Impairment

6 Months Ended

Jun. 30, 2023

Disclosure of impairment loss and reversal of impairment loss [abstract]

Note 9: Impairment


	Half-year to 30 Jun 2023 £m	Half-year to 30 Jun 2022 £m	Half-year to 31 Dec 2022 £m

Impact of transfers between stages	431	421	493
Other changes in credit quality1	374	21	469
Additions and repayments	(150)	(65)	183
Other items	7	4	(4)
	231	(40)	648
Total impairment	662	381	1,141

In respect of:
Loans and advances to banks	(3)	3	11
Loans and advances to customers	667	335	1,016
Debt securities	2	2	5
Financial assets held at amortised cost	666	340	1,032
Other assets	(2)	6	16
Impairment on drawn balances	664	346	1,048
Loan commitments and financial guarantees	1	35	87
Financial assets at fair value through other comprehensive income	(3)	–	6
Total impairment	662	381	1,141

1 Includes a credit for methodology and model changes of £3 million (half-year to 30 June 2022: charge of £3 million; half-year to 31 December 2022: credit of £66 million).

There was a £27 million charge in respect of residual value impairment and voluntary terminations within the Group’s UK Motor Finance business in the current period (half-year to 30 June 2022: no charge; half-year to 31 December 2022: no charge).

The Group’s impairment charge comprises the following:

Impact of transfers between stages

The net impact on the impairment charge of transfers between stages.

Other changes in credit quality

Changes in loss allowance as a result of movements in risk parameters that reflect changes in customer credit quality, but which have not resulted in a transfer to a different stage. This also contains the impact on the impairment charge of write-offs and recoveries, where the related loss allowances are reassessed to reflect the view of credit quality at the balance sheet date and therefore the ultimate realisable or recoverable value.

Additions and repayments

Expected loss allowances are recognised on origination of new loans or further drawdowns of existing facilities. Repayments relate to the reduction of loss allowances resulting from the repayment of outstanding balances that have been provided against.