Barclays 2014 Annual Report Download - page 162

160 I Barclays PLC Annual Report 2014 barclays.com/annualreport
Risk performance
Credit risk
Risk review
Credit cards, overdrafts and unsecured loans
Gross loans and advances in credit cards, overdrafts and unsecured loans in Barclays Core retail portfolios increased 13% to £49.2bn (2013:
£43.4bn), primarily due to increases in US and UK cards. The principal portfolios listed below account for 94% (2013: 94%) of Core portfolios.
Principal portfolios
Gross loans
and
advances
£m
30 day
arrears,
excluding
recoveries
%
90 day
arrears,
excluding
recoveries
%
Gross
charge-off
rates
%
Recoveries
proportion
of
outstanding
balances
%
Recoveries
impairment
coverage
ratio
%
As at 31 December 2014
Barclaycard
UK cardsa17,447 2.5 1.2 4.3 4.9 87.6
US cardsa,b 14,005 2.1 1.0 3.7 1.8 87.1
Barclays Partner Finance 3,399 1.5 0.7 2.4 2.7 76.8
Germany cards 1,355 2.5 1.1 3.8 3.4 82.8
Iberia cards 968 6.0 2.5 8.2 6.3 84.9
Personal & Corporate Banking
UK personal loans 4,953 2.0 0.9 3.4 10.0 76.3
UK overdrafts 902 5.8 4.0 7.1 11.0 89.9
Africa Banking
South Africa cards 2,364 8.1 4.6 7.6 5.9 75.7
South Africa personal loans 993 5.4 2.6 8.1 7.8 70.8
As at 31 December 2013
Barclaycard
UK cards 15,937 2.4 1.1 4.4 4.6 86.2
US cards 10,301 2.1 1.0 4.0 1.8 86.6
Barclays Partner Finance 2,765 1.6 0.8 2.9 3.2 83.2
Germany cards 1,290 2.5 1.0 3.7 3.2 73.5
Iberia cards 1,036 5.7 2.4 10.7 9.9 84.8
Personal & Corporate Banking
UK personal loans 4,958 2.7 1.2 4.6 15.8 79.4
UK overdrafts 1,307 4.8 3.3 7.6 14.5 94.5
Africa Banking
South Africa cards 2,224 8.1 4.3 7.3 5.1 70.7
South Africa personal loans 906 5.4 2.6 7.9 7.4 70.4
UK cards: Gross loans and advances increased by 9% to £17.4bn, primarily due to balance growth from existing customers, and new account
recruitment. Recovery balances increased due to a reduction in debt sale activity.
US cards: Gross loans and advances increased by 36% to £14.0bn due to the combined impact of new account volumes and portfolio acquisitions.
Arrears rates remain stable at 2.1% and 1.0% for 30 days and 90 days, respectively, driven by a strategy focused on high quality customers and
low risk partnerships.
Barclays Partner Finance: Gross loans and advances increased by 23% to £3.4bn driven by growth in the motor lending portfolio. Reduction in
recoveries coverage to 76.8% (2013: 83.2%) was due to the adoption of an improved loss given default model.
UK personal loans: Arrears and charge-off rates reduced over the year, as a result of the improved economic conditions and previous changes to
credit criteria that have taken full effect. The recoveries proportion reduced to 10.0% (2013: 15.8%) as the write-off policy was fully embedded in
2014.
Iberia cards: Arrears rates remained stable while charge-off rates improved as performance stabilised following the completion of system
migration that initially impacted direct debit processing. Balances in recovery decreased to 6.3% of outstandings (2013: 9.9%) driven by debt sale
activity.
South Africa cards: Recoveries coverage increased to 75.7% (2013: 70.7%), in part due to a change in the mix of the recoveries book in store
cards which have higher associated losses.
Notes
a For UK and US cards, outstanding recoveries balances for acquired portfolios recognised at fair value (which have no related impairment allowance) have been excluded from the
recoveries impairment coverage ratio. Losses have been recognised where related to additional spend from acquired accounts in the period post acquisition.
b US cards risk metrics exclude the impact of a £440m portfolio acquisition made in April 2014.