Barclays 2012 Annual Report Download - page 138

Wholesale credit risk
Gross loans and advances to customers and banks in the wholesale portfolios decreased 7% to £243.2bn principally as a result of a 9% fall in the
Investment Bank mainly due to a reduction in corporate, interbank and other wholesale lending. For more detail, see analysis of Investment Bank
wholesale loans and advances on page 138. Furthermore, there was a 6% decrease in balances in Corporate Banking primarily in Europe due to
the disposal of the Iveco Finance business and a reduction in Spanish exposures.
The total loan impairment charge across the wholesale portfolios increased 13% to £1.5bn principally due to higher charges in the Investment
Bank, due to charges in ABS CDO Super Senior positions and losses on a small number of single name exposures. In addition, there was a
non-recurring release of £223m in 2011. Furthermore, the impairment charge in Africa RBB increased 118% to £174m, principally due to the
impact of one large name in the commercial property portfolio in South Africa. This was partially offset by lower loan impairment charges in
Corporate Banking, principally in Spain where there are ongoing initiatives to reduce exposure within the property and construction sector.
The higher impairment charge and lower loan balances led to a higher wholesale loan loss rate of 61bps in 2012 (2011: 50bps).
CRLs in the wholesale portfolio decreased 11% to £9,744m primarily due to decreases in Investment Banking, where lower balances principally
reflected asset sales and paydowns, as well as decreases in Corporate Banking, where the lower balances principally reflected the disposal of the
Iveco Finance business in Europe.
Presented below is further information related to the Group’s wholesale lending portfolios by business, with additional analysis of portfolios
in the Investment Bank and Corporate Banking. Further detail is presented on the Group’s wholesale exposure to Eurozone countries (pages
143-154); geographic and industry asset concentrations (pages 118-121 and 125-126) and asset credit quality (pages 122-123).
Wholesale loans and advances at amortised costa,b
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 2012
Africa RBB 9,246 323 8,923 772 8.3 174 188
Investment Bankc 147,439 2,463 144,976 4,209 2.9 448 30
Corporate Banking 65,835 2,098 63,737 4,141 6.3 824 125
– UK 52,667 428 52,239 1,381 2.6 279 53
– Europe 8,122 1,536 6,586 2,607 32.1 527 649
– Rest of World 5,046 134 4,912 153 3.0 18 36
Wealth and Investment Managementd 19,236 141 19,095 603 3.1 38 20
Head Office and Other Functions 1,466 16 1,450 19 1.3 – –
Total 243,222 5,041 238,181 9,744 4.0 1,484 61
As at 31 December 2011
Africa RBB 9,729 294 9,435 720 7.4 80 82
Investment Bankc 161,194 2,555 158,639 5,253 3.3 129 8
Corporate Banking 70,268 2,235 68,033 4,312 6.1 1,071 152
– UK 52,772 545 52,227 1,267 2.4 345 65
– Europe 12,899 1,574 11,325 2,876 22.3 699 542
– Rest of World 4,597 116 4,481 169 3.7 27 59
Wealth and Investment Managementd 17,157 110 17,047 611 3.6 35 20
Head Office and Other Functions 1,958 17 1,941 36 1.8 (2) (10)
Total 260,306 5,211 255,095 10,932 4.2 1,313 50
Notes
a Loans and advances to business customers in Europe RBB are included in the retail loans and advances to customers at amortised cost table on page 129.
b For December 2012 reporting UKRBB Medium Business net lending (2011: £2,680m) and Barclaycard’s Global Payment Acceptance, Global Commercial Payments
and Business Cards portfolios (2011: £468m) have been reclassified from wholesale to retail. These reclassifications (including comparatives) better reflect the way
in which risk in these portfolios is managed.
c Investment Bank gross loans and advances include cash collateral and settlement balances of £85,116m as at 31 December 2012 and £75,707m as at 31 December
2011. Excluding these balances, CRLs as a proportion of gross loans and advances were 6.8% and 6.1% respectively.
d Wealth and Investment Management Private Bank net lending (2011: £14,627m) has been reclassified from retail to wholesale as at December 2012.
barclays.com/annualreport136 I Barclays PLC Annual Report 2012
Risk review
Credit risk continued