- Absa
-
The South African segment of Barclays PLC, comprising Absa Group
Limited, but excluding Absa Capital, Absa Card and Absa Wealth which are
reported within Barclays Capital, Barclaycard, and Barclays Wealth
respectively.
- Absa Capital
-
The portion of Absa's results that is reported by Barclays
within the Barclays Capital business.
- Absa Card
-
The portion of Absa's results that arises from the Absa credit
card business and is reported within Barclaycard.
- Absa Group Limited
-
Refers to the consolidated results of the South
African group which is listed on the Johannesburg Stock Exchange in
which Barclays owns a controlling stake.
- ABS CDO Super Senior
-
The super senior tranches of debt linked to
collateralised debt obligations of asset backed securities.
Payment of super senior tranches takes priority over other obligations.
See Risk Management section - Barclays Capital Credit Market Exposures.
- Adjusted Gross Leverage
-
The multiple of adjusted total tangible assets
over total qualifying Tier 1 capital. Adjusted total tangible assets are total
assets less derivative counterparty netting, assets under management on
the balance sheet, settlement balances and cash collateral on derivative
liabilities, goodwill and intangible assets. See 'Tier 1 Capital'.
- Adjusted profit before tax
-
Profit before tax excluding the gain on own
credit of £391m (2009:£1,820m charge), gains on acquisitions and
disposals of £210m (2009:£214m) and gains on debt buy-backs and
extinguishments of £nil (2009: £1,429m).
- Africa
-
The geographic segment comprising countries where Barclays operates
within Africa and the Indian Ocean.
- Alt-A
-
Loans regarded as lower risk than sub-prime, but with higher risk
characteristics than lending under normal criteria. See Risk Management
section - Barclays Capital Credit Market Exposures.
- Americas
-
The geographic segment comprising the USA, Canada and
countries where Barclays operates within Latin America.
- Annual Earnings at Risk (AEaR)
-
The sensitivity of annual earnings to
shocks in market rates, at approximately 99th percentile for change over
one year. For interest rates this equates to a 2% parallel shift in rates.
For equity indices, it equates to a 25% change from one-year end to
the next, or 15% from one-year end to the next year's average.
- Arrears
-
Customers are said to be in arrears when they are behind in
fulfilling their obligations with the result that an outstanding loan is unpaid
or overdue. Such a customer is also said to be in a state of delinquency.
When a customer is in arrears, his entire outstanding balance is said to be
delinquent, meaning that delinquent balances are the total outstanding
loans on which payments are overdue.
- Asia
-
The geographic segment comprising countries where Barclays
operates within Asia (including Singapore, Japan, China and India),
Australasia and the Middle East.
- Asset backed products
-
As used in Note 41 'Fair value of financial
instruments', asset backed products are debt and derivative products that
are linked to the cash flow of a referenced asset. This category includes
asset backed loans; collateralised debt obligations (CDOs); collateralised
loan obligations (CLOs); asset backed credit derivatives (ABS CDS); asset
backed and mortgage backed securities.
- Asset Backed Securities (ABS)
-
Securities that represent an interest in an underlying pool of referenced assets. The referenced pool can comprise any assets which attract a set of associated cash flows but are commonly pools of residential or commercial mortgages and, in the case of Collateralised Debt Obligations (CDOs), the referenced pool may be ABS or other classes of assets. See Risk Management section - Credit Market Exposures.
- Assets margin
-
Interest earned on customer assets relative to the average
internal funding rate, divided by average customer assets, expressed as an
annualised percentage.
- Average customer balances
-
Balances in the average balance sheet which
are based on daily averages for most UK banking operations and monthly
averages outside the UK.
- Average Daily Value at Risk
-
The average Daily Value at Risk for a specified period of time.
- Average LTV on new mortgages
-
The ratio of all new mortgage balances
disbursed in the period to the appraised property value of those
mortgages, i.e. total amount disbursed year-to-date divided by total
amount of appraised property value.
