Fulfilling our Purpose
Our
Purpose...
and our
Values...
influence
our strategy...
delivered
through Group
synergies...
We deploy
finance responsibly
to support people
and businesses,
acting with empathy
and integrity,
championing
innovation and
sustainability, for the
common good
and the long term.
Respect
Integrity
Service
Excellence
Stewardship
Our diversification,
built to deliver
double-digit returns
We work as one
organisation to
create synergies and
deliver greater value.
Strategic priorities
to sustain and grow
creating
positive
outcomes
for our
stakeholders.
Customers
and clients
Colleagues
Society
Investors
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Barclays PLC
Annual Report 2022 01
Parts 1, 2 and 3 of Barclays
PLC 2022 Annual Report
together comprise
Barclays PLC’s annual
accounts and report for
the purposes of Section
423 of the Companies
Act 2006.
Please note that throughout the document,
graphical representation of component parts
may not cast due to rounding.
Strategic report
The Barclays PLC Strategic Report 2022 was
approved by the Board of Directors on 14
February 2023 and signed on its behalf by the
Chairman.
The Strategic Report 2022 is a part of Barclays
PLC’s Annual Report 2022 and is not the
Group’s statutory accounts. It does not contain
the full text of the Directors’ Report, and it does
not contain sufficient information to allow as full
an understanding of the results and state of
affairs of the Group and of its policies and
arrangements concerning Directors’
remuneration as would be provided by the full
Annual Report 2022.
Report of the auditor
The Auditor’s report on the Financial
statements of Barclays PLC for the year ended
31 December 2022 was unmodified, and its
statement under Section 496 of the Companies
Act 2006 was also unmodified (see page 399 of
Part 3 of the Annual Report 2022).
Inside Part 1
Strategic report
Group overview
Prepared for the road ahead
Chairman’s introduction
Chief Executive’s review
Our business model
Our strategy
Section 172(1) statement
Engaging with our stakeholders
Key performance indicators
Customers and clients
Supporting our customers and clients
Colleagues
Our people and culture
Society
Making a difference
Investors
Summary financial review
Barclays UK
Barclays International: Corporate
and Investment Bank
Barclays International: Consumer, Cards
and Payments
Managing risk
Viability statement
Non-financial information statement
ESG ratings performance
ESG-related reporting and disclosures
TCFD Content Index
Shareholder information
Key dates, Annual General Meeting,
dividends, and other useful information
1
2
3
4
6
10
12
16
21
23
26
31
39
45
49
52
54
56
58
60
63
64
65
66
66
Inside Part 2
Climate and sustainability report
Introduction
Risks and opportunities
Implementing our climate strategy
Resilience of our strategy
Inside Part 3
Governance
Governance contents
Board Governance
Directors’ report
Remuneration report
69
70
73
77
127
Other Governance
Risk review
Risk review contents
Risk management
Material existing and emerging risks
Principal risk management
Risk performance
Supervision and regulation
Financial review
Financial review contents
Key performance indicators
Consolidated summary income
statement
Income statement commentary
Consolidated summary balance sheet
Balance sheet commentary
Analysis of results by business
Non-IFRS performance measures
Financial statements
Financial statements contents
Consolidated financial statements
Notes to the financial statements
141
141
142
143
197
246
264
264
266
269
282
296
370
378
378
379
381
382
383
384
385
392
397
397
416
424
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Barclays PLC
Annual Report 2022 02
Group overview
A resilient universal bank
built to deliver double
digit returns
Barclays supports individuals and small businesses
through our consumer banking services, and larger
businesses and institutions through our corporate and
investment banking services. Barclays is diversified by
business, geography and income type.
£7.0bn
Profit before tax
(PBT)
£336.5bn
Risk weighted assets
(RWAs)
10.4%
Return on tangible equity
(RoTE)
Barclays UK
Barclays International
£2.6bn
PBT
£73.1bn
RWAs
18.7%
RoTE
£5.0bn
PBT
£254.8bn
RWAs
10.2%
RoTE
UK retail and business banking
Helping customers with their day-to-day banking needs and
business services for clients from high-growth start-ups to small
and medium enterprises (SMEs),
Consumer, Cards and Payments
Offering credit cards and retail products outside of the UK, a
global private bank, and enabling businesses around the world
to make and receive payments.
Corporate and Investment Bank
Aiding money managers, financial institutions, governments,
supranational organisations and corporate clients to manage
their funding, financing, strategic and risk management needs.
+ Read more
Page 49
+ Read more
Page 54
+ Read more
Page 52
+ Read more
Page 48
Barclays Execution Services (BX) is the Group-wide service company providing technology,
operations and functional services to businesses across the Group.
Barclays Execution Services
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Barclays PLC
Annual Report 2022 03
Prepared for
the road ahead
Our Purpose is to deploy finance responsibly to
support people and businesses, for the common
good and the long term. To do so we must be
strong as an institution, prepared for the future,
able to navigate change and focused on the
evolving needs of our stakeholders.
Our model and strategy are designed to ensure we remain resilient through market cycles and long-term trends. In recent
years our diversified model has delivered sustained income growth even through significant macroeconomic change.
Our strategic priorities anticipate three major trends:
The impact of technology on
consumer products and services
As the impact of technology on consumers
continues to drive innovation and market
access, our UK retail and business bank,
combined with our international consumer
lending, cards and payments franchise, give us
breadth across consumer financial services. We
have invested in our platforms including cloud
technology and our mobile applications,
creating more versatile, lower cost
infrastructure. Combined with the depth and
quality of our customer data and insight, we are
well placed to anticipate the ever-changing
needs and expectations of consumers and
small businesses, delivering more personalised
products and services.
The role of capital markets as
the principal driver of global growth
The long-term shift to capital markets as the principal source of
funding has continued across both public and private markets,
growing the investment banking fee wallet. As one of the few global
diversified banks headquartered outside of the US, but with a scale
Corporate and Investment Bank in the US, our model allows us to
support our clients' financing activity. We offer expertise in a wide
range of services, including financial advisory, capital raising, financing
and risk management services. These services help corporations,
financial institutions and governments worldwide to raise capital and
manage their risks. As the competitor market evolves, we have
adapted to capture new opportunities including growing our franchise
in Europe and the US, expanding in certain sectors or products, and
integrating our approach to our clients to offer the best solutions to
the most complex needs.
The transition of the global economy
towards low-carbon energy
The transition towards a low-carbon economy is one of the
defining challenges in the current and coming decades. Helping
customers and clients to navigate this complex challenge will be an
important part of fulfilling our Purpose and capturing the
opportunity this global economic shift offers. We are building our
expertise in this area to help customers and clients with their needs,
as well as working to reduce our financed and own operational
emissions. Furthermore, we are investing in businesses developing
innovative new technologies which address the challenge, helping
them to grow and to support the transition.
We continually review our operating environment for emerging
trends, including regulation, and adapt to address them, as we have
with our strategic priorities. These trends are considered
throughout the report, including on pages detailing progress
against our strategy and in the divisional reporting.
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Barclays PLC
Annual Report 2022 04
Chairman’s introduction
We are
resilient
for the
future
2022 was a year of almost
unprecedented challenges
for Barclays and for society
more broadly. As a bank, we
continued to demonstrate
our resilience, our ability
and commitment to support
customers, clients and
wider stakeholders in ever-
changing economic
conditions.
In my letter in last year’s Annual Report, I talked
about the challenging times ahead. It is clear this
was an understatement. The intervening year has
seen war in Europe, increasingly frequent climate
disasters, COVID-19 still a great threat in large
parts of the world, a partial reeling-in of
globalisation and considerable pressure on
households and businesses from rising costs. We
have left behind the economic comfort zone of
low inflation and predictable interest rates. The
reasonably free flow of goods, including sources of
energy, around the world can no longer be so
easily taken for granted. As a result of these and
other factors, free market capitalism is not just
under increasing pressure but, rightly, faces a
more forceful requirement to demonstrate how it
can contribute to inclusive, sustainable and global
economic growth.
In such times it is good to be able to report that
Barclays remains financially and operationally
resilient. We finished the year with both a return
on capital and a capital ratio that met the target
levels which we had set. All of our businesses,
across consumer and wholesale, performed well.
I am also pleased to report that Venkat and
Anna, the new Chief Executive and Chief
Financial Officer respectively, have navigated well
the challenges of their first year. However, they,
their Executive Committee colleagues, and the
Board as a whole, are very conscious that there is
much work ahead. First, the very uncertainty that
has created the volatility that in turn powered the
results in Markets can have adverse
consequences for households and corporate
customers; we will work hard to support our
customers and clients through this period.
Secondly, we have to improve aspects of the way
Barclays operates in order to eliminate the type
of error that led to the loss relating to the
issuance of securities materially in excess of the
limits under certain of our US registration
statements. This incident reflects internal
failings which we are determined to remedy;
elsewhere in this report we cover in more detail
this issue, its causes and consequences and what
we have done and are doing to mitigate the risk
of any similar failings.
Free market capitalism faces
a more forceful requirement
to demonstrate how
it can contribute to inclusive,
sustainable and global
economic growth.
In light of this incident and the environment in
which we operate, we must make sure that our
programmes embed a higher standard of
operational performance, and demonstrate
measurable progress to shareholders. Thirdly,
our share price performance has not reflected
the underlying business strength. It is only with
consistent performance, without the negative
impact of avoidable incidents, that we can hope
to earn a better reputation for reliable earnings
and thereby materially reduce the discount at
which the bank’s shares trade to our book value.
Facts and figures
30.8p
EPS
2021: 36.5p
7.25p
Dividend
2021: 6.0p
£1.0bn
Announced buyback of shares
2021: £1.5bn
c.13.4p
Total payout per sharea
2021: 15.0p
Note:
a Includes total dividend for 2022 of 7.25p per share and total share
buybacks announced in relation to 2022 of £1.0bn.
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Chairman’s introduction (continued)
As Venkat says in his letter, we therefore go into
2023 determined to remain resilient in all
respects, whilst performing at a more
consistently excellent level. Considerable
investment and progress have been made over
the last five or so years to enhance the resilience
of our business, but there are still investments to
be made, processes to simplify and behaviours
to change before we can be more satisfied with
our overall performance.
Returning to the broader theme of the role of
business in addressing today’s socio-economic
and other challenges, I would like to comment on
the ever-increasing need for partnership
between the public and the private sector.
Let me begin by emphasising that we welcome
constructive dialogue between finance, industry
and government. Finance has a big role to play in
supporting growth initiatives in the UK whilst at the
same time protecting households and smaller
businesses as far as we can from the immediate
ramifications of high inflation, higher interest rates
and other disruptions in the economy. Barclays
has the people and skills to compete with the best
internationally, to bring best-in-class business
practices to the UK and to export its services
elsewhere. To do so, it is important that its ability
to compete is supported by developments at
home, political and regulatory. We welcome the
UK Government’s ‘Edinburgh Reforms’ and it is
good too that the UK Government and regulators
embrace the importance of both competition and
of competitiveness, and the need to re-energise
the UK’s capital markets. A strong prudential
regime is part of that, provided it operates in
coherence with international standards and
practices. But it is not, alone, sufficient as a means
to facilitate the domestic and international
competitiveness of our major financial institutions
and capital markets.
There is a purpose, energy
and creativity in the people
of Barclays which will
continue to be deployed
for the benefit of the
communities we serve.
Good engagement between authorities and
industry about the outcomes of policy and
supervision, and the complex interactions of policy
with broader market dynamics, are necessary to
deliver the agility and innovation both government
and business want to see from the UK’s financial
sector. The new measures and obligations in the
Financial Services and Markets Bill helpfully clarify
the importance both of competitiveness as an
outcome of policy and of transparent and
informed public debate in this regard. The
success of these measures will not be in the
legislation per se, but in the quality of debate it
establishes between government, regulators,
business and parliamentarians, and the direction it
thereby informs and creates.
Secondly, I have written before about our role in
addressing effectively the climate challenge,
whilst meeting the world’s energy demands at
the same time. In the last year, energy security
has joined sustainability and affordability as a
major challenge. The financial sector has an
important part to play in ensuring that we help
address all three dimensions – the energy
trilemma. We recognise that a faster transition
from fossil fuels to lower carbon energy is
necessary to meet the Paris Agreement goals.
Barclays PLC
Annual Report 2022 05
both the demand-side and supply-side issues
which have led to a decline in equity ownership in
the UK, a reduction in UK listings and IPOs, and a
diminution of the risk appetite of UK capital.
Thank you
I would like to start by thanking all my Board
colleagues for their contributions this last year.
Following their long service to the Board, I would
like to single out Mike Ashley and Crawford Gillies
in particular and wish them the very best as they
retire in 2023. They have supported Barclays
through a period of considerable change and
made a real difference to the organisation in their
roles. I am very pleased that Julia Wilson, who
joined us in 2021, will take over as Chair of the
Audit Committees of Barclays and Barclays Bank
PLC in April. In January we announced the
appointments of Marc Moses and Sir John
Kingman, both of whom have deep experience of
financial services and will further strengthen the
Board. Sir John will succeed Crawford as Chair of
Barclays Bank UK PLC in June.
Barclays has nearly 90,000 employees. As I have
remarked before, I have always been humbled by
the dedication of colleagues to the pursuit of our
Purpose and by the way they embrace the
societal and climate challenges I have described.
Without full engagement of colleagues our
LifeSkills programme would not have been able
to reach and make a difference to the lives of
more than 18 million young people in almost a
decade. There is a purpose, energy and creativity
in the people of Barclays which will continue to be
deployed for the benefit of the communities we
serve as we head into the uncertainties ahead.
Nigel Higgins
Chairman
All this needs to be done affordably and in an
orderly fashion and in collaboration and
alignment with governments' energy strategies.
The Inflation Reduction Act in the US has been a
significant step forward. Barclays has committed
to play a full role in supporting our clients in their
transition and we have now developed a
framework to assess our high emitting clients’
transition plans. In 2022 we facilitated £25bn of
new green financing and we have also now
announced a new target to facilitate $1trn of
Sustainable and Transition Financing between
2023 and the end of 2030.
At a more micro level in the UK, we are piloting
schemes to help retail customers finance
energy-efficiency solutions and the adoption,
where possible, of non-fossil fuel energy in the
home. We look forward to working with the UK
Government on more extensive versions of
these schemes.
Thirdly, and to some extent bringing these two
themes together, Barclays has a big role to play in
financing innovation and technology, whether at
the start-up point or as companies mature.
Barclays as a whole operates as an ecosystem to
support innovation and entrepreneurship,
creating new opportunities for employment with
both our Sustainable Impact Capital fund and our
work with the inspiring entrepreneurs we meet
through the Unreasonable Impact Partnership.
Many of these innovators are of course focused
on adapting existing technology and practice to
reduce carbon intensity in a way that supports
consumers and business to adapt their activities
to become less carbon-intensive.
As companies mature, many of them seek
further funding through the public stock markets
and it is important for the UK and its growth
agenda that reforms are undertaken to rekindle
the appetite for equity growth, which was once a
stronger feature of the London markets.
Barclays is committed to playing its part, with
government and asset owners, in addressing
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Annual Report 2022 06
Chief Executive’s introduction
Strong and supportive
franchise in testing times
Our strong operating performance in 2022 has
been powered across all our businesses - they
have individually generated strong returns in an
uncertain operating environment, and they fit well
together. We played an important role in delivering
value for our stakeholders, and in helping them
overcome the challenges they faced this year.
We see clear opportunity
for financial services to contribute
new approaches to address
complex issues including energy
independence and efficiency,
housing and economic growth.
I write to you at the end of a year which saw many
unexpected events. It followed a sequence of
such years and may not be the last one. In 2022,
we witnessed the largest conflict in Europe since
World War II, a resulting energy security crisis, a
sustained rise in interest rates across the
developed world, political uncertainty in the UK
with associated movement in gilt yields and in
sterling, and the first re-alignment of global
geopolitical lines since the end of the Cold War. A
year ago, I wrote that we were entering a period
of unusual uncertainty. I had far more benign
scenarios in mind than what has actually
transpired. Not only was this an eventful year, but
it has followed the devastating human and
economic tragedy of COVID-19, the
repercussions of which still persist. Lastly, in
Barclays, in 2022 we faced our own challenge of
discovering and reacting to a costly over-
issuance of securities in the US.
I want to use this letter to share my views on our
performance and our priorities, and also my
thoughts on the UK as we look ahead into 2023.
Our performance has been strong but we must
remain prepared for testing economic and
market conditions.
Our performance
Our business performed well in 2022 and we have
demonstrated our continued financial resilience,
notwithstanding the unusual events of the year.
We created broad-based income growth even as
we continued to take a cautious approach to the
macro environment. We produced an annual
income of £25.0bn, PBT of £7.0bn, Return on
Tangible Equity of 10.4% and ended the year with a
CET1 ratio of 13.9%. We have approved dividends
of 7.25p per share and announced buybacks of
£1.0bn worth of shares for the year ended 31
December 2022. Our share count has decreased
by over 9% since December 2020.
I attribute this performance to the strength of our
franchise — our businesses are operating well
individually and complement each other collectively.
Barclays UK, which serves consumers and small
businesses across the country, produced income
of £7.3bn, PBT of £2.6bn and a RoTE of 18.7%.
The income growth in the business was the result
of higher interest rates, increased transaction-
based revenues and higher mortgage balances. It
was particularly important that we kept our costs
flat at £4.3bn (2021: £4.4bn), as a result of a long-
term ongoing programme of digitising the
production and delivery of our offerings.
Our Consumer, Cards and Payments business
which includes our partnership cards business in
the US, the Payments business and our growing
Private Bank, generated income of £4.5bn, PBT of
£0.7bn and a RoTE of 10.0%. We also continue to
make good progress in combining Barclays UK
Wealth and Investment Management business
with our Private Banking business.
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Chief Executive’s introduction (continued)
Barclays PLC
Annual Report 2022 07
Facts and figures
£25.0bn
Total income
2021: 21.9bn
£7.0bn
Profit before tax
2021: £8.2bn
10.4%
Return on Tangible Equity
2021: 13.1%
13.9%
CET1 capital
2021: 15.1%
This is the first step in an integrated approach to
help clients manage their personal finances over
their lifetimes.
In the Corporate and Investment Bank (CIB), we
have ranked number six for Global Markets for
the last three years, growing market share,
particularly in our trading businesses. These
desks, especially in Fixed Income, managed their
risk well and provided excellent market access
and liquidity to clients during the many periods of
tumult in 2022. The revenues in trading
compensated for a weaker performance in
Investment Banking, which was consistent with
declines in capital markets activity across the
industry.
In addition to our operating businesses
performing well in 2022, we managed our
interest rate risk prudently. Rising interest rates
deliver a net interest margin benefit but can
reduce the value of our capital holdings. Through
careful Treasury management in anticipation of
rising rates, we have benefited from the former
and minimised the latter. Managing our interest
rate exposure programmatically through a
'structural hedge' allowed us to capture and
spread out the benefits of rising rates on our Net
Interest Income (NII) across many years. As a
result, we expect our NII to have a tailwind in
2023 and beyond.
Technology has allowed
many tasks to be completed digitally,
at the customer’s convenience
and unbounded by opening hours.
Technology has allowed many of those tasks to
be completed digitally, at the customer’s
convenience and unbounded by opening hours.
Even in the context of digital service, there is an
important place for face-to-face interaction for
some customers and for certain needs. This
year, we began testing different approaches to
serving communities which can no longer
support a branch but where there is a need for a
physical presence. These formats include pop-
up services, mobile vans and pods, all of which
can be located conveniently for customers. By
year end we had deployed 200 around the
country. We also deployed our Cashback Without
Purchase programme allowing customers to
withdraw cash from merchants where other
means aren’t easily available.
Our priorities
Our strong operating performance has been in
the context of the three priorities which I outlined
in my letter last year.
The first priority is to build next generation,
digitised consumer financial services. This year,
we took important steps towards that goal.
In the US, we completed the acquisition of a
partnership credit card portfolio from Gap,
increasing our balances by $3.3bn and adding 10
million new customers, doubling our customer
base. Our US consumers are mostly served
digitally and, as this transaction demonstrated, it
is a more scalable business. Second, in the UK
we agreed to purchase Kensington Mortgage
Company, a specialist mortgages lending
platform which lends via brokers to customers
with complex incomes using proprietary
technology and data analytics. Lastly, we
continue to increase our provision of digital
services to customers in the UK, particularly to
those customers who once depended almost
entirely on branches for most everyday banking
needs.
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Chief Executive’s introduction (continued)
The second growth priority is to produce
sustainable growth in the CIB. We have
continued to diversify our income in the CIB,
growing our financing business in Markets to
balance the intermediary business. For example,
our investment in Financing has continued and
income has grown by c.16% CAGR from
2019-2022. This diversification allows us to
generate income even in periods of relatively low
market volatility, creating more predictable
revenues. We are focused on being the
corporate banking partner of choice for clients
across our CIB core markets and delivered
increased transaction banking revenue in 2022.
We have continued to invest in people and
technology. We have broadened our trading
teams, and our capability in Investment Banking
coverage and advisory, and in November we
opened new state-of-the-art trading floors in
our London headquarters.
Our third priority is to continue to support our
clients and capture opportunities as the world
transitions to a low-carbon economy. We are
building capability and reputation with clients in
this area. We continued to invest in senior talent
to help build expertise in sustainable finance, so
that we are better able to support our clients as
they transition their businesses to a low-carbon
economy. An example of our growing strength
was acting as the sole M&A advisor to ConEdison
in the $6.8bn sale of its clean energy business.
We have made good progress in two priority
areas to support the transition to a low-carbon
economy: investing in sustainable technology
start-ups, and facilitating sustainable finance.
With the former, our early commitment of
Sustainable Impact Capital of up to £175m by
2025 generated substantial demand and in
December 2022 we announced we would
increase that to £500m by the end of 2027.
This scale of early investment has helped to
stimulate innovation in climate technology from
residential property retrofit to energy storage
and hydrogen technologies. This next phase of
Sustainable Impact Capital investments we
expect will see a focus on decarbonisation
technologies within carbon-intensive sectors,
particularly where Barclays has meaningful client
exposure such as energy and power, real estate
and transport.
In respect of financing the transition, Barclays
has passed its 2018 target to deliver £150bn of
Social, Environmental and Sustainability-linked
financing by 2025 and is on track to meet its
target to deliver £100bn of Green Finance well
ahead of the 2030 target date. As a result of a
strategic review of our capabilities, market
demand and new growth opportunities, we
announced a new target to facilitate $1trn of
Sustainable and Transition Financing between
2023 and the end of 2030.
Alongside global capital markets, support from
governments and regulators is critical to setting
the right frameworks to guide action and support
investment decisions. This theme of
governments and the capital markets working
together to solve large and complex issues is one
to which I will return later in this letter.
Supporting customers and clients
Barclays’ financial performance and our progress
against our strategic priorities is inextricably
linked to the global economy and the financial
wellbeing of our customers and clients.
Barclays has long sought to build the
employability skills and improve the financial
health of our communities by providing people
with the information and tools more confidently
to manage their money. Our LifeSkills
programme has been the nucleus of this effort
for almost a decade, reaching 18 million people.
We continued to invest in senior
talent to help build expertise in
sustainable finance, so that we are
better able to support our clients
as they transition their businesses.
Barclays PLC
Annual Report 2022 08
This year, we have expanded the programme in
partnership with charities like the Trussell Trust
to help communities most in need. In the face of
a sharply rising cost of living, we also launched a
Money Worries hub in September, to help UK
customers evaluate and manage the impact of
rising inflation and interest rates on their
personal finances. In particular cases where we
identify customers entering financial distress we
have offered tailored help to support them.
Skills and information are one way we can build
financial resilience. In September we launched
another, the Rainy Day Saver, a new instant-
access account with an interest rate of 5% on
balances up to £5,000. The product is designed
specifically to help customers build savings
equivalent to three months of outgoings for an
average household, providing a cushion should
they need it.
A major effect of rising rates is the increased
cost of mortgage interest. With approximately a
quarter of customers approaching the end of
their fixed-rate terms each year, we increased
the window for renewing from 90 days to 180
days prior to the fixed rate ending, enabling
customers to lock in a new fixed rate, should they
so wish, in anticipation of further rate rises.
Small and Medium Enterprises (SME) customers
are also facing pressure from rising wages and
input costs without being able to pass them
onward. We held 450 'Masterclasses' for these
customers, helping them anticipate and manage
pressures common to many small businesses.
This focus on supporting the needs of our retail
and SME customers is matched in our wholesale
business, through which we support
governments and some of the largest financial
and industrial enterprises in the world by
managing their financial risk and growth
ambitions. In volatile markets, through
tremendous economic uncertainty, that ability to
deliver for clients is critical.
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Managing Barclays excellently
Our strong support of wholesale clients and
consumers this year has shown Barclays
operating at its best, with empathy, skill and drive.
Unfortunately, in 2022, we also discovered that
we had issued approximately $17.7bn of
securities more than we were permitted to do
under shelf registration statements we had filed
with the US Securities and Exchange
Commission (SEC). When the matter surfaced,
we promptly reported it to our regulators,
elected to make a rescission offer to eligible
purchasers, and settled the related regulatory
investigation by the SEC. The net cost to
Barclays was £720m, including $200m (£165ma)
in penalties paid to the SEC. We commissioned
an internal review and an external one, led by
experienced outside counsel.
Our shareholders and the management want
Barclays to perform at a consistently very high
level, day in and day out. Therefore, towards the
end of 2022, we established a change
programme, alongside our Purpose, Values and
Mindset, to set such a standard of consistent
excellence. We are holding ourselves to that high
standard across:
• Service: accepting nothing less than world-
class service for clients and customers
• Precision: our operations, risk management
and controls should run efficiently with no
unacceptable disruptions or
unanticipated losses
• Focus: we pursue projects and businesses
where we can be consistently excellent, and do
not dilute our energy or focus with activity
where we will not
Note:
a Exchange rate USD/GBP 1.22 as at 30 June 2022.
Our strong support of wholesale
clients and consumers this year
has shown Barclays operating at its
best, with empathy, skill and drive.
• Simplicity: we strive for simplicity and
efficiency in product design and delivery,
seeking out opportunity for automation
• Diversity of thought: we champion new
thinking, and challenge the status quo, to help
us achieve excellence.
Only by achieving these objectives to the fullest
will we create leading franchises and leave a
strong legacy for the future.
Supporting the UK
The United Kingdom has been our home for 330
years. Here we have helped the nation prosper,
and here we have prospered.
Serving the UK has been a central tenet of our
history, from 1690, when our Quaker founders
financed maritime trade from Lombard Street in
London, to 2022, when, in the throes of a sell off
in UK assets, we led the issuance of £4.5bn of
Green Gilts for the Treasury.
Core to our own success has been the
institutional strength of the UK: the rule of law,
the fairness and transparency of our regulators,
an availability of superb financial talent and
infrastructure and a disciplined business culture.
The health of the financial sector in the UK
depends on the overall health of the UK and vice-
versa, given the importance of finance to the UK.
As I described above in relation to the transition
to a low-carbon economy, the combination of
government and capital markets skilfully applied
is a strong lever to achieve powerful and far-
reaching goals. We are ambitious to help with
forming and executing an agenda for progress in
the UK. We recognise that public spending is
constrained and essential services like education,
health and social care are a priority for the UK
Government. We also recognise that capital
markets are complex and, given a chequered
history in the deployment of private capital for
public good, we are still rebuilding public trust in
financial services.
Barclays PLC
Annual Report 2022 09
We see clear opportunity for financial services to
contribute new approaches to address complex
issues including energy independence and
efficiency, housing and economic growth, where
the scale would be challenging for public finance
alone. With Brexit behind us, the UK has an
opportunity to shape the UK financial services
sector best to support that work. We will use our
data and our expertise in markets, sectors and
our clients to advance ideas, build common
cause with others and ultimately be good
stewards for our Company and for our country.
Thank you
We have achieved a great deal this year,
progressing our objectives and supporting
customers and clients. None of this would be
possible without the skill and dedication of our
colleagues across Barclays. I am grateful to every
one of them for their hard work and commitment
to our Purpose.
C. S. Venkatakrishnan
Group Chief Executive, Barclays
+ See our strategy
Page 12
See our approach to managing risk
Page 56
See how we act in our society and environment
Page 39
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Our business model
Designed to create synergies
Our universal banking model enables us to create synergies, across
the organisation and deliver long-term value for our stakeholders.
We deploy our resources ...
We draw on tangible and intangible assets to drive
long-term, sustainable value creation.
Our people, Purpose,
Values and Mindset
Our people are our organisation.
We deliver success through a
purpose-driven and
inclusive culture.
Our brand
Our brand equity instils trust,
lowers the cost of acquiring
customers and clients and helps
retain them for longer.
Technology
and infrastructure
Our deep technology and
infrastructure capabilities drive
customer experiences and
support strong resiliency.
Operations
and governance
Our risk management,
governance and controls help
ensure customer and client
outcomes are delivered in the
right way.
to serve the financial
needs of our diversified
customer base...
Due to our wide range of products
and services across markets, we define
ourselves as a ‘universal bank’.
Moving
We facilitate transactions
and move money around the world.
Protecting
We ensure the assets of our
clients and customers are safe.
Lending
We lend to customers and clients
to support their needs.
Investing and advising
We help our customers and clients
invest assets to drive growth.
Connecting
We connect companies seeking
funding with the financial markets.
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Our business model (continued)
delivering value through
synergies ...
providing clear outcomes
for our stakeholders.
We bring our organisation together to
create synergies and deliver greater value.
Our diversified model provides the resilience
and consistency needed for the road ahead.
Providing customers
and clients with the full
range of our products
and services.
Joining up different
parts of the Group so
capabilities in one can
benefit another.
Applying Group-wide
technology platforms
to deliver better
products and services.
Making the Group more
efficient.
Customers
and clients
Supporting our customers and
clients to achieve their goals
with our products and services.
Colleagues
Helping our colleagues across
the world develop as
professionals.
Society
Providing support to our
communities, and access to
social and environmental
financing to address societal need.
Investors
Delivering attractive and
sustainable shareholder returns
on a foundation of a strong
balance sheet.
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Our strategy
Sustaining and growing
in challenging times
Our strategy enables us to sustain and grow through different market
conditions and evolving trends
Our Purpose
informs our strategy
Our diversification, built to
deliver double-digit returns
Strategic priorities
to sustain and grow
We deploy finance
responsibly to support
people and businesses,
acting with empathy and
integrity, championing
innovation and
sustainability, for the
common good
and the long term.
Our diversification means we are resilient
through economic cycles and can deliver
double-digit returns.
• A large-scale retail and business bank in
the UK.
• An international bank containing:
– a top tier global corporate and
investment bank
– a broad international consumer
lending, cards and payments
franchise.
Deliver next-generation,
digitised consumer
financial services
Deliver sustainable
growth in the CIB
Capture opportunities
as we transition to
a low-carbon economy
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Annual Report 2022 13
Our strategy (continued)
59.8
US Consumer Bank Digital tNPS
2022 Target: 55
The new Digital tNPS metric provides us
with feedback on customer experience,
and can be measured at the digital journey level.
76%
% of UK customer journeys
digitally enabled
2021: 72%
As customers needs change
with evolving technology, we are adapting
to facilitate customer journeys digitally.
Barclays Local
In areas where demand has fallen and the bank
branch is no longer sustainable, we are testing
alternative solutions to remain part of the
community and to support customers who
require face-to-face assistance.
Barclays has now launched almost 200 flexible
banking pop-ups, enabling colleagues to reach
customers in places such as town halls,
libraries and community centres.
We also have a growing Barclays mobile van
network which can be deployed wherever
support is most needed, including rural and
remote locations. These spaces help
customers with cashless banking needs
including digital transactions and bill
payments. We also host workshops on topics
such as digital skills, money management and
fraud and scams prevention.
Deliver next-
generation, digitised
consumer financial
services
As technology transforms
consumer financial services, we
are building and delivering
enhanced products and services
for our customers, leveraging our
payments interconnection and
improving our efficiency.
Our objectives
• Investing in digital capabilities to
improve service for customers and
unlock new sources of income:
• accelerating digital access and
adoption, while not leaving
customers behind
• building cost-effective infrastructure
• using the quality and scale of our
data to better understand customer
needs, anticipate trends and deliver
more competitive products and
services
• Realising value from investment in
Payments across the Group, delivering
additional income streams
• Expanding unsecured lending through
partnerships
• Creating a competitive Wealth
franchise to efficiently service
customers’ evolving needs
Strategic context
Technology is transforming the way consumers
access products and services. We are adapting
to anticipate and meet those needs, and find
effective means of ensuring non-digital
customers can still access our services.
Progress
We continue to invest in our digital capabilities,
upgrading our systems, moving to cloud technology
and implementing automation of manual
processes. This is allowing us to deliver a more
personalised digital journey, reduce cost and create
additional capacity to support more of our
customers.
We are introducing digital tools to the Barclays app
to provide new products for our customers,
improve the overall experience and enable
individuals to manage their finances better. For
example, mortgage customers can manage their
mortgages seamlessly through the app, including
switching onto a new rate up to 180 days before
their current rate expires. This year, our active
mobile customers have grown to 10.5 million and we
hit a record of 15.4 million logins in a single day –
demonstrating the impact of going digital-first.
In our US consumer business, we completed the
acquisition of the Gap cards portfolio, doubling our
customer base in the US.
We continue to adapt our service model by building
out Barclays Local – an alternative branch presence
for those who need in-person support. Our new
Cashback Without Purchase programme was
launched to give customers the ability to withdraw
cash for free via thousands of small businesses
across the country, supporting those communities
without a branch or cashpoint.
Evolution in 2023 and beyond
We are working to develop a seamless, digital
customer journey that provides access to a full
range of unsecured lending solutions and the ability
to switch between different credit products -
expanding beyond cards into merchant integrated
point-of-sale lending and open market loans.
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Annual Report 2022 14
Our strategy (continued)
Deliver sustainable
growth in the CIB
As the capital markets grow,
we will seek to maintain our
market position as a top six global
investment bank while investing
in new capabilities to serve
our clients.
Our objectives
• Building consistent strength in
Investment Banking, expanding in high-
growth sectors and deepening our
M&A capabilities
• Consistently investing in our Global
Markets business with particular
priority given to digital investment to
ensure we are an electronic-first
markets business
• Capturing greater client flow in Equities
and balances in Prime Financing while
growing our share in Securitised
Products and Macro Rates, FX and EM
• Broadening Corporate Banking
product capabilities, particularly in
Europe and US
• Optimising our global footprint by
expanding the CIB internationally
where we have an attractive
opportunity
Strategic context
A strong presence in the capital markets is
important as this remains core to our clients’
needs.
Trading and investment banking income is
subject to market volatility, and banks have
sought to diversify CIB revenues to increase the
predictability of earnings.
Our success will be judged on our absolute
performance, as well as how we perform in terms
of Investment Banking fee wallet share and
Global Markets revenue relative to our
competitors, which are industry standard
markers for CIB performance.
Progress
In 2022, we maintained our overall ranking of
sixth globally across Investment Bankinga and
Global Marketsb, narrowing the gap to fifth.
We increased the diversity and predictability of
our income, growing our financing business in
Global Markets, including in Prime. We further
integrated our Corporate Banking services to
global and UK multinationals with our Investment
Banking business, focusing on growing our
Transaction Banking share across our core CIB
markets.
We actively recruited to strengthen our teams
and in November, we opened new state-of-the-
art trading floors in our London headquarters,
bringing all CIB colleagues in London into one
location to further enhance collaboration and
client service.
Evolution in 2023 and beyond
We will continue to invest in Investment Banking
high-growth sectors and in our digital initiatives
in Global Markets. We will also seek to further
build our Corporate Banking business in the US
and Europe – a key source of stable, high-
returning income.
Global service that delivers
Colleagues across the globe have enabled
leading French bank La Banque Postale to
expand its services to customers by taking full
control of CNP Assurances, the leading
French life insurer, which was previously listed
on the Paris Stock Exchange.
Barclays won the mandate to lead the
acquisition for La Banque Postale, with
colleagues in Investment Banking, Corporate
Banking and Principal Investments working
together seamlessly to deliver a complex
transaction for the client.
The transaction is one of the most significant
insurance deals in the French market for over
15 years, the first guarantee issued by
Barclays in France for an M&A mandate, and
an example of the power of collaboration to
deliver great client outcomes.
700+
Growth in Corporate
Banking clients in Europe
2021: c.600
£2.9bn
Total Financing incomec
2021: £2.2bn
Notes:
a Dealogic Investment Banking global fee ranking and share
demonstrating our performance vs peers, for the period covering 1
January 2020 to 31 December 2022.
b Global Markets market share and rank for Barclays is based on our
share of Top 10 banks reported revenues. Peer banks include BoA,
BNP, CITI, CS, DB, GS, JPM, MS and UBS.
c Global Markets Financing includes income related to client financing in
both FICC and Equities. In FICC this includes fixed income securities
repurchase agreements, structured credit, warehouse and asset
backed lending. In Equities this includes prime brokerage margin
lending, securities lending, quantitative prime services, futures
clearing and settlement, synthetic financing, and equity structured
financing. All other items are considered intermediation.
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Annual Report 2022 15
Our strategy (continued)
Capture opportunities
as we transition to
a low-carbon economy
We want to work alongside customers
and clients as they transition to a low-
carbon economy, using our advisory and
financial expertise to help them navigate
this period of extraordinary change.
Our objectives
• Using our financial and capital markets
expertise to support the scale-up of low-
carbon technologies, infrastructure and
capacity
• Supporting clients to decarbonise by
providing financial advice and finance,
including supporting the transition towards
a low-carbon economy
• Continuing to develop green and
sustainable banking products, including
green mortgages, bonds, loans and
investment funds eligible under our updated
Barclays’ Sustainable Finance Framework
•
Investing in sustainability-focused start-ups
with growth potential
• Continuing to make progress to achieve our
ambition to become a net zero bank by
2050, including aligning all of our financing to
the goals and timelines of the Paris
Agreement, consistent with limiting the
increase in global temperatures to 1.5°C
• Continuing to reinforce our social and
environmental policies through our
governance
Strategic context
The scale of the investment needed for a timely
transition is significant. The final decision text
from COP27 stated that $4trna per year needs to
be invested in renewables to be able to reach net
zero emissions by 2050 and furthermore, a
global transformation to a low-carbon economy
is expected to require investments of between
$4-6trna per year. We are determined to capture
these opportunities by supporting our
customers and clients in their transition.
Progress
As defined by our Sustainable Finance
Framework, in 2022 we facilitated £25.5bnΔ of
green financing, reflecting our ability to capture
the opportunities from the transition.
After a strategic review of our capabilities,
market demand and growth opportunities, in
December we announced a new target to
facilitate $1trn of Sustainable and Transition
Financing between 2023 and the end of 2030.
In addition, we also announced that we will be
increasing our investment into global climate-
tech start-ups through our Sustainable Impact
Capital portfolio to £500m by the end of 2027,
As noted in last year's Annual Report, we
strengthened our risk and control governance,
recognising climate as a Principal Risk.
Evolution in 2023 and beyond
Aligned to our new $1trn target, we will continue
to invest in our business, with the aim of creating
a centre of excellence for sustainable finance
within the CIB, delivering a fuller suite of
products, solutions, and expertise to clients as
they navigate the transition towards a low-
carbon economy.
In the next phase of our Sustainable Impact
Capital investments we expect will see an
enhanced focus on decarbonisation
technologies which are enabling the transition
within carbon-intensive sectors, particularly
carbon capture and hydrogen technologies.
Powering Portland General
Electric’s future with innovative
green financing
Bringing together experts from its Power &
Utilities, Equity Capital Markets and
Sustainable Capital Markets teams in October
2022, Barclays structured a Green Use of
Proceeds equity offering for Portland General
Electric, which saw the issuance of 11.615m
shares of common stock.
This novel structure gives investors publicly
tradable common shares, whose proceeds are
earmarked for investment toward the issuer's
decarbonisation goals.
Investor reaction was strong for the nearly
$500m offering, which was oversubscribed
and priced at a tight discount relative to the
size of the deal.
The proceeds of this offering are designated
to the construction of a 311 MW wind energy
facility, as well as additional renewable and
battery storage projects.
£89m
invested through our Sustainable
Impact Capital Programme
£2.6bn
Green home mortgages
issued since 2018
Barclays was one of the first major lenders to launch
a Green Mortgage in 2018 and in January 2022,
we announced the launch of Green Home
Buy-to-let Mortgages
Green financing facilitated (2018-2030)
£bn
n Progress from 2018 to 2021 n 2022 progress
n Total achieved to date
n Against a target of £100bn by 2030
Notes:
a $4-6trn as referenced at COP27 at unfccc.int/documents/624444 as
well as the United Nations Environment Programme - Emissions Gap
Report 2022 at unep.org/resources/emissions-gap-report-2022.
Δ 2022 data subject to independent Limited Assurance under
ISAE(UK)3000 and ISAE3410. Current and previous limited assurance
scope and opinions can be found within the ESG Resource Hub for
further details: home.barclays/sustainability/esg-resource-hub/
reporting-and-disclosures/
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Annual Report 2022 16
Section 172(1) statement
How the Board has
regard to the views
of our stakeholders
The Directors have acted in the way that they
considered, in good faith, would be most likely to
promote the success of the Company for the benefit
of its members as a whole and this section forms our
Section 172 disclosure, describing how, in doing so,
the Directors considered the matters set out in
Section 172(1)(a) to (f) of the Companies Act 2006.
The Directors provide this statement setting out how they have
had regard to the matters set out in Section 172(1)(a) – (f) of the
Companies Act 2006 when performing their duty to promote the
success of the Company under Section 172.
+ For further details of the key activities of the Board in 2022, refer to
page 154 of our Governance report in Part 3 of the Annual Report.
How does the Board engage with stakeholders?
Throughout the year, the Board engages directly and indirectly with stakeholders to ensure it has a
comprehensive understanding of the impact of the Group's operations on key stakeholders, as well as
their interests and views. This engagement, both directly and through regular reports from individual
business areas and key Group functions ensures the Board is well-versed on key issues to enable the
Directors to comply with their legal duty under Section 172(1).
+ Read more on how Barclays engages with its
stakeholders on pages 21 to 22.
Engagement in action
See pages 17 to 20 below to find out about how the Directors have had regard to the
matters set out in Section 172 when discharging their duties, and the effect of those
considerations in reaching certain decisions taken by them in the context of:
The Board’s
response to the
Over-issuance
of Securities
by BBPLC
Responding
to the impacts of
the Russian invasion
of Ukraine
Supporting our
customers, clients,
colleagues and
communities through
challenging times
Say on Climate:
Understanding the
views of our shareholders
and other stakeholders
in relation to
our climate
strategy
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Barclays PLC
Annual Report 2022 17
The Board’s
response to the
Over-issuance
of Securities
by BBPLC
The Board has worked alongside management
this year to assess and respond to the Over-
issuance of Securities.
The Group operates a structured products
business in BBPLC, through which it issues
structured notes and exchange traded notes to
customers in the US and elsewhere. In March
2022, management became aware that BBPLC
had issued securities materially in excess of the
amount registered under BBPLC's shelf
registration statement on Form F-3, as declared
effective by the SEC in August 2019 (2019 F-3).
Subsequently, management also became aware
of issuances in excess of the amount registered
under BBPLC's prior shelf registration
statement (the Predecessor Shelf).
Due to an SEC settlement order in 2017, at the
time the 2019 F-3 was filed and the
Predecessor Shelf was amended, BBPLC had
ceased to be a 'well known seasoned issuer' (or
WKSI) and was required to register upfront a
fixed amount of securities with the SEC .
When management became aware of the
Over-issuance of Securities, the matter was
escalated to senior management and to the
Board, and Barclays’ regulators in the US and the
UK were notified. As part of its response, the
Board considered both the immediate impact of
the Over-issuance of Securities, and the
underlying causes of this issue.
The securities issued in excess of the registered
amounts were considered to be ‘unregistered
securities’ for the purposes of US securities law
and certain offers and sales of these securities
were not made in compliance with the US
Securities Act of 1933, which requires that
offers and sales of securities be registered
unless there is an exemption from registration.
This gave rise to rights of rescission for certain
purchasers of relevant securities under US
securities laws. As a result, BBPLC elected to
conduct a rescission offer, as approved by the
Board, to eligible purchasers of relevant
securities.
Barclays also commissioned a review led by
external counsel of the facts and circumstances
relating to the Over-issuance of Securities and,
among other matters, the control environment
related to such issuances (the Review). The
Board then considered carefully the outcome of
the Review which concluded that the Over-
issuance of Securities occurred because
Barclays did not put in place a mechanism to
track issuances after BBPLC became subject to
a limit on such issuances, as a result of losing
WKSI status.
The Board has supported
the creation of a Group-wide
programme, seeking to identify
issues and lessons learned.
Among the principal causes of the Over-
issuance of Securities were, first, the failure to
identify and escalate to senior executives the
consequences of the loss of WKSI status and,
secondly, a decentralised ownership structure
for securities issuances.
The Review further concluded that the
occurrence of the Over-issuance of Securities
was not the result of a general lack of attention
to controls by Barclays, and that Barclays’
management has consistently emphasised the
importance of maintaining effective controls.
The Board has worked to address the root
cause and impacts of the Over-issuance of
Securities, including through the Review, and
deeply regrets its occurrence.
The Over-issuance of Securities also underlined
to the Board the need to continue to focus on
embedding Barclays' Values and Mindset at all
levels of the organisation to achieve operational
and controls excellence.
Further, the Board has supported the creation
of a Group-wide programme, established by the
Group Chief Executive. This programme will
seek to identify issues and lessons learned
across the Group's remediation initiatives to
help ensure that Barclays is consistently
excellent, in customer and client service, in
operational capability and in financial
performance, with all activities underpinned by a
strong risk management culture.
+ Read more about the work of the Board and its
Committees in Part 3 of the Annual Report
Page 141
Find details of the impact of the Over-issuance
of Securities on remuneration in Part 3 of the Annual
Report
Page 197
Read our Shareholder Q&A on the Over-issuance of
Securities in Part 3 of the Annual Report
Page 188
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Section 172(1) statement (continued)
Supporting our
customers, clients,
colleagues and
communities through
challenging times
The Board is acutely aware of how current
inflationary pressures are impacting our
customers’ and clients’ financial wellbeing, and
that a 'one size fits all' approach is not
appropriate. The impact of high inflation and
increasing interest rates, coupled with rising
energy costs are creating financial pressures
across wider society. The Board recognises
that customers and clients have different
needs, and throughout the year received regular
reports on the work undertaken across the
Group to support each of them. In September,
the Board met directly with a delegation of FCA
senior management where, among other
matters, the Group’s response to the increased
cost of living and the pressure this has placed on
our customer base was discussed.
In November we expanded our engagement,
launching a nationwide campaign and sending
13.5 million segmented emails to our customer
base, directing them to our cost of living content.
With specific reference to our Business Banking
clients, many of whom are also facing financial
pressures, not least from increased operating
costs and rising wages, we have delivered over
600 'Business Health Pledge Masterclasses',
talking to small businesses about the issues
impacting them.
In response to unusually large increases to living
costs experienced by our UK colleagues, we
brought forward part of the 2023 pay increase,
awarding 35,000 UK-based junior colleagues a
£1,200 salary increase effective from August
2022, ahead of our annual salary review. In
January 2023, Barclays worked closely with
Unite the Union to agree a 2023 UK pay deal
which, combined with the August 2022
increases, brought the total average salary
increase for our lowest paid colleagues up to
11%. By doing this we ensured that our
minimum rate of pay in the UK remains well
ahead of Living Wage Foundation benchmarks.
Similarly, we brought forward part of the 2023
pay increase for our most junior colleagues in
Belgium, France, Ireland, Italy, Luxembourg,
Netherlands, Portugal and Spain, awarding them
€1,500 effective 1 November 2022.
Throughout 2022, the Board Risk Committee
maintained close oversight of the Group's
ongoing review of the retail and business
banking portfolios to identify areas of stress
where customers and clients might be facing
financial pressures. The Committee also
considered the actions taken to provide
support, balancing our duty to lend responsibly
alongside the need to support customers and
clients who might be struggling in this current
challenging environment, particularly those who
are characterised as vulnerable. During 2022,
the Board has also received updates and
discussed with management the measures
being taken across the Group to support our
stakeholders, some examples of which are
described below.
For those customers who are already facing
financial hardship, we have increased resource
within our Barclays Financial Assistance (BFA)
team, which provides a range of support to
customers, including referrals to debt support
charities, and targeted forbearance. For
customers who may start to struggle, we are
proactively monitoring their financial resilience
in order to identify when and where targeted
support might be required (including contacting
c.200,000 customers each month to offer pre-
emptive support before they miss a payment).
Recognising the pressures faced by our
customers, in August we expanded our Money
Management and Money Worries hubs to include
a Cost of Living focus, with improved navigation
to help direct customers to relevant content, to
guide and help them better understand and
manage the impact of rising inflation and interest
rates on their personal finances.
Barclays PLC
Annual Report 2022 18
In November, we also awarded junior colleagues
in Germany a one-off payment of €2,000 as that
was more appropriate under local rules.
The Board, through the Board Remuneration
Committee, continued to have regard to the
impact of the current macroeconomic
environment as it reviewed pay across the
organisation during the year-end cycle. More
information can be found in the Remuneration
report within the Annual Report and the Barclays
PLC Fair Pay Report 2022.
In monitoring our response to the increased
cost of living, we are working with a wide range
of stakeholders – including the FCA, the UK
Government and our peers – to ensure our
customers and clients are supported during
these difficult times. This includes consistent,
industry-wide communications, where
appropriate, so that all customers and clients,
irrespective of who they bank with, can know
what to expect from their financial services
provider.
We also remain committed to supporting the
financial health and literacy of our communities.
Our LifeSkills programme is at the heart of this
work and this year we have evolved the
programme, partnering with organisations like
the Trussell Trust which work with local
communities to help those most in need,
building awareness of the help available to
people facing financial difficulties, increasing
access to the support they are entitled to and
helping them maximise their incomes.
The Board will keep the overarching situation
under close review in order to ensure that
Barclays continues to play its role in supporting
our customers, clients, colleagues and our
communities through these challenging times.
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Section 172(1) statement (continued)
Say on Climate:
Understanding the
views of our shareholders
and other stakeholders
in relation to
our climate
strategy
The Board takes Barclays' role in supporting the
transition to a low-carbon economy very
seriously. This commitment was reflected in
Barclays’ announcement, at the 2021 AGM, that
it would offer shareholders a ‘Say on Climate’
advisory vote, whereby shareholders would be
asked to vote on Barclays' climate strategy at
the 2022 AGM. This vote would serve as a
touchstone for Barclays as to whether the
climate strategy set by the Board had the
support of shareholders.
Throughout 2021 and continuing into 2022,
Barclays engaged with major shareholders, their
representative bodies, connected activist
groups and other stakeholders on a one-to-
one and group basis, with our Group Chairman
attending a number of these meetings. This
included engagements with 15 of our largest
shareholders, the Investor Forum, the
Institutional Investors Group on Climate Change
and ShareAction.
Stakeholder feedback was received on a range
of matters including:
• the evolution of Barclays’ fossil fuel policies, in
particular the phase out of thermal coal
financing;
• Barclays’ oil sands policy;
• our 2030 target-setting, including the
integration of 1.5oC aligned scenarios such as
the IEA Net Zero 2050 scenario in our
financed emission targets and the use of
ranges for certain sectors;
• incorporation of other greenhouse gases
including methane in our BlueTrackTM
methodology;
• green and sustainable financing targets and
insight into how Barclays’ climate strategy is
embedded into operational practices
including client engagement.
Stakeholders also asked about the impact of the
conflict in Ukraine within the context of just
transition, and in relation to our approach to
energy security. The Board received a series of
updates on the feedback which followed the
engagement with investors and stakeholders
more broadly.
In February 2022, the Board reviewed a report
on the 2021 progress against Barclays’ climate
commitments and was asked to endorse a
number of proposals:
• revisions to Barclays' thermal coal policy
(including setting final exit dates with respect
to the financing of thermal coal mining and
coal-fired power generation);
The industrial revolution took over a century
to transform the planet, and we cannot hope to undo
overnight its deleterious impact on the environment.
We are still at an early stage of an important journey
but are committed to the destination and will persevere
to reach it. One of my foremost priorities in view of
market and risk factors is for Barclays to demonstrate
progress against our net zero ambition.
C.S. Venkatakrishnan
Group Chief Executive
Barclays PLC
Annual Report 2022 19
• proposed 2030 emissions intensity reduction
target ranges for Cement, Steel and Power,
and absolute emissions reduction targets for
Energy; and
• new operational emissions ambition and
updated operational targets, further details of
which were to be included in the Barclays’
Climate Strategy, Targets and Progress 2022
document, which would form the basis of the
Say on Climate advisory vote.
The Board noted the varying feedback received
from investors and other stakeholders
regarding the purpose and frequency of the Say
on Climate vote. Acknowledging that it is
ultimately the responsibility of the Board and
executive management to set the strategy of
the Barclays Group, including climate strategy, it
was the Board's view, announced at the 2021
AGM, that the vote should be advisory only in
nature.
At the 2022 AGM, our Chairman spoke directly
with a number of our shareholders on a series of
questions posed by them covering topics such
as Barclays’ climate strategy, targets and
progress, green and sustainable financing,
Barclays' involvement with and views on climate
change, fossil fuels, fracking, deforestation,
renewable/sustainable energy and our ambition
to be a net zero bank by 2050.
The Say on Climate resolution received the
support of over 80% of votes cast. The Board
acknowledged the spectrum of views across the
share register, but was pleased that the
resolution was supported by such a strong
majority of votes cast.
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Section 172(1) statement (continued)
The Board viewed the Say on Climate advisory
vote as an important part of its ongoing
engagement with shareholders and Barclays
has continued to engage with shareholders
and other stakeholders on our climate strategy
and ambitions following the 2022 AGM.
Since the AGM, in September 2022, the Board
reviewed a further proposal to strengthen the
thermal coal policy and endorsed the proposal
to update the US thermal coal power phase-
out date from 2035 to 2030 and the Board has
also reviewed a change to the oil sands policy
and new green and sustainable finance
targets. The Board continues to receive
updates on the evolution of our climate
strategy and progress against targets.
In line with our commitment in the Barclays’
Climate Strategy, Targets and Progress 2022
document to provide further updates on
targets for sustainable financing in 2022, the
Board was also updated on Barclays' new
target to facilitate $1trn of Sustainable and
Transition Financing between 2023 and the
end of 2030.
+ More on climate strategy
Page 15.
Responding
to the impacts of
the Russian invasion
of Ukraine
The Board has closely overseen the Group’s
response to the Russian invasion of Ukraine.
The impacts of the war are numerous and
widespread, with implications for Barclays, its
clients and customers and other stakeholders.
Recognising the urgency of situation, the Group
Chairman convened a Board meeting in mid-
March 2022 to assess developments and the
Group’s response. Since then, the Board and its
Committees have received ongoing updates.
Notwithstanding that Barclays has no onshore
presence in Ukraine or in Russia, this situation
has required a multi-faceted response by
Barclays, with the Board and its Committees
overseeing a number of matters including the
Group’s response to the rapidly imposed global
sanctions, the management of the Group’s
financial exposure to Russia-specific market,
credit and liquidity risks and management
actions taken to reduce the Group’s exposure
to the heightened risk of cyber attack.
Barclays PLC
Annual Report 2022 20
Across the financial services sector, cyber risk
remains heightened. The Board and its
Committees have heard from management on
the measures implemented to address these
concerns to ensure that Barclays is, and will
remain, well placed to react in the event of any
such attack, which could target Barclays directly
or the wider financial services infrastructure.
The Board Risk Committee has also received a
briefing on the operational and risk learnings
from the Group's response to this situation in
order that the Group is best placed to respond
should conflict arise in another jurisdiction
requiring similar actions to be taken.
The Board and senior management will continue
to monitor the situation and its implications for
the Group and our stakeholders.
The sanctions imposed represent the most
significant change to the global sanctions
regime since the 9/11 terrorist attack in the US,
requiring the Group to act at pace. The Board
received reports on the significant work done by
colleagues in the compliance and legal
functions, along with other areas of the
business, to ensure that Barclays was able to
take swift action to respond to these sanctions.
The response was aimed at reducing the
potential for financial crime, directing
substantial resources into the management of
potential conflicts between sanctions regimes
as new sanctions were rolled out across
different jurisdictions, obtaining required
licences and playing a strategic role on policy
developments and sanctions implementation.
With regard to the management of risk
associated with the Russian invasion of Ukraine,
the Board received updates on operational risk,
credit risk and market risk exposures and on
actions taken to reduce these, manage funds
and de-risk positions effectively.
The impacts of the war are
numerous and widespread, with
implications for Barclays,
its clients and customers
and other stakeholders.
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Annual Report 2022 21
Engaging with our stakeholders
Listening and responding to our stakeholders
Barclays aims to create sustainable value for all those we serve, through the economic cycle.
Customers and clients
Colleagues
How we responded
For customers, we have developed the
Barclays Money Management Hub,
containing advice on how to better
understand their spending behaviours and
improve their financial wellbeing.
We continued to develop both our personal
and corporate apps, to provide our
customers and clients with the tools required
to effectively manage their finances and
transactions. The newly launched Barclays
Corporate app is now available in 150+
countries.
We are developing a Client Transition
Framework, a methodology that allows us to
evaluate our corporate clients' current and
expected future progress in transitioning to a
low-carbon economy. The framework
comprises both a quantitative and qualitative
component to assess clients' trajectory
against our targets and benchmarks, and the
ambition and achievability of their plans,
allowing us to engage with them at a more
granular level for their transition financing
needs.
150+
countries covered by
our Corporate app
How we responded
The 2022 Your View survey results showed
progress on colleague engagement as well as
against the primary cultural topics we
measure.
• We brought forward part of the 2023 pay
increase, awarding 35,000 UK-based junior
colleagues a £1,200 salary increase
effective from August 2022, ahead of our
annual salary review
• During 2022, we made enhancements to
drive further global consistency in how we
support our colleagues with disabilities and
health conditions, providing them with
greater control over their own individual
requirements, as well as improving the
processes to self-serve and get the right
equipment they need for office and/or
home working
• We supported colleagues with their next
career move within Barclays, with 43% of
vacancies being filled by internal
candidates, helping to retain our diverse
and inclusive workforce and mitigate
redundancies
90%
of colleagues believe their
line manager supports
their wellbeing
Our people and culture are our greatest
assets. Together, they make a critical
difference to our success, and our
investment in our colleagues strengthens
and protects our culture.
What did they tell us?
We have an established colleague
engagement programme across a number of
platforms. These provide us with a robust
body of information and ensure we are
attuned and listening to the different
perspectives, and responding accordingly to
colleague feedback. Further detail can be
found on page 32.
• Our colleagues told us that with rising costs,
they needed financial support
• As colleagues embraced hybrid working,
they required the right tools to undertake
their roles
• Our colleagues wanted support to be able
to develop their own careers
We are committed to serving our
customers' and clients' best interests,
and engage with them regularly so
we can understand how best to adapt
our products and services to their
evolving needs.
What did they tell us?
We engage in a wide variety of ways, including
running regular surveys, analysing customer
complaints, and drawing on data from millions
of individual transactions and personal
customer interactions.
• As customers face a rising interest rate
environment and inflationary cost
pressures, they have asked for more
support and advice on their finances
• Customers are looking for full integration of
services to ensure seamless digital
transactions
• Clients are asking for advice and finance in
support of their efforts to decarbonise their
operations.
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Engaging with our stakeholders (continued)
Barclays PLC
Annual Report 2022 22
Society
Investors
How we responded
We engaged with stakeholders at our 2022
AGM, through our 'Say on Climate' advisory
vote and attended COP15 on biodiversity as
well as COP27 on climate change. We
engaged with NGOs, such as ShareAction, by
participating in their recent survey on key
climate and biodiversity metrics.
We spoke to our suppliers and promoted the
importance of diversity, equity and inclusion,
as well as the importance of our focus on
modern slavery across our supply chain.
In support of the communities in which we
operate, through our LifeSkills programme
we have reached 18.1 millionΔ people since
2013. Through our Unreasonable Impact
programme, since 2016 we have supported
269 ventures that are helping to deliver
innovative solutions to pressing social and
environmental challenges.
Notes
Δ 2022 data subject to independent Limited Assurance under
ISAE(UK)3000 and ISAE3410. Current and previous limited
assurance scope and opinions can be found within the ESG
Resource Hub for further details: home.barclays/sustainability/
esg-resource-hub/reporting-and-disclosures/
$1 trillion
target announced in December 2022 to
facilitate Sustainable and Transition
Financing by the end of 2030
How we responded
• We provided further detail on our Markets
performance, more granular transactional
activity and additional insights into interest
rate sensitivity
• We delivered on our priority to return capital
to shareholders, with an appropriate mix of
returns amounting to a total capital return
equivalent to c.13.4p per share
• We listened to feedback on our Say on
Climate advisory vote at the 2022 AGM as
well as other factors, published new a $1trn
Sustainable and Transition Financing target,
and are announcing in this report an
updated policy on coal-fired power
financing
• Investor Relations helped establish ESG
engagement with investors, which
contributed to key investment decisions
• We continued to enhance transparency in
our external disclosures
• Our efforts were recognised through
Barclays winning the PwC award for Building
Public Trust, and the Investor Relations
team being shortlisted for best IR team at
the IR Society awards
c.13.4p
Total capital return
equivalent per share
Engaging with our shareholders and other
market participants has helped us to
understand their priorities and drive
better outcomes for all stakeholders.
What did they tell us?
We continue to enjoy productive bilateral
engagement with institutional equity and fixed
income investors, rating agencies, as well as
our private shareholders. We were able to
further our efforts in hybrid meetings,
enabling deeper engagement with investors
irrespective of their individual location. In
2022, the focus of our dialogue has been:
▪ the factors driving current performance and
expectation of further momentum from
changes in the macro economic
environment
▪ capital return to shareholders
▪ continued engagement and progress on
the climate agenda
▪ the need for clearer, transparent
messaging on business performance
Deep and thoughtful engagement with the
numerous individuals and interest groups
that represent our wider society help us to
shape our approach and ultimately deliver
long-term sustainable value.
What did they tell us?
We engaged with a wide range of
stakeholders, including non-governmental
organisations (NGOs) and others where
appropriate. We participated in various
sustainability forums including global and
regional industry initiatives.
Major themes we heard from them included:
▪ wanting to see continued progress, targets
and development of the global climate
agenda, including appropriate social and
environmental governance
▪ support for communities facing hardship
▪ an increased focus on nature and
biodiversity
▪ transparency and harmonisation of data
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Barclays PLC
Annual Report 2022 23
Key performance indicators
Measuring
success
for all
stakeholders
We analyse a broad range
of financial and non-
financial measures to
support the execution
of our strategy.
We use a number of sources to assess the
success of our strategy and provide a
balanced review of our performance during
the year, taking into consideration financial and
non-financial metrics across all stakeholder
groups.
A number of these performance measures
are also linked to the way we pay our
colleagues, including at executive
management level. For more information,
please see the Directors’ Remuneration
Report in Part 3 of the Annual Report.
In order to reflect our strategic priorities, we
have further refined the performance metrics
we use, most notably with respect to our
societal stakeholders.
Key measures used in our 2022 assessment
include the metrics reported on this page,
as well as the broader discussion of our
performance on the subsequent pages of
this report.
We aim to build trust by offering
innovative products and services, with
an excellent customer and client
experience, increasing advocacy.
+ Customers and clients
Page 26
We strive to manage the environmental
and societal impact of our business, helping
stakeholders access a prosperous and
sustainable future.
+ Colleagues
Page 31
Our ambition is to generate attractive and
sustainable returns through the economic cycle,
measured through our Group targets.
+ Society
Page 39
We promote and maintain a diverse
and inclusive workforce within a
positive, values-based culture.
+ Investors
Page 45
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Key performance indicators (continued)
Barclays PLC
Annual Report 2022 24
Customers and clients
Barclays UK Net
Promoter Score (NPS)a
Barclays UK complaints excluding PPI
(% movement year on year)
Colleagues
Colleague engagement
(%)a
“I would recommend Barclays to people
I know as a great place to work” (%)b
2022
2021
2020
2022
2021
2020
2022
2021
2020
2022
2021
2020
The NPS is a view of how willing customers
are to recommend our products and services
to others.
We measure our volume of complaints and
review root causes to inform what changes we
should make to our products and services to
improve them for customers.
This is a measure derived from responses to
three colleague engagement questions in the
Your View survey.
A question in the Your View employee survey
that measures colleague advocacy.
Consumer, Cards and Payments US
customer digital engagement (%)b
Corporate and Investment Bank revenue
ranks and market shares (#,%)
Females at Managing Director
and Director level (%)
“I believe that my team and I do a good job
of role modelling the Values every day” (%)
Metric shows percentage of digitally
active Consumer, Cards and Payments
US consumers.
2022
2021
2020
n Global Markets revenue ranking and sharec
n Dealogicd Investment Banking global fee ranking and share
demonstrating our performance vs peers.
#6
#6
#6
#6
#6
#7
2022
2021
2020
2022
2021
2020
Metric reflects % of females at Managing
Director and Director level within Barclays,
against 2025 ambition of 33%.
A question from the Your View employee survey
showing colleagues’ connection to the Barclays
Values which underpin the desired culture.
Notes
a ®Net Promoter, Net Promoter System, Net Promoter Score, NPS and the NPS-related emoticons are registered trademarks of Bain &
Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.
b Excluding new Gap customers.
c Global Markets market share for Barclays is based on our share of Top 10 banks reported revenues. Peer banks include BoA, BNP, CITI, CS, DB,
GS, JPM, MS and UBS.
d Dealogic for the period covering 1 January 2020 to 31 December 2022.
Notes:
a As part of our efforts to improve our measurement frameworks, we have transitioned to a new three question engagement model. This was after
collecting four years of concurrent data and running analysis to affirm the new model’s validity. Historic figures have been updated to reflect
results from the new three question model.
b KPI adjusted in line with new engagement model. The previous KPI “I would recommend Barclays as a good place to work” would have been 86%
(2021:83%).
Δ 2022 data subject to independent Limited Assurance under ISAE(UK)3000 and ISAE3410. Current and previous limited assurance scope and
opinions can be found within the ESG Resource Hub for further details: home.barclays/sustainability/esg-resource-hub/ reporting-and-
disclosures/
111115995-17-17-327.33.16.43.63.66.46.73.63.36.484828229△2826858284929294
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Key performance indicators (continued)
Barclays PLC
Annual Report 2022 25
Society
Operational GHG emissions (market-based)
(tonnes CO2e)
Social, environmental and sustainability-
linked financing facilitated (£bn)
Investors
Common Equity Tier 1 (CET1) ratioa
(%)
Group return on tangible equity (RoTE)a
(%)
2022
2021
2020
2022
2021
2020
2022
2021
2020
2022
2021
2020
Notes:
Total gross Scope 1 and 2 (market-based) emissions generated from
Barclays’ branches, offices and data centres, including all indirect
emissions from electricity consumption.
Notes:
Financing in social and environmental segments aligned to Version 3 of
Barclays’ Sustainable Finance Framework. Version 4 was released in
December 2022 upon announcing new sustainable financing targets.
The Group maintained a strong CET1 ratio of
13.9% in 2022, within the Group target range of
13-14%.
Group RoTE was 10.4% in 2022, down on prior
year from the normalisation of credit impairment
charges and higher litigation and conduct costs,
partially offset by income growth across all
operating divisions.
The Group targets a RoTE of greater than 10.0%
in 2023 in line with our medium-term target.
Our current estimate of our financed
emissions based on our disclosed BlueTrackTM
methodology
Portfolio
December 2022
Cumulative
performance vs.
baseline
LifeSkills: Number of people upskilled
(millions)
2022
2021
2020
Achieved the target to upskill 10 million people
between 2018 and 2022.
Notes:
Number of people participating in the Barclays LifeSkills programme
focused on employability skills.
LifeSkills: Number of people placed
into work
77,200△
2021: 77,100
2020: 49,700
Achieved the target to place 250,000 people
into work between 2019 and 2022.
Notes:
Number of people placed into work following training provided by
Barclays LifeSkills partner organisations.
Δ 2022 data subject to independent Limited Assurance under
ISAE(UK)3000 and ISAE3410. Current and previous limited
assurance scope and opinions can be found within the ESG
Resource Hub - for further details: home.barclays/sustainability/
esg-resource-hub/reporting-and-disclosures/
Δ
51.7
MtCO2e
(Absolute emissions)
Δ
KgCO2e / MWh
302
(Physical intensity)
Δ
tCO2e / t
0.610
(Physical intensity)
Δ
tCO2e / t
1.732
(Physical intensity)
Δ
167.2
gCO2e / km
(Physical intensity)
Δ
kgCO2e / m2
32.9
(Physical intensity)
Energy
Power
Cement
Metals (Steel)
Automotive
manufacturing
Residential real
estate
Date baseline set:
n December 2020
n December 2021
n December 2022
-32%
-9%
-2%
-11%
N/A
N/A
Total operating expensesa
(£bn)
Cost: income ratioa
(%)
2022
2021
2020
Group operating expenses increased 14% to
£16.7bn including £1.6bn of litigation and
conduct chargesb. Excluding litigation and
conduct charges, costs were £15.1bn, up 6%,
reflecting the impact of FX and inflation.
The Group is targeting a cost: income ratio
percentage in the low 60s in 2023 and below
60% over the medium-term.
Notes:
Energy and Power cumulative performance assessed against a 2020
baseline whereas Cement and Steel are against a 2021 baseline.
Further details on reducing our financed emissions can be found on page
87 including our approach to reporting financed emissions data.
Notes
a
2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See Impact of the Over-
issuance of Securities on page 356 and Restatement of financial statements (Note 1a) on page 428 for further details.
Litigation and conduct in 2022: £1,597m, which includes £966m related to the Over-issuance of Securities, 2021: £397m and 2020: £153m.
b
21,91936,84271,0382.74△2.92.354.3△69.260.914.9△8.313.915.115.11.210.413.13.22.79.96767643
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Annual Report 2022 26
Customers and clients
Supporting our
customers and clients
We seek to understand our customers' and clients’
expectations and aspirations, and develop products
and services which support them, especially during
difficult economic conditions. We believe that
transparency of information in our products and
services is key to empowering consumers to make
sound financial decisions.
Highlights
11
Barclays UK Net
Promoter Score (NPS)*
2021: 11
44
Barclays US Consumer Bank Care
Net Promoter Score
2021: 43.4a
−17
Barclays UK complaints excluding PPI
(% movement year on year)
2021: -17%
74.1%
Consumer, Cards and Payments US
customer digital b
2021: 71.8%
The importance of delivering value
for our customers and clients
Customers and clients are at the heart of our
business. For us to deliver value for them, we
need to continue building confidence in our
organisation, our products and services,
understand and anticipate our customers and
clients' needs, and use our expertise to become a
trusted partner.
In order to understand those needs and measure
our progress towards delivering on them, we use
a range of non-financial measures.
Net Promoter Score
Net Promoter Score® (NPS) is used widely
across industries to measure the strength of
customer relationships. We track NPS to identify
both our strengths and where there is room for
improvement. This, combined with our
transactional NPS data, becomes a powerful tool
to inform how we should develop our services
and products in the future, and benchmark our
performance against the rest of the market.
Barclays UK NPS
The Net Promoter Score (NPS) for Barclays UK
was relatively stable throughout 2022 at +11.
This reflects the returning capability to service
our customers after previous declines during the
pandemic. However, we recognise that we need
to continue to push forward our initiatives to
drive improvements in customer experience,
including improving and expanding our digital
journeys.
Barclays UK NPS
(#)
2022
2021
Barclaycard NPS
Barclaycard NPS continued to trend upwards
throughout 2022 to +12, in line with the market,
as usage and availability of credit became more
important to customers.
Barclaycard NPS
(#)
2022
2021
US Consumer Bank Digital tNPS
The Digital tNPS is a newly tracked metric for US
Consumer Bank which is measured at the digital
journey level.
This is a recognised and respected industry
measure of customer experience. Digital tNPS is
trending positive, attributed to increased web
and app ease of use.
US Consumer Bank Digital tNPS
%
Target: 55 and over
2022
Notes
a Care tNPS provides an accurate measure of customer sentiment
across our Fraud, Dispute, Credit and Care channels and replaces the
relationship NPS reported in 2021 Annual Report.
b Excluding new Gap customers.
111112459.8
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Customers and clients (continued)
Barclays PLC
Annual Report 2022 27
Consumer, Cards and Payments US
customer digital engagement
Digital engagement is used as a KPI to assess the
performance of our digital value proposition and
the quality of the user experience. We measure
usage over a 90-day period, as a percentage of
the total of active customers, to illustrate the
interactivity with our platforms and uncover
potential use cases for our online and app
channels. This KPI reflects the general health of
the digital experience, and allows us to look at
how this is performing and what issues, if any, we
should address.
We launched significant digital engagement
features and technology advancements.
Highlights included Gap ecommerce integration,
asynchronous chat for servicing, card delivery
tracking, payments journey enhancements, as
well as ongoing human-centred UX
improvements.
The addition of the Gap partnership initially
decreased the overall digital engagement rate
due to retail segment behaviour differences.
Excluding Gap, the rate increased YoY to 74.1%.
Consumer, Cards and Payments US
customer digital engagementa
(%)
2022
2021
Notes
a Excluding new Gap customers
Complaints data
The FCA publishes complaints information in
relation to reportable complaints across the UK
financial industry every six months and it is a
good measure of how well UK institutions are
driving customer outcomes. We measure our
volume of complaints, tracking against goals and
reviewing root causes to inform what changes
we should make to our products and services to
improve them for customers.
Through doing this, we hope to see improved
customer satisfaction, improved reputation in
the industry and reduced costs.
Barclays UK
In Barclays UK, as in previous years we continue
to be focused on improving the overall customer
experience by identifying and supporting the
removal of the root causes of customer
complaints. Complaints across Barclays UK in
2022 have further reduced on those received in
2021, with volumes excluding PPI complaints
decreasing 17% YoY (18% including PPI). This is
despite an 8% rise in interactions across our
channels which therefore lowers the rate of
complaints per 10k interactions annually by 24%.
