UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
February
13, 2020
Barclays PLC
(Name
of Registrant)
1 Churchill Place
London E14 5HP
England
(Address
of Principal Executive Office)
Indicate
by check mark whether the registrant files or will file annual
reports
under
cover of Form 20-F or Form 40-F.
Form
20-F x Form 40-F
Indicate
by check mark whether the registrant by furnishing the
information
contained
in this Form is also thereby furnishing the information to
the
Commission
pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes No
x
If
"Yes" is marked, indicate below the file number assigned to the
registrant
in
connection with Rule 12g3-2(b):
This
Report on Form 6-K is filed by Barclays PLC.
This
Report comprises:
Information
given to The London Stock Exchange and furnished pursuant
to
General
Instruction B to the General Instructions to Form 6-K.
EXHIBIT
INDEX
__________________________________________________________________________________
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
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BARCLAYS
PLC
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(Registrant)
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Date:
February 13, 2020
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By: /s/
Garth Wright
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Garth
Wright
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Assistant
Secretary
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13 February 2020
Barclays PLC
Annual Report and Accounts 2019
UK Listing Authority submissions
In compliance with Disclosure Guidance & Transparency Rule
(DTR) 4.1, Barclays PLC announces that the following documents will
today be submitted to the National Storage Mechanism and will
shortly be available for inspection at: www.morningstar.co.uk/uk/NSM
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Barclays PLC Annual Report 2019
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Barclays PLC Strategic Report 2019; and
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Pillar 3 Report for 2019.
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These documents may also be accessed via Barclays PLC's website
at home.barclays/investorrelations
The Barclays PLC Strategic Report 2019 (or the full Annual Report
2019 for those shareholders who have requested it) will be posted
to shareholders with mailing of the Barclays PLC 2020
Notice of Annual General Meeting in due course.
Additional information
The following information is extracted from the Barclays PLC Annual
Report 2019 (page references are to pages in the Annual Report) and
should be read in conjunction with Barclays PLC's Final Results
announcement issued on 13 February 2020. Both documents can be
found at home.barclays/investorrelations and
together constitute the material required by DTR 6.3.5 to be
communicated to the media in unedited full text through a
Regulatory Information Service. This material is not a
substitute for reading the Barclays PLC Annual Report 2019 in
full.
Risk review
Material existing and emerging risks
Material existing and emerging risks to the Group's future
performance
The Group has identified a broad range of risks to which its
businesses are exposed. Material risks are those to which senior
management pay particular attention and which could cause the
delivery of the Group's strategy, results of operations, financial
condition and/or prospects to differ materially from expectations.
Emerging risks are those which have unknown components, the impact
of which could crystallise over a longer time period. In addition,
certain other factors beyond the Group's control, including
escalation of terrorism or global conflicts, natural disasters,
epidemic outbreaks and similar events, although not detailed below,
could have a similar impact on the Group.
Material existing and emerging risks potentially impacting more
than one principal risk
i) Business conditions, general economy and geopolitical
issues
The Group's operations are subject to potentially unfavourable
global and local economic and market conditions, as well as
geopolitical developments, which may have a material effect on the
Group's business, results of operations, financial condition and
prospects.
A deterioration in global or local economic and market conditions
may lead to (among other things): (i) deteriorating business,
consumer or investor confidence and lower levels of fixed asset
investment and productivity growth, which in turn may lead
to lower client activity, including lower demand for borrowing
from creditworthy customers; (ii) higher default rates,
delinquencies, write-offs and impairment charges as borrowers
struggle with the burden of additional debt; (iii) subdued asset
prices and payment patterns, including the value of any collateral
held by the Group; (iv) mark-to-market losses in trading
portfolios resulting from changes in factors such as credit
ratings, share prices and solvency of counterparties; and (v)
revisions to calculated expected credit losses (ECLs) leading to
increases in impairment allowances. In addition, the Group's
ability to borrow from other financial institutions or raise
funding from external investors may be affected by deteriorating
economic conditions and market disruption.
Geopolitical events may lead to further financial instability and
affect economic growth. In particular:
■ In the UK, the decision to leave
the European Union (EU) may give rise to further economic and
political consequences including for investment and market
confidence in the UK and the remainder of EU. See "(ii) Process of
UK withdrawal from the EU" below for further
details.
■ A significant proportion of the Group's portfolio
is located in the US, including a major credit card portfolio and a
range of corporate and investment banking exposures. The
possibility of significant continued changes in US policy in
certain sectors (including trade, healthcare and commodities), may
have an impact on the Group's associated portfolios. Stress in the
US economy, weakening GDP and the associated exchange rate
fluctuations, heightened trade tensions (such as the current
dispute between the US and China), an unexpected rise in
unemployment and/or an increase in interest rates could lead to
increased levels of impairment, resulting in a negative impact on
the Group's profitability.
■ Global GDP growth weakened in 2019, as elevated
policy uncertainty weighed on manufacturing activity and
investment. As a result, a number of central banks, most notably
the Federal Reserve and European Central Bank (ECB), pursued
monetary easing. Growth is expected to stabilise in 2020, but
macroeconomic risks remain skewed to the downside, while concerns
around the efficacy of existing policy tools to counter these risks
persist. An escalation in geopolitical tensions, increased use of
protectionist measures or a disorderly withdrawal from the EU may
negatively impact the Group's business in the affected
regions.
■ In China the pace of credit growth remains a
concern, given the high level of leverage and despite government
and regulatory action. A stronger than expected slowdown could
result if authorities fail to appropriately manage growth during
the transition from manufacturing towards services and the end of
the investment and credit-led boom. Deterioration in emerging
markets could affect the Group if it results in higher impairment
charges via sovereign or counterparty defaults.
ii) Process of UK withdrawal from the EU
The manner in which the UK withdraws from the EU will likely have a
marked impact on general economic conditions in the UK and the EU.
The UK's future relationship with the EU and its trading
relationships with the rest of the world could take a number of
years to resolve. This may lead to a prolonged period of
uncertainty, unstable economic conditions and market volatility,
including fluctuations in interest rates and foreign exchange
rates.
Whilst the exact impact of the UK's withdrawal from the EU is
unknown, the Group continues to monitor the risks that may have a
more immediate impact for its business, including, but not limited
to:
■ Market volatility, including in currencies and
interest rates, might increase which could have an impact on the
value of the Group's trading book positions.
■ Credit spreads could widen leading to reduced
investor appetite for the Group's debt securities. This could
negatively impact the Group's cost of and/or access to funding. In
addition, market and interest rate volatility could affect the
underlying value of assets in the banking book and securities held
by the Group for liquidity purposes.
■ A credit rating agency downgrade applied directly
to the Group, or indirectly as a result of a credit rating agency
downgrade to the UK Government, could significantly increase the
Group's cost of and/or reduce its access to funding, widen credit
spreads and materially adversely affect the Group's interest
margins and liquidity position.
■ A UK recession with lower growth, higher
unemployment and falling UK property prices could lead to increased
impairments in relation to a number of the Group's portfolios,
including, but not limited to, its UK mortgage portfolio, UK
unsecured lending portfolio (including credit cards) and its
commercial real estate exposures.
■ The ability to attract, or
prevent the departure of, qualified and skilled employees may be
impacted by the UK's and the EU's future approach to the EU freedom
of movement and immigration from the EU countries and this may
impact the Group's access to the EU talent
pool.
■ A disorderly exit from the EU may
put a strain on the capabilities of the Group's systems, increasing
the risk of failure of those systems and potentially resulting in
losses and reputational damage for the Group.
