Barclays 2012 Annual Report Download - page 135

The strategic report Governance Risk review Financial review Financial statements Risk management Shareholder information
Credit cards, overdrafts and unsecured loans
Total credit cards, overdrafts and unsecured loans remained broadly stable with the increase in card portfolio balances due to acquisitions being
offset by decreases in unsecured loans and overdraft portfolios. 90 day arrears improved marginally to 1.1% (2011: 1.2%) in UK Cards, while the
rate improved to 1.1% (2011: 1.5%) in US Cards reflecting a continued move towards better asset quality and improving delinquency performance.
Arrears rates in the European Cards portfolios deteriorated marginally in the same period, reflecting the difficult economic environment. Rates
were broadly stable in South Africa card portfolios and performance remained within expectations. The reduction in the coverage ratio on the
main UK and US portfolios reflects improved recoveries, the change in write-off policy at the end of 2011 and increased debt sale activity. The
principal portfolios listed below account for 87% of total credit cards, overdrafts and unsecured loans in the Group’s retail portfolios.
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 2012
UK cardsa15,434 2.5 1.1 4.9 6.2 80.4
US cardsb9,296 2.4 1.1 5.0 2.3 90.7
UK personal loans 4,861 3.0 1.3 5.1 17.4 78.9
South Africa cardsc2,511 5.2 2.8 4.2 5.2 70.9
Barclays Partner Finance 2,323 1.9 1.0 3.9 4.8 78.1
Europe RBB cards 1,604 6.2 2.9 9.2 12.7 95.5
UK overdrafts 1,382 5.3 3.5 8.2 14.6 92.7
Italy salary advance loansd1,354 2.3 0.9 8.4 9.4 12.5
South Africa personal loans 1,061 5.6 3.1 8.5 7.6 72.3
As at 31 December 2011
UK cardsa14,692 2.7 1.2 6.2 6.8 85.2
US cardsb8,303 3.1 1.5 7.6 3.5 92.1
UK personal loans 5,166 3.4 1.7 6.5 19.0 82.8
South Africa cardsc1,816 5.1 3.0 5.6 6.4 72.9
Barclays Partner Finance 2,122 2.4 1.3 4.6 6.3 84.8
Europe RBB cards 1,684 5.9 2.6 10.1 13.8 89.5
UK overdrafts 1,322 6.0 3.9 9.7 17.5 90.6
Italy salary advance loansd1,629 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
Business lending
Business lending primarily relates to small and medium enterprises typically with exposures up to £3m or with a turnover up to £5m. The principal
portfolios listed below account for 88% of total Business lending loans in the Group’s retail portfolios.
Principal portfolios
Arrears ManagedeEarly Warning List Managedf
As at 31 December 2012
Gross
loans and
advances
£m
Drawn
balances
£m
Of which
arrears
balances
%
Drawn
balances
£m
Of which
Early
Warning List
balances
%
Loan loss
rates
bps
Gross
charge-off
rates
%
Recoveries
proportion
of
outstanding
balances
%
Recoveries
coverage
ratio
%
UK 8,053 713 6.0 7,122 9.2 140 2.5 4.3 34.9
Spain 1,095 95 11.3 993 60.4 210 3.8 6.6 45.0
Portugal 596 185 6.4 393 17.8 503 5.7 6.7 65.9
Notes
a UK cards includes the acquired Egg credit card assets, which totalled £1.7bn at acquisition. The outstanding acquired balances have been excluded from the
recoveries impairment coverage ratio on the basis that the portfolio has been recognised on acquisition at fair value during 2011 (with no related impairment
allowance). Impairment allowances have been recognised as appropriate where these relate to the period post acquisition.
b US cards risk metrics exclude the impact of U-promise in 2011.
c South Africa cards risk metrics exclude the Edcon portfolio which was acquired in November 2012. In addition, these metrics now include Woolworth Financial
Services portfolios.
d 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.
e Arrears managed accounts are principally customers with an exposure threshold less than £50k in the UK and €100k in Europe, with processes designed to manage
a homogeneous set of assets. Arrears balances reflects the total balances of accounts which are past due on payments.
f EWL Managed accounts are customers that exceed the arrears managed threshold, with processes that record heightened levels of risk through an EWL grading.
EWL balances comprise of a list of three categories graded in line with the perceived severity of the risk attached to the lending, and can include customers that are
up to date with contractual payments or subject to forbearance as appropriate.
barclays.com/annualreport Barclays PLC Annual Report 2012 I 133