- Average net income per employee
-
Total operating income compared to the
average number of employees for the reporting period.
- Bank levy
-
The levy that will apply to certain UK banks, building societies
and the UK operations of foreign banks from 1st January 2011. The levy is
payable based on a percentage of the chargeable equity and liabilities of
the bank as at the balance sheet date.
- Barclays Business
-
The business unit within UK Retail Banking providing
banking services to small and medium enterprises.
- Barclays Corporate
-
A business unit that provides global banking services
across 10 countries grouped into three regions: UK & Ireland, Continental
Europe (Spain, Italy, Portugal and France) and New Markets (India,
Pakistan, Russia and the UAE).
- Backstop facility
-
A standby facility, that is a liquidity arrangement whereby
another party agrees to make a payment should the primary party not do so.
- Basel III leverage ratio
-
The ratio of Tier 1 capital to certain on and off
balance sheet exposures, calculated in accordance with the methodology
set out in the Basel III guidelines published in December 2010.
- Basis point
-
One hundredth of a per cent (0.01%), so 100 basis points is
1%. Used in quoting movements in interest rates or yields on securities.
- BCBS
-
Basel Committee of Banking Supervisors ('BCBS', or 'The Basel
Committee'), a forum for regular cooperation on banking supervisory
matters which develops global supervisory standards for the banking
industry. Its members are officials from central banks or prudential
supervisors from 27 countries and territories.
- Capital ratios
-
Key financial ratios measuring the Group's capital adequacy
or financial strength. These include the Core Tier 1 ratio, Tier 1 ratio and
Risk asset ratio.
- Collateralised Debt Obligations (CDOs)
-
Securities issued by a third party
which reference Asset Backed Securities (ABSs) (defined above) and/or
certain other related assets purchased by the issuer. CDOs may feature
exposure to sub-prime mortgage assets through the underlying assets.
CDO2 securities represent investments in CDOs that have been securitised
by a third party. See Risk Management section – Barclays Capital Credit
Market Exposures.
- Collateralised Loan Obligation (CLO)
-
A security backed by the repayments
from a pool of commercial loans. The payments may be made to different
classes of owners (in tranches). See Risk Management section – Barclays
Capital Credit Market Exposures.
- Collateralised Synthetic Obligation (CSO)
-
A form of synthetic collateralised
debt obligation (CDO) that does not hold assets like bonds or loans but
invests in credit default swaps (CDSs) or other non-cash assets to gain
exposure to a portfolio of fixed income assets.
- Commercial Mortgage Backed Securities (CMBS)
-
Securities that
represent interests in a pool of commercial mortgages. Investors in these
securities have the right to cash received from future mortgage payments
(interest and/or principal). See Risk Management section - Barclays Capital Credit Market Exposures.
- Commercial Real Estate
-
Includes office buildings, industrial property,
medical centres, hotels, malls, retail stores, shopping centres, farm land,
multifamily housing buildings, warehouses, garages, and industrial
properties. Commercial real estate loans are those backed by a package
of commercial real estate assets. See Risk Management section – Barclays
Capital Credit Market Exposures.
- Commercial Paper
-
An unsecured promissory note issued to finance
short‑term credit needs. It specifies the face amount paid to investors
on the maturity date.
- Commodity products
-
As used in Note 41 'Fair value of financial
instruments', these products are exchange traded and OTC derivatives
based on a commodity underlying (e.g. metals, precious metals, oil and oil
related, power and natural gas).
- Compensation:income ratio
-
Staff compensation based costs compared
to total income.
- Conduits
-
A financial vehicle that holds asset-backed debt such as
mortgages, vehicle loans, and credit card receivables, all financed with
short-term loans (generally commercial paper) that use the asset-backed
debt as collateral. The profitability of a conduit depends on the ability to
roll over maturing short-term debt at a cost that is lower than the returns
earned from asset-backed securities held in the portfolio. See Risk
Management section - Barclays Capital Credit Market Exposures.
