Barclays 2013 Annual Report Download - page 167

Portfolio reviews
Secured home loans
Total home loans to retail customers represented 73% (2012: 73%) of the Group’s total retail balances. Home loan balances increased 2% to
£173bn.
The principal home loan portfolios listed below account for 97% (2012: 96%) of total home loans in the Group’s retail portfolios.
Home loans principal portfoliosa
Gross loans
and
advances
£m
> 90 day
arrears
%
> 90 day
arrears,
including
recoveriesb
%
Annualised
gross
charge-off
ratesc
%
Recoveries
proportion
of
outstanding
balances
%
Recoveries
impairment
coverage
ratio
%
As at 31 December 2013
UK 122,880 0.3 0.8 0.5 0.5 14.7
South Africa 12,172 0.7 6.2 2.6 5.6 34.7
Spain 12,748 0.7 3.0 1.1 2.4 36.0
Italy 15,518 1.1 3.5 0.7 2.4 25.8
Portugal 3,641 0.5 3.9 1.1 3.4 31.9
As at 31 December 2012
UK 114,766 0.3 0.8 0.6 0.5 13.4
South Africa 15,773 1.6 8.4 3.9 6.9 34.6
Spain 13,551 0.7 2.6 1.1 1.9 34.0
Italy 15,529 1.0 2.9 0.8 1.8 25.4
Portugal 3,710 0.7 3.4 1.4 2.8 25.6
Arrears rates remained steady in the UK due to a conservative credit policy and stable economic conditions including the continued low base rate
environment. The recoveries impairment coverage ratio increased reflecting a delay in impairment releases while the business assesses the
changing environment conditions.
In the UK, gross loans and advances increased 7% to £123bn which includes £5.4bn of balances at acquisition from the Barclays Direct (formerly
ING Direct) mortgage portfolio in February 2013. Within the total home loans portfolio:
 Owner-occupiedd interest-only balances of £44.5bn (2012: £45.7bn) represented 36% of total home loan balances (see page 168 for more
detail). The average balance weighted LTV for interest-only balances remained low at 54.2% (2012: 58.8%) and 90 day arrears rates remained
stable at 30bps (2012: 30bps) which was in line with the overall portfolio performance; and
 Buy-to-lete home loans comprised 8% (2012: 7%) of the total balances. For buy-to-let home loans, 90 day arrears rates improved marginally
from 0.2% to 0.1% while balance weighted portfolio LTV remained broadly stable at 62.9% (2012: 65.7%).
Gross loans and advances in South Africa of £12.2bn (2012: £15.8bn) were broadly unchanged in local currency. The improvement in the arrears
and charge-off rates was driven by the continued strong performance of new lending and improvements in collections capabilities. The decrease
in recoveries balances was driven by revised strategies in the recoveries environment to reduce this portfolio, and lower charge-off rates.
In the principal European home loans portfolios, gross loans and advances reduced 3% to £31.9bn reflecting the amortisation of existing balances
and reduced new business flows following the realignment of our target Europe RBB customer profile (see page 14 for further detail). 90 day
arrears rates and charge-off rates have remained broadly stable in Spain and Italy, but have reduced in Portugal due to improved collections
performance.
 Balances in recoveries and recovery impairment coverage rates have increased in Spain in part due to an increase in the legal recovery timescales
following introduction of new Spanish mortgage protection laws. The lengthy legal process in Europe and difficult property market conditions
have contributed to the increased recovery balances and higher impairment coverage ratios.
Notes
a Excluded from the above analysis are Wealth International home loans, which are managed on an individual customer exposure basis, France home loans and other small home
loans portfolios. All portfolios under Secured Home Loans are primarily first lien mortgages. Other Secured Retail Lending under Barclaycard is a second lien mortgage portfolio.
b 90 day arrears including recoveries is the sum of balances greater than 90 day arrears and balances charged off to recoveries, expressed as a percentage of total outstanding balances.
c Gross charge-off rates are calculated over average monthly outstanding balances through the year.
d Owner-occupied refers to mortgages where the intention of the customer was to occupy the property at origination.
e Buy to let refers to mortgages where the intention of the customer (investor) was to let the property at origination.
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