This has been achieved through continued
stability of our platforms alongside regular and
direct communications with customers during
times of change, particularly in relation to our
service model. Some acute pressures exist in
areas impacted by the economic changes seen
in 2022 with volumes rising across Mortgage
complaints as customers rushed to find the right
rates for them in light of the Bank of England
interest rate changes and unpredicted demand
for Mortgages with rate switch applications up
30% in the second half of the year.
Barclays UK complaints excluding PPI
(%)
2022
2021
We received a significant volume of PPI-related claims leading up to the
FCA deadline of 29 August 2019. As such, the underlying trend provides a
more meaningful comparison.
+ Further details can be found at: home.barclays/citizenship/our
reporting-and-policy-positions/UK-complaints-data
Barclays Bank PLC (BBPLC)
BBPLC's reportablea complaint volumes in 2022
increased 2% in comparison to 2021. This
reflects the return to normality after the
coronavirus pandemic which saw business
closures/restrictions on non-essential business
in 2021. Volumes of transactions and customer
interactions increased in 2022 and whilst
complaints saw a small increase, the complaints
received per 1,000 accounts held reduced during
2022 from 6.8 to 6.1.
BBPLC remains focused on improving the overall
customer experience by identifying and
supporting the removal of the root causes of
customer complaints where possible.
Barclays Bank PLC complaints
(%)
In 2022, we maintained our performance of prior
years, illustrating the continued success of the
CIB for the clients we work for. In Markets, we
maintained our ranking of 6th and grew share by
90bps, a particularly strong result given
challenging market conditions and driven by the
excellent performance of our FICC businesses.
In Banking we solidly maintained our overall
ranking of 6th in a year of suppressed
dealmaking.
Corporate and Investment Bank revenue
ranks and market shares (#,%)
2022
2021
#6
#6
#6
#6
2022
2021
n Global Markets revenue ranking and share
n Dealogica Investment Banking global fee ranking and share
demonstrating our performance vs peers.
Notes:
a Reportable reflects the FCA’s definition of a complaint which must be
reported to the FCA on a half-yearly basis and published externally on the
Barclays website.
Notes
a Dealogic for the period covering 1 January 2020 to 31 December
2022.
+ Further details can be found at:
fca.org.uk/data/complaints-data
Corporate and Investment Bank
revenue ranks and market shares
Revenue ranks and market shares are a good
indicator to monitor success. We use them to
measure how successful our Corporate and
Investment Bank has been, and where there is
the ability to progress.
By using Dealogic Investment Banking global fee
ranking and share, and a comparison to global
peers share of reported revenues for Global
Markets, we can assess our relative performance
versus a defined peer group, clearly and
transparently.
We have adopted a new performance measure
for Global Markets based on its share of reported
revenues of the Markets businesses of the top
10 banks. The peer group contains BoA, BNP,
CITI, CS, DB, GS, JPM, MS and UBS. Where any of
the peer group have not published results when
we report, we use the consensus estimate for
their quarterly performance. While
acknowledging accounting treatment
differences in peer reporting (e.g. treatment of
cost of income) and inclusions of business lines
we do not operate in (e.g. Commodities), we
have adopted this measure as it provides the
most consistent and timely view of the
performance of our Global Markets business
relative to our global competitor set. The
measure is a simple and effective way of
understanding relative performance on a global
scale.
74.171.8-17-17+2-217.33.16.43.6 Strategic
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Customers and clients (continued)
Barclays PLC
Annual Report 2022 28
Supporting customers through
Barclays UK
Barclays has a large retail presence in the
UK, offering a wide range of products and
services to c.20 million customers
through Barclays UK.
We recognise that there is a heightened need to
help customers who may be experiencing
financial vulnerability due to the current
inflationary pressures on household budgets.
We are endeavouring to support customers
during these challenging times, by focusing on
four key areas:
1. using data analytics to determine which
customers are in need of support and the
appropriate type of support;
2. engaging those customers impacted to
increase awareness of products, tools and
support available;
3. understanding customers’ needs and
developing solutions to provide greater
support; and
4. ensuring colleagues have, and are aware of,
the financial health tools to enable them to
support customers.
Barclays defines vulnerability as any existing or
potential customers who, due to their personal
circumstances e.g. financial difficulty, long-term
medical conditions, or other personal
circumstances, are especially susceptible
to detriment.
Our aim at Barclays is to offer an accessible,
empathetic and inclusive service for our
customers, including for those who may typically
face barriers to accessing banking services, such
as customers living with disabilities, complex
needs or experiencing difficult life events.
To better support financially vulnerable
customers, we are enhancing our Barclays'
tools, training, support and systems, continuing
to improve our ongoing support when
customers need us the most.
Our key measures in 2022 have included:
• Extending unsecured borrowing solutions for
consumers allowing them to borrow money
without offering up security based on a major
asset, while being protected by the Consumer
Credit Legislation and the FCA’s Consumer
Credit Sourcebook.
+ Further details can be found on page 154 in relation to
Consumer Duty within the Governance section in Part 3 of
the Annual Report
• Cost of living support by proactively contacting
over 13.5 million customers in 2022 with
targeted emails based on their financial needs,
providing support and guidance on managing
their finances, offering them help ranging from
budgeting to direct financial support and
guiding them towards dedicated functions
such as Barclays Financial Assistance (BFA) or
external agencies such as Step Change.
• Providing knowledge and expertise through
our colleagues with the aim to offer our
customers more tools and features to
educate them on managing their money,
including by giving them guidance on how to
use our digital platforms via the Digital Eagles,
or supporting them in their understanding of
financial products, how to build financial plans,
and save money through budgeting via our
Barclays Money Mentors®.
Our early intervention strategies assess all
customers who hold a retail product to
determine if we think they would benefit from
our support. These customer engagement
strategies are bank-initiated and largely focused
around proactive communications, based on
sets of customer behavioural triggers, whilst we
also support customers who initiate contact
with us.
Our primary focus is to support customers
whose account behaviours are showing signs
of possible early financial difficulty, and look to
help customers maintain or regain control of
their finances.
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Customers and clients (continued)
Some of the other ways we seek to support
vulnerability and provide responsible and
inclusive banking are set out below:
Access to banking
Customers are looking for more convenient,
simpler ways to bank that fit their lives, including
banking digitally: our mobile app has over 10.5
million active users. We are continuing to help
deliver these solutions at pace.
Alongside our investment in technology
enabling digital customers to access tools and
products whenever they need them, we’re
transforming the role of physical locations
across the UK to ensure older and more
vulnerable customers can still access banking.
We have launched our own initiatives, including a
cashback without purchase service and Barclays
Local, and we are working with other banks, the
Post Office and LINK, to keep Barclays at the
heart of the community.
Alongside these changes, we are investing in
multi-skilled training for our colleagues so they
are better able to serve customers in ways that
meet their needs today as well as breaking down
internal barriers to enable quicker resolution of
customer queries.
+ Further details on mobile banking vans and how to book an
appointment can be found at: events.uk.barclays/barclaysvan/
Economic crime and scams
We have an established programme to educate
customers and prevent them from falling victim
to scams.
We have also launched a new Fraud and Scams hub
on the Barclays website, which hosts a variety of
content and resources to help the public learn how
to keep themselves safe.
Additionally, to help keep our customers safe,
we’ve continued to invest in multi-layered security
systems that protect against fraud and scams,
including ‘Confirmation of Payee’, an account
name checking service that helps to make sure
payments aren’t sent to the wrong bank or building
society account.
We introduced app ID, which allows Barclays
colleagues to verify to customers that they’re a
legitimate caller and not an impersonator.
We are part of the ‘Do not originate’ scheme,
created in partnership with the
telecommunications industry, UK Finance and
Ofcom, to prevent our most common inbound
helpline phone numbers from being used in a scam.
We are also proud initial signatories of the
Contingent Reimbursement Model Code, providing
measures to help prevent Authorised Push
Payments scams taking place and building
increased consumer protection standards for
customers of signatory firms.
We are founding members of Stop Scams UK, a
cross-industry group made up of banks, telecoms
and tech firms that have come together to seek to
put an end to scams by collaborating, sharing best
practices and engaging with the government and
regulators to make it harder for scammers to
operate. Through Stop Scams UK, we have created
a dedicated hotline for customers to call if they
think they are being targeted by a scammer.
Further detail and evidence with regards to our
position can be found in the Frontier Economics
report published earlier this year, in conjunction
with Barclays, which includes Barclays’ Scams
Manifesto, outlining specific and actionable
recommendations.
If you suspect that you have been approached by
fraudsters please tell the FCA using the share fraud
reporting form at fca.org.uk/scams
You can also call the FCA Helpline on 0800 111 6768 or
through Action Fraud on 0300 123 2040
+ Frontier Economics report on Tacking Fraud and Scams:
home.barclays/content/dam/home-barclays/documents/
news/PressReleases/Tackling-Fraud-and-Scams-An-
Ecosystem-Wide-Approach.pdf
Digital accessibility
We aim to ensure that our digital services are
easy to see, hear, understand and use for all
customers, including those with disabilities.
Collectively we seek to deliver digital services
and workplace tools that promote disability
inclusion and meet accessibility requirements
set out in the Web Content Accessibility
Guidelines (WCAG) 2.1 AA level.
+ The Barclays Accessibility statement
barclays.co.uk/accessibility/statement/
Gambling
Barclays understands that gambling and
financial difficulty can often go hand in hand and
that customers may sometimes find it hard to
ask for help. We have continued to work in
partnership with GamCare, a UK charity which
provides information, advice and support for
anyone affected by problem gambling.
GamCare provided additional training for our
specialist financial assistance teams helping
them have conversations with customers who
are impacted by problem gambling, directly
transferring those who need further support to
trained GamCare advisers.
+ Further details can be found at:
barclays.co.uk/gambling-support/
Barclays PLC
Annual Report 2022 29
Domestic abuse
To support customers impacted by domestic
abuse, we have partnered with Refuge, a UK
charity providing specialist support for women
and children experiencing domestic abuse.
This enables us to direct those impacted by
domestic abuse to expert advice and assist
survivors with the opening of bank accounts
and gaining access to banking services in
situations where they may not have the
requisite documentation.
In 2022, the Barclays Refuge Partnership, has
been recognised at the Better Society Awards
and the Charity Times Awards.
We have also signed up to the revised UK
Finance Domestic Abuse Code of Practice,
which sets out how participating banks and
building societies should support customers
who are victims and survivors of economic or
financial abuse.
Homelessness
We continue to support those with limited
documentation such as homeless people to
open a basic current account. This year, the UK
has seen its fastest cost of living increase in 40
years. Barclays has partnered with charities to
help those most impacted by the current
environment through dedicated financial
inclusion support.
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Customers and clients (continued)
Barclays PLC
Annual Report 2022 30
Bereavement
We continue to support customers through the
bereavement process. Throughout 2022 we
have seen increased customer satisfaction
scores in our surveys and a reduction in
complaints year on year. We have an ongoing
programme of work to enhance the customer
experience across all of our channels including
physical locations and online. In particular, we
are improving our handling and processing of
documentation to make it easier for customers
to supply important information to us. Further
enhancements are planned for 2023.
+ Further details can be found at:
barclays.co.uk/what-to-do-when-someone-dies/notify-us/
Authorised users
Barclays was one of the first in the UK to launch
a new way in connecting customers to those
they trust - Barclays 'Authorised Users’.
The launch of ‘Authorised Users’ in June 2022,
enables Barclays customers to digitally and
instantly add someone that they trust to their
current account to support them with spending
on their behalf or supervising their account, This
empowers sometimes vulnerable - but capable
- customers to manage their finances
effectively with support of another, while
retaining full control of their account.
+ Further details can be found at:
barclays.co.uk/ways-to-bank/authorised-users/manage-
account/
Specialist support team
We continue to support our frontline colleagues
when handling cases of complex or extreme
vulnerability through a Specialist Support Team.
This ensures frontline colleagues are better
equipped to support customers in vulnerable
circumstances.
Accessibility & Vulnerability (A&V)
Indicators Platform
In July 2022 we launched a new framework
across Barclays UK, giving colleagues within
Barclays the ability to record disclosed customer
vulnerability on our systems, so allowing us to
provide customers with the correct level of
service based on their particular needs and/or
adjustments.
Training for colleagues
Over 28,000 Barclays UK colleagues completed
the mandatory Customers in Vulnerable
Circumstances annual e-learning modules. The
training improves awareness and understanding
of vulnerability for our frontline and head office
colleagues. Additional training modules were
also updated with a view to greater depth of
understanding for colleagues on the
overarching drivers of vulnerability.
We are further enhancing our training materials
for our colleagues in 2023, with the addition of a
‘Threat to Life’ module to help further support
colleagues when liaising with customers.
Banking Made Clearer brochure
We have also partnered with the British Institute
of Learning Disabilities to refresh our Banking
Made Clearer brochure; an easier to read guide
which uses simple, clear language and imagery.
Barclays UK Performance Framework
Within Barclays UK, the Performance
Framework is in place to ensure a sustainable
commercial performance. The framework looks
to mitigate the risks of inappropriate practices,
such as ensuring there is no undue pressure on
colleagues to sell products, which can result in
mis-selling.
Alongside the Performance Framework we have
introduced Performance Standards to set clear
expectations, identify development
opportunities, and deliver sustainable
performance for our customers and clients.
Basic current account
Since 2015, we have been offering our basic
current account to individuals who may not be
eligible for a standard account access to
banking, including over the counter services,
access to ATMs, and digital banking and free
text alerts to manage finances. There were over
660,000 Barclays basic current accounts open
at the end of 2022.
Access to a transactional bank account enables
consumers to benefit from bill reductions
through paying by direct debit and access to
cheaper goods and services on the internet, to
help them along their financial journey. If their
circumstances change, customers on the basic
current account are able to apply for a standard
Barclays current account at any time.
Number of basic current accounts
(#)
2022
2021
2020
Barclays mortgages and
first-time buyers
In 2022, we helped almost 40,000 first-time
buyers get onto the property ladder, near the
level achieved in 2021. We have continued to
support customers buying their first home with
95% loan-to-value mortgages through UK
Government schemes including Help to Buy and
Mortgage Guarantee Schemes, and Barclays
Family Springboard Mortgage.
The Help to Buy scheme allows first-time buyers
to get on the property ladder with the help of an
equity loan from the Government. Customers
put down a 5% deposit which is ‘topped up’ with
an equity loan of 20% (or 40% in London) to
support their property purchase. Help to Buy is
only available on new build properties.
Our Mortgage Guarantee Scheme offers 95%
LTV mortgages which are backed by a UK
Government guarantee. Customers can apply
for the scheme with a minimum deposit of 5% of
the property purchase price, and it is available
for first-time buyers and those looking to make
their next move on the property ladder.
661,991642,468614,000
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Barclays PLC
Annual Report 2022 31
Our people and culture
Empowering
our colleagues
Our people and our culture are our greatest assets.
We are committed to making Barclays a great place
to work, enabling colleagues to deliver strong
results for our customers, clients, communities
and each other.
Mindset Indices
90%
Empower
2021: 87%
85%
Challenge
2021: 83%
2022 Your View survey
85%
“I would recommend
Barclays to people I know
as a great place to work”
2021: 82%
92%
“I believe my team and I do
a good job of role modelling
our Mindset every day”
2021: 89%
87%
Drive
2021: 84%
86%
Wellbeing Index
2021: 84%
We further embedded hybrid working, with
colleagues spending a mix of time between
Barclays' sites and at home. We provided support
and practical guidance to all people leaders
seeking to ensure we were balancing the needs
of our colleagues, alongside those of our
customers and clients, as well as providing
colleagues with the collaboration tools and
technology we believe they need to succeed in a
hybrid environment. We continue to develop and
optimise our workspaces.
Our support for colleagues extends beyond the
tools and environment that we provide. We have
evolved our Be Well programme to provide a
holistic and inclusive perspective on wellbeing
which supports the needs of our diverse
workforce with a focus on:
• sustainable high performance: giving
colleagues the skills and knowledge to
enhance their physical and mental fitness; and
• supportive culture: building confidence to
address stigma and offer support around
mental health and other aspects of wellbeing
from financial welfare to the menopause.
W
During 2022, we continued to embed the
Barclays Mindset, helped colleagues to adapt to
hybrid working, supported colleague wellbeing
and made further progress against our diversity,
equity and inclusion (DEI) ambitions. Through our
colleague listening survey, Your View, we saw
improved scores across all our indices.
We remain committed to attracting, developing
and retaining a diverse and inclusive workforce.
Against a competitive hiring market, we hired
22,759 new colleagues into Barclays, and
supported our colleagues into their next career
moves through internal mobility, with 43% of
vacancies being filled by internal candidates. This
was in addition to welcoming 841 graduates, 1,190
interns and 440 apprentices to Barclays
throughout 2022. To support colleague
development, an average of 2.2 days/17 hours of
development and training was completed per
colleague in 2022, including enrolment of 1,035
colleagues in our flagship leadership development
programmes (The Enterprise Leaders Summit,
Aspire and Strategic Leaders Programme).
We launched the Barclays Mindset in 2021, taking
the best of what we learnt from our ways of
working through the course of the pandemic, and
sought to embed the behaviours (empower,
challenge and drive) into everyday working
practices. In 2022, we formally incorporated this
into our hiring, performance management,
reward and recognition frameworks.
+ For further information on our Purpose and Values, please
visit home.barclays/who-we-are/our-strategy/purpose-and-
values/
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Our people and culture (continued)
Our approach to diversity,
equity and inclusion
We launched our refreshed DEI vision and strategy
to incorporate 'equity’ into how we talk about, and
take action to progress, our DEI activities.
Our vision is to strengthen our diverse, equitable
and inclusive culture, with a view to attracting and
retaining the best talent, building high-
performing teams which generate better
outcomes for our customers and clients, whilst
also meeting the expectations of our regulators,
shareholders and other stakeholders.
We have five strategic priorities:
• Workforce diversity
• Inclusive and equitable culture
• Leadership accountability
• Data transparency and accountability
• Optimisation of external relationships.
These priorities are underpinned by our guiding
principles of accountability, transparency and
engagement. These principles and priorities help
us to deliver against our six core agendas –
disability, gender, LGBT+, multicultural,
multigenerational and socio-economic.
Our data-led approach, underpinned by our
Wellbeing Index (now in its second year), brings
together actionable insights for people leaders. It
also enables curation of content for colleagues
that is grounded in clinical evidence to help them
better manage their own health. Ongoing leader-
led campaigns are at the forefront of the way we
engage with colleagues, with regular expert
speaker events chaired by senior executives. Our
‘Talk Money’ week in the UK challenged the
stigma around talking about money, building
confidence with financial management and
signposting to free and confidential support. This
is complemented by practical resources and
guidance offered through our global Be Well
portal (with 45% of colleagues registered), and
our Employee Assistance Programme.
In response to increases in living costs
experienced by our UK colleagues, we brought
forward part of the 2023 pay increase, awarding
35,000 UK-based junior colleagues a £1,200
salary increase effective from August 2022,
ahead of our annual salary review. In January
2023, Barclays worked closely with Unite the
Union to agree a 2023 UK pay deal which,
combined with the August 2022 increases,
brought the total average salary increase for our
lowest paid colleagues up to 11%. By doing this
we ensured that our minimum rate of pay in the
UK remains well ahead of Living Wage
Foundation benchmarks.
Similarly, we brought forward part of the 2023
pay increase for our most junior colleagues in
Belgium, France, Ireland, Italy, Luxembourg,
Netherlands, Portugal and Spain, awarding them
€1,500 effective from 1 November 2022. In
November, we also awarded junior colleagues in
Germany a one-off payment of €2,000 as that
approach, whilst having the same effect, was
more appropriate under local rules.
+ For further information on the resources and support
available to colleagues relating to financial wellness, please
visit the 2022 Fair Pay Report.
Barclays PLC
Annual Report 2022 32
2022 highlights
We have:
• Achieved our ambition to double the
number of Black Managing Directors in the
UK and US by the end of 2022, going from
nine to 18.
• Increased our female representation at
Director/Managing Director grades to
29%∆, in line with our gender ambitions of
33% female representation at this level
by 2025.
• Launched partnerships with Historically
Black Colleges and Universities (HBCUs)
and Hispanic-Serving Institutions (HSI) in
the US, creating a pipeline of diverse talent
into Barclays.
• Our Inclusion Index score improved to
82% (from 79% in 2021) and we increased
engagement with colleagues through
webcasts, workshops and events including
our inaugural ‘Inclusion Unleashed’ week
• Appointed Accountable Executives (AEs)
to champion and galvanise support for each
of our six agendas with an emphasis on
intersectionality.
Note
∆ 2022 data subject to independent Limited Assurance under
ISAE(UK)3000 and ISAE3410. Refer to the ESG Resource Hub for details:
home.barclays/sustainability/esg-resource-hub/
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Our people and culture (continued)
Workforce
diversity
Developing diverse talent pipelines
We are focused on recruiting the best talent and
have created, and participated in, dedicated
recruitment schemes across our agendas and
regions to increase access to diverse talent. This
has included:
• Continued support for our internal
programmes, such as the Barclays Military and
Veterans Outreach programme, in the UK and
US, supporting active duty service members
into secondment opportunities at Barclays. In
2022, we welcomed 45 service leavers into
permanent roles across Barclays through our
Military Talent Scheme and Hiring Our Heroes
programmes alongside 120+ military talent
hired with support from Barclays' Military and
Veterans Outreach (MVO) team.
• Establishing a partnership with the Thurgood
Marshall College Fund, which represents a
network of 47 Historically Black Colleges and
Universities (HBCUs) and Predominantly Black
Institutions (PBIs) in the US. Through this
partnership, we will work to increase the
diversity of our talent pipelines in the US.
• Participation in the Grace Hopper Celebration
Event in the US, which focuses on supporting
women and non-binary technologists with
careers in Technology, resulting in over 400
job offers to join our Technology division.
Globally, there is training and support available for
all hiring managers and interviewers to ensure
inclusivity and consistency throughout the hiring
journey. We are an equal opportunities employer
and give full and fair consideration to all
populations based on their competencies,
strengths and potential.
Additionally, as part of the UK Government
Disability Confident scheme, we encourage
applications from people with a disability, or a
physical or mental health condition. We require
people leaders to give full and fair consideration
to those with a disability on the basis of
strengths, potential and ability, both when hiring
and managing. We also ensure opportunities for
training, career development and promotion are
available to all.
+ For further information on our work on developing diverse
talent pipelines, please visit our DEI website.
Providing tools and support for colleagues
to succeed and progress at every stage of
their career
We offer multiple development programmes to
support the growth of our colleagues, providing
them with the opportunities and resources
necessary to strengthen key skills to progress
and reach their full potential.
The Black Professionals Resource Group (BPRG)
created Ascent, a six-month programme for
Analysts in the UK and US, to support the
development of Black colleagues across Barclays
and was the first such programme conceived and
delivered by a Barclays Employee Resource
Group (ERG).
+ For further information on development programmes, please
visit the Talent Now and for the Future section.
Inclusive and
equitable culture
At Barclays, we are committed to building a
supportive and inclusive culture. We believe that
making our organisation more equitable will help
us to make the most of the different
backgrounds, perspectives and experiences of
our colleagues, and to better serve our
customers and clients.
As part of our Continuous Listening strategy, we
ask colleagues to participate in surveys, providing
regular opportunities to feed back on their
experience of working at Barclays. Colleagues are
asked to share their feedback on topics ranging
from inclusion to wellbeing, and responses help
us to assess progress on our DEI journey and
identify areas of focus.
+ To learn more about the 2022 Your View survey results,
please visit the Listening to our colleagues section.
Employee Resource Groups (ERGs)
Colleague networks have long played an
important role at Barclays, through creating
communities and fostering belonging. More
recently, they have acted as a sounding board for
the business, driving a better understanding of
the needs of our customers, clients and
communities. With over 24,000 colleagues
globally participating in one or more of the ERGs,
these colleague-led communities amplify the
unique challenges of diverse groups at Barclays
and provide insight into colleague sentiment and
experience.
Barclays PLC
Annual Report 2022 33
Socio-economic inclusion agenda
To support the launch of the socio-economic
agenda, colleagues created the Inspire ERG,
which aims to amplify the voices of those who
identify as coming from a lower socio-economic
background. Members and allies of the ERG are
encouraged to develop their understanding of
how socio-economic status can impact a
person’s work and life experiences. Through
Inspire, we are also connecting with schools and
universities to remove barriers for people of
varied backgrounds to join Barclays.
In July, colleagues across the organisation were
invited to join the socio-economic Inclusion
Week. Speakers shared insights on a range of
topics, including: social mobility, socio-economic
background and bias, ethnicity, accents and the
differences across the regions in which we
operate. Throughout the week, we shared how
we are supporting the career progression of
colleagues from lower socio-economic
backgrounds, and the removal of barriers from
the workplace. These include mentoring and
education initiatives which aim to tackle the
barriers to development and promotion,
partnerships with schools and universities, as well
as through our LifeSkills programme, which
provides opportunities for colleagues to
volunteer within the community and amplify the
breadth of opportunities available to young
people within the business.
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Our people and culture (continued)
Pronouns
In 2022, we added two new features to our
internal phonebook where colleagues can opt to
display their personal pronouns, as well as the
phonetic spelling or audio recording of their
name. We also proudly partnered with Microsoft,
to pilot a pronoun feature on Microsoft Teams.
Branch colleagues in the UK are also now able to
add their pronouns, as well as markers indicating
health conditions and flags denoting spoken
languages, to their name badges. This helps to
create a safe space for our trans, non-binary and
LGBT+ colleagues, and promotes inclusivity of
diverse nationalities, abilities and backgrounds.
We support the sharing of pronouns as a
personal choice.
Wellbeing and policies
Prioritising the wellbeing of our colleagues is
central to creating productive teams where all
individuals feel valued and included. Our holistic
and inclusive perspective requires us to measure
wellbeing, using our Wellbeing Index and to
educate and empower our colleagues and
leaders to actively manage their health and
support that of others. We continue to deploy
training, which recognises the importance of
mental wellbeing and building a supportive and
inclusive culture. We have also partnered with our
DEI ERGs and leaders on global campaigns to
normalise conversations about mental health
and wellbeing topics. In the UK, Barclays
pioneered ‘This is Me’, now in its ninth year,
where individual colleagues talk openly about the
challenges they have faced, with the aim of
tackling the stigma associated with mental ill
health.
For the first time in 2022 we expanded the DEI
performance objective to include wellbeing,
with colleagues now being asked to develop their
understanding of the factors contributing to
their resilience and sustaining high performance;
and managers now being asked to champion
and support team wellbeing. This was bolstered
by the launch, on World Mental Health Day, of a
new toolkit to help people leaders lead their
teams in a way that protects and enhances
colleague health with a focus on practices such
as workload management, fostering autonomy
and enabling growth.
We also made enhancements to our provision of
workplace adjustments for colleagues with
disabilities and health conditions, to drive
consistency in how we support our colleagues
globally. Colleagues now have greater control
over their own individual requirements and an
improved experience through the
implementation of a new self-service process for
the ordering of equipment for office and home
working use, as required.
We regularly revisit our people policies to ensure
they are in line with our broader DEI and people
strategy. This includes making updates to our HR
policies, processes and support materials on a
range of topics such as flexible working and
workplace support for menopause.
+ To learn more about the policies reviewed in 2022, please
visit the Our Policies section.
Barclays PLC
Annual Report 2022 34
Leadership
accountability
Data transparency
and accountability
Our leadership play an important role in
progressing our DEI journey and meeting the
rising expectations of colleagues, customers,
clients and communities. Accountable
Executives (AEs) from the Barclays Group
Executive Committee have been appointed as
visible advocates for the DEI agendas, shaping
priorities and delivering against these.
We also hosted the second annual Inclusion
Summit, a virtual two-day event to engage and
mobilise senior leaders in respect of the DEI
strategy. The event, consisting of a series of
speaker events and focused discussions,
reached over 1,000 Barclays leaders and ERG
representatives from across the organisation. It
was met with positive feedback from
participants, with 71% agreeing or strongly
agreeing that Barclays has made meaningful
progress on inclusion since the 2021 Summit.
Every colleague continues to have a mandatory
inclusion performance objective against which
they are assessed as part of their performance
review. The objective encourages inclusive and
supportive behaviours that recognise every
individual’s background as key drivers of our
Purpose, Values and Mindset.
Data plays an essential role in delivering our DEI
strategy, allowing senior leaders to make
informed decisions and track our progress.
In an effort to ensure colleagues’ personal data
records are accurate, this year we held another
‘Count Me In’ campaign, inviting colleagues in the
UK and US to review and share their personal
details in our HR systems, in line with local privacy
laws. Maintaining up to date personal data
records also helps us to develop and update
programmes, practices and policies to best
support colleagues at every level.
In late summer, we began producing an
enhanced monthly management pack for senior
leaders, containing a detailed breakdown of their
team's progress against our Race at Work and
gender ambitions.
Note
Under the Companies Act 2006 (the 'Companies Act'), Barclays is
required to report on the gender breakdown of our employees, ‘senior
managers’, and the Board of Barclays PLC's Directors. The Group’s global
workforce was 92,898 (50,967 male, 41,720 female, 211 unavailable), with
432 senior managers (329 male, 103 female), and the Board of Barclays
PLC had 13 directors (8 male, 5 female) as at 31 December 2022. This is
on a headcount basis, including colleagues on long-term leave.
Unavailable refers to colleagues who do not record their gender in our
systems. The ‘male’ and ‘female’ gender splits disclosed in this paragraph
are based on Companies Act disclosure requirements and numbers are
taken from our employee records which are maintained pursuant to
applicable rules and regulations on employee record keeping. For further
information on the Group’s approach to building a more inclusive
company, please see our DEI website - at home.barclays/who-we-are/
our-strategy/diversity-and-inclusion/. ‘Senior managers’ is defined by the
Companies Act, and is different to both our Senior Managers under the
FCA and PRA Senior Managers regime, and our Director and Managing
Director corporate grades. It includes Barclays PLC Group Executive
Committee members, their direct reports and directors on the boards of
undertakings of the Group, but excludes Directors on the Board of
Barclays PLC. Where such persons hold multiple directorships across the
Group they are only counted once. The definition of 'senior managers'
within this disclosure has a narrower scope than the Managing Director
and Director female representation data provided above.
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Our people and culture (continued)
Barclays PLC
Annual Report 2022 35
Recognising our colleagues
Over the past year, Barclays and several of our
colleagues have been recognised for our efforts to
advance diversity, equity and inclusion.
Americas
• 100% - Disability Equality Index
(Disability:IN)
UK
• Top 100 - Stonewall UK Workplace
Equality Index (Stonewall)
• Employer of the Year – 2022 Forces
Families Awards (Forces Families)
• Gold Award – Employer Recognition
Scheme (UK Ministry of Defence)
Optimisation of
external relationships
We develop relationships with external partners
to challenge our thinking, leverage best practices
and access diverse pools of talent. We partner
with organisations across all six agendas
(disability, gender, LGBT+, multicultural,
multigenerational and socio-economic) and in
each region.
Relationships with organisations such as the
Business Disability Forum, Disability Confident
and Disability:IN help us make our workplace and
policies more inclusive, while providing resources
and support to colleagues with disabilities,
neurodiversity and health conditions. Stonewall,
Pride Circle and Working Mother Media provide
us with valuable feedback on our LGBT+ and
gender inclusivity in the form of benchmarks and
conferences. Partners in the multicultural space
such as COQUAL, Thurgood Marshall Fund,
National Urban League, Executive Leadership
Council, Black Young Professionals UK, RARE UK
and the Hispanic Association for Corporate
Responsibility (HACR), among others, provide us
with platforms to connect with diverse talent.
Work with organisations including Working
Families, Carers UK and the UK Socio-economic
Taskforce is helping to position us as an
employer of choice for talent across all
generations and socio-economic backgrounds.
Asia Pacific
• Top 10 - 2022 India Workplace Equality Index
(Stonewall, Pride Circle, Keshav Suri Foundation)
Workforce diversity
38%
Female members of the
Board of Directors
2021: 33%
27%∆
Female Group ExCo and ExCo
direct reports
2021: 25%
29%∆
Females at MD/D level
2021: 28%
40%
Female hiring rate
2021: 39%
45%
Female promotion rate
2021: 47%
13%
Female voluntary attrition ratea
2021: 11%
• Best Companies for Women in India (Working Mother
Media and AVTAR)
• City of Good Award - President’s Volunteerism &
Philanthropy Awards Singapore (President of Republic
of Singapore)
Notes:
Δ 2022 data subject to independent Limited Assurance under
ISAE(UK)3000 and ISAE3410. Current and previous limited
assurance scope and opinions can be found within the ESG
Resource Hub for further details: home.barclays/sustainability/
esg-resource-hub/reporting-and-disclosures/
a Volume of leavers in 2022 divided by the average headcount in
2022 that have recorded their gender as female
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Talent now and for the future
Talent attraction – now and for the future
Across 2022, demand for talent has remained
high, alongside a greater focus from candidates
seeking flexible working options and on wellness
and wellbeing. In response, we have pursued
opportunities to attract and recruit talent as
quickly and efficiently as possible, including
doubling the number of recruiters to support our
businesses and the launch of the Onboarding
app, giving new joiners and their people leaders
access to information required prior to joining
Barclays, including the ability to sign employment
contracts via the app.
Barclays was ranked number one in the LinkedIn
Top Companies UK 2022 list for the second year
in a row. Based on LinkedIn-owned data, the list is
a resource for jobseekers and career builders to
explore open vacancies, enhance their skills and
identify companies that invest in their talent. This
was further recognised by the Learning and
Performance Institute, where Barclays won a
Bronze Learning Leader Award.
The Financial Service Skills Commission (FSSC)
brings together industry, government and the
education sector to help overcome the top
five skills gaps in Financial Services (Data and
Analytics; Tech Design and Management;
Business Process and Customer Experience
Design; Personal Effectiveness, Thinking and
Problem Solving; and Leadership and Social
Influence), working to identify solutions and
increase our access to diverse talent. Barclays
is proud to partner with the FSSC, and has used
the insights gleaned from the partnership to
inform our approach to talent, particularly
in Technology.
Delivering world-class customer service and care
remains of paramount importance to Barclays. In
order to meet the demand, we significantly grew
our customer care teams globally; for example,
following the acquisition of the Gap credit card
portfolio in the US, we nearly doubled our
footprint in our US contact centre in Nevada,
with over 1,800 new hires and saw demand triple
for roles supporting our customers in the UK.
Developing our colleagues
We remain committed to our culture of lifelong
learning, through a development proposition that
supports colleagues at every stage of their
career.
On completion of a research-led review of our
Graduate Programmes in 2020, we have re-
designed our approach to managing high-
potential, junior talent. Launched in 2022, we
welcomed 841 graduates on to our new Scholar
programme, which provides support,
development and training in either technical skills
through our Expert programme, or leadership
pathways through our Explorer programme. Both
programmes are underpinned by a suite of
baseline learning experiences, which aim to
maximise graduate experience and
development, while also equipping them with the
skills needed to build their future career.
The Barclays Learning Lab is our learning
ecosystem. Consisting of Barclays-designed
knowledge and skills modules, as well as modules
from external specialists, it provides our
colleagues with the development tools needed
to support them in their current and future roles.
Colleagues can access a wide range of
workshops, split between colleague and people
leader development. This is complemented by
our digital content providers, whose content has
been mapped against role-specific learning
pathways, making it easy for colleagues to
navigate development resources suitable for
their needs.
Barclays PLC
Annual Report 2022 36
The Learning Lab also offers a selection of self-
assessment tools, empowering colleagues to
understand their strengths and development areas.
These are supported by business-led solutions
that encompass professional and technical
resources encouraging colleagues to drive their
own development.
People leadership at Barclays is about helping others
to achieve their potential. To equip our people
leaders with the critical skills and behaviours to
inspire, develop and support their teams today and
into the future, we have refreshed our Management
Unlocked programme.
The programme provides participants with
extensive digital content, as well as our Evolution
programme, which supports new people leaders
as they transition into leadership roles.
We also operate three high-potential flagship
leadership programmes: The Enterprise Leaders
Summit, for Managing Directors; the Strategic
Leaders Programme, for Directors; and Aspire,
for Vice Presidents. These programmes aim to
build enterprise-wide leadership, alongside
strong people leadership capabilities, helping
colleagues tackle people management situations
confidently, in line with our Values and Mindset.
Developing digital skills
across Barclays
As our organisation evolves, we have
implemented strategies to actively upskill, reskill
and realign talent across Barclays, supporting
colleagues’ career growth and our future skills
needs. Our Destination Technology and
Destination Security Apprenticeship schemes
focus on developing digital capabilities and
provide opportunities for UK-based colleagues
to reskill via a clear and structured career
pathway, leading to increased internal mobility
and employment in a variety of roles such as
Testers, Developers and User Experience
(UX) Designers.
Apprentices are provided with a range of
support, from team buddies and talent coaches
to more structured learning courses and study
time to achieve industry-recognised
qualifications, with over 190 colleagues having
successfully transitioned into their new roles.
Here’s what two of our 2022 cohort had to say
about how Destination Technology has
transformed their careers.
“This is the most incredible
opportunity I could ever have asked
for; I had no idea how to get into
Technology and no idea how to code.
I am now coding in five different
languages in my first 12 weeks.
This experience has been life-
changing and it has really improved
my mental health."
“This is a golden ticket and a life-
changing opportunity. The support
I have received has been amazing
and I will be forever grateful."
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Barclays PLC
Annual Report 2022 37
Employee statistics
Number of employees split by region (000s)
Number of employees split by grade (%)
Talent and development
2022
2021
4.0
3.6
Total
87.4
Total
81.6
2022
2021
n Senior (Managing Director and Director)
n Middle (Assistant Vice President and Vice President)
n Junior (Business Analyst grades)
n UK n Europe n Americas n Asia Pacific
Split by full time/part time (%)
Employees by employment contract type
and gender (%)
n Full time
n Part time
93
7
Payroll
Agency
n Female n Male
Our hires
By age group %
By gender %
By ethnicity %
By management level %
n Below 20
n 20-30
n 30-40
n 40-50
n 50-60
n Over 60
1
46
32
10
10
1
n Female
n Male
40
60
n White
n Asian
n Black
n Other ethnicities
19
71
6
4
n Junior
n Middle
n Senior
72
25
3
Aspire
471
participants
in 2022 which is
3%
of the overall
VP population
Strategic leaders
278
participants
in 2022 which is
5%
of the overall
Director population
The Enterprise
Leaders Summit
286
MDs completed the
programme in 2022 which is
18%
of the overall
MD population
Nominations (%)
n Female
n Male
Note
The pool of females
to select from at the
VP level is 32%.
Nominations (%)
n Female
n Male
Note
The pool of females
to select from at the
D level is 29%.
50
50
49
51
People
leadership training
807
Number of people leaders that took part
in Management Unlocked training
1,580
Number of people leaders that took
part in Evolution Programme
4444.111.410.12823.8884241505145445556
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Listening to our colleagues
Listening to colleagues allows us to obtain
insights into what we are doing well and areas
where we need to focus our attention.
Our biannual all-colleague Your View surveys
measure colleague considerations across a
breadth of topics including colleague
engagement, organisational culture, including
the Mindset and Values, wellbeing, inclusion and
working practices and tools. The Your View
survey is the primary mechanism for how we
track engagement and monitor our culture, with
the 2022 survey results indicating good progress
for both engagement and cultural measures.
Senior leaders continue to receive and review the
results from these surveys to inform decisions.
We have also evolved our Continuous Listening
strategy, leveraging pulse surveys, as well as
additional surveys deployed throughout the
employee lifecycle, to capture insights which help
us better understand our culture and improve
colleague experience.
We have adopted a number of methods for
engagement with our workforce, in line with the
UK Corporate Governance Code. These
engagement mechanisms, including all-
colleague townhalls, skip-level meetings, DEI
summits, site visits and engagement surveys,
enable colleagues to share ideas and feedback
with senior management and the Board.
We keep colleagues updated on the strategy,
performance and progress of the organisation
through a combination of leader-led engagement,
digital and print communication, blogs, vlogs and
podcasts. In 2022, the Barclays Group CEO held
over 50 engagement sessions throughout the
year with colleagues, including quarterly
townhalls on financial performance, listening
sessions on flagship talent programmes and
Q&A sessions.
Other workforce engagement activities have also
been carried out by both Board and management
to deliver meaningful, regular two-way dialogue
with colleagues. This helps our Board reflect
colleague feedback in their decision-making. The
range of direct engagement mechanisms we use,
across multiple channels throughout the year,
combined with a comprehensive reporting
approach, enables us to effectively engage with
our workforce.
Results from our surveys and other employee
engagement mechanisms were shared with
colleagues and discussed with the Barclays Board,
the Executive Committee and people leaders.
We maintain a strong and effective partnership
with Unite and the Barclays Group European
Forum, whom we brief on our strategy and
progress to obtain feedback on how we can
improve the colleague experience. In 2022, we
engaged with Unite on the transition to hybrid
working and our updated DEI strategy. We also
consult with colleague representatives on major
change programmes which impact our people, to
minimise compulsory job losses, and focus on
reskilling and redeployment. In 2022, this included
the launch of an enhanced mobility service to
further mitigate redundancies across the
organisation, redeploying colleagues into roles
commensurate with their skills and experience,
and upskilling colleagues where required.
The collective bargaining
coverage of Unite in the UK
represents 83% (2021: 84%)
of our UK workforce
and 43% (2021: 48%)
of our global workforce.
Highlights
84%
Colleague engagement scorea
2021: 82%
85%
“I would recommend Barclays to people
I know as a great place to work”
2021: 82%
92%
“I believe that my team and I do a good job
of role modelling our Values every day”
2021: 92%
92%
“I believe my team and I do a good job
of role modelling our Mindset every day"
2021: 89%
83%
“It is safe to Speak Up”
2021: 79%
13%
Voluntary employee turnover
2021: 11%
16%
Employee turnover
2021: 14%
Barclays PLC
Annual Report 2022 38
Our policies
Our people policies are designed to recruit the
best people, provide equal opportunities and
create an inclusive culture, in line with our
Purpose, Values and Mindset, and in support of
our long-term success. They also reflect relevant
employment law, including the provisions of the
Universal Declaration of Human Rights and the
International Labour Organization (ILO)
Declaration on Fundamental Principles and
Rights at Work.
We regularly review and update these policies to
ensure that they are in line with our broader DEI
and people strategy. To support the transition to
hybrid working in 2022, we updated our policies
on Working Flexibly to enable an approach that
meets the requirements of each role, while also
taking into account the needs of our colleagues.
We also updated our policies and guidance on a
range of topics including workplace support for
menopause and baby loss.
We are committed to paying our people fairly and
appropriately relative to their role, skills,
experience and performance. This means our
remuneration policies reward performance that is
in line with our Purpose, Values and Mindset, as
well as our risk expectations. We also encourage
our people to benefit from Barclays’ performance
by enrolling in our share ownership plans.
+ For further information, please see our Fair Pay Report 2022
and UK Pay Gaps 2022.
Note
a As part of our efforts to improve our measurement frameworks, we
have transitioned to a new three question engagement model. This
was after collecting four years of concurrent data and running analysis
to affirm the new model’s validity. Historic figures have been updated
to reflect results from the new three question model
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Annual Report 2022 39
Society
Making a difference
Our success is judged not only by commercial
performance, but also by our contribution to society and
in the way we deploy finance responsibly to support
people and businesses, acting with empathy and
integrity, championing innovation and sustainability for
the common good and the long term.
Highlights
1.5°C
aligned-targets set against five NZBAa
high-emitting sectors
New target to facilitate
$1 trillion
of Sustainable and Transition Financing
between 2023 and the end of 2030
269
Unreasonable Impact ventures
supported since 2016
93%
Prompt payment rate
We believe that we can, and should, make a
positive difference for society – globally and
locally. We do that through the choices we make
about how we run our business in light of all
relevant risk and other factors and through the
commitments we make to support our clients
and communities and to champion sustainability
for the long term. We recognise that we are at
our best when our clients, customers,
communities and colleagues all progress.
Our focus on society falls broadly into three
categories: Climate, Communities and Suppliers.
Climate
Addressing climate change is an urgent and
complex challenge but also an opportunity. It
requires a fundamental transformation of the
global economy. The financial sector has an
important role to play in supporting the transition
to a low-carbon economy and at Barclays, we are
determined to play our part consistent with our
Purpose and relevant business and risk
considerations.
In 2020, Barclays announced an ambition to be a
net zero bank by 2050, across all of our direct and
indirect emissions and we committed to align all
of our financing activities with the goals and
timelines of the Paris Agreement. We made it
clear at the time that we would approach the
climate challenge thoughtfully and transparently,
engaging with our shareholders and other
stakeholders and reporting our progress.
In doing so, we also recognise the importance of
supporting a just transition considering the social
risks and opportunities of the transition and
seeking to ensure effective dialogue with
affected stakeholders.
+ For further details on our integration of social and
environmental issues into our business, please refer to
our ESG-related reporting and disclosures on page 64
For further details on our climate-related progress,
please refer to our climate-related financial disclosures
(TCFD) Content Index from page 65
Communities
In the communities in which we operate, Barclays
is supporting people to develop the skills and
confidence they need to succeed, now and in the
future and working to help businesses create
jobs. We collaborate with experienced partners,
employability experts and businesses to develop
meaningful and innovative programmes that aim
to deliver a significant positive impact over the
long term.
+ More information on how we are supporting our
communities can be found from page 41
Suppliers
As a global institution, we have responsibility for
a large supply chain. We engage directly with our
suppliers seeking to promote diversity, equity
and inclusion and we work to identify and address
modern slavery risks across our operations,
supply chain, and customer and client
relationships.
+ More information on how we engage with our supply
chain can be found from page 43
Engagement
We engage with stakeholders internally and
externally to assess our areas of focus
against their priorities. That happens
through ongoing conversations, as well as
surveys and information requests from
investors and ratings agencies. We also
monitor closely the relevant ESG
frameworks and reporting guidelines.
Notes:
a Net-Zero Banking Alliance (NZBA)
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Barclays PLC
Annual Report 2022 40
Society (continued)
Barclays’ climate strategy
Our climate strategy is driven by
consideration of relevant risks and
opportunities and our Purpose to deploy
finance responsibly to support people and
businesses, acting with empathy and
integrity, championing innovation and
sustainability for the common good and
the long term.
In March 2020, Barclays announced its ambition
to be a net zero bank by 2050, becoming one of
the first banks to do so.
We are committed to achieving net zero
operations and have made progress, having
sourced 100% renewable electricity for our
global real estate portfolio operationsb and
created a pathway to address our supply
chain emissions.
We are also committed to reducing our financed
emissions, those deriving from the activities of the
clients that we finance and those generated in
their respective value chains by providing financial
advice and support as they transition to a low-
carbon economy. We have now set 2030
reduction targets across five of the highest-
emitting sectors in our portfolio: Energy, Power,
Cement, Steel and Automotive manufacturing
and have assessed the baseline and convergence
point for our Residential real estate portfolio.
We have developed a methodology for
measuring our financed emissions and tracking
them at a portfolio level against the goals and
timelines of the Paris Agreement – this
methodology is called BlueTrack™. All of our
2030 target-setting includes the integration of
1.5oC aligned scenarios, such as the IEA Net Zero
2050 scenario in our financed emission targets,
and including the upper end of ranges for
certain sectors.
1
Achieving net
zero operations
2
Reducing our
financed emissions
3
Financing
the transition
Barclays is working to reduce its Scope 1,
Scope 2 and Scope 3 operationala emissions
consistent with a 1.5°C aligned pathway and
counterbalance any residual emissions.
Barclays is committed to aligning its financing
with the goals and timelines of the Paris
Agreement, consistent with limiting the
increase in global temperatures to 1.5°C.
Barclays is helping to provide the green and
sustainable finance required to transform
the economies, customers and clients we
serve.
Our strategy is underpinned by the way we assess and manage our exposure to climate-related risk.
As a large global financial intermediary, Barclays
also has an important role in helping channel
investment into new green technologies and
low-carbon infrastructure projects.
The transition to a low-carbon economy is
today’s defining opportunity for innovation and
growth. With the scale of investment needed
estimated to be $4trn per year in renewables and
a further $4-6trnc per year to get to a low-carbon
economy over the next 30 years, Barclays is
helping to provide the green and sustainable
finance required to transform the economies we
serve. We surpassed our 2018 target to deliver
£150bn of social and environmental financing
by 2025 and we are still on track to meet our
goal to deliver £100bn of green finance well
ahead of 2030.
We keep our policies, targets and progress under
review in light of the rapidly changing external
environment and the need to support
governments and clients in delivering an orderly
energy transition and providing energy security.
The trajectory for our clients’ transition to a low-
carbon economy is influenced by a number of
external factors, including market developments,
technological advancement, the public policy
environment, geopolitical developments and
regional variations, behavioural change in society
and the scale of change needed to adapt their
business models. Client transition pathways will
vary, even within the same sectors and
geographies.
Many highly carbon-intensive sectors require
finance to transition. Restricting the flow of
capital to these sectors could be harmful to the
pace of the transition, limiting the real terms
impact on global warming. However, we
anticipate that companies which are unwilling to
reduce or eliminate their emissions consistent
with internationally accepted pathways may find
it increasingly difficult to access financing,
including through Barclays.
Our strategy is underpinned by the way we
assess and manage our exposure to climate-
related risk. Climate risk became a Principal Risk
at Barclays in 2022.
We monitor financing transactions through
our due diligence and have declined financing
to clients that have not been able to meet
our policies after taking into account all
relevant considerations.
Notes
a We define our Scope 3 operational emissions to include supply chain,
waste, business travel and leased assets.
b Global real estate portfolio includes offices, branches, campuses and
data centres.
c $4-6trn as referenced at COP27 at unfccc.int/documents/624444 as
well as the United Nations Environment Programme - Emissions Gap
Report 2022 at unep.org/resources/emissions-gap-report-2022.
After a strategic review of the Group’s
capabilities, market demand and growth
opportunities, we announced in December 2022,
new targets to:
• facilitate $1 trillion of Sustainable and
Transition Financing between 2023 and the
end of 2030.
• increase investment into global climate tech
start-ups to £500m through our Sustainable
Impact Capital portfolio by the end of 2027.
Over the coming years, our strategy will continue
to evolve and adapt to reflect external factors
affecting the shape and timing of the transition
to a low-carbon economy, similar to those
impacting our clients' transitions. Progress is
likely to vary year to year and we need to be able
to adapt our approach to respond to external
circumstances and to manage the effectiveness
and impact of our support for the transition,
whilst remaining focused on our ambition of
becoming a net zero bank by 2050.
+ Please see the Barclays Climate and Sustainability
report from page 69 for further details on Barclays'
ambition to be a net zero bank.
Barclays' climate and ESG-related data, targets and
progress can be found within the ESG (non-financial)
Data Centre within our ESG Resource Hub
Further details on our BlueTrackTM methodology can be
found within our Whitepaper accessible at:
home.barclays/sustainability/esg-resource-hub/
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Society (continued)
Supporting our communities
At Barclays, we believe that a strong,
inclusive economy is a better economy for
everyone. With rising costs likely to
exacerbate social and economic
inequalities, it is more important than
ever to support communities facing
hardship.
We work with experienced partners and
employability experts to design programmes
that make a positive and enduring difference in
the communities around the world in which we
live and work. Our LifeSkills programme is
enabling people to develop the employability and
financial skills they need to get into work and
manage their money and our Unreasonable
Impact programme is supporting ventures that
are solving key social and environmental
challenges, driving innovation and creating jobs.
Enhancing people’s
skills and confidence
Through our LifeSkills programme, Barclays
committed to help a further 10 milliona people to
develop the skills and confidence they need to
succeed, as well as place 250,000b people into
work by the end of 2022. The programme has
now reached this milestone with 12.6 million
people upskilled and 270,600 people placed into
work. Since LifeSkills first began in 2013, it has
reached 18.1 millionΔ people.
Sectors of companies in which people have
been placed into work (%)
n Technology
n
Retail and customer
service
n Financial services
n Other
58%
15%
12%
15%
Celebrating 10 years of upskilling
communities across New York City
with Per Scholas
Barclays has a long history of delivering
Citizenship programmes that are designed for
inclusion. Through its community
partnerships, we are upskilling and creating
pathways into work for Black and ethnically
diverse people, and working with ethnically
diverse leaders to promote social equity in
our communities.
In 2022, we celebrated 10 years of upskilling
historically underserved communities across
New York City with LifeSkills partner Per
Scholas, and continue to evolve this
partnership to empower even more of their
learners – 87% of whom are Black and
ethnically diverse, with the skills to be
successful in technology careers.
Barclays has played a key role in helping Per
Scholas to launch technology training
campuses in Brooklyn and in Newark, New
Jersey, and more recently supporting the
expansion of its Brooklyn campus. We have
also helped develop curricula for Java
developer and cybersecurity courses.
As a result of Barclays' investment, more than
1,800 Per Scholas graduates have been placed
into work, including more than 60 who have
been hired as apprentices, interns or full-time
employees at Barclays.
As the partnership continues, Barclays is
working closely with Per Scholas to create and
extend more pathways into work by taking
advantage of remote learning opportunities
and establishing satellite locations in
partnership with community-based
organisations. This is enabling them to expand
their footprint and reach underserved
populations in every borough across New
York City.
+ You can find out more about this approach and its impact in
a newly launched report, accessible at: perscholas.org/wp-
content/uploads/2022/10/Partnering-For-Impact-Per-
Scholas-Satellite-Model.pdf
Notes:
a. Over a five-year period, 2018-2022.
b. Over a four-year period, 2019-2022.
Δ 2022 data subject to independent Limited Assurance under
ISAE(UK)3000 and ISAE3410. Current and previous limited assurance
scope and opinions can be found within the ESG Resource Hub for
further details: home.barclays/sustainability/esg-resource-hub/
reporting-and-disclosures/
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Society (continued)
Partnership with Trussell Trust
to help UK households with rising
cost of living
In 2022, Barclays launched a new 3-year
partnership with the Trussell Trust to help
unlock income for people struggling to afford
essentials and help them to access financial
assistance that they’re entitled to, but not
receiving, such as benefits and grants. Staff
and volunteers at food banks are being
upskilled to provide bespoke support to tackle
the underlying causes of hardship in their
community, provide effective financial advice
and be able to signpost to other relevant
services such as mental health support.
Since April 2022, the Trussell Trust has
unlocked more than £2.3m for people
through the financial inclusion initiatives that
Barclays is supporting, as well as writing off
more than £500,000 of unaffordable debt for
families. 43% of food banks in the Trussell
Trust network currently offer financial
inclusion services. Looking forward, the
partnership is committed to increasing this to
75% of their network by March 2025.
Highlights
18.1m∆
LifeSkills – Overall participation
since launch in 2013
2021: 15.3m
2.74m∆
LifeSkills –
No. of people upskilled
2021: 2.89m
Enabling sustainable growth
Through the Unreasonable Impact programme,
in 2022, Barclays celebrated delivering its
Citizenship commitment of supporting 250 high-
growth entrepreneurs to scale their companies
and address key global issues. The programme is
now reaching 269a companies that have
positively affected the lives of more than 300
million people around the world, and employ over
19,500 people full-time (FTE). From air-based
protein which makes meat from the air, to hybrid
solar panels that generate both electricity and
water – these companies are delivering
innovative solutions to address pressing social
and environmental challenges.
Notes:
a Cumulative ventures supported since 2016
Δ 2022 data subject to independent Limited Assurance under
ISAE(UK)3000 and ISAE3410. Current and previous limited assurance
scope and opinions can be found within the ESG Resource Hub for
further details: home.barclays/sustainability/esg-resource-hub/
reporting-and-disclosures/
77,200∆
LifeSkills – No. of people
placed into work
2021: 77,100
269a
Unreasonable Impact –
Ventures supported since 2016
2021: 216
Charitable giving and investment
in our communities
Alongside these high-impact programmes, we
help our employees to make a difference to the
causes that matter most to them personally
through our matching programmes. In 2022, we
supported more than 5,700 colleagues around
the world to fundraise and donate to their
chosen charities, including organisations
providing vital humanitarian assistance in
Ukraine. With Barclays matching, a total of £9.3m
was raised for more than 1,800 charities. We also
supported 11,900 colleagues to donate via our
UK Payroll Giving programme, which saw us
match more than £720,000 in 2022.
We also support communities directly by
investing money and skills in partnerships with
respected non-governmental organisations,
charities and social enterprises. Our investment
amounted to £44.7m in 2022, including
charitable giving, management costs and
monetised work hours of Barclays colleagues.
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Society (continued)
Championing equality through sport
At Barclays, we believe in creating opportunities
for all through access to football. In 2022, in
partnership with Sported, we launched the
Barclays Community Football Fund which helps
to reduce inequalities in football, with grants
available to groups that wish to start offering
football, or expand their existing programmes to
new, under-represented audiences.
The programme focuses on including girls and
young people from lower socio-economic and
under-represented groups, including racially
diverse communities, people with disabilities, and
people from the LGBTQ+ community.
With a target to support 5,500 community
groups across the UK by 2025, the fund delivered
support to over 2,000 organisations in 2022 –
engaging more than 268,800 young people in
inclusive football activities.
Lithium Urban Technologies:
Pioneering sustainable urban
mobility
Unreasonable Impact company Lithium Urban
Technologies is one of India’s largest electric
corporate transport services, operating a fleet
of electric vehicles (EVs) that Lithium
estimates have cumulatively prevented more
than 50,000 metric tons of carbon dioxide
equivalent (MtCO2e) since 2015, and support
businesses to reduce their carbon footprint.
Barclays is utilising vehicles from Lithium’s EV
fleet to transport colleagues to its offices in
Pune and Noida.
Following their involvement in Unreasonable
Impact, Lithium formed a partnership with
another Unreasonable Impact company,
Fourth Partner Energy, to set up solar-
powered EV charging infrastructure across
India under a joint venture, laying the
groundwork for the company’s growth.
~50,000
metric tons of carbon dioxide
equivalent prevented since 2015
Supporting our supply chain
With nearly 9,000a companies coming from
28 countries supplying us, our supply chain
helps our businesses deliver for our
customers, clients and colleagues.
Though our businesses are geographically
diverse, more than 90%b of our supplier
relationships are concentrated in the UK and the
US with many of them having their own extensive
supply chains.
Our supply base is diverse across scale,
ownership type and structure from privately-held
start-ups to publicly-listed multinational
corporations. Barclays has sought to reduce the
size of its supply chain over recent years and
while this has now stabilised, our focus continues
to be on embedding preferred suppliers for
products and services that ensure adequate
geographical coverage and at the same time,
create opportunities for diverse suppliersc which
encompass small or medium-sized enterprises
and diverse-ownedd businesses.
+ Please see further details on our requirements of external
suppliers at: home.barclays/who-we-are/our-suppliers/our-
requirements-of-external-suppliers/
Third party operational and
reputational risk management
Barclays must effectively manage, monitor and
mitigate risks in our supply chain. Our suppliers
act on behalf of Barclays and we expect them to
make responsible decisions that take our
stakeholders’ needs into account in both the
short and long term. We have therefore put
measures in place to encourage high standards of
conduct and accessibility across our supply chain.
Barclays expects suppliers to comply with
applicable laws, regulations and standards within
the geographies in which they operate. Barclays’
standard approach to new supplier on-boarding
and renewal begins by assessing the services
that are being provided and ascertaining the level
of risk. Suppliers that are assessed as being at a
heightened risk from a business risk perspective
are subject to Barclays’ Supplier Control
Obligations (SCOs).
Suppliers to whom the SCOs apply become
managed suppliers and are subject to ongoing
management and controls assurance during the
term of service. These suppliers are required to
complete a pre-contractual questionnaire which
captures their adherence to the SCOs and
Barclays’ Third Party Code of Conduct (TPCoC).
Highlights
8.5%
Global spend with small
and medium-sized enterprises
and diverse-owned suppliers
(2021: 8%)
93%
Prompt payment rate
(2021: 90%)
Includes non-addressable spend and One Time Vendors (OTV).
Notes
a
b 90% by invoice value
c Spending between Barclays and diverse suppliers is considered first-
tier spending. Spending between Barclays’ first-tier suppliers that can
trace subcontracted spend with diverse suppliers on Barclays-specific
work is considered second-tier direct spending.
d For Barclays, diverse suppliers are defined as either size diverse (small
and medium sized enterprises) or ownership diverse (majority owned,
controlled and operated by protected class groups, such as women,
ethnic minorities, LGBT+, persons with disabilities, military veterans
and for-profit social enterprises).
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Society (continued)
The TPCoC encourages our suppliers to adopt
our approach to doing business when acting on
behalf of Barclays and details our expectations
for matters including environmental
management, human rights, diversity and
inclusion and also for living the Barclays Values.
Managed suppliers are asked to complete an
annual self-certification against the individual
topics contained within the TPCoC, as well as
providing annual assurance that the controls
required of them under the SCOs are maintained
and operating effectively.
Where suppliers are unable to meet our
expectations under the TPCOC and SCOs, the
issue will be escalated and we will look for options
to manage the risk, which may include electing
not to do business with the supplier.
The TPCoC and SCOs are published on the
Barclays public website for all new and existing
suppliers to view and are refreshed periodically.
For example in 2022, we upgraded our TPCoC to
strengthen the expectations relating to
environmental, climate change and human rights.
In addition, we have included certain key
elements from the TPCoC in our General
Contracting Terms used with suppliers with a
view to strengthening their impact.
+ Please see further details on our climate change initiatives
in our supply chain within our Achieving net zero
operations section from page 78 within the Climate and
Sustainability report.
Payment on time
Prompt payment is critical to the cash flow of
every business, and especially to smaller
businesses within the supply chain as cash flow
issues are a major contributor to business failure.
We aim to pay our suppliers within clearly defined
terms, and to help ensure there is a proper
process for dealing with any issues that may
arise. We measure prompt payment globally by
calculating the percentage of third-party supplier
spend paid within 45 days following invoice date.
The measurement applies against all invoices by
value over a three-month rolling period for all
entities where invoices are managed centrally.
In 2022, we achieved 93% (2021: 90%) on-time
payment to our suppliers (by invoice value),
exceeding our public commitment to pay 85% of
suppliers on time (by invoice value).
The need to promptly pay our diverse suppliers
became even more important during the
COVID-19 pandemic. Barclays established a
process to expedite the payments for diverse
suppliers at this critical time. This process
remained in place during 2022.
Barclays is proud to be a signatory of the Prompt
Payment Code in the UK and we also work closely
with the Small Business Commissioner and other
organisations, including Good Business Pays, to
educate the public on late payments and the
impact they can have on businesses and
business owners, and to raise the social
conscience of larger businesses who do not pay
on time.
We are also calling on other large businesses to
join us to make sure their smallest suppliers are
paid promptly.
Diversity, Equity and
Inclusion in our value chain
Barclays believes that diversity across our value
chain expands our ability to attract and harness
innovative solutions in the market that
complement our own capabilities, while
simultaneously creating value for customers and
clients, and economic opportunities for wider,
under-represented segments of society. This is
why we launched our first Global Supplier
Diversity (GSD) initiative in 2013.
As part of our GSD initiative in 2022, 8.5% of
our global addressable spenda was placed with
small and medium-sized enterprises and
diverse-owned businesses as measured by first-
and second-tier direct spending. Ownership-
diverse businesses are majority owned,
controlled and operated by protected class
groups, such as women, ethnic minorities,
LGBT+, persons with disabilities, military
veterans and for-profit social enterprises.
In support of the GSD initiative, Barclays is a
corporate member of, and plays an important
role with, several of the most prominent
domestic and international diverse supplier
certification organisations including National
Minority Supplier Development Council
(nmsdc.org), Women’s Business Enterprise
National Council (wbenc.org), WeConnect
International (weconnectinternational.org),
National LGBTQ Chamber of Commerce
(nglcc.org), National Veteran Owned Businesses
Association (NaVoba.org), Minority Supplier
Development UK (msduk.org.uk), Disability:IN
(disabilityIn.org) and Social Enterprise UK
(socialenterprise.org.uk).
In 2021, we pledged to double our spend with
black and female-owned businesses by 2025 and
to grow overall spend with SMEs and diverse-
owned businesses to 10% of Barclays annual
global addressable spend. We have made
structural changes to improve how we measure
and report spending with diverse, Black and
female-owned businesses, increasing
transparency to stakeholders and driving greater
accountability with those authorised to direct
spend with third-party providers.
The aim is for service providers, which make up
70% of our addressable spend, to have a
diversity and inclusion policy or standard in place
by 2025. We are continuing to engage and
assess our suppliers and will report against our
progress in the future.
Note
a Addressable spend is defined as external costs incurred by Barclays in
the normal course of business where Procurement has influence over
where the spend is placed. It excludes costs such as regulatory fines or
charges, exchange fees, taxation, employee expenses or litigation
costs, property rent.
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Investors
Resilient franchise
built to deliver
double-digit returns
Our strong, diversified business is built to deliver
attractive and sustainable returns despite an
uncertain operating environment.
C. S. Venkatakrishnan, Group Chief Executive, commented
“Barclays performed strongly in 2022. Each business delivered income growth, with Group
income up 14%. We achieved our RoTE target of over 10%, maintained a strong Common
Equity Tier 1 (CET1) capital ratio of 13.9%, and returned capital to shareholders. We are
cautious about global economic conditions, but continue to see growth opportunities across
our businesses through 2023.”
Highlightsa
£25.0bn
Income
2021: £21.9bn
£7.0bn
Profit before tax
2021: £8.2bn
67%
Cost: income ratio
2021: 67%
10.4%
Return on Tangible Equity
2021: 13.1%
Financial performance in 2022a,b
Barclays delivered a profit before tax of £7.0bn
(2021: £8.2bn), RoTE of 10.4% (2021: 13.1%) and
earnings per share (EPS) of 30.8p (2021: 36.5p).
Total income increased 14% to £25.0bn versus
prior year, with income momentum across
all businesses:
Barclays UK income of £7.3bn increased 11%
versus prior year, primarily driven by rising
interest rates, higher customer spend volumes in
UK cards and improved transaction-based
revenue in Business Banking. This was partially
offset by mortgage margin compression, lower
interest earning lending (IEL) balances in UK
cards and lower government-backed lending
income as repayments continue.
Within Barclays International, CIB income of
£13.4bn was up 8% versus prior year. Global
Markets income increased 38% to £8.8bn
representing the best full year for both Global
Markets and FICC on a comparable basisc. In
Corporate, Transaction banking income
increased 52% to £2.5bn driven by improved
margins and growth in deposits, and higher fee
income. This was partially offset by Investment
Banking fees declining 39% to £2.2bn due to the
reduced fee pool. In CC&P income of £4.5bn was
up 35%, reflecting higher balances in US cards
which included the impact of the Gap portfolio
acquisitiond, client balance growth and improved
margins in Private Bank as well as turnover
growth in Payments following the easing of
lockdown restrictions, which was partially offset
by higher customer acquisition costs.
Group operating expenses increased to £16.7bn
(2021: £14.7bn) mainly due to higher litigation
and conduct charges:
Group operating expenses excluding litigation
and conduct charges increased 6% to £15.1bn,
reflecting the impact of inflation and the
appreciation of average USD against GBP
Litigation and conduct charges were £1.6bn
(2021: £0.4bn) including £1.0bn from the Over-
issuance of Securitiesa.
Credit impairment charges were £1.2bn (2021:
£0.7bn net release). The increase in charges
reflect macroeconomic deterioration and a
gradual increase in delinquencies, partially offset
by the utilisation of macroeconomic uncertainty
post-model adjustments (PMAs) and the release
of COVID-19 related adjustments informed by
refreshed scenarios. Total coverage ratio
decreased to 1.4% (December 2021: 1.6%)
driven by changes in portfolio mix and write-offs.
Coverage levels remain strong.
Our CET1 capital ratio was 13.9% (2021: 15.1%),
within our target of 13-14%, and TNAV per share
increased 3% to 295p.
Capital distributions: total dividend for 2022 of
7.25p per share (2021: 6.0p), including a 5.0p per
share 2022 full year dividend. Intend to initiate a
share buyback of up to £0.5bn, bringing the total
share buybacks announced in relation to 2022 to
£1.0bn and total capital return equivalent to
c.13.4p per share.
Notes
a
2021 financial and capital metrics have been restated to reflect the
impact of the Over-issuance of Securities. See Impact of the Over-
issuance of Securities on page 356 and Restatement of financial
statements (Note 1a) on page 428 for further details.
The 10% appreciation of average USD against GBP positively
impacted income and profits and adversely impacted credit
impairment charges and total operating expense.
Period covering 2014-2022. Pre 2014 data was not restated
following re-segmentation in 2016.
The Gap portfolio refers to the Gap Inc. US credit card portfolio.
b
c
d
Barclays PLC
Annual Report 2022 46
Total operating expenses
Barclays views total operating expenses as a key
strategic area for banks; those which actively
manage costs and control them effectively will
gain a strong competitive advantage.
Cost: income ratio
The cost: income ratio measures total operating
expenses as a percentage of total income and is
used to assess the productivity of our business
operations.
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Summary financial review (continued)
Financial metrics
CET1 ratio
CET1 ratio is a measure of the capital strength
and resilience of Barclays, determined in
accordance with regulatory requirements. The
Group’s capital management objective is to
maximise shareholder value by prudently
managing the level and mix of its capital. This is to
ensure the Group is appropriately capitalised
relative to the minimum regulatory and stressed
capital requirements, and to support the Group’s
risk appetite, growth, and strategy while seeking
to maintain a robust credit proposition for the
Group.
The ratio expresses the Group’s CET1 capital as
a percentage of its RWAs. RWAs are a measure
of the Group’s assets adjusted for their
respective associated risks.
Group RoTE
RoTE measures our ability to generate returns
for shareholders. It is calculated as profit after tax
attributable to ordinary shareholders as a
proportion of average shareholders’ equity
excluding non-controlling interests and other
equity instruments adjusted for the deduction of
intangible assets and goodwill.
This measure indicates the return generated by
the management of the business based on
shareholders’ tangible equity. Achieving a target
RoTE demonstrates the organisation’s ability to
execute its strategy and to align management’s
interests with those of its shareholders. RoTE lies
at the heart of the Group’s capital allocation and
performance management process.
CET1 ratioa
(%)
.
2022
2021
2020
Group RoTEa
(%)
2022
2021
2020
Total operating expensesa
(£bn)
Cost: income ratioa
(%)
2022
2021
2020
Performance in 2022
RoTE was 10.4% (2021: 13.1%) from the
normalisation of credit impairment charges and
higher litigation and conduct costs, partially
offset by income growth across all operating
divisions.
The Group targets a RoTE of greater than 10.0%
in 2023 in line with our medium-term target.
Performance in 2022
The CET1 ratio decreased to 13.9% (2021:
15.1%) as £5.0bn of attributable profit was offset
by returns to shareholders, impacts of regulatory
change from 1 January 2022, pension deficit
contribution payments and decreases in the fair
value of the bond portfolio through other
comprehensive income and other capital
deductions.
Increases in RWAs, largely as a result of foreign
exchange movements, were broadly offset by an
increase in the currency translation reserve
within CET1.
The Group targets CET1 ratio in the range of
13-14%.
Performance in 2022
Group operating expenses increased to £16.7bn
(2021: £14.7bn) mainly due to higher litigation
and conduct charges:
Group operating expenses excluding litigation
and conduct increased 6% to £15.1bn, reflecting
the impact of inflation and the appreciation of
average USD against GBP.
Litigation and conduct charges were £1.6bn (2021:
£0.4bn) including £1.0bn impact from the Over-
issuance of Securities.
The Group will continue to drive efficiencies while
investing in its franchise where appropriate.
Note
a 2021 financial and capital metrics have been restated to reflect the
impact of the Over-issuance of Securities. See Impact of the Over-
issuance of Securities on page 356 and Restatement of financial
statements (Note 1a) on page 428 for further details.
Performance in 2022
The Group cost: income ratio was 67% (2021:
67%), as increased income was offset by higher
litigation and conduct charges, primarily from the
Over-issuance of Securities.
The Group is targeting a cost: income ratio
percentage in the low 60s in 2023 and below
60% over the medium-term.
+ For further detailed analysis of our financial performance
in 2022, please see our full Financial review and our
Financial statements on pages 378 to 396, and pages 397 to
423 respectively of Part 3 of the Annual Report.
For more information on our global tax contribution as well
as our approach to tax, please see our Country Snapshot
report available at home.barclays/annualreport
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Summary financial review (continued)
Consolidated summary income statement
For the year ended 31 December
Net interest income
Net fee, commission and other income
Total income
Operating costs
UK bank levy
Litigation and conduct
Total operating expenses
Other net income
Profit before impairment
Credit impairment (charges)/releases
Profit before tax
Tax charge
Profit after tax
Non-controlling interests
Other equity instrument holders
Attributable profit
Selected financial statistics
Basic earnings per share
Diluted earnings per share
Return on average tangible shareholders’ equity
Cost: income ratio
2022
£m
10,572
14,384
24,956
(14,957)
(176)
(1,597)
(16,730)
6
8,232
(1,220)
7,012
(1,039)
5,973
(45)
(905)
5,023
30.8p
29.8p
10.4%
67%
Restateda
2021
£m
8,073
13,867
21,940
(14,092)
(170)
(397)
(14,659)
260
7,541
653
8,194
(1,138)
7,056
(47)
(804)
6,205
36.5p
35.6p
13.1%
67%
Note
a 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See impact of Over-issuance of
Securities on page 356 and Restatement of financial statements (Note 1a) on page 428 for further details.