- Continental Europe
-
See Barclays Corporate.
- Core Tier 1 capital
-
Called-up share capital and eligible reserves plus equity
non-controlling interests, less intangible assets and deductions relating to
the excess of expected loss over regulatory impairment allowance and
securitisation positions, as specified by the FSA.
- Core Tier 1 capital ratio
-
Core Tier 1 capital as a percentage of risk
weighted assets.
- Corporate income tax paid
-
Tax paid during the year on taxable profits,
including withholding tax deducted from income.
- Cost:income ratio
-
Operating expenses compared to total income net
of insurance claims.
- Cost:net income ratio
-
Operating expenses compared to total income net
of insurance claims less impairment charges and other credit provisions.
- Cost of Equity
-
The rate of return targeted by the equity holders of the
company.
- Coverage ratio (CRL)
-
Impairment allowances as a percentage of
CRL balances.
- Covered bonds
-
Debt securities backed by a portfolio of mortgages that is
segregated from the issuer's other assets solely for the benefit of the
holders of the covered bonds.
- Credit Default Swaps (CDS)
-
A credit derivative is an arrangement
whereby the credit risk of an asset (the reference asset) is transferred from
the buyer to the seller of protection. A credit default swap is a contract
where the protection seller receives premium or interest-related payments
in return for contracting to make payments to the protection buyer in the
event of a defined credit event. Credit events normally include bankruptcy,
payment default on a reference asset or assets, or downgrades by a rating
agency.
- Credit Derivative Product Company (CDPC)
-
A company that sells
protection on credit derivatives. CDPCs are similar to monoline insurers.
However, unlike monoline insurers, they are not regulated as insurers.
See Risk Management section - Barclays Capital Credit Market Exposures.
- Credit market exposures
-
Relates to commercial real estate and leveraged
finance businesses that have been significantly impacted by the
deterioration in the global credit markets. The exposures include positions
subject to fair value movements in the Income Statement, positions that
are classified as loans and advances and available for sale.
- Credit Risk Loans (CRLs)
-
A loan becomes a credit risk loan when evidence
of deterioration has been observed, for example a missed payment or
other breach of covenant. A loan may be reported in one of three
categories: impaired loans, accruing past due 90 days or more or impaired
and restructured loans. These may include loans which, while impaired, are
still performing but have associated individual impairment allowances
raised against them.
- Credit spread
-
The yield spread between securities with the same coupon
rate and maturity structure but with different associated credit risks, with
the yield spread rising as the credit rating worsens. It is the premium over
the benchmark or risk-free rate required by the market to accept a lower
credit quality.
- Credit Valuation Adjustment (CVA)
-
The difference between the risk-free
value of a portfolio of trades and the market value which takes into
account the counterparty’s risk of default. The CVA therefore represents an
estimate of the adjustment to fair value that a market participant would
make to incorporate the credit risk of the counterparty due to any failure to
perform on contractual agreements.
- Customer deposits
-
Money deposited by all individuals and companies
that are not credit institutions. Such funds are recorded as liabilities in the
Group's balance sheet under Customer Accounts.
- Economic capital
-
An internal measure of the minimum equity and
preference capital required for the Group to maintain its credit rating based
upon its risk profile.
- Economic profit
-
Profit attributable to equity holders of the Parent
excluding amortisation of acquired intangible assets less a capital charge
representing adjusted average shareholders' equity excluding noncontrolling
interests multiplied by the Group cost of capital.
- Equities and Prime Services
-
The Barclays Capital trading businesses
encompassing Cash Equities, Equity Derivatives & Equity Financing.
- Equity products
-
As used in Note 41 'Fair value of financial instruments’,
these products are linked to equity markets. This category includes listed
equities, exchange traded derivatives, equity derivatives, preference shares
and contract for difference (CFD) products.
