Notes to the consolidated financial statements
- « 19 Loans and advances to customers
- 20 Allowance for impairment losses
- 21 Available-for-sale financial assets »
20 Allowance for impairment losses on loans and advances
| Loans and advances to customers |
Loans and |
Total |
||||
|---|---|---|---|---|---|---|
| Retail – |
Retail – |
Wholesale |
Total |
|||
| Balance at 1 January 2007 |
42 |
1,918 |
233 |
2,193 |
1 |
2,194 |
| Exchange and other adjustments |
– |
– |
2 |
2 |
– |
2 |
| Advances written off |
(25) |
(1,439) |
(78) |
(1,542) |
– |
(1,542) |
| Recoveries of advances written off in previous years |
2 |
133 |
2 |
137 |
– |
137 |
| Unwinding of discount |
– |
(101) |
(3) |
(104) |
– |
(104) |
| Charge (credit) to the income statement |
18 |
1,518 |
186 |
1,722 |
(1) |
1,721 |
| At 31 December 2007 |
37 |
2,029 |
342 |
2,408 |
– |
2,408 |
| Exchange and other adjustments |
– |
– |
43 |
43 |
– |
43 |
| Advances written off |
(23) |
(1,382) |
(205) |
(1,610) |
– |
(1,610) |
| Recoveries of advances written off in previous years |
1 |
111 |
– |
112 |
– |
112 |
| Unwinding of discount |
– |
(100) |
(2) |
(102) |
– |
(102) |
| Charge to the income statement |
171 |
1,687 |
860 |
2,718 |
158 |
2,876 |
| At 31 December 2008 |
186 |
2,345 |
1,038 |
3,569 |
158 |
3,727 |
The analysis of allowances for impairment between retail and wholesale has been prepared based upon the type of exposure and not the business segment in which the exposure is recorded. Included within retail are exposures to personal customers and small businesses, whilst included within wholesale are exposures to corporate customers and other large institutions.
The criteria that the Group uses to determine that there is objective evidence of an impairment loss are disclosed in note 2(J). All impaired loans which exceed a certain threshold, principally within the Group’s corporate banking business, are individually assessed for impairment having regard to expected future cash flows including those that could arise from the realisation of security. Included in loans and advances to customers and to banks were loans and advances individually determined to be impaired whose gross amount before impairment allowances was £2,699 million (2007: £684 million) and in respect of which collateral with a fair value of £518 million (2007: £193 million) was held.