Barclays 2015 Annual Report Download - page 172

170 I Barclays PLC Annual Report 2015 home.barclays/annualreport
Risk review
Risk performance
Credit risk
Impairment
Impairment allowances
Impairment allowances decreased 10% to £4,921m primarily within Non-Core as a result of the reclassification of impairments held against the
Portuguese loans now held for sale.
Movements in allowance for impairment by asset class (audited)
At beginning
of year
£m
Acquisitions
and
disposals
£m
Unwind of
discount
£m
Exchange
and other
adjustmentsa
£m
Amounts
written off
£m
Recoveries
£m
Amounts
charged to
income
statement
£m
Balance at
31 December
£m
2015
Home loans 547 – (32) (64) (94) 7 154 518
Credit cards, unsecured and other retail lending 3,345 – (105) (170) (1,848) 301 1,871 3,394
Corporate loans 1,563 – (12) (383) (335) 92 84 1,009
Total impairment allowance 5,455 – (149) (617) (2,277) 400 2,109 4,921
2014
Home loans 788 – (23) (200) (191) 17 156 547
Credit cards, unsecured and other retail lending 3,603 13 (116) (307) (1,679) 126 1,705 3,345
Corporate loans 2,867 – (14) (540) (1,167) 78 339 1,563
Total impairment allowance 7,258 13 (153) (1,047) (3,037) 221 2,200 5,455
Management adjustments to models for impairment
Management adjustments to models for impairment are applied in order to factor in certain conditions or changes in policy that are not incorporated
into the relevant impairment models, or to ensure that the impairment allowance reflects all known facts and circumstances at the period end.
Adjustments typically increase the model derived impairment allowance. Where applicable, management adjustments are reviewed and incorporated
into future model development.
Management adjustments to models of more than £10m with respect to impairment allowance in our principal portfolios are presented below.
Principal portfolios that have management adjustments greater than £10m (unaudited)
2015 2014
As at 31 December
Total management
adjustments to
impairment stock,
including
forbearance
£m
Proportion of total
impairment stock
%
Total management
adjustments to
impairment stock,
including
forbearance
£m
Proportion of total
impairment stock
%
PCB
UK home loans 68 67 52 55
UK personal loans 75 16 48 10
UK overdrafts 37 29 30 19
UK large corporate and business lending 183 26 98 14
Africa Banking
South Africa home loans 22 17 22 11
Barclaycard
UK cards 147 17 62 5
US Cards 58 9 10 2
Barclays Partner Finance 41 28 9 7
Germany Cards 20 21 3 3
During 2015, the Retail Impairment Policy was significantly strengthened and models enhanced.
UK home loans: Adjustments to capture the potential impact from increase in the house price to earnings ratio, change in the impairment
methodology and increased coverage on interest only loans maturing in the next five years.
UK personal loans: Adjustments to incorporate revised impairment policy requirements, and for updated model requirements.
UK overdrafts: Principally for updated model-related requirements and adjustments to align to revised impairment policy.
UK large corporate and business lending: In business lending to reflect policy changes affecting customers on forbearance and impairment
treatment. In corporate lending to account for single name losses, adjustment to allow for small names yet to emerge within the oil and gas sector,
and the susceptibility of minimum debt service customers to interest rate raises not currently captured in models.
South Africa home loans: Primarily to incorporate the uncertainty in the macroeconomic outlook. The adjustment has increased by 27% in local
currency.
Barclaycard: Predominantly to align to new impairment policy requirements in models, and to increase coverage on forbearance programmes and
accounts in recoveries.
Note
a Exchange and other adjustments includes the reclassification of impairments held against the Portuguese loans now held for sale and the Spanish loans held for sale in 2014.