Consolidated summary balance sheet
As at 31 December
Assets
Cash and balances at central banks
Cash collateral and settlement balances
Loans and advances at amortised cost
Reverse repurchase agreements and other similar secured lending
Trading portfolio assets
Financial assets at fair value through the income statement
Derivative financial instruments
Financial assets at fair value through other comprehensive income
Other assets
Total assets
Liabilities
Deposits at amortised cost
Cash collateral and settlement balances
Repurchase agreements and other similar secured borrowings
Debt securities in issue
Subordinated liabilities
Trading portfolio liabilities
Financial liabilities designated at fair value
Derivative financial instruments
Other liabilities
Total liabilities
Equity
Called up share capital and share premium
Other equity instruments
Other reserves
Retained earnings
Total equity excluding non-controlling interests
Non-controlling interests
Total equity
Total liabilities and equity
Net asset value per ordinary share
Tangible net asset value per share
Number of ordinary shares of Barclays PLC (in millions)
Year-end USD exchange rate
Year-end EUR exchange rate
Barclays PLC
Annual Report 2022 47
2022
£m
256,351
112,597
398,779
776
133,813
213,568
302,380
65,062
30,373
1,513,699
545,782
96,927
27,052
112,881
11,423
72,924
271,637
289,620
16,193
1,444,439
4,373
13,284
(2,192)
52,827
68,292
968
69,260
1,513,699
347p
295p
15,871
1.20
1.13
Restateda
2021
£m
238,574
92,542
361,451
3,227
147,035
191,972
262,572
61,753
25,159
1,384,285
519,433
79,371
28,352
98,867
12,759
54,169
250,960
256,883
13,450
1,314,244
4,536
12,259
1,770
50,487
69,052
989
70,041
1,384,285
339p
291p
16,752
1.35
1.19
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Divisional reviews
About Barclays
We are diversified by business, geography and income type.
Our operations include consumer banking and payment services
in the UK, US and Europe, as well as a global corporate and
investment bank.
Our structure
Barclays operates as two divisions, Barclays UK and Barclays International,
supported by our service company, Barclays Execution Services.
Barclays UK
Barclays UK consists of our UK Personal Banking,
UK Business Banking and Barclaycard Consumer
UK businesses. These businesses are carried on by
our UK ring-fenced bank (Barclays Bank UK PLC)
and certain other entities within the Barclays Group.
UK Personal Banking offers retail solutions to help
customers with their day-to-day banking needs.
UK Business Banking serves business clients, from
high-growth start-ups to small and medium-sized
enterprises, with specialist advice for their business
banking needs.
Barclaycard Consumer UK is a leading credit card
provider, offering flexible borrowing and payment
solutions, while seeking to deliver a leading customer
experience.
Barclays International
Barclays International consists of our Corporate and
Investment Bank and Consumer, Cards and
Payments businesses. These businesses operate
within our non ring-fenced bank (Barclays Bank PLC)
and its subsidiaries, and certain other entities within
the Group.
Barclays Corporate and Investment Bank is
comprised of the Investment Banking, Corporate
Banking and Global Markets businesses, aiding
money managers, financial institutions,
governments, supranational organisations and
corporate clients to manage their funding, financing,
strategic and risk management needs.
The Consumer, Cards and Payments division of
Barclays International is comprised of our
International Cards and Consumer Bank, Private
Bank and Barclaycard Payments businesses.
As part of our International Cards and Consumer
Bank, in the US we have a partnership-focused
business model, offering credit cards to consumers
through our relationships. We also offer online
retail savings products, instalment payments and
personal loans.
In Germany, we offer multiple consumer products
including own-branded and co-branded credit cards,
online loans, electronic Point of Sale (ePOS) financing
and deposits.
Barclaycard Payments enables businesses of all sizes
to make and receive payments.
Our Private Bank offers banking, credit and
investment capabilities to meet the needs of our
clients across the UK, Europe, the Middle East and
Africa, and Asia.
Barclays Execution Services
Barclays Execution Services is the Group-wide
service company providing technology, operations
and functional services to businesses across
the Group.
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Divisional reviews (continued)
Barclays UK
Barclays UK consists of our UK Personal Banking,
UK Business Banking and Barclaycard Consumer
UK businesses.
Highlights
• UK Personal Banking offers retail solutions to help customers with their day-to-day banking
needs.
• UK Business Banking serves business clients, from high-growth start-ups to SMEs, with
specialist advice for their business banking needs.
• Barclaycard Consumer UK is a leading credit card provider, offering flexible borrowing and
payment solutions, while delivering a leading customer experience.
Measuring where we are
£7.3bn
Income
2021: £6.5bn
£2.6bn
Profit before tax
2021: £2.5bn
+11
Barclays UK NPS
2021: +11
£4.3bn
Operating expenses
2021: £4.4bn
18.7%
Return on Tangible Equity
2021: 17.6%
+12
Barclaycard NPS
2021: +4
Market and operating environment
Focus areas
Against a challenging economic and political
backdrop this year, customer confidence in
both the UK economy and its impact on their
personal finances fell. Inflationary pressures
have put significant strain on our customers in
the UK and elsewhere, with many adapting to
address these challenges, from changing their
spending habits to paying down higher cost
debts. As a bank, we have an important duty to
play in society, and use our expertise to help
people with their financial wellbeing, providing
them with the support they need to navigate
these uncertain times, including help with
money management and budgeting.
There continues to be a significant shift towards
digital adoption and demand for digital financial
services to meet day-to-day needs. The
changes in competition over the past decade
makes addressing these evolving customer
expectations even more pertinent. We aim to
provide customers with banking services in new
and innovative ways, embracing technology as a
means of making things simpler, more
transparent and more secure. Whilst we have
seen an increase in the number of customers
moving to digital, there remains a cohort of
customers who are digitally less confident, and
require more traditional points of engagement.
UK regulation continues to evolve, seeking to
provide higher levels of protection for the
consumer. The Consumer Duty, due to come
into force in July 2023, is focused on ensuring
that firms deliver good customer and client
outcomes through: ensuring those products
and services provide fair value; enabling
informed decision-making and providing
support that meets the needs of customers
and clients. These key principles align with the
Barclays UK Purpose and strategy, and we are
committed to ensuring that the Consumer Duty
is demonstrably embedded throughout
the organisation.
Providing exceptional service
and insights to customers:
We aim to provide simple, relevant and prompt
services and propositions for our customers so
they have greater choice and access to the
support they need to make their money work
for their individual circumstances.
Driving technology and digital innovation:
We continue to invest in our digital capabilities,
upgrading our systems, moving to cloud
technology and implementing automation of
manual processes. This is intended to allow us
to deliver a more personalised digital
experience, reduce cost and create additional
capacity to support more of our customers. It
aims to give us the capability to drive service
and improve financial inclusion.
Continuing to grow our business:
We are pursuing partnership and acquisition
opportunities to build and deliver better
propositions and services, while continuing to
innovate across our Barclays platforms to
unlock new and sustainable income streams. In
the unsecured lending space, in particular, we
are working with partners such as Avios, to
adapt to evolving customer demands as they
look for flexibility, convenience and safety from
their lending solutions - driving a shift from
overdrafts, towards reward credit cards and
instalment lending.
Evolving our societal purpose:
We are working across the communities in
which we serve to support financial inclusion
and recognise our role in supporting the
transition towards a low-carbon economy. We
are reinventing how we support customers in
the community and also seeking to preserve
access to banking for consumers and
businesses over the long term.
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Divisional reviews (continued)
Year in review
Barclays UK delivered a RoTE of 18.7% (2021:
17.6%), as the continued evolution into a next
generation, digitised consumer bank delivered
strong returns and cost efficiencies, which
combined with rising interest rates, contributed
to a cost: income ratio of 60% (2021: 68%).
This year, the UK has seen its fastest increase in
inflationary pressure on household budgets in 40
years, and we have focused on making sure our
customers have the support they need to
navigate these challenging times. This includes
our Money Management Hub, which provides
tools and information directly to our customers,
giving them a better grasp of their spending
behaviours and the steps they can take to
improve their financial wellbeing.
We have been focused on helping customers
boost their financial resilience in the long term, by
encouraging healthy saving habits through the
launch of our Rainy Day Saver account, as well as
providing one-to-one support for customers
experiencing financial hardship through our
expert financial assistance teams.
We continue to focus on improving the overall
customer experience by identifying and
supporting the removal of the root causes of
customer complaints. Complaints in 2022 have
further reduced, with volumes decreasing 17%
year on year excluding PPI complaints, or
decreasing 18% when looking at total
complaints. This has been achieved through the
continued stability of our platforms, alongside
regular and direct communications with
customers during times of change, particularly in
relation to our service model.
We have seen acute pressures in areas impacted
by economic events, such as an increase in
complaints related to mortgages as customers
rush to find the right rates for them in light of
Bank of England interest rate changes.
The Net Promoter Score (NPS) for Barclays UK
was relatively stable throughout 2022 at +11.
This reflects the returning capability to service
our customers after previous declines during the
pandemic. However, we recognise that we need
to continue to push forward our initiatives to
drive further improvements in customer
experience, including improving and expanding
our digital journeys. Barclaycard UK NPS
continued to trend upwards throughout 2022 to
+12, in line with the market, as usage and
availability of credit became more important
to customers.
Barclays mobile banking vans
We are working to reduce our own emissions
at Barclays and have recently introduced our
first fully electric mobile banking van. Vans
are just one of the ways Barclays provides an
accessible in-person service, supporting
customers in remote and rural locations, as
well as growing our business in strategic
locations.
Since launching our first van in August 2020,
we’ve supported c.9,500 customers across
238 locations such as hospitals, schools,
markets and retail parks. We are at the start
of this journey, introducing another six
electric mobile banking vans in early 2023, as
part of our ambition to transform our entire
existing fleet of vehicles in the UK to electric
by 2025.
c.9,500
customers supported
since launching our first van
We continue to evolve our physical service
model, expanding Barclays Local - an alternative
branch presence for those who need in-person
support - which includes mobile banking vans and
pop-up banking sites in community centres,
libraries and business hubs. This transformation
reflects the reality of the rapid digitisation of
transactional banking, as customers demand
more convenient, simpler ways to bank that fit
their lives.
These new formats seek to ensure we leave no-
one behind and remain available, in person, to
support the small proportion of customers
unable to self-serve digitally, who value physical
presence when things go wrong or to support
them through vulnerability.
Supporting vulnerable customers across all of
our Barclays channels remains a key focus. We
have trained over 16,000 frontline colleagues to
better recognise the subtle signs of vulnerability
when speaking to customers who might need
additional support, and are encouraging them to
allow us to put an indicator on their banking
records to ensure that Barclays, holistically,
understands their needs and can better serve
them across all their touchpoints as a result.
Whilst we have made progress, we have more to
do to embed this with colleagues, including
further training and support materials.
+ Further details on mobile banking vans and how to book
an appointment can be found at: events.uk.barclays/
barclaysvan/
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Annual Report 2022 51
Divisional reviews (continued)
As part of the changes to our physical branches,
we are working to ensure that customers who
rely on cash can still access it and get the support
they need. Barclays is a member of the Cash
Action Working Group (CAG), working with
industry banks and consumer groups, the Post
Office and LINK, in an agreement on shared
services such as banking hubs, helping to ensure
long-term cash availability across the UK.
We also rolled out a new Cashback Without
Purchase service, in partnership with Barclaycard
Payments, creating thousands of new locations
for consumers to withdraw cash from shops,
cafes, restaurants and other small businesses for
free. We anticipate that it will also help local
community cash recycling and boost business
footfall.
We continue to invest in smarter technologies to
improve the customer and colleague experience,
particularly for our digital journeys. For example,
our mortgage customers can now manage their
mortgage through the Barclays app, including
switching onto a new rate up to 180 days before
their current rate expires instead of 90 days
previously, and have the ability to apply for
additional borrowing. This provides customers
with greater choice of channel, and avoids the
need for an appointment to be made when
advice is not required. In 2022, our active mobile
customers grew to 10.5 million and we hit a
record of 15.4 million logins in a single day,
demonstrating the impact of going digital-first.
We have delivered a regular programme of
customer education on fraud, scams and mules
alongside our new 'Scan for a Scam' campaign,
leveraging social media and influencers to ensure
as broad a reach as possible. We have also
invested in upskilling and educating colleagues
across economic crime, and as a result,
complaints relating to fraud, scams and mules
have reduced by 17% versus 2021.
We continued to unlock new and sustainable
sources of income, which also provide innovative
propositions for our customers. We have
reached an agreement to acquire Kensington
Mortgage Company, a specialist mortgage
lending platform focused on providing
mortgages via brokers to customers with
complex incomes, together with a portfolio of UK
mortgages. This will complement our existing
residential mortgage offerings and give us the
chance to support even more customers.
Regulatory approval has been obtained and the
transaction is expected to complete in Q1 2023.
Within our unsecured lending proposition, we are
also working with partners to provide differentiated
solutions for our customers, helping them make
the most of their day-to-day spending, including
launching two new co-branded credit cards this
year in partnership with Avios.
For our business customers, we continued to
develop our partnership with Propel, helping to
provide financing for businesses wanting to
invest in renewable assets. To support this, in
2022, we launched a reduced interest rate
proposition incentivising the purchase of
electric vehicles.
We continue to work on green finance products,
recognising that uptake is relatively small but
growing, reflecting economic constraints and the
current immaturity of the policy environment.
This year we expanded our green mortgages
proposition to support the transition to a low-
carbon economy, launching the Barclays Green
Home Buy-to-Let Mortgage product. We also
launched a Greener Home Reward pilot,
providing eligible UK mortgage customers with
cash rewards when retrofitting their homes, for
example, when installing double or triple glazing,
solar panels or insulation.
Looking ahead
Our aim remains putting customers and
clients at the heart of the decisions we make,
helping to ensure good customer outcomes
for every customer and client. We are
continuing to adapt our service model for
customers, creating a more efficient, more
resilient and seamless service at a pace that
suits our customers' expectations. We’re
also investing significantly in growing our
financial assistance teams, to be on hand
should customers and businesses run into
some form of financial difficulty and need
specialist support.
More interactions are moving to digital and
virtual channels, with customers demanding
better digital services and fewer customers
using our branch network. Where traditional
branches may have been the most
appropriate point of engagement in the past,
we are looking to increase the range of more
flexible options for our customers; delivering
human support for those customers who are
digitally less confident.
This will continue to include physical
branches, complemented with flexible
banking pop-ups in community spaces,
banking pods and mobile banking vans. We
continue to ensure greater accessibility of
cash in local and remote areas through our
work with local businesses and the Post
Office.
We are building partnerships in the open
market and work across Barclays to deliver
additional value for our customers and
businesses through our size and scale, and
continue to invest in digital platforms, remove
unnecessary processes and costs and aim for
a seamless self-service for customers.
We are acutely aware of increasing consumer
expectations on climate and sustainability,
and we are committed to supporting our
customers and clients through the transition
to a low-carbon economy with products and
propositions which support greener choices.
+ For more information go online:
home.barclays
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Divisional reviews (continued)
Barclays International:
Corporate and
Investment Bank
Within Barclays International, the Corporate and
Investment Bank comprises Investment Banking,
Corporate Banking and Global Markets, aiding money
managers, financial institutions, governments,
supranational organisations and corporate clients to
manage their funding, financing, strategic and risk
management needs.
Highlights
• Our Global Markets business provides a broad range of clients with market insight, execution
services, tailored risk management and financing solutions across equities, credit, securitisations,
rates and foreign exchange products.
• Investment Banking provides clients with strategic advice on mergers and acquisitions (M&A),
corporate finance and financial risk management solutions, as well as equity and debt issuance
services.
• Corporate Banking provides working capital, transaction banking (including trade and payments), and
lending for multinational, large and medium corporates, and for financial institutions.
Measuring where we are
£13.4bn
Income
2021: £12.3bn
£4.3bn
Profit before tax
2021: £5.6bn
£8.9bn
Operating expenses
2021: £7.0bn
10.2%
Return on Tangible Equity
2021:14.3%
6th
Investment Banking
global fee ranking
(2021: 6th) Dealogic rankinga
6th
Global markets revenue rank
Largest non-US bank (2021: 6th)
Based on external reported
Markets revenuesb
Market and operating environment
Focus areas
We saw global inflationary pressures and
responsive monetary policy action in the form of
interest rate increases by central banks across
the globe have a profound effect on financial
markets in 2022. Bond markets in particular were
affected, with growth in yields not seen for
decades. Many global equity markets were off
double digit percentages in the context of these
macro drivers.a
As a consequence of this macro instability, global
capital markets retreated to pre-pandemic levels
from their record highs in 2021. Market volatility,
inflation and geopolitical uncertainty created
headwinds for dealmaking across all products,
with significant declines in High Yield bonds
(-80%) and Initial Public Offerings (-70%).a
Across our CIB businesses, the opportunities
presented by the climate transition and the
broader sustainability agenda continued to grow
despite challenging market conditions.
Notes
a Dealogic for the period covering 1 January 2021 to 31 December
2022.
b Market share for Barclays is based on our share of top 10 banks'
reported revenues. Peer banks include BoA, BNP, CITI, CS, DB, GS,
JPM, MS and UBS.
Investing in high-growth sectors and
maintaining high returns in Investment
Banking:
We are continuing to invest in high-growth
sectors such as Technology and Healthcare,
and we aim to sustain the investment we have
made in our high-returning, fee-driven M&A
and Equities businesses.
Becoming an electronic-first Global Markets
business, growing in targeted areas:
In Global Markets, we are prioritising service
excellence for our clients through simplification
of our systems architecture, investing in Prime
Brokerage, further bolstering our
intermediation businesses and focusing on
financing solutions to build a diversified
portfolio that performs across the
economic cycle.
Capturing opportunities as we transition
to a low-carbon economy:
We aim to support clients who want to make
their business models more sustainable, and
use our scale and capital markets expertise to
mobilise capital for the transition to a low-
carbon economy.
Improving integration:
Across our businesses we are focused on
serving clients in an integrated way. Our efforts
to broaden and deepen our CIB offering across
Europe will form an important part of this effort.
In Corporate Banking we will continue to focus
on delivering enhancements to how we engage
with clients through our digital proposition and
will continue to build our capabilities in the US
and Europe. Broadly, we are focused on being
a leading provider of digitally-enabled lending
and transaction banking services to our clients
in our chosen markets across the globe.
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Annual Report 2022 53
Divisional reviews (continued)
Year in review
Corporate and Investment Bank RoTE was
10.2% (2021: 14.3%), a strong return in a year
with challenging market conditions. This
performance reflected the benefits of income
diversification and continued investment in
sustainable growth, partially offset by the net
impact of the Over-issuance of Securities.
Investment Banking revenue declined compared
with a strong performance in 2021, driven by
significant declines in the overall market
opportunity. We are ranked sixth in overall global
fee share for the third year running and are top
five in Debt Capital Marketsa.
We continued to invest in our Investment
Banking coverage of high-growth sectors,
including expanding our Sustainable Financing
business. Founded in 2019, our sustainability-
focused investment banking effort last year
continued to advise and raise capital for
companies seeking to address environmental or
social challenges, helping our firm deliver on its
strategic priority of assisting our clients with the
transition to a low-carbon economy.
Our Global Markets business acted as a market-
maker and liquidity provider to clients across the
globe, playing an important role in helping them
to find opportunities and manage risk during a
continued period of heightened market
disruption. During a year which experienced
several distinct episodes of volatility, we
materially increased revenues and captured
share relative to our peers.
The importance of business diversification
across Global Markets was evidenced by the
gains in our FICC businesses, which helped to
offset declines in our Equities business.
We continued to invest in enhancing our Global
Markets digital proposition, including our
electronic trading capabilities and our digital self-
service platform, as well as our financing
platforms across Fixed Income and Equities.
In Corporate Banking, revenues grew off the back
of strong interest income given the rising
interest rate environment, although this
performance was partly offset by rising
impairments owing to the increasingly
challenging business environment.
2022 was defined by an increased focus on capital
discipline, including increased selectivity around
risk taking and a streamlined and consistent
approval process across all of CIB lending.
We made significant progress in 2022 in
expanding our international capabilities,
particularly with the build out of our Corporate
Banking businesses in the US and Europe. We
have also continued to invest in strengthening
our digital capabilities, including driving the
adoption of iPortal to provide our clients with
seamless access to our transaction banking
product set.
Our Research team continued to deliver
differentiated insights to our clients, acting as a
driver of thought leadership for the CIB. We
sought to further drive the ESG agenda in
support of our climate strategy in 2022, through
establishing a new Sustainable and Thematic
Research team, focused on identifying multi-
sector thematic trends that could shape the
future business environment, and partnering with
our Data and Investment Science teams to bring
data-driven insights to our clients.
Note
a Dealogic for the period covering 1 January 2020 to
31 December 2022.
Powering Portland General
Electric’s future with innovative
Bringing together experts from its Power &
Utilities, Equity Capital Markets and
Sustainable Capital Markets teams, in
October 2022 Barclays structured a Green
Use of Proceeds equity offering for Portland
General Electric, which saw the issuance of
11.615 million shares of common stock.
This unique structure gives investors publicly
tradable common shares, whose proceeds
are earmarked for investment toward its
decarbonisation goals.
Looking ahead
Across our Corporate and Investment Bank,
we remain focused on maintaining our client-
centric approach and developing
opportunities to grow our business and
increase returns. We continue to focus on
growth in high-returning, capital efficient
parts of our business and to sustain our focus
on cost discipline and operational rigour.
In Global Markets we are focused on further
developing our electronic trading-led
business, investing in low touch and machine
learning capabilities to drive efficiency and
scale and better serve the needs of our
investor base. We will continue to invest in
growth in Securitised Products, Emerging
Markets, and parts of our Rates and Foreign
Exchange businesses.
Investment Banking continues to invest in
high-priority sectors, particularly in
Healthcare and in Technology in the US and
Europe. More broadly, we aim to build on
Investor reaction
was strong for
the nearly
$500 million
offering, which was
multiple times
oversubscribed
and priced at a
tight discount relative
to the size of the deal.
The proceeds of this offering are
designated to the construction a 311 MW wind
energy facility, as well as additional renewable
and battery storage projects.
+ For further information go online
at barclayscorporate.com
momentum and improve revenue
contribution from our equity and advisory
offerings.
Aligned to our new climate-related target to
facilitate $1trn of Sustainable and Transition
Financing, we will continue to invest in
creating a centre of excellence for
sustainable finance, and broaden the range
of ESG capital market product types we offer
across more client segments.
In Corporate Banking, we continue to
monetise investments in our European and
US offering with an emphasis on growing our
Transaction Banking business. Our focus will
remain on steadily improving our credit
portfolio returns by reallocating risk
weighted assets to higher-returning
opportunities. We continue to invest in our
trade, payments and wholesale lending
offerings and look to further enhance our
digital proposition.
+ For further information go online at
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Divisional reviews (continued)
Barclays International:
Consumer, Cards and
Payments
The Consumer, Cards and Payments division of
Barclays International is comprised of our International
Cards and Consumer Bank, Private Bank and
Barclaycard Payments businesses.
Highlights
• As part of our International Cards and Consumer Bank, in the US we have a partnership-focused
business model, offering co-branded and private-label credit cards to consumers through our
relationships with some of America’s well known brands, including American Airlines and Gap Inc. We
also offer online retail deposits products (savings and certificates of deposit), personal loans, instalment
payments, and point-of-sale financing.
• In Germany, we offer multiple consumer products, including own-branded and co-branded credit
cards, online loans, electronic Point of Sale (ePOS) financing and deposits.
• Barclaycard Payments enables businesses of all sizes to make and receive payments.
• Our Private Bank offers banking, credit and investment capabilities to meet the needs of our clients
across the UK, Europe, the Middle East and Africa, and Asia.
Measuring where we are
£4.5bn
Income
2021: £3.3bn
£0.7bn
Profit before tax
2021: £0.8bn
+44
US Consumer Bank Care tNPS
2021: +43.4
£3.1bn
Operating expenses
2021: £2.4bn
10.0%
Return on Tangible Equity
2021: 15.0%
74.1%
CC&P US customer
digital engagementa
2021: 71.8%
Market and operating environment
Focus areas
We continue to see recovery in consumer
activity and spending post the COVID-19
pandemic. As cash use declines and online
transactions grow, the shift towards digital
services and payments continues.
We are seeing a rise in the popularity of
alternative payment methods such as Buy Now
Pay Later and Open Banking, not only online but
also face to face, as consumer behaviour
continues to evolve and the need for omni-
channel integrated solutions increases.
The rise in inflation and the interest rate
environment is driving changes in consumer
behaviour, particularly around demand for
personal loans and the impact of the increasing
cost of borrowing.
Market uncertainty has moderated Private Bank
clients' appetite to invest in regular equity-
related strategies while the comeback of
significant positive fixed income yields has
created strong tailwinds for alternate strategies.
In parallel, higher market volatility is supporting
strong investment in transactional activity and
revenue as well as supporting demand for
private market funds.
With an increasing regulatory focus on
consumer protection (including the FCA’s
Consumer Duty due to come into force in July
2023), we continue to provide customers and
clients with the information and tools to select
the right products and services best suited for
their needs. This is at the foundation of our
business, ensuring we act to deliver good
outcomes and avoid harms for our customers
and clients.
We strive to deliver next-generation consumer
financial services, offering best-in-class finance,
private banking and payment solutions.
Responding to changing consumer behaviour:
We continue to invest in the digitalisation of our
businesses, delivering new products and
capabilities to reflect growing trends. This
includes focusing on scaling our existing e-
commerce solutions to add further value to our
digitally engaged customers, small businesses
and corporates.
Building a more efficient
and seamless business:
We are accelerating our automation agenda to
drive operational efficiency and create a more
seamless, digital customer experience.
Winning new partnerships:
We are focused on broadening relationships
with our existing partners and pursuing new
partnerships, particularly in the US. We are also
building capabilities to offer new financing
solutions across all our markets.
Growing in key markets:
We are continuing to drive growth in our
strategic home and international markets. In
2023 the planned integration of the Private
Bank and Barclays UK Wealth and Investment
Management business will strengthen our
position in the UK, while we continue to deepen
our existing footprint outside the UK and further
strengthen and expand our product capabilities.
Note
a Excluding new Gap customers.
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Divisional reviews (continued)
Year in review
CC&P delivered a RoTE of 10% (2021: 15%), and
continued to invest for growth while absorbing a
provision for customer remediation costs
relating to legacy loan portfolios.
▪ We successfully launched a new long-term
programme with Gap Inc., the largest specialty
apparel company in the USa, to issue both co-
branded and private label credit cards and also
renewed our existing partnership agreement
with Carnival Cruise Lines, among other
partners. Both are good examples of how we
maintained our position as a top 10 credit card
issuerb in the US.
▪ We continued to invest in our digital servicing
model, reaching a digital active user rate of
74.1%c. We have seen a slight improvement
on the Care Net Promoter Scored in the US
Consumer Bank, reaching +44, versus +43.4
in 2021.
Launching Gap Inc. credit
card programme
The Barclays US Consumer Banking business is
now the exclusive credit card issuer for Gap
Inc.’s family of purpose-led, lifestyle brands
following the successful migration of nearly 10
million existing card members and doubled the
size of our US customer base.
Delivering next generation retail digitised
consumer financial services is a strategic
growth priority for Barclays, and following a
year-long effort to build, test and launch the
new programme, Gap, Old Navy, Banana
Republic and Athleta customers can now
apply for and use a new, Barclays-issued
credit card through multiple digital and
online channels and in over 2,100 retail
stores across the United States and Puerto
Rico.
• Our Payments business maintained its
position as one of the foremost payment
processors in Europee. We secured new client
relationships, and retained others, including
Ryanair and Getir UK. We’ve also added to our
capabilities with the launch of Smartpay
Touch, our new card acceptance solution as
well as Cashback Without Purchase, a new
service enabling UK consumers to withdraw
cash for free from thousands of local retailers
and small businesses.
▪
In Germany, we continue to be a leading
provider of consumer financef through our
credit cards and personal loans business. We
relaunched our Deposits Open Market offer to
further diversify our revenue structure.
▪ The Private Bank continued to drive its market
strategy, deepen its footprint in established
markets, while monetising recent investments
in Asia and EEA through new client acquisition.
A Referral Agreement was also undertaken
with Credit Suisse, enabling the Private Bank to
grow its business in Africa. We continued to
drive enhancements to client experience, as
well as product offering, including asset
management capabilities.
Financial inclusion in our US
consumer business
The Community Reinvestment Act (CRA) is a US
federal law designed to encourage financial
institutions to help meet the needs of borrowers
in all segments of their communities, including
low and moderate-income neighbourhoods.
Barclays meets the CRA requirement by
supporting and investing in local Community
Development Financial Institutions (CDFIs),
small-medium businesses and non-profits.
The success of CDFIs, small-medium businesses
and non-profits are key to a thriving community.
Barclays has predefined goals with specific
performance targets that we must meet each
year in order to be considered in compliance with
CRA guidelines. Barclays has met its CRA goals
for 2022, evidencing that we are continuing to
invest in the communities where we live, work
and serve.
Barclays Bank Delaware (BBDE) is committed to
fair and equitable treatment of all prospective
and existing customers without regard to race,
sex, colour, national origin, religion, age, marital
status, disability, sexual orientation, military
status, gender identity, familial status, Limited
English Proficiency, receipt of public assistance
income, and good faith exercise of rights under
the Consumer Credit Protection Act.
We believe Barclays’ core Values of Respect,
Integrity, Service, Excellence, and Stewardship
reflect our commitment to fair lending and fair
treatment principles and practices. We strive to
develop long-term relationships by providing
products and services that meet prospective and
existing customer needs, avoid causing
prospective and existing customer detriment or
harm, and place our prospective and existing
customers' interests at the heart of our strategy,
planning, and decision-making processes.
Notes
a Gap Inc., 2020.
b Nilson Report #1204 (mid-year ranking).
c Excluding Cap customers.
d Care tNPS provides an accurate measure of customer sentiment
across our Fraud, Dispute, Credit and Care channels and replaces the
relationship NPS reported in the 2021 Annual Report.
e Nilson Report #1197 (May 2022).
f Deutsche Bundesbank, Advanzia Bank S.A., plus own calculations.
Looking ahead
Within Consumer, Cards and Payments, we
continue to invest in building our technology
and digital capabilities, to meet consumer
demand and responding to an increasingly
difficult economic environment.
We aim to further scale our Payments
business. Our goal is to deliver a world-class
unified payments experience for customers,
by combining payments and banking
technology.
We continue to deepen our relationships with
corporates by collaborating with the
Corporate and Investment Bank; grow our
offering to small businesses; and evolve with
our multinational customers.
In Germany, we are leveraging proprietary and
partner distribution channels, and developing
seamless onboarding and underwriting
capabilities, to grow our core business.
As we focus on our partnership-centric
business model in the US, we will also scale our
existing proposition to deliver more value to
our partners across a broader range of sectors,
diversifying our business.
The Private Bank remains focused on targeted
markets, deepening our client footprint in the
UK, Europe, the Middle East and Africa, and
Asia. The appetite for sustainable investing
carries on growing at pace and we continue to
manage sustainable portfolios for a broad
range of clients. We intend to enhance product
capabilities and drive better client experiences
by improving end-to-end platform automation
and delivering our digital agenda. We continue
to make good progress in integrating BUK's
Wealth and Investment Management business
with our Private Bank to provide a more
seamless client experience.
+ For more information go
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Managing risk
Prudently managing risk
for stakeholders
Barclays is exposed to internal and external risks as
part of its ongoing activities. These risks are managed
as part of our business model.
Enterprise Risk Management
Framework (ERMF)
At Barclays, risks are identified and overseen in
accordance with the ERMF, which supports the
business in its aim to embed effective risk
management and a strong risk management
culture.
The ERMF governs the way in which Barclays
identifies and manages its risks.
The management of risk is then embedded into
each level of the business, with all colleagues
being responsible for identifying and controlling
risk.
Given the increasing risks associated with climate
change, and to support the Group’s ambition to
be a net zero bank by 2050, Climate risk became
a Principal Risk at the start of 2022.
Risk appetite
Risk appetite defines the level of risk we are
prepared to accept across the different risk
types, taking into consideration varying levels of
financial and operational stress. Risk appetite is
key to our decision-making processes, including
ongoing business planning and setting of
strategy, new product approvals and business
change initiatives.
The Group sets its risk appetite in terms of
performance metrics as well as a set of mandate
and scale limits to monitor risks (i.e. to ensure
business activities are aligned with expectations
and are of an appropriate scale relative to the risk
and reward of the underlying activities). During
2022, the Group’s performance remained within
its risk appetite limits.
Three lines of defence
The first line of defence is comprised of the
revenue-generating and client-facing areas,
along with all associated support functions,
including Finance, Treasury, Human Resources
and Operations and Technology. The first line
identifies the risks, sets the controls and
escalates risk events to the second line of
defence. Employees in the first line have primary
responsibility for their risks and their activities are
subject to oversight from the relevant parts of
the second and third lines.
The second line of defence is made up of Risk
and Compliance and oversees the first line by
setting limits, rules and constraints on their
operations, consistent with the risk appetite.
The third line of defence is comprised of Internal
Audit, providing independent assurance to the
Board and Executive Committee on the
effectiveness of governance, risk management
and control over current, systemic and evolving
risks.
The Legal function provides support to all areas
of the business and is not formally part of any of
the three lines of defence, The Legal function is
responsible for the identification of all legal and
regulatory risks. Except in relation to the legal
advice it provides or procures, it is subject to
second line oversight with respect to its own
operational and conduct risks, as well as with
respect to the legal and regulatory risks to which
the Group is exposed.
Monitoring the risk profile
Together with a strong governance process,
using business and Group level Risk Committees
as well as Board level forums, the Board receives
regular information in respect of the risk profile of
the Group, and has ultimate responsibility for
Group risk appetite and capital plans. Information
received includes measures of risk profile against
risk appetite as well as the identification of new
and emerging risks, which are derived by
mapping risk drivers, identified through horizon
scanning, to risk themes, and similar analysis.
To support the Group’s
ambition to be a net zero
bank by 2050, Climate risk
became a Principal Risk at
the start of 2022.
During 2022, Barclays ran a stress test to assess
its capital adequacy and resilience under a severe
but plausible macroeconomic scenario. The
internal stress test was informed by the Bank of
England 2022 regulatory stress test featuring
high and persistent inflation, rising global interest
rates, a severe UK recession brought by falling
household real incomes, job losses leading to a
high unemployment rate, energy and cost of
goods shocks, increasing corporate defaults, and
severe house and real estate price shocks. For
further details of the stress test, please refer to
page 59.
We believe that our structure and governance
supports us in managing risk in the changing
economic, political and market environments.
+ For further detailed analysis of approach to risk
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Managing risk (continued)
The Enterprise Risk Management Framework defines nine Principal Risks
Principal Risks
Risks are classified into Principal Risks, as below
How risks are managed
Credit risk
Market risk
Treasury and
Capital risk
The risk of loss to the Group from the failure of clients, customers or counterparties
(including sovereigns), to fully honour their obligations to the Group, including the whole
and timely payment of principal, interest, collateral and other receivables.
The risk of loss arising from potential adverse changes 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.
Liquidity risk
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.
Capital risk
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 and stressed conditions (both actual and as defined for internal
planning or regulatory testing purposes). This also includes the risk from the Group’s
pension plans.
Interest rate risk in the banking book
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.
Climate risk
The impact on Financial and Operational Risks arising from climate change through physical
risks, risks associated with transitioning to a low-carbon economy and connected risks
arising as a result of second order impacts on portfolios of these two drivers.
Operational risk
The risk of loss to the Group from inadequate or failed processes or systems, human
factors or due to external events (for example, fraud) where the root cause is not due to
credit or market risks.
Model risk
Conduct risk
The potential for adverse consequences from decisions based on incorrect or misused
model outputs and reports.
The risk of poor outcomes for, or harm to, customers, clients and markets, arising from the
delivery of the Group's products and services.
Reputation risk
The risk that an action, transaction, investment, event, decision, or business relationship
will reduce trust in the Group’s integrity and/or competence.
Credit risk teams identify, evaluate, sanction, limit and monitor various forms of credit exposure, individually and
in aggregate.
A range of complementary approaches to identify and evaluate Market risk are used to capture exposure to
Market risk. These are measured, limited and monitored by market risk specialists.
Treasury and Capital risk is identified and managed by specialists in Capital Planning, Liquidity, Asset and Liability
Management and Market Risk. A range of approaches are used appropriate to the risk, such as limits; plan
monitoring; and stress testing.
The Group assesses and manages its Climate risk across its businesses and functions in line with its net zero
ambition by monitoring exposure to elevated risk sectors, conducting scenario analysis and risk assessments for
key portfolios. Climate risk controls are embedded across the financial and Operational Principal Risk types
through the Barclays Group's frameworks, policies and standards.
The Group assesses and manages its Operational risk and control environment across its businesses and
functions with a view to maintaining an acceptable level of residual risk.
Models are evaluated for approval prior to implementation, and on an ongoing basis.
The Conduct Risk Management Framework (CRMF) sets out the control objectives and minimum control
requirements which must be implemented to manage Conduct risk.
A selection of tools is mandated in the CRMF and Barclays Control Framework to support with the assessment of
conduct risks, whilst the governance of Conduct risk is fulfilled through management committees and forums
with clear escalation and reporting lines to Board-level committees.
Reputation risk is managed by embedding our Purpose and Values, and maintaining a controlled culture within the
Group, with the objective of acting with integrity, enabling strong and trusted relationships to be built with
customers and clients, colleagues and broader society. Each business assesses Reputation risk using
standardised tools and the governance is fulfilled through management committees and forums, clear escalation
and reporting lines to the Group Board.
Legal risk
The risk of loss or imposition of penalties, damages or fines from the failure of the Group to
meet its legal obligations, including regulatory or contractual requirements.
Legal risk is managed by the identification of legal risks by the Legal function, the engagement of the Legal
function in situations that have the potential for legal risk, and the escalation of legal risk as necessary.
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Viability statement
Consideration
of the long-term viability
of Barclays
The financial statements and accounts
have been prepared on a going concern basis.
Provision 31 of the 2018 UK Corporate
Governance Code requires the Directors to
make a statement in the Annual Report regarding
the viability of the Group, including an explanation
of how they assessed the prospects of the
Group, the period of time for which they have
made the assessment and why they consider
that period to be appropriate.
Time horizon
In light of the analysis summarised below, the
Board has assessed the Group’s current viability,
and confirms that the Directors have a
reasonable expectation that the Group will be
able to continue in operation and meet its
liabilities as they fall due over the next three
years. This time frame is used in management’s
Working Capital and Viability Report (WCR),
prepared at the start of February 2023. The WCR
is a formal projection of capital and liquidity based
upon formal profitability forecasts. The
availability of the WCR gives management and
the Board sufficient visibility and confidence on
the future operating environment for this time
period.
The three-year time frame has also been chosen
because:
▪
▪
▪
it is within the period covered by the formal
medium-term plans approved by the Board
which contain projections of profitability, cash
flows, capital requirements and capital
resources
it is also within the period over which internal
stress testing is carried out
it is an appropriate horizon over which to
consider the impacts of new regulations in the
financial services industry.
The Directors are satisfied that this period is
sufficient to enable a reasonable assessment of
viability to be made.
Considerations
In making its assessment the Board has:
▪ carried out a robust and detailed assessment
of the Group’s risk profile and material existing
and emerging risks (see below for further
details), in particular those risks which senior
management believes could cause the
Group’s future results of operations or
financial condition to differ materially from
current expectations or could adversely
impact the Group’s ability to meet its material
regulatory requirements
▪
reviewed how those risks are identified,
managed and controlled (further detail
provided on pages 56 to 57)
▪ considered the WCR which provides an
assessment of forecast CET1, leverage, Tier 1
and total capital ratios, as well as the build-up
of minimum requirement for own funds and
eligible liabilities (MREL) up to the end of 2025
▪ considered the Group’s Medium Term Plan
reviewed the Group’s liquidity and funding
▪
profile, including forecasts of the Group’s
internal Liquidity Risk Appetite (LRA) and
regulatory liquidity coverage ratios
▪ considered the Group’s viability under a
specific internal stress scenario (see below for
further detail)
▪ considered the stability of the major markets in
which it operates, supply chain resilience and
material known regulatory changes to be
enacted
▪ considered the sustainability of any future
capital distributions
▪ considered scenarios which might affect the
operational resilience of the Group
▪ considered factors that may inform the impact
of a severe recession in major economies with
affordability pressures on consumers from
high inflation and rising interest rates, energy
supply pressures, and financial markets
instability
▪ considered the impact of the Group’s ambition
to be a net zero bank by 2050 and support its
clients’ transition to a low-carbon economy,
including the need to continue to incorporate
climate considerations into its strategy,
business model, the products and services it
provides to customers and its financial and
non-financial risk management processes
▪
▪
reviewed the draft statutory accounts and the
financial performance of the Group
reviewed the possible impact of legal,
competition and regulatory matters set out in
Note 26 to the financial statements on pages
479 to 484.
The Group's Medium Term Plan is based on
assumptions for macroeconomic variables such
as interest rates, inflation, unemployment, which
have been consistently applied for the purpose
of forecasting the Group’s capital and liquidity
position and ratios, as well as any credit
impairment charges or releases.
Assessment of the Group's risk profile
Risks faced by the Group’s business, including in
respect of financial, conduct and operational
risks, are controlled and managed within the
Group in line with the ERMF. Executive
management sets a risk appetite for the Group,
which is then approved by the Board. Limits are
set to control risk appetite, within which
businesses are required to operate.
Management and the Board then oversee the
ongoing risk profile. Internal Audit provides
independent assurance to the Board and
Executive Committee over the effectiveness of
governance, risk management and control over
current and evolving risks.
A full set of material risks to which the
organisation is exposed can be found in the
material existing and emerging risks on pages
269 to 281 in Part 3 of the Report.
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Viability statement (continued)
Certain risks are additionally identified as key
themes and monitored closely by the Board and
Board Committees. These are chosen on the
basis of their potential to impact viability during
the time frame of the assessment but in some
instances the risks may continue beyond this
time frame.
These particular risks include:
▪ the potential impact of: (i) further rises in cost
of living pressures including inflation and
interest rates, particularly in developed
markets and the possibility of elevated
unemployment; (ii) a resurgence in COVID-19
and/or restrictions on movement imposed
locally to combat outbreaks or new strains; and
(iii) further trading disruption between the UK
and the EU and general supply chain
disruption. These risks may result in an
adverse impact on profitability and capital
through increased costs and increased
expected credit losses
failure to successfully adapt the Group’s
operations and business strategy to address
the financial risks resulting from both: (i) the
physical risk of climate change; and (ii) the risk
from the transition to a low-carbon economy
legal proceedings, competition, regulatory and
conduct matters giving rise to the potential
risk of fines, loss of regulatory licences and
permissions and other sanctions, as well as
potential adverse impacts on our reputation
with clients and customers and on investor
confidence and/or potentially resulting in
adverse impacts on capital, liquidity and
funding
▪
▪
▪ sudden shocks or geopolitical instability in any
of the major economies in which the Group
operates which could alter the behaviour of
depositors and other counterparties, affect
the ability of the firm to maintain appropriate
capital and liquidity ratios or impact the
Group's credit ratings
▪ evolving operational risks (notably cyber
security, technology and resilience) and the
ability to respond to the new and emerging
technologies in a controlled fashion.
As a universal bank with a diversified and
connected portfolio of businesses, servicing
customers and clients globally, the Group is
impacted in the longer term by a wide range of
macroeconomic, political, regulatory and
accounting, technological, social and
environmental developments. The evolving
operating environment presents opportunities
and risks in respect of which we continue to
evaluate and take steps to appropriately adapt
our strategy and its delivery.
Stress tests
The Board has also considered the Group’s
viability under a specific internal stress scenario.
The latest macroeconomic internal stress test,
conducted in Q4 2022, was informed by the Bank
of England 2022 regulatory stress test with the
following narrative:
• high and persistent inflation (peaks at 17%)
coupled with rising global interest rates (peak
6% UK, 6.5% US) in an attempt to curb inflation
drives considerable affordability pressures on
customers
• severe UK recession brought by falling
household real incomes, job losses leading to
8.5% unemployment rate, declining economic
confidence and tight financial conditions.
Other major economies experience very
similar shocks
• cost of goods increase coupled with energy
price inflation at a time of falling demand
putting significant pressure on small and
medium businesses, increasing their default
rates
• residential house prices in the UK decline 31%.
Commercial real estate prices are stressed
even more, at 45%, reflecting more cyclical
occupier demand and contagion effects from
the financial markets.
The above stress test outcome for the
macroeconomic internal stress test assesses
the Group's full financial performance over the
horizon of the scenario in terms of profitability,
capital, liquidity and leverage to ensure the Group
remains viable.
Climate risk was not part of the internal stress
test this year but is being explored separately as
part of a pilot scenario analysis assessing tail
event climate risks.
Additionally, the Board considered the results of
the following external climate-related stress
tests:
• The BoE announced in Q2 the results of the
Climate Stress Test undertaken in 2021 which
considered the impact of three climate
scenarios covering both 'transition' and
'physical' risks. This was an exploratory
exercise across the banking industry with a
focus on the banking book. The aim was to size
financial exposures to climate-related risks,
understand the challenges to business models
from these risks and enhance management of
climate-related financial risks. The exploratory
nature of the exercise was specifically stated,
acknowledging climate stress testing
capabilities are in their infancy hence it was not
used to set capital requirements.
• in addition, Barclays Bank Ireland undertook
the ECB Climate Risk Stress Test (CRST), an
exploratory exercise designed to test both the
Bank's Climate Risk Framework as well as its
financial resilience to climate risk.
The Group-wide stress testing framework also
includes internal reverse stress testing
assessments, conducted once a year, which aim
to identify the circumstances under which the
Group’s business model would no longer be
viable, leading to a significant change in business
strategy and to the identification of appropriate
mitigating actions. Examples include extreme
macroeconomic downturn (‘severely adverse’)
scenarios, or specific one-off events, covering
both operational risk and capital/liquidity items.
Reverse stress testing is used to help support
ongoing risk management and is an input to the
Group’s recovery planning process.
Legal proceedings, competition, regulatory and
remediation/redress conduct matters are also
assessed as part of the stress testing process.
Capital and LRA are set at a level designed to
enable the Group to withstand various stress
scenarios. As part of this process, management
also identified actions, including cost reductions
and withdrawal from lines of business, available to
restore the Group to its desired capital flight
path. These internal stress tests informed the
conclusions of the WCR.
The results of the macroeconomic internal
stress test were approved by the Board Risk
Committee and allowed the Board to approve
the Medium Term Plan as being able to sustain a
severe but plausible scenario and remain within
Risk Appetite.
Based on current forecasts, taking account of
material known regulatory changes to be
enacted and having considered possible stress
scenarios, the current liquidity and capital
position of the Group continues to support the
Board’s assessment of the Group’s viability.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Non-financial information statement
Non-financial
information statement
We use a variety of tools to track and measure our strategic
delivery, and collect both quantitative and qualitative
information to have a holistic view of our performance.
Certain elements of the non-financial information required pursuant to the Companies Act 2006
is provided within this Report by reference to the following locations:
Non-financial information
Section
Business model
Business model
Policies
Non-financial information statement
Principal Risks
Managing risk
Principal Risk management
Risk performance
Key performance indicators
Key performance indicators
*
in Part 3 of the Report
Pages
10-11
60-62
56-57
282-295*
296-369*
23-25
The Non-Financial Reporting requirements contained in Sections 414CA and 414CB of the
Companies Act 2006 are addressed within this section by means of cross reference in order to
indicate in which part of the strategic narrative the respective requirements are embedded. We have
used cross referencing as appropriate to deliver clear, concise and transparent reporting.
We have a range of policies and guidance (also available at home.barclays/esg-resource-hub/
reporting-and-disclosures/) that support our key outcomes for all of our stakeholders. Performance
against our strategic non-financial performance measures, as shown from page 23, is one indicator of
the effectiveness and outcome of policies and guidance.
Across Barclays, policies and statements of intent are in place to ensure consistent governance on a
range of issues. For the purposes of the Non-Financial Reporting requirements, these include, but are
not limited to:
Barclays PLC
Annual Report 2022 60
Environmental statements
Statement or policy
position
Climate Change
statement
Forestry and
Agricultural
Commodities
statement
Description
The Barclays Position on Climate Change sets out our approach
based on a consideration of all risk and market factors to certain
energy sectors with higher carbon-related exposures or
emissions from extraction or consumption, or those which may
have an impact in certain sensitive environments or on
communities, namely thermal coal mining, coal-fired power
generation, mountain top coal removal, oil sands, Arctic oil and
gas and hydraulic fracturing ('fracking') The statement outlines
Barclays' focus on supporting our clients to transition to a low-
carbon economy, while helping to limit the threat that climate
change poses to people and to the natural environment.
We recognise that forestry and agribusiness industries are
responsible for producing a range of commodities such as
timber, palm oil and soy that are often associated with significant
environmental and social impacts, particularly in relation to
biodiversity loss, tropical deforestation and climate change. Our
Forestry and Agricultural Commodities Statement outlines our
due diligence approach for clients involved in these activities,
ensuring that we support clients that promote sustainable
forestry and agribusiness practices while respecting the rights of
workers and local communities.
World Heritage
Site and Ramsar
Wetlands
statement
We understand that industries can impact areas of high
biodiversity value including United Nations Educational, Scientific
and Cultural Organization (UNESCO) World Heritage Sites and
Ramsar Wetlands. Our statement outlines our client due
diligence approach to preserving and safeguarding these sites.
Environmental
risk in lending
Barclays is committed to managing the direct and indirect
environmental risks associated with commercial lending.
Environmental risk is regarded as a credit risk driver, and is
considered in the Barclays credit risk assessment process
through our Environmental Risk Standard. A dedicated
Environmental and Climate Risk team is responsible for advising
on environmental and climate related credit risks to Barclays
associated with particular transactions and industries.
Environmental risks in credit are governed under the Client
Assessment and Aggregation Policy and Standard, which are
embedded within the Wholesale Credit Risk Control Framework,
which is part of the Enterprise Risk Management Framework.
Information to help
understand our Group and
its impact, policies, due
diligence and outcomes
• See our Climate and
Sustainability report
from page 69 in Part 2
of the Annual Report.
• See the managing
impacts in lending and
financing section from
page 246 in Other
Governance within
the Governance
report in Part 3 of the
Annual Report.
• See our Nature and
biodiversity section
from page 119 within
our Climate and
Sustainability report in
Part 2 of the Annual
Report.
• See our Climate risk
section within the Risk
review section from
page 282 in Part 3 of
the Annual Report.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Non-financial information statement (continued)
Barclays PLC
Annual Report 2022 61
Other Environmental-related policies and statements
Data protection
Statement or policy position
Climate Change
Financial and
Operational Risk
Policy
Description
The Climate Change Financial Risk and Operational Risk
Policy outlines the requirements and policy objectives for
assessing and managing the impact on Financial and
Operational Risks arising from the physical, transition and
connected risks associated with climate change. This
incorporates identification, measurement, management and
reporting. Financial and Operational Risks / Themes
associated with Climate Change are being managed in
accordance with the requirements set out in this policy.
Governance and Financial Crime statements
Statement or policy position
Financial Crime:
Bribery and
corruption
Description
The Financial Crime Policy is designed to ensure that
Barclays' employees know how to identify and manage the
legal, regulatory and reputational risks associated with all
forms of bribery and corruption.
Financial Crime:
Anti-money
laundering and
counter-terrorist
financing
Financial Crime:
Sanctions
Barclays’ Anti-Money Laundering Policy is designed to
ensure that we comply with the requirements and
obligations set out in UK legislation, regulations, rules and
industry guidance for the financial services sector, including
the need to have adequate systems and controls in place to
mitigate the risk of the Group being used to facilitate
financial crime.
Sanctions are restrictions on activity with targeted
countries, governments, entities, individuals and industries
that are imposed by bodies such as the United Nations (UN),
the EU, individual countries or groups of countries. The
Barclays Group Sanctions Policy is designed to ensure that
the Group complies with applicable sanctions laws in every
jurisdiction in which it operates.
Information to help
understand our Group and
its impact, policies, due
diligence and outcomes
• See our Climate risk
section from page
282 in Risk Review in
Part 3 of the Annual
Report.
Information to help
understand our Group and
its impact, policies, due
diligence and outcomes
• See the Financial
Crime section from
page 246 in Other
Governance within
the Governance
report in Part 3 of the
Annual Report.
• See the Financial
Crime section from
page 246 Other
Governance within
the Governance
report in Part 3 of the
Annual Report.
• See the Financial
Crime section from
page 246 in Other
Governance within
the Governance
report in Part 3 of the
Annual Report.
Donations
Resilience
Tax
Across Barclays, the privacy and security of personal
information is respected and protected. Our Privacy website
page governs how we collect, handle, store, share, use and
dispose of information about people. We regard sound
privacy practices as a key element of corporate governance
and accountability.
Barclays works in partnership with non-profit organisations,
including charities and NGOs, to develop high-performing
programmes and volunteering opportunities that harness
the skills and passion of our employees. Barclays has chosen
to partner with a small number of organisations, allowing us
to have deeper relationships and ultimately enabling us to
have the greatest impact on our communities in which we
operate. Barclays does not accept unsolicited donation
requests.
Barclays maintains a robust resilience framework with our
clients’ and customers’ interests at the centre. Our aim is to
be able to continue delivering services and meet our clients’
and customers’ needs during business disruptions, crises,
adverse events and other types of threats.
Our Tax Principles are central to our approach to tax
planning, for ourselves or on behalf of our clients. We believe
our Tax Principles have been a strong addition to the way we
manage tax, ensuring that we take into account all of our
stakeholders when making decisions related to our tax
affairs. The same applies to our Tax Code of Conduct.
Colleagues
Statement or policy position
Description
Board Diversity
Policy
The Board Diversity Policy confirms that the Board
Nominations Committee will consider candidates on merit
against objective criteria and with due regard to the benefits
of diversity in identifying suitable candidates for
appointment to the Board.
• See the managing
data privacy, security
and resilience section
from page 246 in
Other Governance
within the
Governance report in
Part 3 of the Annual
Report.
• home.barclays/
content/dam/home-
barclays/documents/
citizenship/our-
reporting-and-policy-
positions/Barclays-
donation-
guidelines.pdf
• See the managing
data privacy, security
and resilience section
from page 246 in
Other Governance
within the
Governance report in
Part 3 of the Annual
Report.
• See the tax section
from page 246 in
Other Governance
within the
Governance report
• Barclays PLC Country
Snapshot report at
home.barclays/
annualreport
Information to help
understand our Group and
its impact, policies, due
diligence and outcomes
• See our section on
diversity within the
report of the Board
Nominations
Committee on page
161 of Part 3 of the
Annual Report
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Non-financial information statement (continued)
Barclays PLC
Annual Report 2022 62
Human Rights-related statements
Codes of conduct
Statement or policy position
Defence sector
Human rights
Modern slavery
Description
Information to help
understand our Group and
its impact, policies, due
diligence and outcomes
Barclays Statement on the Defence Sector outlines our
appetite for defence-related transactions and relationships.
We provide financial services to the defence sector within a
specific policy framework. Transactions and relationships are
assessed on a case-by-case basis and legal compliance
alone does not automatically guarantee our support.
N/A
Barclays is committed to operating in accordance with the
International Bill of Human Rights and takes account of other
internationally accepted human rights standards, including
the UN Guiding Principles on Business and Human Rights
(UNGPs). We take steps to ensure we are respecting human
rights in our own operations through our employment
policies and practices, in our supply chain through screening
and engagement, and through the responsible provision of
our products and services.
Barclays recognises its responsibility to comply with all
relevant legislation including the UK Modern Slavery Act
2015 and the Australian Modern Slavery Act 2018 (Cth). In
accordance with the requirements of these two Acts, we
release an annual Barclays Group Statement on Modern
Slavery, which outlines the actions we have taken in seeking
to identify and address the risks of modern slavery and
human trafficking in our operations, supply chain, and
customer and client relationships.
• See our managing
impacts in lending and
financing section from
page 246 in Other
Governance within
the Governance
report in Part 3 of the
Annual Report.
• See our managing
impacts in lending and
financing section
from page 246 in
Other Governance
within the
Governance report in
Part 3 of the Annual
Report.
Statement or policy position
Code of Conduct
Third-party code of
conduct
Description
The Barclays Way is our code of conduct and outlines the
Purpose, Values and Mindset which govern our way of
working across our business globally. It constitutes a
reference point covering all aspects of colleagues’ working
relationships, and provides guidance on working with
colleagues, customers and clients, governments and
regulators, business partners, suppliers, competitors and
the broader community.
Our approach to the way we do business needs to be
adopted by our suppliers when acting on behalf of Barclays.
To ensure a common understanding of our approach which
will help us collectively drive the highest standards of
conduct, we have created our Third Party Code of Conduct,
which details our expectations for Environmental
Management, Human Rights, Diversity and Inclusion; and
living the Barclays Values.
Information to help
understand our Group and
its impact, policies, due
diligence and outcomes
• See The Barclays Way
section from page
246 in Other
Governance within
the Governance
report in Part 3 of the
Annual Report.
• See our supply chain
section within the
Society section of the
strategic report from
page 43
Statement of
Commitment to
Health & Safety
Our statement itself is an expression of Barclays
commitment to managing health and safety across the
organisation to protect the safety and wellbeing of our
colleagues, customers, suppliers, and any individual using
our premises by providing and maintaining a safe working
environment that protects both physical and mental
wellbeing.
• See our health and
safety section from
page 246 in Other
Governance within
the Governance
report in Part 3 of the
Annual Report.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2022 63
ESG Ratings and Benchmarks
ESG ratings
performance
We are firmly committed to enhancing our disclosures
and in engaging with industry-led initiatives intended
to support an effective and trusted ESG
ratings market.
In 2022, we remained stable or improved for
most ratings, although we continue to focus on
improving certain underlying activities in
accordance with our overall sustainability
strategy.
Where our performance improved, we believe
this was driven by our new targets in relation to
climate, alongside enhancements in the
granularity of our disclosures.
In addition to providing key ratings agencies with
relevant data and information when requested,
we also engage when they consult on changes to
their methodologies. We recognise markets and
stakeholders need clear and consistent
information, and we fully support this objective.
While the ESG ratings market is evolving rapidly,
significant challenges remain. The ratings
landscape has increasingly become the focus of
reform. Regulators and other market participants
are looking to introduce principles to support the
consistency, clarity and robustness of ESG
ratings.
We strongly support these initiatives and are
contributing to efforts to develop a voluntary
code of conduct as a member of the ESG Data
and Ratings Code of Conduct Working Group
convened by the UK Financial Conduct Authority.
+ Please also refer to page 142 in Part 3 of the Annual Report for
details of BPLC Board consideration of matters relating to
the reporting and monitoring of ESG-related data in addition
to how we manage Climate across our Board structures
within the Other Governance section from page 246 in Part 3
of the Annual Report.
Select ESG ratings and benchmarks
MSCI ESG Rating
ISS QualityScore Environment
Scale (best to worst):
AAA to CCC
Barclays’ rating was stable
AA
2021: AA
2020: A
1
2021: 1
2020: 1
Scale (best to worst):
1 to 10
Barclays’ rating was stable
Sustainalytics ESG Risk Rating
ISS QualityScore Social
Scale (best to worst):
0-100
Barclays’ rating improved
1
Scale (best to worst):
1 to 10
Barclays’ rating was stable
2021: 1
2020: 1
ISS QualityScore Governance
Scale (best to worst):
100 to 0
Barclays’ rating declined slightly, but
relative performance improved
9
2021: 7
2020: 8
Scale (best to worst):
1 to 10
Barclays' rating declined
23.8
2021: 25.1
2020: 23.9
S&P Global CSA
75
(95th
percentile)
2021: 78
(92nd percentile)
2020: 77
(88th percentile)
CDP Climate Change
ISS ESG Corporate Score
Scale (best to worst):
A to D-
Barclays’ rating improved
A-
2021: B
2020: B
Scale (best to worst):
A+ to D
Barclays’ rating was stable
C-
2021: C-
2020: C-
FTSE Russell ESG Rating
Moody’s ESG Solutions
Scale (best to worst):
5 to 0
Barclays’ rating improved
4.7
(98th
percentile)
2021: 4.2
(92nd percentile)
2020: 4.7
(94th percentile)
Scale (best to worst):
100 to 0 with advanced (>60)
Barclays’ rating was stable
55
2021: 55
2020: 49
Note: All scores updated as of 31 December 2022.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
ESG-related reporting and disclosures
Barclays PLC
Annual Report 2022 64
ESG-related reporting and disclosures
Our approach to ESG reporting is driven by recognised external standards and frameworks. As these frameworks
evolve, we will continue to assess and amend our approach to ESG disclosures appropriately.
The aim with our ESG-related disclosures within
this Annual Report is to outline the progress we
have made over the past year on ESG criteria
that we have identified as important to our
customers and clients, shareholders and
stakeholders. Barclays continues to support
efforts for enhanced ESG reporting and
advocates for improved consistency across
disclosures, ratings and benchmarks. We support
the work of the International Sustainability
Standards Board (ISSB) and continue to
participate in a range of regional and global
industry efforts to promote increased
harmonisation on data, taxonomies and
disclosures.
ESG Additional Reporting Disclosures
Barclays provides additional disclosures within
the ESG Resource Hub. This includes our
reporting with reference to the material topics
from the Sustainability Accounting Standards
Board (SASB) and the Global Reporting Initiative
(GRI).
Our ESG-related disclosures:
ESG Resource Hub
Barclays' ESG Resource Hub provides more
detailed technical information, disclosures
and our position statements on
environmental, social and governance
matters. It is intended to be relevant for
analysts, ESG investors, rating agencies,
suppliers, clients and all other stakeholders.
+ Further details can be found on the ESG Resource Hub
at: home.barclays/sustainability/esg-resource-hub/
UN Principles for Responsible Banking (PRB)
Barclays was one of the founding signatories of
the UN PRB. We report annually on how we are
implementing the Principles.
TCFD reporting and disclosures
Our climate-related financial disclosures are now
included within this Annual Report. The majority
of the content can be found in our new climate
and sustainability report in Part 2 in addition to
the Other Governance section within the
Governance report and Risk review sections in
Part 3 of the report.
+ For further details on where to access TCFD-related topics,
ESG Data Centre
Within the ESG Resource Hub, our ESG (non-
financial) Data Centrea continues to provide a
central repository of all ESG-related data that is
published within the Barclays PLC Annual Report
as well as additional information and granularity.
please see the TCFD content index on page 65.
+ The Barclays PLC PRB Report 2022 can be found at:
home.barclays/sustainability/esg-resource-hub/reporting-
and-disclosures/
+ The ESG (non-financial) Data Centre can be accessed online
within the ESG Resource Hub at: home.barclays/
sustainability/esg-resource-hub/reporting-and-disclosures/
Note
a Re-named from ESG Data Hub to ESG Data Centre in 2022.
Annual Report
ESG-related reporting
ESG data resources
Other ESG resources
Statements and policy positions Indices
Taskforce for Climate-
related Financial
Disclosures (TCFD)
Recommendations
ESG-related disclosures
Principles for Responsible
Banking (PRB)
ESG (non-financial) Data
Centre
ESG Investor
Presentations
ESG Resource Hub - Statements
and policy positions
Global Reporting Index
(GRI)
Fair Pay report / UK Pay
Gaps report
(Tax) Country Snapshot
report
Board Diversity Policy
Diversity, Equity and
Inclusion report
Limited Independent
Assurance statement
Barclays' Sustainable
Finance Framework
BlueTrackTM Whitepaper
Corporate Transition
Forecast Model
Sustainability
Accounting Standards
Board (SASB)
KPMG LLP Limited Assurance
Barclays appoints KPMG LLP to perform limited
independent assurance over selected ESG
content, which have been marked with the
symbol Δ.
The assurance engagement was planned and
performed in accordance with the International
Standard on Assurance Engagements (UK) 3000
Assurance Engagements Other Than Audits or
Reviews of Historical Financial Information and
the International Standard on Assurance
Engagements 3410 Assurance of Greenhouse
Gas Statements. A limited assurance opinion was
issued and is available at the website link below.
This includes details of the scope, reporting
criteria, respective responsibilities, work
performed, limitations and conclusion. No other
information in this Annual Report has been
subject to this external limited assurance.
+ Further details on Limited Assurance can be found at:
home.barclays/sustainability/esg-resource-hub/reporting-
and-disclosures/
ESG disclosures
As ESG criteria have become increasingly
embedded into what we do, for the 2022
Barclays PLC Annual Report we have taken
the decision to further integrate our ESG-
related disclosures into relevant sections of
Parts 1, 2 and 3 within the Annual Report.
To clearly signpost the location of our ESG-
related disclosures, we have included a
detailed ESG Content Index within our ESG
(non-financial) Data Centre.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2022 65
TCFD Content Index
TCFD Content Index
Our climate-related financial disclosures form part of the Barclays PLC Annual Report.
UK Listing Rules statement
of compliance
This year, our climate-related financial disclosures
are included in the bank's annual report instead of a
standalone report. Our strategy is set out in the
Climate and Sustainability report, climate
governance in our Governance report and our
approach to Climate risk is in our Risk review section.
We have considered our obligations in respect of
climate-related disclosure under the UK's Financial
Conduct Authority's Listing Rules and confirm that
we have made disclosures consistent with the
relevant Listing Rules and the Taskforce for
Climate-related Financial Disclosures (TCFD)
Recommendations and Recommended
Disclosures (including the implementing guidance
set out in the 2021 TCFD Annex), save for certain
items which we describe below:
Strategy Recommendation disclosure c) relating to
quantitative climate-related scenario analysis
We have disclosed our current understanding of the
resilience of our strategy, taking into consideration
the different climate-related scenarios that we have
explored. However, in undertaking these climate
scenario exercises we are gaining a greater
understanding of the challenges and nuances of
climate scenario analysis which is in part driven by
the unique and complex features of climate science.
We recognise that we have further work to do in
order to evolve our approach to the analysis and to
reach a more comprehensive and deeper
understanding of the resilience of our business
under various climate scenarios.
The work we have already done in this regard and
which we plan to undertake in 2023 is set out in
"Resilience of our strategy" from page 128 in Part 2
of the Annual Report.
Metrics and targets Recommended Disclosures a),
Supplemental Guidance for Banks, the extent to which
lending and other financial intermediary business
activities, where relevant, are aligned with a well below
2°C scenario
We have developed a methodology for measuring
our financed emissions and tracking them at a
portfolio level in BlueTrackTM. This methodology
currently applies to six high carbon-emitting sectors
in our portfolio, five of which are tracked against the
IEA Net Zero by 2050 scenario (which is aligned with
a goal to limit global temperature rises by 1.5°C with
a 50% probability). In relation to Residential Real
Estate, we have assessed this sector against the UK
Climate Change Committee's Balanced Net Zero
(CCC BNZ) scenario, and which takes into
consideration the UK's net zero commitments and
Sixth Carbon Budget. We will continue to assess the
financed emissions across our portfolio and
measure the baseline emissions that we finance
across sectors. In particular, our commitment under
the Net-Zero Banking Alliance is to set science-
based targets for all material high-emitting sectors
(as defined by the NZBA) in our portfolio by April
2024.
We aim to assess our baseline financed emissions
across the Agriculture, Commercial Real Estate,
Aviation and Shipping sectors during 2023. This
assessment will inform our plan for target setting in
the coming years and will, together with our ongoing
work to develop a high-level modelled assessment
of our overall balance sheet emissions consistent
with the approach outlined by the Partnership for
Carbon Accounting Financials (PCAF), support our
better understanding of the extent to which our
financing aligns with a 'well below 2°C' scenario.
Looking ahead: TCFD sector specific
requirements for asset managers
We have started to assess the TCFD sector
specific guidance for asset managers (which
represents a small part of our overall business)
and are working towards reporting next year in
accordance with the FCA Enhanced Climate-
Related Disclosure Requirements for Asset
Managers, recognising the industry-wide
TCFD Content index
Section
Recommendation
challenge with data availability and accuracy to
meet these requirements. We will publish more
granular information in line with the requirements
in future reporting periods.
+ Further details on the TCFD Recommendations and
Recommended Disclosures are available at: fsb-tcfd.org
Full list of metrics and targets can be found in the ESG Data
Centre at: home.barclays/sustainability/esg-resource-hub/
reporting-and-disclosures/
Page references within
Parts 2 and 3 of the
Annual Report
155, 248 – 249
Governance
a) We describe the Board's oversight of climate-related risks and
opportunities
b) We describe management's role in assessing and managing climate-
related risks and opportunities
117, 250 – 252
Strategy
a) We describe the climate-related risks and opportunities the
organisation has identified over the short, medium and long term
74 – 76, 282, 296
– 299
b) We describe the impact of climate-related risks and opportunities on
the organisation's businesses, strategy and financial planning
77 – 126
c) We describe the resilience of the organisation's strategy, taking into
consideration different climate-related scenarios, including a 2oC or
lower scenario
128 – 135
Risk
management
a) We describe the organisation's processes for identifying and
assessing climate-related risks
b) We describe the organisation's processes for managing climate-
related risks
c) We describe how processes for identifying, assessing and managing
climate-related risks are integrated into the organisation's overall risk
management
74 – 76, 282 – 289
Metrics &
Targets
a) Our metrics used to assess climate-related risks and opportunities in
line with our strategy and risk management processes
74 – 76
b) Our Scope 1, Scope 2 and Scope 3 greenhouse gas (GHG) emissions
and the related risks
80, 88
c) Our performance against the targets used to manage climate-related
risks and opportunities and performance against targets
80, 88, 101
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
information
Barclays PLC
Annual Report 2022 66
Shareholder information
Annual General Meeting (AGM)
Location
QEII Centre, Broad Sanctuary, Westminster,
London SW1P 3EE
And virtually on an electronic platform
Date
Wednesday, 3 May 2023
Time
11.00am
The arrangements for the Company’s 2023 AGM
and details of the resolutions to be proposed,
together with explanatory notes, will be set out in
the Notice of AGM to be published on the
Company’s website (home.barclays/agm).
Preparations for the Coronation of His Majesty
The King and Her Majesty The Queen Consort in
the Westminster area of London may require
changes to the 2023 AGM arrangements set out
above. If changes are required, details will be
provided in the Notice of AGM.
Key dates
31 March 2023
Full year dividend payment date
27 April 2023
Q1 2023 Results Announcement
3 May 2023
Annual General Meeting at 11.00am
Keep your personal
details up to date
Please remember to tell Equiniti if:
• you move; or
• you need to update your bank or building
society details.
If you are a Shareview member, you can update
your bank or building society account or address
details online. If you are not a Shareview member
you can update details quickly and easily over the
telephone using the Equiniti contact details
overleaf.
Dividends
The Barclays PLC 2022 full year dividend for the
year ended 31 December 2022 will be 5.0p per
share, making the 2022 total dividend 7.25p per
share.
Dividend Re-investment Plan
Barclays offers a share alternative in the form of
a dividend reinvestment plan (DRIP) for those
shareholders who wish to elect to use their
dividend payments to purchase additional
ordinary shares, rather than receive a cash
payment. The DRIP is provided and administered
by Barclays’ registrar, Equiniti.
+ Further details regarding the DRIP can be found at
home.barclays/dividends and www.shareview.co.uk/info/drip
Dividend Payments
Barclays has made the decision that dividends
will no longer be paid by cheque. All future
dividends will be credited to a shareholder’s
nominated bank account or building society.
We believe this decision is beneficial for our
shareholders to safeguard dividends by using
a more secure payment method, as well as
removing our environmental impact of
printing and posting cheques.
It is easy to set up payment directly to your
bank account by completing a bank mandate,
meaning your money will be in your bank
account on the dividend payment date. You
can provide your bank or building society
details quickly and easily over the telephone
using the Equiniti contact details overleaf.
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Shareholder information (continued)
Shareholder security
Shareholders should be wary of any cold calls
with an offer to buy or sell shares. Fraudsters
use persuasive and high pressure techniques
to lure shareholders into high-risk
investments or scams. You should treat any
unsolicited calls with caution.
Please keep in mind that firms authorised
by the Financial Conduct Authority (FCA)
are unlikely to contact you out of the blue.
You should consider getting independent
financial or professional advice from
someone unconnected to the respective
firm before you hand over any money.
Report a scam
If you suspect that you have been
approached by fraudsters please tell the FCA
using the share fraud reporting form at
fca.org.uk/scams. You can also call the FCA
Helpline on 0800 111 6768 or through Action
Fraud on 0300 123 2040.
Donations to Charity
We launched a Share Dealing Service in October
2017 aimed at shareholders with relatively small
shareholdings for whom it might otherwise be
uneconomical to deal. One option open to
shareholders was to donate their sale proceeds
to ShareGift. As a result of this initiative, £90,379
was donated in 2022, taking the total donated
since 2017 to over £493,000.
Managing your shares online
Shareview
Barclays shareholders can go online to manage
their shareholding and find out about Barclays
performance by joining Shareview. Through
Shareview, you:
• will receive the latest updates from Barclays
direct to your email;
• can update your address and bank details
online;
• can vote in advance of general meetings.
To join Shareview, please follow these three easy
steps:
Step 1 Go to portfolio.shareview.co.uk
Step 2
Register for electronic
communications by following the
instructions on screen
You will be sent an activation code in
the post the next working day
Step 3
Returning funds to shareholders
Over 60,000 shareholders did not cash their
Shares Not Taken Up (SNTU) cheque following
the Rights Issue in September 2013. In 2022, we
continued the tracing process to reunite these
shareholders with their SNTU monies and any
unclaimed dividends and by the end of the year,
we had returned approximately £482,800 to our
shareholders, in addition to the approximately
£4.7m returned since 2015.
Useful contact details
Equiniti
The Barclays share register is maintained by
Equiniti. If you have any questions about your
Barclays shares, please contact Equiniti by
visiting
shareview.co.uk
+ 44 (0)371 384 2055
(UK & International telephone number)
+44 (0)371 384 2255
(for the hearing impaired in the UK &
international)
Aspect House
Spencer Road, Lancing, West Sussex
BN99 6DA
To find out more, contact Equiniti or visit:
home.barclays/dividends
American Depositary Receipts (ADRs)
ADRs represent the ownership of Barclays
PLC shares which are traded on the New York
Stock Exchange. ADRs carry prices, and pay
dividends, in US dollars.
