Barclays 2011 Annual Report Download - page 101

Credit cards, overdrafts and unsecured loans
The principal portfolios listed below account for 79% of total credit cards, overdrafts and unsecured loans in the Group’s retail portfolios. Total credit
cards, overdrafts and unsecured loans increased 1% primarily due to increased lending in UK Cards and the acquisitions of credit card portfolios in 2011.
Principal portfolios
Gross loans
and
advances
£m
30 day
arrears
%
90 day
arrears
%
Gross
charge-off
rates
%
Recoveries
proportion
of
outstanding
balances
%
Recoveries
impairment
coverage
ratio
%
As at 31 December 2011
UK cardsa13,162 2.7 1.2 6.0 5.1 85.2
US cardsb8,303 3.1 1.5 7.6 3.5 92.1
UK personal loansc5,166 3.4 1.7 6.5 19.0 82.8
Barclays Partner Finance 2,122 2.4 1.3 4.6 6.3 84.8
South Africa cardsd1,816 4.9 2.7 5.5 6.7 72.9
Europe RBB cardse1,684 5.9 2.6 10.1 13.8 89.5
Italy salary advance loansf1,629 2.6 1.3 6.3 6.6 11.7
South Africa personal loans 1,164 6.4 3.9 8.3 6.9 72.4
UK overdrafts 1,322 6.0 3.9 9.7 17.5 90.6
As at 31 December 2010
UK cards 12,297 3.4 1.5 8.4 9.1 83.9
US cards 7,453 4.6 2.5 12.2 8.1 93.8
UK personal loansc5,756 4.7 2.6 7.9 18.5 82.5
Barclays Partner Finance 2,143 2.8 1.3 6.8 8.3 94.1
South Africa cardsd2,113 7.2 4.7 7.2 8.7 80.4
Europe RBB cardse1,814 6.8 3.2 13.1 18.2 91.4
Italy salary advance loansf1,609 2.9 1.0 7.3 5.0 7.5
South Africa personal loans 1,435 6.6 4.5 8.4 5.3 79.0
UK overdrafts 1,430 7.2 4.9 10.9 18.2 92.9
30 day arrears rates reduced in 2011 in all the principal portfolios, with 90 day arrears rates reducing in all portfolios except Italy salary advance loans.
90 day arrears reduced to 1.2% (2010: 1.5%) in UK cards and to 1.5% (2010: 2.5%) in US cards, reflecting better, although still subdued, economic
conditions during 2011, the impact of customer loan repayments and a continued revision of the credit approval policy in Barclaycard.
Retail forbearance programmes
Retail forbearance is available to customers experiencing financial difficulties. Forbearance solutions take a number of forms depending on individual
customer circumstances. Short term solutions focus on temporary reductions to contractual payments and may change from capital and interest
payments to interest only. For customers with longer term financial difficulties, term extensions may be offered, which may also include interest rate
concessions.
When an account is placed into a programme of forbearance, the asset will be classified as such for the remainder of its term. Accounts may be up
to date on a programme of forbearance but will continue to be classified as subject to forbearance and therefore will be included as forborne until the
loan is repaid, a programme of rehabilitation is agreed or the loan is written off.
When Barclays agrees to a forbearance programme with a customer, the impairment allowance recognises the impact on cashflows of the agreement
to receive less than the original contractual payments. The Group Retail Impairment Policy prescribes the methodology for impairment of forbearance
assets, which is measured by comparing the debt outstanding to the revised expected repayment. This results in higher impairment than for fully
performing assets, reflecting the additional credit risk attached to loans subject to forbearance.
During 2011, Barclays continued to assist customers in financial difficulty through the use of forbearance programmes. However, the extent of
forbearance offered by the Group to customers and clients is immaterial to the size of the loan book.
Forbearance on the Group’s principal portfolios in US, UK and Europe are presented below. Additional portfolios will be added to this disclosure should
the forbearance in respect of such portfolios become material.
Notes
a UK cards excludes £1.5bn relating to Egg credit card assets, which were recognised on acquisition at fair value (with no related impairment allowance). An impairment allowance of £20m is
held on Egg balances post acquisition.
b Risk metrics exclude the impact of the $1.4bn Upromise portfolio acquired in December 2011.
c Gross loans and advances for UK personal loans as at 31 December 2010 have been revised to exclude £740m of UK smaller specialist loans as they are no longer considered to be principal
portfolio.
d South Africa cards 30 and 90 days arrears revised to include approved debt counselling accounts.
e Europe RBB includes Spain, Portugal and Italy card assets.
f The recoveries impairment coverage ratio for Italy salary advance loans is lower than other unsecured portfolios as these loans are extended to customers where the repayment is made via a
salary deduction at source by qualifying employers and Barclays is insured in the event of termination of employment or death. Recoveries represent balances where insurance claims are
pending that we believe are largely recoverable, hence the lower coverage.
Barclays PLC Annual Report 2011 www.barclays.com/annualreport 99
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