Barclays 2015 Annual Report Download - page 159

home.barclays/annualreport Barclays PLC Annual Report 2015 I 157
Exposure to interest only owner-occupied home loans excluding part and part interest only (P&P IO)a
As at 31 December 2015 2014
Interest only balances, excluding P&P IO (£m) 33,901 35,328
Interest only home loans maturity years (£m):
2016 703 864
2017 1,043 1,180
2018 1,131 1,249
2019 1,080 1,195
2020 1,090 1,176
2021-2025 7,359 7,632
Post 2025 21,155 21,104
Total Impairment coverage (bps) 11 8
Marked to market LTV: total balances (%)
Balance weighted 44.7 48.7
Valuation weighted 34.7 37.6
For >100% LTVs: (£m)
Balances 178 349
Marked to market collateral 150 302
Overview of performing portfolio
Performing balances (£m) 33,690 35,155
Marked to market LTV: performing balances (%)
Balance weighted 44.6 48.6
Valuation weighted 34.6 37.5
Overview of non-performing portfolio
Non-performing balances (£m) 211 173
Non-performing proportion of interest only balances excluding P&P IO (%) 0.6 0.5
Marked to market LTV: non-performing balances (%)
Balance weighted 61.4 66.2
Valuation weighted 49.8 54.1
Interest only mortgages account for £50bn (2014: £51bn) of the total balance of £128bn (2014: £127bn) of UK home loans. This comprised £40bn
(2014: £42bn) to owner-occupied customers, and £10bn (2014: £9bn) to buy-to-let customers.
Of the £40bn exposure to owner-occupied customers, £34bn (2014: £35bn) was interest only, with the remaining £6bn (2014: £7bn) representing
the interest only component of part and part mortgages.
The average balance weighted LTV for interest only owner-occupied balances reduced to 44.7% (2014: 48.7%) as property prices appreciated. The
increase in impairment coverage to 11bps (2014: 8bps) was due to (i) enhancements in methodology, where management adjustments to
impairment allowances were allocated on a more granular basis to their appropriate segments; and (ii) a broadening of the high risk definition used
on interest only mortgages. The overall impairment coverage of the total home loans portfolio remained unchanged.
Exposures to mortgage current accounts (MCA) reserves
The MCA reserve is a secured overdraft facility previously available to home loan customers in the UK on either a fully amortising or interest only
mortgage loan, which allows them to borrow against the equity in their home. It permits draw-down up to an agreed available limit on a separate but
connected account to the main mortgage loan facility. The balance drawn must be repaid on redemption of the mortgage.
Of the total 917k home loan customers in the UK, 442k have MCA reserves, with total reserve limits of £11.3bn (2014: £17.9bn).
As at 31 December 2015 2014
Total outstanding of home loans with MCA reserve balances (£bn) 53.6 62.2
As a proportion of outstanding UK home loan balances (%) 42.0 49.1
Home loan customers with active reserves (000s) 442 505
Total reserve limits (£bn) 11.3 17.9
Utilisation rate (%) 48.9 32.3
Utilisation (£bn) 5.5 5.8
Marked to market LTV: balance weighted (%) 43.7 47.7
Total outstanding balances which are an aggregate of the mortgage account and the drawn reserve, reduced 14% to £53.6bn (2014: £62.2bn),
during the period reflecting paydowns in the main mortgage account.
Reduction in portfolio reserve limits to £11.3bn (2014: £17.9bn) is due to an active limit management programme, combined with natural mortgage
redemptions from the existing book during the period. As a result, the utilisation rate increased to 48.9% (2014: 32.3%). MCA balances have
remained broadly stable at £5.5bn (2014: £5.8bn), while the average balance weighted LTV reduced to 43.7% (2014: 47.7%) due to an increase in
average house prices and repayment on the main mortgage loan.
Although the product has been withdrawn from sale, existing customers can continue to draw against their available reserves.
Note
a A part and part home loan is a product in which part of the loan is interest only and part is amortising. Analysis excludes the interest only portion of the part and part book which
contributes £6.2bn (2014: £6.6bn) to the total owner occupied interest only balance of the £40.1bn (2014: £41.9bn). The total exposure on part and part book is £9.9bn (2014,
£9.8bn) and represents 8% of total UK home loans portfolio.
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