If you have any questions about ADRs,
please contact Shareowner Services:
StockTransfer@equiniti.com or visit adr.com
+1 800 990 1135
(toll free in the US and Canada)
+1 651 453 2128
(outside the US and Canada)
Barclays PLC
Annual Report 2022 67
Shareowner Services
PO Box 64504, St Paul, MN 55164-0504, USA
Delivery of ADR certificates and overnight mail
Shareowner Services, 1110 Centre Point
Curve, Suite 101, Mendota Heights, MN
55120, USA
Qualifying US and Canadian resident ADR
holders should contact Shareowner Services
for further details regarding the DRIP
Shareholder Relations
To give us your feedback or if you have any
questions, please contact:
privateshareholderrelations@barclays.com
Shareholder Relations Barclays PLC
1 Churchill Place London E14 5HP
Share price
Information on the Barclays share price and
other share price tools are available at:
home.barclays/investorrelations
Copies of the Annual Report 2022
The Strategic Report 2022 and Annual Report
2022 can be downloaded from Barclays’
website home.barclays
Shareholders who wish to receive a hard copy
of the Strategic Report 2022 or Annual Report
2022 should contact Barclays’ share
registrars, Equiniti.
Alternative formats
Shareholder documents can be provided in
large print, audio CD or Braille free of charge
by calling Equiniti.
+44 (0)371 384 2055a
(UK & International telephone number)
Audio versions of the Strategic Report
will also be available at the AGM.
Note
a Lines open 8.30am to 5.30pm (UK time) Monday to Friday,
excluding public holidays.
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Barclays PLC
Annual Report 2022 68
Important Information
Subject to Barclays PLC’s 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.
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.
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
directors, officers and employees of the Group
(including during management presentations) 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 levels, costs, assets and liabilities,
impairment charges, provisions, capital, leverage
and other regulatory ratios, capital distributions
(including dividend policy and share buybacks),
return on tangible equity, projected levels of
growth in banking and financial markets, industry
trends, any commitments and targets (including
environmental, social and governance (ESG)
commitments and targets), business strategy,
plans and objectives for future operations and
other statements that are not historical or
current facts. By their nature, forward-looking
statements involve risk and uncertainty because
they relate to future events and circumstances.
Forward-looking statements speak only as at the
date on which they are made. Forward-looking
statements may be affected by a number of
factors, including, without limitation: changes in
legislation, regulation and the interpretation
thereof, changes in IFRS and other accounting
standards, including practices with regard to the
interpretation and application thereof and
emerging and developing ESG reporting
standards; the outcome of current and future
legal proceedings and regulatory investigations;
the policies and actions of governmental and
regulatory authorities; the Group’s ability along
with governments and other stakeholders to
measure, manage and mitigate the impacts of
climate change effectively; environmental, social
and geopolitical risks and incidents and similar
events beyond the Group’s control; the impact of
competition; capital, leverage and other
regulatory rules applicable to past, current and
future periods; UK, US, Eurozone and global
macroeconomic and business conditions,
including inflation; volatility in credit and capital
markets; market related risks such as changes in
interest rates and foreign exchange rates; higher
or lower asset valuations; changes in credit
ratings of any entity within the Group or any
securities issued by it; changes in counterparty
risk; changes in consumer behaviour; the direct
and indirect consequences of the conflict in
Ukraine on European and global macroeconomic
conditions, political stability and financial
markets; direct and indirect impacts of the
coronavirus (COVID-19) pandemic; instability as
a result of the UK’s exit from the European Union
(EU), the effects of the EU-UK Trade and
Cooperation Agreement and any disruption that
may subsequently result in the UK and globally;
the risk of cyber-attacks, information or security
breaches or technology failures on the Group’s
reputation, business or operations; the Group’s
ability to access funding; and the success of
acquisitions, disposals and other strategic
transactions. A number of these factors are
beyond the Group’s control. As a result, the
Group’s actual financial position, results, financial
and non-financial metrics or performance
measures or its ability to meet commitments and
targets 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 the description of material existing
and emerging risks from page 269 of this Annual
Report.
Climate and sustainability report
The Climate and sustainability report is Part 2 of Barclays PLC 2022 Annual Report.
Parts1, 2 and 3 of Barclays PLC 2022 Annual Report together comprise Barclays PLC's annual
accounts and report for the purposes of Section 423 of the Companies Act 2006.
TCFD Strategy Recommendation A:
Describe the climate-related risks and
opportunities the organisation has identified over
the short, medium, and long term.
TCFD Strategy Recommendation B:
Describe the impact of climate-related risks and
opportunities on the organisation’s businesses,
strategy, and financial planning.
TCFD Strategy Recommendation C:
Describe the resilience of the organisation’s
strategy, taking into consideration different
climate-related scenarios, including a 2°C or
lower scenario.
Risks and opportunities
Risks
Opportunities
73
74
76
Resilience of our strategy
Scenario analysis
Resilience of our strategy,
taking into consideration different
climate-related scenarios
Macro-dependencies and objectives
Important information / disclaimers
127
128
135
135
136
Implementing our climate strategy
Achieving net zero operations
Operational footprint dashboard
All other narrative
Reducing our financed emissions
BlueTrackTM dashboard
All other narrative
Financing the transition
Sustainable finance dashboard
All other narrative
Working with our clients
Embedding ESG into our business
Just transition and nature and biodiversity
Engaging with industry
Barclays' approach to public policy
77
78
80
81
85
88
89
99
101
102
103
117
119
122
126
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Annual Report 2022 70
Introduction
Barclays' Climate Strategy
Our climate strategy is driven by considerations of all relevant risks as well
as our Purpose to deploy finance responsibly to support people and businesses,
acting with empathy and integrity, championing innovation and sustainability for the
common good and the long term.
1
Achieving net
zero operations
2
Reducing our
financed emissions
3
Financing
the transition
Barclays is working to reduce its Scope 1,
Scope 2 and Scope 3 operationala emissions
consistent with a 1.5°C aligned pathway and
counterbalance any residual emissions.
Barclays is committed to aligning its financing
with the goals and timelines of the Paris
Agreement, consistent with limiting the
increase in global temperatures to 1.5°C.
Barclays is helping to provide the green and
sustainable finance required to transform the
economies, customers and clients we serve.
Our strategy is underpinned by the way we assess and manage our exposure to climate-related risk.
The financial sector has an important role to play
in helping to address climate change. The final
decision text from COP27 stated that $4trnb per
year needs to be invested in renewables to be
able to reach net zero emissions by 2050 and
furthermore, a global transformation to a low-
carbon economy is expected to require
investments of between $4-6trnb per year.
As a global universal bank, Barclays is well-
positioned to help scale the new climate
technologies that will decarbonise industries and
create green jobs. We are determined to play our
part by leveraging our experience as an adviser,
bank and investor (through our Sustainable
Impact Capital Programme) to help the transition
to a low-carbon economy.
In March 2020, we announced our ambition to be
a net zero bank by 2050, becoming one of the
first banks to do so. We have a three-part
strategy to turn our net zero ambition into
action.
Our strategy is underpinned by the way we
assess and manage our exposure to climate-
related risk. Climate risk became a Principal Risk
in January 2022 under Barclays’ Enterprise Risk
Management Framework, reflecting the
complexity of the risks associated with a
changing climate and decarbonising the
economy.
+ Further details on how we identify and consider the impact of
Climate risk on other Principal Risks facing Barclays can be
found from page 273 to 289.
Barclays recognises the importance of a just
transition in planning the transition towards a
low-carbon economy.
+ Further details of our work on a just transition can be found
on page 119.
We also recognise the important role of the
financial sector in stewarding responsible finance
towards a nature-positive future.
+ Further details on how we're considering nature and
biodiversity can be found on pages 119 to 120.
Notes
a We define our Scope 3 operational emissions to include supply chain,
waste, business travel and leased assets.
b $4-6trn as referenced at COP27 at unfccc.int/documents/624444 as
well as the United Nations Environment Programme - Emissions Gap
Report 2022 at unep.org/resources/emissions-gap-report-2022.
Our approach to TCFD climate-
related financial disclosures
The Climate and sustainability report
includes disclosures related to the Strategy
and certain Metrics and Targets sections of
the TCFD Recommendations. This includes
the opportunities and risks identified as
having an impact on Barclays over the
short, medium and long term, our climate
strategy, and our approach to scenario
analysis and the resilience of our strategy.
The TCFD Risk Management disclosures
can be found in the Risk review on page
282, and the TCFD Governance disclosures
can be found in the Governance report on
page 246.
We have provided a TCFD index on page 65
for ease of reference.
Barclays is participating in the FCA sandbox
for the Transition Plan Taskforce. We have
voluntarily considered elements of the
November 2022 Transition Plan Taskforce
guidance in preparing this report.
During 2023, we will look to further develop
elements of our climate disclosures
including transition planning, scenario
analysis, stress testing, physical risk
assessment, and embedding climate into
strategy and financial planning. This will be
reflected in future disclosures.
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Barclays PLC
Annual Report 2022 71
Introduction (continued)
Our strategy, selected targets and progress
The table below sets out selected targets and policies we have previously announced,
progress against them, and the new announcements we are now making.
Strategic pillar
1.Achieving net zero
operations
By end 2025
Energy
Previously announced target/policy
• 100% renewable electricity sourcing for our global real estate
portfolio by end of 2025
Progress
2022 performance
100%Δ sourced
Reduction of GHG
emissions
• 90% reduction in Scope 1 and 2 GHG emissions (market-based,
−91%Δ reduction
against a 2018 baseline)
New announcement
We are working towards the following milestones
• By end of 2035, 115 kWh/m2/year average energy use intensity
across our corporate offices, against a 2022 baseline of 265
kWh/m2/year
• By end of 2035, 10 MW on-site renewable electricity capacity
installed across our global real estate portfolio, against a 2022
baseline of 0.26 MW
• By end 2030, 90% of our suppliers, by addressable spend, to
have science-based GHG emissions reduction targets in place
• By end 2030, 50% GHG supply chain emissions reduction
against a 2018 baseline
• By end 2050, 90% GHG supply chain emissions reduction
against a 2018 baseline
2.Reducing our
By the end of 2030
financed emissions
Energy
Portfolio reduction
targets/convergence
point
Power
Cement
Steel
• 40% reduction in absolute CO2e emissions against a 2020
baseline of 75.7Δ MtCO2e (Scopes 1, 2 & 3)
• 50-69% reduction in CO2e emissions intensity against a 2020
baseline of 331Δ kgCO2e/MWh (Scope 1)
• 20-26% reduction in CO2e emission intensity against a 2021
baseline of 0.625Δ tCO2e/t (Scopes 1 & 2)
• 20-40% reduction in CO2e emissions intensity against a 2021
baseline of 1.945Δ tCO2e/t (Scopes 1 & 2)
Automotive manufacturing N/A
Residential real estate
N/A
Cumulative change
By the end of 2030
-32%
-9%
-2%
-11%
N/A
N/A
N/A
N/A
N/A
N/A
• 40-64 % reduction in CO2e emissions intensity against a 2022
baseline of 167.2Δ gCO2e/km (Scopes 1, 2 & 3)
• Convergence point: 40% reduction in CO2e emissions intensity
against a 2022 baseline of 32.9Δ kgCO2e/m2 (Scopes 1 & 2)
Notes:
Δ 2022 data subject to independent Limited Assurance under ISAE(UK)3000 and ISAE3410. Current and previous limited assurance scope and opinions can be found within the ESG Resource Hub for further details: home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/
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Annual Report 2022 72
Introduction (continued)
Strategic pillar
2.Reducing our
Existing restrictions in relation to thermal coal financing will continue to apply other than as updated below
Previously announced target/policy
New announcement
• By 2030: in the UK and EU – phase out of financing to clients engageda in coal-
• By 2030: in EU and OECD phase out of financing to clients engageda in coal-
financed emissions
Thermal coal power policy
Restrictive policies
fired power generation. In the rest of the world (including USA) – no financing to
clients that generate more than 10% revenue from coal-fired power generation
• By 2035: phase out of financing to clients engaged in coal-fired power
generation
Oil sands policy
• We will only provide financing to oil sands exploration and production clients
who have projects to reduce materially their overall emissions intensity, and a
plan for the company as a whole to have lower emissions intensity than the level
of the median global oil producer by the end of the decade.
fired power generation. In the rest of the world, no longer provide financing to
clients that generate more than 10% of revenue from coal-fired power
generation
• By 2035: phase out financing to clients engaged in coal-fired power generation
We will not provide financing:
• To oil sands exploration and production companiesb ; or
• For the construction of new (i) oil sands exploration, production and/or processing
assets; or (ii) oil sands pipelinesc.
Strategic pillar
3.Financing the
transition
Previously announced target/policy
Progress
Previously announced target
Sustainable financing
• Facilitate £150bn of social, environmental and sustainability-
linked financing between 2018 and 2025
• Facilitate £100bn green financing between 2018 and 2030
2022 performance
• £54.3bnΔ (Cumulative
performance: £247.6bnΔ)
• £25.5bnΔ (Cumulative
performance: £87.8bnΔ)
New announcement
Announced in December 2022
• Facilitate $1trn of Sustainable and Transition Financing
between 2023 and end of 2030
Sustainable Impact Capital
•
Invest up to £175m of Barclays’ own capital in environmentally-
focused early-stage companies by 2025
• £35m (£89m invested by
•
the end of 2022)
Increase investment of Barclays’ capital in global climate tech
start-ups up to £500m by the end of 2027
Notes:
a A client is defined as "engaged in" coal-fired power generation if the client earns >5% revenue from that activity.
b Oil sands exploration and production companies are those that majority own (>50%) or operate oil sands exploration, production and processing assets, other than companies that generate less than 10% of revenue from these activities.
c Oil Sands Pipelines are pipelines whose primary use is for the transportation of crude oil extracted from oil sands.
Δ 2022 data subject to independent Limited Assurance under ISAE(UK)3000 and ISAE3410. Current and previous limited assurance scope and opinions can be found within the ESG Resource Hub for further details: home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/
Risk and opportunities
TCFD Strategy Recommendation A:
Describe the climate-related risks and
opportunities the organisation has identified over
the short, medium, and long term.
TCFD Strategy Recommendation B:
Describe the impact of climate-related risks and
opportunities on the organisation’s businesses,
strategy, and financial planning.
TCFD Strategy Recommendation C:
Describe the resilience of the organisation’s
strategy, taking into consideration different
climate-related scenarios, including a 2°C or
lower scenario.
Risks and opportunities
Risks
Opportunities
73
74
76
Resilience of our strategy
Scenario analysis
Resilience of our strategy,
taking into consideration different
climate-related scenarios
Macro-dependencies and objectives
Important information / disclaimers
127
128
135
135
136
Implementing our climate strategy
Achieving net zero operations
Operational footprint dashboard
All other narrative
Reducing our financed emissions
BlueTrackTM dashboard
All other narrative
Financing the transition
Sustainable finance dashboard
All other narrative
Working with our clients
Embedding ESG into our business
Just transition and nature and biodiversity
Engaging with industry
Barclays' approach to public policy
77
78
80
81
85
88
89
99
101
102
103
117
119
122
126
Barclays PLC
Annual Report 2022 74
The tables below summarise the nature, drivers
and potential impacts of physical and transition
risks. Analysis of these drivers is undertaken as
part of Barclays' annual review of elevated
sectors, clients operating in these sectors and
monthly horizon scanning of new developments
leading to climate-related risks. These risk
drivers have been assessed through qualitative
analysis, external research and expert views.
Quantitative analysis is also undertaken through
our programme of scenario analysis.
+ Further details on how Barclays approaches scenario analysis
can be found on pages 128 to 134.
The feedback effects of climate risk drivers
through macro and micro transmissions
channels are observed in Barclays' portfolio
through traditional risk categories such as credit
risk, market risk, operational risk etc. The
approach to identify, measure and manage
climate-related risks is consistent with other key
risks, however the significant impact climate-
related financial risks are most likely to
materialise in the longer term.
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Risk and opportunities (continued)
TCFD Strategy Recommendation (a)
Climate-related risks identified over
the short, medium and long term
Our climate strategy is underpinned by the
way we assess and manage our exposure to
climate-related risk. Climate risk became a
Principal Risk within the Barclays Enterprise
Risk Management Framework from 2022.
We broadly categorise climate risks into three
categories – transition risk, physical risk and
connected risk. Within these, we identify risk
drivers from climate change which we monitor
over the short, medium and long term.
Transition risks
As the world transitions to a low-carbon
economy, financial institutions such as Barclays
may face significant and rapid developments in
stakeholder expectations, policy, law and
regulation which could impact the lending
activities Barclays undertakes, as well as the risks
associated with its other portfolios, and the value
of Barclays’ financial assets.
As new policies and regulations are enforced,
market sentiment and societal preferences
change and new technologies emerge, this may
result in increased costs and reduced demand
for product and services of a company, early
retirement and impairment of assets, decreased
revenue and profitability for Barclays customers.
This in turn may impact creditworthiness of
customers and their ability to repay loans.
Additionally, Barclays may face greater scrutiny
of the type of business it conducts, adverse
media coverage, reputational damage, and an
increase in financial and operational risks, which
may impact customer demand for Barclays’
products, returns on certain business activities
and the value of certain assets and trading
positions resulting in impairment charges.
Physical risks
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,
shortage of raw materials and products due to
supply chain disruptions, significant changes in
asset prices, and profitability of industries.
Damage to properties, and operations of
borrowers could decrease production capacity,
increase operating costs, impair asset values and
the creditworthiness of customers leading to
increased default rates, delinquencies, write-offs
and impairment charges in Barclays’ portfolios. In
addition, Barclays’ premises and infrastructure
may also suffer physical damage due to weather
events leading to increased costs for Barclays.
Connected risks
In addition, the impacts of physical and transition
climate risks can lead to second order connected
risks, which have the potential to affect Barclays’
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 Barclays’
clients, higher expected credit losses (ECLs), and
increased charge-offs and defaults among retail
customers.
When considering climate-related risks, Barclays
has categorised short, medium and long term to
mean the following timescales:
• Short term (S) - 0-1 year
• Medium term (M) - 1-5 years
• Long term (L) - 5-30 years
Climate change as a driver of risk
Climate change may lead to economic and
operational impacts and may increase the
likelihood or severity of other risks, for example:
• cyclical: amplifying economic cycles, including
deeper troughs
• event-driven: a singular event or series of
events, for example severe weather events
leading to physical risk impacts
• structural: macroeconomic shifts as
economies transition to a low-carbon
economy, driven by regulatory tightening such
as introduction of carbon pricing mechanisms,
emission trading schemes and technology
evolution.
There is potential for tail risks and tipping points,
including from chronic physical risks that are not
currently clearly understood. This might include
impacts from lack of access to clean water, mass
human migration due to inhospitable conditions,
biodiversity and ecosystem services loss, second
order impacts on food chain, or conflict resulting
from competition for environmental resources.
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Barclays PLC
Annual Report 2022 75
TCFD Strategy Recommendation (a)
Transition risks
Example drivers
Potential impacts - examples
Expected time horizon
Classification
Primary risks impacted
Secondary risks impacted
Trend
Physical risks
Example drivers
Policy and Regulatory
Legal
Technology
Market
• Disruptive substitute technologies being
• Shift in Consumer preferences
• Carbon tax impacting sectors and clients
• Tightening of emissions and energy
efficiency standards
•
Imposing an absolute cap on GHG
emissions at manufacturing sites
• Enhanced GHG reporting obligations
•
•
Increased operating cost for compliance
Increased capital expenditure to meet
regulatory standards
• Operating constraints
• Write-offs and early retirement of assets
•
•
• Government and non-governmental
organisations taking litigation actions
Imposing legal liabilities on firms for their
contribution to physical impacts of
climate change
favoured because of lower carbon
footprint
• Development of emissions capture and
recycling facilities
•
Investments in new technologies
• Alternatives to fossil fuel
Increased costs due to fines and
penalties from class action damages
•
Impairment of assets and early
retirement of assets
• Changes in the valuation of assets
• Decreased demand for products and
• Research and development expenditure
in new technologies
• Changes in supply and demand of raw
materials
• Shareholder perceptions and consumer
pressures
• Changing market sentiment
•
•
Increased costs and reduced demand for
products and services
Increased production costs due to changing
input prices and output requirements
services
• Costs for adoption of new practices and
• Decreased revenue and repricing of assets
Sa, M, L
Sa, M, L
Event-driven, Structural
Event-driven, Structural
processes
Sa, M, L
Structural
Sa, M, L
Structural
Credit Risk, Market Risk, Treasury and Capital Risk, Operational Risk, Reputational Risk
Conduct Risk, Legal Risk
Increasing
Increasing
Stable
Stable
Acute
Chronic
• Damage to fixed assets and infrastructure (property, power supplies) by climate events
• Change in weather and precipitation patterns resulting in reduced agricultural yields and
such as wildfires
land no longer suitable for farming
• Adverse impact on agriculture and production of soft commodities due to drought
• Potential population migration due to inhabitable land
• Transport difficulties and damage to infrastructure due to severe storm and flooding
Potential impacts - examples
•
Increased costs due to damage to facilities
•
Increase in sea levels and consequent coastal erosion requiring building of new seawall
and flood defences
• Rising temperatures resulting in diminished productivity and health issues
• Reduced revenue from decreased production capacity and early retirement of assets
• Reduced revenue from decreased production capacity
• Decrease in property values
•
Increased operating costs and decrease in sales due to unavailability of raw materials
and supply chain disruptions
•
Increased costs and insurance for assets in high risk locations
• Reduced revenue from lower sales and output
Expected time horizon
Classification
Primary risks impacted
Secondary risks impacted
Trend
Sa, M, L
Event-driven
M, L
Structural
Credit Risk, Market Risk, Treasury and Capital Risk, Operational Risk, Reputational Risk
Conduct Risk, Legal Risk
Increasing
Increasing
Notes:
a Whilst these risks will start to manifest over these time horizons, we expect financial impact in the short term to be immaterial based on current information / circumstances, with no specifically identified charges related to climate risk in the 2022 reported expected credit losses.
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Risk and opportunities (continued)
Barclays PLC
Annual Report 2022 76
TCFD Strategy Recommendation (a)
Climate-related opportunities
identified over the short, medium
and long term
During 2022, Barclays completed a review
and assessment of the global market
opportunity for sustainable financing,
focusing on the period to 2030 (i.e. short and
medium term). This work considered the
opportunity arising from the global
transition to a low-carbon economy that will
be needed if the world is to avoid the worst
effects of climate change and the
opportunity for the financial community to
play its part in supporting the global
Sustainable Development Goals. The work
considered the size of the market
opportunity and the potential addressable
market for Barclays.
The work identified three thematic areas of
potential opportunity for Barclays:
• Energy Transition Finance, including
renewables and nascent/early-stage climate
technologies that will need financing to scale
as they support the transition to net zero
• Sustainable Finance Instruments, consisting
of non-climate-related financial instruments,
specifically social, sustainability-linked and
transition bonds/loans
• Retail and Business Banking, which focuses on
BUK and the retail market, including green
mortgages (including retrofitting), electric
vehicle loans and SME lending.
These three thematic areas cut across Barclays'
businesses and do not align precisely to individual
product and service areas or reporting
segments. It is recognised that some
technologies or solutions that will facilitate the
world to align to net zero are not yet fully
developed and will likely come to maturity
beyond 2030. We will continue to review this area
closely.
Following the analysis of market demand for
sustainable financing, together with a review of
the Group's capabilities, in December 2022 we
announced a new target to facilitate $1trn of
Sustainable and Transition Financing between
2023 and the end of 2030.
+ Further details of Barclays' sustainable finance targets can be
found on page 99 and further details on how Barclays'
products and services are harnessing this opportunity on
pages 103 to 116.
Assessing the market opportunity
To determine the addressable global market
for sustainable finance to 2030, Barclays
leveraged widely used and credible third-
party sources including the IEA, IRENA,
Climate Bonds Initiative and the IFC, as well
as Barclays' own industry, ESG and market
research. The analysis considered the
investment needed through to 2030 for the
world to align to net zero, including
accelerated scenarios reflecting possible
policy and market developments.
Having determined the global addressable
market, Barclays developed scenarios for
the bank’s potential market for various asset
classes, product sets, technological sectors
and geographic markets, validated through
comparison with historic growth rates and
our projected share of the overall market.
Energy Transition Finance
The analysis indicated that based on current
policy, technology and market developments,
Energy Transition Finance represents an
estimated 10-year addressable opportunity of
over $16trn across North America, Europe and
Asia Pacific (excluding China). This extends to up
to $24trn over the same time period if policy,
technology and market developments step up to
deliver on net zero by 2050. This consists of a
number of mature and scaling technologies but
with renewable energy (including wind and solar)
and low emissions transport (including electric
vehicles, fuel cell electric vehicles and mass
transit) expected to make up over half of the
addressable market through to 2030.
Alongside this, there are significant longer-term
opportunities in financing the scaling of
capabilities in nascent technologies such as
carbon capture utilisation and storage (CCUS)
and hydrogen solutions, which we hope to
capture as part of our $1trn target between 2023
and the end of 2030.
Sustainable Finance Instruments
Sustainable Finance Instruments represent an
estimated $3.5-6trn annual issuance opportunity
through to 2030 across North America, Europe
and Asia Pacific (excluding China), with Europe
expected to remain the primary market for ESG
debt. It was c.60% of global issuance in 2021.
While green bonds represented the largest
individual market at c.$500 bn in 2021, all ESG
instruments are expected to grow, including
social loans/bonds (promoting positive social
outcomes), sustainable loans/bonds (serving
both green and social projects) and
sustainability-linked bonds (loans/bonds indexed
to green or social KPIs).
The analysis indicated that ESG debt (excluding
green bonds and loans) represents an estimated
10-year $400-650 bn cumulative financing
opportunity for Barclays based on our current
global market share in sustainable finance
instruments.
We see opportunities to expand our share and
drive growth, particularly in the Utilities, Energy
and Public Sector sectors and in sustainability-
linked instrument issuances. Alongside growing
green finance, we recognise we must also tackle
the decarbonisation of "hard to abate" sectors
that are carbon intensive, including through
scaling and commercialising new technologies
such as hydrogen and carbon capture, Barclays is
developing a framework for such transition
financing during 2023.
Retail and Business Banking
Within the UK, sustainable opportunities in Retail
and Business Banking represent a $225-286bn
market opportunity by 2025, increasing to an
estimated $640bn-1trn by 2030. This projected
growth is split across three main sectors:
• green home loans,
• electric vehicle (EV) financing, and
• green SME lending.
Green home loans, including green mortgages
for existing and new homes and retrofit financing,
represent the largest individual market at
$140-170bn in 2025, growing to $400-600bn in
2030, with new homes mortgages representing
the largest proportion of the opportunity at
c.60-70%. Growth is mainly dependent on UK
government delivering on its ambition to achieve
net zero. We recognise there are significant
dependencies for that ambition to be realised.
+ Further details of the drivers of change in the Residential Real
Estate sector can be found on page 93.
EV financing of new and used auto loans has an
estimated 10-year addressable market of
$240-400bn for Barclays, with EV sales expected
to increase 10-fold in the next 10 years, reaching
up to 97% of annual car sales by 2030 in the UK.
Barclays expects the markets to be primarily
driven by policy and legislation, for example, the
UK policy to ban sale of new petrol and diesel cars
from 2030.
Green SME lending represents a $10-16bn
opportunity by 2030. Our analysis focuses on
three sectors - agriculture, non-residential
buildings and manufacturing and construction -
with retrofitting non-residential buildings being the
largest market opportunity at c.$7-10bn.
Implementing our climate strategy
TCFD Strategy Recommendation A:
Describe the climate-related risks and
opportunities the organisation has identified over
the short, medium, and long term.
TCFD Strategy Recommendation B:
Describe the impact of climate-related risks and
opportunities on the organisation’s businesses,
strategy, and financial planning.
TCFD Strategy Recommendation C:
Describe the resilience of the organisation’s
strategy, taking into consideration different
climate-related scenarios, including a 2°C or
lower scenario.
Risks and opportunities
Risks
Opportunities
73
74
76
Resilience of our strategy
Scenario analysis
Resilience of our strategy,
taking into consideration different
climate-related scenarios
Macro-dependencies and objectives
Important information / disclaimers
127
128
135
135
136
Implementing our climate strategy
Achieving net zero operations
Operational footprint dashboard
All other narrative
Reducing our financed emissions
BlueTrackTM dashboard
All other narrative
Financing the transition
Sustainable finance dashboard
All other narrative
Working with our clients
Embedding ESG into our business
Just transition and nature and biodiversity
Engaging with industry
Barclays' approach to public policy
77
78
80
81
85
88
89
99
101
102
103
117
119
122
126
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Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b) | Strategic Pillar 1
Achieving net zero operations
Our operational GHG emissions by scope
Although financed emissions account for
the greatest proportion of our climate
impact, addressing our operational
emissions is also important in meeting our
ambition to be a net zero bank by 2050. We
are aiming to integrate sustainability into
every aspect of how we run our business,
from decarbonising our operations to
managing our impact on biodiversity and
nature.
Defining net zero operations
To reflect our commitment to reducing
operational emissions beyond our Scope 1 and
Scope 2 emissions, we are explicitly adding
Scope 3 operational emissions to our net zero
operations ambition.
We now define net zero operations as the state
in which we will achieve a greenhouse gas
reduction of our Scope 1, Scope 2 and our Scope
3 operationala emissions consistent with 1.5oC
aligned pathway and counterbalance any residual
emissions.
The standards available to understand and define
net zero are rapidly evolving. We will continue to
review and develop our own approach to net zero
operations as this subject area matures.
Scope 1
Scope 2
Scope 3
Emissions from our
corporate vehicles’ exhaust,
natural gas from our
building boilers and the
generators we might run
Emissions from the energy
sources we use to power
our data centres, branches,
campuses and offices
Emissions from our
upstream and downstream
activities such as purchase
of products and services,
waste generated and air
travel
Fuel
combustion
Energy
purchased
Fugitive emissions
Supply chain
Waste
Company cars
Leased assets
Business travel
Barclays PLC
Annual Report 2022 78
Net zero operations strategy
Our net zero operations strategy has two
components:
• Reduce our Scope 1 and 2 emissions through
energy efficiency, electrification of our
buildings and vehicles, renewable energy
sourcing and replacing fossil fuels with low
emission alternatives.
• Reduce Scope 3 operational emissions by,
engaging with our key stakeholders including
suppliers and colleagues to track, manage and
reduce their GHG emissions, while embedding
net zero principles across our policies and
contractual requirements.
Note:
a We define our Scope 3 operational emissions to include supply chain,
waste, business travel and leased assets
Notes:
• Our reporting of supply chain emissions includes the following GHG Protocol Scope 3 categories: Category 1: Purchased Goods and Services,
Category 2: Capital Goods, Category 4: Upstream transportation and distribution. In 2022 we reported GHG emissions of Categories 1, 2 and 4
by aggregating these under Category 1. It is our intent to assign emissions to each of these separate categories in due course.
Leased assets include our third party co-located data centres and property we lease out to tenants
•
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Annual Report 2022 79
TCFD Strategy Recommendation (b) | Strategic Pillar 1
Progress to date
We achieved our 90% GHG market-based
emissions reduction target for Scope 1 and 2,
having reduced our Scope 1 and 2 emissions by
91% since 2018 and sourced 100% renewable
electricity for our global real estate portfolioa in
2022.
We achieved our renewable electricity target
ahead of schedule by matching 100% of our
electricity consumption with energy attribute
certificatesb and green tariffsc which we consider
to be a transitional solution as we seek to
increase the proportion of on-site renewable
electricity sources and Power Purchase
Agreements (PPA).
In 2022, we expanded our net zero operations
approach to include our supply chain emissions
as they account for the majority of our
operational emissions.
Our supply chain emissions data is currently
indicative. We will continue to develop our
methodology and aim to improve the accuracy of
our supply chain data over time. In the interim, we
intend to work towards the milestone of a 50%
reduction in our supply chain emissions by 2030
(against a 2018 base year) and a longer-term
milestone of a 90% emissions reduction by 2050.
In addition, we aim for 90% of our suppliers by
addressable spendd to have science-based
emissions reduction targets in place by 2030.
Approximately
47%
of our suppliers by addressable spend
have committed to or have
science-based targets in place
Also, this year we evolved our energy use
intensity and on-site renewable energy reporting
approach to include our global real estate
portfolio, beyond campuses.
We intend to work towards the milestones of a
115 kWh/m2/year average energy use intensity
across our corporate offices and installing 10MW
on-site renewable electricity capacity across our
global real estate portfolio by 2035.
Our net zero operations approach
Delivery year Scope 1 and 2
2022 Performance Scope 3
2022 Performance
100% renewable electricity sourcing for all our
global real estate portfolio
2025
90% reduction for our Scope 1 and 2 GHG
emissions (market-basede, against a 2018 baseline)
100% electric vehicles (EV) transition for UK
company cars
100% electric vehicles (EV) or ultra-low emissions
vehicles (ULEV) for all company cars
100%Δ
-91%Δ
55%
24%
2030
2035
2050
50% reduction for our Scope 1 and 2 GHG
emissions (location-basedf, against a 2018 baseline)
-43%Δ
We intend to work towards the milestone of 115
kWh/m2/year average energy use intensity across
our corporate officesg
265 kWh/m2/year
(-18% against 2018
baseline)
We intend to work towards the milestone of 10 MW
on-site renewable electricity capacity installed
across our portfolioh
0.26MW (<1% total
electricity use)
70% of our suppliers, by addressable spend, to have
science-based GHG emissions reduction targets in
place
We intend to work towards the milestone of 90% of
our suppliers, by addressable spend, to have
science-based GHG emissions reduction targets in
place
We intend to work towards the milestone of 50%
GHG supply chain emissions reduction (against a
2018 baseline)
Divert 90% of waste from the landfill, incineration
and the environment across key campuses
We intend to work towards the milestone of 90%
GHG supply chain emissions reduction (against a
2018 baseline)
47%i
47%g
8%j
65%
8%j
Notes:
a Global real estate portfolio includes offices, branches, campuses and data centres
b Energy attribution certificates (EACs) are the official documentation to prove renewable energy procurement. Each EAC represents proof that 1 MWh of renewable energy has been produced and added to the grid. Global EAC
standards for renewable claims are primarily Guarantees of Origin in Europe, RECs in North America and International RECs (I-RECs) in a growing number of countries in Asia, Africa, the Middle East and Latin America.
c Green tariffs are programmes in regulated electricity markets offered by utilities that allow large commercial and industrial customers to buy bundled renewable electricity from a specific project through a special utility tariff rate.
d Targets are considered ‘science-based’ if they are in line with what the latest climate science deems necessary to meet the goals and timelines of the Paris Agreement – limiting global warming to well-below 2°C above pre-
industrial levels and pursuing efforts to limit warming to 1.5°C. Science Based Targets initiative (SBTi), a partnership between CDP, the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for
Nature (WWF), provides companies with independent assessment and validation of targets and is currently the internationally accepted standard.
e Market-based method is a GHG Protocol accounting method for Scope 2 emissions, where a company's energy consumption emissions are calculated based on the electricity the company chose to purchase, often using
contracts or instruments like Energy Attribute Certificates (EACs) or Power Purchase Agreements
f Location-based method is a GHG Protocol accounting method for Scope 2 emissions, where a company's energy consumption emissions are calculated based on the average emissions intensity of local grids on which energy
consumption occurs
g Energy use intensity reporting approach expanded to include all our corporate offices, beyond campuses and align to UK Green Building Council energy performance metric for buildings
h On-site renewable electricity reporting approach evolved to include installations across our global real estate portfolio, beyond campuses.
i Indicative number provided to illustrate the number of suppliers by addressable spend that have committed to or have science-based targets in place.
j Based on our indicative supply chain emissions inventory
Δ 2022 data subject to independent Limited Assurance under ISAE(UK)3000 and ISAE3410. Current and previous limited assurance scope and opinions can be found within the ESG Resource Hub for further details: home.barclays/
sustainability/esg-resource-hub/reporting-and-disclosures/
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TCFD Strategy Recommendation (b) | Strategic Pillar 1
Operational footprint dashboard
Barclays PLC
Annual Report 2022 80
Total GHG emissions by scope
(market-based) ‘000 tonnes CO2e
Total GHG emissions by scope (location-
based) ‘000 tonnes CO2e
Scope 1 and 2 (market-based) GHG emission
reductions (against a 2018 baseline)
Scope 3 GHG inventory
('000 tonnes CO2e)
2022
2021
2020
Total
41.3△
Total
39.2
Total
90.2
2022
2021
2020
n Scope 1 n Scope 2 n Scope 3 (Business travel)
n Scope 1 n Scope 2 n Scope 3 (Business travel)
Total
142.9△
Total
149.8
Total
190.6
-91%△
Against a target of -90%
by the end of 2025
2021: -86%
GHG emissions intensity (market-based)
tonnes CO2e/FTE
Total energy use
(MWh)
2022
2021
2020
2022
2021
2020
Other sustainability-related highlights
Renewable electricity sourcing for our
global real estate portfolio
100%△
Against a target of 100% by the end of 2025
2021: 94%
n Purchased
goods and
services
n Fuel and energy-
related activities
n Waste generated
in operations
n Business travel n Leased assets
On-site renewable electricity capacity installed
across our global real estate portfolio (MW)
Average energy use intensity across our
corporate offices (kWh/m2/year)
Campus waste diverted
(%)
2022
Progress
By 2035
2022
Progress
By 2035
2022
Progress
By 2035
Improve water efficiency
86%
recycled water used at
our Pune campus in 2022
Notes
1. For 2022, our Supply chain categories 1, 2 and 4 GHG emissions are reported on an aggregated basis under Category 1 and will be reported independently in due course.
2. Emission reductions and intensities have been reported using the market based methodology.
3. The reporting year for our GHG emissions is 1 October to 30 September. The methodology used for emissions calculation is the WRI/ WBCSD Greenhouse Gas (GHG) Protocol. We have adopted the operational
control approach on reporting boundaries. For more information, see the Barclays ESG Reporting Framework 2022 on our ESG Data Centre
4. For 2022, we have applied the latest emission factors as of 31st December 2022. We continuously review and update our performance data based on updated carbon emission factors, improvements in data quality
and updates to estimates previously applied. In 2022 prior year figures have been restated to reflect additional Scope 1 natural gas data that is now available for two of our large corporate offices. The restatement
has been applied to all prior years to 2018. In addition, there is additional Scope 1 fuel data available for three locations globally that were not reported in prior years. We have also replaced estimated Scope 2
electricity data for select locations in the US with actual billing from utility providers that was not available at the time of reporting. Finally, corrections to Scope 2 electricity data in Switzerland & Netherlands have
taken place due to incorrect meter reads. All location and market-based figures are gross and do not include netted figures from carbon credits.
In 2022 we have disclosed additional Scope 3 categories which can be found in the ESG Data Centre. Our overall Scope 3 emissions have increased compared to prior years due to the additional disclosure.
5.
6. Campuses include 1 Churchill Place, Radbroke, Northampton, Glasgow, Pune, Whippany, 745 7th Avenue, Dryrock
Our operational footprint data follows a reporting period of 1 October 2021 to 30 September 2022
Δ 2022 data subject to independent Limited Assurance under ISAE(UK)3000 and ISAE3410. Current and previous limited assurance scope and opinions can be found within the ESG Resource Hub for further details:
home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/
Further details of the data provided, including further granularity of decimal points can be found in the ESG Data Centre located within the ESG Resource Hub.
ESG Data Centre
See our ESG (non-financial) Data Centre for further details of our
annual operational GHG emissions since 2018, including our Scope
1, 2 and 3 business travel with location-based and market-based
emissions data. As of 2022, we also detail our Scope 3 operational
emissions. We further provide insights on our annual waste
production, energy and water consumption and renewable
electricity consumption by country.
+ Further data granularity relating to our operational footprint can be
found at: home.barclays/sustainability/esg-resource-hub/reporting-and-
disclosures/
20.0△23.222.81.9△13.648.319.4△2.419.10.47△0.481.0920.0△23.222.8103.4△124.2148.719.4△2.419.1467,939△559,241604,856599.24.610.719.4△21.10.26102651156590 Strategic
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Annual Report 2022 81
Electrify our real estate portfolio and vehicles
We are also transitioning, where possible, to all-
electric technology to heat and cool our global
real estate portfolio such as our new air source
heat pumps at our Glasgow Sustainability Centre.
As part of our commitment to Climate Group’s
EV100 initiative, we are transitioning our global
fleet to electric vehicles. By the end of 2022, 55%
of our UK fleet was converted to electric. To
support the programme, we also increased the
number of EV charging stations across our global
locations, which as of the end of 2022 totals
approximately 500 stations.
Replace our reliance on fossil fuels
with renewable energy
In 2022, we also accelerated our commitment to
source 100% renewable electricity for all our
global real estate portfolio by 2025 and have
achieved this ahead of schedule through
instruments including green tariffsa (59%) and
energy attribute certificatesb (41%).
Our intent moving forward is to source
renewable electricity primarily from on-site
renewable installations or from new renewable
energy facilities that add clean energy to the grid
for example via PPAs. In 2022, we installed solar
photovoltaic systems at our Pune and Glasgow
campuses and have planned more installations
across our global real estate portfolio to work
towards installing 10MW of on-site renewable
electricity capacity by 2035. Factors such as
supply chain disruptions, material availability and
market volatility may impact the type of
renewable energy projects we can support and
the speed of execution.
Notes:
a Green tariffs are programmes in regulated electricity markets offered
by utilities that allow large commercial and industrial customers to buy
bundled renewable electricity from a specific project through a special
utility tariff rate.
b Energy attribute certificates (EAC) are the official documentation to
prove renewable energy procurement. Each EAC represents proof
that 1 MWh of renewable energy has been produced and added to the
grid. Global EAC standards for renewable claims are primarily
Guarantees of Origin in Europe, RECs in North America and
International RECs (I-RECs) in a growing number of countries in Asia,
Africa, the Middle East and Latin America.
Retail branches
In 2022, we procured 100% of all retail branch
electricity from renewable sources and
introduced electric mobile banking vans as
part of our flexible ways of serving customers.
Power Purchase Agreements
In February 2022, Barclays signed a 10-year PPA in
support of Barclays' goal of sourcing renewable
electricity to power our global real estate portfolio
by 2025. Through this PPA, Barclays will support
Creag Riabhach, an onshore wind farm project in
Scotland.
Beginning in 2024 through to 2032, Barclays has
committed to purchase up to 160 GWh per year of
power from this new-build renewable power asset,
which will meet approximately 80% of Barclays'
future electricity needs in the UK and enhance the
UK grid's renewable energy capacity.
This PPA will avoid approximately 30,000
tonnes of CO2e per year. In addition, the Creag
Riabhach project is expected to provide social
and environmental benefits through new
employment opportunities within the local area
and the Scottish economy, supporting a local
community benefit fund, and establishing a
riparian tree planting programme to promote
soil conservation and habitat biodiversity.
160 GWh
of power Barclays has committed
to purchase from the new-build
renewable power asset
TCFD Strategy Recommendation (b) | Strategic Pillar 1
Reducing our Scope 1 and 2 emissions
Improve efficiency
We reduced our global real estate portfolio
energy consumption by 30% against a 2018
baseline. At the end of 2021, we launched an
Energy Optimisation Programme to help improve
the energy efficiency of our global real estate
portfolio. In the first 12 months of our five-year
programme, we saved 6GWh of energy,
equivalent to the annual electricity consumption
of approximately 2,000 UK households.
We have also focused on our own data centres,
which consume a large amount of energy to
operate. For example, we upgraded our cooling
systems at our Cranford, New Jersey data centre.
In just four months this upgrade led to an
approximately 19% energy reduction for cooling
alone, in comparison to the same period in 2021.
We will continue to make investments in
technology and systems to reduce the amount of
energy we need to power our global real estate
portfolio.
Technology Office of Sustainability
Technology has an instrumental role to play
in reducing operational emissions. For
example, data centres account for 29% of
our Scope 1 and 2 emissions. Barclays has
established a Technology Office of
Sustainability responsible for integrating
sustainable practices and processes into
technology hardware lifecycles, applications,
data management and supply chain
decisions. The new team helps identify
infrastructure and application efficiency
improvements, work with internal partners
to manage building efficiencies and engage
with technology suppliers to reduce supply
chain footprint.
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Annual Report 2022 82
TCFD Strategy Recommendation (b) | Strategic Pillar 1
Addressing our Scope 3 operational
emissions
Supply chain
In 2022, we expanded our GHG emissions
inventory by accounting for our Scope 3 supply
chain emissions. We used the GHG Protocol's
Corporate Accounting and Reporting Standard
to establish a base year emissions inventory for
2018 and calculate emissions associated with our
supply chain.
Following the GHG Protocol guidelines, we used
a hybrid method to calculate our 2022 emissions
inventory. The spend-based method (the
economic value of goods and services purchased
multiplied by industry average emission factors)
has been used to calculate emissions for most
suppliers. Primary supplier-sourced data has
been used where available.
It is important to recognise that our emissions
inventory for 2022 is indicative. The emission
factors used represent average emissions for a
particular service or product group, and not the
emissions from the actual service or product.
The method provides us with insights that help
us to determine which procurement categories
and companies in our supply chain are
responsible for the highest proportion of our
GHG emissions and enables us to identify focus
areas for emissions reduction and supplier
engagement.
Over time, we will evolve our methodology and
improve the accuracy of our supply chain
emissions inventory by increasing use of primary,
supplier-sourced and product/service specific
data as it becomes more widely available. This will
ultimately support consistent and transparent
year-on-year accounting and reporting and
enable us to better measure progress. In the
interim, we anticipate seeing fluctuations in our
inventory as we improve our data methodology.
In 2022, we developed a supply chain net zero
pathway which sets out our strategies and action
plan and details the accountability mechanisms in
place to track progress. The pathway defines
organisational and operational boundaries and
explains how we will identify and track supply
chain GHG emissions over time. It also sets our
interim emissions reduction and supplier
engagement milestones, and describes the
activities required to achieve them. Finally, it
establishes the governance mechanisms for the
supply chain net zero programme and the
stewardship necessary to deliver and track
progress.
In developing our net zero supply chain
emissions plan, we used the Science Based
Target Initiative's (SBTi) Corporate Net Zero
Standard and Target Setting Tool, consistent
with a 1.5ºC aligned pathway.
We will continue to develop our methodology
and our approach. In the interim, we intend to
work towards the milestone of a 50% reduction
in our supply chain emissions by 2030 (against a
2018 base year) and a longer-term milestone of
a 90% emissions reduction by 2050.
In addition, we aim for 90% of our suppliers by
addressable spenda to have science-based
emissions reduction targets in place by 2030. As
of 2022, approximately 47% of our suppliers by
addressable spend have science-based targets
in place or have committed to implementing
targets.
To support our net zero operations strategy, we
updated our general terms to include contractual
expectations relating to climate change which will
apply to new contracts and contract renewals
moving forward. We are also looking to further
embed climate change considerations in our
procurement processes.
We understand that our success depends on our
suppliers reducing their emissions, and that
progress may be volatile and non-linear.
Geographic considerations, resource capacities,
data availability, legal requirements, market
conditions and the varying pathways that
individual companies take as a result of the
technologies available to them to transition may
all affect the speed at which our suppliers can
reduce emissions and track their progress
against their transition plan.
To mitigate these variables, we are proactively
engaging with our suppliers to drive process
improvements and innovations and learn from
them where we can. We will adapt our approach
as needed to respond to external circumstances
and manage the effectiveness and impact of our
support for the transition, while remaining
focused on our ambition of achieving net zero
emissions in our supply chain.
In 2022, we significantly scaled up our climate-
related engagement with our suppliers. For
example, we invited 475 of our suppliers,
representing approximately 80% of our
addressable spend, to report their GHG and
climate strategy to the Carbon Disclosure
Project (CDP), which is an increase of 385
suppliers invited compared to 2021. We have
also directly approached over 100 suppliers to
discuss their climate strategy, including for
example data quality, reporting mechanism and
reduction efforts.
Supplier Engagement
We invited suppliers representing
approximately 80% of our addressable
spend to disclose through CDP in 2022.
As the landscape evolves, we will refine our
approach and develop tools and resources to
help our suppliers in their journey to reduce their
greenhouse gas emissions.
Note
a Addressable spend is defined as external costs incurred by Barclays in
the normal course of business where Procurement has influence over
where the spend is placed. It excludes costs such as regulatory fines or
charges, exchange fees, taxation, employee expenses or litigation
costs, property rent.
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Business travel
In 2022, total colleague air travel emissions
reduced by 73% against a 2018 baseline. While
emissions have decreased from our baseline,
emissions increased between 2021 and 2022 by
a percentage difference of 24% due to return to
business travel post-COVID.
Though a small percentage of our operational
emissions, we use a variety of solutions to reduce
our travel emissions including using digital
technology where practicable as an alternative to
face-to-face meetings, adjusting our travel
policy to promote lower carbon solutions (such
as promoting train versus air travel when
feasible), avoiding non-essential business trips
and using our booking and reporting platforms to
improve colleagues’ awareness of their individual
carbon footprint.
In 2022, we also completed a review of our
preferred airline partners and have selected
those with strong sustainability credentials,
including the use of sustainable aviation fuel
(SAF), and are actively pursuing a number of
initiatives to work with our partners to increase
capacity and use of SAF.
Leased assets and waste
We have established a baseline for our leased assets
and waste GHG emissions detailed in our ESG Data
Centre. Though these emissions are minimal in
comparison to all other operational emissions, we
will develop activities to address those emissions.
Supporting our colleagues
In support of our net zero operations ambition we
are engaging with colleagues and implementing
initiatives to reduce our individual environmental
footprints.
In 2022, we implemented several programmes to
increase colleague understanding of our net zero
ambition and opportunities to support it:
• We provided colleague green benefits including
the relaunch of our UK salary sacrifice car scheme
as an electric vehicle scheme. We have worked
with our third party discounts platform provider in
the UK and US to curate and promote offers that
support a more sustainable lifestyle, and are
seeking to roll this platform out to more
jurisdictions throughout 2023
• We deployed Barclays Go Green sustainability
gamification programme globally, which led to
employees avoiding approximately 139tCO2e
through their sustainable actions
• Our 12 employee-led environment networks
across the globe created and participated in
activities aligned with Barclays’ net zero ambition.
In 2022 they hosted a variety of activities and
engaged with more than 6,200 Barclays
employees
+ Further information about how Barclays engages with
colleagues can be found on page 118.
Carbon credits
We plan to purchase at least 42,000 voluntary
carbon credits to remain carbon neutrala for our
2022 Scope 1, Scope 2 and Scope 3 business
travel market-based emissions. We will look to
purchase a portfolio of certified carbon credits
that follow industry standards and GHG crediting
programmes including Verified Carbon Standard
(VCS) Programme and Climate Action Reserve
(CAR).
We periodically review our carbon credits
procurement process. We currently conduct due
diligence as part of our carbon credits
procurement process, that will include a third
party review of the project portfolio from an
independent voluntary carbon markets advisory
firm which is not directly involved in the sourcing
process.
All final projects must pass independent due
diligence screening based on risk assessment in
five key areas: location, technology, additionality,
environmental and social impacts as well as
potential benefits.
+ Further details on our carbon credits can be found on Barclays
ESG Data Centre at: home.barclays/sustainability/esg-
resource-hub/reporting-and-disclosures/
Nature and biodiversity in our
operations
Nature and biodiversity are intrinsically
connected to our efforts to mitigate and adapt
to climate change and maintain healthy
communities. As such, we focus on improving
our resource use and protecting natural
environments through our circular design
principles including designing out waste and
pollution across our operations, recycling, and
regenerating natural ecosystems.
Barclays PLC
Annual Report 2022 83
Zero waste
In 2022, we produced 5,616 tonnes of waste
across our sites, 69% of which was recycled. Due
to return to the office, post-COVID, we have
seen an increase in waste produced compared to
last year.
All sites in our UK real estate portfolio (offices,
branches, campuses and data centres) are zero
waste to landfill certified. We have an ambition to
achieve and maintain TRUE (Total Resource Use
and Efficiency) zero waste certified projects
across our key campuses by 2035, which means
we must divert a minimum of 90% of solid, non-
hazardous wastes from the environment, landfill
and incineration (waste-to-energy) to recycling
facilities or locations where the waste can be
reused. Our Pune campus in India was the first to
achieve the TRUE certification in 2022.
To deliver our ambition across the rest of our
campuses, we are removing single use items,
using on-site composters to reduce food waste
and promoting recycling.
We are using on-site composters across
numerous global offices including Singapore,
Glasgow, and Pune. In addition, at our New York
offices we work with Goodr, which participated in
Barclays' Unreasonable Impact accelerator
programme, to re-route our surplus food to local
charities.
Note
a We define carbon neutral as first reducing carbon dioxide emissions
then counterbalancing carbon dioxide emissions from Scope 1, Scope
2 and Scope 3 business travel with carbon credit offsets.
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Barclays PLC
Annual Report 2022 84
TCFD Strategy Recommendation (b) | Strategic Pillar 1
Water management
Although our operational water footprint is
relatively small, we are investing in new
technologies to reduce our water consumption
and increase our use of recycled water. For
example, in 2022 the grey water recycling system
at our Pune campus enabled us to repurpose
approximately 38,000 kilolitres of grey water, so
that 85% of the campus’ water consumption
came from on-site recycled water.
Biodiversity
As part of our location strategy and ongoing
management of our operational assets, we
consider how biodiversity and ecosystems are
impacted – both positively and negatively – by
our activities.
We conduct pollution risk assessments across
our property portfolio where we hold generators,
to ensure no fuel escapes outside its
containment and therefore does not pollute land
and water systems. We also seek to enhance
biodiversity across our buildings. For example, as
part of the redevelopment of the Radbroke
campus, we are seeking a 10% increase in
biodiversity by 're-greening' 800m2 of the site by
2025. Recognising the importance of this
agenda, we will be developing our understanding
and we will be evaluating nature-related risks and
opportunities on an ongoing basis.
+ Further details on Barclays’ approach to biodiversity can be
found on pages 119 to 120.
Sustainability in our building
design and operations
As of December 2022, 57% of our
global real estate portfolio by area has
a third-party verified green building
certification. These certifications
comprise of US Green Building
Council’s Leadership in Energy and
Environmental Design (LEED)
certification programme, Building
Research Establishment
Environmental Assessment Method
(BREEAM), Energy Star certification
and WELL Building Certification™.
This achievement includes:
• LEED certifications at our Chicago,
Boston, Whippany, and Pune sites
• WELL Gold certified™ at our Pune
site, the first in our property
portfolio in addition to Barclays’
participation in the WELL at Scale
programme
• Energy Star certification at our
Piscataway data centre for the 10th
consecutive year.
Additionally, 41% of our global real
estate portfolio remain certified to
ISO 14001, the international standard
for designing and implementing an
Environmental Management System
(EMS). All sites in our UK real estate
portfolio (offices, branches, campuses
and data centres) were zero waste to
landfill certified.
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Barclays PLC
Annual Report 2022 85
TCFD Strategy Recommendation (b) | Strategic Pillar 2
Reducing our financed emissions
We are committed to aligning all of our
financing to the goals and timelines of the
Paris Agreement, consistent with limiting
the increase in global temperatures to
1.5°C. To meet our ambition, we need to
reduce the client emissions that we finance,
not just for lending but for capital markets
activities as well.
We aim to work closely with our clients to ensure
that over time the activities we finance lead to
lower financed emissions for the bank.
Consistent with our Purpose and taking into
account considerations of all relevant business
factors, we will undertake this by continuing to
set emission reduction targets for our portfolios
where possible, aligned with the ambitions of the
Net-Zero Banking Alliance, of which we are a
founding member. We will also continue to set
and follow clear restrictions on financing certain
activities.
+ Further details on our restrictive policies can be found on
page 98.
We have assessed our financed emissions for six
sectors, including two new sectors that have
been assessed for the first time in 2022:
Automotive manufacturing and Residential real
estate.
We will keep our policies, targets and progress
under review in light of the rapidly changing
external environment and the need to support
governments and clients both in delivering an
orderly transition and providing energy security.
+ Further details on our performance against our sector targets
can be found from page 88.
Details of the new Automotive manufacturing and residential
real estate sectors where financed emissions have been
assessed can be found on pages 91 to 93.
It is important to note that progress towards our
targets will likely be variable and non linear. We
may need to adapt our approach to respond to
external circumstances and to manage the
effectiveness and impact of our support for the
transition, while remaining focused on our
ambition of becoming a net zero bank by 2050.
Notes:
Δ 2022 data subject to independent Limited Assurance under ISAE(UK)3000 and ISAE3410. Current and previous limited assurance scope and
opinions can be found within the ESG Resource Hub for further details: home.barclays/sustainability/esg-resource-hub/reporting-and-
disclosures/
Financed emissions metrics
Sector
Sector
Sector boundaries
Emissions
scope
GHG included
Reference scenario
Target metric
Setting our targets
Unit of
measurement
Baseline
year
Monitoring our progress in 2022
Target vs. baseline
Cumulative change
Absolute emissions
(MtCO2e)
Physical intensity
Energy
Upstream Energy
1,2,& 3
CO2 and methane
Power
Power generators
1
CO2
IEA SDS
IEA NZE2050
IEA SDS
IEA NZE2050
Cement
Steel
Cement
manufacturers
Steel
manufacturers
1 & 2
All GHGs
IEA NZE2050
1 & 2
All GHGs
IEA NZE2050
Automotive
manufacturing
Light Duty Vehicles
manufacturers
1,2 & 3
All GHGs for
Scope 1 and 2;
CO2 for Scope 3
IEA NZE2050
Physical
intensity
Physical
intensity
Physical
intensity
Physical
intensity
Absolute
emissions
MtCO2e
(Absolute)
2020
-32%
51.7Δ
59.6 gCO2e/MJ
-15% by 2025
-40% by 2030
-30% by 2025
kgCO2e/MWh
2020
-9%
29.2
-50% to -69% by 2030
tCO2e/t
2021
-20% to -26% by 2030
-2%
tCO2e/t
2021
-20% to -40% by 2030
-11%
gCO2e/kma
2022
-40% to -64% by 2030
0.7
1.6
6.2
1.5
Baseline set in
December 2022
Baseline set in
December 2022
302Δ
0.610Δ
1.732Δ
167.2Δ
32.9Δ
Residential real
estate
UK buy-to-let and owner
occupied mortgages
1 & 2
CO2, methane and
nitrous oxide
CCC BNZ
Physical
Intensity
kgCO2e/m2
2022
Portfolio convergence
point vs. baseline
-40% by 2030
Notes
a Physical intensity (CO2e emissions per v-km travelled by LDV produced), expressed in gCO2e/km.
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Basis of preparation
BlueTrackTM
We have developed our BlueTrackTM
methodology to measure and track our financed
emissions at a portfolio level against the goals
and timelines of the Paris Agreement.
BlueTrackTM builds on existing industry
approaches to cover lending as well as capital
markets financing, reflecting the breadth of our
support for corporate clients through our
Investment Bank.
Main products included in financed emissions calculations
Financed
(own balance
sheet)
Drawn loans
Undrawn committed loans
Trade financing
Mortgages (for residential real
estate only)
Facilitated
Equity holdings
Bond issuances
Equity issuances
Syndicated loans
In certain sectors product scope may vary, for
example, the Residential Real Estate sector
metrics only include mortgages. We continue to
keep product inclusion under review. Additionally,
BlueTrackTM is also being expanded to cover UK
residential mortgages.
BlueTrackTM starts by selecting a benchmark for
a sector which defines how financed emissions
for a portfolio need to change over time, in line
with the goals and timelines of the Paris
Agreement, consistent with scenarios limiting
the increase in global temperatures to 1.5°C. We
then determine how our sector portfolios are
performing against these benchmarks by
estimating the emissions that our clients
produce, determining how those emissions
should be linked to the financing we provide and
then aggregating those measurements into a
portfolio-level metric. This portfolio-level metric
is then compared to the benchmark. This helps
to determine our target for each sector.
BlueTrackTM relies on modelling client emissions
based on the most recent publicly reported
asset-level production or client reported
emissions.
+ Our 2023 BlueTrackTM Whitepaper provides more details of
our methodology and can be found within the ESG Resource
Hub online at: home.barclays/sustainability/esg-resource-hub/
reporting-and-disclosures/
Sector boundaries
For each sector, we aim to identify, measure and
set targets on the segment of the value chain
where either (i) it is generally recognised that
decarbonisation efforts are likely to spur the rest
of the sector value chain to fall into alignment or
(ii) where financiers are likely to have more
influence over companies active in that segment.
Our choice of segment is based on Barclays' own
view, informed by guidance and recommended
practice from portfolio alignment initiatives such
as PACTA, SBTi and others.
Emissions scope
For each sector target we must consider which
of a company's emissions we should measure,
for example, direct or indirect emissions. We
define this according to the GHG Protocol
definition of Scope 1, 2, and 3 emissions. Within
the boundary of our target, we aim to capture a
company's most material emissions, taking into
account considerations including materiality,
consistency to benchmark, level of control and
whether the emissions can be abated by the
company. For example, our Upstream Energy
target includes Scope 3 emissions, recognising
these emissions are significant for a company
extracting fossil fuel.
BlueTrackTM financed emissions are therefore a
subset of the total financed emissions for each
customer or client, as they only include the
portion of the client's activities that are both
within the value chain we have chosen for the
Barclays PLC
Annual Report 2022 86
sector and the scope of emissions we deem
material for that activity.
Greenhouse gases (GHGs) included
Metrics and targets for all sectors capture
emissions on a CO2e (carbon dioxide equivalent)
basis, aligned to the guidance issued by the Net-
Zero Banking Alliance. We assess which of the
GHGs are relevant and material for each sector.
Target metrics
We use physical intensity metrics for all sector
targets with the exception of Energy, where we
use absolute emissions. We see carbon intensity
as the most appropriate measure of our
performance, at least in the earlier stages of
decarbonisation, as it encourages transition to
lower-emitting fuel sources.
The Energy sector cannot reduce its carbon
emissions intensity below a certain point (for
instance, a barrel of oil cannot be decarbonised),
therefore a reduction in absolute carbon
emissions is more appropriate for Energy.
Reference scenarios
Each of our 2030 target ranges is developed with
reference to a 1.5°C aligned scenario. For the
majority this is the IEA's Net Zero by 2050
(NZE2050) scenario. In calculating a
convergence point for our Residential Mortgages
portfolio, we use a UK focused Balanced Net
Zero Scenario developed by the UK's Climate
Change Committee (CCC BNZ).
Baseline year
We measure our financed emissions for each
portfolio against a baseline metric that was
determined in the year we first assessed that
target. The baseline year therefore varies across
the six sectors assessed to date, to ensure we
are using the most up to date data available when
we set our targets or convergence points.
Use of target ranges
For Power, Cement, Steel and Automotive
Manufacturing, we have set emissions intensity
targets using a target range.
While we are clear on the reduction required to
align with the IEA NZE2050 pathway (the higher
emissions reduction in the range), we recognise
there are dependencies outside our control that
will determine how quickly our financed
emissions intensity can reduce in these sectors.
The lower emissions reduction in the range
reflects our view of the sector, client pathways
and commitments at the time of setting the
target. We seek to achieve the higher emissions
reduction, consistent with our net zero ambition,
but achieving it will depend on external factors.
Use of carbon credits
BlueTrackTM does not allow company-purchased
offsets (e.g. carbon credits) to reduce emissions,
as we believe it is important to base a metric on
operational activities under a company's control,
rather than on unrelated credits (the availability
of which may be limited). The methodology does
allow company-operated removals, i.e. on-site
carbon capture at a plant; however, given this is
currently marginal in the context of emissions,
there is currently no impact on the metrics.
Top-down portfolio assessment
We aim to set granular targets for material high-
emitting sectors in-line with the Net-Zero
Banking Alliance commitments within our
financing portfolio. However, we recognise it will
take time to assess our entire portfolio using this
approach. We are progressing work to develop a
high-level, modelled assessment of our overall
balance sheet emissions, consistent with the
approach outlined by the Partnership for Carbon
Accounting Financials (PCAF), of which Barclays
is a member.
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Annual Report 2022 87
TCFD Strategy Recommendation (b) | Strategic Pillar 2
Data sourcing and data quality
Climate data, models and methodologies are
evolving and not yet at the same standard as more
traditional financial metrics. BlueTrackTM relies on
externally sourced data which is mapped to internal
customer and client identifiers. The externally
sourced data has various limitations for each sector,
including lack of coverage, low resolution,
consistency and transparency of company reported
data, and the time lag for external sources to report
estimates or actuals.
Time lags could be as much as two years for data
such as company value, company revenue share,
emissions, production capacity and capacity factors.
Due to these time lags, our financed emissions
metrics are at best an estimate of our clients'
activities on a given date, using the external data
available at that point in time.
Our approach to reporting
financed emissions data
Given the evolving nature of climate data, models
and methodologies, past period metrics may
change to reflect updates. To manage the impact of
these changes, we have adopted a principles-based
approach to guide whether prior metrics and
baselines should be restated or re-baselined.
• A restatement will involve updating the historical
starting point for a period and recalculating the
historical performance
• A re-baseline will involve keeping the historical
performance constant and re-calculating the
current period baseline to ensure consistency
when reviewing performance. The indicative
historical baseline will also be disclosed.
Due to this, direct like for like comparisons of
financed emissions information disclosed may not
always be possible from one reporting period to
another. Where information is restated or re-
baselined, this will be identified or explained.
For 2022, our methodologies have been updated
for the Energy and Power sectors:
Our approach to reporting financed emissions data
Scenario
Error identified in our internal
finance data or methodology
Restatement
• Financed emissions metrics for all years impacted by the error will be restated, including the baseline year.
Our approach
Changes to our methodology and/
or data sources to calculate
financed emissions (e.g. including
additional GHGs)
Re-baseline
• The updated methodology will be applied from the start of the current reporting period.
• The last reported financed emissions spot metric will be recalculated using the new methodology / data
source to provide the new baseline. This will ensure consistency of data and methodology when calculating our
performance.
• The recalculated baseline and the progress achieved to date will be used to disclose the theoretical baseline
for the year the targets were originally set.
• The cumulative progress will be the progress for the current reporting period (using the new methodology)
and the progress up until the last reporting period (using the old methodology).
Updates to external counterparty
data driven by timing lags when
data is reported (e.g. counterparty
valuations or emissions estimates)
Capture in-
year
• The impact of updated external data will be included into the current period financed emissions data and the
progress metric for the current reporting period.
• Data lags are inherent to the process and Barclays will endeavour to use the latest available data . Historically
reported metrics will not be updated for data lags.
• Energy: updated to include methane, adding
more granularity to our estimate of the Scope 1
and 2 emissions for energy producers
• Power: updated to account for the difference in
capacity factors (or utilisation levels) for
renewable power technologies, to improve the
robustness of our intensity estimates for Power
Generators.
Across both sectors, we have also updated the
external dataset on production / capacity following a
change in the data sourcing methodology adopted
by our external data vendor.
Under our approach (as explained above), we have
published a theoretical baseline for 2020.
Notes:
a
In calculating the 2022 metrics, we have restated the baseline for
Energy from 75.0 MtCO2 to 75.2 MtCO2 resulting in no impact on our
year-end 2021 metrics.
b For Power we have restated the baseline from 320 kgCO2/MWh to
322 kgCO2/MWh with a recalculated year-end 2021 number of 296
kgCO2/MWh vs 295 kgCO2/MWh with a consistent percentage
reduction for 2021.
Δ 2022 data subject to independent Limited Assurance under
ISAE(UK)3000 and ISAE3410. Current and previous limited assurance
scope and opinions can be found within the ESG Resource Hub for
further details: home.barclays/sustainability/esg-resource-hub/
reporting-and-disclosures/
Baselines at December 2022
Sector
Energy
Power
Unit
Baseline
year
Baseline
metric
Previously reported metrics
Recalculated metrics
Financed
emissions
for Dec 2021
Change at Dec
2021
(percentage
change)
Recalculated
financed
emissions for
Dec 2021
Theoretical
baseline
metric
(re-baselined)
MtCO2e
(Absolute)
kgCO2e/
MWh
2020
75.2a
58.6
-22%
59.0
2020
322b
296
-8%
304
75.7Δ
331Δ
Cement
tCO2e/t
2021
Steel
tCO2e/t
2021
Automotive
manufacturing
Residential
real estate
gCO2e/km 2022
kgCO2e/m2
2022
32.9Δ
0.625Δ
1.945Δ
167.2Δ
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Progress against our existing sector targets
Financed emissions - Energy
Absolute emissions MtCO2e (Indexed 2020 = 100)
Financed emissions - Power
Physical Intensity kgCO2e/MWh (Indexed 2020 = 100)
Barclays PLC
Annual Report 2022 88
IEA NZE Benchmark: World
Portfolio target path
¢ Barclays portfolio
IEA NZE Benchmark: World
Portfolio target path (range) ¢ Barclays portfolio
Financed emissions - Cement
Physical Intensity tCO2e/t (Indexed 2021 = 100)
Financed emissions - Steel
Physical Intensity tCO2e/t (Indexed 2021 = 100)
IEA NZE Benchmark: World
Portfolio target path (range) ¢ Barclays portfolio
IEA NZE Benchmark: World
Portfolio target path (range) ¢ Barclays portfolio
Notes:
Δ 2022 data subject to independent Limited Assurance under ISAE(UK)3000 and ISAE3410. Current and previous limited assurance scope and opinions can be found within the ESG Resource Hub for further details: home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/
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Progress against existing
sector targets
In April 2022, we published new 2030
BlueTrackTM targets for the Power, Energy,
Cement and Steel sectors, building on our
existing 2025 targets for Power and Energy.
Against a backdrop of the conflict in Ukraine and
the associated energy crisis, elevated energy
prices for much of 2022 resulted in energy
companies experiencing strong cash flows.
Governments and corporations have prioritised
energy security and (for consumers and SMEs)
affordability.
Our progress in 2022 against our targets reflects
the potential for volatility in these metrics and
highlights that our future progress will likely
continue to be non-linear due to the many
external dependencies and variables beyond
Barclays' control that may determine the pace of
transition.
We remain focused on our ambition of becoming
a net zero bank by 2050, in line with our stated
Climate risk appetite, and acknowledge the need
to adapt our approach in light of the rapidly
changing external environment, including
addressing legitimate concerns about energy
security and ensuring we continue to support
governments and clients in delivering the
transition to a low-carbon economy.
+ Further details on Barclays' Climate risk appetite can be
found on page 283.
Our continued progress reflects year-on-year
reductions in emissions from our financing,
primarily a decrease in capital markets volumes
as rising interest rates paired with strong cash
flows tempered client appetite for raising capital.
Lending activity showed a slight increase, mainly
reflecting the strengthening of the US dollar.
Many energy producers have focused on capital
discipline, returning capital to shareholders,
rather than increasing investment in new
production and continuing to deleverage their
balance sheets. The impact of these capital
allocation decisions had the effect of partially
offsetting the reduction in our financed
emissions metrics. This is a function of our
BlueTrackTM methodology, whereby when a
client's book value decreases, Barclays' financed
emissions increase, all else being equal.
Power
For our power portfolio, we have set targets to
reduce our financed emission intensity resulting
from clients’ Scope 1 emissions. We are
targeting a 30% reduction in CO2e by 2025 and a
reduction in the range of 50% to 69% by 2030,
both against our 2020 baseline.
In 2022, we achieved a 9% cumulative reduction
in emission intensity across our power portfolio.
This progress reflects net reductions in the
intensity of our lending activity and updated input
values used in our calculations (as outlined in our
BlueTrackTM Whitepaper), however, this was
partially offset by an increase in the intensity of
our capital markets financing year-on-year.
We are continuing to invest in developing tools
that will enhance the quality of our forecasting
and better understand the potential volatility in
our progress over the remaining target period.
+ Further details on management and oversight of our
performance can be found on page 95.
Our Client Transition Framework (CTF), which we
began developing in 2022, will also provide insight
into key dependencies and levers that will impact
our ability to meet our targets across sectors.
+ Further details on our Client Transition Framework can be
found on page 96.
Energy
For our energy portfolio we set targets to reduce
our absolute financed emissions inclusive of
clients' Scope 1, 2, and 3 emissions. We are
targeting a 15% reduction in CO2e by 2025 and a
40% reduction in CO2e by 2030 against a 2020
baseline.
In 2022 we reduced our Energy absolute
financed emissions by a cumulative
-32%
further exceeding our 2025 target
Our absolute financed emissions were down to
51.7 MtCO2e, an additional 10% reduction from
the 2021 level. Of our total attributed emissions,
c. 70% was related to oil, gas and natural gas
liquids (NGLs) production while the remaining
c.30% was attributable to coal production, with
natural gas liquids (NGLs) being generally
immaterial.
+ Further details on our use of NGLs can be found in our latest
BlueTrackTM Whitepaper in the ESG Resource Hub online at:
home.barclays/sustainability/esg-resource-hub/reporting-and-
disclosures/
Barclays PLC
Annual Report 2022 89
Our progress reflects the challenges in the
power sector during 2022. While many clients
continued to invest in additional renewables
capacity, they also needed financing to ensure
they could continue to meet energy demands
while managing elevated input costs. For
companies across Europe particularly, this meant
identifying how to rapidly replace Russian natural
gas supplies, given the conflict in Ukraine, as well
as shortfalls in hydroelectric power and nuclear
power generation that resulted from heat and
drought. This supply gap has been filled in part by
an increased reliance on coal-fired power
capacity, which offset some of the intensity
improvements from their renewables
investments. We have seen an increase in
lending and capital markets activity, reflecting the
market conditions. However, emissions intensity
remained broadly flat, as we have focused on the
relative intensity of our portfolio.
Despite this forced return to coal, clients and the
governments in the jurisdictions in which they
operate, have reiterated that this increase in coal
power capacity will only be temporary. On
balance, the consensus view is that the longer-
term impacts of the Ukraine crisis will accelerate
efforts to transition to renewables to avoid
similar supply shocks in the future.