■ Changes to current EU
'Passporting' rights may require further adjustment to the current
model for the Group's cross-border banking operation which could
increase operational complexity and/or costs for the
Group.
■ The legal framework within which the Group
operates could change and become more uncertain if the UK takes
steps to replace or repeal certain laws currently in force, which
are based on EU legislation and regulation (including EU regulation
of the banking sector) following its withdrawal from the EU.
Certainty around the ability to maintain existing contracts,
enforceability of certain legal obligations and uncertainty around
the jurisdiction of the UK courts may be affected until the impacts
of the loss of the current legal and regulatory arrangements
between the UK and EU and the enforceability of UK judgements
across the EU are fully known.
■ Should the UK see reduced access to financial
markets infrastructures (including exchanges, central
counterparties and payments services, or other support services
provided by third party suppliers) service provision for clients
could be impacted, likely resulting in reduced market share and
revenue and increased operating costs for the
Group.
iii) The impact of interest rate changes on the Group's
profitability
Any changes to interest rates are significant for the Group,
especially given the uncertainty as to the direction of interest
rates and the pace at which interest rates may change particularly
in the Group's main markets of the UK and the US.
A continued period of low interest rates and flat yield curves,
including any further cuts, may affect and continue to put pressure
on the Group's net interest margins (the difference between its
lending income and borrowing costs) and could adversely affect the
profitability and prospects of the Group.
However, whilst interest rate rises could positively impact the
Group's profitability as retail and corporate business income
increases due to margin de-compression, further increases in
interest rates, if larger or more frequent than expected, could
lead to generally weaker than expected growth, reduced business
confidence and higher unemployment, which in turn could cause
stress in the lending portfolio and underwriting activity of the
Group. Resultant higher credit losses driving an increased
impairment charge would most notably impact retail unsecured
portfolios and wholesale non-investment grade lending and could
have a material effect on the Group's business, results of
operations, financial condition and prospects.
In addition, changes in interest rates could have an adverse impact
on the value of the securities held in the Group's liquid asset
portfolio. Consequently, this could create more volatility than
expected through the Group's FVOCI reserves.
iv) The competitive environments of the banking and financial
services industry
The Group's businesses are conducted in competitive environments
(in particular, in the UK and US), with increased competition
scrutiny, and the Group's financial performance depends upon the
Group's ability to respond effectively to competitive pressures
whether due to competitor behaviour, new entrants to the market,
consumer demand, technological changes or otherwise.
This competitive environment, and the Group's response to it, may
have a material adverse effect on the Group's ability to maintain
existing or capture additional market share, business, results of
operations, financial condition and prospects.
v) Regulatory change agenda and impact on business
model
The Group remains subject to ongoing significant levels of
regulatory change and scrutiny in many of the countries in which it
operates (including, in particular, the UK and the US). As a
result, regulatory risk will remain a focus for senior management.
Furthermore, a more intensive regulatory approach and enhanced
requirements together with the potential lack of international
regulatory co-ordination as enhanced supervisory standards are
developed and implemented may adversely affect the Group's
business, capital and risk management strategies and/or may result
in the Group deciding to modify its legal entity, capital and
funding structures and business mix, or to exit certain business
activities altogether or not to expand in areas despite otherwise
attractive potential.
There are several significant pieces of legislation and areas of
focus which will require significant management attention, cost and
resource, including:
■ Changes in prudential requirements may impact
minimum requirements for own funds and eligible liabilities (MREL)
(including requirements for internal MREL), leverage, liquidity or
funding requirements, applicable buffers and/or add-ons to such
minimum requirements and risk weighted assets calculation
methodologies all as may be set by international, EU or national
authorities. Such or similar changes to prudential requirements or
additional supervisory and prudential expectations, either
individually or in aggregate, may result in, among other things, a
need for further management actions to meet the changed
requirements, such as:
- increasing capital, MREL or liquidity resources,
reducing leverage and risk weighted assets;
- restricting distributions on capital
instruments;
- modifying the terms of outstanding capital
instruments;
- modifying legal entity structure (including with
regard to issuance and deployment of capital, MREL and
funding);
- changing the Group's business mix or exiting other
businesses;
- and/or undertaking other actions to strengthen the
Group's position.
■ The derivatives market has been the subject of
particular focus for regulators in recent years across the G20
countries and beyond, with regulations introduced which require the
reporting and clearing of standardised over the counter (OTC)
derivatives and the mandatory margining of non-cleared OTC
derivatives. These regulations may increase costs for market
participants, as well as reduce liquidity in the derivatives
markets. More broadly, changes to the regulatory framework (in
particular, the review of the second Markets in Financial
Instruments Directive and the implementation of the Benchmarks
Regulation) could entail significant costs for market participants
and may have a significant impact on certain markets in which the
Group operates.
■ The Group and certain of its
members are subject to supervisory stress testing exercises in a
number of jurisdictions. These exercises currently include the
programmes of the BoE, the European Banking Authority (EBA), the
Federal Deposit Insurance Corporation (FDIC) and the Federal
Reserve Bank (FRB). Failure to meet the requirements of regulatory
stress tests, or the failure by regulators to approve the stress
test results and capital plans of the Group, could result in the
Group or certain of its members being required to enhance their
capital position, limit capital distributions or position
additional capital in specific subsidiaries.
For further details on the regulatory supervision of, and
regulations applicable to, the Group, see Supervision and
regulation on pages 204 to 210.
vi) The impact of climate change on
the Group's business
The risks associated with climate change are subject to rapidly
increasing societal, regulatory and political focus, both in the UK
and internationally. Embedding climate risk into the Group's risk
framework in line with regulatory expectations, and adapting the
Group's operations and business strategy to address both the
financial risks resulting from: (i) the physical risk of climate
change; and (ii) the risk from the transition to a low carbon
economy, could have a significant impact on the Group's
business.
Physical risks from climate change arise from a number of factors
and relate to specific weather events and longer-term shifts in the
climate. The nature and timing of extreme weather events are
uncertain but they are increasing in frequency and their impact on
the economy is predicted to be more acute in the future. The
potential impact on the economy includes, but is not limited to,
lower GDP growth, higher unemployment and significant changes in
asset prices and profitability of industries. Damage to the
properties and operations of borrowers could impair asset values
and the creditworthiness of customers leading to increased
default rates, delinquencies, write-offs and impairment charges in
the Group's portfolios. In addition, the Group's premises and
resilience may also suffer physical damage due to weather events
leading to increased costs for the Group.
As the economy transitions to a low-carbon economy, financial
institutions such as the Group may face significant and
rapid developments in stakeholder expectations, policy, law
and regulation which could impact the lending activities the Group
undertakes, as well as the risks associated with its lending
portfolios, and the value of the Group's financial
assets. As sentiment towards climate change shifts and
societal preferences change, the Group may face greater scrutiny of
the type of business it conducts, adverse media coverage and
reputational damage, which may in turn impact customer demand for
the Group's products, returns on certain business activities and
the value of certain assets and trading positions resulting in
impairment charges.
In addition, the impacts of physical and transition climate risks
can lead to second order connected risks, which have the potential
to affect the Group's retail and wholesale portfolios. The impacts
of climate change may increase losses for those sectors sensitive
to the effects of physical and transition risks. Any subsequent
increase in defaults and rising unemployment could create
recessionary pressures, which may lead to wider deterioration in
the creditworthiness of the Group's clients, higher ECLs, and
increased charge-offs and defaults among retail
customers.