- Equity structural hedge
-
An interest rate hedge which functions to reduce
the impact of the volatility of short-term interest rate movements on equity
positions on the balance sheet that do not reprice with market rates.
- Europe region
-
The geographic segment comprising countries in which
Barclays operates within the EU (excluding UK & Ireland), Northern,
Continental and Eastern Europe, including Russia.
- Expected loss
-
The Group measure of anticipated loss for exposures
captured under an internal ratings based credit risk approach for capital
adequacy calculations. It is measured as the Barclays modelled view of
anticipated loss based on Probability of Default (PD), Loss Given Default
(LGD) and Exposure at Default (EAD), with a one-year time horizon.
- Exposure in the event of default (EAD)
-
The estimation of the extent to
which Barclays may be exposed to a customer or counterparty in the event
of, and at the time of, that counterparty’s default. At default, the customer
may not have drawn the loan fully or may already have repaid some of the
principal, so that exposure is typically less than the approved loan limit.
- First/Second Lien
-
First lien: debt that places its holder first in line to
collect compensation from the sale of the underlying collateral in the event
of a default on the loan. Second lien: debt that is issued against the same
collateral as higher lien debt but that is subordinate to it. In the case of
default, compensation for this debt will only be received after the first lien
has been repaid and thus represents a riskier investment than the first lien.
See Risk Management section - Barclays Capital Credit Market Exposures.
- Fixed charge
-
Security taken over a specific asset of a borrower to secure
the repayment of a loan. In this arrangement the asset is signed over to
the creditor and the borrower would need the lender’s permission to sell it.
The lender also registers a charge against the asset which remains in force
until the loan is repaid.
- Fixed Income, Currency and Commodities
-
The Barclays Capital trading
businesses encompassing Rates, Credit, Emerging Markets, Commodities,
Foreign Exchange & Fixed Income Financing.
- Forbearance
-
Forbearance Programmes that assist customers in financial
difficulty through agreements to accept less than contractual amounts
due where financial distress would otherwise prevent satisfactory
repayment within the original terms and conditions of the contract. These
agreements may be initiated by the customer, Barclays or a third party and
include approved debt counselling plans, minimum due reductions,
interest rate concessions and switches from capital and interest
repayments to interest-only payments.
- FSA-eligible pool assets (liquid assets buffer)
-
High quality unencumbered
assets that meet the FSA's requirements for liquidity. These assets include,
for example, high quality government or central bank securities, certain
sight deposits with central banks, and securities issued by designated
multilateral development banks.
- Full time equivalent
-
Full time equivalent employee units are the on-job
hours paid for employee services divided by the number of ordinary-time
hours normally paid for a full-time staff member when on the job (or
contract employee where applicable).
- Funds and fund-linked products
-
As used in Note 41 'Fair value of financial
instruments', this category includes holdings in mutual funds, hedge
funds, fund of funds and fund linked derivatives.
- Funded/unfunded
-
Exposures where the notional amount of the
transaction is either funded or unfunded. Represents exposures where a
commitment to provide future funding has been made and the funds have
been released/not released.
- FX products
-
As used in Note 41 'Fair value of financial instruments', these
products are derivatives linked to the foreign exchange market. This
category includes FX spot and forward contracts; FX swaps; FX options.
- Impaired loans
-
Loans are reported as Credit Risk Loans (defined above)
and comprise loans where individual identified impairment allowance has
been raised and also include loans which are fully collateralised or where
indebtedness has already been written down to the expected realisable
value. The impaired loan category may include loans, which, while
impaired, are still performing.
- Impairment allowances
-
Provisions held on the balance sheet as a result
of the raising of a charge against profit for the incurred loss inherent in the
lending book. An impairment allowance may either be identified or
unidentified and individual or collective.
- Income
-
Total income net of insurance claims, unless otherwise specified.
- Incremental Default Risk Charge (IDRC)
-
The IDRC captures default risk.