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Annual Report 2022 90
TCFD Strategy Recommendation (b) | Strategic Pillar 2
Cement
Last year we announced a 2030 target to reduce
the scope 1 and 2 gross emissions intensity of
financed emissions for our cement portfolio by
20% to 26% against a 2021 baseline.
During 2022, we reduced the intensity of this
portfolio by 2%. This reflects a net increase in
financing to clients with an intensity below our
portfolio average.
Steel
In 2022, we announced a 2030 target to reduce
the intensity of financed emissions for our steel
portfolio by 20% to 40% against a 2021 baseline.
In 2022 the intensity of this portfolio reduced by
11%. This progress was largely driven by
decreases in some clients’ emission intensities
as they built lower emission Electric Arc Furnace
capacity, rather than as the result of changes in
our financing.
Both our Steel and Cement portfolios are
comprised of small populations of clients with a
range of intensities, thus, changes in our
financing activity even for a single client within a
portfolio can have a significant impact on our
metrics and reported progress.
Future target progress
As previously noted in our disclosures, in the
short term, we may experience significant
decreases or increases in our metrics, partly due
to the volatility of the mix and volume of capital
markets financing included in our metrics.
Our future progress in achieving these targets is
dependent on many external factors including,
for example, our clients’ pace of progress on
their individual transition pathways, the public
policy and regulatory environment, technological
advancement, geopolitical or regional
developments, energy security, cost of living and
just transition considerations. The transition to a
low-carbon economy will be reflective of the
specific pathways companies take.
For some sectors progress can occur in the
short term while, for others, the technologies
required to transition are not yet fully available
meaning they are likely to transition at a later
point in time.
Ultimately our progress may prove challenging
and may be affected (positively or negatively) by
these external factors.
Our Client Transition Framework will support our
evaluation of our corporate clients' current and
expected future progress as they transition to a
low-carbon business model.
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Annual Report 2022 91
TCFD Strategy Recommendation (b) | Strategic Pillar 2
New sector target -
Automotive Manufacturing
Over the next 10 years, the auto manufacturing
industry will undergo significant change driven by
policy and regulation, consumer demand, and
the transition to low-carbon transport. The
global vehicle fleet will transition from internal
combustion engines, towards hybrid vehicles and
vehicles powered by batteries (BEVs) or fuel cells
(FCEVs).
Our automotive emission intensity target
To support this shift toward BEVs, we have set a
target to reduce the financed emissions intensity
of our automotive manufacturing portfolio by
40%-64% by 2030 against a 2022 baseline,
calculated using our BlueTrackTM methodology.
Consistent with our target ranges for other sectors:
• the lower emissions reduction in the range
reflects an estimated emissions reduction
trajectory based on our current view of sector
and client pathways and commitments
• the higher emissions reduction in the range is
aligned to the IEA NZE2050 pathway
consistent with limiting global warming to
1.5°C. This pathway incorporates an
assumption that public policy interventions,
shifts in demand and new technologies will
transpire and enable our clients and the
industry as a whole, to accelerate their
transition plans beyond current commitments
or expectations.
The scope of this portfolio target is limited to new
light duty vehicle (LDV) manufacturers, including
Scope 1, 2 and 3 downstream emissions (use of
sold products) i.e. the combustion of fuel or ‘tank
to wheel’ metrics.
Heavier vehicles may be dependent on future
technology developments including green
hydrogen to decarbonise and are not currently in
scope of this target. We will keep this under
review, as the transition of heavier vehicles will be
required for the automotive sector as a whole to
reach net zero.
+ Further details on our financed emissions methodology can
be found in our latest BlueTrackTM Whitepaper at:
home.barclays/esg-resource-hub/reporting-and-disclosures/
Financed emissions - Automotive Manufacturing (LDVs)
Physical Intensity (gCO2e/km) (Indexed Dec 2022 = 100)
Power of One Barclays helps
create a cleaner, more efficient
way to move goods
Barclays colleagues across the Corporate
and Investment Bank partnered to deliver a
US$300m securitisation transaction and
commit US$150m of financing. Einride
designs, develops and deploys technologies
for freight mobility – including electric and
autonomous trucking fleets, charging
infrastructure and connectivity networks –
with the vision to create a more resilient,
cost-effective and intelligent way to
transport goods.
Founded in 2016, Einride’s connected
electric trucks and charging solutions,
intelligently co-ordinated by Einride Saga,
allow shippers and carriers to go electric,
improve operational outcomes and reduce
their carbon footprint.
Einride will use this securitisation
programme to finance their global truck
assets and customer contracts - permitting
them to continue to scale their fleet,
increase investment in research and
development, and further develop
relationships with partners.
IEA NZE Benchmark: World
Portfolio target path (range) ¢ Barclays portfolio
We are clear as to the level of emissions
reductions required to align with the IEA
NZE2050 pathway but we recognise there are
dependencies and variables outside our control
that will determine how quickly our financed
emissions intensity can reduce in this sector.
We note that our clients’ ability to meet their
targets is dependent on continued regulatory,
policy and technical support for the industry, as
well as consumer demand for BEVs and FCEVs,
supply chain capacity and continued
infrastructure building, for example, EV charging
networks and related grid upgrades or green
hydrogen production and hydrogen refuelling
stations to support demand.
Estimating our financed emissions
Using our BlueTrackTM methodology, we have
estimated the financed emissions and emissions
intensity of our global autos manufacturing
portfolio. The emission intensity benchmark is
based on the IEA NZE2050 scenario.
Currently, the IEA only provides granular
pathways for tailpipe emissions associated with
the stock of vehicles on the road so we have
made adjustments to convert this to a flow
measure, including assessing the rate of retired
LDVs and the growth in BEV, FCEVs and hybrid
vehicle sales. Given our focus on automotive
manufacturers, we believe a sales focused
measure is more appropriate.
Our assessment of the NZE scenario indicates
that the intensity of new vehicles sold needs to
reduce by c.65% from 2022 to 2030.
The automotive value chain includes parts
suppliers, manufacturers, in-house financing
business, dealers and end users, including the
use of fleets within companies. Our methodology
focuses on the manufacturers and assigns all
downstream tailpipe emissions to the
manufacturer. We focus on auto manufacturers
because they play a major role in the type of
vehicle brought to market for consumers and
fleet operators to buy and are in a strong position
to influence their production process and
upstream suppliers.
Notes:
Δ 2022 data subject to independent Limited Assurance under
ISAE(UK)3000 and ISAE3410. Current and previous limited assurance
scope and opinions can be found within the ESG Resource Hub for
further details: home.barclays/sustainability/esg-resource-hub/
reporting-and-disclosures/
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Financed emissions - Residential Mortgages
Physical Intensity (kgCO2e/m2) (Indexed Dec 2022 = 100)
CCC - Synthetic BNZP Scenario: UK ▲ Portfolio convergence point ¢ Barclays portfolio
The transition of the residential real estate
sector to net zero depends mostly on external
changes and public policy interventions to: steer
the UK energy grid towards renewable electricity;
reduce dependence on fossil fuels for home
heating; drive retrofitting of existing homes to
promote energy efficiency; and require that new
homes are built to a net zero standard.
Without these external changes, Barclays cannot
materially decrease the emissions intensity of its
mortgage portfolio. Barclays has therefore
chosen to identify the 2030 emissions intensity
'convergence point' and measure our progress
towards it, but not to set a formal target at the
current time.
TCFD Strategy Recommendation (b) | Strategic Pillar 2
New sector assessed –
Residential Real Estate
Estimating our financed emissions
Homes contributed to over 15% of total GHG UK
emissions in 2021a, primarily from the use of oil
and gas in heating and hot water. Decarbonising
UK homes is a complex challenge that will require
widespread engagement and systemic change.
In view of these challenges, we are announcing a
convergence point for our UK residential real
estate mortgage portfolio of a 40% reduction in
CO2e emissions intensity against a 2022 baseline
of 32.9 kgCO2e/m2 (Scopes 1 and 2)”
Barclays has estimated the financed emissions
and emissions intensity of its UK residential real
estate portfolio by integrating the PCAFb
approach into BlueTrackTM. This is the first sector
where we are leveraging the well-established
approach and data sourcing recommended by
PCAF. Our in scope portfolio consists mostly of
Barclays UK residential mortgages, including
properties to let. It also includes a smaller
portfolio of mortgages originated by the Private
Banking division of Barclays Bank PLCc.
We have selected the Balanced Net Zero (BNZ)
scenario developed by the UK's Climate Change
Committee (CCC) as a benchmark for this sector
as it is specific to the UK, independent,
developed by a credible institution and aims to
achieve net zero emissions for the UK by 2050. In
line with this scenario, our portfolio would need
to reach an emissions intensity of 19.7kgCO2e/
m2 by 2030 to be on a path to net zero by 2050,
which would be a 40% reduction in emissions
intensity from a 2022 baseline.
+ Further details on the methodology can be found in the 2023
BlueTrackTM Whitepaper at: home.barclays/sustainability/esg-
resource-hub/reporting-and-disclosures/
Barclays PLC
Annual Report 2022 92
Barclays UK Residential Real Estate ambition
In addition to establishing a convergence point
and measuring our progress towards it, we have
set an ambition for 50% of homes in our Barclays
UK mortgages book with known EPC rating to
have an EPC of C or better by 2030. This will be
an important improvement, but it will not be
sufficient to reduce portfolio emissions intensity
to the level required under a 1.5oC scenario.
As at the end of Q3 2022, 65.1%d of homes in our
portfolio had an EPC rating, and of those, 42.3%
of these are C or better (27.5% of total homes,
including those without an EPC).
Notes:
a Climate Change Committee 2022 Progress Report to Parliament.
b Our Data Quality scope for the Residential Real Estate sector is 3.7.
The PCAF framework provides guidance for a data quality score for
each sector to help institutions rate the reliability of their information.
The score ranges from one to five, with one being the highest quality
date. For Residential Real Estate, our Data Quality score is 3.7. Please
refer to the BlueTrackTM Whitepaper for further details on how the
data quality score is calculated.
c Corporate counterparties such as social housing associations or
house builders, mortgages on properties outside of the UK or
mortgages originated through Barclays UK Business Banking have not
been included in this sector.
d EPC rating metrics calculated based on volume of accounts. Data as
of 30 Sept 2022.
Δ 2022 data subject to independent Limited Assurance under
ISAE(UK)3000 and ISAE3410. Current and previous limited assurance
scope and opinions can be found within the ESG Resource Hub for
further details: home.barclays/sustainability/esg-resource-hub/
reporting-and-disclosures/
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Annual Report 2022 93
TCFD Strategy Recommendation (b) | Strategic Pillar 2
Drivers of reduction in emissions
in Residential Real Estate
The two most important drivers in the transition
to net zero in this sector are the decarbonisation
of the UK energy grid and the phasing out of
fossil fuel in domestic heating through the switch
to low-carbon heating bringing clean energy to
our customers’ homes. This will be mostly driven
by the transition of the energy sector and UK
Government policy to drive the decarbonisation
of the UK electricity grid and promote the take up
of low-carbon heating,
Barclays can play a role through supporting
renewable projects and clients in the Power
sector, for example through our BlueTrackTM
targets, our banking activity and Sustainable
Impact Capital investments.
Another key driver required to reach net zero in
the Residential Real Estate sector is improving
the energy efficiency of existing homes, which
includes our customers improving the fabric of
their homes and other energy efficiency
measures.
Other key contributors to the reduction in
emissions intensity of this sector include new
homes being built to net zero standard, with low-
carbon energy sources and high energy
efficiency rating, and reduction in consumption
through changes in behaviour.
As a mortgage lender, we can support our
customers making the decision to retrofit their
homes, switch to low-carbon heating e.g. heat
pumps and reduce their energy consumption by
providing education, financial incentives and
partner offers, as well as financing through our
wide range of lending products. However, we
expect the overall impact of our actions to be
low, given the barriers to retrofitting such as high
upfront costs and low customer demand.
High level assessment of drivers of net zero in Residential Real Estate
Driver
Barclays' role
Without external changes and public policy interventions, Barclays actions are expected
to have limited impact in decreasing the emissions intensity of its mortgage portfolio.
Improvement in energy
efficiency of existing homes
• Continue to offer education, financing products and
services to incentivise retrofitting
Barclays is also committed to working
collaboratively with the UK Government to
encourage and inform the development of
strategies and policies to drive more energy-
efficient homes and retrofitting, including
through industry groups where appropriate, and
through our own engagement with policymakers.
De-carbonisation of UK
electricity grid
• Advocating for external measures to drive take up of
retrofitting
• Supporting our clients in the power sector in their net zero
transition
• Advocating for the UK Government to deliver on its
ambitions to decarbonise the electricity grid
Phasing out of fossil fuel in
heating
• Continue to offer education, products and services to
incentivise customers switching to low-carbon heating
• Opportunity to develop strategic partnerships, including
with utilities providers, to drive electrification of domestic
heating
New homes built to net zero
standard
• Continue to promote energy efficiency in new builds
through propositions such as Green Home Mortgages
Behaviour change
• Continue supporting our Corporate Bank's real estate
clients in their transition, for example, through Barclays'
Sustainable Residential Development Framework
• Continue to offer education to customers on energy
efficiency and promoting reduction of usage through
tools, awareness and partnerships
Barclays Green Homes strategy
Barclays is committed to supporting our
customers' transition to a more sustainable way
of living; our Green Homes strategy is to deliver
products and propositions to support our
customers to take steps to improve the energy
efficiency of their homes, switch to low-carbon
heating and reduce their energy consumption.
Our focus is on launching initiatives that aim to
drive real benefit to society and to the
environment.
We have continued to support customers
purchasing a new build, energy efficient home
through our Green Home Mortgage, launched in
2018 and under which we've already lent over
£2.8bn to over 12,000 customers.
+ Further details on our role in supporting supporting our
customers' transition in Barclays UK can be found on pages
107 and 108.
Barclays' approach to advocacy in
residential real estate
We have recommended that policymakers,
in collaboration with the industry, take the
following steps:
• increase policy clarity through a national
decarbonisation roadmap and
retrofitting strategy to create a clear
framework for action
• introduce measures to build trust and
confidence in taking action, such as
improved access to practical advice
about retrofitting and installers who are
TrustMark accredited
• long-term funding which will give supply
chains confidence to grow
• improving accuracy and confidence in
EPC Standards as key basis for
measuring change.
Barclays PLC
Annual Report 2022 94
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Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b) | Strategic Pillar 2
Barclays UK Greener Home Reward
In 2022, we conducted research exploring
homeowner attitudes towards sustainability
and the barriers preventing action. Our
research showed that while the vast majority
(90%) of homeownersa intend to make energy
efficiency-related changes to their homes
within the next five years, cost is a prohibitive
barrier.
Retrofit types at registration
Solar Energy
Doors & windows
Insulation
Low-carbon
heating
Solid wall insulation
n Solar energy
n Doors and windows
n Insulation
n Low-carbon heating
n Solid wall insulation
In response, we launched our Greener Home
Reward pilot in October. It offers a cash reward of up
to £2,000 for mortgage customers who install
energy efficiency measures in their homes.
The objective of the pilot, which remains
ongoing, is to help us to understand consumer
behaviour and motivations for taking sustainable
action. The pilot will provide empirical evidence to
evaluate real and perceived barriers, and whether
such incentives from mortgage providers would
help to reduce these barriers and enable
homeowners to take proactive action on the
energy efficiency improvements they want.
As of December 2022, we have seen continuing
interest from our customers. 44% of applications
have been for solar panels and solar battery
storage, but there is clear demand for a range
of energy efficiency measures. The insights
from this pilot will help us to develop relevant
products and propositions to support
our customers' transition to low-carbon,
energy efficient homes.
Notes:
a Consumer data and insights taken from a nationally representative research
study of 2,000 homeowners, commissioned by Barclays, and carried out by
Mortar Research from 26 August - 1 September 2022.
442017154
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Working to support future
sector target setting
Barclays has been working with the Banking
for Impact on Climate in Agriculture (B4ICA)
initiative, along with other peers, to consider
the particular challenges of setting financed
emission reduction targets in the agricultural
sector, given the heterogeneity of practices,
products and conditions. In December 2022,
the group published non-binding guidance for
financial institutions aimed at supplementing
existing guidance relating to agriculture and
climate change, with practical advice for banks
setting targets and supporting companies
within their agricultural sector portfolio.
The report covers some of the key
considerations for the agricultural sector
including appropriate scope of emissions
and activities to include in targets; data and
measurement of emissions; use of offsets;
treatment of land-use-change; net versus
gross targets; and absolute versus intensity
targets.
+ The report can be found at: www.wbcsd.org/contentwbc/
download/15359/224482/1
TCFD Strategy Recommendation (b) | Strategic Pillar 2
Next sectors in our portfolio
alignment
Using BlueTrackTM, we have assessed our
financed emissions in six high emitting sectors
and have set targets in five of those.
We will continue to assess the financed
emissions across our portfolio and measure the
baseline emissions that we finance across
sectors. In particular, we aim to assess our
baseline financed emissions across the
Agriculture, Commercial Real Estate, Aviation
and Shipping sectors during 2023.
Our commitment under the Net-Zero Banking
Alliance is to set science-based targets for all
material high-emitting sectors in our portfolio by
April 2024. Our assessment of our baseline
financed emissions in these further sectors will
inform our plan for target setting in the coming
year.
This work to comply with our commitment under
the Net-Zero Banking Alliance, as well as work
that is ongoing to develop a high-level modelled
assessment of our overall balance sheet,
consistent with the approach outlined by the
Partnership for Carbon Accounting Financials
(PCAF), will aid our understanding of the extent
to which our financing aligns with a 'well below
2°C' scenario.
The phasing of our work and progress we've
made in portfolio alignment reflects the
considerable effort required to establish our
baseline emissions for each sector and to set
appropriate targets, taking account of both our
lending and capital markets financing activities.
Barclays PLC
Annual Report 2022 95
Corporate and Investment Bank:
Managing our portfolios
In managing our portfolios, we taken into
account all relevant climate-related risks and
considerations, including how our portfolios are
performing against our BlueTrackTM targets so
that this can be considered in context, alongside
our client transition analysis, counterparty risk
and other relevant business considerations.
+ Further details of climate risk-related considerations are
managed can be found in the Managing impacts in lending
and financing section on page 253.
With regards to performance against targets, we
have established regular senior management
reporting and monitoring for each of our
portfolios in the Corporate and Investment Bank.
This includes both our current metrics as well as
a forecast of how clients’ emissions and thus our
overall portfolio may evolve over the remaining
target period. By understanding how our
estimated performance compares to our targets
we are able to appropriately increase or
decrease the degree of required management
oversight.
• Where we believe we are currently likely to
exceed our targets we continue monitoring
our progress.
• For targets we believe will be met within a
margin of error, we assess the portfolio impact
of proposed new lending transactions above
certain thresholds to ensure we are
comfortable with the potential impacts.
• Where we expect meeting our targets will be
challenging, the thresholds for the size of
transactions to be reviewed are scaled down
accordingly to ensure greater management
oversight in the round of such transactions.
We are continuing to invest in building improved
tools that allow us to enhance the quality of our
forecasting and to help us better understand the
potential impact of the uncertainty in our
estimates of future performance.
Barclays PLC
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TCFD Strategy Recommendation (b) | Strategic Pillar 2
Short and medium-term actions to
deliver on emission reduction targets
In 2020, we started to measure and assess our
clients' emissions by building our financed
emissions methodology (BlueTrackTM) and
setting interim emission reduction targets,
To achieve these targets, we will need to support
our clients to reduce the emissions that result
from their activities and those generated in their
respective value chains.
New tool: Client Transition Framework (CTF)
In our Climate Strategy, Targets and Progress
document published in March 2022 we noted our
intention to develop a Client Transition Framework
(CTF). This has been underway during 2022 and the
CTF will become a key tool in implementing our
climate strategy.
The CTF will support our evaluation of our corporate
clients' current and expected future progress as
they transition to a low-carbon business model.
The CTF includes quantitative and qualitative
elements. The quantitative element assesses a
client's alignment with our emissions targets and
sector benchmarks.
The qualitative element seeks to assess the
credibility of a client’s transition plan. It considers
criteria that serve as indicators of intent and
ambition, and therefore the likelihood that a client
will meet its targets. For example, the low-carbon
technologies employed, and green capital or
operational expenditure plans.
Most of these criteria are consistent across
sectors, however we also consider some sector-
specific criteria. This includes Energy sector
clients' commitments on methane emissions
reduction and Power sector clients' commitments
to phase-out thermal coal.
The assessments under the two elements are
combined to arrive at an overall CTF score from
T1 (best) to T5 (worst).
The development of the CTF has been a cross-
bank exercise utilising the breadth of climate
expertise across Barclays. It has been informed by
a review of third-party frameworks (e.g. TPI,
CA100+, SBTi) and other industry initiatives (e.g.
UK's Transition Plan Taskforce, GFANZ). Design
choices regarding material criteria have also been
informed by internal sector analysis and insights
from our stress testing exercises.
Today, the CTF is primarily a benchmarking tool.
Our initial assessments have been conducted for
the majority of our corporate clients in sectors
where BlueTrackTM targets have previously been
set: Power, Energy, Cement and Steel - over 150
clients in total. As new BlueTrackTM targets are set,
the CTF will be applied to corporate clients in
those sectors.
Findings from those initial assessments include:
• c.80% of assessed clients have climate targets
• c.60% of clients assessed have executive
compensation tied to achievement of their
climate goals.
The review process has also revealed a number of
challenges in gaining an accurate assessment of
clients' transition preparedness, in particular the
availability and consistency of data. We will
continue to work to address data quality
challenges we have identified in the next iteration
of the CTF.
The CTF has also provided insight into key
dependencies and levers that will impact our
ability to meet our targets across sectors.
+ Further details on the dependencies impacting our
strategy can be found on page 135.
Barclays PLC
Annual Report 2022 97
Other tools considered
We have developed tools to monitor and report
on progress to date against our financed
emission targets, as well as to estimate potential
future paths. Client commitments and our Client
Transition Framework feed into this analysis and
help us determine where to best deploy capital.
We have considered other tools to help steer our
financing and portfolios, including applying an
internal carbon price or capital weightings. We will
continue to explore carbon pricing as a tool to
support the transition but, at this stage, we have
decided not to progress with it as we think there
are other levers that are more effective.
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Just transition within the CTF
We have launched a pilot assessment, which is
ongoing, to evaluate whether our clients are
seeking to decarbonise in line with a just
transition for their stakeholders, considering
the social risks and opportunities of the
transition, and ensuring effective dialogue with
affected stakeholders. Relevant stakeholders
include workers, communities, consumers,
and suppliers impacted by the client’s
decarbonisation strategy. We will iterate this
assessment and expect our criteria to evolve.
In this pilot, we are assessing whether our
clients' approach to a just transition
includes consideration of:
• adverse impacts on stakeholder groups
from their activity (e.g. job loss, loss of
tax revenue)
• actions to address identified impacts
(e.g. upskilling, remuneration,
psychological support)
• engagement with impacted stakeholder
groups in decision-making that
affects them.
We engaged Oliver Wyman, a leading
management consultancy, to review and
benchmark the CTF. This will allow us to identify
enhancements to the CTF to ensure it is a robust
mechanism for assessing the credibility of
clients' transition plans.
As the framework is improved and refined, the
CTF results will be integrated into key processes
across the bank and capital allocation, as well as
informing client engagement. CTF scores may
also be used alongside other relevant factors to
inform other processes, including credit risk
assessments, Climate Enhanced Due Diligence,
and portfolio alignment strategy. This will allow us
over time to:
• measure, monitor and report on our clients'
decarbonisation progress and their
implications for our targets
• understand how we can support our clients'
transition activities
• identify engagement opportunities to support
clients' decarbonisation progress in line with
market expectations and consistent with our
own approach, through the provision of
financing advice and solutions; and inform
decision-making should engagement be
ineffective over time
• inform our own transition plan and progress,
including key dependencies, risks to meeting
our interim emissions reduction targets, and
levers to address those risks.
Additionally, these evaluations will increasingly
feed into our wider climate scenario analysis,
such as being used to inform sensitivity analyses
that will in turn inform our strategy.
+ Further details on our approach to climate EDD and
climate risk can be found on pages 253, 273 and 285.
Engaging clients with the CTF
We believe that Barclays can make the greatest
difference by supporting our clients as they
transition to a low-carbon business model, rather
than by simply phasing out support for them.
This is particularly true for our clients in highly
carbon-intensive sectors. Where companies are
unwilling to reduce their emissions consistent
with internationally accepted pathways, they may
find it difficult to access financing, including from
Barclays.
As part of the roll-out of the CTF, we will begin
climate-specific engagement for those clients
with scores of T4 and T5. This will ensure that we
are directing efforts towards the clients that are
most at risk of failing to transition in line with our
targets and our approach to climate risk.
We will track our climate engagement efforts and
ensure we clearly communicate our expectations
for an appropriate transition plan while working
with them to understand any unique challenges
they may face in pursuing their transition.
As the economy progresses along the pathway
to net zero and we get closer to our interim
targets, we may adjust our expectations of
clients.
We will report on the progress from our
engagement in our 2023 Annual Report.
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Barclays PLC
Annual Report 2022 98
TCFD Strategy Recommendation (b) | Strategic Pillar 2
Restrictive policies
In addition to setting sector-specific emission
reduction targets, consistent with our Purpose
and considering relevant risks and other factors,
we have set explicit restrictions to curtail or
prohibit financing of certain activities in sensitive
sectors. These policies are listed below and set
out in detail within our statements and policy
positions .
They include clear restrictions on thermal coal
mining and coal-fired power generation, Arctic oil
and gas, oil sands and hydraulic fracturing
(fracking). Our restrictive policies are regularly
reviewed and updated based on a number of
internal and external factors. In light of this we are
aligning our thermal coal power phase-out date
for all EU and OECD countries to 2030.
Since 2020, as part of our climate strategy we
have only provided financing to oil sands
exploration and production clients who have
projects to reduce materially their overall
emissions intensity, and a plan for the company
as a whole to have lower emissions intensity than
the level of the median global oil producer by the
end of the decade. As a result of this policy, our
lending exposure to oil sands exploration and
production clientsa had reduced to zero at the
end of 2022.
In light of this position and consistent with
Barclays’ business strategy, we are further
restricting our business appetite so that with
effect from 1 July 2023 we will not provide
financing to oil sands exploration and production
companies or for the construction of new oil
sands exploration assets, production and
processing infrastructure or Oil Sands Pipelines.
Position and policy statements
on sensitive sectors
Climate
change
• Coal mining
• Coal power
• Oil sands
• Fracking
• Arctic oil and gas
Forestry and
Agricultural
Commodities
• Forestry, pulp
and paper
• Palm oil
• Soy
+ Further details can be found at: home.barclays/
sustainability/esg-resource-hub/statements-and-policy-
positions/
The experience of the last few years leads us to
recognise that client transition pathways will vary
and the ability of our clients to meet our
requirements may be affected (positively or
negatively) by external factors, including, for
example, the public policy and regulatory
environment, technological advancement,
geopolitical or regional developments, energy
security, cost of living and just transition factors.
We intend to continue to work with and support
our clients as they transition their business and
will monitor and engage with them on their
progress and the impact of external factors over
time, through our Enhanced Due Diligence and
Client Transition Framework.
We will continue to keep our policies, targets and
progress under review in light of the output of
that work, the external environment and the
need to support an orderly energy transition and
provide energy security.
Further restrictions are set out in our Position
Statements in relation to Forestry and
Agricultural Commodities and World Heritage
and Ramsar Wetlands. We intend to update
these Statements and related policies and
procedures in Q2 2023.
Notes
a Oil sands exploration and production companies are those that
majority own (>50%) or operate oil sands exploration, production and
processing assets, other than companies that generate less than 10%
of revenue from these activities.
b A client is defined as "engaged in" coal-fired power generation if the
client earns >5% revenue from that activity.
c Oil Sands Pipelines are pipelines whose primary use is for the
transportation of crude oil extracted from oil sands.
Changes to our restrictive policies
Previously announced policy
New announcement
Restrictive
policy
Thermal Coal
Power
Existing restrictions in relation to thermal coal financing will continue to apply other than as updated below
• By 2030: in the UK and EU – phase out of financing to clients
engagedb in coal-fired power generation. In the rest of the
world (including USA) – no financing to clients that generate
more than 10% revenue from coal-fired power generation
• By 2030: in EU and OECD phase out of financing to clients
engagedb in coal-fired power generation. In the rest of the
world, no longer provide financing to clients that generate more
than 10% of revenue from coal-fired power generation
• By 2035: phase out of financing to clients engaged in coal-fired
• By 2035: phase out financing to clients engaged in coal-fired
power generation
power generation
Oil Sands
• We will only provide financing to oil sands exploration and
production clients who have projects to reduce materially their
overall emissions intensity, and a plan for the company as a
whole to have lower emissions intensity than the level of the
median global oil producer by the end of the decade.
We will not provide financing:
• To oil sands exploration and production companiesa ; or
• For the construction of new (i) oil sands exploration, production
and/or processing assets; or (ii) oil sands pipelinesc.
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Financing the transition
Financing the transition targets
Barclays PLC
Annual Report 2022 99
Barclays is facilitating green and sustainable
finance, alongside investing, to help the
economies we serve to support the
transition to a low-carbon model.
We are facilitating funding and investing into
green technologies and low-carbon
infrastructure projects. We are also using our
advisory capabilities, product sets and financial
expertise to help our customers and clients
realise their own transitions to a low-carbon
economy.
In 2018, we set two targets covering financing
that we facilitate for our clients and customers:
(i) £150bn of social, environmental and
sustainability-linked financing by 2025; and
(ii) £100bn of green financing by 2030.
In 2020, we also announced that we would invest
up to £175m in environmentally-focused early-
stage technology companies under our
Sustainable Impact Capital investment mandate.
During 2022, we continued to facilitate finance
and undertook a strategic review of the Group’s
capabilities, market demand and growth
opportunities across sustainable financing.
As a result in December 2022, we announced
two new targets - to facilitate $1trn of
Sustainable and Transition Financing between
2023 and the end of 2030 and to invest £500m
into global climate tech start-ups through our
Sustainable Impact Capital portfolio by the end of
2027.
£150bn social, environmental and sustainability -
linked financing facilitated between 2018 and 2025
Progress: target exceeded in 2021, with £247.6bnΔ facilitated by the end
of 2022
Sustainable
financing
targets
Sustainable
Impact
Capital
target
£100bn green financing facilitated between 2018 and 2030
Progress: on track to meet target well ahead of the 2030 target date,
with £87.8bnΔ facilitated by the end of 2022
$1trn Sustainable and Transition Financing
between 2023 and 2030
New target encompasses green,
social, transition and sustainability-linked financing
£175m between 2020 and 2025
Progress: £89m invested
by the end of 2022
Extended
to £500m
by 2027
Existing targets New targets announced in 2022
Social, environmental and
sustainability-linked financing
Barclays surpassed its target of facilitating £150bn
of social, environmental and sustainability-linked
financing between 2018 and 2025 in 2021, four
years early. We facilitated £54.3bnΔ of social,
environmental and sustainability-linked financing
during 2022 (£69.2bn in 2021) and a cumulative
£247.6bnΔ since 2018. The fall in financing facilitated
in 2022 is consistent with the drop in overall market
activity compared to 2021.
Social and environmental financing consists of
financing for dedicated use of proceeds, financing
for clients with an eligible business mix in relevant
environmental and social categories, and
sustainability-linked financing which refers to
general purpose funding linked to specific
sustainability performance metrics.
Debt issuance was the largest product category
again this year accounting for 71% of the total
(2021: 74%). Loans and equity accounted for 26%
(2021: 19%) and 2% (2021: 7%) respectively.
Social financing
Raising finance for clients including
supranational, national and regional development
institutions continued to be a key driver of the
£24.9bnΔ of social financing facilitated in 2022,
while also contributing 58% of the total social and
environmental financing (excluding
sustainability-linked).
Notes:
Δ 2022 data subject to independent Limited Assurance under
ISAE(UK)3000 and ISAE3410. Current and previous limited assurance
scope and opinions can be found within the ESG Resource Hub for further
details: home.barclays/sustainability/esg-resource-hub/reporting-and-
disclosures/
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As a growing area of sustainable finance, we have
seen issuers aligning their financing
commitments to social use of proceeds bonds
which allocate funds to categories such as
access to healthcare, affordable housing and
essential services. We have also seen the use of
social KPIs within sustainability-linked financing
such as targets linked to gender diversity.
Environmental financing
Our environmental financing consists of labelled,
dedicated use of proceeds and general purpose
financing in environmental categories. In 2022,
we facilitated £18.0bnΔ versus £22.6bn in 2021,
reflecting continued strong demand for
environmental financing and our strategy to work
with our clients and customers to help facilitate
their transitions towards a low-carbon economy.
Sustainability-linked financing (including social)
In addition to dedicated use of proceeds
transactions where financing is allocated to
specific eligible green, social or sustainable
activities, projects or assets, sustainability-linked
bonds (SLBs) and sustainability-linked loans
(SLLs) are forward-looking, performance-based
debt instruments issued with specific KPIs and
sustainability performance targets.
Our sustainability-linked financing totalled
£11.4bnΔ in 2022, up 5% from £10.8bn in 2021.
The SLB market continues to be of significant
importance to both investors and issuers alike
who use these instruments to embed their
sustainability targets into financing
commitments.
Barclays' Sustainable
Finance Framework
Our sustainable financing is tracked using the
methodology set out in the Barclays
Sustainable Finance Framework, which defines
the criteria we use for social financing,
environmental financing, green financing and
sustainability-linked financing for the purpose
of recording progress against our sustainable
finance targets.
Barclays is developing a similar Transition
Finance Framework, that will determine the
eligibility of transition transactions.
+ Our Sustainable Finance Framework can be found online
within our ESG Resource Hub at: home.barclays/
sustainability/esg-resource-hub/reporting-and-
disclosures/
Facilitating £100bn of green financing
We facilitated £25.5bnΔ of green financing in
2022 (down from £29.8bn in 2021, reflecting
lower market activity), comprising:
• labelled use of proceeds and general purpose
financing in environmental categories
(£18.0bnΔ in 2022) and
• sustainability-linked financing that
incorporates environmental performance
targets (£7.5bnΔ in 2022).
Since 2018, we have facilitated a total of
£87.8bnΔ across these categories. We are
therefore on-track to meet our target of £100bn
of green financing well ahead of the 2030 target
date.
Breaking down our green financing by product
type, the largest category was debt issuance,
accounting for 61% (2021: 63%) of the total.
Loans and equity made up 33% (2021: 21%) and
4% (2021: 15%) respectively.
New $1trn Sustainable and Transition
Financing target
In light of the progress made against our
previously announced targets and after a
strategic review of the Group's capabilities,
market demand and growth opportunities, in
December 2022 we announced a new target to
facilitate $1trn of Sustainable and Transition
Financing between 2023 and the end of 2030.
This encompasses the green, social, transition
and broader sustainability-linked financing
requirements of clients including corporates,
governments and consumers. This includes
financing of climate and environmental solutions
including green mortgages, energy efficient
technology and renewable energy, as well as
financing for broader social and sustainability
work, including sustainability-linked structures
and areas such as affordable housing.
The inclusion of transition financing in this target
reflects our recognition of the importance of
supporting the decarbonisation of "hard to
abate" sectors that are carbon intensive.
Progress towards this target may vary from year
to year. Changes in market conditions, policy,
laws, regulation and stakeholder expectations,
including approaches to product labelling and
regulatory scrutiny of green and sustainable
products could impact lending and capital
markets appetite. New climate and
decarbonisation technologies may scale at
varying rates, including being reliant on the supply
and demand of raw materials. We will continue to
review and adapt our approach to sustainable
financing in response to the evolving market
opportunities.
Barclays PLC
Annual Report 2022 100
Sustainable Impact Capital
We firmly believe that innovation is key to tackling
climate change and we are committed to
supporting transformative change by investing
our own capital in entrepreneurial companies. In
2020 Barclays announced that it would invest up
to £175m equity capital into environmentally-
focused start-ups by 2025, helping to support
our clients' transition towards a low-carbon
economy.
To date, we have invested £89m into 16
innovative start-ups, helping them to scale
solutions to environmental challenges and fill
their growth-stage funding gaps.
These investments have supported many
aspects of climate-tech innovation, from
property retrofit solutions to long-duration
energy storage and hydrogen technologies.
Momentum has so far been in-line with
expectations creating strategic opportunities
across the Group. The success of the
investments to date meant that an increase in the
investment mandate was required to allow Barclays
to continue existing efforts and support new
investments. As a consequence, in December
2022 we announced that the investment
mandate will increase to £500m by the end of
2027.
We expect the next phase of investments will see an
enhanced focus on decarbonisation technologies
that are enabling transition within carbon intensive
sectors, particularly where Barclays has meaningful
client exposure such as energy and power, real
estate and transport. A particular focus will be on
carbon capture and hydrogen technologies.
Notes:
Δ 2022 data subject to independent Limited Assurance under
ISAE(UK)3000 and ISAE3410. Current and previous limited assurance
scope and opinions can be found within the ESG Resource Hub for further
details: home.barclays/sustainability/esg-resource-hub/reporting-and-
disclosures/
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Sustainable financing dashboard
Barclays PLC
Annual Report 2022 101
£150bn social, environmental and sustainability-linked financing facilitated
(2018-2025)
Annual breakdown by category
(£bn)
Annual breakdown by region
(£bn)
Achieved to date
£247.6bnΔ
Annual breakdown by product
(£bn)
2022
2021
2020
2019
2018
2022
2021
2020
2019
2018
2022
2021
2020
2019
2018
n Environmental n Social n Sustainability-linked
n Americas n UK / Europe n Asia and Rest of World
n Debt n Equity n Loan n Investments n Other (Contingent)
£100bn green financing facilitated
(2018-2030)
Breakdown by year
(£bn)
Breakdown by region
(£bn)
2022
2021
2020
2019
2018
2022
2021
2020
2019
2018
Achieved to date
£87.8bnΔ
Breakdown by product
(£bn)
2022
2021
2020
2019
2018
n Environmental n Sustainability-linked (green)
n Americas n UK / Europe n Asia and Rest of World
n Debt n Equity n Loan n Investments n Other (Contingent)
Notes
Δ 2022 data subject to independent Limited Assurance under ISAE(UK)3000 and ISAE3410. Current and previous limited assurance scope and opinions can be found within the ESG Resource Hub
for further details: home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/
+ Further details of the data provided, including further granularity of decimal points
can be found in the ESG Data Centre located within the ESG Resource Hub at
home.barclays/sustainability.esg-resource-hub/reporting-and-disclosures/
18.0△22.614.87.85.324.9△35.741.223.921.811.4△10.85.03.11.419.827.129.614.410.030.836.028.618.617.13.66.12.71.81.538.350.949.130.2 25.8 1.24.82.60.10.414.313.19.24.4 2.30.40.318.0△22.614.87.85.37.5△7.22.81.40.37.112.77.93.32.316.814.79.05.03.01.72.40.70.90.315.618.912.27.0 4.8 0.94.41.50.10.38.36.23.82.1 0.60.70.34.312.320.5824.1 Strategic
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Barclays' Sustainable
Finance Framework
We seek to be transparent about our approach
to reporting against our sustainable finance
targets. Our sustainable financing is tracked
using the methodology set out in the Barclays
Sustainable Finance Framework (SFF). This
framework defines the criteria we use for social
financing, environmental financing, green
financing and sustainability-linked financing. This
includes ‘dedicated purpose’ green and social
financing, ‘general purpose’ financing based on
eligible company business mix and sustainability-
linked financing, and sets out applicable criteria
drawing on industry guidelines and principles.
It should be noted that the methodology is reliant
on a range of data sources including Dealogic
and Bloomberg transaction listings and league
tables, as well as other third-party data and
verification sources including company
disclosures to aid the classification of financing
into eligible green and social categories.
We recognise that the quality, consistency and
comparability of the data relied upon is not yet of
the same standard as more traditional financial
metrics and presents an inherent limitation to
the performance reported. We will continue to
review available data sources and enhance our
methodology and processes to improve the
robustness of the performance disclosed.
The legal and regulatory landscape relating to
sustainable financing, including the naming and
categorisation of products as ‘green’, ‘social’,
‘sustainability-linked’ and otherwise, is rapidly
evolving with differing regulations across
jurisdictions. We may wish to revisit our approach
in that context in the future.
There is currently no globally accepted
framework or definition (legal, regulatory or
otherwise) governing what constitutes 'ESG',
'green', 'sustainable', or similarly-labelled
products, nor is there unanimous agreement on
what attributes a particular investment, product
or asset should have to be labelled as such.
Furthermore, no assurance can be given that a
globally accepted definition or consensus will
develop over time. We will continue to monitor
and comply with applicable jurisdictional
regulatory taxonomy definitions and product
labelling obligations as they emerge.
As innovation in sustainable finance continues to
accelerate, we will continue to review and update
our SFF, our measurement of our performance
against targets, and keep our general approach
under review.
To support the new sustainable finance target,
we updated our SFF, published in December
2022, which will apply to financing volumes
tracked against our new target to facilitate $1trn
of Sustainable and Transition Financing between
2023 and the end of 2030.
+ Barclays' Sustainable Finance Framework can be found
online in our ESG Resource Hub at: home.barclays/
sustainability/esg-resource-hub/reporting-and-disclosures/
How our sustainable financing
supports the Sustainable
Development Goals (SDGs)
The 2030 Agenda for Sustainable Development,
adopted by all United Nations Member States in
2015, provides a shared blueprint for peace and
prosperity for people and the planet, now and
into the future. At its heart are the 17 SDGs,
which are a call for action by all countries -
developed and developing - in a global
partnership. Barclays is pleased to play its part,
working in partnership with our stakeholders to
support the delivery of the SDGs.
Since 2018, we have tracked our annual
contribution to the SDGs, through our financing
activities. An illustrative breakdown of our social
and environmental financing is provided in the
chart above.
Barclays PLC
Annual Report 2022 102
SDG illustrative breakdown of 2022 social and environmental financing
£bn
8.7bn
5.9bn
4.7bn
4.5bn
3.7bn
0.3
0
0.5
0.6
0.1
n Clean water and sanitation
n Affordable and clean energy n Sustainable cities
and communities
n Reduced inequalities
n No poverty
n Zero hunger
n Good health and wellbeing n Decent work and
economic growth
n Quality education
n Gender equality
n Industry, innovation
and infrastructure
n Responsible consumption
and protections
n Climate action
n Life below water
n Life on land
n Peace and Justice Strong
Insititutions
n Partnerships for the goals
Note: Includes 2022 social and environmental financing and excludes sustainability-linked financing.
Our financing covers a range of financing
activities including debt and equity capital
markets, corporate lending, trade finance and
consumer lending. It helps to generate positive
social and environmental outcomes through
financing of activities such as, but not limited to,
energy efficiency, renewable energy, affordable
housing, basic infrastructure and services.
Financing of activities set out in the SFF in turn
supports progress towards achieving the SDGs.
For a full list of eligible social and environmental
activities see the Barclays Sustainable Finance
Framework, which shows how eligible social and
environmental activities contribute to individual
SDGs, supported through an analysis of
underlying SDG targets.
As we evolve our understanding of how our
financing contributes to the SDGs, we will refine
our methodology accordingly.
Beyond our financing activities, our community
programmes contribute to Goal 8 – decent work
and economic growth.
We also contribute to the SDGs through our
work implementing the UN Principles for
Responsible Banking (PRB). We continue to
analyse the potential positive and negative
impacts of our business through these principles.
Barclays has set targets in line with some of our
significant impact areas to drive alignment with
the goals and timelines of the Paris Agreement
and to contribute to the SDGs.
+ For further details, our PRB disclosure can be found online in
our ESG Resource Hub at: home.barclays/sustainability/esg-
resource-hub/reporting-and-disclosures/
4.52.35.94.71.28.72.41.63.72.62.01.6
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Working with our clients
We want to be by our clients' side as they
transition their businesses to operate in a
low-carbon economy. We are working on
expanding our sustainable finance offering
through our specialist teams to help clients
navigate this period of extraordinary
change.
Engaging clients through our Client
Transition Framework
The Client Transition Framework, outlined on
page 96, will enable us to direct engagement
efforts towards clients that are most exposed to
the risk of failing to transition in line with sectoral
pathways as reflected in our targets.
Engagement through business/
events
As trusted advisers, we continue to proactively
engage with many of our clients on the risks and
opportunities for their businesses from the
transition to a low-carbon economy. This
includes working with higher-intensity clients on
their transition journey. We help clients execute
on their climate strategies including facilitation of
initial public offerings for climate-focused growth
companies, acquisitions of emerging climate
technology start-ups to diversify incumbent
clients’ business models and financing to
mobilise decarbonisation of operational
activities.
Over the course of 2022, we had over 15,000
engagements with clients within the Corporate
Bank on ESG topics, around triple the number of
ESG engagements delivered over 2021 (5,000),
thanks to focused efforts by relationship teams
to raise ESG topics proactively.
We also held numerous client events on ESG and
sustainability topics, reaching nearly 2,000
contacts over 2022.
Engagement through research
We provide thought leadership to support our
clients, using our in-house ESG Research
capability. Clients who have access to our
research publications tell us it prompts greater
evaluation of their business needs, and we have
seen a number of instances of this leading to
broader conversations about the transition to a
low-carbon economy and the ways Barclays is on
hand to support. In 2022, we published over 400
ESG-focused research reports.
We will continue to provide support to our clients
in their efforts to transition. This will be informed
by the outcomes of the Client Transition
Framework assessments, allowing us to be
targeted in our engagement efforts and provide
clients with clear communication on our
expectations for transition planning and how to
take advantage of the opportunities from the
transition.
Barclays PLC
Annual Report 2022 103
Products and services
As a British universal bank, we support a wide
range of customers and clients from individuals
and small businesses through our consumer
banking services, to mid-sized and larger
businesses and institutions, including
governments, through our corporate and
investment banking services. We believe the
transition to a low-carbon economy is a defining
opportunity for innovation and growth and we
are determined to play our part in the transition.
There is an opportunity for Barclays to play a
significant role in helping to meet the demand for
climate-related financing to support the
transition.
We believe it is an advantage that we serve
clients across the spectrum from small to large,
across different sectors, and in some cases
supporting these clients as they grow.
We are also building capabilities to help support
the innovation that is needed to make the
transition a success. We have developed
dedicated teams, capabilities and propositions
to help scale the start-up businesses that are
developing and growing the technologies that will
help the world reduce emissions - through our
Sustainable Impact Capital mandate but also
through Sustainable and Impact Banking, ESG
Research and our network of accelerators.
In each of the business areas and product teams
we have been building expertise and knowledge
that will enable us to better support clients as
they chart their way through the journey to a low-
carbon economy.
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Barclays PLC
Annual Report 2022 104
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Entrepreneur and
innovation programmes
Barclays is finding new ways to collaborate with
innovative start-ups, bringing new ideas to life
and enabling sustainable growth, supporting
individuals, businesses, communities and the
wider economy.
Barclays' open financial technology (fintech)
innovation strategy is focused on sourcing ideas,
technology and talent outside the bank and
supporting its adoption and dissemination within
Barclays. Our wider programme of fintech
initiatives includes, among other things, support
for fintechs in-line with Barclays' Climate
Strategy and societal goals.
Strategic initiatives
Initiative
Goal
Rise Start-Up
Academy
Rise Growth
Academy
750 founders supported
by the end of 2025
50 fintechs supported by
the end of 2025
Female Innovators
Lab Fund
Deploy $30m capital into
female fintechs
FinTech Venture
Studio
6 new ventures launched
by the end of 2027
Eagle Labs
Unreasonable
Impact
In 2023, aim to provide:
• 1500 mentorship hours
• 18 Growth Programmes
Support 250 businesses
solving social and
environmental challenges
by the end of 2022
+ Further details on Barclays Innovation can be found at:
home.barclays/who-we-are/innovation/
The transition to a low-carbon economy requires
financing to scale the start-up businesses that
provide the technologies needed to reduce
emissions. Fintech is an important driver to the
commercialisation of climate-focused
technology for mass market adoption.
Barclays Rise
Rise, Barclays' global fintech platform, seeks to
create, explore and support new business
models and ideas in the latest fintech trends,
including climate fintech. Since 2015, Rise has
focused on building a global community of the
best minds in fintech to disrupt, challenge and
confront the way things are done in our industry.
Barclays Rise Start-Up Academy
The Start-Up Academy helps create future
fintechs, supporting emerging founders to
transition their idea into minimum viable
propositions. A special edition was launched in
2022 to support the increased talent in the
market due to layoffs across the tech sector.
The history of innovation has shown some of the
most successful new companies are built during
a market downturn.
Barclays Rise Growth Academy
The Growth Academy helps scale strategically
relevant fintechs and transition their founders
into CEOs with a 10 week, digital first curriculum
with coaching, MD mentorship and access to a
community. Participants may also be considered
for a potential strategic investment.
+ Further details on Barclays Rise and its programmes can be
found at: rise.barclays/
Barclays PLC
Annual Report 2022 105
Climate FinTech
Tackling climate change is one of the defining issues of our lifetime.
For the fintech sector, this creates opportunities for innovative, fast-growth companies that are
developing financial technology in supporting the transition to a low-carbon economy.
+ Barclays Rise publishes FinTech Insights from
across the world. Further details can be found at:
rise.barclays/news/reports/
Barclays Female Innovators Lab Fund
The Female Innovators Lab Fund is a US, UK and
Europe-based studio and fund co-created by
Barclays and Anthemis, and backed by Aviva. The
Lab’s mission is to identify female founders at the
idea stage of their journey and match them with
the resources and mentorship required to develop
a company and bring it to its first round of
fundraising.
Anthemis’ record as early-stage fintech investors
and venture builders, coupled with the resources
and global footprint of Barclays, makes this an
exceptional opportunity for prospective founders
to progress their business ideas. Participating
start-ups will have access to Barclays’ fintech hub
Rise, and Anthemis’ dedicated office spaces, with
mentorship and networking opportunities.
+ Further details on Barclays Female Innovators Lab can be
found at: home.barclays/who-we-are/innovation/female-
innovators-lab-/
iWarranty, supported by the Female
Innovators Lab Fund, is digitising end to
end warranties to reduce electrical waste
Responding to new EU legislation and the
sustainability challenge to ensure appliances
can be repaired for up to 10 years to reduce
the mountain of electrical waste, iWarranty
is digitising the end-to-end warranty market
as well as connecting consumers with local
repair networks.
+ Further details on iWarranty can be found at:
iwarranty.co/
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Barclays FinTech Venture Studio
Barclays Fintech Venture Studio, powered by
Rainmaking, is seeking to develop a portfolio of
new growth opportunities, transforming finance
for Barclays teams and clients across the bank
through effective fintech partnerships and co-
creation.
We identify strategic opportunities across the
breadth of the bank, and design and deliver pilots
to ensure the success of our scaled partnerships.
Our approach leverages deep market knowledge,
extensive experience in delivering innovation
across complex environments, and a repeatable
model enabling us to scale innovation at pace.
A dedicated Climate Fintech Innovation Strategy
has been developed to identify and drive growth
opportunities within this framework.
Unreasonable Impact
Through its Unreasonable Impact programme,
Barclays is supporting high-growth
entrepreneurs with the network and resources
they need to address pressing social and
environmental challenges.
This strategic global partnership with
Unreasonable Group has enabled Barclays to
deliver on its Citizenship commitment to support
more than 250 entrepreneurs by the end of
2022, whose ventures have the potential to
create jobs of the future while solving key social
and environmental issues.
With billions in financing already raised by its
portfolio, the partnership’s momentum
continues to grow, and the ventures are driving
innovations in a variety of industries, from energy
and environment to food and water.
+ Further details on Unreasonable Impact can be found at:
home.barclays/sustainability/supporting-our-communities/
unreasonable-impact/
Barclays Eagle Labs
Barclays Eagle Labs look to help incubate, inspire
and educate UK founders, start-ups and scale-
ups and help them to succeed and grow.
+ Further details on Barclays Eagle Labs can be found at:
labs.uk.barclays
Eagle Labs Demo Directory
Eagle Labs run a proposition which supports
growth stage companies and investors across all
industries. Investors can use the platform to
identify sustainability-related businesses
including those seeking to raise capital to help
the transition to a low-carbon economy.
+ Further details on Eagle Labs Demo Directory can be found
at: labs.uk.barclays/demo-directory/
Etopia - Building for a lower
carbon future
Etopia, a participant in the Unreasonable
Impact programme, is creating a more
sustainable, efficient, affordable, and resilient
approach to net zero carbon home building
through modern methods of construction.
They are doing this by producing sustainable
building systems that enable contractors,
developers, and housing providers to deliver
net zero ready carbon homes that are built to
the UK's Future Homes and Buildings Standard.
+ Further details on Etopia and how Barclays has been
supporting them on their journey to build more
sustainable homes, can be found at:
barclayscorporate.com/client-experience/client-stories/
etopia/
Carbon13 Incubator via
Cambridge Eagle Labs
In October 2022, Barclays Eagle Labs and
Carbon13 announced a new partnership
which will support start-ups focused on
sustainability and climate-tech innovation.
Through the partnership Barclays is
committing up to £2.5m investment to
deliver the Carbon13 Venture Launchpad
programme from 2023. The programme will
provide founders with support and
mentoring to tackle significant challenges
that UK start-ups face on the road to net
zero, and drive innovation in the green
technology sector. It will also provide them
with access to potential investors.
Barclays PLC
Annual Report 2022 106
Eagle Labs Green Tech
Eagle Labs is building a community of start-ups
working on disruptive technology and more
established companies with deep domain
expertise, to accelerate the innovation needed
to create the new technology that will deliver a
more sustainable future and achieve our net zero
goals. EnergyTech Bridge has helped 10 large
corporate energy industry customers as they
transition to a lower carbon economy by
connecting them to promising UK start-ups and
innovative leaders from the tech industry.
+ Further details on climate-related topics with Energy and
technology can be found at: labs.uk.barclays/our-industries/
energytech/
Eagle Labs Agri Tech
We connect traditional agriculture with new and
emerging innovation to help create sustainable
efficiencies in farming and agriculture to close
supply chain gaps in food production.
+ Further details on climate-related topics with Agriculture and
technology can be found at: labs.uk.barclays/our-industries/
agritech/ in addition to insights available at: labs.uk.barclays/
learning-and-insights/agritech/
Barclays Eagle Labs also offers our Barclays Eagle
Labs Female Founder Accelerator in partnership with
AccelerateHER to support 40 innovative female-led
technology businesses as well as the Barclays Black
Founder Accelerator, a programme especially
designed to champion diversity in entrepreneurship
and showcase Black Founder-led businesses.
+ Further details on Barclays Eagle Labs and Carbon13
Incubator can be found at: labs.uk.barclays/learning-and-
insights/news-and-insights/news/
c.9,600a
businesses supported by Eagle Labs
throughout 2022
Notes:
a Covering all our members, alumni, programme attendees and
ecosystem engaged businesses
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Barclays UK Consumer
and Business Banking
Sustainability is a key focus area for Barclays UK. We
are actively engaging with our retail and business
customers to better understand the steps they
want to take to become more sustainable, and the
role that finance can play. We are using this insight-
led approach to design and develop sustainable
finance solutions that meet the needs of our
customers.
We have started embedding environmental
considerations and climate risk into product and
proposition standards, and we plan to further
embed this into product governance through the
New and Amended Product Approval (NAPA)
process. We have recruited specialists into
sustainability-focused roles across Barclays UK and
we intend to roll out colleague training for the retail
bank. In 2022, we began issuing recycled cards for
our retail credit and debit cards, as well as across our
commercial card issuing portfolio. We have also
used new digital journeys in the app and online
banking to support an additional 1.8 million
customers to become paperless and reduce their
paper waste. We are also switching to a different
paper type sourced from an integrated paper mill
which has a lower environmental impact as it uses
less energy. We have launched our first electric
mobile banking van to provide a lower emitting way
of serving our customers and communities.
Complementary to this, our electric mobile banking
colleagues have been trained with a government
approved Alternative Fuelled Vehicle (AFV) driving
certification. Additional electric mobile banking vans
will be introduced next year, in line with our intention
to fully electrify our mobile banking vans by 2025. As
part of our physical network, we are developing
‘Print’ and ‘Energy’ dashboards for our branch
colleagues to provide information about usage and
insights to encourage them to reduce the carbon
footprint.
By working collaboratively under a unified strategy
across Barclays UK, we aim to further expand our
sustainable products and propositions to meet
customers’ needs and support them in seeking to
reduce emissions.
Consumer Bank
Barclays UK Consumer Sustainability Hub
We launched a Sustainability Hub to engage
consumers and provide them information on
financial products and services we offer that may
support them in making more sustainable
choices. This includes sharing Barclays’ approach
to tackling climate change. Given the current
energy crisis and consumer interest in reducing
home energy usage, we are engaging customers
on this topic by featuring information about
making homes more energy efficient. We are
also providing information on moving towards
sustainable travel and we aim to focus on this
area, particularly by helping to scale the adoption
of electric vehicles across the UK for consumers
through partnerships and propositions. We plan
to expand the content on the Sustainability Hub
and integrate the content into the Barclays app.
+ Further details on the consumer-facing Sustainability Hub
can be found at: barclays.co.uk/sustainability/
Green home propositions
In 2018, Barclays led the market as one of the
first UK lenders to launch a Green Mortgage.
Since inception, Barclays has lent over £2.6bn to
Green Home mortgage customers with £1.6bn
of financing delivered in 2022. In 2022, Barclays
expanded Green Home mortgages to include
buy-to-let properties, supporting more
customers to purchase an energy efficient new-
build home.
+
Further details on our progress to estimate emissions
intensity for our UK mortgage portfolio can be found on
pages 92 to 94.
Barclays PLC
Annual Report 2022 107
Green Mortgage completions
Number of completions
n 2022 progress n Total since 2018
Value of completions (£m)
n 2022 progress n Total since 2018
Based on the enhanced EPC matching, as of the
end of Q3 2022, a valid EPC rating was available
for 65.1% of our mortgage book by volume
compared to Q3 2021, where we had a valid EPC
rating for 55.7% of our mortgage book. There are
industry-wide challenges regarding obtaining
greater coverage of EPC ratings as this data is
sourced directly from the government EPC
register and is released on a quarterly basis.
Mortgages balance by EPC rating (£m)
as of 30 September 2022
In October 2022, Barclays launched the Greener
Home Reward pilot.
2022 total: 116,644
+ Further details on Barclays Greener Home Reward can be
found at: barclays.co.uk/mortgages/greener-home-reward/
We have piloted training on energy efficiency of
homes with a small group of mortgage advisors
and will roll this out further in 2023.
+ Further details on Barclays Green Home Mortgages can be
found at: barclays.co.uk/mortgages/green-home-mortgage/
Further details on Barclays Buy-To-Let Mortgages can be
found at: barclays.co.uk/mortgages/green-buy-to-let-
mortgage/
Our UK mortgages by EPC rating
Barclays UK regularly monitors the Energy
Performance Certificate (EPC) rating of its
mortgage portfolio, to support our management
of climate risk and our understanding of the
impact of our financing on the environment. In
line with our commitment to the improvement in
energy efficiency of our mortgages portfolio,
Barclays UK has set an ambition for 50% of
homes in its mortgage portfolio with a known
EPC to be rated EPC band C or better by 2030.
As at the end of Q3 2022, 42.3% were rated EPC
C or better (out of homes with a valid EPC, or
27.5% including homes without an EPC).
In 2022, Barclays UK onboarded a third party to
provide enhanced EPC matching in addition to a
broad suite of climate data for assessing physical
and transition risks in the Barclays UK Mortgages
portfolio (owner-occupied and buy to let).
782
4,275
n EPC rating G
n EPC rating F
n EPC rating E
n EPC rating D
n EPC rating C
n EPC rating B
n EPC rating A
358
EPC A & B Mortgages
18%
of mortgage balances rated
A or B against available EPCs
(2021: 17%)
7,08011,6861,6012,65619,08844,62426,63920,878
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Business Bank
Barclays' Business Bank has a dedicated
strategy to:
• prepare colleagues by upskilling them on
sustainability and client needs
• support clients to understand the case for
sustainability and know how to take action
• develop products to finance the transition
• embed sustainability into the business
Colleague engagement
We have provided training to our Business
Banking Relationship Managers and Specialist
Client Solutions Team, this is a key limb of the
Business Bank's strategy.
+ Further details on colleague training can be found
on page 118.
We have expanded our Specialist offering, with
an initiative to introduce net zero as a new area of
expertise within our Specialist Client Solutions
Team. Colleagues can now refer clients in to the
team to discuss how the transition to a low-
carbon economy can impact their business. This
is intended to extend across all regions in 2023.
Recognising that Agriculture is a high emitting
sector, we have announced a three-year agri-
climate partnership with Oxford University on a
project that will establish sector decarbonisation
pathways and methodologies for measuring
farm-level greenhouse gas emissions. The
partnership is aimed at supporting the sector’s
transition to more sustainable practices and will
inform financial decision-making.
The outcomes will be shared publicly and we aim
to use these to set emissions reduction targets
for the agriculture sector, in support of the
bank’s net zero ambition.
+ Further details on our partnership with Oxford University
can be found at: home.barclays/news/press-
releases/2022/10/barclays-and-oxford-university-
announce-3-year-agri-climate-part/
We have also created a Dairy & Livestock Forum
to consider carbon emissions as part of our
lending decisions to livestock farms. The aim is to
drive awareness of clients' emissions and help
both colleagues and clients understand and
share best practice and practical actions that can
be taken to reduce them. Topics on our ‘Let’s
Talk Business’ client podcast this year have also
covered sustainability.
Recognising that our business customers have
experienced unprecedented challenges over the
last two years, and to support them on their
journey from recovery to growth, in 2022 we
launched Barclays Business Health Pledge.
Sustainability has been a key theme covered
under this pledge and two masterclasses have
been filmed with a sustainability expert, alongside
hosting over 50 local Business Health Pledge
events, supporting over 1,300 attendees. We
have also held a ‘High Growth Live’ panel event
on sustainable funding with over 300 attendees.
+ Further details on our Health Pledge can be found at:
labs.uk.barclays/business-health-hub/barclays-business-
health-hub/introducing-the-barclays-business-health-pledge/
To recognise the positive impact of ESG-
focused entrepreneurs on the wider economy,
we have created a new ‘Sustainability Award’
category for the Barclays Entrepreneur Awards
this year which saw a total of 112 entries across
the whole breadth of the UK.
The Business Bank’s Sustainability Hub launched
this year to support customers as they get
started on their sustainability journey, to
understand how they might be impacted and
signposting them to support and financing
options. It has content and resources on EVs
and other green assets, as well as customer case
studies to help customers explore options that
may be right for them.
+ Further details on our Business Banking Sustainability Hub
can be found at: barclays.co.uk/business-banking/
sustainability-for-business/
Barclays PLC
Annual Report 2022 108
External engagement
Barclays worked with the Cambridge Institute of
Sustainability Leadership (CISL)’s Banking
Environment Initiative (BEI) and BSR on a series
of innovation sprints to better address the
barriers SMEs face to reach net zero. The sprints
produced a number of potential solutions to
drive change and support SME net zero action.
+ Further details on the 'Financial innovation for SME net zero
transition: Role of banks and buyers' report can be found at:
cisl.cam.ac.uk/resources/publications/financial-innovation-
sme-net-zero-transition-role-banks-and-buyers
Electric Vehicle proposition
In July 2022, we created an initial £20m fund and
launched a proposition with Propel Finance, our
Asset Finance provider, to offer competitively
priced fixed rate asset finance, supporting
business clients who are looking to purchase new
electric vehicles.
+ Further details on our Business Banking sustainability
journey can be found at: barclays.co.uk/business-banking/
sustainability-for-business/
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We expect that industry groups will begin to
dedicate more resources to the coverage of
sustainable technologies and related companies.
As this happens, we plan to evaluate how sectors
and companies are best covered by the bank and
adapt our model accordingly to provide the
support and resources required by our clients.
We will also use incentives to drive the
commercial success of our strategy by setting
appropriate key performance indicators and
tracking progress against them.
Sustainable Capital Markets
The Sustainable Capital Markets team is a key
part of Barclays’ dedicated ESG specialist CIB
teams and sits within the broader Barclays Global
Capital Markets function. This global team offers
a broad range of ESG capital markets product
types and delivers across multiple client
segments to help clients finance their
sustainability and transition journeys, as well as
formalise their sustainability commitments.
TCFD Strategy Recommendation (b) | Strategic Pillar 3
Corporate and
Investment Bank
How we serve clients
We continue to evolve our model to support our
clients and capture the opportunities as they
transition to a low-carbon business model. In
2022 we expanded our leadership in the
Corporate and Investment Bank (CIB) and
established the role of Global Head of
Sustainable Finance to create a centre of
excellence for sustainable finance in the CIB.
At Barclays we already use the concept of the
Power of One Barclays, which brings our
organisation closer together to create synergies
and provide customers and clients with the full
range of our products and services.
We are extending this mindset to consider how
we can best serve our clients’ needs relating to
ESG and the climate transition through an
integrated approach across Barclays’ products
and services. Examples of this include our ESG
advisory, industry coverage and Sustainable and
Impact Banking teams collaborating on M&A
opportunities; or our industry teams bringing
technical experts into client meetings to discuss
decarbonisation options. We believe this
approach incentivises proactive partnerships and
drives better outcomes for our clients.
How our model will evolve
Over time, we expect an evolution in our
coverage model so that sustainability becomes
increasingly embedded in our sector and industry
coverage teams. We intend to expand the
knowledge of our bankers and ensure subject
matter experts partner with the relevant teams
to develop content and expertise.
Barclays PLC
Annual Report 2022 109
The team focuses on underwriting and
structuring green, social, sustainable, transition
and sustainability-linked capital markets
financing solutions.
Supporting the UK Government in
their Green Finance ambitions
The UK Chancellor announced at the
Budget in early 2021 that the UK
Government’s ambition to issue a minimum
of £15bn of green gilts during the financial
year 2021/22. In June 2021, HM Treasury
released the UK Government Green
Financing Framework ahead of an inaugural
green gilt issuance in September 2021 of
£10bn, with a second issuance of £6.1bn in
October 2021.
In addition to participating in the UK’s first
green gilt issuance, Barclays also acted as
Duration Manager on the £4.5bn tap of the
UK’s second Green Gilt in September 2022.
Despite a highly volatile market at that point
in time, the transaction was well received by
investors; a testament to the markets’
support for the UK Debt Management
Office and the commitment of the
Syndicate for the transaction.
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Sustainable and Impact Banking
The Sustainable and Impact Banking team is a
dedicated sector coverage team focused on
advising and raising capital for emerging climate
technology companies across four key verticals:
clean energy, sustainable materials and recycling,
food and agriculture tech and carbon
management.
The team also provides financial advisory
services to existing banking clients on energy
transition matters via our ESG advisory team.
Regular interaction with funds with ESG
mandates and other stakeholders inform our
client dialogue.
Advancing decarbonisation
with Haffner Energy
Barclays supported decarbonisation and green
hydrogen leader Haffner Energy IPO, raising
€74.4 million in one of Europe’s first IPOs in 2022.
€74.4m
raised by Barclays supporting
decarbonisation and green hydrogen
leader Haffner Energy IPO
Barclays PLC
Annual Report 2022 110
The family-owned business, based in north east
France has 30 years’ experience in providing
engineering, procurement, construction and
construction management solutions for global
biomass-to-energy projects.
In 2021, Haffner Energy sought guidance to
help shape and manage the company’s
IPO ambitions.
Barclays’ Equity Capital Markets team partnered
closely with its Sustainability and Impact
Investment Banking colleagues and Haffner
Energy executives to align the company’s
equity story to its unique modular carbon
sequestration and hydrogen technology,
HYNOCA®, which converts sustainable
biomass into carbon-negative green hydrogen.
This repositioned the offering from a story of
a green hydrogen solutions provider, to one
of a decarbonisation solutions provider in the
global transition to a low-carbon economy.
This combination of innovative technology
alongside the strength of the management
team provided an attractive proposition for
investors, despite the strong volatility and
market backdrop of early 2022.
+ Further details on Haffner Energy can be found online at:
cib.barclays/investment-banking/advancing-
decarbonisation-with-haffner-energys-ipo.html
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ESG across our research teams
Barclays Research has continued to invest in its
ESG research capabilities and thought leadership
this year. We hired a Head of Asia ESG Research
and further strengthened our ESG teams in
Europe and the US.
Our approach to ESG Research is differentiated
through broad-based engagement with ESG
issues and higher quality insights with our
investor clients.
The ESG Research team works closely with
coverage teams to identify and analyse material
ESG opportunities and risks and to integrate ESG
into their analysis and recommendations. The
team also analyses how investors measure and
consider ESG factors in the investment process
to help asset managers structure their portfolios
and investment decisions. There have been over
400 ESG-focused research reports published in
2022 and over 800 bottom-up, company-
specific ESG profiles published to date.
Our expectation is that topics such as climate
change and decarbonisation, as well as other
sustainability themes and specific ESG attributes
will continue to grow in importance, and that the
global momentum behind ESG investing will
continue at pace, making it an essential requisite
for a large and growing number of investors.
During 2022, ESG Research hosted over 25 ESG-
related client events, including the third annual
Barclays ESG Research conference and Barclays
ESG Emerging Market Corporate Day.
+ Further details on ESG Research can be found at:
cib.barclays/research
Sustainable and Thematic Investing
The Sustainable and Thematic Investing
Research team at Barclays focuses on
sustainability and long-term thematic disruption.
Their reports are produced in conjunction with
sector analysts with the aim of identifying multi-
year sector trends that could help shape the
future business environment. Typically, the team
identify topics with a 5 to 10 year time horizon,
with the investment opportunities spanning both
public and private companies.
To aid thematic and ESG investors, the team
maintain an investment framework known as the
‘2030 Thematic Roadmap: 150 Trends’ and have
published reports on various trends relating to
disruptive technology, sustainability and
demographic change. The team have also
developed a range of investment tools including
trend momentum scores, UN SDG mapping and
company revenue tagging.
Relevant 2022 publications include Biodiversity,
Food Security, Sustainable Aviation Fuel, Food
Waste, Virtual Try-On, Electronic Waste and
Social Inclusion.
+ Further details on the Sustainable and Thematic
Investing Research team can be found at: cib.barclays/
our-insights
Sustainable Product Group
The Sustainable Product Group focuses on
increasing sustainability-related dialogue with
our clients and delivers a broad range of green
and sustainability-linked banking products.
The Sustainable Product Group’s offering
includes project finance; green and
sustainability-linked trade; corporate lending
and fund financing products. Clients benefit not
only from sustainability-related products but
also from the greater connectivity with
Corporate and Investment Banking teams as
well as the wider Group.
Barclays PLC
Annual Report 2022 111
Supporting Motability Operations
with its financing needs
Barclays has a longstanding and established
relationship with Motability Operations Group
PLC, a purpose-driven company and the UK’s
largest vehicle lessor who provide the
Motability Scheme to over 650,000 disabled
people.
Having launched its Social Bond framework in
2020, which Barclays supported as a joint ESG
structuring advisor and in 2022, Motability
Operations continued to align its financing
requirements to its sustainability strategy.
Motability Operations worked with Barclays,
leveraging our ESG expertise, to develop and
structure bespoke KPIs and targets to account
for its evolving sustainability strategy, priorities
and needs of its customer base.
In October 2022, Barclays, acting as both Joint
Mandated Lead Arranger and Sustainability and
Documentation Coordinator, helped Motability
Operations secure £1.9bn of sustainability-
linked term and revolving credit facilities.
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Barclays PLC
Annual Report 2022 112
TCFD Strategy Recommendation (b) | Strategic Pillar 3
Treasury green
programmes
Barclays Treasury plays a key role in helping
Barclays to meet its climate goals by allocating,
managing and governing its financial resources
effectively, and executing sustainable principal
investments and transactions, partnering with
businesses to advance strategic climate
objectives in the transition towards a
low-carbon economy.
Sustainable Impact Capital
Our Sustainable Impact Capital portfolio, led by
the Barclays Principal Investments team in
Treasury, has a mandate to invest £500m into
global climate tech start-ups through our
Sustainable Impact Capital portfolio by the end of
2027, helping to support our clients’ transition
towards a low-carbon economy.
+ Further examples of our green innovation financing can be
found at: home.barclays/sustainability/our-position-on-
climate-change/accelerating-the-transition/sustainable-
impact-capital/
From the acceleration of innovative carbon
efficient technologies and supply chains to
supporting the development of viable markets
for carbon capture and sequestration, the
programme is seeking out and supporting clear,
scalable propositions that deliver both
environmental benefits and economic returns.
We aim to fill growth stage funding gaps to help
accelerate and scale catalytic and strategic
solutions to environmental challenges.
We have made meaningful progress towards
building a portfolio of strategic investments
which have a focus on reducing carbon footprints
and accelerating the transition towards a low-
carbon economy. £89m of the £175m overall
target has been deployed since 2020, with £35m
invested in 2022, up 16% from 2021.
We expect the next phase of investments will see an
enhanced focus on decarbonisation technologies
that are enabling transition within carbon intensive
sectors, particularly where Barclays has meaningful
client exposure such as energy and power, real
estate and transport. A particular focus will be on
carbon capture and hydrogen technologies.
+ Further examples of our entrepreneur and innovation
programmes can be found on pages 105 and 106.
Achieved to date
£89m
Sustainable Impact Capital
£m
n 2020 n 2021 n 2022 n Target by 2027
MOF Technologies
An example of how Barclays is supporting
technology that will drive the transition to a
low-carbon economy is the investment in MOF
Technologies. A spin-out from Queen’s
University Belfast, MOF Tech has developed an
energy efficient carbon capture system,
Nuada, to reduce harmful emissions from
cement works, steel works, or energy-from-
waste plants.
They have expertise in a class of nanomaterials
known as Metal-Organic Frameworks (MOFs).
MOFs are solid, sponge-like materials tailor-
made to capture and separate gases like CO2.