If the Group does not adequately embed risks associated with
climate change into its risk framework to appropriately measure,
manage and disclose the various financial and operational risks it
faces as a result of climate change, or fails to adapt its strategy
and business model to the changing regulatory requirements and
market expectations on a timely basis, it may have a material and
adverse impact on the Group's level of business growth,
competitiveness, profitability, capital requirements, cost of
funding, and financial condition.
For further details on the Group's approach to climate change, see
page 138 of climate change risk management.
vii) Impact of benchmark interest rate reforms on the
Group
For several years, global regulators and central banks have been
driving international efforts to reform key benchmark interest
rates and indices, such as the London Interbank Offered Rate
("LIBOR"), which are used to determine the amounts payable under a
wide range of transactions and make them more reliable and robust.
This has resulted in significant changes to the methodology and
operation of certain benchmarks and indices, the adoption of
alternative "risk-free" reference rates and the proposed
discontinuation of certain reference rates (including LIBOR), with
further changes anticipated.
Uncertainty as to the nature of such potential changes, the
availability and/or suitability of alternative "risk-free"
reference rates and other reforms may adversely affect a broad
range of transactions (including any securities, loans and
derivatives which use LIBOR to determine the amount of interest
payable that are included in the Group's financial assets and
liabilities) that use these reference rates and indices and
introduce a number of risks for the Group, including, but not
limited to:
■ Conduct
risk: in undertaking
actions to transition away from using certain reference rates
(including LIBOR), the Group faces conduct risks, which may lead to
customer complaints, regulatory sanctions or reputational impact if
the Group is (i) considered to be undertaking market activities
that are manipulative or create a false or misleading impression,
(ii) misusing sensitive information or not identifying or
appropriately managing or mitigating conflicts of interest, (iii)
providing customers with inadequate advice, misleading information,
unsuitable products or unacceptable service, (iv) not taking an
appropriate or consistent response to remediation activity or
customer complaints, (v) providing regulators with inaccurate
regulatory reporting or (vi) colluding or inappropriately sharing
information with competitors;
■ Financial
risks: the valuation of
certain of the Group's financial assets and liabilities may change.
Moreover, transitioning to alternative "risk-free" reference rates
may impact the ability of members of the Group to calculate and
model amounts receivable by them on certain financial assets and
determine the amounts payable on certain financial liabilities
(such as debt securities issued by them) because currently
alternative "risk-free" reference rates (such as the Sterling
Overnight Index Average (SONIA) and the Secured Overnight Financing
Rate (SOFR)) are look-back rates whereas term rates (such as LIBOR)
allow borrowers to calculate at the start of any interest period
exactly how much is payable at the end of such interest period.
This may have a material adverse effect on the Group's
cashflows;
■ Pricing
risk: changes to existing
reference rates and indices, discontinuation of any reference rate
or indices and transition to alternative "risk-free" reference
rates may impact the pricing mechanisms used by the Group on
certain transactions;
■ Operational
risk: changes to existing
reference rates and indices, discontinuation of any reference rate
or index and transition to alternative "risk-free" reference rates
may require changes to the Group's IT systems, trade reporting
infrastructure, operational processes, and controls. In addition,
if any reference rate or index (such as LIBOR) is no longer
available to calculate amounts payable, the Group may incur
additional expenses in amending documentation for new and existing
transactions and/or effecting the transition from the original
reference rate or index to a new reference rate or index;
and
■ Accounting
risk: an inability to
apply hedge accounting in accordance with IFRS could lead to
increased volatility in the Group's financial results and
performance.
Any of these factors may have a material adverse effect on the
Group's business, results of operations, financial condition and
prospects.
For further details on the impacts of benchmark interest rate
reforms on the Group, see Note 14 on pages 270 to 277.
viii) Holding company structure of Barclays PLC and its dependency
on distributions from its subsidiaries
Barclays PLC is a holding company and its principal sources of
income are, and are expected to continue to be, distributions (in
the form of dividends and interest payments) from operating
subsidiaries which also hold the principal assets of the Group. As
a separate legal entity, Barclays PLC relies on such distributions
in order to be able to meet its obligations as they fall due
(including its payment obligations with respect to its debt
securities) and to create distributable reserves for payment of
dividends to ordinary shareholders.
The ability of Barclays PLC's subsidiaries to pay dividends and
interest and Barclays PLC's ability to receive such distributions
from its investments in its subsidiaries and other entities will be
subject not only to such subsidiaries' and other entities'
financial performance but also to applicable local laws and other
restrictions. These laws and restrictions could limit the payment
of dividends and distributions to Barclays PLC by its subsidiaries
and any other entities in which it holds an investment from time to
time, which could restrict Barclays PLC's ability to meet its
obligations and/or to pay dividends to ordinary
shareholders.
ix) Application of resolution measures and stabilisation powers
under the Banking Act
Under the Banking Act 2009, as amended, (the "Banking Act")
substantial powers are granted to the Bank of England (or, in
certain circumstances, HM Treasury), in consultation with the PRA,
the FCA and HM Treasury, as appropriate, as part of a special
resolution regime (the "SRR"). These powers enable the relevant UK
resolution authority to implement resolution measures and
stabilisation options with respect to a UK bank or investment firm
and certain of its affiliates (currently including Barclays PLC)
(each a "relevant entity") in circumstances in which the relevant
UK resolution authority is satisfied that the resolution conditions
are met. The SRR consists of five stabilisation options: (i)
private sector transfer of all or part of the business or shares of
the relevant entity, (ii) transfer of all or part of the business
of the relevant entity to a "bridge bank" established by the Bank
of England, (iii) transfer to an asset management vehicle wholly or
partly owned by HM Treasury or the Bank of England, (iv) the
cancellation or transfer of the relevant entities' equity and
write-down or conversion of the relevant entity's capital
instruments and liabilities (the bail-in tool) and (v) temporary
public ownership (i.e. nationalisation).
In addition, the relevant UK resolution authority may, in certain
circumstances, in accordance with the Banking Act require the
permanent write-down or conversion into equity of any outstanding
tier 1 capital instruments and tier 2 capital instruments prior to
the exercise of any stabilisation option (including the bail-in
tool), which may lead to the cancellation, transfer or dilution of
Barclays PLC's ordinary share capital.
Shareholders should assume that, in a resolution situation, public
financial support will only be available to a relevant entity as a
last resort after the relevant UK resolution authorities have
assessed and used, to the maximum extent practicable, the
resolution tools, including the bail-in tool (the Bank of England's
preferred approach for the resolution of the Group is a bail-in
strategy with a single point of entry at Barclays PLC). The
exercise of any of such powers under the Banking Act or any
suggestion of any such exercise could materially adversely affect
the value of Barclays PLC ordinary shares and could lead to
shareholders losing some or all of their investment.
In addition, any safeguards within the Banking Act (such as the 'no
creditor worse off' principle) may not result in compensation to
shareholders that is equivalent to the full losses incurred by them
in the resolution and there can be no assurance that shareholders
would recover such compensation promptly.
Material existing and emerging risks impacting individual principal
risks
i) Credit risk
Credit risk is the risk of loss to the Group from the failure of
clients, customers or counterparties, including sovereigns, to
fully honour their obligations to members of the Group, including
the whole and timely payment of principal, interest, collateral and
other receivables.
a) Impairment
The introduction of the impairment requirements of IFRS 9 Financial
Instruments, resulted in impairment loss allowances that are
recognised earlier, on a more forward-looking basis and on a
broader scope of financial instruments, and may continue to have a
material impact on the Group's business, results of operations,
financial condition and prospects.