This means the potential for a direct loss due to an obligor's default as well
as the potential for indirect losses that may arise from a default event.
- Individually/Collectively Assessed
-
Impairment is measured individually
for assets that are individually significant, and collectively where a portfolio
comprises homogenous assets and where appropriate statistical
techniques are available.
- Individual liquidity guidance (ILG)
-
Guidance given to a firm about the
amount, quality and funding profile of liquidity resources that the FSA has
asked the firm to maintain.
- Interchange income
-
A fee that is paid to a credit card issuer in the clearing
and settlement of a sales or cash advance transaction.
- Interest rate products
-
As used in Note 41 'Fair value of financial
instruments', these are products with a payoff linked to interest rates. This
category includes interest rate swaps, swaptions, caps and exotic interest
rate derivatives.
- Internal funds pricing
-
The Group's mechanism for pricing intra-group
funding and liquidity.
- Investment banking
-
Fee generating businesses encompassing Advisory,
Debt and Equity Origination within Barclays Capital.
- Investment grade
-
A debt security, treasury bill or similar instrument with
a credit rating measured by external agencies of AAA to BBB.
- Leveraged Finance
-
Loans or other financing agreements provided to
companies whose overall level of debt is high in relation to their cash flow
(net debt: EBITDA) typically arising from private equity sponsor led
acquisitions of the businesses concerned.
- Liabilities margin
-
Interest paid on customer liabilities relative to the
average internal funding rate, divided by average customer liabilities.
Expressed as an annualised percentage.
- Liquidity and Credit enhancements
-
Credit enhancement facilities are used
to enhance the creditworthiness of financial obligations and cover losses due
to asset default. Two general types of credit enhancement are third-party
loan guarantees and self-enhancement through over collateralization.
Liquidity enhancement makes funds available if required, for other reasons
than asset default, e.g. to ensure timely repayment of maturing commercial
paper.
- Liquidity Coverage Ratio (LCR)
-
The ratio of the stock of high quality liquid
assets to expected net cash outflows over the following 30 days. Highquality
liquid assets should be unencumbered, liquid in markets during a
time of stress and, ideally, be central bank eligible. These include, for
example, cash and claims on central governments and central banks. The
Basel III guidelines require this ratio to be at least 100% and it is expected to
apply from 2015.
- Liquidity pool/buffer
-
The Group liquidity pool comprises cash at central
banks and highly liquid collateral specifically held by the Group as
contingency to enable the bank to meet cash outflows in the event
of stressed market conditions.
- Loan loss rate
-
Defined as total credit impairment charge (excluding available for sale assets and reverse repurchase agreements) divided by gross loans and advances to customers and banks (at amortised cost).
- Loan to deposit ratio
-
The ratio of loans and advances to customer
accounts. This excludes certain liabilities issued by the retail business that
have characteristics comparable to retail deposits (for example, structured
CDs and retail bonds), which are included within debt securities in issue.
- Loan to deposit and long term funding ratio
-
The ratio of wholesale and
retail loans and advances to customers net of impairment allowance,
divided by the total of customer accounts, long term debt (due after 1
year) and equity.
- Loan funding ratio
-
The ratio of wholesale and retail loans and advances
to customers net of impairment allowance, divided by the total of
customer accounts, long-term debt (>1 yr) and equity.
- Loan to value ratio (LTV)
-
Expresses the amount borrowed against an asset
(e.g. a mortgage) as a percentage of the appraised value. The ratio is used
in assessing the appropriate level of risk for the loan and is generally
reported as an average for new mortgages or an entire portfolio.
- Loan to value of new mortgage lending
-
See Average LTV in new
mortgage.
- Loans past due
-
Loans are past due when a counterparty has failed to
make a payment when contractually due.
- Loss Given Default (LGD)
-
The fraction of Exposure at Default (EAD)
(defined above) that will not be recovered following default. LGD
comprises the actual loss (the part that is not expected to be recovered),
together with the economic costs associated with the recovery process.
