Barclays 2011 Annual Report Download - page 103

Wholesale credit risk
Gross loans and advances to customers and banks in the wholesale portfolios increased 2% to £248,839m principally as a result of a rise of 6% in
Barclays Capital to £161,194m. For more detail, see analysis of Barclays Capital wholesale loans and advances on page 102. This increase was partially
offset by an 18% decrease in balances in Africa RBB to £11,998m, primarily due to the depreciation in the value of the Rand against Sterling and from
lower demand.
Wholesale impairment allowances at 31 December 2010 included £532m held against the loan to Protium. Excluding this balance, wholesale
impairment allowances increased 4% to £5,223m reflecting higher levels of new impairment in Europe, particularly the property sector in Portugal and
some large single names in Barclays Capital.
The total loan impairment charge across the wholesale portfolios improved 41% to £1,368m principally reflecting lower charges in Barclays Capital,
mainly as a result of charges in leveraged finance being partially offset by a release of £223m relating to the loan to Protium which has now been repaid;
and in Barclays Corporate due to lower credit impairment charges in Spain reflecting lower exposure to the property and construction sector. Charges
also reduced in the Barclays Corporate UK business, reflecting lower default rates and tightly controlled exposure to commercial real estate loans.
However, weak credit conditions in Portugal led to a higher charge in 2011.
The substantial reduction in the impairment charge and higher loan balances led to a lower wholesale loan loss rate of 55bps in 2011 (2010: 96bps).
CRLs in the wholesale portfolio, excluding Protium, decreased 7% to £10,926m primarily due to falls in Barclays Corporate where lower balances in
the UK reflected the high level of write-offs and balance reductions; and Africa RBB, principally due to the depreciation in the value of the Rand against
Sterling, repayments and a slowdown in new CRLs. Balances in Barclays Corporate Europe remained stable with higher balances in Portugal and Italy
reflecting deteriorating credit conditions, offset by lower balances in Spain.
Presented below is further information related to the Group’s wholesale lending portfolios by business, with additional analysis of portfolios in Barclays
Capital in relation to wholesale credit risk.
Further detail in relation to the Group’s wholesale lending is presented as part of geographical and industrial loan concentrations (pages 93 to 94);
potential credit risk loans (page 95); forbearance (pages 99 to 100); loan credit quality (pages 104 to 105) and exposures to selected Eurozone countries
(pages 112 to 119).
Wholesale loans and advances at amortised costa
Gross L&A
£m
Impairment
allowance
£m
L&A net of
impairment
£m
Credit risk
loans
£m
CRLs % of
gross L&A
%
Loan
impairment
charges
£m
Loan loss
rates
bps
As at 31 December 2011
UK RBB 2,743 63 2,680 285 10.4 45 164
Africa RBB 11,998 298 11,700 723 6.0 78 65
Barclaycardb 476 8 468 3 0.6 27 567
Barclays Capitalc,d 161,194 2,555 158,639 5,253 3.3 129 8
Barclays Corporate 67,999 2,231 65,768 4,309 6.3 1,073 158
– UK 53,668 545 53,123 1,267 2.4 345 64
– Europe 12,576 1,574 11,002 2,876 22.9 699 556
– Rest of World 1,755 112 1,643 166 9.5 29 165
Barclays Wealth 2,471 51 2,420 317 12.8 18 73
Head Office Functions and Other Operations 1,958 17 1,941 36 1.8 (2) nm
Total 248,839 5,223 243,616 10,926 4.4 1,368 55
As at 31 December 2010
UK RBB 3,889 77 3,812 345 8.9 80 206
Africa RBB 14,644 362 14,282 1,154 7.9 123 84
Barclaycardb 338 5 333 7 2.1 20 592
Barclays Capitalc,d 152,711 3,036 149,675 5,370 3.5 642 42
Barclays Corporate 66,961 1,986 64,975 4,591 6.9 1,436 214
– UK 50,599 539 50,060 1,503 3.0 447 88
– Europe 14,094 1,333 12,761 2,935 20.8 940 667
– Rest of World 2,268 114 2,154 153 6.7 49 216
Barclays Wealth 2,884 66 2,818 218 7.6 27 94
Head Office Functions and Other Operations 1,411 17 1,394 66 4.7 1 7
Total 242,838 5,549 237,289 11,751 4.8 2,329 96
Notes
a Loans and advances to business customers in Europe RBB are included in the retail loans and advances at amortised cost table on page 96.
b Barclaycard wholesale loans and advances represent corporate credit and charge cards.
c Barclays Capital gross loans and advances includes cash collateral and settlement balances of £75,707m as at 31 December 2011 and £56,486m as at 31 December 2010.
Excluding these balances CRLs as a proportion of gross loans and advances were 6.1% and 5.6% respectively.
d Barclays Capital credit risk loans exclude the loan to Protium of £7,560m held as at 31 December 2010.
Barclays PLC Annual Report 2011 www.barclays.com/annualreport 101
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