In May 2022, MOF Technologies announced
that it would start work on an infield pilot
involving three of the world’s major cement
companies – Heidelberg Materials, Cementir
Holding and Buzzi Unicem - as part of the
Global Cement and Concrete Association’s
Innovandi ‘Open Challenge’ to achieve net zero
concrete by 2050. With the cement industry
accounting for 7-8% of global carbon
emissions, the impact opportunity for MOF
Tech’s pioneering technology is substantial
and Barclays looks forward to supporting them
as they scale.
+ Further details can be found at: home.barclays/news/press-
releases/2022/10/barclays-invest-in-mof-technologies-/
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TCFD Strategy Recommendation (b) | Strategic Pillar 3
Naked Energy
Barclays is actively supporting the energy
transition through Sustainable Impact Capital
investment in the British design and
engineering business Naked Energy. It
specialises in global innovation in solar thermal
and solar PVT (PV-Thermal) with a mission to
‘change energy for good’ by heat
decarbonisation. Heat is responsible for 51% of
all energy demand and accountable for 40% of
carbon emissions globally. 90% of all heat
consumption still comes from fossil fuels. The
key to decarbonising heat is through large-
scale deployment of distributed renewable
heating solutions, such as solar thermal. Solar
thermal heating systems provide a reliable, and
more resilient energy infrastructure by offering
zero carbon heat affordably and space
efficiently. Additionally, modern thermal
storage technology allows end-customers to
benefit from affordable clean heat throughout
the year. The International Energy Agency
estimates solar thermal and geothermal
production will meet 75% of all heat demand by
2050 – putting solar thermal energy at the
heart of working to meet the goals and
timelines of the Paris Agreement. Naked
Energy’s Virtu product range addresses end-
customers with a constant heat demand, such
as hospitals, multi-dwelling residential
developments, hotels, leisure centres and
manufacturing, e.g. food and beverage
industries. Virtu allows businesses to maximise
the potential of their roof space by generating
more energy per m2 than other solar
technologies. VirtuHOT (solar thermal) and
VirtuPVT (combined solar heat and power)
produce 50-100% more energy per m2, deliver
three to four times more carbon savings (when
compared with PV) and up to 50% greater
returns. It is a versatile solution to delivering on
a company’s ESG targets.
Decarbonisation impact
Since becoming commercially active in 2018
Naked Energy has sold more than 5,000 Virtu
collectors, to over 60 projects in 13 countries.
In total Virtu has abated over 274 tonnes of
carbon emissions.
+ Further details can be found at: nakedenergy.com/ or
home.barclays/news/ for press release updates
Barclays PLC
Annual Report 2022 113
ECOncrete
Barclays’ Sustainable Impact Capital investment
in ECOncrete Tech, a pioneering start-up
delivering high-performance ecological
concrete technologies, demonstrates our
support for innovative environmental solutions.
The technology seeks to enhance marine life on
offshore and coastal infrastructure, which can
be used for shoreline protection, waterfront
infrastructure and offshore applications. The
technology creates new biologically available
surfaces for marine life such as oysters, corals or
barnacles, while preserving and strengthening
the infrastructure’s functional and structural
properties. Species like oysters, for example,
become a critical ecological stepping stone for
additional organisms to live on and around a
structure and also act as biological glue,
enhancing the strength and durability of
structures.
Compared with traditional concrete,
ECOncrete’s technology has shown the
ability to double the biodiversity and
abundance of marine species, provide an
active carbon sink over the lifespan of the
structure, and significantly improve water
quality. This is due to their patented
admixture and unique design which has been
peer revieweda and evaluated by marine
scientists.
ECOncrete’s activities are helping to solve a
key environmental challenge for the coastal
and marine industries, improving the health
and resilience of surrounding ocean life.
Barclays’ support in ECOncrete’s growth
ambitions through Sustainable Impact Capital
equity investment will help enable ECOncrete
to expand rapidly into new markets and scale
operations into large-scale projects.
Note
a icevirtuallibrary.com/doi/abs/10.1680/fsts.59757.124
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TCFD Strategy Recommendation (b) | Strategic Pillar 3
Strategic ESG transactions
Treasury partners with businesses to originate,
structure and execute strategic ESG
transactions in order to support the climate
objectives of the bank and our clients. Together,
we partner with key development stakeholders
including the UK Infrastructure Bank, British
Business Bank and Export Credit Agencies to
design solutions which help unlock financing for
emergent green technologies and social
projects, leveraging on our unique principal risk
transfer, structuring and investment capabilities
to support these clients and projects to scale up.
Green notes programme
The Barclays Bank PLC green notes programme
covers a wide range of Barclays issued products
including structured and index-linked notes,
asset-backed notes and commercial paper which
are used to finance and / or refinance green
assets originated by our corporate and
investment banking teams and helping to finance
these projects more economically.
Green notes programme (Notional) £m
n Green structured notes
n ECP
88
135
Markets and Treasury structure and manage the
programme including the governance and note
frameworks which underpin issuance.
Green Structured Notes, in particular, give our
investors an opportunity to invest alongside us in
green assets that help fund the transition to a
low-carbon economy. It also helps Barclays
provide financing for these projects more
economically and thereby benefit borrowers.
+ Further details on our green notes programme can be found
at: home.barclays/greenbonds/
Green bond investment portfolio
In 2022, we remained engaged in the ESG market
as an investor. After above average growth in
ESG issuance volumes in 2021, the pace slowed
in 2022, with labelled bond issuance down by
approximately 30%. The market however
continued to broaden, with several new issuers
coming to the market. Barclays’ Treasury was
involved in a number of these inaugural events,
including debut issuance from the Canadian and
Austrian governments.
We aim to reach our £4bn target portfolio size
in the near term, as the green and sustainable
bond markets continue to broaden and with
issuance volume predicted to return to 2021
levels this year.
Green bond investment portfolio
size by year £bn
2022
2021
2020
Against an ambition to get to a portfolio size of
£4bn over time
Barclays PLC
Annual Report 2022 114
Green bond investment portfolio
impact by sector (%)
n Renewable energy
n Transport
n Other
39
45
10
n Water and waste
n Agriculture
3
3
Green bond investment portfolio
impact by region (%)
n Europe
n Asia
n South America
86
3
3
n Africa
n North America
4
4
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Private
Bank
Responsible Investing
In our Private Bank, Responsible Investing means
integrating material ESG considerations (among
others) into our investment decisions and
fulfilling our stewardship responsibilities through
engagement and voting. We regard Responsible
Investing as an integral element in meeting our
fiduciary duties towards our clients.
Our Discretionary Portfolio Management (DPM)
services are offered across the Private Bank and
sit at the core of the Private Bank's long-term
strategy. Our DPM Traditional strategies include
the Global Multi-Asset Class Strategy, Equity
strategies and Fixed Income strategies. Our DPM
Sustainable strategies are the Multi-Asset Class
Sustainable Total Return Strategy and the
Sustainable Global Equity Strategy.
While we incorporate the same approach in each
of our discretionary strategies and in all
jurisdictionsa in which we operate, we may have
portfolios with specific requirements where we
need to vary our approach to our core strategies.
For our Traditional strategies, we maintain a
standard set of exclusions that do not allow us to
invest in businesses we view as being involved in
the manufacture of controversial weapons and
we consider material ESG risks as part of the
standard investment process. For our
Sustainable strategies, more detail can be found
in the Sustainable Investing Solutions section
below.
All our DPM strategies seek to deliver
competitive investment returns for our clients
and create long-term value for stakeholders. We
believe that Responsible Investing helps us
achieve this.
As a long-term investor, we believe material ESG
issues can impact portfolio returns and are
relevant considerations in managing risk
effectively and delivering successful investing
outcomes for our clients. Understanding how
businesses are, for example, impacting the
environment, engaging with employees and key
stakeholders and practising good governance
helps us understand how well these businesses
are positioned now and for the future.
Engagement and voting .
We undertake engagement and voting in
partnership with our stewardship services
provider, EOS at Federated Hermes (EOS)b.
We view engagement and voting as an important
mechanism through which to hold management
to account and act as a lever to promote change
in investee companies on material ESG issues
where appropriate. We believe companies that
can better manage material ESG issues could be
less prone to severe incidents, such as fraud,
litigation or reputational risks.
In 2022, across our UK and Jersey DPM
services, we voted at 125 shareholder
meetings, supporting management on 88% of
the resolutions we voted on. This, alongside
our engagement practices, reflects our
approach of promoting constructive dialogue
with our investee companies by building long-
term relationships to seek to influence ESG
and other practices.
Our engagement and voting activities are publicly
available to all stakeholders on the Barclays
Private Bank website. We believe that such
transparency is an integral part of good
governance.
+ Further details on our responsible investing can be found at:
privatebank.barclays.com/what-we-offer/investments/
responsible-investing-engagement-and-voting-activities
Sustainable Investing Solutions
Launched in 2018, our Sustainable Investment
strategies seek to invest in businesses that
provide products and services to support the
transition to a more sustainable economy.
These strategies exclude certain companies that
generate revenues over our internally defined
thresholds from adult entertainment, alcohol,
armaments, gambling, fossil fuels tobacco and
controversial weapons.
We also identify businesses that we believe are
able to mitigate ESG risks from an investment
perspective and also demonstrate high
standards of non-financial ESG quality (e.g. high
quality environmental standards or safe working
environment). These businesses must also
address sustainability considerations through
their economic activities, by aligning to at least
one of the United Nations' Sustainable
Development Goals (UN SDGs).
Responsible Lending
We are expanding our credit offering with Green
Private Bank Mortgages, launching in 2023. We
intend to offer a discounted arrangement fee for
UK-based new-build properties with an EPC
rating of A-B to incentivise clients to seek out
energy efficient properties and to encourage
home builders to achieve maximum energy
efficiency from their projects. Clients will also be
supported in improving the energy efficiency of
their existing properties, primarily through
retrofitting their homes.
We are enhancing our lending policy in order to
support clients who wish to make their homes
more energy efficient and will work with
industry experts to understand how best to
do this with the properties in our portfolio.
For example, listed buildings are subject to strict
planning regulations and therefore require a
bespoke approach.
Barclays PLC
Annual Report 2022 115
To further support clients in making their homes
more energy efficient, we have a plan of
education and guidance for clients and we intend
to launch our Private Bank ‘Sustainability Hub’,
which will provide clients with information on
financial products and services we offer that may
support them to refurbish their home in ways
that may improve their home's energy efficiency.
This information is available to all clients and
throughout 2023 we will produce an Insights
series to provide further education specific to
the types of properties in our portfolio. We are
building relationships with partners in the wider
real estate domain, such as freeholders, brokers,
and estate agents, to ensure a joint approach to
reducing carbon emissions on properties.
Notes:
a The exception is India where we offer strategies developed for the
local market. ESG integration and engagement and voting are not
undertaken.
b Engagement (on select material ESG issues) and voting activities are
being exercised in relation to all of our Private Bank DPM investment
strategies globally with the exception of services provided in India.
Engagement activity is undertaken for our fixed income and equity
holdings, while voting activity is only undertaken for our equity
holdings. Please note, engagement and voting activities have been
undertaken for portfolios managed in Ireland, Switzerland and Monaco
since Q4 2022 and relevant reports for these regions are expected to
be publicly available commencing Q1 2023. It is our intention to
exercise voting in all markets, although at times our ability to do so
may be hindered by regulatory and practical considerations as well as
internal restrictions.
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Barclays PLC
Annual Report 2022 116
TCFD Strategy Recommendation (b) | Strategic Pillar 3
Wealth Management
and Investments
Barclays Wealth and Investments factors
Responsible Investing into our discretionary
portfolio and fund investment solutions. The vast
majority of our clients’ assets are managed by
external fund managers. We aim to assess each
of those active investment managers based on
their ESG credentials amongst other relevant
factors. Every manager’s offering is given a single
standalone score from A to C for ESG
considerations – reflecting both their intent and
their outcome. We focus on how ESG is
embedded across each of five key areas: the
Parent company; the People managing the
assets; the investment Philosophy employed; the
robustness of the Process; as well as the
Performance achieved (‘The 5 Ps’). Ultimately, we
award an ESG score for every fund that we
recommend or invest in. The team uses data
from different sources including investment
managers and MSCI ESG Manager, and as such
there may be some limitations.
We are involved in a number of industry
initiatives. Examples include the United Nations
Principles of Responsible Investments (UNPRI) to
which we have been a signatory since 1 April
2016 and which rated us 4* for our Manager
Research (note that this latest rating covers the
period before we started to formally vote and
engage with our underlying holdings).
Additionally, we have a Multi-Impact Fund that
incorporates not just responsible investment
principles but investments targeting specific
sustainability and societal outcomes. We are also
working towards becoming a signatory of the
Stewardship Code in 2023.
EOS, as our voting and engagement provider,
regularly provides voting recommendations to us
on our company holdings. We operate a filtering
process on these recommendations ensuring
that we review, and amend if necessary, any
particularly noteworthy votes. They also engage
on behalf of clients and Barclays with a wide
range of stakeholders including government
authorities, trade bodies, unions, investors, and
NGOs, to seek to identify and respond to
market-wide and systemic risks. In addition, EOS
provides a range of formal qualitative and
quantitative reporting for Barclays on a regular
basis outlining how they have implemented our
engagement policy.
Our engagement and voting activities are publicly
available to all stakeholders on the Barclays
Wealth & Investments website. We believe that
such transparency is an integral part of good
governance.
Under the EU Sustainable Finance Disclosure
Regulation (SFDR), we have converted most of
our Irish-domiciled fund range to satisfy the
criteria of Article 8. This was introduced to
improve transparency in the market for
sustainable investment products, to prevent
greenwashing and to increase transparency
around sustainability claims made by financial
market participants. It is primarily predicated
upon adding several exclusionary screens and
seeking to mitigate climate change.
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Barclays PLC
Annual Report 2022 117
TCFD Strategy Recommendation (b)
Embedding ESG into our business
We are embedding Sustainability and ESG
throughout the Barclays business, taking
into account the impact of climate-related
risks and opportunities on our businesses,
strategy and financial planning.
Our climate strategy is underpinned by the way
we assess and manage our exposure to climate-
related risk.
The risks associated with climate change are
subject to rapidly increasing societal, regulatory
and policy focus, both in the UK and
internationally. We are embedding climate risk
into Barclays' risk framework taking into account
regulatory expectations and requirements, and
adapting Barclays' operations and business
strategy to address the financial risks resulting
from both the physical risk of climate change and
the transition to a low-carbon economy.
In January 2022, climate risk became one of the
Principal Risks in our Enterprise Risk
Management Framework. We also identify and
consider the impact of climate risk on other
Principal Risks facing the bank.
+ Further details on climate risk identification, assessment
and management can navigated via the Risk Review
contents section on page 264.
In 2022, we included our climate strategy and
climate-related risks and opportunities in our
financial planning. We continue to work to embed
these considerations into our products and
services and operations.
We have also worked on embedding ESG
considerations into the culture of the
organisation through training and knowledge
building. To embed ESG in culture, we cannot
only train colleagues whose role includes ESG
aspects, but all colleagues across the bank so in
2022, we have implemented a number of training
initiatives and developed resources available to
all colleagues.
Impact of climate-related risks
and opportunities on our business,
strategy and financial planning
Barclays’ 2022 financial planning process
included a review of our strategy and its
implementation, as well as an initial view of
climate-related risks and opportunities, which
aligns with how we manage other risks. The
implementation of our strategy is not only
impacting our products and services, but also our
operations. We continue to develop new
processes and capabilities and are embedding
them into our operations to address increasing
complexity, including building technology
solutions where required to support oversight,
management and reporting processes.
Within Barclays' group change programme for
climate, there is a workstream specifically related
to finance and regulations. Within this, we have
strategic deliverables (along with a set of actions
we track) to seek to embed our climate strategy
into the financial planning process, and prioritise
it as appropriate in line with our overall strategy.
Barclays' latest financial plan, developed during
2022, leverages the three pillars of our climate
strategy to estimate the future impact of climate
on our financial performance. The financial plan
also includes a section dedicated to climate.
Further details on how this was included in our
five-year financial planning process are set out
below, including our approach to sustainable
financing, targets and capital investments.
All key businesses and functions are involved and
delivery is managed through a central
programme, supported by extensive change
management expertise. We are further
developing processes and levers that have
already started to impact the business we
engage in.
For example:
• we strive to continue to decarbonise our own
operations, reducing our Scope 1 and Scope
2 and our upstream and selective downstream
Scope 3 emissions
• we are tracking progress towards portfolio
alignment (i.e. of our financed emissions) with
the goals and timelines of the Paris Agreement
through BlueTrack™, which includes a number
of portfolio alignment metrics. The metrics are
subject to regular management review
including second line review by the Climate
Risk team to assess the strategy against the
targets
• we continue to develop our green, sustainable
and transition finance banking product sets,
including for retail customers, such as green
mortgages, bonds, loans and investment funds
• we continue to explore climate scenario
analysis and stress testing as a tool to assess
and quantify the potential impacts on our
business from climate change
• we conduct portfolio reviews to monitor that
business activities conducted are within
Barclays’ mandate (i.e. aligned with
expectations), and are of an appropriate scale
(relative to the risk and reward of the underlying
activities). Mandate & Scale Exposure Controls
form part of our overall risk appetite control
framework and climate risks have been
integrated into annual credit portfolio reviews
for elevated risk sectors since 2020.
Over the past year we have grown our existing
talent with several strategic hires, including
Heads of Sustainable Finance for CIB and BUK.
Each hire will allow us to further support our
climate strategy; increase co-ordination and
accountability and aid engagement with
colleagues across our businesses as part of our
financial planning process; and help our
customers and clients with their individual
transitions to a low-carbon economy.
The 2022 financial planning process used a five
year baseline scenario that assumed climate
factors were already included in the wider
macroeconomic variables, and therefore no
further climate-related adjustments were
necessary. We assessed the financial impact of
embedding the individual parts of our climate
strategy, new initiatives and targets across our
businesses, including the wholesale credit book,
sustainable financing and sustainable lending in
the Corporate and Investment Bank and initiatives
across our retail businesses, such as green
mortgages and sustainable investing.
A strategic review of sustainable financing was
also completed during the year. The review
identified commercial opportunities and noted
certain risks which could arise. The majority of
opportunities continue to reside within Equity
Capital Markets, Debt Capital Markets and lending.
The output of the strategic review was considered
in the planning process, including incremental
revenue, cost and capital. Additionally, the
planning process included an assessment of our
financed emissions reduction targets for some of
our highest emitting sectors: Energy, Power,
Cement and Steel. Barclays has set absolute
emissions or emissions intensity targets for these
sectors. Barclays continues to engage with our
clients to support the transition to a low-carbon
economy and our current targets do not
materially impact financial performance over the
next five years.
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TCFD Strategy Recommendation (b)
The financial planning process also covered a
review of our own net zero operations target,
which supported decisions around how we
redirect real estate and technology capital
investment across our businesses, including the
branch network in BUK, to deliver our stated
targets.
We will continue to enhance how our climate
strategy is embedded into the way we think
about financial planning over the coming years.
Skills, culture and training
Building our expertise
We continue to invest in our resource and
capabilities to ensure colleagues across the
organisation have the appropriate skills,
competencies and knowledge to execute our
climate strategy and transition plan.
During 2022, we had two main objectives. Firstly
to ensure our people had a good understanding
of climate change risks and opportunities, as well
as their responsibilities under the bank's evolving
approach and policies - training was developed to
address this and was targeted at impacted
colleagues. Secondly we wanted to embed a
more general understanding among a broader
internal audience of climate change, its impacts
on society and the bank's strategy and response.
During 2022, mandatory online training modules
were provided to over 14,600 colleagues across
Risk, Compliance, Internal Audit and other
functions covering climate as a Principal Risk. A
separate mandatory online module was
implemented across the Corporate and
Investment Bank, Trade and Working Capital as
well as other client-facing teams, which covered
climate change, how the firm manages Climate
risk, as well as the Group's sustainability-related
statements and policy positions and how they
should be applied.
+ Further details on Barclays' sustainability statements and
policy positions can be found from page 60.
In addition, for the benefit of a broader internal
audience, a centralised resource on the internal
employee training website was created called
'Sustainability' with the focus on 'Addressing
climate change' where selected existing and new
ESG-related training material was placed. This
included e-learning modules and videos on a
range of topics including but not limited to
climate change and its impacts, Barclays' climate
change strategy, BlueTrackTM, and climate
change and the financial sector. This provides
colleagues the opportunity to enhance their
understanding of the topic.
Barclays PLC
Annual Report 2022 118
Incentives
For Executive Directors, a proportion of both
bonus and Long Term Incentive Plan (LTIP) is
driven by non-financial performance measures,
including measures related to climate and
sustainability and colleague measures, including
diversity, inclusion and engagement.
+ Further details on Barclays' remuneration can be found from
page 197.
Barclays’ performance against non-financial
measures (including ESG metrics) is also explicitly
considered in the determination of the incentive
pool and therefore directly impacts pay levels of
employees as a whole. In 2022, non-financial
performance was assessed against three
categories: Customers and clients, Colleagues
and Climate and sustainability. The Colleague
category included measures of diversity,
inclusion and engagement. The Climate and
sustainability category included climate-related
measures including performance against green
financing targets, emissions financing reduction
targets, carbon footprint reduction and increase
in renewable energy usage, as well as measures
relating to our investment in communities.
A series of three educational videos to explain
how Barclays is addressing climate change were
widely publicised to colleagues via a dedicated
internal communications campaign, each video
explaining one of Barclays' three climate strategy
pillars. Since the creation of the initial series, we
have published two further videos providing
colleagues with updates to our progress against
two of the pillars: achieving net zero operations
and financing the transition.
Across the Corporate and Investment Bank,
colleagues attended a series of talks titled
‘Confident ESG Conversations’ featuring internal
experts who delivered insights and briefings on
Barclays' climate strategy, with a focus on action
needed to both deliver for Barclays and to
support our clients’ own climate objectives.
A 'Sustainability Academy' was launched on 12
December 2022; the programme enables c.300
Corporate Bank employees to trial two separate
16-week ESG training initiatives co-delivered by
Barclays and two external ESG training providers.
The training will serve as a pilot, with a view of
further expansion within Barclays following
completion. The Sustainability Academy seeks to
deepen ESG knowledge and capability within our
front office teams so that we can best help
clients transition to net zero whilst also driving
growth and Client Satisfaction scores.
In the Business Bank, a core training module was
delivered to over 1,200 colleagues which covered
climate-related concepts, risks, opportunities
and legislation. There were also targeted training
modules to meet the needs of bankers who
cover customers in the agriculture sector and in
the specialist client solutions team.
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Just transition and nature
and biodiversity
We have continued to develop our work on
just transition and nature and biodiversity,
which are intrinsically connected to efforts
to mitigate and adapt to climate change.
We aim to enhance our understanding of the
interdependencies between climate action,
nature and biodiversity and the social aspects of
the transition to net zero. This is in line with the
increasing support of international policy
frameworks to address just transition as part of
climate strategies, as well as the new Global
Biodiversity Framework, adopted at COP15,
which references the impacts of climate action
and social dimensions related to nature. This also
aligns with ongoing work in the development of
the Taskforce on Nature-related Financial
Disclosures (TNFD) and initial guidance of the UK
Transition Plan Taskforce.
There is clear evidence that climate change and
nature and biodiversity loss have significant
interdependencies, where change in one area
can impact the other. We are reviewing ways in
which these interlinkages could be addressed
together when considering the bank's
environmental impacts, dependencies and
opportunities. One example of this is our
participation in the UNEP FI TNFD pilot, as part of
which we have tested a number of nature and
climate scenarios on our European Agriculture
and Food portfolio.
+ Further details on the TNFD pilot
can be found on page 120.
Barclays recognises the need for financial
institutions to integrate social considerations
into their net zero plans and targets, and in their
contributions to nature-positive goals.
Just transition
International policy frameworks provide broad
support to address just transition within climate
strategies. The Just Transition Declaration,
adopted at COP26, committed governments to
ensure that workers, businesses and
communities are supported as countries
transition.
At COP27, Barclays participated in a panel
discussion with the International Chamber of
Commerce regarding unleashing the full
potential of sustainable finance, highlighting that
a just transition is crucial for reaching net zero
and financial institutions need to put it at the
heart of what they do. More broadly, efforts were
intensified during COP27 to ensure that Just
Transition was a prevalent theme throughout
conversations for governments, business and
finance, trade unions and civil society. Notably, a
breakthrough for climate justice was reached
with the 'loss and damage' fund providing
financial assistance for vulnerable countries
impacted by climate disasters.
While still at a relatively nascent stage, the
strategic importance of the just transition is
rapidly becoming clearer, and first efforts are
being made by governments, businesses and
financial institutions to deliver a transition to net
zero underpinned by the principles of social
justice. Barclays is working to build an approach
to a just transition cognisant of the important
dynamic between climate actions and social
justice, while being mindful of the potential
interconnectedness with biodiversity.
We are playing our part to translate the concept
of a just transition into tangible actions for the
industry, by continuing our engagement with
Financing a Just Transition Alliance (FJTA) and
other key initiatives:
• as part of our engagement with the FJTA, we
actively participated in the development of the
'Making Transition Plans Just' report that
begins to provide non-binding guidance to
financial institutions on how they can integrate
the social dimension of climate action in their
net zero transition plans
• Barclays is also a member of the CISL Banking
Environmental Initiative (BEI) and through this
initiative, Barclays has engaged with member
banks on practical steps that banks can take to
support SME customers with a just transition
• we have worked closely with Ceres to develop
an understanding of just transition in the US
context.
As part of our work on client transition plans, we
have launched a pilot assessment to evaluate
whether certain of our clients are considering
how to decarbonise in line with a just transition
for their stakeholders, considering the social risks
and opportunities of the transition and ensuring
effective dialogue with affected stakeholders.
+ Further details on the just transition within the Client
Transition Framework can be found on page 97.
Barclays PLC
Annual Report 2022 119
Our approach to nature
and biodiversity
Banks have an important role to play in stewarding
nature-positive finance and managing their
nature-related risks.
Nature and biodiversity is a growing ESG focus for
Barclays and the wider industry, given that nature
and its ecosystem services fundamentally
underpin economies and societies. Nature and
biodiversity are also important to the sector due
to their interlinkages with climate change. During
2022, nature and biodiversity loss continued to be
recognised at a global scale. The Convention on
Biological Diversity (CBD) COP15 in December
saw the agreement of the new Global Biodiversity
Framework, which will be the framework for
national and international action. For companies
and financial institutions, the Taskforce on
Nature-related Financial Disclosures (TNFD)
released its third draft iteration of the framework
for organisations to assess and disclose on
nature-related risk and opportunity.
At Barclays we recognise the important role of the
finance sector in stewarding responsible finance
towards a nature-positive future. We continue to
work to build an understanding of the ways in
which our financing activities impact nature, as well
as the ways in which the bank and our clients
depend on nature. This includes engaging with
industry groups and our membership of the TNFD
Forum. We also continue to review the ways in
which our financing activities can help to facilitate
a nature-positive future.
We recognise interlinkages across environmental
and social themes, in particular key crossovers
with our approaches to climate change and
human rights. Given these interdependencies, it is
important for banks to consider nature-related
considerations alongside other ESG factors, such
as climate change and social considerations.
+ Further details on our approach to nature and biodiversity in
our own operations can be found on page 83.
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Nature-related risk in financing
We include financing restrictions that seek to
address nature-related risk within our position
statements on Forestry and Agricultural
Commodities, World Heritage Sites and Ramsar
Wetlands, and Climate Change. We continue to
review and monitor the ways in which we can
strengthen our approach. For example, see page
253 for details of our due diligence approaches
to climate change and deforestation.
We have continued to develop our
understanding and ability to evaluate nature-
related risk in financing, building on the work
started in 2021. This included working with an
external expert on a materiality exercise to
produce an initial portfolio heatmap to analyse
nature-related risk by sector and exposure
across our lending portfolio. This involved a
qualitative review of sector impacts and
dependencies across a number of key risk drivers
representing both physical and transition risks, to
determine where in the portfolio were the likely
areas of highest risk.
TNFD pilot with UNEP FI - European
Agriculture and Food
In 2022, the TNFD published a draft version of
its risk management and disclosure framework
for organisations to report and act on evolving
nature-related risks. UNEP FI is piloting this
framework with approximately 40 financial
institutions - Barclays is participating in their
pilot group focused on European agriculture
and fisheries, which in the Barclays context
means agriculture and food sectors.
As part of the pilot programme, we worked with
an external expert to test the draft TNFD
framework, including the proposed risk
assessment process (LEAP FI), on our
agriculture and food portfolio in Europe, with a
focus on UK farming.
We have been part of a TNFD pilot group led by
UNEP FI to test the draft TNFD Framework. As
part of the pilot, we looked specifically at
agriculture and food in Europe, with a focus on
UK farming, in which Barclays has a significant
presence.
We recognise the need for continuous
improvement with regard to available data and
technologies, in particular noting the complexity
and challenge given the number of nature
attributes and their associated metrics. We will
therefore continue to support the development
of methodologies which seek to better evaluate
risk impacts and dependencies at a portfolio
level. For example, we have trialled an emerging
modelling methodology in order to support our
participation with the UNEP FI work, which draws
upon a wide range of available data and also
adopts assumptions where there are gaps.
+ Further details can be found in our position statements on
the Barclays ESG Resource Hub at: home.barclays/
sustainability/esg-resource-hub/
Further details on our position statements can be found in
the non-financial information statement from page 60.
This involved assessing our clients’ locations in
terms of production and sales and applying a
number of biodiversity metrics to each location
to determine where key impacts and risks may
arise. A number of different 2030 scenarios
were also used to stress the portfolio and
individual counterparties, to see whether
material financial impact could arise as a result
of nature-related transition and physical risks.
The results are currently being reviewed
internally to assess how they could be used
alongside existing climate risk procedures.
Barclays PLC
Annual Report 2022 120
From a biodiversity perspective, the annual
targets include a commitment to increase
biodiversity net gain (BNG) across Cairn’s new
developments measured as a percentage of
overall new homes commenced. BNG delivers
measurable improvements for ecology by
protecting, enhancing and creating habitats in
association with development and Cairn's
approach includes a development-specific
biodiversity programme that replaces or
improves the local biodiversity of each new
Cairn development or otherwise contributes to
the improvement of Ireland’s biodiversity.
Barclays nature-linked
financing - Cairn Homes plc
Biodiversity Linked SLL
Barclays Corporate Banking Sustainable
Product Group (SPG) provided support to Cairn
Homes plc (Cairn) in the selection of
meaningful targets and indicators linked to
certain sustainability performance targets.
In July 2022, Cairn completed a refinancing of
its €277.5m syndicate facility into a
sustainability linked term loan (SLL) and
revolving credit facility (RCF), one of the largest
of its type arranged in the Irish homebuilding
sector, with AIB, Bank of Ireland and Barclays
Bank Ireland. The term loan and revolving credit
facility interest rates are linked to Cairn
meeting certain sustainability performance
targets on biodiversity, decarbonisation and its
people strategy.
Nature-related financing
While the market is at a relatively early stage,
nature-related financing presents significant future
opportunities for the financial sector given the
capital requirements to address and reverse nature
loss: the biodiversity financing gap is estimated to
be in the region of $598-824bn per yeara.
At Barclays, we will continue to work towards
green and sustainable finance targets which
include financing relevant to nature and
biodiversity.
This includes categories such as ‘sustainable
food, agriculture, forestry, aquaculture and
fisheries’ in addition to financing that tracks
against Sustainable Development Goal (SDG) 14,
Life Under Water, as well as SDG 15, Life on
Land. Examples include a sustainability-linked
facility that includes biodiversity targets, as well
as investment by Barclays Principal Investments.
We seek to support impactful projects through our
partnership with Blue Marine Foundation through
which Barclays has financed projects which help to
support the protection, restoration and
sustainable management of the world’s ocean.
+ A breakdown of Barclays' sustainable financing, including
against the SDGs, can be found on pages 99 to 102.
Details of Barclays Principal Investments team investment
in ECOncrete can be found on page 113.
Note
a Paulson Institute, Financing Nature: Closing the Global Biodiversity
Financing Gap (2020)
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Barclays PLC
Annual Report 2022 121
TCFD Strategy Recommendation (b)
Engagement
We see collaboration and engagement across
industry as essential for sharing learnings across
the sector and a successful transition to nature-
positive future. A key component of this is our
membership of the TNFD Forum.
During 2022, we provided feedback to the TNFD
on their draft framework and conducted an
internal mock disclosure exercise to understand
our progress towards making a comprehensive
disclosure against the framework in the future.
+ A table signposting our disclosures on nature and
biodiversity can be found within the ESG Data Centre on
Barclays ESG Resource Hub at: home.barclays/sustainability/
esg-resource-hub/reporting-and-disclosures/
In 2022, we have continued engagement with a
number of industry and cross-sector groups,
including the Banking Environment Initiative (BEI),
part of the Cambridge Institute of Sustainability
Leadership (CISL). As part of the BEI’s nature-
related finance steering group we fed into to the
paper ‘Integrating climate and nature: The
rationale for financial institutions’. We further
worked with the Association for Financial Markets
in Europe (AFME) and EY to contribute to their
paper 'Into the wild: why nature may be the next
frontier for capital markets.'
+ The' Integrating climate and nature: The rationale for
financial institutions' paper can be found at:
www.cisl.cam.ac.uk/resources/publications/integrating-
climate-and-nature-rationale-financial-institutions
The 'Into the wild: why nature may be the next frontier for
capital markets' paper can be found at: www.afme.eu/
publications/reports/details/Into-The-Wild-Why-nature-may-
be-the-next-frontier-for-capital-markets
Barclays' partnership
with Blue Marine Foundation
Barclays completed the second year of our
three-year partnership with the Blue Marine
Foundation to support them in seeking to deliver
their goal of ensuring that at least 30% of the
global ocean is effectively protected and the
other 70% sustainably managed by 2030.
Protecting blue carbon habitats is a critical
part of mitigating against climate change as
they act as significant carbon sinks. Our
donation has, so far, contributed to this by
helping to secure the protection of 300km2 of
seabed and kelp forests on the south coast of
the UK, and catalysing an ecosystem
restoration project in the Solent.
In 2022, Blue Marine built the case for a network
of highly protected marine areas (HPMAs) using
pilot sites, and was a key stakeholder in the
process resulting in a commitment from
Government to designate and manage a
network of HPMAs in England.
Our donation continues to support thought
leadership with a focus on conservation
finance, blue carbon and oceanic climate
change.
Recognising the critical links between the
ocean and the issues of climate change and
biodiversity loss, this partnership is an example
of how collaboration between NGOs and the
corporate sector can bring together new
opportunities for nature-positive action and
seek to make progress against the gap in
financing for climate and biodiversity solutions.
+ Further details on the Blue Marine Foundation can be found
at: bluemarinefoundation.com/
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Engaging with industry
We know that leveraging the relationships
we hold with stakeholders can support all of
us in achieving our objectives.
For the world to transition at pace and to keep
global warming at 1.5 ° above pre-industrial
levels, all actors in the economy have to play their
part, adapt and innovate. Against this backdrop,
engagement with others in our industry -
experts, key stakeholders and our peers - and
sharing knowledge is vital, noting that in doing so
we remain mindful of regulatory considerations.
Through appropriate engagement with industry
experts, academics and peers, we have benefited
from, as well as contributed to conceptual
discussions assessing the pathways to a low-
carbon economy, considered emerging
methodologies and taxonomies and worked to
develop tools and best practice in data sourcing.
By sharing and being open about challenges in
this new discipline where permissible, the
industry is building knowledge and thought
leadership to enable advancement.
We have partnered with civil society
organisations, such as RMI whereby we have
joined 12 other FIs to become a strategic partner
of their Centre for Climate Aligned Finance.
Barclays has contributed to sector-wide
ambitions and the development of solutions
through participation in initiatives including the
Net-Zero Banking Alliance (NZBA), the Glasgow
Financial Alliance for Net Zero (GFANZ) and the
Sustainable Markets Initiative’s Financial Services
Taskforce.
These groups bring together peers under a
common set of principles, and help to support
members’ unilateral implementation of those
principles through the independent targets and
plans they adopt, through sharing knowledge and
publishing additional guidance or research.
The issues we grapple with are shared by many in
the industry. One example is the work we are
doing with the Global Financial Markets
Association (GFMA) Climate Data Standard
working group, which is working towards
development of a voluntary industry wide,
standardised data collection template for
decision relevant data.
To prevent inefficiencies, for example through
unnecessary duplication of effort, and encourage
widespread adoption of a solution, Barclays
joined peers and industry experts to try and
tackle one of the biggest challenges facing the
industry: a lack of robust and comparable data.
We have publicly supported industry-wide
engagements, including at events, roundtables
and panel discussions including at COP27 and
COP15. Topics covered included improving
reporting for accelerated reductions, unleashing
the full potential of sustainable financing,
supporting a timely transition and embedding
climate and nature into corporate decision-
making.
+ Further details of our just transition related engagements
can be found on page 119.
Further details of our nature and biodiversity related
engagements can be found on page 121.
Barclays' register of our engagement with industry
initiatives, working groups and memberships can be found
at: home.barclays/sustainability/esg-resource-hub/reporting-
and-disclosures/
Barclays PLC
Annual Report 2022 122
Department for International
Trade’s Green Trade &
Investment Expo
Barclays has joined forces with the Department
for International Trade (DIT) to sign an
industry-leading five-year partnership
agreement to broaden, deepen and sharpen
efforts to drive increased exports and trade
and investment opportunities for UK
businesses of all sizes.
The Green Trade and Investment Expo (GTIE)
is a UK Government-led conference to
position net zero as a key driver of the UK’s
future economic growth and highlight the
commercial opportunities around the
transition.
GTIE is the precursor to the next Global
Investment Summit in 2023, for which
Barclays was the headline sponsor in 2021.
This partnership underlines the importance
of building strong private and public sector
relationships to unlock increased trade,
export and investment opportunities post-
COVID. From start-ups looking to step onto
the exporting ladder, or established
corporates looking to expand their global
offering, clients from across the bank will be
able to capitalise on the benefits of closer
working between Barclays and the DIT.
+ Further details can be found at: home.barclays/news/
press-releases/2022/060/barclays-and-department-for-
international-trade--dit--announce-i/
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In addition to our engagements with industry
working groups and events, we have worked with
governments in the geographies where we operate
to support them in their adoption of net zero targets
and strategies.
+ Further details of our engagements with
governments can be found on page 126.
PCAF Working Group on
Capital Markets Activities
Since 2020, Barclays has been an active
member of the Partnership for Carbon
Accounting Financials (PCAF), an industry-wide
initiative which aims to build consensus on
approaches to carbon accounting, disclosure
and portfolio alignment.
In 2022, and for the second year running,
Barclays co-chaired the PCAF Capital Markets
working group which is tasked with
In striving towards a common reporting
framework to help support comparability and
accountability, we were an early adopter of TCFD
reporting in the UK, adopting and promoting the
framework in 2017, prior to it become a
regulatory requirement. We have also responded
to the Transition Plan Taskforce’s call for
evidence, and are part of the sandbox testing
their recommendations.
formulating an industry-wide standard for
accounting for the emissions associated with
capital markets activity.
This year the working group built on the
feedback from their November 2021
discussion paper and put out a proposed
methodology to public consultation in
September 2022. Final discussions are
ongoing and a finalised methodology is
expected to be published in 2023.
+ Further details can be found at:
carbonaccountingfinancials.com/files/
downloads/pcaf-capital-market-instruments-
proposed-methodology-2022.pdf
Barclays PLC
Annual Report 2022 123
Sponsor of Net Zero
Delivery Summit
Barclays was a sponsor of the Net Zero
Delivery Summit 2022, an international summit
that took place in London in May 2022, focused
on net zero delivery and the progress being
made against the key priorities for finance
agreed at COP26.
Our Group CEO, C.S. Venkatakrishnan, spoke
as part of a panel of CEOs discussing net zero
implementation and how the financial sector
and the real economy can realise their net zero
ambitions through credible, ambitious,
transition plans.
Commenting on the role of banks in the
transition to net zero, Venkat reflected on
how financial institutions were critical to
driving progress during the industrial
revolution through offering and pricing credit.
Around 200 leaders from the Glasgow
Financial Alliance for Net Zero, as well as from
business, and financial and professional
services, attended.
+ Further details can be accessed at:
www.theglobalcity.uk/sustainable-finance/net-
zero-delivery-summit-2022
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External initiatives, signatories or memberships
Additional information
Multi-thematic
Barclays PLC
Annual Report 2022 124
Cambridge Institute of Sustainability
Leadership's Banking Environment
Initiative
Barclays is a founding member of the Banking Environment Initiative (BEI), a group of global banks working on
actionable pathways towards a sustainable economy, convened by the Cambridge Institute for Sustainability
Leadership (CISL). In 2022, Barclays engaged with member banks on the topics of just transition and nature.
Ceres
Barclays has been an active member of Ceres since 2019, participating in various working groups across
environmental and climate justice, climate-related disclosures, policy engagement and biodiversity. In 2022, we
partnered with Ceres to integrate a US perspective on just transition, conducting research to organise a stakeholder
dialogue on the topic and spoke at their Financing a Net Zero Economy conference during New York Climate week on
a Just Transition panel.
United Nations Environment
Programme - Finance Initiative
Barclays has been a member of United Nations Environment Programme - Finance Initiative (UNEP FI) for more than
20 years and was a founding signatory of the Principles for Responsible Banking (PRB) as well as joining the Net-Zero
Banking Alliance in 2021. From 2021, Barclays' Group Head of Sustainability has sat on the Western Europe Banking
Board and our CEO joined the Leadership Council in 2022.
LSE/Grantham Institute
In 2021, Barclays joined over 40 financial institutions and stakeholders to form the Financing a Just Transition Alliance.
In 2022 Barclays contributed to the report 'Making Transition Plans Just'.
Taskforce on Nature-related Financial
Disclosures Forum
Barclays is a member of the Taskforce on Nature-related Financial Disclosures Forum (TNFD), which is a consultative
network of institutional supporters who share the vision and mission of the TNFD. In 2022, we participated in a pilot led
by UNEP FI to test the draft TNFD framework.
Just transition
Nature and biodiversity
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Climate and sustainability
Additional information
Barclays PLC
Annual Report 2022 125
Glasgow Financial Alliance for Net Zero
In 2022, Barclays contributed to a publication ‘Guidance on Use of Sectoral Pathways for Financial institutions’
published in June.
Net-Zero Banking Alliance
In 2021, Barclays was a founding member of the Net-Zero Banking Alliance. Since 2022, Barclays has co-led the Sector
Work Track within NZBA.
Oxford Sustainable Finance Group
& the UK Centre for Greening Finance
and Investment
In October 2022, Barclays announced a three-year partnership with Oxford to work on developing a credible
methodology for monitoring emissions and creating transition pathways in the agriculture sector,
Partnership for Carbon Accounting
Financials
Barclays has been a member of PCAF since 2020. During 2022, Barclays co-chaired a Capital Markets Working Group
of eight global banks that have developed a proposed methodology to account for the emissions associated with
capital markets transactions.
PRA/FCA Climate Financial Risk Forum The Climate Financial Risk Forum (CFRF) brings together UK regulators and senior financial sector representatives to
share their experiences in managing climate-related risks and opportunities. During 2022, Barclays chaired the
Transition to Net Zero Working Group (TNZWG).
RMI's Center for Climate Aligned
Finance
In September 2022, Barclays became a Strategic Partner of Rocky Mountain Institute (RMI) Center for Climate Aligned
Finance (CCAF). The Center acts as an implementation partner to banks seeking to align their investments with a net
zero future.
Sustainable Markets Initiative
Barclays is a member of the SMI Financial Services Taskforce (FSTF) and co-chairs the Net Zero Group. The SMI was
launched in 2020 by His Majesty King Charles III when in role as The Prince of Wales.
World Business Council for
Sustainable Development
In 2021, Barclays became a member of the Banking for Impact on Climate in Agriculture (B4ICA) initiative which brings
together banks to develop technical data-solutions to support themselves and their clients to align their financial
portfolios in the food, agriculture, and land use space towards net zero and Paris Agreement goals.
+ Barclays' register of our engagement with industry initiatives,
working groups and memberships can be found at:
home.barclays/sustainability/esg-resource-hub/reporting-and-
disclosures/
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Barclays' approach to public policy
We have a responsibility to engage with
governments and policymakers
appropriately, whilst remaining politically
neutral.
Transparency and governance
As a major economic and societal contributor to
the communities in which we operate – whether
via the products we offer, customers and clients
we serve, the colleagues we employ, or
contribution we make through our community
investment programme – we believe it is also
important to contribute to relevant public policy
debates. We seek to engage constructively with
policymakers in jurisdictions where the firm
operates, including with governments,
legislatures, regulators and other organisations.
In our discussions, we have a responsibility to
make contributions that are accurate, honest
and evidence-based. We also believe that
Barclays should only engage on issues where we
have a legitimate interest (for example, where
there is a direct consequence for our business,
our customers and clients, or our colleagues).
Responsibility for the co-ordination and
oversight of public policy advocacy lies with the
Group Head of Strategic Policy.
Barclays retains the services of public affairs
agencies in certain jurisdictions. These agencies
primarily assist with political monitoring and
strategic advice. We work very closely with these
agencies, on a day-to-day basis, to help ensure
that the Strategic Policy Group has oversight of
the work being undertaken for the firm.
Advocacy with public officials in the US is publicly
reported, as required by the Lobbying Disclosure
Act. Barclays also discloses its EU advocacy
activities on the European Commission’s
Transparency Register.
Additionally, Barclays is a member of a number of
trade associations globally. These associations
work to represent their members, and for many
this involves undertaking work to shape
industry’s collective response to various public
policy issues. We seek to be an engaged and
productive member of all associations in which
the firm participates, in respect of areas where
we have a legitimate interest or expertise. The
main mechanism for achieving this is through the
committees and working group structures that
exist within each trade association. To manage
our major trade association engagement, the
Strategic Policy Group monitors who from the
firm sits on which working group and, where
appropriate, supports senior executives
occupying trade association Board positions.
On our Public Policy Engagement website, we
publish material Barclays responses to
governmental public policy consultations in the
UK and EU, along with the agencies we work with
in different jurisdictions, and key trade
association memberships. In the US and Asia,
responses to public consultations are published
on government websites. Active participation in
trade association discussions to develop policy
positions, such as working groups, helps to
ensure that the public policy and advocacy
positions adopted by trade associations are
generally in line with Barclays’ own public policy
objectives and any positions that are in conflict
are identified.
+ Our Public Policy website can be found at: home.barclays/
sustainability/esg-resource-hub/reporting-and-disclosures/
public-policy-engagement/
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Annual Report 2022 126
Climate Policy Engagement
We proactively seek opportunities for senior-
level dialogue with policymakers to demonstrate
private sector leadership on sustainable finance
and the energy transition. We also provide
feedback, as an individual institution and/or via
trade associations to relevant consultation
processes launched by standard setters and
multilateral organisations and NGOs that could
eventually inform policy recommendations. We
also discuss green investment plans and policies
with governments and other key stakeholders to
help attract investment for climate solutions.
This includes participating in key international
fora, such as the United Nations Climate Change
Conference, to promote net zero-aligned public
policy at senior levels.
Barclays seeks to be actively involved in relevant
trade association working groups and to
influence the development of policy positions in
relation to aspects of climate and sustainable
finance to be consistent with our own, stated
ambition to be a net zero bank by 2050. Many of
the trade associations of which we are members
do not exclusively focus on sustainability, but
rather engage across the full breadth of financial
services policy and so do not have stated
positions in relation to net zero.
We engage with many trade associations on
climate issues and will continue to do so to
promote our net zero objectives. Given the pace
of developments and regional differences in
approaches to sustainability, there can be
diverging views within trade associations.
Barclays seeks to ensure risks of misalignment
between an association’s advocacy position and
its own net zero ambitions are managed
appropriately, including seeking to address any
misalignment through engagement where
possible. Where there is a material and ongoing
difference that we identify through our routine
engagement, Barclays reserves the right to
publicly dissent from a trade association’s
position. Should a trade association adopt a
material position that, following engagement,
remains irreconcilable with our values or strategy,
we are prepared to end our membership.
In addition to our ordinary course engagement
with trade associations described above, we have
begun to undertake an internal review of the
climate policy positions of the 35 material trade
associations of which we are members, which are
listed on our Public Policy Engagement website,
in order to assess the extent to which they are
aligned with achieving net zero by 2050 and
limiting global warming to 1.5 C above pre-
industrial levels. This includes sampling publicly
available press releases, speeches, responses to
consultations and other published statements.
For the majority of trade associations in-scope
for the review, to date we have not identified a
clearly defined position on net zero. For those
that have a position, they were generally
considered to be in line with achieving net zero by
2050. We will continue to keep our approach
under review.
Resilience of our strategy
TCFD Strategy Recommendation A:
Describe the climate-related risks and
opportunities the organisation has identified over
the short, medium, and long term.
TCFD Strategy Recommendation B:
Describe the impact of climate-related risks and
opportunities on the organisation’s businesses,
strategy, and financial planning.
TCFD Strategy Recommendation C:
Describe the resilience of the organisation’s
strategy, taking into consideration different
climate-related scenarios, including a 2°C or
lower scenario.
Risks and opportunities
Risks
Opportunities
73
74
76
Resilience of our strategy
Scenario analysis
Resilience of our strategy,
taking into consideration different
climate-related scenarios
Macro-dependencies and objectives
Important information / disclaimers
127
128
135
135
136
Implementing our climate strategy
Achieving net zero operations
Operational footprint dashboard
All other narrative
Reducing our financed emissions
BlueTrackTM dashboard
All other narrative
Financing the transition
Sustainable finance dashboard
All other narrative
Working with our clients
Embedding ESG into our business
Just transition and nature and biodiversity
Engaging with industry
Barclays' approach to public policy
77
78
80
81
85
88
89
99
101
102
103
117
119
122
126
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Annual Report 2022 128
Resilience of our strategy
TCFD Strategy Recommendation (c)
Scenario Analysis
Scenario analysis forms a key part of Barclays’ approach in
assessing and quantifying the impact of climate change1.
Since 2018, Barclays has progressively developed its scenario
analysis capabilities, developing-in house methodologies,
collaborating with external subject matter experts, and
participating in regulatory exercises.
The outcomes, time horizon and future pathways for climate-
related events and risks are highly uncertain, which presents
challenges in understanding and quantifying the impact on financial
systems and market participants. It is critical for organisations to
evaluate the business implications of climate-related risks and
opportunities to inform strategic thinking and to design
appropriate risk management strategies in response to these
risks. At Barclays, scenario analysis and stress testing tools are
used to provide insights on the effects of transition and physical
risks on our portfolios under a range of climate change scenarios,
which we intend to increasingly use to inform financial planning and
business strategy setting, risk appetite and risk management.
2. Internal short-term
transition scenario
• Short-term assessment exploring the
potential transition risk impact of a
‘Climate Minsky Moment’ with a rapid
market correction, followed by broader
macroeconomic shocks
• Scenario narrative and shocks informed by
external publications e.g. RA insurance
climate stress, DNB energy transition
stress test.
4. Exploratory climate scenarios
by the Bank of England (BoE)
• Barclays participated in the BoE’s Climate
Biennial Exploratory Scenario (CBES)
• Stress test covers three long-term scenarios:
Early Action, Late Action and No Action
• Assessments focused on credit risk impacts
to wholesale and retail portfolios
1. External case studies through UNEP FI
3. Internal climate scenarios informed by
• Case study exercises covering Power
Utilities, Oil & Gas and Residential Real
Estate
• Scenario assessment based on REMIND
2oC scenario, assessing a specific client set
in each sector
• Judgement-led and simplistic approach to
calculate climate probabilities of default
NGFS
• Long-term climate internal stress test
• Scenario narrative and shocks informed by
NGFS ‘Disorderly Transition’ combined
with internal scenario of comparable
sensitivity (pre-COVID IFRS 9 Downside 1)
• Second assessment considered
incremental physical risk impact from the
‘Hot House World’ scenario
5. Framework, regulatory and internal
scenario analysis
This year, Barclays has participated in
regulatory stress tests (e.g. ECB CRST),
conducted bespoke internal scenario analysis
exercises and further developed frameworks
for performing scenario-based climate risk
measurement exercises
Notes:
1 Informed by the Basel Committee on Banking Supervision's 2021 "Climate-related financial risks - measurement methodologies" report, Barclays considers climate scenario analysis as forward-looking projections of climate risk outcomes, with climate stress testing a subset of this where the exercise is
designed to evaluate financial resiliency to a severe but plausible scenario.
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Barclays participated in the Bank of England’s
Climate Biennial Exploratory Scenario (CBES) in
2021, which was a first phase. The bank also took
part in the second phase of the CBES exercise in
2022. These exercises were exploratory and
designed to assess financial institutions'
capabilities and preparedness for dealing with
financial and economic shocks stemming from
climate risks. The CBES exercise was a
significant undertaking for the bank, requiring a
material uplift in our climate risk quantification
capabilities and approaches.
The ECB Climate Risk Stress Test (CRST), held in
2022, was an exploratory exercise designed to
test climate stress testing capabilities and assess
the financial resilience of participating banks.
Both CBES and CRST were learning exercises for
both supervisors and financial institutions and
without direct implications on the capital
requirements for the supervised banks.
In 2022, Barclays performed a sector-specific
scenario analysis exercise to understand the
impact of transition risks to the specific sectors
over the short and medium term. The details of
these exercises are covered in the next sections.
In 2022, and considering learnings from CBES
Phase 1, Barclays has further developed
understanding and use of climate scenario
analysis by performing deep dives on available
third-party climate scenarios, benchmarking
internal climate methodologies and approaches
to industry practice, and developing a consistent
approach for the development of climate models
across asset classes.
Banks' climate losses as a result of counterfactual losses
(%)
Mortgages
Consumer credit
Wholesale
n Early action
n Late action n No additional action n No additional action (illustrative adjustment)
Banks’ total losses in the transition scenarios versus expected losses
in hypothetical counterfactual scenario ($bn )
n Late action
n Early action n Counterfactual scenario
The size of the losses published by the Bank of England here broadly aligned to those Barclays estimated from
the exercise.
Source: https://www.bankofengland.co.uk//2022/results-of-the-2021-climate-biennial-exploratory-scenario
Barclays PLC
Annual Report 2022 129
Barclays has developed its approach and
methodologies, including:
• refining corporate transition risk modelling by
sourcing additional datasets on company
emissions and transition plans, while factoring
in sector-specific dynamics that the transition
will pose
• enhancing corporate physical risk modelling,
a key area of focus across the industry given
the challenges it poses, by incorporating
additional physical risk considerations such
as knock-on geopolitical impacts and
supply chain disruptions
• developing methodologies for a wide range
of climate transmission channels for mortgage
assets, at a high resolution of granularity,
across physical risk hazards such as flood,
subsidence, coastal flooding and storm,
and transition risks including EPC costs and
energy prices
• further incorporating these methodological
approaches and enhancements into Climate
Risk Management processes and frameworks.
Throughout 2022, Barclays have built on these
learnings to inform our vision and plan for
undertaking climate scenario analysis exercises.
As our capabilities for scenario analysis evolve
and mature, we expect these to increasingly
inform the financial planning process and
business strategy.
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Resilience of our strategy (continued)
Climate Scenario Analysis
Exercises and Insights
A number of external and internal scenario
analysis exercises have been continued or
undertaken during 2022, the details of which are
provided below.
Climate Biennial Exploratory Scenario (CBES)
The objectives of the CBES exercise were to: (1)
assess the magnitude of the financial exposures
of the firms and financial system to climate
change; (2) understand implications and
resilience of a firm’s business model to a range of
different climate scenarios; and (3) improve
firms’ management of the financial risks from
climate change. In order to achieve these
objectives, the CBES utilised three scenarios that
test a wide variety of pathways: (1) Early Action;
(2) Late Action; and (3) No Additional Action. In
the CBES exercise, carbon prices provide an
indication of the level of transition risks in the
scenarios. A summary of these scenarios is
included in the table below.
Barclays submitted results for the first phase of
this exercise in October 2021 and participated in
the second round of submissions during 2022.
This stage focused on the implications of the
first-round responses to financial institutions'
ability to manage climate risks and adapt
business models. The CBES results were
published by the Bank of England in 2022, with
Barclays losses broadly in line with our banking
market share. The aggregate results of this
exercise across all participants can be seen on
page 129.
Insights from this exercise
Learnings from the CBES exercise have informed
our risk management approaches. This includes
our evaluation and assessment of elevated risk
sectors and enhancing our climate risk metrics
reported to Climate Risk Committee and Board
Risk Committee.
CBES scenario
Early Action (EA)
Late Action (LA)
No Additional Action (NAA)
Description An Early and Orderly
Transition
A Late and Disorderly
Transition
Includes only policies in place
before 2021
The transition to a net zero
economy starts in 2021.
Carbon taxes and other
policies intensify relatively
gradually over the scenario
horizon. Global carbon dioxide
emissions are reduced to net
zero by around 2050. Global
warming is limited to 1.8oC by
the end of the scenario (2050)
relative to pre-industrial levels.
The implementation of
policies to drive the transition
is delayed until 2031 and is
then more sudden and
disorderly. Global warming is
limited to 1.8oC by the end of
the scenario (2050) relative to
pre-industrial levels. The more
compressed nature of the
reduction in emissions results
in material short-term
macroeconomic disruption.
Primarily explores physical
risks from climate change.
Here there are no new climate
policies introduced beyond
those already implemented.
The absence of transition
policies leads to a growing
concentration of greenhouse
gas emissions in the
atmosphere and, as a result,
global temperature levels
continue to increase, reaching
3.3oC relative to pre-industrial
levels by the end of the
scenario (2080).
Barclays PLC
Annual Report 2022 130
Additionally, a new requirement has been
incorporated into the Client Assessment and
Aggregation Standard, so that any lending
request to a corporate defaulting under the
CBES scenario will include enhanced due
diligence on the impact of climate change on
borrowers' financial conditions.
The CBES exercise will also inform a series of
credit risk deep dives to be conducted in 2023,
which will also take into account quantitative
metrics including carbon intensity and client
transition plan assessments.
+ Further details on our Climate risk management approach
can be found from page 282.
ECB Climate Risk Stress Test
The ECB Climate Risk Stress Test (CRST) was an
exploratory exercise designed to test climate
stress testing capabilities and assess the financial
resilience of participating banks.
Specifically, it explored: (1) banks’ capabilities and
progress in developing climate risk stress testing
frameworks; (2) the capacity of banks to produce
climate risk factors; (3) the capacity of banks to
produce climate risk stress test projections; (4)
the risks banks are facing in the form of transition
risks (both short-term and long-term) and acute
physical risk events. This exercise was conducted
for Barclays Bank Ireland’s portfolio under the
ECB jurisdiction.
For the specific stress testing component of the
exercise, four scenarios were used spanning
multiple time horizons, emissions pathways and
climate risk types. A summary of these scenarios
is included on the next page.
To model Barclays' exposures to these
scenarios, existing internal approaches were
leveraged, for example the Corporate Transition
Risk Model.
+ Further details on this model can be found at: home.barclays/
content/dam/home-barclays/documents/citizenship/
ESG/2021/Corporate-Transition-Forecast-Model-2021.pdf
New bespoke approaches were also developed
specifically for this exercise. For example, the
assessment of drought combined the gross
value added curves provided by the ECB, which
indicate the relative performance of a sector,
with granular physical risk data from Moody’s
427, which includes heat stress scores for over
5,000 companies. The final impacts were
reviewed by credit risk subject matter experts to
ensure that impacts appeared intuitive to the
scenario narrative and company specific factors.
Insights from this exercise
Overall, the climate impacts from the scenarios
were considered manageable, with highest
losses observed in the Wholesale Credit Portfolio
under the Drought & Heat Risk scenario. We set
out below a heat map of losses, indicating the
relative impact of the climate stress scenario
against the baseline scenario used within the
exercise. The ECB also provided general
feedback with respect to banks' stress-testing
capabilities and its expectation that further
progress will be made in the coming years.
A climate risk dashboard has been developed to
monitor risks identified and to inform Barclays
Bank Ireland Board Risk Committee.
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Annual Report 2022 131
Type
Scenario
Transition Risk
Short term
Time period
3 years
Projections
Disorderly
Scenario Description
The short-term Disorderly transition scenario reflects a delayed implementation of government policy to reduce carbon emissions. In order to
still meet the goals and timelines of the Paris Agreement, this scenario assess a sharp, unexpected increase in carbon prices in 2022.
This is a less adverse scenario that the EU-wide European Banking Authority stress test which reflects a broad-based economic crisis. The
disorderly scenario results in sectors strongly linked to fossil fuels experiencing the largest impact.
Long term
30 years
Orderly
The long-term scenario reflects the implementation of transition strategies across three possible trajectories:
1. An Orderly transition assumes early, ambitious government action to transition to a net zero CO2 emissions economy by 2050
2. A Disorderly transition assumes CO2 emissions do not decrease quickly enough until 2030. This triggers action that is late, disruptive,
sudden and unanticipated to meet emission targets by 2050
3. A Hot-house transition assumes CO2 emissions are not reduced and the economy is confronted with the materialisation of increasing
physical risks, leading to, amongst other things, GDP losses.
Disorderly
Hot-house
Physical Risk
Drought and Heat
1 year
Stress
The short-term Drought and Heat scenario reflects the physical risk of an extended period of hot weather and low rainfall. This scenario results
in material output losses across the agriculture, manufacturing and construction sectors.
Flood
1 year
Stress
The short-term Flood scenario reflects the physical risk of a severe flood scenario in Europe. This scenario results in changes in the value of
bank's underlying collateral, with a specific focus on mortgage portfolios.
Scenario
Scope
Stress impact
Short-term stress
Credit Risk - Wholesale £ High
£ High
Credit Risk - Retail
£ Moderate
Market Risk
Long-term stress
Credit Risk - Wholesale Long-term stress scenario projections were exploratory, therefore did not stress against Baseline. The ECB recommends results be interpreted as qualitative rather than
Credit Risk - Retail
quantitative.
Retail portfolio experienced greater shocks in Hot-House scenario due to the macroeconomic impact on production, unemployment and subsequent impact on house prices, in
contrast, Wholesale experienced the greatest shock in Disorderly scenario due to the impact of both macroeconomic factors and late introduction of more severe carbon price
shocks.
Drought and heat risk Credit Risk - Wholesale £ Critical
Flood risk
Credit Risk - Retail
£ Moderate
Key £ Moderate £ High £ Critical
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Power Utilities Bespoke Assessment
During 2022, Barclays also performed a targeted
scenario analysis exercise on Power Utility clients
to better understand transition risks to the
sector over a short to medium term. This
exercise was designed to support climate risk
management and evolve climate risk modelling,
with outputs indicating the change in risk
profile for the sector rather than quantifying
financial losses.
The scenario was informed by the Network for
Greening the Financial System (NGFS) Delayed
Transition scenario, and was designed in line with
the Programme Finance Initiative (UNEP FI) and
National Institute of Economic and Social
Research (NIESR) guidance on exploring short-
term climate-related shocks. The scenario shifts
the transition period experienced in the NGFS
scenario from 2032 and beyond to today,
representing greater tail risk from rapid transition
policies being introduced in a disorderly manner.
This was done to ensure the exercise was
informative and appropriate for risk management
purposes.
The exercise leveraged Barclays' Corporate
Transition Risk Forecast Model. In addition, the
exercise involved some key assumptions,
principally that regulated financial entities are less
sensitive to climate factors, owing to regulatory
support and ability to cover costs.
1. Carbon price
($/tCO2e)
3. Renewable capital costs
(Index)
n EU n US n RoW
Key scenario variables include 1) Carbon Price, representing an overall
proxy for transition costs applied to companies as an additional cost to
doing business.
n CapEx Cost
Key scenario variables include 3) Renewable Investment Cost,
a component of capital expenditure where marginal renewable
investment costs fall as the technologies mature.
2. Electric capacity mix
(GW)
n Gas Capacity
n Coal Capacity
n Nuclear Capacity n Renewable Capacity
Key scenario variables include 2) Electricity Capacity Mix, reflecting
changing fuel types for power generation as economies decarbonise.
Insights from this exercise
The exercise highlighted key conclusions
warranting further investigation and action:
• transition scenarios represent a significant risk
for Power companies with high carbon-intensive
operations, given the high costs of transition (e.g.
carbon prices, investment in renewables)
• there are existing transition risks in the EU
Emissions Trading System that may lead to
financial stress for major Power Utilities, and
current geopolitical issues may accelerate this as
EU companies rely further on coal to offset gas
supply issues, driving emissions higher and
further away from legally binding targets
• if companies pass through carbon-related
costs to consumers, this will likely lead to
consumer affordability issues, the dynamics of
which are being observed today albeit from
different drivers
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Annual Report 2022 132
• carbon hedging represents a potential mitigant
against carbon tax and further investigation
is needed on the extent of this activity and
its effectiveness
• given the short-term nature of the scenario, the
exercise assumed that companies would meet
their five-year plans as currently disclosed, and
would not be assessed or discounted based on
a credibility assessment
The learnings from this exercise will form a
broader power sector deep dive, to be
conducted in 2023, which will take into account
quantitative metrics including carbon intensity
and client transition plan assessment.
Whilst the exercise provided insight and learning
into this sector, the nature of this exploratory
exercise, along with high model uncertainty,
means that there were limitations to the analysis.
For instance, forecasting the exact nature and
timing of government policy is challenging,
meaning that estimations must be made as to
the format and magnitude these will take. The
outputs and insights gained from this exercise
will be used to enhance climate risk management
processes, including to better quantify the
impacts of climate change on the Bank's
portfolio, to improve our understanding of how
climate risks manifest in this sector, and to
support Barclays' resilience to climate risk.
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Annual Report 2022 133
Evolution of approach
Having undertaken a number of climate scenario
analysis exercises over the last four years, and
gained a greater understanding of the challenges
and nuances of climate modelling, Barclays has
created and continues to evolve its models,
methodologies and scenarios for conducting
climate scenario analysis and stress testing for
its portfolios.
Climate models
Informed by these climate scenarios, Barclays
is embarking on a journey to develop new,
and enhance existing, climate models for
specific portfolios.
These models are designed to produce climate-
relevant credit risk metrics applicable to different
use cases, for example climate-adjusted
probability of default. These models will work
with a range of climate scenarios and evaluate
the impact of specific physical and transition
risk drivers.
The below schematic shows the outline of the
model design.
Barclays has initially focused on developing this
approach for credit risk, given that this risk type
has been the focus of climate scenario analysis
to date.
1. Models consume climate scenario variables
5. Using these metrics, credit risk parameters
e.g. carbon pricing or flood risk
can be obtained e.g. PD or LGD
2. Over time, models will be designed and
6. These outputs can be integrated into different
developed across a wide range of
asset classes
3. Relevant climate risk drivers are analysed and
evaluated to understand how they interact
with the asset class
4. These risks are applied to metrics that drive
credit risks within the asset class e.g. LTV
for mortgages
downstream use cases e.g. stress testing
7. Models can be used across different business
lines within Barclays.
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Annual Report 2022 134
Challenges
Having undertaken a number of climate scenario
analysis exercises, Barclays has gained a greater
understanding of the challenges and nuances of
climate modelling and continues to develop new
and enhance existing tools for scenario analysis
and stress testing. However, unique and complex
features of climate risks, with potential tipping
points and non-linearities, represent major
challenges in terms of accurately capturing the
impact of climate risks and effectively using the
results of these exercises to inform various
business activities. Some of the challenges include:
• climate change scenarios are often derived
using models such Integrated Assessment
Models (IAMs), which are complex and require
deep understanding of feedback loops and
module interactions. Over long-term time
horizons, such scenarios may struggle to
identify inflection points, or periods of
heightened volatility caused by physical
climate risks, and understanding such
as events is important for climate
risk management
• climate scenario risk analysis requires
approaches and tools that are more granular
(e.g. focus on company level analysis) which
differs from more traditional stress testing
exercises which are conducted at portfolio or
sector level. This creates a need for more
granular data which Barclays may not typically
have maintained
• modelling typically occurs over long time
horizons, which are subject to significant
uncertainty. When modelling large and diverse
portfolios, pinpointing where and when risks
will manifest, and the magnitude of these,
is challenging.
Planned activity:
Group-wide climate stress test
Barclays will be performing a Group-wide climate
scenario analysis exercise in 2023, to test the
impact to Barclays' portfolios from a severe but
plausible climate scenario. This exercise is split
across four phases over a five-year time horizon,
including paths for Physical, Connected and
Transition risk events:
• severe physical risks emanating from a climate
‘tipping point’, causing widespread impacts to
physical systems, including sea level rise,
drought and more severe changes in
temperature including colder winter weather
• amplifying affects to the wider economy as
physical risk events lead to changes in society,
such as declining agricultural production and
increased migration from severely impacted
regions, potentially leading to severe price
rises and inflation
• this results in various stakeholders taking
mitigating actions, including transition
action from policy spheres and consumers
switching consumption habits to more
sustainable practices
• additional non-financial risk impacts including
legal and conduct risks are explored, to
holistically assess the plausible set of events
that manifest from climate change.
Through detailed research, it has become clear
that there is significant uncertainty within the
scientific community around how major changes
to the environment may impact weather patterns,
given the complexity and interconnections
involved. In order to calibrate the scenario, the
following sources have been used: a) academic
evidence where available, b) tail events that have
occurred throughout history, or c) comparable
events driven by non-climate factors. However,
we acknowledge the limitations of running a
scenario as outlined above.
The exercise will be used as part of Barclays'
ongoing climate risk management, to better
quantify the impacts of climate change on the
Bank’s portfolios and balance sheet. This will
enable Barclays to improve its understanding of
how climate risks interact with macroeconomic
stresses and to support Barclays' resilience to
climate risk.
+ Further details on the impact of climate-related risks and
opportunities on our business, strategy and financial
planning can be found on pages 74 and 76.
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In the No Additional Action scenario, the world
would experience heightened physical risks in the
longer-term. Without any additional policy
support to incentivise the transition, the gap
between our ambition to transition to net zero
and the emissions reductions observed in the
economy would increase. While we might see
less transition risk in this scenario, Barclays would
need to consider the implications of such
divergence and manage increasing exposure to
physical risks faced by certain segments of
customers and clients we serve.
We recognise that we have more work to do in
order to reach a more comprehensive and
deeper understanding of the resilience of our
business under various climate scenarios. We
also aim to more fully integrate climate scenario
analysis into our strategic and financial planning
over time as our capabilities in the area of
scenario analysis evolve further.
Resilience of our strategy,
taking into consideration different
climate-related scenarios
As described above, we use scenario analysis to
help us assess and quantify potential impacts of
climate change.
Based on the stress tests undertaken to date,
our current best understanding of the resilience
of our business is that the impacts of the climate
scenarios we have so far explored, even over the
long term, are more benign than the scenarios
we generally use to test the resilience of our
business. Under the CBES exercise, our business
remained resilient under all scenarios. Under the
ECB exercise, we did find that the Barclays
Europe portfolios (as a sub-set of the Barclays'
Group exposures) were vulnerable under the
long-term scenarios given their exposure to
power and gas utilities.
Under the CBES exercise, we found that Barclays’
existing strategic plans to manage emerging
climate risks and to align our financing to the
goals and timelines of the Paris Agreement in
part mitigate some of the risk in at least two of
the three scenarios – the Early Action and Late
Action scenarios.
The Late Action scenario indicated greater
disruption compared with the Early Action
scenario due to the delay in policy incentives,
which amplified the transition risks faced by our
clients. In this scenario, there would be a greater
need and opportunity to support our clients to
adapt, where they are in sectors most vulnerable
to transition risks. However, our strategic plans
to transition our portfolio reduces our risk
exposure in both these scenarios.
Barclays PLC
Annual Report 2022 135
• greater confidence, action and awareness
among consumers in wider society could
facilitate private investment into the conduits
where it could have the most impact to change
behaviour. This includes the need for
households to see sufficient return on
investment in low-carbon products to create
incentives to act
• improved access to client sustainability-
related risk and impacts data would allow for
better assessments of Scope 3 emissions,
and therefore allow full integration of these
factors into decision-making. Government
and regulators should recognise that
corporate and financial sector reporting will
improve over time, with some challenges
likely to persist over the coming years due to
data gaps.
+ Further details on our assessment of material existing and
emerging risks, including climate risk, can be found from
page 273.
In addition to the risks arising from our clients'
and suppliers' transitions, we are also dependent
on wider market and geopolitical developments
outside our control. For example, progress may
be impacted by geopolitical developments that
result in energy supply pressures, such as the
conflict in Ukraine, or by the varying pathways
that individual companies take as a result of the
technologies available to them to transition.
Macro-dependencies and objectives
We consider that, at a high level, the following
areas represent some of the macro-
dependencies that may impact our clients,
customers and suppliers, and thus our ability to
deliver our climate strategy:
• policy clarity is needed across the real
economy, sector by sector, and country by
country, to ensure shared expectations and
aligned objectives. Without clear milestones
that lead to full decarbonisation, there is
uncertainty around where finance should flow
to support economy-wide decarbonisation
• a comprehensive carbon-pricing scheme
could be an efficient way to support the
transition to net zero. Barclays Research
shows current prices (avg $6/tCO2) are
insufficient to achieve 1.5°C or 2°C targets
• many technological innovations and wider
activities needed for the net zero transition
need to become more attractive to lenders
through improved risk / return ratios.
Currently, technology solutions such as
carbon capture or hydrogen are yet to achieve
full commercial scalability, limiting access to
less expensive forms of capital. Larger
amounts and less costly capital could be
unlocked via blended finance
• a wide variety of sector-specific, supply-side
challenges need to be addressed on a case-
by-case basis. For example, the UK is
encountering a skills shortage in the
construction sector which will impact
retrofitting of housing stock
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Disclaimers
In preparing the climate and sustainability
content within the Barclays PLC Annual Report
wherever it appears, we have:
• made a number of key judgements,
estimations and assumptions, and the
processes and issues involved are complex.
This is for example the case in relation to
financed emissions, portfolio alignment,
classification of environmental and social
financing, operational emissions and
measurement of climate risk.