Measurement involves complex judgement and impairment charges could
be volatile, particularly under stressed conditions. Unsecured
products with longer expected lives, such as credit cards, are the
most impacted. Taking into account the transitional regime, the
capital treatment on the increased reserves has the potential to
adversely impact the Group's regulatory capital
ratios.
In addition, the move from incurred losses to ECLs has the
potential to impact the Group's performance under stressed economic
conditions or regulatory stress tests. For more information, refer
to Note 1 on pages 248 to 252.
b) Specific sectors and
concentrations
The Group is subject to risks arising from changes in credit
quality and recovery rates of loans and advances due from borrowers
and counterparties in any specific portfolio. Any deterioration in
credit quality could lead to lower recoverability and higher
impairment in a specific sector. The following are areas of
uncertainties to the Group's portfolio which could have a material
impact on performance:
■ UK retail, hospitality &
leisure. Softening
demand, rising costs and a structural shift to online shopping is
fuelling pressure on the UK High Street and other sectors heavily
reliant on consumer discretionary spending. As these sectors
continue to reposition themselves, the trend represents a potential
risk in the Group's UK corporate portfolio from the perspective of
its interactions with both retailers and their
landlords.
■ Consumer
affordability has remained
a key area of focus, particularly in unsecured lending.
Macroeconomic factors, such as rising unemployment, that impact a
customer's ability to service unsecured debt payments could lead to
increased arrears in unsecured products.
■ UK real estate
market. UK property
represents a significant portion of the overall Group retail and
corporate credit exposure. In 2019, property price growth across
the UK has slowed, particularly in London and the South East where
the Group's exposure has high concentration. The Group is at risk
of increased impairment from a material fall in property
prices.
■ Leverage finance
underwriting. The Group takes
on sub-investment grade underwriting exposure, including single
name risk, particularly in the US and Europe. The Group is exposed
to credit events and market volatility during the underwriting
period. Any adverse events during this period may potentially
result in loss for the Group, or an increased capital requirement
should there be a need to hold the exposure for an extended
period.
■ Italian mortgage
portfolio. The Group is
exposed to a decline in the Italian economic environment through a
mortgage portfolio in run-off and positions to wholesale customers.
Growth in the Italian economy remained weak in 2019 and should the
economy deteriorate further, there could be a material adverse
effect on the Group's results including, but not limited to,
increased credit losses and higher impairment
charges.
The Group also has large individual exposures to single name
counterparties, both in its lending activities and in its financial
services and trading activities, including transactions in
derivatives and transactions with brokers, central clearing houses,
dealers, other banks, mutual and hedge funds and other
institutional clients. The default of such counterparties could
have a significant impact on the carrying value of these assets. In
addition, where such counterparty risk has been mitigated by taking
collateral, credit risk may remain high if the collateral held
cannot be realised, or has to be liquidated at prices which are
insufficient to recover the full amount of the loan or derivative
exposure. Any such defaults could have a material adverse effect on
the Group's results due to, for example, increased credit losses
and higher impairment charges.
For further details on the Group's approach to credit risk, see
credit risk management on pages 139 to 140 and credit risk
performance on pages 148 to 175.
ii) Market risk
Market risk is the risk of loss arising from potential adverse
change in the value of the Group's assets and liabilities from
fluctuation in market variables including, but not limited to,
interest rates, foreign exchange, equity prices, commodity prices,
credit spreads, implied volatilities and asset
correlations.
A broadening in trade tensions between the US and its major trading
partners, slowing global growth and political concerns in the US
and Europe (including Brexit) are some of the factors that could
heighten market risks for the Group's portfolios. In addition,
the Group's trading business is generally exposed to a prolonged
period of elevated asset price volatility, particularly if it
negatively affects the depth of marketplace liquidity. Such a
scenario could impact the Group's ability to execute client trades
and may also result in lower client flow-driven income and/or
market-based losses on its existing portfolio of market risks.
These can include having to absorb higher hedging costs from
rebalancing risks that need to be managed dynamically as market
levels and their associated volatilities change.
It is difficult to predict changes in market conditions, and such
changes could have a material adverse effect on the Group's
business, results of operations, financial condition and
prospects.
For further details on the Group's approach to market risk, see
market risk management on page 141 and market risk performance on
pages 176 to 177.
iii) Treasury and capital risk
There are three primary types of treasury and capital risk faced by
the Group:
a) Liquidity risk
Liquidity risk is the risk that the Group is unable to meet its
contractual or contingent obligations or that it does not have the
appropriate amount, tenor and composition of funding and liquidity
to support its assets. This could cause the Group to fail to meet
regulatory liquidity standards or be unable to support day-to-day
banking activities. Key liquidity risks that the Group faces
include:
■ The stability of the Group's
current funding profile: In particular, that part which is based on
accounts and deposits payable on demand or at short notice, could
be affected by the Group failing to preserve the current level of
customer and investor confidence. The Group also regularly accesses
the money and capital markets to provide short-term and long-term
funding to support its operations. Several factors, including
adverse macroeconomic conditions, adverse outcomes in conduct and
legal, competition and regulatory matters and loss of confidence by
investors, counterparties and/or customers in the Group, can affect
the ability of the Group to access the capital markets and/or the
cost and other terms upon which the Group is able to obtain market
funding.
■ Credit rating changes and the
impact on funding costs: Rating agencies regularly review credit
ratings given to Barclays PLC and certain members of the Group.
Credit ratings are based on a number of factors, including some
which are not within the Group's control (such as political and
regulatory developments, changes in rating methodologies,
macro-economic conditions and the sovereign credit ratings of the
countries in which the Group operates).
Whilst
the impact of a credit rating change will depend on a number of
factors (including the type of issuance and prevailing market
conditions), any reductions in a credit rating (in particular, any
downgrade below investment grade) may affect the Group's access to
the money or capital markets and/or terms on which the Group is
able to obtain market funding, increase costs of funding and credit
spreads, reduce the size of the Group's deposit base, trigger
additional collateral or other requirements in derivative contracts
and other secured funding arrangements or limit the range of
counterparties who are willing to enter into transactions with the
Group. Any of these factors could have a material adverse effect on
the Group's business, results of operations, financial condition
and prospects.
b) Capital risk
Capital risk is the risk that the Group has an insufficient level
or composition of capital to support its normal business activities
and to meet its regulatory capital requirements under normal
operating environments or stressed conditions (both actual and as
defined for internal planning or regulatory stress testing
purposes). This includes the risk from the Group's pension plans.
Key capital risks that the Group faces include:
■ Failure to meet prudential
capital requirements: This
could lead to the Group being unable to support some or all of its
business activities, a failure to pass regulatory stress tests,
increased cost of funding due to deterioration in investor appetite
or credit ratings, restrictions on distributions including the
ability to meet dividend targets, and/or the need to take
additional measures to strengthen the Group's capital or leverage
position.
■ Adverse changes in FX rates
impacting capital ratios: The Group has capital resources, risk
weighted assets and leverage exposures denominated in foreign
currencies. Changes in foreign currency exchange rates may
adversely impact the Sterling equivalent value of these items. As a
result, the Group's regulatory capital ratios are sensitive to
foreign currency movements. Failure to appropriately manage the
Group's balance sheet to take account of foreign currency movements
could result in an adverse impact on the Group's regulatory capital
and leverage ratios.