- Net Asset Value per Ordinary Share
-
Computed by dividing shareholders'
equity excluding non-controlling interests by the number of issued ordinary
shares.
- Net Interest Income
-
The difference between interest received on assets
and interest paid on liabilities including the interest income on Group
equity.
- Net Interest Margin
-
The margin is expressed as annualised net interest
income for Global Retail Banking, Absa, Barclays Corporate and Barclays Wealth
divided by the sum of the average assets and average liabilities for
those businesses.
- Net Investment Income
-
Includes the net result of revaluing financial
instruments designated at fair value, dividend income and the net result
on disposal of available for sale assets.
- Net Stable Funding Ratio (NSFR)
-
The ratio of available stable funding to
required stable funding over a one year time horizon, assuming a stressed
scenario. The ratio is required to be over 100% with effect from 2015.
Available stable funding would include such items as equity capital,
preferred stock with a maturity of over 1 year, or liabilities with a maturity
of over 1 year. The required amount of stable funding is calculated as the
sum of the value of the assets held and funded by the institution,
multiplied by a specific required stable funding (RSF) factor assigned to
each particular asset type, added to the amount of potential liquidity
exposure multiplied by its associated RSF factor.
- Net Trading Income
-
Income arising from trading positions which are held
at fair value, including market-making and customer business. The
resulting gains and losses are included in the income statement together
with interest, dividends and funding costs relating to trading activities.
- New Markets
-
See Barclays Corporate
- Non-asset backed debt instruments
-
As used in Note 41 'Fair value of
financial instruments', these products are debt instruments. This category
includes government bonds; US agency bonds; corporate bonds;
commercial paper; certificates of deposit; convertible bonds; corporate
bonds and issued notes.
- Non-investment grade
-
A debt security, treasury bill or similar instrument
with a credit rating measured by external agencies of BB+ or below.
- Non-performing loans
-
A loan that is in default or close to being in default
because interest or capital payments are not made on time.
- Performance costs
-
The accounting charge recognised in the period for
performance awards. For deferred incentives and long-term incentives the
accounting charge is spread over the relevant periods in which the
employee delivers service.
- Performance awards
-
Annual performance incentives (including deferred
incentives), long-term incentive awards and commission payments.
A detailed description of the Group's incentive plans is provided in the
Directors’ Remuneration Report.
- PCRL Coverage ratio
-
Impairment allowances as a percentage of total CRL
(credit risk loan) & PPL (potential problem loan) balances. See CRL and
PPL.
- Portfolio MTM LTV
-
The ratio of the total outstanding balance to the
current value of the security, which is estimated using one or more external
house price indices, i.e. total outstanding balance divided by total current
property value (mark to market).
- Potential Credit Risk Loans (PCRLs)
-
Comprise the outstanding balances
to Potential Problem Loans and the three categories of
Credit Risk Loans (defined above).
- Potential Problem Loans (PPLs)
-
Loans where serious doubt exists as to
the ability of the borrowers to continue to comply with repayment terms
in the near future.
- Prime
-
Loans of a higher credit quality and would be expected to satisfy
the criteria for inclusion into Government programmes
- Principal Investments
-
Private Equity Investments.
- Prior year compensation deferrals
-
The accounting charge recognised for
service delivered in the current period in respect of deferred incentives and
long-term incentives previously awarded.
- Private equity investments
-
As used in Note 41 'Fair value of financial
instruments', private equity is equity securities in operating companies not
quoted on a public exchange. Investment in private equity often involves
the investment of capital in private companies or the acquisition of a public
company that results in the delisting of public equity. Capital for private
equity investment is raised by retail or institutional investors and used to
fund investment strategies such as leveraged buyouts, venture capital,
growth capital, distressed investments and mezzanine capital.
- Private-label securitisation
-
Residential mortgage-backed security
transactions sold or guaranteed by entities that are not sponsored or
owned by the government.