• used ESG and climate data, models and
methodologies that we consider to be
appropriate and suitable for these purposes as
at the date on which they were deployed.
However, these data, models and
methodologies are subject to future risks and
uncertainties and may change over time. They
are not of the same standard as those
available in the context of other financial
information, nor subject to the same or
equivalent disclosure standards, historical
reference points, benchmarks or globally
accepted accounting principles. There is an
inability to rely on historical data as a strong
indicator of future trajectories, in the case of
climate change and its evolution. Outputs of
models, processed data and methodologies
will also be affected by underlying data quality
which can be hard to assess or challenges in
accessing data on a timely basis.
• continued (and will continue) to review and
develop our approach to data, models and
methodologies in line with market principles
and standards as this subject area matures.
The data, models and methodologies used
and the judgements estimates or assumptions
made are rapidly evolving and this may directly
or indirectly affect the metrics, data points and
targets contained in the climate and
sustainability content within the Annual
Report. Further development of accounting
and/or reporting standards could impact
(potentially materially) the performance
metrics, data points and targets contained in
this report. In future reports we may present
some or all of the information for this reporting
period using updated or more granular data or
improved models, methodologies, market
practices or standards or recalibrated
performance against targets on the basis of
updated data. Such re-presented, updated or
recalibrated information may result in different
outcomes than those included in this section
of the Annual Report. It is important for
readers and users of this report to be aware
that direct like-for-like comparisons of each
piece of information disclosed may not always
be possible from one reporting period to
another. Where information is re-presented,
recalibrated or updated from time to time, our
principles based approach to reporting
financed emissions data (see page 87) sets out
when information in respect of a prior year will
be identified and explained.
• appointed KPMG LLP to perform limited
independent assurance over selected ESG
content, which have been marked with the
symbol Δ. The assurance engagement was
planned and performed in accordance with
the International Standard on Assurance
Engagements (UK) 3000 Assurance
Engagements Other Than Audits or Reviews
of Historical Financial Information and the
International Standard on Assurance
Engagements 3410 Assurance of Greenhouse
Gas Statements. A limited assurance opinion
was issued and is available at the website link
below. This includes details of the scope,
reporting criteria, respective responsibilities,
work performed, limitations and conclusion.
No other information in this Annual
Report has been subject to this external
limited assurance.
+ The limited assurance opinion is available at: home.barclays/
sustainability/esg-resource-hub/reporting-and-disclosures/
Barclays PLC
Annual Report 2022 136
Information provided in climate
and sustainability disclosures
What is important to our investors and
stakeholders evolves over time and we aim to
anticipate and respond to these
changes. Disclosure expectations in relation to
climate change and sustainability matters are
particularly fast moving and differ in some ways
from more traditional areas of reporting in the
level of detail and forward-looking nature of the
information involved and the consideration of
impacts on the environment and other persons.
We have adapted our approach in relation to
disclosure of such matters. Our disclosures take
into account the wider context relevant to these
topics, including evolving stakeholder views, and
longer time-frames for assessing potential risks
and impacts having regard to international long-
term climate and nature-based policy goals. Our
climate and sustainability-related disclosures are
subject to more uncertainty than disclosures
relating to other subjects given market
challenges in relation to data reliability,
consistency and timeliness, and in relation to the
use of estimates and assumptions and the
application and development of methodologies.
These factors mean disclosures may be
amended, updated, and recalculated in future
as market practice and data quality and
availability develops.
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Annual Report 2022 137
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.
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
directors, officers and employees of the Group
(including during management presentations) 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 levels, costs, assets and liabilities,
impairment charges, provisions, capital, leverage
and other regulatory ratios, capital distributions
(including dividend policy and share buybacks),
return on tangible equity, projected levels of
growth in banking and financial markets, industry
trends, any commitments and targets (including
environmental, social and governance (ESG)
commitments and targets), business strategy,
plans and objectives for future operations and
other statements that are not historical or
current facts. By their nature, forward-looking
statements involve risk and uncertainty because
they relate to future events and circumstances.
Forward-looking statements speak only as at the
date on which they are made. Forward-looking
statements may be affected by a number of
factors, including, without limitation: changes in
legislation, regulation and the interpretation
thereof, changes in IFRS and other accounting
standards, including practices with regard to the
interpretation and application thereof and
emerging and developing ESG reporting
standards; the outcome of current and future
legal proceedings and regulatory investigations;
the policies and actions of governmental and
regulatory authorities; the Group’s ability along
with governments and other stakeholders to
measure, manage and mitigate the impacts of
climate change effectively; environmental, social
and geopolitical risks and incidents and similar
events beyond the Group’s control; the impact of
competition; capital, leverage and other
regulatory rules applicable to past, current and
future periods; UK, US, Eurozone and global
macroeconomic and business conditions,
including inflation; volatility in credit and capital
markets; market related risks such as changes in
interest rates and foreign exchange rates; higher
or lower asset valuations; changes in credit
ratings of any entity within the Group or any
securities issued by it; changes in counterparty
risk; changes in consumer behaviour; the direct
and indirect consequences of the Russia-Ukraine
war on European and global macroeconomic
conditions, political stability and financial
markets; direct and indirect impacts of the
coronavirus (COVID-19) pandemic; instability as
a result of the UK’s exit from the European Union
(EU), the effects of the EU-UK Trade and
Cooperation Agreement and any disruption that
may subsequently result in the UK and globally;
the risk of cyber-attacks, information or security
breaches or technology failures on the Group’s
reputation, business or operations; the Group’s
ability to access funding; and the success of
acquisitions, disposals and other strategic
transactions. A number of these factors are
beyond the Group’s control. As a result, the
Group’s actual financial position, results, financial
and non-financial metrics or performance
measures or its ability to meet commitments and
targets 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 the description of material existing
and emerging risks from page 269 of this
Annual Report.
Subject to Barclays PLC’s 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.
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Annual Report 2022 139
Fulfilling
our
Purpose
Our Purpose...
We deploy finance responsibly to support
people and businesses, acting with empathy and
integrity, championing innovation and sustainability,
for the common good and the long term.
and our Values…
Respect
Integrity
Service
Stewardship
Excellence
influence our strategy…
Our diversification,
built to deliver
double-digit returns
Strategic priorities
to sustain and grow
delivered through Group synergies...
We work as one organisation to create
synergies and deliver greater value.
creating positive outcomes
for our stakeholders.
Customers
and clients
Colleagues
Society
Investors
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Annual Report 2022 140
Contents
Parts 1, 2 and 3 of Barclays PLC 2022 Annual Report
together comprise Barclays PLC’s annual accounts and report
for the purposes of Section 423 of the Companies Act 2006.
Inside Part 3
Governance
Governance contents
Board Governance
Directors’ report
Remuneration report
Other Governance
Risk review
Risk review contents
Risk management
Material existing and emerging risks
Principal risk management
Risk performance
Supervision and regulation
Financial review
Financial review contents
Key performance indicators
Consolidated summary income statement
Income statement commentary
Consolidated summary balance sheet
Balance sheet commentary
Analysis of results by business
Non-IFRS performance measures
Financial statements
Financial statements contents
Consolidated financial statements
Notes to the financial statements
141
141
142
143
197
246
264
264
266
269
282
296
370
378
378
379
381
382
383
384
385
392
397
397
416
424
Inside Part 1
Strategic report
Group overview
Prepared for the road ahead
Chairman’s introduction
Chief Executive's review
Our business model
Our strategy
Section 172(1) statement
Engaging with our stakeholders
Key performance indicators
Customers and clients
Supporting our customers and clients
Colleague
Our people and culture
Society
Making a difference
Investors
Summary financial review
Barclays UK
Barclays International: Corporate and Investment Bank
Barclays International: Consumer, Cards and Payments
Managing risk
Viability statement
Non-financial information statement
ESG ratings performance
ESG-related reporting and disclosures
TCFD Content Index
Shareholder information
Key dates, Annual General Meeting, dividends, and other
useful information
Inside Part 2
Climate and sustainability report
Introduction
Risks and opportunities
Implementing our climate strategy
Resilience of our strategy
Please note that throughout the document, graphical representation
of component parts may not cast due to rounding
1
2
3
4
6
10
12
16
21
23
26
31
39
45
49
52
54
56
58
60
63
64
65
66
66
69
70
73
77
127
Governance
Our governance framework facilitates
the effective management of the Group
across its diverse businesses.
Board Governance
Directors’ report
Our Board of Directors
Other Governance
Climate and sustainability governance
143 Managing impacts in lending and financing
Our Group Executive Committee
147
The Barclays Way
Our Governance Framework
Key Board Activities in 2022
Board Nominations Committee report
Board Audit Committee report
149 Whistleblowing
154
157
169
Tax
Financial crime
Health and safety
Board Risk Committee report
178 Managing data privacy, security and resilience
247
253
256
257
258
260
261
262
How we comply
Shareholder Q&A
Other statutory and regulatory information
Remuneration report
186
188
190
197
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information
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statements
Barclays PLC
Annual Report 2022 142
Board Governance
Welcome to our 2022 Board Governance report. The report sets out the
composition of our Board and our Executive Committee and explains
how our Board governance framework operates, alongside the key areas
of focus of our Board and Board Committees in 2022.
Aim of our governance
The primary aim of our governance is that it:
• seeks to ensure that our decision-making is aligned to our
Purpose, Values and Mindset
• creates long-term sustainable value for our shareholders,
having regard to the interests of all our stakeholders
• is effective in providing constructive challenge, advice and
support to management
• provides checks and balances and drives informed,
collaborative and accountable decision-making.
Compliance with the Code
• Our Board Governance report reflects the requirements of the
2018 UK Corporate Governance Code (the Code).
• To view how we comply with the Code,
please see pages 186 to 187.
Certain additional information, signposted throughout this report,
is available at home.barclays/corporategovernance
Directors’ report
Our Board of Directors
Our Group Executive Committee
Our Governance Framework
Key Board Activities in 2022
Board Nominations Committee report
Board Audit Committee report
Board Risk Committee report
How we comply
Shareholder Q&A
Other statutory and regulatory information
Remuneration report
143
147
149
154
157
169
178
186
188
190
197
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information
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Barclays PLC
Annual Report 2022 143
Directors’ report: Our Board of Directors
Guided by our Purpose,
Values and Mindset
in leading the Group
Board Committee
membership
Audit Committee
Member
Nominations
Committee Member
Remuneration
Committee Member
Risk Committee
Member
Committee
Chair
Nigel Higgins
Group Chairman
Appointed:
March 2019 (Board), May 2019
(Chairman)
Skills, experience and contribution:
• seasoned business leader with extensive
experience in, and understanding of,
banking and the financial services industry
• strong track record in leading and chairing
organisations
• significant experience in providing
strategic advice to major international
organisations and governments
• keenly focused on culture and corporate
governance.
Nigel spent 36 years at Rothschild & Co.
where he was most recently Deputy
Chairman. Prior to that he was Chairman of
the Group Executive Committee and
Managing Partner of Rothschild & Co.
Key current appointments:
Chairman, Sadler’s Wells; Non-Executive
Director, Tetra Laval Group
C.S. Venkatakrishnan
Group Chief Executive
Appointed:
November 2021
Brian Gilvary
Senior Independent Director (SID)
Appointed:
February 2020 (Board), January 2021 (SID)
Skills, experience and contribution:
• highly regarded leader with significant
global banking experience
• extensive background in financial markets
and risk management
• deep understanding of the business and
the areas within which the Group
operates.
Prior to his appointment as Group Chief
Executive, Venkat served as Head of Global
Markets and Co-President of Barclays Bank
PLC from October 2020 and Group Chief
Risk Officer from 2016 to 2020.
Before joining Barclays in 2016, Venkat
worked at JPMorgan Chase from 1994,
holding senior roles in Asset Management,
Investment Banking, and in Risk.
Key current appointments:
Board Member, Institute of International
Finance; Advisory member to the Board,
Massachusetts Institute of Technology
Golub Centre for Finance and Policy;
Member of the UN Environment Programme
Finance Initiative Leadership Council
Skills, experience and contribution:
• extensive senior level experience of
management, finance and strategy
• deep experience of US and UK
shareholder engagement
• significant experience with, and
understanding of, the challenges and
opportunities inherent in advancing a
sustainable energy future.
Brian spent much of his career with BP p.l.c.
in senior leadership roles, where he was
most recently Chief Financial Officer.
His other senior-level experience includes
serving on the boards of various commercial
and charitable organisations. Brian was Chair
of The 100 Group of FTSE 100 Finance
Directors, a member of the UK Treasury
Financial Management Review Board and has
served on various HRH Prince of Wales'
Business in the Community Leadership
Teams.
Key current appointments:
Non-Executive Chair, INEOS Energy, an
INEOS group company
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Annual Report 2022 144
Directors’ report: Our Board of Directors (continued)
Mike Ashley
Independent Non-Executive Director
Skills, experience and contribution:
• specialised knowledge of accounting and
Appointed:
September 2013
audit related matters
• extensive experience of auditing large
international financial institutions
• deep financial services and regulatory
knowledge and experience.
Mike previously worked at KPMG for over 20
years. Mike's former roles include acting as
the lead engagement partner on the audits
of large financial services groups including
HSBC, Standard Chartered and the Bank of
England, as Head of Quality and Risk
Management for KPMG Europe LLP and as
KPMG UK's Ethics Partner. Mike will retire
from the Board with effect from the
conclusion of the 2023 AGM.
Key current appointments:
Member, Cabinet Office Board; Member, UK
Endorsement Board; Treasurer, The Scout
Association
Robert Berry
Independent Non-Executive Director
Appointed:
February 2022
Skills, experience and contribution:
• proven track record of management of
risk exposure for a global financial
institution and building a modern group-
wide risk management organisation
• strong record of integrating risk
management with strategy
• significant experience in finance, model
development and trading.
Robert has robust risk management
expertise having had a 28-year career at
Goldman Sachs, where, prior to his
retirement in 2018, he held the role of Co-
Deputy Chief Risk Officer.
Key current appointments:
Board President, Alina Lodge
Tim Breedon CBE
Independent Non-Executive Director
Skills, experience and contribution:
• significant experience in strategic
planning
• extensive financial services experience
• detailed knowledge of risk management
and UK and EU regulation.
Tim is a member of the Board and is also
Chair of Barclays Bank Ireland PLC (also
referred to as Barclays Europe).
He had a distinguished career with Legal &
General, where, among other roles, he was
the Group Chief Executive Officer until June
2012. Tim also served as Chair of the
Association of British Insurers.
Key current appointments:
Chairman, Apax Global Alpha Limited; Non-
Executive Director, Quilter PLC
Appointed:
November 2012
Anna Cross
Group Finance Director
Appointed:
April 2022
Skills, experience and contribution:
• extensive accounting and financial
services expertise
• deep understanding of banking and retail
sectors
• significant financial leadership experience
of financial institutions.
Anna is a chartered accountant and Group
Finance Director with responsibility for
Finance, including Tax, Treasury, Investor
Relations and Strategy.
Prior to joining Barclays, Anna worked in both
banking and retail and held various roles at
Asda, HBOS and Lloyds Banking Group.
Since joining Barclays in 2013, Anna was
appointed Chief Financial Officer of Barclays
Bank UK PLC in 2016, Group Financial
Controller in 2019 and Deputy Group
Finance Director in 2020. She joined the
Group Executive Committee in February
2022, before taking up the role of Group
Finance Director in April 2022.
Key current appointments:
None
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Annual Report 2022 145
Directors’ report: Our Board of Directors (continued)
Mohamed A. El-Erian
Independent Non-Executive Director
Appointed:
January 2020
Dawn Fitzpatrick
Independent Non-Executive Director
Appointed:
September 2019
Skills, experience and contribution:
• highly respected economist and investor
• extensive experience in the asset
management industry and multilateral
institutions
• deep knowledge and understanding of
international economics and financial
services sector.
Mohamed currently serves as President of
Queens' College, Cambridge University. He
is Chief Economic Advisor at Allianz SE, the
corporate parent of PIMCO (Pacific
Investment Management Company LLC)
where he formerly served as Chief Executive
and Co-Chief Investment Officer.
Skills, experience and contribution:
• extensive management experience of
international financial institutions
• strong financial and strategic leadership
experience
• detailed knowledge of the markets in
which the Group operates.
Dawn holds the role of Chief Executive
Officer and Chief Investment Officer at
Soros Fund Management LLC.
Mohamed is a regular columnist for
Bloomberg Opinion and a contributing editor
at the Financial Times. He spent 15 years at
the IMF where he served as Deputy Director
before moving to the private sector and
financial services.
Key current appointments:
Lead Independent Director, Under Armour
Inc.; Chief Economic Adviser, Allianz SE;
Chairman, Gramercy Funds Management;
Senior Advisor, Investcorp Bank BSC
Her previous experience includes 25 years
with UBS, most recently as Head of
Investments for UBS Asset Management.
Key current appointments:
Chief Executive Officer and Chief
Investment Officer, Soros Fund
Management LLC; Member, Advisory Board
and Investment Committee of the Open
Society Foundations’ Economic Justice
Programme; Advisory Council Member, The
Bretton Woods Committee
Mary Francis CBE
Independent Non-Executive Director
Skills, experience and contribution:
• extensive board-level experience across a
Appointed:
October 2016
range of industries
• strong focus on reputation management
and promoting board governance values
• detailed understanding of the interaction
between public and private sectors.
Mary's previous appointments include Non-
Executive Directorships at the Bank of
England, Alliance & Leicester, Aviva, Centrica
and Swiss Re Group.
In her executive career, Mary held senior
positions with both HM Treasury and the
Prime Minister's Office and served as
Director General of the Association of British
Insurers.
Key current appointments:
Senior Independent Director, PensionBee
Group PLC; Member, UK Takeover Appeal
Board
Crawford Gillies
Independent Non-Executive Director
Appointed:
May 2014
Skills, experience and contribution:
• extensive business transformation and
management experience in international
and cross-sector organisations
• deep understanding and experience of
stakeholder engagement
• strong leadership qualities and expert at
strategic decision-making.
Crawford is a member of the Board having
previously held the roles of Senior
Independent Director and Chair of the Board
Remuneration Committee. He is Chair of
Barclays Bank UK PLC.
Crawford has held a number of roles during
his 30-year career including Managing
Partner Europe of Bain & Company, Chair of
Scottish Enterprise and the Confederation
of British Industry London (CBI) and Non-
Executive Director roles at both Standard
Life and SSE. Crawford will retire from the
Board with effect from 31 May 2023.
Key current appointments:
Chairman, Edrington Group
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Annual Report 2022 146
Directors’ report: Our Board of Directors (continued)
Marc Moses
Independent Non-Executive Director
Appointed:
January 2023
Diane Schueneman
Independent Non-Executive Director
Appointed:
June 2015
Julia Wilson
Independent Non-Executive Director
Appointed:
April 2021
Stephen Shapiro
Group General Counsel
and Group Company Secretary
Appointed:
November 2017
Skills, experience and contribution:
• strong technical finance background in
accounting and audit-related matters
• significant board and senior executive-
level risk management experience
• extensive knowledge of banking and
financial services.
Marc was appointed to the Board on 23
January 2023. His financial services
experience extends over 43 years, initially as
a trader and then in senior executive roles as
an audit partner at PwC, and Chief Financial
Officer of JPMorgan Europe.
Skills, experience and contribution:
• significant experience of managing global,
cross-discipline business operations and
client services in the financial services
industry
• strong transformational programme
experience
• extensive technology and information
security expertise.
Diane is Chair of Barclays Execution Services
Limited and a member of the Board of
Barclays US LLC.
He joined HSBC in 2005 where he was Chief
Risk Officer for nine years and joined the
group board as an executive director in
2014. He retired from HSBC in 2019.
Key current appointments:
None
Diane was previously Global Chief
Infrastructure Officer of Merrill Lynch, where
she was responsible for all technology and
operations across retail, corporates and
banking.
Key current appointments:
None
Skills, experience and contribution:
• significant board and executive-level
strategic and financial leadership
experience
• extensive accounting, audit and financial
services expertise
• strong UK regulatory experience.
Julia is a chartered accountant and was the
Group Finance Director of 3i Group plc, having
served on its board since 2008 until she
stepped down in June 2022. Prior to joining 3i
she was Group Director of Corporate Finance
at Cable & Wireless where she also held a
number of finance-related roles.
Julia was appointed as a Non-Executive
Director at Legal & General Group PLC in
2011. She chaired L&G’s Audit Committee
between 2013 and 2016 and was Senior
Independent Director from 2016 until she
stepped down from L&G in March 2021. Julia
served as the Chair of The 100 Group of
FTSE 100 Finance Directors from June 2020
until September 2022. Julia will take over the
role of Chair of the Board Audit Committee
(subject to regulatory approval) with effect
from 1 April 2023.
Key current appointments:
None
Relevant skills and experience:
Stephen is an experienced lawyer and company
secretary with a deep understanding of legal,
corporate governance and regulatory matters.
Holding the combined role of Group General
Counsel and Group Company Secretary, he
oversees Barclays’ global Legal and Corporate
Secretariat functions. Stephen is also a
member of the Group Executive Committee.
Career:
Stephen previously served as the Group
Company Secretary and Deputy General
Counsel of SABMiller plc. Prior to this, he
practised law as a partner in a law firm in South
Africa, and subsequently in corporate law
and M&A at Hogan Lovells in the UK. He was
appointed as Group Company Secretary of
Barclays in November 2017 and was
subsequently appointed Group General
Counsel in August 2020, in addition to his
role as Company Secretary. Stephen is an
active industry contributor and serves as a
member of the GC100 Executive
Committee, the association of General
Counsel and Company Secretaries working
in FTSE 100 companies, having previously
served as Vice-Chair until January 2022.
Stephen also previously served as Chairman
of the ICC UK’s Committee on Anti-
Corruption.
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Directors’ report: Our Group Executive Committee
Continuing to lead the delivery
of Barclays’ strategic priorities
The right balance of skills and experience to lead the execution of the
Group's strategy.
As our most senior management
committee for the Group, our Group
Executive Committee (ExCo)
supports the Group Chief Executive in
executing the Group’s strategy.
As reported in our 2021 Annual
Report, C.S. Venkatakrishnan (known
as Venkat) was appointed as Group
Chief Executive in November 2021,
following which he made a series of
changes to the composition of ExCo
to bring together the right balance of
skills and experience to deliver for our
stakeholders and to lead the
execution of the Group's strategy.
Over 2022, we have seen how ExCo has
supported the Group in enabling us to
deliver a robust performance.
Changes to ExCo composition during
the course of 2022 and up to the date
of this report are set out below, and
remain subject to regulatory approval
where stated.
Changes to ExCo in 2022
Group Finance Director
Anna Cross joined ExCo on 23 February
2022, ahead of her appointment as Group
Finance Director and Executive Director of
Barclays PLC (BPLC) on 23 April 2022.
Anna brings significant skills and
experience to ExCo, as set out in her
biography on page 144. Anna joined the
Group in 2013 and held the role of Deputy
Group Finance Director from July 2020,
prior to which she was appointed Group
Financial Controller in 2019 and before
that held the role of Chief Financial Officer
for Barclays Bank UK PLC (BBUKPLC).
A qualified chartered accountant, Anna has
worked in both banking and retail and had
previously held finance roles at leading
financial and retail institutions.
Interim Group Chief Compliance Officer
Matthew Fitzwater was appointed Interim
Chief Compliance Officer and member of
ExCo with effect from 1 November 2022,
subject to regulatory approval, while we
complete our search for a permanent
successor. Matthew was most recently our
General Counsel for Conduct, Customer
and Client Affairs and brings to ExCo a
wealth of legal and regulatory experience
from a career spanning the US and the UK.
Changes to ExCo in 2023
Group Chief Operating Officer
and Chief Executive, BX
With effect from 1 February 2023, Alistair
Currie was appointed Group Chief
Operating Officer (subject to regulatory
approval) and Chief Executive of Barclays
Execution Services Limited (BX). With his
experience leading customer delivery, as
well as operational and business
transformation, Alistair is ideally placed to
continue the momentum created by his
predecessor, Mark Ashton-Rigby.
Global Head of Consumer Banking
and Payments
Vim Maru was appointed Global Head of
Consumer Banking and Payments with
effect from 1 February 2023, subject to
regulatory approval. Vim brings to Barclays
deep experience of consumer banking and
a passion for leading the continued
evolution of our industry. Vim's leadership
will be a great asset to Barclays.
Standing attendees and
ex-officio posts
Recognising the strategic importance of
our technology and cyber agenda, in
October 2022 we welcomed Craig Bright,
our Chief Information Officer, as a
standing attendee to ExCo. Craig is
responsible for Barclays’ technology
strategy, leading the delivery of our digital
transformation across both our consumer
and wholesale businesses.
ExCo continues to utilise ex-officio
positions on the Committee to broaden
the scope of perspectives and
contributions made, as well as to provide
specialist input, with each appointee
serving for a four-month rotation.
ExCo meetings are also attended on a
regular basis by the Group Chief Internal
Auditor, Lindsay O’Reilly.
We are grateful for the significant
contributions made by the outgoing ExCo
members, as set out below.
Tushar Morzaria stepped down as Group
Finance Director in April 2022.
Laura Padovani stepped down as Group
Chief Compliance Officer in October 2022.
Mark Ashton-Rigby stepped down as Group
Chief Operating Officer and Chief Executive,
BX in January 2023.
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Directors’ report: Our Group Executive Committee (continued)
Group Executive Committee
C.S.
Venkatakrishnan
Group Chief
Executive
Anna Cross
Group Finance
Director
Paul Compton
Global Head of the
Corporate and
Investment Bank and
President of BBPLC
Alistair Currie
Group Chief
Operating Officer
and Chief Executive,
BX
Matthew Fitzwater
Interim Group Chief
Compliance Officer
Matt Hammerstein
Chief Executive
Officer, Barclays UK
Vim Maru
Global Head of
Consumer Banking
and Payments
Tristram Roberts
Group Human
Resources Director
Taalib Shaah
Group Chief Risk
Officer
Stephen Shapiro
Group General
Counsel and
Company Secretary
Sasha Wiggins
Group Head of
Public Policy and
Corporate
Responsibility
Standing attendees
Craig Bright
Chief Information
Officer
Lindsay O’Reilly
Group Chief Internal
Auditor
2022/2023 Ex-officio posts
Koral Anderson
Interim Chief
Operating Officer,
Barclays UKa
Laura Barlow
Group Head of
Sustainability
Susannah Parden
Group Chief
Accounting Officer
Ingrid Hengsterb
CEO,
Barclays Germany
a During her tenure as ExCo ex-officio, Koral Anderson held the role of Chief Procurement Officer.
b Current ex-officio, February 2023.
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Directors’ report: Our Governance Framework
A Group-wide governance
framework facilitating effective
decision making
Driving long-term sustainable value for our shareholders, with regard
to the interests of our stakeholders.
Board Governance Framework
Barclays PLC Board
Responsible for the overall leadership of the Group
(with direct oversight of matters relating to strategy, reputation and culture)
Board Nominations
Committee
Reviews the composition of,
and appointments to, the
Board, Board Committees,
and ExCo
Board Audit
Committee
Reviews financial reports and
monitors the internal control
environment
Board Risk
Committee
Monitors financial,
operational and legal risk
appetite
Board Remuneration
Committee
Sets principles and
parameters of remuneration
policy across the Group
+ For more information
see page 157.
+ For more information
see page 169.
+ For more information
see page 178.
+ For more information
see page 197.
Governance framework
The Board recognises that effective
governance is key to the successful
development and execution of the Group’s
strategy. We think of governance as how the
Board makes decisions and provides
oversight in order to promote Barclays’
success for the long-term sustainable benefit
of our shareholders, having regard to the
interests of our key stakeholders (including
our clients, customers, colleagues and the
society in which we operate).
Our Group-wide governance framework,
described in this report, is designed to:
• facilitate the effective management of
the Group across its diverse businesses
by our Group Chief Executive and his ExCo
• preserve constructive challenge, and
support and provide oversight of the
Group’s major subsidiary boards in the
UK, Ireland and the US, consistent with
the legal, regulatory and independence
requirements applicable to those
entities.
Generally, there is one set of rules for the
Group. Group-wide frameworks, policies
and standards are adopted throughout the
Group unless local laws or regulations, for
example, the ring-fencing obligations
applicable to BBUKPLC, require otherwise,
or ExCo decides it would otherwise be
appropriate in a particular instance.
Group structure
BPLC is the Group’s parent company and
has a premium listing on the London Stock
Exchange.
Each of the Group’s key operating entities –
Barclays Bank PLC (BBPLC), BBUKPLC,
Barclays Europe, Barclays US LLC and
Barclays Bank Delaware – has its own board
(with Executive and Non-Executive Directors)
and Board Committees.
These main operating companies are
supported by our Group-wide service
company, BX, which provides technology,
operations and functional services to
businesses across the Group.
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Directors’ report: Our Governance Framework (continued)
Corporate Governance
Operating Manual
Our Corporate Governance Operating
Manual sets out how the Group’s entities
(and their respective Boards and Board
Committees) should interact with each
other, while also providing guidance and
clarity for management and Directors as to
how these relationships and processes
should work in practice. This is a dynamic
document that continues to evolve with
the changing nature of the Group.
The role of the Board
The BPLC Board sets the purpose, strategic
direction and risk appetite for the Group and
is the ultimate decision-making body for
matters of Group-wide strategic, financial,
regulatory or reputational significance.
We partially consolidated and streamlined
the membership of the BPLC and BBPLC
Boards in 2019, to improve coordination
and efficiency while reducing complexity
and unnecessary duplication.
As a result, membership of the BBPLC
Board is a subset of the BPLC Board, with
all members of the BPLC Board (except
the SID, Chair of BBUKPLC and at least one
other Non-Executive Director) also serving
on the Board of BBPLC.
We believe that having members of the
BPLC Board serve as the Chairs of some of
the Group’s main subsidiaries supports
improved coordination, efficiency and
escalation, whilst enabling an appropriate
focus on matters relevant to each entity.
Spotlight
Board engagement
with stakeholders
The Board strongly believes in the value
of engaging directly with our stakeholders
and in 2022 Board members continued to
engage with our shareholders, including
extensive engagement by our Chairman
and SID ahead of the 2022 AGM. The
Chairman also met with institutional
investors throughout the course of the
year, and the Group Chief Executive and
Group Finance Director held briefings
with investors at each set of quarterly
results.
The Board recognises that our colleagues
are critical to our success, and our
continued investment in them protects
and strengthens our culture. In addition
to receiving formal updates about
colleague engagement and sentiment,
the Board also met colleagues to hear
their feedback at various events held
during the year.
How the Board discharged its responsibilities in 2022
Board members also participated in
events with other stakeholders.
These engagements bring valuable
outside perspectives to the Board.
Other Board engagement with
stakeholders in 2022 included:
• a site visit to the Barclays Radbroke
campus to meet colleagues and
explore first-hand their skills,
experience and career aspirations
• the Board held a reception with
senior female leaders in New York,
together with members from the
Boards of Barclays US LLC and
Barclays Bank Delaware
• the Chairman, Tim Breedon and
Crawford Gillies facilitated a Lifeskills
workshop at a London school
• the Group Chief Executive held
engagement sessions with
colleagues, including quarterly
Group results town halls, Business
and Function town halls, and
Employee Resource Group
sessions
• the Group Finance Director
participated in colleague events,
including during Multi-Generational
Week and Women in Junior
Banking events. She also met with
environmentally-focused
companies that Barclays is
supporting
• Mohamed A. El-Erian, Dawn
Fitzpatrick and Brian Gilvary
participated in various colleague
and client events.
+ Further information about how we engage with
stakeholders can be found in the Strategic
Report on pages 21 to 22.
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Directors’ report: Our Governance Framework (continued)
+ You can read about the key activities of the Board
during 2022 on pages 154 to 156.
You can read about how the Board considered the
interests of our stakeholders in 2022 in our Section
172 statement in the Strategic Report on pages 16
to 20.
Matters reserved to the Board
Matters reserved solely for the decision-
making power of the Board are set out in
our bespoke Matters Reserved to the Board.
Those matters include material decisions
relating to strategy, risk appetite, medium
term plans, capital and liquidity plans, risk
management and controls frameworks,
approval of financial statements, approval
of large transactions and the approval of
share allotments, dividends and share
buybacks.
The Board has delegated the responsibility
for making and implementing operational
decisions and running the Group’s
business on a day-to-day basis to the
Group Chief Executive, supported by his
ExCo.
Board effectiveness
We assess the effectiveness of our Board,
its Committees and individual Directors on
an annual basis, in line with the
requirements of the Code. Following an
externally conducted evaluation in 2021,
the Board, Board Committee and individual
Director effectiveness review for 2022 was
carried out internally, led by our SID and
supported by the Deputy Company
Secretary. You can read more about the
2022 effectiveness review, and progress
against recommendations from the 2021
review, in the report of the Board
Nominations Committee on pages 166 to
168.
Attendance
Directors are expected to attend every Board meeting. Where a Director was not able to attend a Board meeting, the relevant
Director's views were made known to the Chairman in advance of the meeting. The Chairman also met privately, on a regular basis, with
each Non-Executive Director.
Board attendance in 2022
Chairman
Nigel Higgins
Executive Directors
C.S. Venkatakrishnan
Anna Crossc
Non-Executive Directors
Mike Ashley
Robert Berryd
Tim Breedon
Mohamed A. El-Erian
Dawn Fitzpatrick
Mary Francis
Crawford Gillies
Brian Gilvary
Diane Schueneman
Julia Wilson
Former Directors
Tushar Morzariah
Independent/
Executive
Scheduled
meetings eligible
to attend
Scheduled
meetings
attended
%
attendance
Ad hoc
meetings eligible
to attend
Ad hoc
meetings
attendeda
On appointmentb
Executive Director
Executive Director
Independent
Independent
Independent
Independent
Independent
Independent
Independent
Independent
Independent
Independent
Executive Director
14
14
12
14
14
14
14
14
14
14
14
14
14
2
14
14
12
14
14
12e
13f
12g
14
14
14
14
14
2
100 %
100 %
100 %
100 %
100 %
86 %
93 %
86 %
100 %
100 %
100 %
100 %
100 %
100 %
5
5
3
5
5
5
5
5
5
5
5
5
5
2
5
5
3
5
5
5
2
5
3
5
4
4
5
2
Notes
a A number of the ad hoc meetings were called at short notice, which resulted in some Directors being unable to attend.
b As required by the Code, the Chairman was independent on appointment.
c Anna Cross was appointed to the Board with effect from 23 April 2022.
d Robert Berry was appointed to the Board with effect from 8 February 2022.
e Tim Breedon was unable to attend the two meetings (held on consecutive days) due to illness.
f Mohamed A. El-Erian was unable to attend due to a prior commitment.
g Dawn Fitzpatrick was unable to attend the two meetings (held on consecutive days) due to a bereavement.
h Tushar Morzaria stepped down from the Board with effect from 22 April 2022.
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Directors’ report: Our Governance Framework (continued)
Division of responsibilities
Roles on the Board and Charter of Expectations
In line with the provisions of the Code, a clear division of responsibilities has been established between Executive and Non-Executive
Directors, as shown in the table below.
Our Charter of Expectations sets out individual role profiles and required behaviours and competencies for the Chair, SID, Non-
Executive Directors, Executive Directors and Committee Chairs.
We review our Charter of Expectations annually, to ensure it remains relevant and accurately reflects the requirements of the Code,
the Companies (Miscellaneous Reporting) Regulations 2018 and industry best practice.
Role on Board
Chair
Responsibilities
As Chair, Nigel Higgins is responsible for:
•
leading the Board and its overall effectiveness in directing the company
• demonstrating objective judgement
• promoting a culture of openness and inclusion, and facilitating and encouraging open constructive challenge
and debate between all Directors, and which challenges executives where appropriate
• ensuring the Board as a whole has a clear understanding of the views of shareholders
•
facilitating constructive board relations and the effective contribution of all Non-Executive Directors
• ensuring Directors receive all information in an accurate, timely and clear form that is relevant to discharge
their obligations
• developing and monitoring, with the support of the Board Nominations Committee, effective induction,
training and development for the Board.
+ You can read more about the skills and experience Nigel brings to the Board in his biography
on page 143.
Group Chief Executive
As the Group Chief Executive, Venkat is supported in his role by the ExCo, and leads the Executive Directors in:
Senior Independent
Director (SID)
• making and implementing operational decisions and running the Group's business on a day-to-day basis
•
leading Barclays towards the achievement of its strategic objectives and implementing the strategy decisions
taken by the Board
• assisting the Board in considering strategic issues, and ensuring that decisions taken are in the Group's best
interests
• actively promoting and demonstrating the appropriate culture, values and behaviours of the boardroom,
including upholding Barclays' Values and Mindset.
+ You can read more about the skills and experience Venkat brings to the Board in his biography
on page 143 and can find further information on the membership of ExCo on page 148.
As our SID, Brian Gilvary:
• provides a sounding board for the Chair, serving as a trusted intermediary for the other Directors and
shareholders when necessary
•
is available to shareholders if they have any concerns which contact through the normal engagement
channels has failed to resolve, or for which such contact is inappropriate
• maintains contact with major shareholders to understand their issues and concerns, and supports the Chair in
ensuring the Board is aware of the views of major shareholders
•
leads the Non-Executive Directors in meeting at least annually to appraise the Chair's performance, and on
other occasions as necessary.
+ You can read more about the skills and experience Brian brings to the Board in his biography
on page 143.
Non-Executive Directors
Our Non-Executive Directors have responsibility for:
• providing effective oversight, strategic guidance and constructive challenge, helping to develop proposals on
strategy and then empowering the Executive Directors to implement the Group’s strategy while scrutinising
and holding to account the performance of management and Executive Directors against agreed
performance objectives
• having a prime role, led by the Board Nominations Committee, in appointing and, where necessary, removing
Executive Directors, and in succession planning for these roles.
+ You can read more about the skills and experience each of our Non-Executive Directors bring
to the Board in their biographies on pages 144 to 146.
+ You can find a copy of our Charter of Expectations , which sets the role profiles and required competencies for each of the roles
described above, at home.barclays/who-we-are/our governance/board-responsibilities.
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Directors’ report: Our Governance Framework (continued)
Information provided
to the Board
Our Chair is responsible for setting the
Board’s agenda, primarily focused on
strategy, performance, value creation,
culture, stakeholders and accountability,
and ensuring that Board members receive
timely and high-quality information to
enable them to make sound decisions and
promote the success of BPLC.
Our Group Company Secretary, working in
collaboration with the Chair, is responsible for
ensuring good governance and information
flow, to support the Board’s effectiveness. In
2022, we continued to strive for simplicity and
clear focus in the Board’s agendas, papers
and presentations, building on progress
made in previous years.
The Board was kept informed of key
business developments throughout the
year through regular updates from the
Executive Directors and senior executives,
in addition to the presentations delivered
to the Board and the Board Committees as
part of formal meetings.
+ You can read more about the Board’s key activities in
2022, including updates received, on pages 154 to 156.
Where required to enable them to fulfil
their obligations as members of the Board,
Directors are able to seek independent
and professional advice at Barclays’
expense.
Board Committees
The Board is supported in its work by its
Committees - the Board Nominations
Committee, Board Audit Committee,
Board Risk Committee and Board
Remuneration Committee - each of which
has its own terms of reference clearly
setting out its remit and decision-making
powers. This structure allows the Board to
spend a significant proportion of its time
focusing on the strategic direction of the
Group.
The Board Committees are comprised
solely of Non-Executive Directors, in line
with best practice, and cross-membership
between each Committee is shown in the
table below.
The Chairs of each Committee report on
their Committee’s work at every Board
meeting and provide periodic written
updates to the Board on the work of the
Committee.
+ You can read more about the Board Committees, their
membership and their work during 2022 later in this
report.
Board Committee cross-membership in 2022
The table below shows the number of cross-memberships of the Non-Executive Directors across the Board Committees
as at 31 December 2022.
Board Audit
Committee
Board Nominations
Committee
Board Remuneration
Committee
Board Risk
Committee
Board Remuneration
Committee
Board Nominations
Committee
4
2
4
1
2
1
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Directors’ report: Key Board Activities
Key Board Activities in 2022
Keenly focused on strategy and promoting our Purpose, Values and Mindset
to drive the long-term success of Barclays.
Against the backdrop of a changing
macroeconomic and geopolitical
environment in 2022, the Board retained
its focus on Barclays’ strategy, working
with the Group Chief Executive and his
leadership team to drive forward the
implementation of the Group’s strategy as
set by the Board. We commend the work
of our thousands of colleagues across the
globe in delivering a strong financial
performance during these challenging
times. Furthermore, with the challenges of
increased cost of living, and many facing
financial pressure, we are proud of the
steps that Barclays has taken to ensure
that our customers and clients are
supported at this critical time. You can
read about what we've done in our Section
172 statement in the Strategic Report.
Within our overarching consideration of
Group strategy matters, the Board
continued to give significant consideration
to our climate strategy in an evolving
landscape of environmental, legal,
regulatory and social considerations.
Engagement with our shareholders and
other stakeholders continues to be a key
area of focus for the Board, and we were
delighted for the first time since the onset
of COVID-19 in early 2020 to welcome
back shareholders in person at our AGM in
2022, while at the same time providing the
ability for shareholders to attend online.
The Board spent significant time
throughout 2022 in both scheduled and ad
hoc meetings considering the impact of
the Over-issuance of Securities and the
Group's response to it, including through
the work of its Risk and Audit Committees.
In addition, the Board Remuneration
Committee has reflected the impact of the
Over-issuance of Securities in its
remuneration decisions, including the
determination of the Group incentive pool
and the incentive outcomes for the
Executive Directors. Details can be found
on page 201 of the Remuneration report.
Please see page 188 for further
information about the Over-issuance of
Securities.
You can read more about the key areas
of Board focus in 2022 in the rest of
this section.
In September 2022, the Board received
an update on the Consumer Duty rules
and noted its support for the FCA’s
policy objectives in the implementation
of the Consumer Duty and its
requirement for board engagement
within firms. The Board discussed how
the rules apply across the organisation,
the proposed governance structure to
support implementation across the
Group, and the Board’s role in providing
Group-wide, holistic oversight. The
Board received regular updates on the
approach and activities undertaken
across the Group to prepare for the
implementation of the Consumer
Duty. It also endorsed the appointment
of board-level Consumer Duty
Champions to key in-scope subsidiary
boards, including BBPLC and
BBUKPLC.
Spotlight
New FCA Consumer Duty
In July 2022, the Financial Conduct
Authority (FCA) confirmed the final details
of its new Consumer Duty aimed at
setting higher and clearer standards of
consumer protection across financial
services and requiring firms to deliver
good outcomes for customers and
clients. The FCA has emphasised that the
successful application of the Consumer
Duty requires a cultural shift within the
financial services sector, with firms
embedding the Consumer Duty across all
relevant businesses, customer channels,
conduct risk management processes,
controls and governance structures at all
organisational levels.
Monitoring the development of the
Consumer Duty, assessing its
application to the Group and planning
for the first implementation deadline of
31 July 2023 have been a focus for the
Board in 2022, with many of the
requirements of the Consumer Duty
being aligned with the Group’s existing
priorities, including:
• the Barclays UK Customer Strategy
to provide exceptional service and
insights to customers; and
• The Barclays Way, Barclays' Values
and Barclays Mindset initiatives.
Board allocation of timea (%)
n Strategy formulation and
implementation monitoring
n Finance (including capital and liquidity)
n Governance and risk
(including regulatory issues)
n Other (including remuneration)
2022b
2021
46
20
31
3
60
14
23
4
Notes
a The percentages are subject to rounding and therefore may not equal 100% when rounded.
b The allocation of time in 2022 includes the time spent by the Board considering the impacts of the Over-issuance of Securities at
scheduled and ad hoc meetings.
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Directors’ report: Key Board Activities (continued)
Strategy formulation and monitoring
Topic
Board activity
Key decisions
Strategic
review
• Held regular business strategy sessions at meetings
ü Approved the Group's strategy.
ü Approved the 2022 Medium Term Plan (MTP).
throughout the year and its annual corporate strategy
session.
• Received Business/Function reviews to understand risks
and opportunities in key business areas, including the
Corporate and Investment Bank, US Consumer Bank,
Private Bank and Barclays UK.
• Participated in focus sessions on key ‘horizontal topics’
such as cyber, data and climate to understand the impact
of these on the Group and where opportunities and risks
may arise.
Strategic
acquisitions
Macroeconomic
and geopolitical
environment
• Considered the proposal to acquire Kensington
ü Approved the acquisition of Kensington Mortgage
Mortgage Company and its strategic fit within the Group.
• Considered the Group’s overall risk profile and emerging
risk themes in view of events in both the macroeconomic
and geopolitical environment, including rising rates and
inflation and the increased cost of living. Oversaw the
Group's response to these pressures, including providing
assistance to customers facing financial pressures and
responding to the impacts of the war in Ukraine.
Company. This transaction was also approved separately
by the Board of BBUKPLC.
ü Approved the Barclays Risk Appetite Statement.
ü Approved the annual review of the Group Enterprise Risk
Management Framework.
+ Details of the Board's response to the war in Ukraine are set
out in our Section 172 statement in the Strategic Report on
page 20.
Building an inclusive and equitable culture
Topic
Board activity
Key decisions
Culture, including
Mindset
• Received updates on Group culture and colleague
engagement, including by way of the 'Your View' survey
results and monthly pulse surveys.
ü Confirmed that Barclays' workforce policies and practices
are consistent with Barclays' Values and support Barclays'
long-term sustainable success.
Diversity, Equity
and Inclusion
(DEI)
• Tracked management's progress in embedding the
Barclays Mindset - Empower, Challenge and Drive -
through detailed measurements including the Mindset
Indices tracked within Your View results.
• Considered updates on the impact of hybrid working,
including colleague experience of hybrid working to
understand what works well for colleagues remotely and
on site.
• Received and considered updates on Barclays’ DEI-
focused ambitions and activities, including the Race at
Work Ambition, the Gender Ambition and progress
towards creating an inclusive and equitable workforce to
underpin business performance.
• Received updates on the new gender diversity targets set
by the FTSE Women Leaders Review and considered the
new FCA 'comply or explain' disclosure requirements
regarding diversity reporting.
+ You can read more about the Board's engagement with
colleagues and other stakeholders during 2022 on page 150.
ü Approved an updated Board Diversity Policy in December
2022, which reflected new board diversity targets aligned
with the FTSE Women Leaders Review and those set out in
the FCA's diversity reporting requirements.
+ You can read more about the updated Board Diversity Policy on
pages 161 to 162.
Sustainability and climate
Topic
Board activity
Key decisions
Sustainability
Climate
• Discussed updates received from the Group Head of
ü Approved the Group’s ESG report for 2021.
Public Policy and Corporate Responsibility, including on
key government and regulatory policy, climate, and
reputation risk.
ü Approved the Group’s Modern Slavery Statement for 2021.
+ For information about the Board's activities in relation to climate matters, please see our Section 172 statement in the Strategic Report
on pages 19 to 20 and the climate spotlight on page 249.
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Directors’ report: Key Board Activities (continued)
Governance and regulatory matters
Topic
AGM
Succession
Board activity
Key decisions
• Considered the best way to facilitate engagement with
shareholders at the 2022 AGM, having been unable to
engage with shareholders in person for the previous two
years due to COVID-19 restrictions.
ü Approved holding a hybrid AGM for 2022, offering
shareholders the ability to either attend in person or
through an online portal, through which shareholders
could also cast their vote.
• Working closely with the Board Nominations Committee,
reviewed and shaped succession planning and proposed
appointments for the Board, Board Committees and
ExCo, having regard to the diversity targets adopted by
the Board and wider Group.
+ For further information, please refer to the report of the Board
Nominations Committee on pages 157 to 168.
ü Approved the appointment of Anna Cross as the new
Group Finance Director.
ü Approved the appointment of Robert Berry as a Non-
Executive Director, Chair of the Board Risk Committee
and a member of the Board Audit Committee.
ü Approved changes to Board Committee membership, as
outlined in the report of the Board Nominations
Committee.
Consumer Duty
+ For information on the Board's oversight of the FCA's new Consumer Duty, please see the spotlight on page 154.
Regulatory
engagement and
oversight
•
Invited representatives from key regulators, including the
FCA, Prudential Regulation Authority (PRA) and FRBNY,
to join meetings to hear first-hand their feedback and
observations.
ü Supported continued direct engagement with key
regulators to deepen relationships.
ü Encouraged continued visibility from management over
regulatory matters across the Group.
Over-issuance of
Securities
Cyber
+ You can read about the Board's response to the Over-issuance of Securities in our Section 172 statement in the
Strategic Report on page 17 and in the Shareholder Q&A on pages 188 to 189.
• Discussed updates on cyber, cloud services and
ü Approved the Group Resilience Self-Assessment.
operational resilience, including the new resilience policy
requirements of the PRA and FCA.
• Received reports from the Chair of the Board Risk
Committee regarding Barclays’ participation in the PRA’s
cyber stress test which assessed Barclays’ ability to
respond to, and recover from, a severe but plausible
cyber-attack and the results of that test and
management actions.
ü Requested that management conduct a ransomware
attack simulation.
Finance
Topic
Board activity
Key decisions
Financial
statements
Capital
distributions
• Assessed financial performance of the Group and its main
ü Approved the Group’s Annual Report and Accounts for the
businesses through regular updates from the Group
Finance Director.
year ended 31 December 2021.
ü Approved financial results announcements at Q1 2022, HY
2022 and Q3 2022.
• Considered the Group’s capital position and distributions
ü Approved a full year dividend for the year ended
policy.
31 December 2021 of 4.0p per ordinary share and a share
buy-back of up to £1bn.
ü Approved a half year dividend for the period ended 30 June
2022 of 2.25p per ordinary share and a share buy-back of up
to £500m.
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Directors’ report: Board Nominations Committee report
Overseeing effective composition,
succession and evaluation
Supporting the continued delivery of the Group’s strategy through
effective Board, Board Committee and ExCo composition, robust
succession planning and evaluating Board performance.
Introduction
With its focus on effective Board, Board
Committee and ExCo composition, robust
succession planning and evaluating Board
performance, the Committee plays a
crucial role in supporting the continued
delivery of the Group’s strategy.
The Committee’s work ensures that we
have a Board which strikes the right
balance of skills, experience and diversity
of background and opinion, is effective in
providing informed and constructive
challenge to management and acts fairly in
the interests of all of our stakeholders.
Key areas of focus
during the year
With the support of the Committee, the
Chair continued to oversee the execution
of our succession planning for the Board
and its Committees in 2022, and this work
will continue as we move through 2023.
As part of the Committee’s executive
succession planning, we welcomed Anna
Cross to the Board on 23 April 2022, when
she took up the role of Group Finance
Director and Executive Director. Anna
joined the Group in 2013 and has worked in
a number of roles, most recently as
Deputy Group Finance Director since
2020. The Committee and the Board were
delighted to have identified, in Anna, such a
strong internal successor, who was able to
step immediately into the role, ensuring a
smooth transition and supporting our
Group Chief Executive and his leadership
team with the ongoing delivery of our
Group strategy.
We also welcomed Robert Berry to the
Board, who joined as a Non-Executive
Director on 8 February 2022, and as Chair
of the Board Risk Committee and a
member of the Board Audit Committee
with effect from 1 March 2022. Robert
brings with him a wealth of risk
management experience from his
distinguished career at Goldman Sachs.
Board Nominations Committee
Committee membership
and meeting attendance during 2022a
Member
Meetings attended/eligible to attend
(including ad hoc meetings)
Nigel Higgins
Mike Ashley1
Tim Breedon2
Mohamed A. El-Erian3
Crawford Gillies1
Brian Gilvary
Diane Schueneman
Julia Wilson3
Committee membership in 2022
1 Retired with effect from 1 September 2022.
2 Retired with effect from 28 February 2022.
3 Appointed with effect from 1 September 2022.
5/5
3/3
2/2
2/2
3/3
5/5
5/5
2/2
Nigel Higgins
Chair, Board Nominations Committee
Notes
a There were three scheduled meetings and two ad hoc
meetings of the Committee in 2022.
Committee allocation of timeb (%)
n Corporate governance
n Board and Board Committee composition
n Succession planning and talent
n Board effectiveness
n Other
2022 2021
14
14
62
11
0
9
19
54
11
7
Notes
b Including ad hoc meetings. The percentages are subject to
rounding and therefore may not equal 100% when rounded.
Our former Group Finance Director,
Tushar Morzaria, stepped down from that
role and as a Director with effect from 22
April 2022. Tushar has remained with
Barclays, and was appointed as Chairman
of the Global Financial Institutions Group.
Tushar has been an invaluable member of
the senior management team at Barclays
since 2013, when he joined as Group Finance
Director, and he has played a significant role in
the rebuilding of the Group’s financial and
operational resilience. The Committee and
the Board are grateful for his hard work and
are delighted that Tushar has a continuing
role with Barclays.
As announced on 23 January 2023, Mike
Ashley will be retiring from the Board at the
conclusion of our 2023 AGM, having served
on the Board for more than nine years. Mike
has served on the Board since 2013 and is
our Board Audit Committee Chair.
Crawford Gillies will have completed nine
years as a Non-Executive Director by the
time of our AGM, having joined the Board
in 2014, and will be retiring (subject to re-
election) shortly thereafter on 31 May
2023. Mike and Crawford have supported
Barclays through a period of significant
change, both for the Group and for the
industry, in the post-financial crisis period.
The Committee and the Board are
enormously grateful for Mike and
Crawford's significant contributions to the
Group during the course of their tenures,
and the work they have each undertaken
as valued members of the Board, and in
their respective roles as Chair of the Board
Audit Committee and Chair of the
BBUKPLC Board in particular.
With effect from 1 April 2023, Julia Wilson
will succeed Mike Ashley as Board Audit
Committee Chair, subject to regulatory
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Directors’ report: Board Nominations Committee report (continued)
approval. Having previously held the roles
as Group Finance Director at 3i Group plc
and Chair of the Audit Committee of Legal
& General Group plc, the Committee and
the Board are confident that Julia will make
an excellent successor to Mike as Board
Audit Committee Chair.
We were also delighted to welcome Marc
Moses to the Board as a Non-Executive
Director and member of the Board Audit
and Risk Committees, with effect from 23
January 2023.
As previously announced on 23 January
2023, Sir John Kingman will take up his role
as a Non-Executive Director with effect
from 1 June 2023. He will succeed
Crawford Gillies as Chair of BBUKPLC upon
taking up his appointment, subject to
regulatory approval.
The Committee also oversaw a series of
changes to Board Committee composition
during the course of the year, including
with regard to the membership of this
Committee, as described on page 160.
The Committee and the Board are
confident that these changes will enhance
the Board’s effectiveness, bringing new
and diverse perspectives while also
providing valuable input and support to the
work of the Board Committees.
Membership and principal
activities during 2022
The Committee is composed solely of
Non-Executive Directors and is chaired by
our Group Chairman. Details of
Committee membership, meeting
attendance and allocation of time during
2022 are set out on page 157, and the
Committee’s principal activities during the
year are set out below. In discharging its
responsibilities, the Committee takes into
account feedback from key stakeholders,
and from Board discussions more widely.
Key activities in 2022
• Approval of the appointment of Anna
Cross as Group Finance Director.
uvwx
• Approval of the appointment
of Robert Berry as a Non-Executive
Director.
uvwx
• Candidate evaluation for both
executive and non-executive current
and future roles including review of core
skills and (for internal candidates)
scrutiny of internal feedback.
uvwx
• Review of the balance of skills and
diversity on the Board, and leading the
search and recruitment process
(including conflict analysis) for potential
candidates. The Committee utilised
external search consultants Spencer
Stuart and Egon Zehnder to facilitate
the targeted external mapping and
search processes based on agreed and
reviewed criteria.
uvwxz
• Approval of changes in Board
Committee composition during the
year:
– Board Risk Committee: Tim Breedon
stepping down (Chair and member),
appointment of Robert Berry (Chair
and member), and appointment of
Julia Wilson (member)
– Board Audit Committee:
Appointment of Robert Berry
(member)
– Board Nominations Committee: Tim
Breedon, Mike Ashley and Crawford
Gillies stepping down (members) and
appointments of Julia Wilson and
Mohamed A. El-Erian (members).
uvwxy
• Review of ExCo composition and
succession planning, including review of
the balance of skills and diversity on the
ExCo and for key successors.
uvwxz
• Review of recommendations and
suggested improvements arising from
the 2021 Board effectiveness review.
uv{|
• Approval of internally conducted 2022
Board, Board Committee and individual
Director effectiveness reviews, led by
the SID with the support of the Deputy
Company Secretary.
{|
• Consideration of Director training and
development.
z{|
• Review and approval of size,
composition and succession planning
for the Board and the Board
Committees, including updates on
succession planning for the Group’s
main subsidiary company Boards.
uvxz
• Review and recommendation to the
Board for approval an updated Board
Diversity Policy in December 2022,
including adopting an increased gender
diversity target and re-affirming the
existing ethnic diversity target aligned
with the Parker Review on the ethnic
diversity of UK boards. Refer to page
161 for further information.
vz
• Review of Directors’ tenure and
effectiveness, and identifying
candidates for election or re-election at
the AGM.
uvxyz{|
Committee responsibilities
u Ensuring the right individuals are appointed – in line with objective criteria – who can discharge the duties and responsibilities of Directors.
v Planning for effective ExCo, Board and Committee composition, through focusing on appointment and succession based on merit and skill, through a diversity lens.
w Leading candidate search and identification.
x Regularly reviewing succession planning and recommendations for key executive and non-executive roles.
y Monitoring time commitments for incoming and existing Directors to ensure sufficient time for effective discharge of duties.
z Monitoring compliance against corporate governance guidelines and the Board Diversity Policy, including yearly review and any recommendations for enhancements.
{ Ensuring compliance by the Board with legal and regulatory requirements.
| Agreeing the approach to individual Director, Board and Committee effectiveness reviews and implementing any required actions.
} Considering and authorising, subject to ratification by the Board, conflicts of interest.
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Directors’ report: Board Nominations Committee report (continued)
Marc’s appointment reflects our
commitment to strengthening the Board
through the addition of further highly
respected individuals with recent and
relevant financial experience, in
accordance with our skills-based
recruitment priorities.
Appointment of Sir John Kingman
Sir John Kingman will take up his role
as a Non-Executive Director with
effect from 1 June 2023. He will
succeed Crawford Gillies as Chair of
BBUKPLC upon taking up his
appointment, subject to regulatory
approval.
Sir John has a deep background in
financial services, gained from his
executive and non-executive career,
and will bring invaluable skills and
experience to the Board, and to the
Board of BBUKPLC. His experience
spans the public and private sector,
with his former roles including senior
positions at HM Treasury, as the first
Chief Executive of UK Financial
Investments Ltd (UKFI), and as Global
Co-Head of the Financial Institutions
Group at Rothschild. Sir John is
currently Chair of Legal & General
Group plc, and stepped down as Chair
of Tesco Bank on 22 January 2023.
Composition
Regularly reviewing Board, Board
Committee and ExCo composition
is a key responsibility of the
Committee. Through frequently
considering the skills, experience,
knowledge and diversity required
for these roles, as well as the annual
Board effectiveness evaluation (as
outlined further below), the
Committee is able to refresh its
thinking on Board, Board
Committee and ExCo composition
and establish a timeline for any
proposed appointments.
+ You can find biographies for each Director,
including details of the skills, experience and
knowledge they bring to the Board, and their
Board Committee memberships and other
principal appointments on pages 143 to 146.
Changes to Board composition in
2022: Group Finance Director
As reported above, Tushar Morzaria
stepped down from the Board on 22 April
2022 and was succeeded by Anna Cross,
who took up the role of Group Finance
Director and became an Executive
Director with effect from 23 April 2022,
having joined ExCo on 23 February 2022.
Anna brings significant skills and
experience to the Board, as set out in her
biography on page 144. Anna joined the
Group in 2013 and held the role of Deputy
Group Finance Director from July 2020
until April 2022. Before that, she held the
role of Group Financial Controller, prior to
which she was the Chief Financial Officer
for BBUKPLC. A qualified chartered
accountant, Anna has worked in both
banking and retail and previously held
finance roles at leading financial and retail
institutions.
In considering Anna’s appointment, the
Committee – and the Board – took into
account a number of factors, including her
expanded leadership and commercial
experience through her appointment as
Deputy Group Finance Director. The
Committee and the Board also had regard
to the stability that Anna’s appointment as
an internal candidate would bring to the
Group’s key stakeholder groups, in
particular shareholders, colleagues, and
customers/clients.
Following Anna’s appointment to ExCo on
23 February 2022, and prior to her taking
up her role as Group Finance Director on
23 April 2022, the Board was made aware
of the Over-issuance of Securities. Anna
was very much 'new in role' as our Group
Finance Director, and took a leading role in
the management and resolution of this
matter throughout the course of 2022,
alongside our Group Chief Executive and
other members of his leadership team. As
a Board, we would like to recognise the
hard work and dedication that Anna has
shown through this challenging period.
Changes to Board composition in
2022: Non-Executive Directors
Robert Berry was appointed as a Non-
Executive Director on 8 February 2022,
and as Chair of the Board Risk Committee
and a member of the Board Audit
Committee with effect from 1 March 2022.
Robert brings significant skills and
experience to the Board and to the
important role of Chair of the Board Risk
Committee. He has extensive risk
management experience, having worked in
the financial services industry for the
entirety of his 32-year career. The majority
of Robert’s career was spent with Goldman
Sachs, where he became a Partner in 2008
and then Co-Deputy Chief Risk Officer in
2016, prior to his retirement as a Partner at
the end of 2018. Following his retirement,
Robert was retained as an Advisory
Director with Goldman Sachs, remaining as
a member of its Enterprise Risk
Committee, during the period from
January 2019 to December 2019.
Changes to Board composition in
2023: Non-Executive Directors
We welcomed Marc Moses to the Board as
a Non-Executive Director and a member
of both the Board Audit Committee and
Board Risk Committee on 23 January
2023.
Marc brings a strong technical finance
background with a deep knowledge of
banking and financial services. His financial
services experience extends to over 43
years in the industry, initially as a trader and
then in senior executive roles as an Audit
Partner at PwC, and Chief Financial Officer
of JPMorgan Europe. He joined HSBC in
2005, and prior to retiring in 2019, was the
Group Chief Risk Officer and an Executive
Director of HSBC Holdings plc. Since
formally retiring from HSBC, Marc has
remained active, undertaking advisory
work for start-ups and he is currently
acting as advisor to a fintech company.
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Directors’ report: Board Nominations Committee report (continued)
Changes to Board Committee
composition in 2022
The Committee oversaw changes in Board
Committee composition in 2022, as
outlined below.
Board Risk Committee
Having chaired the Board Risk Committee
for eight years, Tim Breedon retired from
that Committee on 28 February 2022.
Robert Berry succeeded Tim as Chair of
the Board Risk Committee on 1 March
2022.
Julia Wilson was appointed as a member of
the Board Risk Committee with effect
from 1 September 2022.
Board Nominations Committee
Tim Breedon retired from the Board
Nominations Committee on 28 February
2022. Mike Ashley and Crawford Gillies
retired from the Board Nominations
Committee with effect from 1 September
2022.
We welcomed Julia Wilson and Mohamed
A. El-Erian as additional members of the
Board Nominations Committee on 1
September 2022.
The Board is grateful to Tim, Mike and
Crawford for their valuable contribution to
these Committees during their respective
memberships.
Changes to Board Committee
composition in early 2023
As reported above, Julia Wilson will
succeed Mike Ashley as Chair of the Board
Audit Committee with effect from 1 April
2023, subject to regulatory approval. Julia
will also take on the role of Group
Whistleblowers' Champion in her capacity
as Chair of the Board Audit Committee.
Julia joined the Board Audit Committee on
her appointment to the Board in April
2021. Her time as a member of the
Committee, together with her experience
as former Group Finance Director at 3i
Group plc and Chair of the Audit
Committee of Legal & General Group plc
make her well-placed to take up this
important role.
+ You can read more about Julia, and the skills and
experience she will bring to the role of Board Audit
Committee Chair, in her biography on page 146.
Marc Moses was appointed as a member
of both the Board Audit Committee and
Board Risk Committee upon his
appointment as a Non-Executive Director
on 23 January 2023, as reported above.
Board size
As at 31 December 2022, the size of the
Board, following the appointments of
Robert Berry and Anna Cross, and the
resignation of Tushar Morzaria, was 13.
With the appointment of Marc Moses on
23 January 2023, the size of the Board
increased to 14. Following the retirement
of Mike Ashley from the Board at the
conclusion of our 2023 AGM, the
retirement of Crawford Gillies (subject to
re-election at the AGM) shortly thereafter
on 31 May 2023 and the appointment of
Sir John Kingman on 1 June 2023, the size
of the Board will return to 13.
The Committee continues to consider
Board size as part of both its medium- and
longer-term succession planning. The
Committee remains confident that the
size of the Board remains effective, taking
into account the need to be small enough
to operate in an efficient and collaborative
manner but large enough to have an
appropriate mix of skills and diversity and
to support succession planning, as well as
the additional roles and responsibilities of
some of our Directors on Board
Committees, and on the Boards of BBPLC,
BBUKPLC, Barclays US LLC, BX and
Barclays Europe.
Board composition as at 31 December 2022
Length of tenure (Chairman and Non-Executive Directors)
(number of Directors)
Industry and leadership experienceb
(number of Directors)
n 0-3 years n 3-6 years n 6-9 years n 9+ yearsa
International experiencec
(number of Directors)
International
(UK)
International
(US)
International
(Rest of the World)
Financial services
Political/Regulatory
experience
Current/Recent
Chair/CEO
Accountancy/
Auditing
Operations/
Technology
Retail/
Marketing
Notes
a Please refer to page 166 in relation to the tenure and continued independence of Tim Breedon
b
c
and Mike Ashley, who have served on the Board for more than nine years.
Individual Directors may fall into one or more categories.
International experience is based on the location of the headquarters/registered office of a
company, excluding entities within the Barclays Group.
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Directors’ report: Board Nominations Committee report (continued)
Diversity
Promoting and delivering diversity –
of skills, regional and industry
experience, social and ethnic
background, race, gender and other
distinctions, such as cognitive and
personal strengths- is a vital
element of the Committee’s role in
leading appointments and
succession planning for the Board,
Board Committees and ExCo. Both
the Committee and the Board
consider increasing diversity
essential to maintaining our
competitive advantage, driving
effective governance and mitigating
the risk of ‘group think’.
Further to the Committee’s
recommendation, the Board adopted a
revised version of the Board Diversity
Policy on 15 December 2022.
In considering the proposed amendments
to the policy, the Committee and the
Board had regard to the following voluntary
targets recommended by the FTSE
Women Leaders Review (which builds on
the work of both the Hampton Alexander
and Davies reviews) on gender diversity
which were published in February 2022:
• that FTSE 350 Boards and FTSE 350
Leadership teams have a minimum of
40% women’s representation; and
• that FTSE 350 companies should have
at least one woman in the Chair or
Senior Independent Director role and/or
one woman in the CEO or CFO role.
Following publication of those targets, in
April 2022 the FCA published amendments
to its Listing Rules which will require that
Barclays, in future reporting periods,
include a ‘comply or explain’ statement in
its annual report stating whether it has
achieved certain board gender and ethnic
diversity targets, and requiring that
Barclays disclose certain numerical data
relating to the gender identity and ethnic
background of Board and ExCo members,
together with an explanation of Barclays’
approach to data collection for the
purposes of making the required
disclosures.
The Board gender diversity targets are
aligned with those set out the FTSE
Women Leaders Review, and the Board
ethnic diversity target is aligned with the
target recommended by the Parker Review
Committee Report into the Ethnic
Diversity of UK Boards.
While the Listing Rules reporting
requirements are not yet mandatory for
Barclays in the current reporting period, in
December the Board adopted an updated
Board Diversity Policy which is aligned with
the board diversity targets recommended
by the FTSE Women Leaders Review and
continues to be aligned with the ethnic
diversity target in the Parker Review.
+ Please refer to our statements on Board gender and
ethnic diversity, as at the reporting reference date
of 31 December 2022, on this page and page 162.
The updated policy reaffirms that the
Committee will consider candidates on
merit against objective criteria with due
regard to the benefits of diversity when
identifying suitable candidates for
appointment to the Board, and sets out
the Board gender and ethnic diversity
targets detailed in the table at the bottom
of this page. The Policy also confirms the
Board's commitment to operating in a way
that supports diversity and inclusivity.
Gender diversity
With the appointment of Anna Cross as
Group Finance Director and Executive
Director, and Tushar Morzaria stepping
down as an Executive Director, as at 31
December 2022, Board gender diversity
was 38% female. This fell short of our 40%
target for Board gender diversity, but the
Board satisfied the target contained within
the Board Diversity Policy of having at least
one woman holding a senior board role.
Following the appointment of Marc Moses
on 23 January 2023, Board gender
diversity has, in the short term, fallen to
36% female. With Mike Ashley retiring from
the Board at the conclusion of our 2023
AGM, Crawford Gillies (subject to re-
election) retiring shortly thereafter on 31
May 2023 and the appointment of Sir John
Kingman on 1 June 2023, Board gender
diversity will return to 38% female.
We recognise that this continues to fall
short of our 40% Board gender diversity
target but, as we continue to develop our
Board succession planning, this
Committee and the Board remain focused
on meeting the new gender diversity
targets by 2025 while continuing to bring
the very best, diverse talent we can attract
to the Board.
The Committee and the Board also
recognise and embrace the clear benefits
of diversity at Board Committee level. As
at 31 December 2022, Board Committee
gender diversity was as follows: Board
Audit Committee – 50% female, Board
Remuneration Committee – 67% female,
Board Risk Committee – 43% female and
Board Nominations Committee – 40%
female.
Group-wide, Barclays remains committed
to its DEI vision and strategy, which was
refreshed in 2022, and includes a series of
guiding principles and strategic priorities
designed to help Barclays deliver against
its core DEI agendas including its Gender
Ambition, which is focused on improving
gender diversity across Barclays. In 2022,
Barclays announced its refreshed Gender
Ambition of 33% representation of women
in senior leadership roles - Managing
Directors and Directors - by the end of
2025, having achieved its initial target of
28% female representation in these roles
by the end of 2021.
+ You can find a copy of our Board Diversity policy
at home.barclays/who-we-are/our-governance/
our-framework-code-and-rules.
Updated Board Diversity Policy - Targets
Gender diversity target To ensure that by 2025:
•
the proportion of women on the Board is at least 40%; and
• at least one of the following senior Board positions is held
by a woman: Chair, Chief Executive, Senior Independent
Director or Chief Financial Officer,
And that this is maintained going forward.
To ensure that at least one Board member is from a minority
ethnic background excluding white ethnic groups and that this
is maintained going forward.
Ethnic diversity target
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Directors’ report: Board Nominations Committee report (continued)
Diversified Board1
Leadership balance
(number of Directors)
Chairman
Non-Executive
Directors
Executive
Directors
Gender balance
(number of Directors)
Male
Female
Ethnic diversity
(number of Directors)
White
Ethnic minority
background
excluding white
ethnic groups
Note:
1 Data as at 31 December 2022.
To achieve this ambition, Barclays has
been building a strong pipeline of female
talent at all levels through hiring initiatives
and development programmes, as well as
reporting regularly to its senior leaders to
keep them informed on progress in this
area (including detailed information about
hiring, promotion, and retention in their
respective business areas). As at 31
December 2022, female representation
amongst Managing Directors and
Directors was at 29% globally, and Barclays
is focused on continuing its efforts to
identify and develop female talent within
Barclays and in the market.
You can read more about Barclays' DEI
vision and strategy and gender diversity at
Barclays, including data on the percentage
of females in Barclays’ wider workforce in
Our people and culture section on pages
31 to 38.
The Committee is also mindful of the
voluntary target recommended by the
FTSE Women Leaders Review of 40%
female representation for ExCo and their
direct reports by the end of 2025. As at 31
December 2022, female representation
among ExCo and their direct reports stood
at 27%.
While this falls short of the FTSE Women
Leaders Review recommendation,
increasing gender diversity within both
ExCo and their direct reports, to ensure a
diverse pipeline for ExCo succession,
remains a key priority for Barclays and the
Committee and the hiring initiatives and
development programmes referred to
above are part of the way in which we are
looking to make progress against these
targets. In 2022, Barclays continued to
have one ex-officio position on ExCo, with
each appointee serving for a four-month
rotation.
This initiative, first introduced in 2016,
broadens the scope of perspectives and
contributions made to ExCo, while also
providing appointees with exposure to
matters of Group-wide significance and
further leadership experience. In 2022, all
three holders of this position were female.
You can find details of ExCo membership,
including ex-officio appointees during the
course of 2022, on page 148 and you can
find data on the percentage of females on
ExCo and within ExCo direct reports in Our
people and culture section in the Strategic
Report on page 35.
Further information will be made available
in our Diversity, Equity and Inclusion
Report, which will be available on our
website later in 2023.
Ethnic diversity
As at 31 December 2022, 15% of the
Board (two members) were from a
minority ethnic background (excluding
white ethnic groups), meeting the
recommendations contained within the
Parker Review Committee Report into the
Ethnic Diversity of UK Boards and the
ethnic diversity target in the Board
Diversity Policy.
Alongside the Board, the Committee
continues to support the Group’s
Multicultural agenda, including Barclays'
Race at Work Ambition. Venkat, our Group
Chief Executive, has made a significant
contribution to Barclays’ diversity agenda.
Having achieved our Race at Work
ambition to double the number of Black
Managing Directors globally from nine to
18 by 2022, in January 2023, we set a new
ambition to increase the population of
Managing Directors from
underrepresented ethnicities by at least
50% by the end of 2025. As described on
page 155, the Board considered updates
during the year on Barclays' progress on
DEI initiatives, including our Race at Work
Ambition.
You can find more information on Barclays’
continued commitment to its Multicultural
agenda, including data relating to ethnic
diversity in Barclays' wider workforce, in
Our People and Culture section in the
Strategic Report on Pages 31 to 38.