■ Adverse movements in the
pension fund: Adverse
movements in pension assets and liabilities for defined benefit
pension schemes could result in deficits on a funding and/or
accounting basis. This could lead to the Group making substantial
additional contributions to its pension plans and/or a
deterioration in its capital position. Under IAS 19, the
liabilities discount rate is derived from the yields of high
quality corporate bonds. Therefore, the valuation of the Group's
defined benefits schemes would be adversely affected by a prolonged
fall in the discount rate due to a persistent low interest rate
and/or credit spread environment. Inflation is another significant
risk driver to the pension fund as the liabilities are adversely
impacted by an increase in long-term inflation
expectations.
c) Interest rate risk in the
banking book
Interest rate risk in the banking book is the risk that the Group
is exposed to capital or income volatility because of a mismatch
between the interest rate exposures of its (non-traded) assets and
liabilities. The Group's hedge programmes for interest rate risk in
the banking book rely on behavioural assumptions and, as a result,
the success of the hedging strategy cannot be guaranteed. A
potential mismatch in the balance or duration of the hedge
assumptions could lead to earnings deterioration. A decline in
interest rates in G3 currencies may also compress net interest
margin on retail portfolios. In addition, the Group's
liquidity pool is exposed to potential capital and/or income
volatility due to movements in market rates and
prices.
For further details on the Group's approach to treasury and capital
risk, see treasury and capital risk management on pages 142 to 143
and treasury and capital risk performance on pages 178 to
199.
iv) Operational risk
Operational risk is the risk of loss to the Group from inadequate
or failed processes or systems, human factors or due to external
events where the root cause is not due to credit or market risks.
Examples include:
a) Operational resilience
The loss of or disruption to business processing is a material
inherent risk within the Group and across the financial services
industry, whether arising through impacts on the Group's technology
systems, real estate services including its retail branch network,
or availability of personnel or services supplied by third parties.
Failure to build resilience and recovery capabilities into business
processes or into the services of technology, real estate or
suppliers on which the Group's business processes depend, may
result in significant customer detriment, costs to reimburse losses
incurred by the Group's customers, and reputational
damage.
b) Cyber threats
The frequency of cyber-attacks continues to grow and is a global
threat that is inherent across all industries. The financial sector
remains a primary target for cyber criminals, hostile nation
states, opportunists and hacktivists and there is an increasing
level of sophistication in criminal hacking for the purpose of
stealing money, stealing, destroying or manipulating data
(including customer data) and/or disrupting operations, where
multiple threats exist including threats arising from malicious
emails, distributed denial of service (DDoS) attacks, payment
system compromises, insider attackers, supply chain and
vulnerability exploitation. Cyber events have a compounding impact
on services and customers, e.g. data breaches in social networking
sites, retail companies and payments networks.
Any failure in the Group's cyber-security policies, procedures or
controls and/or its IT systems, may result in significant financial
losses, major business disruption, inability to deliver customer
services, or loss of data or other sensitive information (including
as a result of an outage) and may cause associated reputational
damage. Any of these factors could increase costs (including, but
not limited to, costs relating to notification of, or compensation
for customers) or may affect the Group's ability to retain and
attract customers. Regulators in the UK, US and Europe continue to
recognise cyber-security as an increasing systemic risk to the
financial sector and have highlighted the need for financial
institutions to improve their monitoring and control of, and
resilience (particularly of critical services) to cyber-attacks,
and to provide timely notification of them, as appropriate. Given
the Group's reliance on technology, a cyber-attack could have a
material adverse effect on its business, results of operations,
financial condition and prospects.
For further details on the Group's approach to cyber threats, see
operational risk performance on pages 200 to 202.
c) New and emergent technology
Technological advancements present opportunities to develop new and
innovative ways of doing business across the Group, with new
solutions being developed both in-house and in association with
third-party companies. Introducing new forms of technology,
however, also has the potential to increase inherent risk. Failure
to evaluate, actively manage and closely monitor risk exposure
during all phases of business development could introduce new
vulnerabilities and security flaws and have a material adverse
effect on the Group's business, results of operations,
financial condition and prospects.
d) External fraud
The level and nature of fraud threats continues to evolve,
particularly with the increasing use of digital products and the
greater functionality available online. Criminals continue to adapt
their techniques and are increasingly focused on targeting
customers and clients through ever more sophisticated methods of
social engineering. External data breaches also provide criminals
with the opportunity to exploit the growing levels of compromised
data. These fraud threats could lead to customer detriment, loss of
business, missed business opportunity and reputational damage, all
of which could have a material adverse effect on the Group's
business, results of operations, financial condition and prospects.
Furthermore, recent changes in the regulatory landscape has seen
increased levels of liability being taken by the Group as part of a
voluntary code in the UK to provide additional protection to
customers and clients who are victims of Authorised Push Payment
scams.
e) Data management and information protection
The Group holds and processes large volumes of data, including
personally identifiable information, intellectual property, and
financial data. The General Data Protection Regulation (GDPR) has
strengthened the data protection rights of customers and increased
the accountability of the Group in its management of such data.
Failure to accurately collect and maintain this data, protect it
from breaches of confidentiality and interference with its
availability exposes the Group to the risk of loss or
unavailability of data (including customer data discussed under
"vi) Conduct risk, c) Data protection and privacy" below) or data
integrity issues. Any of these failures could have a material
adverse effect on the Group's business, results of operations,
financial condition and prospects.
f) Algorithmic trading
In some areas of the investment banking business, trading
algorithms are used to price and risk manage client and principal
transactions. An algorithmic error could result in erroneous or
duplicated transactions, a system outage, or impact the Group's
pricing abilities, which could have a material adverse effect
on the Group's business, results of operations, financial
condition and prospects and reputation.
g) Processing error
As a large, complex financial institution, the Group faces the risk
of material errors in existing operational processes, or from new
processes as a result of on-going change activity, including
payments and client transactions. Material operational or payment
errors could disadvantage the Group's customers, clients or
counterparties and could have a material adverse effect on the
Group's business, results of operations, financial condition
and prospects.
h) Supplier exposure
The Group depends on suppliers for the provision of many of its
services and the development of technology. Whilst the Group
depends on suppliers, it remains fully accountable for any risk
arising from the actions of suppliers. The dependency on suppliers
and sub-contracting of outsourced services introduces concentration
risk where the failure of specific suppliers could have an impact
on the Group's ability to continue to provide material services to
its customers. Failure to adequately manage supplier risk could
have a material adverse effect on the Group's business,
results of operations, financial condition and
prospects.
i) Critical accounting estimates and judgements
The preparation of financial statements in accordance with IFRS
requires the use of estimates. It also requires management to
exercise judgement in applying relevant accounting policies. The
key areas involving a higher degree of judgement or complexity, or
areas where assumptions are significant to the consolidated and
individual financial statements, include credit impairment charges
for amortised cost assets, taxes, fair value of financial
instruments, pensions and post-retirement benefits, and provisions
including conduct and legal, competition and regulatory matters.
There is a risk that if the judgement exercised, or the estimates
or assumptions used, subsequently turn out to be incorrect, this
could result in material losses to the Group, beyond what was
anticipated or provided for. Further development of standards and
interpretations under IFRS could also materially impact the
financial results, condition and prospects of the Group. For
further details on the accounting estimates and policies, see the
Notes to the audited financial statements on pages 248 to
337.
j) Tax risk
The Group is required to comply with the domestic and international
tax laws and practice of all countries in which it has business
operations. There is a risk that the Group could suffer losses due
to additional tax charges, other financial costs or reputational
damage as a result of failing to comply with such laws and
practice, or by failing to manage its tax affairs in an appropriate
manner, with much of this risk attributable to the international
structure of the Group. In addition, increasing reporting and
disclosure requirements around the world and the digitisation of
the administration of tax has potential to increase the Group's tax
compliance obligations further.
k) Ability to hire and retain appropriately qualified
employees
As a regulated financial institution, the Group requires
diversified and specialist skilled colleagues. The Group's ability
to attract, develop and retain a diverse mix of talent is key to
the delivery of its core business activity and strategy. This is
impacted by a range of external and internal factors, such as the
UK's decision to leave the EU and the enhanced individual
accountability applicable to the banking industry. Failure to
attract or prevent the departure of appropriately qualified and
skilled employees could have a material adverse effect on the
Group's business, results of operations, financial condition
and prospects. Additionally, this may result in disruption to
service which could in turn lead to disenfranchising certain
customer groups, customer detriment and reputational
damage.
