Barclays 2010 Annual Report Download - page 106

Risk management
Credit risk management continued
The recoveries impairment coverage ratios as at 31st December 2010 were
83.9% for UK Cards (2009: 81.3%), 82.5% for UK Loans (2009: 80.7%),
and 93.8% for US Cards (2009: 91.7%).
Recoveries impairment coverage ratio against UK Cards, UK Loans and
US Cards improved during 2010.
Retail Forbearance Programmes
Barclays forbearance programmes with the largest impairment allowances
were in the Credit Cards and Unsecured Loans portfolios. Forbearance
programme balances and impairment coverage ratios within the Group’s
principal Credit Cards and Unsecured Loans portfolios as at 31st
December 2010 were:
– UK Cards: Balances £875m, Impairment Coverage 35.1%
(2009: £942m, 28.1%);
– UK Loans: Balances £215m, Impairment Coverage 31.7%
(2009: £202m, 18.8%); and
– US Cards: Balances £150m, Impairment Coverage 18.4%
(2009: £198m, 20.5%).
The impairment coverage of UK Cards and Loans Forbearance
Programmes improved during 2010.
The impairment coverage of US Cards Forbearance Programmes
decreased as a result of an improvement in portfolio mix to lower
delinquency cycles, which are impaired at lower rates.
In addition, the Group has forbearance programmes on secured portfolios,
principally Home Loans in the UK and South Africa, against which
appropriate impairment allowances are held in line with the Group’s
impairment policy. Due to the value of the security held against these
loans, impairment allowances held against our UK and South African
Home Loan balances in forbearance are less significant than those held
against Credit Cards and Unsecured Loans in forbearance.
Other Retail Lending
Other Retail Lending net of impairment was £21,226m (2009: £19,259m).
This balance primarily consisted of the Local Business portfolio in UK Retail
Banking (20%), the Barclays Partner Finance (9%) and FirstPlus (16%)
portfolios in Barclaycard, Absa Vehicle and Asset Finance (15%) and other
secured lending portfolios in Barclays Wealth (26%).
Impairment charges on these portfolios decreased 10% to £453m (2009:
£506m). Impairment charges on the Barclays Partner Finance portfolio
decreased 5% to £106m (2009: £111m) and on the UK Secured Lending
portfolio (FirstPlus) 31% to £112m (2009: £163m) driven by improved
economic conditions, previous credit risk actions and, in the case of
FirstPlus, the run-off of the portfolio. Impairment charges on the Absa
Vehicle and Asset Finance portfolio decreased 12% to £73m (2009: £83m)
reflecting the impact of exchange rate movements. Impairment charges
on the other secured lending in Barclays Wealth reduced by 54% to £6m
(2009: £13m) due to impairment in Spain in 2009 not recurring.
Impairment charges on the Local Business portfolio in UK Retail Banking
increased 15% to £156m (2009: £136m).
104 Barclays PLC Annual Report 2010 www.barclays.com/annualreport10