Barclays 2013 Annual Report Download - page 169

Home loans principal portfolios – new lending
UK South Africa Spain Italy Portugala
As at 31 December 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012
New bookings £m 17,100 18,170 1,209 1,186 277 284 494 848 20 83
New mortgages proportion above 85% LTV (%) 3.8 3.9b30.4 36.8 1.8 4.1 ––15.6 4.9
Average LTV on new mortgages: balance
weighted (%) 64.2 64.6 74.9 76.1 61.7 62.8 59.8 62.8 64.8 60.8
Average LTV on new mortgages: valuation
weighted (%) 57.1 57.4b64.9 64.7 52.9 55.8 52.2 55.4 54.2 56.7
New bookings in UK decreased 6% to £17.1bn. The decrease in average balance weighted LTV in the UK to 64.2% (2012: 64.6%) was driven by an
increased proportion of lower LTV origination.
In South Africa, new home loans above 85% LTV decreased to 30.4% (2012: 36.8%) due to an increase of new bookings in the 80-85% LTV band,
the average LTV remained broadly unchanged.
New bookings in Spain, Italy and Portugal reduced 35% to £791m due to changes to business strategy, a tightening of the standard LTV credit
criteria and active management to reduce funding mismatch. Average balance weighted LTV on new mortgages remained stable across these
jurisdictions reflecting these credit criteria.
The proportion of new home loans above 85% LTV in Spain has decreased, and now primarily reflects lending to customers to finance the
purchase of properties which were previously repossessed by the Bank and held as ‘Other Real Estate Owned’ (see Foreclosures in process and
properties in possession below).
Foreclosures in process and properties in possession
Foreclosure is the process by which the bank initiates legal action against a customer with the intention of terminating a loan agreement whereby
the bank may repossess the property subject to local law and recover amounts it is owed. This process can be initiated by the bank independent of
the impairment treatment and it is therefore possible that the foreclosure process may be initiated while the account is still in Collections
(delinquent) or in Recoveries (post charge-off) where the customer has not agreed a satisfactory repayment schedule with the bank.
Properties in possession include properties held as ‘Loans and Advances to Customers’ and properties held as ‘Other Real Estate Owned’.
Held as ’Loans and Advances to Customers’ (UK and Italy) refer to the properties where the customer continues to retain legal title but where the
bank has enforced the possession order as part of the foreclosure process to allow for the disposal of the asset or the court has ordered the
auction of the property.
Held as ‘Other Real Estate Owned’ (South Africa, Spain and Portugal) refers to properties where the bank has taken legal ownership of the title as a
result of purchase at an auction or similar and treated as ‘Other Real Estate Owned’ within other assets on the bank’s balance sheet.
Home loans principal portfolios
Foreclosures in process Properties in possession
number £m number £m
As at 31 December 2013
UK 1,835 254 157 22
South Africa 10,161 484 398 5
Spain 1,560 236 1,305 93
Italyc 3,782 371 504 64
Portugald 2,086 137 540 50
As at 31 December 2012
UK 1,612 203 234 33
South Africa 12,145 778 1,314 27
Spain 1,396 194 945 117
Italy 2,888 283 436 58
Portugald 1,506 110 336 45
In UK Home Loans, foreclosure in process increased 14% to 1,835 in 2013. This increase includes customers where contact and formal agreement
of payment plans for arrears is still to be achieved. On average, 22% of customers in foreclosures in process made a monthly repayment which
was less than the monthly contractual payment. 31% of customers in Recovery have recommenced full contractual payments as a minimum, and
the foreclosure process for these customers are in temporary suspension pending agreement on the arrears.
Notes
a The proportion of new home loans above 85% LTV in Portugal includes home loans to restructure customer existing home loans, with no increase in exposure.
b Figures were restated following a detailed review of the LTVs post-migration to a new data management system.
c In Italy, customers continue to retain legal title of the property after the court has ordered an auction. These are classified as properties in possession and excluded from
foreclosures in process.
d In Portugal, properties in possession is based on the number of associated mortgage contracts.
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