For further details on the Group's approach to operational risk,
see operational risk management on pages 143 to 144 and operational
risk performance on pages 200 to 202.
v) Model risk
Model risk is the risk of potential adverse consequences from
financial assessments or decisions based on incorrect or misused
model outputs and reports. The Group relies on models to support a
broad range of business and risk management activities, including
informing business decisions and strategies, measuring and limiting
risk, valuing exposures (including the calculation of impairment),
conducting stress testing, assessing capital adequacy, supporting
new business acceptance and risk and reward evaluation, managing
client assets, and meeting reporting requirements. Models are, by
their nature, imperfect and incomplete representations of reality
because they rely on assumptions and inputs, and so they may be
subject to errors affecting the accuracy of their outputs. For
instance, the quality of the data used in models across the Group
has a material impact on the accuracy and completeness of its risk
and financial metrics. Models may also be misused. Model errors or
misuse may result in (among other things) the Group making
inappropriate business decisions and/or inaccuracies or errors
being identified in the Group's risk management and regulatory
reporting processes. This could result in significant financial
loss, imposition of additional capital requirements, enhanced
regulatory supervision and reputational damage, all of which could
have a material adverse effect on the Group's business, results of
operations, financial condition and prospects.
For further details on the Group's approach to model risk, see
model risk management on page 144 and model risk performance on
pages 202.
vi) Conduct risk
Conduct risk is the risk of detriment to customers, clients, market
integrity, effective competition or the Group from the
inappropriate supply of financial services, including instances of
wilful or negligent misconduct. This risk could manifest itself in
a variety of ways:
a) Employee misconduct
The Group's businesses are exposed to risk from potential
non-compliance with its policies and instances of wilful and
negligent misconduct by employees, all of which could result in
enforcement action or reputational harm. It is not always possible
to deter employee misconduct, and the precautions we take to
prevent and detect this activity may not always be effective.
Employee misconduct could have a material adverse effect on the
Group's customers, clients, market integrity as well as reputation,
financial condition and prospects.
b) Product governance and life cycle
The ongoing review, management and governance of new and amended
products has come under increasing regulatory focus (for example,
the recast of the Markets in Financial Instruments Directive and
guidance in relation to the adoption of the EU Benchmarks
Regulation) and the Group expects this to continue. The following
could lead to poor customer outcomes: (i) ineffective product
governance, including design, approval and review of products, and
(ii) inappropriate controls over internal and third party sales
channels and post sales services, such as complaints handling,
collections and recoveries. The Group is at risk of financial loss
and reputational damage as a result.
c) Financial crime
The Group may be adversely affected if it fails to effectively
mitigate the risk that third parties or its employees facilitate,
or that its products and services are used to facilitate, financial
crime (money laundering, terrorist financing and proliferation
financing, breaches of economic and financial sanctions, bribery
and corruption, and the facilitation of tax evasion). UK and US
regulations covering financial institutions continue to focus on
combating financial crime. Failure to comply may lead to
enforcement action by the Group's regulators, including severe
penalties, which may have a material adverse effect on the
Group's business, financial condition and
prospects.
d) Data protection and privacy
Proper handling of personal data is critical to sustaining
long-term relationships with our customers and clients and
complying with privacy laws and regulations. Failure to protect
personal data can lead to potential detriment to our customers and
clients, reputational damage, enforcement action and financial
loss, which may be substantial (see "iv) Operational risk, (e) Data
management and information protection" above).
e) Regulatory focus on culture and accountability
Regulators around the world continue to emphasise the importance of
culture and personal accountability and enforce the adoption of
adequate internal reporting and whistleblowing procedures to help
to promote appropriate conduct and drive positive outcomes for
customers, colleagues, clients and markets. The requirements and
expectations of the UK Senior Managers Regime, Certification Regime
and Conduct Rules have driven additional accountabilities for
individuals across the Group with an increased focus on governance
and rigour. Failure to meet these requirements and expectations may
lead to regulatory sanctions, both for the individuals and the
Group.
For further details on the Group's approach to conduct risk, see
conduct risk management on page 145 and conduct risk performance on
pages 203.
vii) Reputation risk
Reputation risk is the risk that an action, transaction,
investment, event, decision or business relationship will reduce
trust in the Group's integrity and/or competence.
Any material lapse in standards of integrity, compliance, customer
service or operating efficiency may represent a potential
reputation risk. Stakeholder expectations constantly evolve, and so
reputation risk is dynamic and varies between geographical regions,
groups and individuals. A risk arising in one business area can
have an adverse effect upon the Group's overall reputation and any
one transaction, investment or event (in the perception of key
stakeholders) can reduce trust in the Group's integrity and
competence. The Group's association with sensitive topics and
sectors has been, and in some instances continues to be, an area of
concern for stakeholders, including (i) the financing of, and
investments in, businesses which operate in sectors that are
sensitive because of their relative carbon intensity or local
environmental impact; (ii) potential association with human rights
violations (including combating modern slavery) in the Group's
operations or supply chain and by clients and customers; and (iii)
the financing of businesses which manufacture and export military
and riot control goods and services.
Reputation risk could also arise from negative public opinion about
the actual, or perceived, manner in which the Group conducts its
business activities, or the Group's financial performance, as well
as actual or perceived practices in banking and the financial
services industry generally. Modern technologies, in particular
online social media channels and other broadcast tools that
facilitate communication with large audiences in short time frames
and with minimal costs, may significantly enhance and accelerate
the distribution and effect of damaging information and
allegations. Negative public opinion may adversely affect the
Group's ability to retain and attract customers, in particular,
corporate and retail depositors, and to retain and motivate staff,
and could have a material adverse effect on the
Group's business, results of operations, financial condition
and prospects.
In addition to the above, reputation risk has the potential to
arise from operational issues or conduct matters which cause
detriment to customers, clients, market integrity, effective
competition or the Group (see "iv) Operational risk"
above).
For further details on the Group's approach to reputation risk, see
reputation risk management on page 145 and reputation risk
performance on page 203.
viii) Legal risk and legal, competition and regulatory
matters
The Group conducts activities in a highly regulated global market
which exposes it and its employees to legal risk arising from (i)
the multitude of laws and regulations that apply to the businesses
it operates, which are highly dynamic, may vary between
jurisdictions, and are often unclear in their application to
particular circumstances especially in new and emerging areas; and
(ii) the diversified and evolving nature of the Group's businesses
and business practices. In each case, this exposes the
Group and its employees to the risk of loss or the imposition
of penalties, damages or fines from the failure of members of the
Group to meet their respective legal obligations, including legal
or contractual requirements. Legal risk may arise in relation to a
number of the risk factors identified above, including (without
limitation) as a result of (i) the UK's withdrawal from the EU,
(ii) benchmark reform, (iii) the regulatory change agenda, and (iv)
rapidly evolving rules and regulations in relation to data
protection, privacy and cyber-security.