- Probability of default (PD)
-
The likelihood that a loan will not be repaid
and will fall into default. PD may be calculated for each client who has a
loan (normally applicable to wholesale customers/clients) or for a portfolio
of clients with similar attributes (normally applicable to retail customers).
To calculate PD, Barclays assesses the credit quality of borrowers and other
counterparties and assigns them an internal risk rating. Multiple rating
methodologies may be used to inform the rating decision on individual
large credits, such as internal and external models, rating agency ratings,
and for wholesale assets market information such as credit spreads. For
smaller credits, a single source may suffice such as the result from an
internal rating model.
- Product structural hedge
-
An interest rate hedge which functions to
reduce the impact of the volatility of short-term interest rate movements
on-balance sheet positions that can be matched to a specific product, e.g.
customer balances that do not reprice with market rates.
- Proprietary trading
-
When a bank, brokerage or other financial institution
trades on its own account, at its own risk, rather than on behalf of
customers, so as to make a profit for itself.
- Renegotiated loans
-
Loans and advances are generally renegotiated either
as part of an ongoing customer relationship or in response to an adverse
change in the circumstances of the borrower. In the latter case
renegotiation can result in an extension of the due date of payment or
repayment plans under which the Group offers a concessionary rate of
interest to genuinely distressed borrowers. This will result in the asset
continuing to be overdue and will be individually impaired where the
renegotiated payments of interest and principal will not recover the original
carrying amount of the asset. In other cases, renegotiation will lead to a
new agreement, which is treated as a new loan.
- Repo/Reverse repo
-
A repurchase agreement that allows a borrower to
use a financial security as collateral for a cash loan at a fixed rate of
interest. In a repo, the borrower agrees to sell a security to the lender
subject to a commitment to repurchase the asset at a specified price on a
given date. For the party selling the security (and agreeing to repurchase it
in the future) it is a repo; for the party on the other side of the transaction
(buying the security and agreeing to sell in the future) it is a reverse
repurchase agreement or reverse repo.
- Residential Mortgage Backed Securities (RMBS)
-
Securities that represent
interests in a group of residential mortgages. Investors in these securities
have the right to cash received from future mortgage payments (interest
and/or principal). See Risk Management section - Barclays Capital Credit
Market Exposures.
- Restructured loans
-
Impaired and restructured loans' comprises loans where, for economic or legal reasons related to the debtor's financial difficulties, a concession has been granted to the debtor that would not otherwise be considered. Where the concession results in the expected cash flows discounted at the original effective interest rate being less than the loan's carrying value, an impairment allowance will be raised.
- Retail Loans
-
Loans to individuals rather than institutions as well as loans to certain smaller business customers. This includes both
secured and unsecured loans such as mortgages and credit card balances.
- Return on average shareholders' equity
-
Calculated as profit for the year
attributable to equity holders of the Parent divided by the average
shareholders’ equity for the year, excluding non-controlling interests.
- Return on average risk weighted assets
-
Calculated as profit after tax for
the year divided by average risk weighted assets for the year.
- Risk asset ratio
-
A measure of the risk attached to the assets of a business
using definitions of capital and risk weightings established in accordance
with the Basel Capital Accord as implemented by the FSA.
- Risk adjusted net interest margin
-
The margin is calculated as the result of
the annualised net interest margin for Global Retail Bank, Barclays
Corporate and Barclays Wealth less the income statement impairment
charge on loans and advances, divided by the sum of the average assets
and average liabilities for those businesses.
- Risk weighted assets
-
A measure of a bank's assets adjusted for their
associated risks. Risk weightings are established in accordance with the
Basel Capital Accord as implemented by the FSA.
- Securitisation
-
A process by which debt instruments are aggregated into a
pool, which is used to back new securities. A company may sell assets to
an SPV (special purpose vehicle) which then issues securities backed by
the assets based on their value. This allows the credit quality of the assets
to be separated from the credit rating of the original company and
transfers risk to external investors.
