Barclays 2013 Annual Report Download - page 163

Retail forbearance programmes
Forbearance programmes on principal credit cards, overdrafts, unsecured loans, home loans and business lending portfolios
Retail forbearance is available to customers experiencing financial difficulties. Forbearance solutions may take a number of forms depending on
the extent of the financial dislocation. Short term solutions normally focus on temporary reductions to contractual payments and switches 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 and fully amortising balances for card portfolios.
Forbearance on the Group’s principal portfolios in the US, UK, Eurozone and South Africa is presented below. The principal portfolios listed below
account for 93% (2012: 94%) of total retail forbearance balances.
Analysis of key portfolios in forbearance programmes
Balances on forbearance programmes Marked to
market
LTV of
forbearance
balances:
balance
weighted
%
Marked to
market
LTV of
forbearance
balances:
valuation
weighted
%
Impairment
allowances
marked
against
balances on
forbearance
programmes
£m
Total
balances on
forbearance
programmes
coverage
ratio
%
of which:
Past due of which:
Total
£m
% of
gross L&A
%
Up-to-date
£m
1-90 days
past due
£m
91 or
more days
past due
£m
As at 31 December 2013
Home Loans
UK 2,364 1.9 1,867 313 184 63.4 51.6 23 1.0
South Africa 248 2.1 117 115 16 74.4 60.5 17 6.9
Spain 171 1.4 124 36 11 68.3 52.3 8 4.9
Italy 307 2.0 248 31 28 62.2 50.9 10 3.2
Credit Cards
UK 912 5.6 861 44 7 n/a n/a 333 36.5
US 106 1.1 73 24 9 n/a n/a 10 9.8
Unsecured Loans
UK 142 2.9 94 40 8 n/a n/a 34 23.7
As at 31 December 2012
Home Loans
UK 2,536 2.2 1,961 391 184 67.7 56.1 24 0.9
South Africa 404 2.6 170 164 70 78.3 64.7 16 4.0
Spain 174 1.3 118 45 11 68.9 53.3 10 5.7
Italy 426 2.6 391 20 15 62.6 52.2 7 1.7
Credit Cards
UK 991 6.3 927 56 8 n/a n/a 350 35.3
US 116 1.3 77 29 10 n/a n/a 15 12.9
Unsecured Loans
UK 168 3.4 113 42 13 n/a n/a 44 26.2
Loans in forbearance in the principal home loans portfolios decreased 13% to £3,090m primarily due to decreases in UK, South Africa and Italy.
 The UK home loans under forbearance programmes decreased 7% to £2,364m. In H213, the definition was expanded to include customers who
are up to date on their mortgage but have either been granted a term extension or have drawn against their Mortgage Current Account and
displayed other indicators of financial stress. 2012 forbearance balances were restated from £1,596m to £2,536m in line with the new definition.
As a result of the restatement, Mortgage Current Account balances (see page 169) now account for 71% of the total forbearance balances, the
majority of the remainder being term extensions which account for 17%. Total past due balances reduced 14% to £497m due to improved
collections procedures.
 In South Africa, the reduction in forbearance balances is due to the implementation of enhanced qualification criteria which results in a more
appropriate and sustainable programme for the customer, and a depreciation of ZAR against GBP.
 In Italy, the majority of the balances relate to specific schemes required by the government, including schemes in response to natural disasters
and amendments are primarily payment holidays and interest suspensions. The decrease of 28% to £307m is in part due to customers exiting
such government forbearance schemes after recommencing payments. The coverage for forbearance accounts remains low, at 3.2% (2012:
1.7%) reflecting the underlying quality of customers on these government schemes, with 85% of customers being up-to-date upon entering the
forbearance schemes for natural disasters.
Forbearance balances on principal credit cards, overdrafts and unsecured loan portfolios decreased by 9% to £1,160m. Forbearance programmes
as a proportion of outstanding balances reduced in UK and US cards due to better payment rates arising from an improved credit environment.
 In UK Cards, Repayment Plans which account for majority of the forbearance balances exit forbearance treatment when they are more than 60
days past due. The small residual balance reported as >90 days past due relates to accounts that remain on legacy terms and conditions.
Impairment allowances against UK cards forbearance decreased following a review of the qualification criteria in the forbearance policy, the
impacts of which became evident from Q2 2013. This included a reduction of balances on forbearance programmes and better performance
resulting in a decrease in impairment coverage ratio.
 US cards forbearance programme coverage ratio was lower than the UK due to the nature of the customer mix (partnership focused) and the
type of forbearance, where long-term fully amortising forbearance plans make up over 50% of all forborne accounts. These plans have lower
loss rates compared to the UK and carry lower levels of impairment driven by higher payment success rates compared with the UK.
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