A breach of applicable legislation and/or regulations by the Group
or its employees could result in criminal prosecution, regulatory
censure, potentially significant fines and other sanctions in the
jurisdictions in which the Group operates. Where clients, customers
or other third parties are harmed by the Group's conduct, this may
also give rise to civil legal proceedings, including class actions.
Other legal disputes may also arise between the Group and third
parties relating to matters such as breaches or enforcement of
legal rights or obligations arising under contracts, statutes or
common law. Adverse findings in any such matters may result in the
Group being liable to third parties or may result in the Group's
rights not being enforced as intended.
Details of legal, competition and regulatory matters to which the
Group is currently exposed are set out in Note 26. In addition to
matters specifically described in Note 26, the Group is engaged in
various other legal proceedings which arise in the ordinary course
of business. The Group is also subject to requests for information,
investigations and other reviews by regulators, governmental and
other public bodies in connection with business activities in which
the Group is, or has been, engaged.
The outcome of legal, competition and regulatory matters, both
those to which the Group is currently exposed and any others which
may arise in the future, is difficult to predict. In connection
with such matters, the Group may incur significant expense,
regardless of the ultimate outcome, and any such matters could
expose the Group to any of the following outcomes: substantial
monetary damages, settlements and/or fines; remediation of affected
customers and clients; other penalties and injunctive relief;
additional litigation; criminal prosecution; the loss of any
existing agreed protection from prosecution; regulatory
restrictions on the Group's business operations including the
withdrawal of authorisations; increased regulatory compliance
requirements or changes to laws or regulations; suspension of
operations; public reprimands; loss of significant assets or
business; a negative effect on the Group's reputation; loss of
confidence by investors, counterparties, clients and/or customers;
risk of credit rating agency downgrades; potential negative impact
on the availability and/or cost of funding and liquidity; and/or
dismissal or resignation of key individuals. In light of the
uncertainties involved in legal, competition and regulatory
matters, there can be no assurance that the outcome of a particular
matter or matters will not have a material adverse effect on the
Group's business, results of operations, financial condition and
prospects.
39 Related party transactions and Directors'
remuneration
Related party transactions
Parties are considered to be related if one party has the ability
to control the other party or exercise significant influence over
the other party in making financial or operational decisions, or
one other party controls both.
Subsidiaries
Transactions between Barclays PLC and its subsidiaries meet the
definition of related party transactions. Where these are
eliminated on consolidation, they are not disclosed in the Group's
financial statements. Transactions between Barclays PLC and its
subsidiaries are fully disclosed in Barclays PLC's financial
statements. A list of the Group's principal subsidiaries is shown
in Note 34.
Associates, joint ventures and other entities
The Group provides banking services to its associates, joint
ventures and the Group pension funds (principally the UK Retirement
Fund), providing loans, overdrafts, interest and non-interest
bearing deposits and current accounts to these entities as well as
other services. Group companies also provide investment management
and custodian services to the Group pension schemes. All of these
transactions are conducted on the same terms as third party
transactions. Summarised financial information for the Group's
investments in associates and joint ventures is set out in Note
36.
Amounts included in the Group's financial statements, in aggregate,
by category of related party entity are as follows:
|
|
|
Associates
|
Joint ventures
|
Pension funds
|
|
|
|
£m
|
£m
|
£m
|
For the year ended and as at 31 December 2019
|
|
|
|
|
|
Total income
|
|
|
-
|
12
|
5
|
Credit impairment charges
|
|
|
-
|
-
|
-
|
Operating expenses
|
|
|
(46)
|
-
|
-
|
Total assets
|
|
|
-
|
1,303
|
3
|
Total liabilities
|
|
|
-
|
-
|
75
|
For the year ended and as at 31 December 2018
|
|
|
|
|
|
Total income
|
|
|
-
|
7
|
4
|
Credit impairment charges
|
|
|
-
|
-
|
-
|
Operating expenses
|
|
|
(27)
|
(7)
|
-
|
Total assets
|
|
|
12
|
1,288
|
3
|
Total liabilities
|
|
|
85
|
2
|
139
|
An entity that is consolidated within the Group under IFRS 10 has
issued Senior Notes to the UKRF with a nominal value of £500m.
This is not included within the table above. Refer to Note 33 for
further details. Total liabilities includes derivatives transacted
on behalf of the pensions funds of £6m (2018:
£3m).
Key Management Personnel
Key Management Personnel are defined as those persons having
authority and responsibility for planning, directing and
controlling the activities of Barclays PLC (directly or indirectly)
and comprise the Directors and Officers of Barclays PLC, certain
direct reports of the Group Chief Executive and the heads of major
business units and functions.
The Group provides banking services to Key Management Personnel and
persons connected to them. Transactions during the year and the
balances outstanding were as follows:
Loans outstanding
|
|
|
|
2019
|
2018
|
|
£m
|
£m
|
As at 1 January
|
7.2
|
4.8
|
Loans issued during the yeara
|
4.8
|
4.2
|
Loan repayments during the yearb
|
(4.8)
|
(1.8)
|
As at 31 December
|
7.2
|
7.2
|
Notes
a
Includes loans issued to existing Key Management Personnel and new
or existing loans issued to newly appointed Key Management
Personnel.
b
Includes loan repayments by existing Key Management Personnel and
loans to former Key Management Personnel.
No allowances for impairment were recognised in respect of loans to
Key Management Personnel (or any connected person).
Deposits outstanding
|
|
|
|
2019
|
2018
|
|
£m
|
£m
|
As at 1 January
|
6.9
|
6.9
|
Deposits received during the yeara
|
36.0
|
24.8
|
Deposits repaid during the yearb
|
(30.8)
|
(24.8)
|
As at 31 December
|
12.1
|
6.9
|
Notes
a
Includes deposits received from existing Key Management Personnel
and new or existing deposits received from newly appointed Key
Management Personnel.
b
Includes deposits repaid by existing Key Management Personnel and
deposits of former Key Management Personnel.
Total commitments outstanding
Total commitments outstanding refers to the total of any undrawn
amounts on credit cards and/or overdraft facilities provided to Key
Management Personnel. Total commitments outstanding as at 31
December 2019 were £0.8m (2018: £0.9m).
All loans to Key Management Personnel (and persons connected to
them) were made in the ordinary course of business; were made on
substantially the same terms, including interest rates and
collateral, as those prevailing at the same time for comparable
transactions with other persons; and did not involve more than a
normal risk of collectability or present other unfavourable
features.
Remuneration of Key Management Personnel
Total remuneration awarded to Key Management Personnel below
represents the awards made to individuals that have been approved
by the Board Remuneration Committee as part of the latest
remuneration decisions, and is consistent with the approach adopted
for disclosures set out on pages 85 to 123. Costs recognised in the
income statement reflect the accounting charge for the year
included within operating expenses. The difference between the
values awarded and the recognised income statement charge
principally relates to the recognition of deferred costs for prior
year awards. Figures are provided for the period that individuals
met the definition of Key Management Personnel.
|
2019
|
2018
|
|
£m
|
£m
|
Salaries and other short-term benefits
|
38.5
|
33.0
|
Pension costs
|
0.1
|
-
|
Other long-term benefits
|
8.7
|
7.6
|
Share-based payments
|
13.4
|
16.2
|
Employer social security charges on emoluments
|
7.4
|
7.5
|
Costs recognised for accounting purposes
|
68.1
|
64.3
|
Employer social security charges on emoluments
|
(7.4)
|
(7.5)
|
Other long-term benefits - difference between awards granted and
costs recognised
|
(0.6)
|
2.8
|
Share-based payments - difference between awards granted and costs
recognised
|
2.2
|
0.7
|
Total remuneration awarded
|
62.3
|
60.3
|
Disclosure required by the Companies Act 2006
The following information regarding the Barclays PLC Board of
Directors is presented in accordance with the Companies Act
2006:
|
2019
|
2018
|
|
£m
|
£m
|
Aggregate emolumentsa
|
8.5
|
9.0
|
Amounts paid under LTIPsb
|
0.8
|
0.9
|
|
9.3
|
9.9
|
Notes
a
The aggregate emoluments include amounts paid for the 2019 year. In
addition, deferred share awards for 2019 with a total value at
grant of £2m (2018: £1m) will be made to James E Staley
and Tushar Morzaria which will only vest subject to meeting certain
conditions.
b
The figure above for 'Amounts paid under LTIPs' in 2019 relates to
an LTIP award that was released to Tushar Morzaria in 2019.