- SIV Lites
-
Vehicles which invest in diversified portfolios of interest earning
assets to take advantage of the spread differentials between the assets in
the SIV and the funding cost. Unlike SIVs they are not perpetual, making
them look more like CDOs, which have fixed maturity dates. See Risk
Management section - Barclays Capital Credit Market Exposures.
- Special Purpose Entities (SPEs)/Special Purpose Vehicles (SPVs)
-
Entities
created to accomplish a narrow and well defined objective. There are often
specific restrictions or limits around their ongoing activities. Transactions
with SPEs/SPVs take a number of forms, including:
- The provision of financing to fund asset purchases, or commitments
to provide finance for future purchases.
- Derivative transactions to provide investors in the SPE/SPV with a
specified exposure.
- The provision of liquidity or backstop facilities which may be drawn
upon if the SPE/SPV experiences future funding difficulties.
- Direct investment in the notes issued by SPEs/SPVs.
- Spot Daily Value at Risk
-
The Daily Value at Risk (defined above) recorded
for a specified day.
- Structural hedge
-
An interest rate hedge which functions to reduce the
impact of the volatility of short-term interest rate movements on positions
that exist within the balance sheet that carry interest rates that do not
reprice with market rates. See also equity structural hedge and product
structural hedge.
- Structured Investment Vehicles (SIVs)
-
Entities which invest in diversified
portfolios of interest earning assets to take advantage of the spread
differentials between the assets in the SIV and the funding cost. See Risk
Management section – Barclays Capital Credit Market Exposures.
- Structural liquidity
-
The liquidity available from current positions –
principally unpledged marketable assets and holdings of term liabilities
with long remaining lives.
- Structured finance/notes
-
A structured note is an investment tool
which pays a return linked to the value or level of a specified asset or index
and sometimes offers capital protection if the value declines. Structured
notes can be linked to equities, interest rates, funds, commodities and
foreign currency.
- Subordination
-
The state of prioritising repayments of principal and
interest on debt to a creditor lower than repayments to other creditors by
the same debtor. That is, claims of a security are settled by a debtor to a
creditor only after the claims of securities held by other creditors of the
same debtor have been settled.
- Subordinated liabilities
-
Liabilities which, in the event of insolvency or
liquidation of the issuer, are subordinated to the claims of depositors and
other creditors of the issuer.
- Sub-Prime
-
Defined as loans to borrowers typically having weakened
credit histories that include payment delinquencies and potentially more
severe problems such as court judgements and bankruptcies. They may
also display reduced repayment capacity as measured by credit scores,
high debt-to-income ratios, or other criteria indicating heightened risk of
default. See Risk Management section - Credit Market Exposures.
- Tax paid
-
All amounts paid to taxation authorities during the year in
respect of taxes borne and collected by the Group. This includes corporate
income tax paid, taxes paid on behalf of employees, irrecoverable VAT and
other taxes.
- Tier 1 capital
-
A measure of a bank's financial strength defined by the FSA.
It captures Core Tier 1 capital plus other Tier 1 securities in issue, but is
subject to a deduction in respect of material holdings in financial
companies.
- Tier 1 capital ratio
-
The ratio expresses Tier 1 capital as a percentage of
risk weighted assets.
- Tier 2 capital
-
A capital measure defined by the FSA. Broadly, it includes
qualifying subordinated debt and other Tier 2 securities in issue, eligible
collective impairment allowances, unrealised available for sale equity gains
and revaluation reserves. It is subject to deductions relating to the excess
of expected loss over regulatory impairment allowance, securitisation
positions and material holdings in financial companies.
- Top-line income
-
Income before own credit gains/losses and credit market write-downs.
- Total shareholder return (TSR)
-
Defined as the value created for
shareholders through share price appreciation, plus reinvested dividend
payments.
