Impairment losses
| 2006 £m |
2005 £m |
|
| New impairment losses | 2,093 | 1,879 |
| less: recoveries of amounts previously written-off | (215) | (172) |
| Charge to income statement | 1,878 | 1,707 |
| Comprising: | ||
| Loan impairment losses | 1,877 | 1,703 |
| Other impairment losses | 1 | 4 |
| Charge to income statement | 1,878 | 1,707 |
2006 compared with 2005
Impairment losses were £1,878 million compared with £1,707 million in 2005. New impairment losses were up 11%, £214 million to £2,093 million. Recoveries of amounts previously written-off were up £43 million, 25% to £215 million. Consequently the net charge to the income statement was up £171 million, 10% to £1,878 million. Improvements in Corporate Markets reflecting a benign credit environment partly offset higher impairment losses in Retail Markets and Citizens.
Total balance sheet provisions for impairment amounted to £3,935 million compared with £3,887 million in 2005.
Total provision coverage (the ratio of total balance sheet provisions for impairment to total risk elements in lending) decreased from 65% to 62%. The ratio of total balance sheet provisions for impairment to total risk elements in lending and potential problem loans also decreased to 62% compared with 65% in 2005. This reflects amounts written-off and the changing mix from unsecured to secured exposure.
© 2007