Dividend shares released on the award are excluded. The LTIP figure
in the single total figure table for executive Directors' 2019
remuneration in the Directors' Remuneration report relates to the
award that is scheduled to be released in 2020 in respect of the
2017-2019 LTIP cycle.
There were no pension contributions paid to defined contribution
schemes on behalf of Directors (2018: £nil). There were no
notional pension contributions to defined contribution
schemes.
As at 31 December 2019, there were no Directors accruing benefits
under a defined benefit scheme (2018: nil).
Directors' and Officers' shareholdings and options
The beneficial ownership of ordinary share capital of Barclays PLC
by all Directors and Officers of Barclays PLC (involving 25
persons) at 31 December 2019 amounted to 22,789,126 (2018:
18,884,023) ordinary shares of 25p each (0.13% of the ordinary
share capital outstanding).
As at 31 December 2019, executive Directors and Officers of
Barclays PLC (involving 15 persons) held options to purchase a
total of 40,428 (2018: 6,000) Barclays PLC ordinary shares of 25p
each at a price of 125p under Sharesave.
Advances and credit to Directors and guarantees on behalf of
Directors
In accordance with Section 413 of the Companies Act 2006, the total
amount of advances and credits made available in 2019 to persons
who served as Directors during the year was £0.3m (2018:
£0.4m). The total value of guarantees entered into on behalf
of Directors during 2019 was £nil (2018:
£nil).
Directors' responsibility statement
The Directors have responsibility for ensuring that the
Company and the Group keep accounting records which disclose with
reasonable accuracy the financial position of the Company and the
Group and which enable them to ensure that the accounts comply with
the Companies Act 2006.
The Directors are also responsible for preparing a Strategic
Report, Directors' Report, Directors' Remuneration Report and
Corporate Governance Statement in accordance with applicable law
and regulations.
The Directors are responsible for the maintenance and integrity of
the Annual Report and Financial Statements as they appear on the
Company's website. Legislation in the UK governing the preparation
and dissemination of financial statements may differ from
legislation in other jurisdictions.
The Directors have a general responsibility for taking such steps
as are reasonably open to them to safeguard the assets of the Group
and to prevent and detect fraud and other
irregularities.
The Directors, whose names and functions are set out on pages 45
and 46, confirm to the best of their knowledge that:
(a) the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit or loss
of the Company and the undertakings included in the consolidation
taken as a whole; and
(b) the management report, on pages 6 to 42, which is incorporated
in the Directors' Report, includes a fair review of the development
and performance of the business and the position of the Company and
the undertakings included in the consolidation taken as a whole,
together with a description of the principal risks and
uncertainties that they face.
By order of the Board
Stephen Shapiro
Company Secretary
12 February 2020
Barclays PLC
Registered in England.
Company
No. 48839
Forward-looking statements
This document contains certain forward-looking statements within
the meaning of Section 21E of the US Securities Exchange Act of
1934, as amended, and Section 27A of the US Securities Act of 1933,
as amended, with respect to the Group. Barclays cautions readers
that no forward-looking statement is a guarantee of future
performance and that actual results or other financial condition or
performance measures could differ materially from those contained
in the forward-looking statements. These forward-looking statements
can be identified by the fact that they do not relate only to
historical or current facts. Forward-looking statements sometimes
use words such as 'may', 'will', 'seek', 'continue', 'aim',
'anticipate', 'target', 'projected', 'expect', 'estimate',
'intend', 'plan', 'goal', 'believe', 'achieve' or other words of
similar meaning. Forward-looking statements can be made in writing
but also may be made verbally by members of the management of the
Group (including, without limitation, during management
presentations to financial analysts) in connection with this
document. Examples of forward-looking statements include, among
others, statements or guidance regarding or relating to the Group's
future financial position, income growth, assets, impairment
charges, provisions, business strategy, capital, leverage and other
regulatory ratios, payment of dividends (including dividend payout
ratios and expected payment strategies), projected levels of growth
in the banking and financial markets, projected costs or savings,
any commitments and targets, estimates of capital expenditures,
plans and objectives for future operations, projected employee
numbers, IFRS impacts and other statements that are not historical
fact. By their nature, forward-looking statements involve risk and
uncertainty because they relate to future events and circumstances.
The forward-looking statements speak only as at the date on which
they are made and such statements may be affected by changes in
legislation, the development of standards and interpretations under
IFRS, including evolving practices with regard to the
interpretation and application of accounting and regulatory
standards, the outcome of current and future legal proceedings and
regulatory investigations, future levels of conduct provisions, the
policies and actions of governmental and regulatory authorities,
geopolitical risks and the impact of competition. In addition,
factors including (but not limited to) the following may have an
effect: capital, leverage and other regulatory rules applicable to
past, current and future periods; UK, US, Eurozone and global
macroeconomic and business conditions; the effects of any
volatility in credit markets; market related risks such as changes
in interest rates and foreign exchange rates; effects of changes in
valuation of credit market exposures; changes in valuation of
issued securities; volatility in capital markets; changes in credit
ratings of any entity within the Group or any securities issued by
such entities; the potential for one or more countries exiting the
Eurozone; instability as a result of the exit by the UK from the
European Union and the disruption that may subsequently result in
the UK and globally; and the success of future acquisitions,
disposals and other strategic transactions. A number of these
influences and factors are beyond the Group's control. As a result,
the Group's actual financial position, future results, dividend
payments, capital, leverage or other regulatory ratios or other
financial and non-financial metrics or performance measures may
differ materially from the statements or guidance set forth in the
Group's forward-looking statements. Additional risks and factors
which may impact the Group's future financial condition and
performance are identified in our filings with the SEC (including,
without limitation, our Annual Report on Form 20-F for the fiscal
year ended 31 December 2019), which are available on the SEC's
website at www.sec.gov.
Subject to our obligations under the applicable laws and
regulations of any relevant jurisdiction, (including, without
limitation, the UK and the US), in relation to disclosure and
ongoing information, we undertake no obligation to update publicly
or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.
- Ends -
For further information, please contact:
Investor Relations
|
Media Relations
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Adam Strachan
|
Tom Hoskin
|
+1 212 526 8442
|
+44 (0) 20 7116 4755
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|
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James Johnson
|
|
+44 (0)20 7116 7233
|
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About Barclays
Barclays is a British universal bank. We are diversified by
business, by different types of customer and client, and
geography. Our businesses include consumer banking and
payments operations around the world, as well as a top-tier, full
service, global corporate and investment bank, all of which are
supported by our service company which provides technology,
operations and functional services across the Group.
For further information about Barclays, please visit our
website www.barclays.com