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Overview Strategic report Corporate governance Risk management Financial statements Other information
Risk management continued
For the year ended 31 December 2013
All amounts are stated in £m unless otherwise indicated
1. Credit risk continued
31 December 2012 Standardised Strong Good Satisfactory Weak Default Total
Corporate CoAM
Accommodation, food and licensed services 298.6 107.1 126.5 20.3 18.1 278.1 848.7
Care 205.7 18.4 43.5 26.1 – 2.1 295.8
Education 17.7 20.5 – 0.2 – – 38.4
Financial services 68.7 52.5 8.2 3.6 – 4.8 137.8
Football clubs – 33.2 – 0.4 0.1 19.2 52.9
Housing associations 0.6 1,046.0 45.0 – – – 1,091.6
Manufacturing 80.5 4.1 18.9 7.5 15.1 9.5 135.6
Motor trade and garages 22.9 54.6 20.1 9.9 0.8 3.7 112.0
PFI – 4.0 1,247.4 34.7 – 10.7 1,296.8
Professional services 47.0 8.2 15.9 11.4 0.8 3.8 87.1
Property and construction:
Commercial investment 56.4 73.5 1,166.5 272.4 126.0 1,420.8 3,115.6
Residential investment 4.2 0.1 161.5 60.6 50.2 120.4 397.0
Commercial development 1.2 9.3 139.5 73.3 15.2 40.2 278.7
Residential development 1.1 0.6 49.5 13.1 7.4 5.8 77.5
Public sector entities 170.8 1.3 – – – – 172.1
Renewable energy 633.7 – – – – 9.2 642.9
Retail and wholesale trade 100.5 87.9 43.7 11.9 5.4 19.3 268.7
Services 326.6 98.4 41.7 28.1 17.8 23.9 536.5
Transport, storage and communication 103.0 51.3 2.8 15.8 0.4 14.9 188.2
Utilities 92.6 – 1.5 0.1 – 0.6 94.8
Business banking – – – – – – –
Other 0.5 0.5 0.4 4.3 – 2.1 7.8
2,232.3 1,671.5 3,132.6 593.7 257.3 1,989.1 9,876.5
Total exposure 2,587.2 2,300.3 3,635.6 624.6 259.4 1,994.9 11,402.0
The comparative table has been updated to reflect the changes to Core (BaCB) and Non-core (CoAM) divisions.
The Standardised category relates to sectors which for purposes of capital calculations, are not rated with a regulatory approved rating model due to the
sector having insufficient numbers of customers and/or low defaults. These typically belong to the public sector entities and renewable energy sectors, and
to the following customer types within other sectors: other energy efficiency schemes, leveraged (more highly geared businesses, for example, comprising of
Management Buy-Outs or firms that have made business acquisitions to expand their operation) of which we have a relatively small portfolio, newly established
companies with an insufficient number of published financial accounts, project finance and charities.
The criteria for the BaCB portfolio is a combination of a maximum turnover of £25m (for a single legal entity (SLE)), maximum exposure of £5m (at connection
level which might comprise of several SLEs that are directly connected or share common directors/collateral) and risk rating being good, strong or standardised.
BaCB also handles charities and co-operatives (irrespective of size). BaCB seeks further opportunities to lend using these criteria.
The movement of balances into the Default category in the period remains reflective of the continued challenging commercial property environment and the
Bank’s focus on the expected outlook for this sector, consequential forbearance strategies and the completion of the Bank’s review of its default and credit risk
impairment strategy.
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The Co-operative Bank plc Annual report and accounts 2013