of new loans to corporate
clients at current terms. Additionally, continuing market volatility resulted
in increased cash collateral being placed with clients relating to OTC
derivatives.
The corporate lending portfolio, including leveraged finance,
increased 47% to £76,556m (2007: £52,258) primarily due to drawdowns
on existing loan facilities and the extension of new loans at current terms
to financial and manufacturing institutions.
Included within corporate lending and other wholesale lending
portfolios are £7,674m of loans backed by retail mortgage collateral.
Barclays Capital loans and advances held at fair value
Barclays Capital loans and advances held at fair value were £19,630m
(2007: £18,259m). These assets are primarily made up of US RMBS whole
loans and commercial real estate loans, £14,429m of which is discussed
within the credit market exposures.