Barclays 2009 Annual Report Download - page 108

106 Barclays PLC Annual Report 2009 www.barclays.com/annualreport09
Risk management
Credit risk management
continued
Retail Credit Risk
Loans and advances to customers in the retail portfolios increased by
£11,261m (6%) to £212,849m. Balances grew in most businesses with the
largest increase in UK Retail Banking, which increased by £4,981m (5%) to
£101,064m primarily in the UK Home Finance portfolio. There was modest
growth in balances to local businesses but a moderate decline in balances
relating to unsecured loans and overdrafts. GRCB – Western Europe
increased by £2,517m (6%), which primarily reflected growth in Italy and
Portugal following the expansion of the franchise, principally across
mortgages and cards. This growth was partially offset by the appreciation
of the Euro against Sterling. The increase of £2,611m (11%) of balances
in GRCB – Absa was due to the appreciation of the Rand against Sterling
during 2009. In Rand terms, balances fell by 3%. Balances in GRCB –
Emerging Markets were £483m (12%) lower, in part reflecting movements
in Sterling against local currencies.
Total home loans to retail customers rose by £9,254m (7%) to
£149,099m (31st December 2008: £139,845m). The UK Home Finance
portfolios within UK Retail Banking grew 7% to £87,943m (31st December
2008: £82,303m).
Unsecured retail credit (credit card and unsecured loans) portfolios fell
7% to £37,733m (31st December 2008: £40,437m).
In the retail portfolios, the impairment charge against loans and
advances rose by £1,584m (68%) to £3,917m (2008: £2,333m) as
economic conditions, particularly unemployment, deteriorated across all
regions. Policy and methodology enhancements, currency movements and
portfolio maturation also had an impact. The largest increase was in
Barclaycard, which increased by £695m (64%) to £1,781m, mainly driven
by higher delinquencies and deteriorating economic conditions in the United
Kingdom and the United States as well as portfolio maturation. The increase
of £334m (55%) to £936m in UK Retail Banking was primarily due to lower
recoveries and policy and methodology enhancements. Impairment
charges in GRCB – Western Europe and GRCB – Emerging Markets were
impacted by increased delinquency rates as credit conditions deteriorated
particularly in Spain and India. Impairment increased in GRCB – Absa as a
result of high delinquency levels due to consumer indebtedness and
increased debt counselling balances following the enactment of the 2007
National Credit Act.
The loan loss rate across the Group’s retail portfolios for 2009 was
184bps (2008: 116bps).
As we enter 2010, the principal uncertainties relating to the
performance of the Group’s retail portfolios are:
– the extent and sustainability of economic recovery in the UK, US, Spain
and South Africa as governments consider how and when to withdraw
stimulus packages;
– the dynamics of unemployment in those markets and the impact on
delinquency and charge-off rates;
Retail loans and advances to customers at amortised cost
Loans & CRLs %
Gross advances of gross
loans & Impairment net of Credit risk loans & Impairment Loan loss
advances allowance impairment loans advances charge rates
£m £m £m £m % £m
bp
As at 31.12.09
UKRB 101,064 1,587 99,477 3,108 3.1 936 93
Barclaycard 29,460 2,670 26,790 3,392 11.5 1,781 605
GRCB WE 41,514 689 40,825 1,411 3.4 335 81
GRCB EM 3,521 474 3,047 551 15.6 331 940
GRCB Absa 27,288 655 26,633 2,573 9.4 500 183
Barclays Wealth 10,002 56 9,946 306 3.1 34 34
Total 212,849 6,131 206,718 11,341 5.3 3,917 184
As at 31.12.08
UKRB 96,083 1,134 94,949 2,403 2.5 602 63
Barclaycard 29,390 1,677 27,713 2,566 8.7 1,086 370
GRCB WE 38,997 306 38,691 798 2.0 172 44
GRCB EM 4,004 187 3,817 175 4.4 129 322
GRCB Absa 24,677 411 24,266 1,518 6.2 328 133
Barclays Wealth 8,437 24 8,413 48 0.6 16 19
Total 201,588 3,739 197,849 7,508 3.7 2,333 116
Home loans Cards and unsecured loans Other retail Total retail
31.12.09 31.12.08 31.12.09 31.12.08 31.12.09 31.12.08 31.12.09 31.12.08
£m £m £m £m £m £m £m £m
UK Retail Banking 87,943 82,303 7,329 8,294 4,205 4,352 99,477 94,949
Barclaycard ––21,564 23,224 5,226 4,489 26,790 27,713
GRCB – Western Europe 34,592 33,807 3,513 4,423 2,720 461 40,825 38,691
GRCB – Emerging Markets 452 556 2,502 2,872 93 389 3,047 3,817
GRCB – Absa 20,492 18,411 1,003 43 5,138 5,812 26,633 24,266
Barclays Wealtha 5,620 4,768 1,822 1,581 2,504 2,064 9,946 8,413
Total 149,099 139,845 37,733 40,437 19,886 17,567 206,718 197,849
Note
a2008 Barclays Wealth analysis of retail loans and advances to customers has been
reanalysed to reflect changes in the classification of assets.