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Directors’ report: Board Nominations Committee report (continued)
f
o
r
a
p
p
Process for
appointments
In leading the process for Board and
senior management appointments,
the Committee promotes diversity
of background and opinion, and
ensures that all appointments are
based on merit and objective
criteria, focusing on the skills,
experience and knowledge required
for the Board’s effectiveness and to
support the continued delivery of
the Group’s strategy.
Appointments to the Board are
made following a formal, rigorous
and transparent procedure,
facilitated by the Committee with
the aid of external search
consultancy firms, as outlined in
further detail below.
Non-Executive Director
recruitment
As reported in our last Annual Report, the
Committee approved a series of skills-
based recruitment priorities in 2021,
reflective of the skills and experience
anticipated to be required for the Board
over the next three years, and which take
into account of the needs of the Board, its
Committees and the business, as well as
ordinary course retirements of long-
serving Directors.
Based on the agreed priorities, the
Committee has set rigorous criteria for the
roles it is seeking to fill, both in terms of
experience and personal qualities.
Independent external search firms
Spencer Stuart and Egon Zehnder
supported our search for additional Non-
Executive Directors to complement the
range of skills on the Board in 2022, with
diversity of background and opinion at the
forefront of that search. Spencer Stuart
and Egon Zehnder do not have any
connection to Barclays or any of the
Directors other than to assist with
searches for executive and non-executive
talent. Open advertising for Board
positions was not used in 2022.
As reported above, we have recently
welcomed Marc Moses to the Board,
following our search for candidates with
recent and relevant financial experience, in
line with our recruitment priorities
described above. We also recently
announced that Sir John Kingman will join
the Board with effect from 1 June 2023,
and will succeed Crawford Gillies as Chair
of the BBUKPLC Board upon taking up his
appointment, subject to regulatory
approval.
+ You can read more about the appointments of
Marc Moses and Sir John Kingman on page 159.
In line with disclosures in our previous
Annual Report, we continue to focus on
identifying candidates with technology
experience.
To ensure due consideration is given to
strong potential candidates who would
enhance the effectiveness of the Board,
the Committee continues to review the
recruitment priorities and give further
consideration to the desired skills and
experience for potential candidates.
Non-Executive Director
independence
A majority of our Board comprises
independent Non-Executive Directors, in
line with the requirements of the Code.
The Committee considers the
independence of our Non-Executive
Directors on an annual basis, having regard
to the independence criteria set out in the
Code. As part of this process, the
Committee reviews the length of tenure of
all Directors, which can affect
independence, and makes any
recommendations to the Board
accordingly.
The Committee reviewed the
independence of all Non-Executive
Directors in 2022. The independence of
those who had served on the Board for
more than six years (Crawford Gillies and
Diane Schueneman) and more than nine
years (Tim Breedon and Mike Ashley) was
subject to a more rigorous review. The
Committee remains satisfied that the
length of their tenure has no impact on
their respective levels of independence or
the effectiveness of their contributions.
The Committee and the Board consider all
of the Non-Executive Directors to be
independent.
For further details of the Committee’s
review of the independence of Tim
Breedon, Mike Ashley and Crawford Gillies,
please refer to the Succession section
below.
During 2022, Tushar Morzaria stepped
down from the Board. Tushar did not raise
any concerns about the operation of the
Board or management.
Director appointments and re-appointments
Non-Executive Director
selection and appointment
process
Director term
The Committee reviewed the Non-Executive Director selection and appointment process in 2022,
which was refreshed in 2019, and concluded that no material changes were required to the current
process. We continue to ensure that all Board members have the opportunity to meet potential
candidates where possible, and that searches for potential candidates should be coordinated across
the Group’s significant subsidiaries where appropriate.
Our standard practice is to appoint any new Non-Executive Director or Chair to the Board for an initial
three-year term, subject to annual re-election at the AGM (as outlined below). This may be extended
for a further term of up to three years. As such, our Non-Executive Directors typically serve up to a
minimum of six years, although this period may be extended where considered appropriate by the
Committee.
Director re-election at the AGM
All Directors are subject to election or re-election (as appropriate) each year by shareholders at the
AGM.
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Directors’ report: Board Nominations Committee report (continued)
On appointment, all Directors receive a
comprehensive induction tailored to their
individual requirements, designed to
provide them with an understanding of
how the Group works and the key issues
that it faces. When designing each
bespoke induction schedule, the Group
Company Secretary consults the
Chairman, taking into account the
particular needs of the new Director.
When a Director is joining a Board
Committee, the schedule will also include
an induction to the operation of that
Committee.
+ You can find details of new Director and Committee-
specific inductions delivered to Board members
during the course of 2022 on page 165.
Conflicts of interest
In accordance with the Companies Act
2006 and BPLC's articles of association
(Articles), the Board has the authority to
authorise conflicts of interest, and this
ensures that the influence of third parties
does not compromise the independent
judgement of the Board. Directors are
required to declare any potential or actual
conflicts of interest that could interfere
with their ability to act in the best interests
of the Group.
A conflicts register is maintained, which is a
record of actual and potential conflicts,
together with any Board authorisation of
the conflicts. The authorisations are for an
indefinite period but are reviewed annually
by the Committee, which also considers
the effectiveness of the process for
authorising Directors’ conflicts of interest.
The Board retains the power to vary or
terminate these authorisations at any
time.
Director training and
development
The Committee supports the Chairman in
developing and monitoring effective
induction, training and development for
the Board in accordance with its Terms of
Reference (available at home.barclays/
who-we-are/our-governance/board-
committees). As well as Barclays providing
Directors with the opportunity to take part
in ongoing training and development,
Directors can also request specific
training, as required.
An overview of existing training and
development arrangements for the Board
is described on the next page, which
encompasses business and function
reviews and horizontal topics to deepen
and broaden the Board’s understanding of
the business.
+ You can find details of training and development
delivered to the Board during the course of 2022 on
page 165.
Time commitment
We ask all potential new Directors to
disclose their other significant
commitments, which the Committee then
takes into account when considering any
proposed appointment to ensure that
Directors can discharge their
responsibilities to Barclays effectively. As
well as attending and preparing for formal
Board and Board Committee meetings,
the Directors’ time commitment to
Barclays includes allowing time to
understand the business and complete
training. We agree expected time
commitments with each Non-Executive
Director on an individual basis.
The Committee was comfortable that the
existing commitments disclosed by each
of Marc Moses and Sir John Kingman
ahead of their respective appointments
would not impact their ability to devote
such time as is necessary to discharge
their duties to Barclays effectively.
All Directors must seek approval (providing
an indication of expected time
commitments) before accepting any
significant new commitment outside of
Barclays. Before approving any significant
new external commitment for a Director,
the Board reviews all relevant facts and
circumstances (including the expected
role and time commitment, as well as the
nature of the external organisation). In
2022, all external appointment requests
were approved on the basis that the Board
was satisfied with any actual or potential
conflicts and the Board was confident that
the Director in question remained able to
devote such time necessary to discharge
their duties to Barclays effectively.
Where circumstances require it, all
Directors are expected to commit
additional time as necessary to their work
on the Board. For the year ended 31
December 2022 and as at the date of
publication, the Board is satisfied that none
of the Directors is over-committed and
that each of the Directors allocates
sufficient time to their role in order to
discharge their responsibilities effectively.
A record of each Director’s time
commitments is maintained.
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Directors’ report: Board Nominations Committee report (continued)
Training, development and updates for the Board in 2022
Topic
Description
Areas covered included
Business and function
reviews
Updates from key business areas and Group
functions, to deepen the Board’s understanding of
the Group businesses.
Business areas: Corporate and Investment Bank,
Consumer Cards and Payments, Barclays UK, US
Consumer Bank.
'Horizontal topics'
Updates covering areas relevant across the Group.
Public Policy and
Corporate Responsibility
Regular updates on Public Policy and Corporate
Responsibility matters.
Regulatory
responsibilities
Annual briefing on regulatory responsibilities.
Corporate governance
Regular updates on corporate governance.
Group functions: Risk, Markets, Legal, HR, Internal Audit,
and Compliance.
Climate, cyber, Reputation risk, Mindset (including
Culture), data strategy, whistleblowing, complaints,
resilience and artificial intelligence.
Reputation Risk matters (for which the Board has direct
oversight) and a broad range of topics including
regulatory engagement and oversight, and climate and
sustainability matters.
Senior Managers Regime and Barclays’ conduct and
financial crime policies and standards.
DEI matters, regulatory developments and
cybersecurity disclosure obligations.
Competition law
Briefing for Board members (ad hoc).
Competition law-related matters.
External speakers
External input to the Board.
Attendance at Board meetings by external speakers and
key regulators, enabling the Board to hear their feedback
and observations.
Board engagement with
stakeholders
Various events enabling the Board to engage directly
with stakeholders.
+ You can read more about the Board's engagement with
stakeholders on page 150.
Committee specific
inductions
Committee-specific induction for Julia Wilson,
following her appointment as a member of the Board
Risk Committee.
Details of Robert Berry's induction, including in
relation to his role as Board Risk Committee Chair,
can be found in the table below.
Committee engagement, including sessions with the
Board Risk Committee Chair, Group Chief Risk Officer,
Interim Group Chief Compliance Officer and Chief
Controls Officer.
Briefings on Conduct, Reputation and Compliance and
Legal risk, and various briefings with members of the Risk
Executive Committee, as well as the Group Treasurer.
New Director inductions delivered in 2022
Director
Description
Induction sessions included
Meetings during induction period
Anna Cross
Tailored Executive
Director induction,
following Anna’s
appointment as Group
Finance Director and
Executive Director.
• Board governance framework
and Directors’ duties.
• SMR and Conduct rules.
• Disclosure requirements
pursuant to the Market
Abuse Regime and the Group
Securities Dealing Code.
Robert Berry
Tailored Non-Executive
Director induction
following Robert’s
appointment as a Non-
Executive Director, Chair
and member of the Board
Risk Committee and
member of the Board
Audit Committee.
• The Group’s strategy and
culture.
• Stakeholder landscape and
relationships.
• Governance matters.
• Briefings from the Chief Risk
Officer and Chief Compliance
Officer (relevant to his
responsibilities as Board Risk
Committee Chair).
Series of meetings undertaken
during Anna’s induction period,
including:
•
•
regular one-to-one meetings
with the Chairman, Group Chief
Executive, and other members
of the Board
induction meetings with senior
executives from across the
business.
Series of meetings with various
senior executives from across the
business during Robert's induction
period including from Risk,
Compliance, Finance, Legal, Internal
Audit, BX and Operations,
BBUKPLC, Corporate and
Investment Banking, and Consumer
Banking and Payments.
Handover in accordance with
requirements of Senior
Managers Regime (SMR)
Formal SMR handover
from Tushar Morzaria (as
outgoing Group Finance
Director).
Formal SMR handover
from Tim Breedon (as
outgoing Board Risk
Committee Chair).
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Directors’ report: Board Nominations Committee report (continued)
Evaluation
Each year, the Committee plays a
key role in ensuring that a formal
and rigorous review of the
performance of the Board, the
Board Committees and individual
Directors is undertaken in line with
the requirements of the Code.
Feedback from the 2022 internally
facilitated effectiveness reviews
indicate that Board, Board
Committees and individual
Directors continue to be effective,
as described below.
Progress against the 2021 Board
effectiveness review and process
for 2022 review
As reported in our last Annual Report, the
2021 Board effectiveness review was
externally facilitated, as required by the
Code, by Christopher Saul Associates
(CSA)1. Recommendations from the 2021
effectiveness review and actions taken
during the course of 2022 to address them
are shown in the table on the next page.
The 2022 Board, Board Committee and
individual Director effectiveness reviews
were facilitated internally, in line with the
Code, and were led by the SID with the
support of the Deputy Company
Secretary. Further detail on the process is
shown in the diagram on the next page.
Note:
1 As reported in our 2021 Annual Report, the Committee
considered CSA's independence prior to the firm's
appointment and was confident that CSA would not be
constrained in its ability to express an independent view as
external facilitator. For further details, please refer to page
129 of the Barclays PLC 2021 Annual Report.
Succession
Robust succession planning ensures
we have the right balance of skills,
experience and effectiveness on
the Board, Board Committees and
ExCo, embracing the clear benefits
of diversity while also taking into
account current and anticipated
future business needs. This includes
contingency planning (for any
unforeseen departures or
unexpected absences), medium-
term planning (orderly refreshing of
the Board, Committees and ExCo)
and long-term planning (looking
ahead to the skills that may be
required on the Board and the ExCo
in the future).
Committee consideration of
succession in 2022
Succession remained a key focus for the
Board and Committee in 2022. The Board
and the Committee discussed succession
in detail at regular points in 2022, in
addition to discussions at formal
Committee meetings.
Mike Ashley had served on the Board for
nine years as of September 2022, and
Crawford Gillies will have served on the
Board for nine years by the time of our
2023 AGM . As reported above, Mike will
remain on the Board until the conclusion of
the AGM, at which he will not seek re-
election and, subject to re-election at the
2023 AGM, Crawford will retire from the
Board shortly thereafter on 31 May 2023.
As at 1 November 2022, Tim Breedon had
served on the Board for ten years. As
reported in our 2021 Annual Report, the
Committee undertook a rigorous
assessment and concluded that it
remained appropriate for Tim to continue
to serve on the Board beyond his nine-year
tenure. A similar review has been
undertaken this year and the Committee
and the Board remain satisfied that Tim's
breadth of financial services sector
experience and deep knowledge of risk and
regulatory issues continues to bring
significant value to Board discussions, and
that his continued tenure as a Non-
Executive Director is advantageous to
Group-wide decision making and is
appropriate in the near-term.
The Committee and the Board recognise
the clear benefits for Group-wide
decision-making of having the Chairs of
the Group’s significant subsidiaries sit on
the BPLC Board, bringing important insight
to Board discussions and connectivity with
BPLC’s significant subsidiaries. With this in
mind, given Tim’s ongoing role as Chair of
Barclays Europe, the Group’s principal
European subsidiary, the Committee and
the Board consider it is appropriate for Tim
to continue as an independent Non-
Executive Director on the BPLC Board.
The Committee and the Board are
confident that Tim, Mike and Crawford
remain independent and continue to
provide effective challenge, advice and
support to management on business
performance and decision-making. Having
undertaken a rigorous review of Tim, Mike
and Crawford's performance as Non-
Executive Directors and taking into
account other relevant factors that might
be considered likely to impair, or could
appear to impair, their independence
including as set out in Provision 10 of the
Code, the Board considers Tim, Mike and
Crawford to be independent.
ExCo succession
The Committee reviews and discusses all
changes to ExCo prior to announcement,
taking into account executive succession
plans.
With regard to ExCo succession, Anna
Cross joined ExCo on 23 February 2022
ahead of succeeding Tushar Morzaria as
Group Finance Director on 23 April 2022.
Laura Padovani stepped down as Group
Chief Compliance Officer on 31 October
2022 and was succeeded by Matthew
Fitzwater on an interim basis with effect
from 1 November 2022, subject to
regulatory approval.
Mark Ashton-Rigby stepped down as
Group Chief Operating Officer and Chief
Executive, BX in January 2023, and was
succeeded by Alistair Currie with effect
from 1 February 2023, subject to
regulatory approval.
Vim Maru was appointed Global Head of
Consumer Banking and Payments with
effect from 1 February 2023, subject to
regulatory approval.
+ You can read more about the changes to
ExCo during the year on page 147.
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Directors’ report: Board Nominations Committee report (continued)
Progress against the 2021 Board effectiveness review
The recommendations from the 2021 Board effectiveness review and actions taken during the course of 2022 to address them are
shown in the table below.
Areas
Board deep dives
Recommendations
from the 2021 evaluation
Actions taken during the year
Consider how the approach to Board
deep dive sessions might be
refreshed.
• A refreshed approach consisting of Business and Function reviews and
'horizontal topics' was designed to provide targeted consideration of each
key area and to provide the Board with an holistic view of the business.
• You can read more about the topics considered in these sessions on page
165 of this report.
Corporate strategy
Review how Board agendas might
focus more on corporate strategy as
we move away from matters focusing
on the COVID-19 pandemic.
• The Board reviewed and made changes to its approach to considering
corporate strategy, reviewing a series of themes and questions in the lead up
to the annual corporate strategy review in September 2022, and the detailed
MTP discussion in November 2022.
Outside perspectives Consider how to increase input to the
Board from thought leaders,
customers and others to provide
relevant outside perspectives.
Board materials
Continue to make Board papers
shorter and more focused.
• During 2022, the Board sought opportunities to obtain outside perspectives
on key matters, including inviting external speakers to discuss with the Board
topical issues, including the US regulatory and political environment.
• The Board has also invited its principal regulators to meet with Board
members to discuss their feedback and views on Barclays.
• During the course of this year, the Board has also received feedback from
customers, clients and other stakeholders through participation in events
such as conferences and regulatory round tables and visits to Barclays
businesses and sites, including a visit to the Radbroke campus following the
2022 AGM. You can read more about these on page 150.
• The Chairman continues to encourage management to ensure that their
papers are as concise as possible and focused on the matters of relevance to
the Board and on key questions for discussion.
Board, Committee and individual Director evaluation process
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Directors’ report: Board Nominations Committee report (continued)
The Committee’s interaction with the
Board, Board Committees and senior
management is considered effective. The
review noted that all Non-Executive
Directors had been invited to participate in
certain Committee discussions during the
course of the year, which was considered
helpful, as was the approach of ensuring
more strategic matters were discussed
with the Board.
Feedback indicated that concurrent
meetings of the BPLC and BBPLC Board
Nominations Committee continue to be
appropriate.
Individual Director effectiveness
All Directors in office at the end of 2022
were subject to an individual effectiveness
review. The Chairman considered each
Director’s individual contribution to the
Board as well as any feedback received as
part of the broader Board and Committee
effectiveness reviews.
The reviews were conducted by the
Chairman and the Chairman’s review was
conducted by the SID.
Based on these reviews, the Board
accepted the view of the Committee that
each Director to be proposed for election
or re-election at the 2023 AGM continues
to be effective and contributes to Barclays’
long-term sustainable success.
Except for Mike Ashley, all of the current
Directors of the Company, who will be
continuing in office, and Marc Moses in his
capacity as a Director from 23 January
2023, intend to submit themselves for
election or re-election at the 2023 AGM
and will be unanimously recommended by
the Board for election or re-election as
appropriate.
Board effectiveness review
The 2022 Board effectiveness review
followed a structured interview process
with Board members.
The full and frank feedback of interviewees
provides important input into the further
development of the performance and
effectiveness of the Board, in particular in
identifying areas in which the Board could
be more effective. This feedback is shared
with the Chairman and the other members
of the Board by reference to the key
themes and recommendations that have
been identified.
Feedback from 2022 review
Feedback from this review indicated that
the Board is operating well and effectively,
with Board members commenting
favourably on the open and collaborative
culture of the Board, supported by the
values-driven and inclusive style of the
Chairman. The review indicated that Board
composition is considered to be a
strength, bringing together a range of
diverse and complementary backgrounds
and expertise. The Chairman’s critical role
in supporting the transition of the new
Group Chief Executive and Group Finance
Director was commented on favourably,
with the review highlighting the positive
relationship between the Board and
management, and an appropriate level of
support and challenge to management.
Recommendations from 2022 review
The 2022 review outlined the following key
recommendations:
• in the context of what is understandably
a structured meeting agenda, Board
members would welcome the
opportunity for more unstructured
discussion of key areas of focus for the
Board - whether in regard to particular
matters on the agenda or other macro
or external developments since the
previous meeting
• consideration should continue to be
given to the structure of Board agendas
to ensure that time allocations are
appropriate
• continued focus on ensuring balanced
papers which clearly identify substantive
points and key issues for the Board’s
attention
• continued focus on Committee
reporting to the Board, to ensure the
Board has the right level of visibility on
key areas of focus
• continue to identify opportunities to
bring external perspectives into the
Board.
Review of Committee
effectiveness
The 2022 effectiveness review of each
Committee was facilitated internally, as
permitted by the Code. The internal review
involved completion of a tailored
questionnaire by Committee members
and senior management. The review is an
important part of the way Barclays
monitors and improves Committee
performance and effectiveness,
maximising strengths and highlighting
areas for further development. The results
of the review for the Committee are set
out in the next section.
In addition to reviewing its own
effectiveness, the Committee also
reviewed the outcomes of the
effectiveness reviews conducted by the
Board Audit, Remuneration and Risk
Committees, which had also been
conducted by way of tailored
questionnaires. You can read about those
reviews in the individual Committee
reports elsewhere in this Board
Governance report.
Following consideration of the findings of
the 2022 Board and Board Committee
effectiveness reviews, the Committee
remains satisfied that the Board and each
of the Board Committees are operating
effectively.
Review of Nominations
Committee effectiveness
The 2022 Committee effectiveness review
was facilitated internally in accordance with
the Code. This internal review involved
completion of a tailored questionnaire by
Committee members and standing
attendees, in line with the approach
adopted for all Board Committees in 2022.
The review is an important part of the way
Barclays monitors and improves
Committee performance and
effectiveness, maximising strengths and
highlighting areas for further development.
The results of the review confirm the
Committee is operating effectively. It is
considered well constituted, providing an
effective and appropriate level of challenge
and oversight of the areas within its remit.
Feedback acknowledged progress during
the year with regard to executive
succession planning.
• continue to identify opportunities for
more informal engagement between
the Non-Executive Directors and senior
executives outside the boardroom
The review noted that sufficient time is
allocated to the matters within the
Committee's remit to enable appropriate
discussion and challenge.
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Directors’ report: Board Audit Committee report
Driving sustainable improvements
to the internal control environment
Overseeing the integrity of our financial disclosures
and the effectiveness of the internal control environment.
Dear Fellow Shareholders
The Committee had a busy year in 2022, as
it closely monitored the reporting of the
Group’s financial performance in an
increasingly challenging macroeconomic
environment, while remaining focused on
driving sustainable improvements to the
internal control environment.
The Over-issuance of Securities was a
significant area of focus for the
Committee in 2022 in terms of both the
financial reporting and internal controls
aspects. The Committee oversaw the
restatement of the BPLC 2021 financial
statements included in the amended
Annual Report on Form 20-F for the year
ended 31 December 2021. The
Committee also carefully considered the
implications of the Over-issuance of
Securities on the Group’s 2021 UK
financial statements, ultimately concluding
that these did not require refiling, although
the prior year comparatives have been
restated in this 2022 Annual Report and
Accounts so that the UK and US reported
figures are now aligned. The Committee
monitored together with the Board the
launch and progression of the rescission
offer and its impact on the Group’s
financial statements. The presentation of
the financial impact of the Over-issuance
of Securities, including the associated
hedging, was a key consideration in the
Committee’s review of the quarterly, half-
year and full-year financial statements for
2022. Throughout the year, the
Committee monitored management’s
remediation of the material weakness in
internal control over financial reporting
(ICOFR) identified in respect of the Over-
issuance of Securities. The Committee also
monitored, towards the end of the year, the
work carried out to address the specific
requirements of the SEC set out in its order
of 29 September 2022, and in early 2023
considered the assurance work conducted
by Barclays Internal Audit (BIA) on the
matter.
Board Audit Committee
Mike Ashley
Chair, Board Audit Committee
Notes
a There were 10 scheduled meetings and four ad hoc
meetings of the Committee in 2022. Owing to prior
commitments, Diane Schueneman was unable to attend
two ad hoc meetings and Julia Wilson was unable to
attend one ad hoc meeting of the Committee. All ad hoc
meetings had been scheduled at short notice.
Committee allocation of timeb (%)
n Control issues
n Business control environment
n Financial results
n Internal audit matters
n External audit matters
n Other
2022c 2021
12
15
42
7
9
14
11
20
33
8
12
16
b Including ad hoc meetings. The percentages are subject
to rounding and therefore may not equal 100% when
rounded.
c The allocation of time in 2022 includes the time spent by
the Committee considering the Over-issuance of
Securities at scheduled and ad hoc meetings
The macroeconomic environment
remained challenging against a backdrop
of the increased cost of living, rising
interest rates, relatively high inflation,
declining GDP and rising energy costs. The
Committee received regular updates from
the Group Finance Director and Group
Chief Accounting Officer, and focused in
particular on management’s judgement on
credit impairment, post-model
adjustments and expected credit loss
(ECL) build. This is an area which the
Committee will continue to monitor
closely during 2023.
A key element of the Committee’s remit is
oversight of the Group’s internal control
environment. Throughout 2022, the
Committee membership
and meeting attendance in 2022a
Member
Meetings attended/eligible to attend
(including ad hoc meetings)
Mike Ashley
Robert Berry1
Diane Schueneman
Julia Wilson
14/14
12/12
12/14
13/14
Committee membership in 2022
1 Appointed with effect from 1 March 2022.
Committee received regular updates on
this and continued to monitor the progress
of programmes aimed at strengthening
the internal control environment across
the Group’s businesses. The Over-
issuance of Securities highlighted the need
for further improvements both in specific
controls and also the control mindset
required at all levels in the organisation. In
addition to this specific issue, the
Committee has continued to pay close
attention to a number of existing control
remediation and enhancement
programmes. These continued to include
significant work in the trading areas (as
highlighted last year) and also on financial
crime controls.
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Directors’ report: Board Audit Committee report (continued)
The Committee provided oversight of an
internal programme established towards
the end of 2022 aimed at bringing together
the more material remediation
programmes with a view to embedding
controls and lessons learned on a holistic
basis in order to achieve a consistently
excellent operating environment across
the Group. The Committee encouraged
and challenged management to ensure
that outcomes are delivered at the times
committed, but in a sustainable manner
and that they drive a strong culture of
continuous improvement which is
essential to keep pace with changes both
within the Group and in the external
environment.
As part of its determination of whether any
control issues required specific disclosure
in this Annual Report, the Committee
continued to apply similar concepts to
those used for assessing internal control
over financial reporting for the purposes of
the US Sarbanes-Oxley Act (SOx). The
Committee is satisfied that management
has effectively remediated the material
weakness relating to the Over-issuance of
Securities and reached the conclusion that
there are no other control issues that are
considered to be a material weakness and
which merit specific disclosure for the year
ended 31 December 2022.
The Committee has oversight of Barclays’
whistleblowing programme and I
continued to act as the Group
Whistleblowers' Champion. During 2022,
the Committee scrutinised the results of a
benchmarking review of Barclays’
whistleblowing programme undertaken by
an independent third party aimed at
identifying areas where certain elements
of the programme can be enhanced.
Moving into 2023, the Committee will
oversee the enhancements to our
whistleblowing programme that are being
implemented by management.
As will be evident from the Strategic report
set out on page 15, Barclays’ climate
strategy continues to be a significant area
of focus for the Group. The Committee
provides oversight of the Group’s climate
and sustainability disclosures and was
supportive of management’s decision to
incorporate Barclays' TCFD disclosures
into the 2022 Annual Report. Whilst the
Committee continues to monitor the
impact of climate change on the Group’s
financial statements, the impacts are not
material at this time.
Consistent with previous years, I held
regular meetings with the Chair of the
BBUKPLC Board Audit Committee to
ensure I had visibility over any material and
emerging key issues impacting BBUKPLC.
Since my last report I have also had
discussions with the Chairs of the Board
Audit Committees of Barclays US LLC and
Barclays Bank Ireland PLC, and attended a
meeting of the Barclays Bank Ireland PLC
Board Audit Committee and BBUKPLC
Board Audit Committee. I will be attending
the Barclays US LLC Board Audit
Committee when it meets to approve the
financial results of the US holding company
in March. I continued to meet frequently
with members of senior management,
including in particular the Group Finance
Director and Group Chief Internal Auditor.
As Committee Chair, throughout the year I
engage regularly with the Group’s key
regulators, including holding meetings with
representatives of the PRA and FRBNY.
Barclays Internal Audit and
external auditors
Given the key role of BIA in supporting the
Committee’s work, I held regular monthly
meetings with the Group Chief Internal
Auditor and members of her senior
management team to ensure that I had
visibility of their programme of work and
key emerging issues. In early 2022, the
Committee commissioned Ernst & Young
to perform an independent External
Quality Assurance assessment of BIA,
which is required every five years. The
Committee was pleased to note the
report’s conclusions that BIA generally
conformed with industry standards and
guidance, and was an independent and
effective function, a view also supported
by feedback from our key regulatory
stakeholders. The Committee also
conducted a performance assessment of
BIA for 2022 and I am pleased to report
that the Committee was satisfied with
BIA's performance against its objectives
agreed with me at the beginning of the
year.
The relationship with the Group’s external
auditor remains a key element of the
Committee’s role, and the Committee
welcomed a new lead audit engagement
partner, Stuart Crisp, for the 2022 financial
year following the retirement of the
previous lead audit partner. The
Committee received regular updates on
KPMG’s progress on the 2022 audit, as well
as on the joint inspection by the US Public
Company Accounting Oversight Board
(PCAOB) and the UK Financial Reporting
Council (FRC) Audit Quality Review (AQR)
team of KPMG’s audit of Barclays’ 2021
financial statements (including the impact
of the discovery of the Over-issuance of
Securities). The outcome of those
inspections are set out on page 176 of this
report.
Committee effectiveness
The 2022 Committee effectiveness review
was facilitated internally in accordance with
the Code. This internal review involved
completion of a tailored questionnaire by
Committee members and standing
attendees, in line with the approach
adopted for all Board Committees in 2022.
The review is an important part of the way
Barclays monitors and improves
Committee performance and
effectiveness, maximising strengths and
highlighting areas for further development.
The results of the review confirm the
Committee is operating effectively. It is
considered well constituted, providing an
effective and appropriate level of challenge
and oversight of the areas within its remit.
The review noted that the Committee was
considered to have the right level of skills
and experience, including recent and
relevant financial experience.
Feedback indicates that the Committee is
considered to operate at the right level of
debate, whilst acknowledging the technical
and detailed nature of the Committee’s
discussions at times, which is reflective of
the nature of the matters within the
Committee’s broad remit.
The review noted that the Committee’s
interaction with the Board, Board
Committees and senior management is
considered effective, noting that sufficient
time is allocated at Board meetings for the
Chair to report to the Board on the work of
the Committee.
Feedback indicated that concurrent
meetings of the BPLC and BBPLC Board
Audit Committee continue to be effective,
with coverage of BBPLC matters within
concurrent meetings considered
adequate. Interaction with BBUKPLC
Board Audit Committee was also
considered effective, confirming that the
Committee continues to exercise
sufficient oversight of issues relevant to
the Committee’s remit relating to
BBUKPLC.
Changes to Committee
composition
On 1 March 2022, we welcomed Robert
Berry to the Committee and have
benefited from his expertise and
perspectives, including through his cross-
membership as Chair of the Board Risk
Committee.
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Directors’ report: Board Audit Committee report (continued)
The Board, together with the Committee,
is responsible for ensuring the
independence and effectiveness of the
internal audit function and external
auditors. For this reason, the Committee
held a number of separate private sessions
with each of the Group Chief Internal
Auditor and the lead KPMG audit
engagement partner during 2022, without
management present. The appointment
and removal of the Group Chief Internal
Auditor is a matter reserved to the
Committee, and the appointment and
removal of the external auditor is a matter
reserved to the Board based on the
recommendation of the Committee.
Neither task is delegated to management.
Role of the Committee
The role of the Committee is to review
and monitor, among other things:
• the integrity of the Group’s financial
statements and related
announcements
• the effectiveness of the Group’s
internal controls
• the independence and
effectiveness of the internal and
external audit processes
• the Group’s relationship with the
external auditor
• the effectiveness of the Group’s
whistleblowing procedures.
The Committee’s Terms of Reference
are available at home.barclays/who-
we-are/our-governance/board-
committees.
Committee composition and
meetings
The Committee is composed solely of
independent Non-Executive Directors.
Membership of the Committee is designed
to provide the breadth of financial
expertise and commercial acumen that
the Committee needs to fulfil its
responsibilities. Its members as a whole
have recent and relevant experience of the
banking and financial services sector, in
addition to general management and
commercial experience; and are financially
literate. Mike Ashley, the Committee Chair,
who is the designated financial expert on
the Committee for the purposes of SOx, is
a former audit partner who, during his
executive career, acted as lead
engagement partner on the audits of a
number of large financial services groups.
+ Read more about the experience of the current
Committee members in their biographies on
pages 144 to 146.
During 2022, the Committee met 14 times
including four ad hoc meetings (2021: 11
times, including one ad hoc meeting) and
the chart on page 169 shows how the
Committee allocated its time. Attendance
by members at Committee meetings is
also shown on page 169. Committee
meetings were attended by
representatives from management,
including the Group Chief Executive,
Group Finance Director, Group Chief
Internal Auditor, Group Chief Controls
Officer, Group Chief Risk Officer, Group
Chief Operating Officer, Group General
Counsel and Group Chief Compliance
Officer, as well as representatives from the
businesses and other functions, and from
BBPLC senior management reflecting the
partially consolidated operation of the
BPLC and BBPLC Committee meetings.
The lead audit engagement partner of
KPMG also attended Committee
meetings.
Marc Moses recently joined the
Committee on taking up his appointment
as a Non-Executive Director of the Board
on 23 January 2023. Marc brings a strong
technical finance background with a deep
knowledge of banking and financial
services.
Looking ahead
In 2023, it is anticipated that a key focus of
the Committee will remain activities to
enhance and strengthen the internal
control environment and overseeing
management in closing out the more
significant remediation programmes. The
Committee welcomes management's
proposals to enhance the 2023 Risk and
Control Self-Assessment (RCSA) process
in view of lessons learnt from 2022 and see
this as a further step towards
strengthening the internal control
environment. In respect of financial
reporting, the Committee’s focus will be
on the ECL charge, impairment levels and
provisions to ensure they continue to
reflect appropriately the macroeconomic
conditions. The Committee will also be
considering the impact of the UK audit
reforms and any steps that may need to be
undertaken in preparation for the
introduction of new legislation and
regulation implementing the changes.
I will be stepping down from the Board with
effect from the conclusion of the 2023
AGM, and ahead of that, on 1 April 2023,
Julia Wilson will, subject to regulatory
approval, succeed me as Chair of this
Committee and also as the Group
Whistleblowers' Champion. Julia has
served as a member of the Committee
since her appointment to the Board on 1
April 2021, and has significant corporate
finance, tax and accounting experience
including, amongst her other senior
executive and non-executive roles, serving
as Chair of the board audit committee at
Legal & General Group PLC. Ahead of my
stepping down from the Board, I will be
working closely with Julia to ensure a
smooth transition of my Chair role to her
and I am confident that she will make an
excellent Chair of the Committee. Finally, I
would like to formally record my thanks to
my fellow Committee members, members
of senior management, BIA and our
external auditors for their support during
my tenure as Committee Chair.
Mike Ashley
Chair, Board Audit Committee
14 February 2023
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Directors’ report: Board Audit Committee report (continued)
Primary activities
The Committee discharged its responsibilities in 2022 through monitoring the effectiveness of the internal control environment, and
internal and external audit processes, as well as the integrity of financial statements and related announcements having regard to the
current macroeconomic environment.
Areas of focus
Matters addressed
Role of Committee
Conclusion/action taken
Fair, balanced and
understandable
reporting
(including Country- by-
Country Reporting and
Modern Slavery
Statement)
In light of the Board’s obligation
under the Code, the Committee
assesses external reporting to
ensure it is fair, balanced and
understandable.
In addition to this Annual Report and
associated year-end reports, the Committee
also reviewed the Group’s half-year and
quarterly reports and the presentations to
analysts. The Committee informed these
reviews through:
• consideration of reports of the Disclosure
Committee, which included views on
content, accuracy and tone
• direct questioning of management,
including the Group Chief Executive and
Group Finance Director, on the
transparency and accuracy of disclosures
• consideration of management’s response
to letters issued by the FRC and other
industry reporting guidance
• evaluation of the output of the Group’s
internal control assessments and SOx
s404 internal control process
• consideration of the results of
management’s processes relating to
financial reporting matters and evidencing
the representations provided to the
external auditors.
Distributions and
return of capital
to shareholders
The Committee assesses the
distributable reserves position.
The Committee considered management’s
proposals for distributions (dividends and
share buy-backs) for the full year ended 31
December 2021 and for the half year ended
30 June 2022.
Going concern
and long-term
viability
(refer to the Viability
Statement on pages
58 to 59)
Barclays is required to assess
whether it is appropriate to
prepare the financial
statements on a going concern
basis. In accordance with the
Code, Barclays must provide a
statement of its viability.
The Committee considered both the going
concern assumption and the form and
content of the Viability Statement taking into
account:
•
•
•
the MTP and Working Capital Report
the forecast capital, liquidity and funding
profiles
the results of stress tests based on internal
and regulatory assumptions
• current risk and strategy disclosures.
In light of a deteriorating macroeconomic
environment, including the increased cost
of living, and rising base rates and inflation,
the Committee closely considered the
Group's disclosures, including in particular
management’s approach to ECL and
impairment charges.
The Committee scrutinised the disclosures
regarding the Over-issuance of Securities,
and the impact of the Over-issuance of
Securities and the related rescission offer
on the financial statements. The
Committee recommended to the Board
for approval the restated BPLC financial
statements for the year ended 31
December 2021, as filed with the SEC on
23 May 2022 in an amended annual report
on Form 20-F. The Committee further
recommended to the Board that it did not
believe that it was necessary or appropriate
to revise the 2021 UK financial statements
to reflect the impact of the Over-issuance
of Securities. Instead, the prior year
comparatives have been restated in this
2022 Annual Report and Accounts to
reflect the impact of the Over-issuance of
Securities.
Having evaluated all of the available
information, the assurances by
management and underlying processes
used to prepare the published financial
information, the Committee concluded
and recommended to the Board that the
2022 Annual Report and Accounts are fair,
balanced and understandable.
Having regard to the distributable reserves
available to the Company, the Committee
reviewed and reported to the Board on
proposals for (1) a dividend for the financial
year ended 31 December 2021 of 4.0p per
share along with a share buy-back of up to
£1bn; and (2) a dividend for the half year
ended 30 June 2022 of 2.25p per share,
along with a share buy-back of up to
£500m.
In early 2023, the Committee reviewed and
reported to the Board on the proposals for
the full year dividend for the year ended 31
December 2022 along with a proposed
share buy-back.
The Committee recommended to the
Board that the financial statements should
be prepared on a going concern basis and
that there were no material uncertainties
that would impact the going concern
statement which required disclosure.
The Committee recommended the
Viability Statement to the Board for
approval.
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Directors’ report: Board Audit Committee report (continued)
Areas of focus
Matters addressed
Role of Committee
Conclusion/action taken
Conduct
provisions
(refer to Note 24 to the
financial statements)
Barclays makes certain
assumptions and estimates,
analysis of which underpins
provisions made for the costs of
customer redress.
With a view to evaluating the adequacy of the
provisions, the Committee analysed the
judgements and estimates made with regards
to Barclays' provisioning for legacy conduct
issues.
Impairment of
financial
instruments
(refer to Note 8 to the
financial statements)
Impairments of
Goodwill and
Intangibles
(refer to Note 22 to the
financial statements)
Legal,
competition and
regulatory
provisions
(refer to Notes 24 and
26 to the financial
statements)
Valuations
(refer to Notes 13 to
17 to the financial
statements)
ECLs are modelled using a range
of forecast economic scenarios.
They use forward-looking
models which require
judgements to be made over
modelling assumptions,
including:
•
•
•
•
the determination of
macroeconomic scenarios to
be used
the methodology for
weighting of scenarios
the criteria used to determine
significant deterioration in
credit quality
the application of
management adjustments to
the ECL modelled output.
The carrying value of goodwill
and intangible assets is
assessed on the basis of
discounted forecast future
earnings. Given the significant
component of earnings
attributable to net interest
income, such forecasts are
particularly sensitive to the level
of long-term interest rates and
assumed levels of future
lending. The period over which
intangible assets are amortised
appropriately reflects the useful
economic life.
Barclays is engaged in various
legal, competition and
regulatory matters which may
give rise to provisioning based
on the facts.
The level of provisioning is
subject to management
judgement on the basis of legal
advice and is, therefore, an area
of focus for the Committee.
Barclays exercises judgement in
the valuation and disclosure of
financial instruments, derivative
assets and certain portfolios,
particularly where quoted
market prices are not available.
As part of its monitoring, the Committee
considered a number of reports from
management on:
•
the impact of the uncertain
macroeconomic environment, delinquency
levels in the loan portfolios and impact of
rising interest rates and inflation
• model changes and model validation
•
refresh of the macroeconomic variables
and associated weighting
• adjustments made to the modelled output
to reflect updated data and known model
deficiencies
• comparisons between actual experience
and forecast losses.
The Committee reviewed the Group's
goodwill balances and intangibles to identify
any indicators of impairment.
The Committee evaluated advice on the
status of current legal, competition and
regulatory matters. It considered
management’s judgements on the level of
provision to be taken and accompanying
disclosures.
The Committee:
• evaluated reports outlining the Group's
material valuation judgements
•
received reports of the Valuation
Committee.
The Committee scrutinised management’s
approach to conduct provisions
throughout the year and was satisfied that
management's judgement and approach
resulted in an adequate and appropriate
level of provision in relation to the various
conduct matters.
The Committee reviewed, and was
comfortable with, the judgement exercised
by management in determining post-
model adjustments, in particular in view of
slowing GDP and rising unemployment.
Having considered and scrutinised the
reports, the Committee agreed with
management’s conclusion that the
impairment provision was appropriate.
The Committee was satisfied with
management's determination that no
indicators of impairment had been
identified.
The Committee reviewed the disclosures
made to ensure that the key sensitivities
and the potential impacts were
appropriately highlighted.
The Committee discussed provisions and
utilisation and, having reviewed the
information available to determine what
was both probable and could be reliably
estimated, the Committee agreed that the
level of provision at the year end was
appropriate. The Committee reviewed the
disclosures made in respect of legal,
competition and regulatory matters and
concluded that they provided appropriate
information for investors.
The Committee scrutinised management's
approach to valuation, including in
particular the Principal Investments and
Leverage Finance portfolios.
The Committee was satisfied with the
accounting treatment in respect of the
various matters.
The Committee reviewed the disclosures
made to ensure that the Level 3
sensitivities and the potential impacts were
appropriately highlighted.
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Directors’ report: Board Audit Committee report (continued)
Areas of focus
Matters addressed
Role of Committee
Conclusion/action taken
Tax
(refer to Note 9 to the
financial statements)
Barclays is subject to taxation in
a number of jurisdictions globally
and makes judgements with
regard to provisioning for tax at
risk and to the recognition and
measurement of deferred tax
assets.
The Committee was satisfied that specific
strategies were in line with the Group's Tax
Principles and on behalf of the Board
approved the UK Tax Strategy statement
published in the Country Snapshot report
and recommended the Country Snapshot
to the Board for approval.
The Committee is responsible for considering
the Group's tax strategy and overseeing
compliance with the Group's Tax Principles.
To support this, the Committee received
reports from the Global Head of Tax.
The Committee considered the impact of:
• announcements made by the UK
government in relation to the future rate of
corporation tax
• the OECD’s proposal to introduce a global
minimum tax
• the tax treatment of the Group’s holding of
index-linked gilts.
The Committee reviewed the
appropriateness of provisions made for
uncertain tax positions.
The Committee also reviewed the Group's tax
risks and its interactions with tax authorities.
Internal controls
and business
control
environment
(read more about
Barclays' internal
control and risk
management
processes on page
187)
The effectiveness of the overall
control environment, including
the status of any significant
control issues and the progress
of specific remediation plans.
The Committee:
In 2022, the Committee:
• considered regulatory views expressed on
the Group’s internal control environment
and management’s response
• evaluated and tracked the status of the
more significant control matters through
regular reports from the Chief Controls
Officer, including updates on the impact of
hybrid working and cyber risks on the
control environment
• scrutinised the pathway to 'Return to
Satisfactory' in respect of internal
controls (operated by the various
functions and businesses) that were not
already rated 'Satisfactory' and satisfied
themselves that management’s plan,
once implemented, should achieve the
objective
• considered management’s progress in
• monitored the remediation of internal
control over financial reporting in relation
to the identification and monitoring of
issuance limits, following the Over-
issuance of Securities
• discussed reports relating to individual
Group entities, businesses and functions
on the control aspects of key matters such
as financial crime, the use of personal
devices for business communications and
trading controls
•
•
received an annual update on data
protection
received independent evaluations from BIA
and external auditors
• monitored Client Assets Sourcebook
(CASS) updates and compliance with
CASS.
Raising concerns
The adequacy of the Group’s
arrangements to allow
colleagues to raise concerns in
confidence and anonymously
without fear of retaliation, and
the outcomes of any
substantiated cases.
The Committee received reports from
management and monitored whistleblowing
metrics and retaliation reports, including
consideration as to potential whistleblowing
trends which might emerge.
remediating internal control over
financial reporting following the Over-
issuance of Securities and SOx testing in
relation to the same, and agreed with
management’s conclusion that it was
remediated as at 31 December 2022
• monitored the progress of other
significant remediation programmes,
challenging management to take a
forward looking view to create
sustainable outcomes
• commenced oversight of an internal
programme aimed at considering the
more material remediation activities on
a holistic basis in order to embed
controls to achieve a consistently
excellent operating environment.
In early 2023, the Committee considered
management’s proposals for evolving the
RCSA process in 2023 taking into account
lessons learned from the Over-issuance of
Securities, and agreed with the aim to
improve the identification of the low
probability / high impact events and the
associated controls.
The Committee received detailed semi-
annual reports on whistleblowing from
management.
The Committee approved proposals by
management to enhance certain elements
of the Group-wide whistleblowing process
following an external benchmarking
exercise.
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Directors’ report: Board Audit Committee report (continued)
Areas of focus
Matters addressed
Role of Committee
Conclusion/action taken
Internal audit
The performance of BIA and
delivery of the internal audit
plan, including scope of work
performed, the level of
resources, and the
methodology and coverage of
the internal audit plan.
External audit
The work and performance of
KPMG.
During the year, the Committee:
• scrutinised and agreed internal audit plans,
methodology and deliverables for 2022
•
•
•
reviewed BIA's audit reports in relation to
specific audits, key areas of focus and
themes
tracked the levels of adverse audits and
issues raised by BIA and monitored related
remediation plans
received regular updates on resourcing and
results of colleague engagement surveys
for BIA
• discussed BIA's assessment of the
management control approach and control
environment in the Group companies and
functions
• continued to monitor BIA's implementation
of its three-year internal audit strategy
ending December 2022.
The Committee:
• met with key members of the KPMG audit
team to discuss the 2022 Audit Plan and
KPMG’s areas of focus
• assessed regular reports from KPMG on
the progress of the 2022 audit and any
material accounting and control issues
identified
• discussed KPMG’s feedback on Barclays’
critical accounting estimates and
judgements
• discussed KPMG’s draft report on certain
control areas and the control environment
ahead of the 2022 year end
•
received reports on the progress of the
PCAOB and AQR joint inspection of
KPMG's audit of Barclays' 2021 financial
statements.
The Committee reviewed BIA's audit
results and performance reports, and
quality assurance reports. The Committee
also reviewed and approved the annual
review of BIA's Audit Charter.
At the end of the year, the Committee
approved the 2023 Audit Plan, detailing the
number of audits to be undertaken in 2023
and the focus areas.
The Committee reviewed the results of the
external quality assurance exercise carried
out in respect of BIA and conducted an
evaluation of BIA for 2022, the results of
which are summarised in the Chair’s letter
on page 170.
The Committee approved the 2022 Audit
Plan and the main areas of focus for the
year.
The Committee received and considered
reports from KPMG on the results of their
2021 CASS audits and management's
responses thereto.
The Committee considered the results of
the PRA Written Auditor Reporting for
2022 and the PRA's feedback thereon, and
has also reviewed management's response
to the matters raised.
Read more about the PCAOB and AQR
inspection results and the Committee’s
role in assessing the performance,
effectiveness and independence of the
external auditor on the next page.
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Directors’ report: Board Audit Committee report (continued)
External auditor
Following an external audit tender in 2015,
KPMG was appointed as Barclays’
statutory auditor with effect from the
2017 financial year. Stuart Crisp of KPMG is
Barclays’ lead audit engagement partner
and was appointed to this role with effect
for the 2022 financial year following the
retirement of the previous lead audit
engagement partner, Michelle Hinchliffe.
Assessing external auditor
effectiveness, objectivity and
independence and non-audit services
The Committee is responsible for
assessing the effectiveness, objectivity
and independence of the Group’s auditor,
KPMG. This responsibility was discharged
by the Committee throughout the year at
formal meetings, during private meetings
with KPMG and through discussions with
key Group executives. In addition to the
matters noted above, the Committee also:
• approved the terms of the audit
engagement letter and associated fees,
on behalf of the Board
• discussed the Group Policy on the
Provision of Services by the Group
Statutory Auditor (the Policy) and
reviewed regular reports from
management on the non-audit services
provided by KPMG to Barclays
• evaluated and recommended to the
Board for approval revisions to the
Group Policy on Engagement of
Employees and Workers of the
Statutory Auditor and ensured
compliance with this by regularly
assessing reports from management
detailing any appointments made
• received reports on KPMG’s
assessment of the financial impact of
the Over-issuance of Securities on both
the Group's UK and US financial
statements
• was briefed by KPMG on critical accounting
judgements and estimates and internal
controls over financial reporting
• met with senior members of the KPMG
Barclays team both from the UK and US
to discuss the approach to the 2022
audit
• assessed any potential threats to
independence that were self-identified
and reported by KPMG, all of which were
regarded by the Committee as being
adequately addressed.
KPMG’s audit of Barclays' 2021 financial
statements was subject to inspection by
the AQR team from the FRC and the US
PCAOB.
The AQR inspection covered three key
audit matters (impairment allowances on
loans and advances, valuation of financial
instruments held at fair value and IT user
access management) as well as four other
areas of audit focus (general IT controls
and automated IT controls, settlement
and clearing and the overall payments
process, existence and accuracy of
unconfirmed OTC bilateral derivatives and
cash and cash equivalents). The AQR also
inspected the work carried out by KPMG in
assessing the restatement that was
reported in the Group's first quarter’s
results, arising from the impact of the
Over-issuance of Securities. The final
report from the AQR was received last
week and the Committee was pleased to
note that there were no significant findings
and that the AQR called out examples of
best practice in KPMG’s work on IT
automated controls, on the partial model
rebuild and evaluation of reasonable
ranges for expected credit losses, on
valuation models and on their climate risk
assessment including their reporting
thereon in the audit report. There were a
number of areas included for
improvement, which the Committee will be
discussing with KPMG following a meeting
to be arranged between the current and
incoming Chair of the Committee with the
AQR. The Committee noted however that
KPMG’s proposed actions did not envisage
significant additional work, but clearly
recognised the need to better articulate
the rationale for and evidence of the audit
work carried out in the relevant areas.
The PCAOB’s inspection also covered the
impairment allowances on loans and
advances and the valuation of financial
instruments held at fair value both as
regards the valuations themselves and the
presentation and disclosure thereof. In
addition, the PCAOB inspected the work
carried out by KPMG on their revised audit
report on the restated financial
statements included in the amended 2021
20-F, which incorporated the impact of the
Over-issuance of Securities. KPMG have
not yet received a report from the PCAOB,
but have informed us that the PCAOB
verbally communicated to them that they
had no formal comments on the work
supporting their audit opinion. KPMG did
inform us that the PCAOB had provided
them with one comment as regards
required communications with the
Committee in respect of the inadvertent
omission of two overseas KPMG member
firms who provided some limited
assistance on the audit and a reference to
three other KPMG member firms in a
specific country which did not specify their
legal names.
The Group undertakes an annual formal
assessment of KPMG’s performance,
independence and objectivity. This
assessment was conducted in early 2023,
by way of a questionnaire completed by
key stakeholders across the Group,
including the chairs of the Board Audit
Committees of the Group’s main
operating companies (BBUKPLC, Barclays
US LLC and Barclays Europe). The
questionnaire was designed to evaluate
KPMG’s audit process and addressed
matters such as the quality of planning and
communication, technical knowledge, the
level of scrutiny and challenge applied and
KPMG’s understanding of the business.
In line with the approach taken in previous
years, in 2022 KPMG also nominated a
senior partner of the audit team to have
specific responsibility for ensuring audit
quality. The Committee met with the
partner concerned on a number of
occasions, without the lead audit
engagement partner present, to receive a
report on his assessment of audit quality.
Taking into account the result of all of the
above, the Committee considered that
KPMG maintained its independence and
objectivity and that the audit process was
effective.
Non-audit services
In order to safeguard the auditor’s
independence and objectivity, Barclays has
in place the Policy setting out the
circumstances in which the auditor may be
engaged to provide services other than
those covered by the Group audit. The
Policy applies to all Barclays’ subsidiaries
and other material entities over which
Barclays has significant influence. The core
principle of the Policy is that non-audit
services (other than those legally required
to be carried out by the Group’s auditor)
should be performed by the auditor only in
certain controlled circumstances. The
Policy sets out those types of services that
are permitted (Permitted services). A
summary of the Policy can be found at
home.barclays/who-we-are/our-
governance/auditor-independence/.
The Policy is reviewed on an annual basis
to ensure that it is fit for purpose and that
it reflects applicable rules and guidelines.
The Policy is aligned with both the FRC’s
requirements and KPMG’s own internal
policy on non-audit services for FTSE 350
companies, which broadly restricts non-
audit work to services that are ‘closely
related’ to the audit.
During 2022, the Committee reviewed and
approved the Policy in its current form on
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Directors’ report: Board Audit Committee report (continued)
the basis it continued to reflect current
applicable rules and guidelines and met the
needs of the business. Any changes to the
Policy are required to be approved at a
Group level by the Committee. This is in
accordance with laws applicable in the UK
and FRC guidance, pursuant to which audit
committees of Public Interest Entities
(such as Barclays) are required to approve
non-audit services provided by their
auditors to such entities; and subsidiary
Public Interest Entities in the UK – such as
BBUKPLC and BBPLC – can rely on the
approval of non-audit services by the
ultimate parent’s Board Audit Committee.
Pursuant to the Policy, audit services and
the fee cap are monitored by the relevant
Board Audit Committee, as appropriate.
Under the Policy, except for specific
categories of permitted services that
require explicit Committee approval, the
Committee has pre-approved all
Permitted services for which fees are less
than £100,000. However, all proposed
work, regardless of the amount of the fees,
must be sponsored by a senior executive
and recorded on a centralised online
system, with a detailed explanation of the
clear commercial benefit arising from
engaging the auditor over other potential
service providers. The lead audit
engagement partner must also confirm
that the engagement has been approved
in accordance with the auditor’s own
internal ethical standards and does not
pose any threat to the auditor’s
independence or objectivity. All requests
to engage the auditor are assessed by
senior management, who are not involved
in any work to which the proposed
engagement relates, before work can
commence.
Requests for Permitted service types in
respect of which the fees are expected to
meet or exceed the above threshold but
expected to be less than £250,000 must
be approved by the Chair of the
Committee (or an appropriate alternate)
before work is permitted to begin. Services
where the fees are expected to be
£250,000 or higher must be approved by
the Committee as a whole. All expenses
and disbursements must be included in the
fees calculation.
During 2022, all engagements for which
expected fees met or exceeded the above
thresholds were evaluated by either the
Committee Chair or the Committee
members as a whole, who, before
confirming any approval, assured
themselves that there was justifiable
reason for engaging the auditor and that
its independence and objectivity would not
be threatened. No requests to use KPMG
were declined by the Committee in 2022
(2021: none). On a quarterly basis, the
Committee scrutinised details of
individually approved and pre-approved
services undertaken by KPMG in order to
satisfy itself that they posed no risk to
independence, either in isolation or on an
aggregated basis.
For the purposes of the Policy, the
Committee has determined that any
service of a value of under £50,000 is to be
regarded as trivial in terms of its impact on
Barclays' financial statements and has
required the Group Financial Controller to
specifically review and confirm to the
Committee that any service with a value of
between £50,000 and £100,000 may also
be regarded as such. Accordingly, any
service with a value of less than £100,000
is treated as a pre-approved service,
subject to satisfactory review and certain
exceptions. The Committee undertook a
review of pre-approved services at its
meeting in December 2022.
KPMG have however recently advised the
Committee that, as more fully described in
their audit report, a KPMG member firm
has provided services in connection with
the preparation of local statutory accounts
of a small overseas subsidiary not in scope
for the group audit. KPMG has assured the
Committee, having made appropriate
enquiries of their member firms providing
services to the Group, this is an isolated
instance. In these circumstances the
Committee agrees with KPMG’s
assessment that this has not impaired
their integrity or objectivity. The
Committee have also asked management
to reinforce the necessity for requests for
non-audit services to clearly distinguish
the different elements of the service to be
provided to ensure they are all permitted.
The Committee will also consider if any
revisions of the Policy are required to make
it clearer in this respect.
The fees payable to KPMG for the year
ended 31 December 2022 amounted to
£71m (2021: £62m), of which £13m (2021:
£12m) was payable in respect of non-audit
services. A breakdown of the fees payable
to the auditor for statutory audit and non-
audit work can be found in Note 40 of the
financial statements. Of the £13m of non-
audit services provided by KPMG during
2022, the significant categories of
engagement, i.e. services where the fees
amounted to more than £500,000,
included:
• audit-related services: services in
connection with CASS audits
• other services in connection with
regulatory, compliance and internal
control reports and specific audit
procedures, required by law or
regulation to be provided by the
statutory auditor
• other attestation and assurance
services, such as ongoing attestation
and assurance services for treasury and
capital markets transactions to meet
regulatory requirements, including
regular reporting obligations and
verification reports.
The Statutory Audit Services for Large
Companies Market Investigation
(Mandatory Use of Competitive Tender
Processes and Audit Committee
Responsibilities) Order 2014
An external audit tender was conducted in
2015 and the decision was made to
appoint KPMG as Barclays’ external auditor
with effect from the 2017 financial year,
with PwC resigning as the Group’s
statutory auditor at the conclusion of the
2016 audit.
Barclays is in compliance with the
requirements of The Statutory Audit
Services for Large Companies Market
Investigation (Mandatory Use of
Competitive Tender Processes and Audit
Committee Responsibilities) Order 2014,
which relates to the frequency and
governance of tenders for the
appointment of the external auditor and
the setting of a policy on the provision of
non-audit services.
As explained in previous Committee
reports, provided that KPMG continues to
maintain its independence and objectivity,
and the Committee remains satisfied with
its performance, the Group has no
intention of tendering for an alternative
external auditor before the end of the
current required period of 10 years.
Accordingly, any tender would be in
respect of the 2027 financial year onwards
and is likely to take place in 2025. The
Committee believes it would not be
appropriate to tender before this date as it
recognises that while it is important to
ensure the audit firm remains objective
and does not become overly familiar with
management, there is an important
balance to be struck with the investment
of time required both from management
and any completely new audit team for
them to gain sufficient understanding of a
large and complex organisation as Barclays
to ensure a top quality audit. The
Committee also observes that there has
been significant turnover of the senior
members of the audit team since 2017 and
more recent changes of the Barclays
senior finance team, both of which have
reduced any potential familiarisation
threat.
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Directors’ report: Board Risk Committee report
Prudent oversight of
the risks facing the Group
Dynamic Risk management in the face of challenging
geopolitical and macroeconomic conditions.
Dear Fellow Shareholders
Since I joined the Board and took on the
role of Risk Committee Chair in early 2022,
there have continued to be many
opportunities and challenges that have
required careful and considered risk
management. As the threat of COVID-19
in our key operating regions receded in
2022, geopolitical risks have heightened
with the Russian invasion of Ukraine and
continued US/China political tensions.
Macroeconomic risks have also increased
as most major economies faced slowing
growth against a backdrop of high inflation,
energy market shocks and rising interest
rates, resulting in increased affordability
pressures for consumers.
Another theme for Barclays throughout
this year has been UK political uncertainty,
with the ‘mini-budget’ in September
causing market disruption, notably the
sudden shifts in demand for UK gilts,
closely followed by the appointment of
another new Prime Minister and a further
fiscal budget. Given the ongoing uncertain
macroeconomic and geopolitical
environment, as a Committee, we spent a
significant amount of time during the year
hearing directly from the business,
alongside risk and compliance colleagues,
about how they are managing the
associated risks and what mitigating
actions are being taken. The Committee
remains watchful of the implications of
these themes, as well as the longer term
consequences of the UK’s withdrawal from
the EU, possible political uncertainty in
other key jurisdictions and the potential for
disorderly market corrections and
economic slowdowns across the globe.
In addition to the geopolitical and
macroeconomic climate, the Committee
has continued to focus on the
management of the Group’s non-financial
risks, including operational risks, such as
cyber-related vulnerabilities, conduct risks,
including those related to the facilitation of
financial crime, and the work undertaken to
mitigate the risks associated with the
Over-issuance of Securities.
Board Risk Committee
Robert Berry
Chair, Board Risk Committee
Committee membership
and meeting attendance in 2022a
Meetings attended/eligible to attend
(including ad hoc meetings)
Member
Robert Berry1
Mike Ashley
Tim Breedon2
Mohamed A. El-Erian
Dawn Fitzpatrick
Brian Gilvary
Diane Schueneman
Julia Wilson3
Committee membership in 2022
1 Appointed with effect from 1 March 2022.
2 Retired with effect from 28 February 2022.
3 Appointed with effect from 1 September 2022.
11/11
12/12
2/2
9/12
12/12
11/12
8/12
5/5
Notes
a There were nine scheduled meetings and three ad-hoc
meetings of the Committee in 2022. Owing to prior
commitments, Mohamed A. El-Erian was unable to
attend one scheduled meeting and two ad-hoc meetings,
Notes
Diane Schueneman was unable to attend three
scheduled meetings and one ad-hoc meeting and Brian
Gilvary was unable to attend one ad-hoc meeting.
Committee allocation of timeb (%)
n Risk profile/appetite
n Key risk issues/monitoring
n Internal controls/risk policies
n Other
b Including ad hoc meetings.
2022 2021
36
50
9
5
46
34
18
2
The Committee also devoted attention to
assessing the full range of risks associated
with implementing strategic opportunities,
such as the digital transformation
programme within Barclays UK,
acquisitions and growth initiatives. The
Committee continues to encourage
management to be alert to areas of
emerging risk, particularly in light of the
rapidly evolving macroeconomic and
geopolitical climate.
Set out below are some of the key areas of
the Committee's work in 2022, but you can
read more about how the Committee
discharged its duties in the table on pages
182 to 185.
Risk appetite
A key role of the Committee is to
recommend to the Board an appropriate
risk appetite for the Group. Risk appetite
represents the amount of risk the Group is
able to take to earn an appropriate return
while meeting minimum internal and
regulatory capital requirements in a severe
but plausible stress environment. The
Committee analyses Barclays’
performance in both its internally
generated stress tests and those
developed externally by such bodies as the
Bank of England (BoE) and the FRB in the
US and, following such analysis, may
recommend adjustments to the Group’s
overall risk profile.
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Directors’ report: Board Risk Committee report (continued)
Treasury and Capital risks have been
actively monitored by the Committee,
including, in particular, the appetite for risk
going into this higher-rate environment
and the adequacy of liquidity levels to
mitigate risks associated with a potential
UK sovereign downgrade. The Committee
reviewed and approved the Group’s
Internal Capital Adequacy Assessment
Process (ICAAP) and Internal Liquidity
Adequacy Assessment Process (ILAAP)
during the course of 2022, concluding that
the Group was appropriately capitalised
and had adequate liquidity resources,
including allowing for the impact of the
Over-issuance of Securities.
Conduct risk
The risk of poor outcomes or harm to
customers, clients and markets arising
from the delivery of Barclays’ products and
services continued to be an area of
ongoing focus for the Committee. The
Committee considered the heightened
inherent risk associated with the rapidly
changing Russian sanctions regime and
the impact on customers and clients of
challenging market conditions.
The introduction by the FCA of the new
Consumer Duty in July 2023, aimed at
setting higher and clearer standards of
consumer protection across financial
services and requiring firms to put
customers’ needs first, will increase the
regulatory focus on conduct issues and
customer outcomes. Current cost of living
pressures also re-enforce the need to
remain focused on ensuring Barclays
delivers good customer outcomes. The
Committee received briefings on the
Group’s plans for implementation of the
Consumer Duty and will continue to
receive updates as this work progresses
Oversight of the management of financial
crime risk was also a core focus of the
Committee, reflecting the increase in the
risks of money laundering, sanctions
circumvention and organised crime taking
advantage of economic pressure on
companies and individuals.
In 2022, the BoE returned to its annual
cyclical scenario (ACS) stress testing
(paused for two years during the
pandemic), which assesses the UK banking
system and its capital resilience to a severe
but plausible shock. The Committee
reviewed and approved the results of the
ACS 2022, and approved its use, subject to
certain adjustments, for the Group’s
internal stress test (IST).
The Committee received a briefing on the
results of the IST and was satisfied that the
Group would meet internal and regulatory
requirements for capital and liquidity.
Financial risk
The Committee continued to monitor
closely the rapidly changing
macroeconomic environment, including
the broad range of impacts stemming
from the war in Ukraine, inflationary
pressures and rising interest rates. The
Committee discussed updates on the
multi-faceted response required to the
Russian invasion of Ukraine, including the
Group’s response to rapidly imposed
global sanctions and the management of
the Group’s financial exposures to Russia-
specific market, credit and liquidity risks.
The Committee also oversaw action taken
by management to assess and mitigate
the financial risks associated with the
Over-issuance of Securities.
The Committee considered assessments
of the potential impacts of heightened
inflation and the evolving interest rate
environment on consumer spending and
affordability, with a view to ensuring the
consumer and business banking portfolios
were appropriately positioned for the
emerging environment and to identify
areas of stress where customers and
clients might be facing financial pressures
and the actions taken to support them.
The Committee also continued to monitor
the risks associated with the collection and
recovery of loans provided under the
government loan schemes during the
pandemic. Throughout the year, the
Committee received regular updates on
Credit and Market risk within the Corporate
and Investment Bank (CIB), with particular
consideration given to the structured
lending and finance and leveraged finance
portfolios, including management’s
actions to manage the size of these
portfolios in light of the deterioration in
market conditions.
Operational risk
Operational risk remained heightened in
2022, driven by an increase in risks
associated with geopolitical instability and
uncertain economic conditions, as well as
changes to working practices following the
COVID-19 pandemic. Against this
backdrop, the Committee discussed
updates on a multi-year effort to increase
Barclays’ Operational Risk capabilities, and
on management actions to enhance the
security and resilience of the Group,
including the risks associated with third
party reliance, hybrid working and
ransomware cyber-attack. The
Committee oversaw the Group’s
participation in the PRA’s cyber stress test
and will continue to oversee related
management actions and preparations for
US legislative changes in the cyber sphere
in 2023.
The Committee also considered
management of risks associated with new
activities, including the onboarding of a
significant new partnership business in the
US Consumer Bank, the Barclays UK digital
transformation programme and the
announced acquisition of Kensington
Mortgage Company; the Committee will
continue to oversee execution risk relating
to these as they progress. In addition, the
Committee continues to oversee
management’s review of the New and
Amended Product Approval (NAPA)
process, which is designed to ensure that
any new activity and change
implementation is appropriately controlled
and supported.
Climate risk
Acknowledging the importance of this
global issue, at the start of 2022, Climate
risk became a Principal Risk within our
ERMF and the Committee has overseen
the continued development and
embedment of Climate risk
methodologies and capabilities. The
Committee approved the Group’s Round 2
submission to the BoE's industry-wide
Climate Biennial Exploratory Scenario
(CBES) and received updates on the
regulatory feedback received and follow-
up actions to be taken by management,
including that Climate risk is adequately
considered as part of business planning
activities across the Group. In particular,
the Committee has discussed with senior
management of both Barclays
International and Barclays UK their
respective climate strategies and plans for
the embedment and delivery of those
strategies within their businesses, in line
with Barclays' ambition to become a net
zero bank by 2050.
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Directors’ report: Board Risk Committee report (continued)
Board Risk Committee was also
considered effective, confirming that the
Committee continues to exercise
appropriate oversight of issues relevant to
the Committee’s remit relating to
BBUKPLC.
Changes to Committee
composition
We welcomed Julia Wilson as a member of
the Committee with effect from 1
September 2022. The Committee has
benefited from Julia’s expertise and the
insights she brings, particularly with her
cross-Committee membership as a
member (and, subject to regulatory
approval, as Chair from 1 April 2023) of the
Board Audit Committee.
We also welcome Marc Moses who
recently joined the Committee on taking
up his appointment as a Non-Executive
Director of the Board on 23 January 2023.
You can find details of Julia's and Marc's
skills and experience in their biographies on
page 146.
Looking ahead
As we move into 2023, geopolitical risk
remains heightened and macroeconomic
conditions continue to be uncertain. With
this in mind, the Committee will continue
to work with management to position the
Group prudently in response to the
challenging risk environment, remaining
watchful and ready to respond to any new
areas of emerging risk.
Robert Berry
Chair, Board Risk Committee
14 February 2023
The Committee will continue to oversee
the evolution and delivery of each
business’ climate strategy, including
development of quantitative risk appetites
across a range of metrics.
Model risk
Models are a core foundation upon which
the majority of the Group’s internal
assessment processes run and, as such,
the Committee closely monitors the
development of the Group’s approach to
models and its regulators’ expectations in
this regard. The Committee continued to
oversee Model risk management, including
the ongoing validation of the Group’s
models and challenging the reliability of
existing models in the changing economic
climate. In 2022, a Model Strategy and
Oversight function was established to
steer the approach to model development
throughout the Group.
Committee effectiveness
The 2022 Committee effectiveness review
was facilitated internally in accordance with
the Code. This internal review involved
completion of a tailored questionnaire by
Committee members and standing
attendees, in line with the approach
adopted for all Board Committees in 2022.
The review is an important part of the way
Barclays monitors and improves
Committee performance and
effectiveness, maximising strengths and
highlighting areas for further development.
The results of the review confirm the
Committee is operating effectively. It is
considered well constituted, providing an
effective and appropriate level of challenge
and oversight of the areas within its remit.
The review acknowledged the Chair’s
inclusive approach, with feedback noting
strong levels of engagement across the
Committee and members’ diverse and
valuable range of expertise.
The Committee has a broad remit and is
considered to allocate time appropriately
to cover matters effectively in meetings,
with sufficient time for discussion and
challenge. The review recognised that it
might be beneficial to give further
consideration to the cadence of meetings
during the year.
The review concluded that the
Committee’s interaction with the Board,
Board Committees and senior
management is considered effective.
Feedback indicated that concurrent
meetings of the BPLC and BBPLC Board
Risk Committee continue to be effective,
with coverage of BBPLC matters within
concurrent meetings considered
adequate. Interaction with BBUKPLC
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Directors’ report: Board Risk Committee report (continued)
Committee roles and
responsibilities
The Committee is responsible for
reviewing, on behalf of the Board,
management’s recommendations on
the Principal Risks as set out in the
ERMF (with the exception of
Reputation risk, which is a matter
reserved to the Board), and in
particular:
• reviewing, on behalf of the Board,
the management of those Principal
Risks in the ERMF
• considering and recommending to
the Board the Group’s risk appetite
and tolerances for those Principal
Risks
• reviewing, on behalf of the Board,
the Group’s risk profile for those
Principal Risks
• commissioning, receiving and
considering reports on key risk
issues
• safeguarding the independence,
and overseeing the performance,
of Barclays’ Risk and Compliance
functions.
The Committee’s terms of reference
are available at home.barclays/who-
we-are/our-governance/board-
committees/.
The Committee monitored the delivery of,
and approved updates to, the Compliance
function's Annual Plan for 2022 and
approved the Annual Plan for 2023. During
2022, a benchmarking review of the design
effectiveness of the Compliance function
was undertaken by an independent third
party. The Committee received an update
on the findings of that review, and was
pleased to note the conclusion that the
Compliance function was considered to
have a well-structured design relative to
firms of a similar size, complexity, business
model and geographical position. The
Committee will oversee management’s
plans to implement and embed the
enhancement opportunities identified by
that review.
Committee meetings
During 2022, the Committee met 12 times
(including three ad hoc meetings) and the
attendance by members at these
meetings is shown on page 178. As well as
its members, Committee meetings were
attended by representatives from
management, including the Group Chief
Executive, Group Chief Risk Officer, Group
Finance Director, Group Chief Internal
Auditor, Group Treasurer, Group Chief
Compliance Officer and Group General
Counsel, as well as representatives from
the businesses and additional members
from the Risk function. The Committee
held a number of sessions with the Group
Chief Risk Officer and the Group Chief
Compliance Officer, which were not
attended by other members of
management. The lead audit engagement
partner of KPMG also attended
Committee meetings.
Committee oversight
of the Risk function
The Committee is responsible for ensuring
the independence and effectiveness of the
Risk function, whose primary role is the
oversight and challenge of risk taking as
the second line of defence. It
accomplishes this by establishing the risk
policies, limits, rules and constraints under
which activities of the first line of defence
shall be performed, consistent with the
Group’s risk appetite and through
monitoring the adherence of the first line
of defence against these risk policies, limits
and constraints.
The Committee reviewed the Risk
function’s own assessment of its risk
capability and effectiveness in late 2022
which showed that the function continues
to meet expectations in providing effective
risk management and independent
oversight. The report identified areas for
enhancement, including continuing to
enhance its Operational risk and Model risk
capabilities, which the Committee will
monitor into 2023. The Committee will
oversee the work of the Risk function to
upgrade and enhance its infrastructure,
which will be pivotal to meeting regulatory
expectations for the Market risk
framework.
During 2022, the Committee oversaw a
change to the senior management of the
Risk function with the appointment of a
new Chief Risk Officer for BBPLC who took
up the role in early 2023.
Committee oversight of the
Compliance function
The Compliance function plays a key role in
strengthening the culture of Barclays by
providing oversight of the management of
Conduct risk. Compliance oversees that
Conduct risks are effectively identified,
managed, monitored and escalated, and
has a key role in helping Barclays achieve
the right conduct outcomes and evolve a
conduct-focused culture. The Committee
maintains oversight of the Compliance
function, and supports the independence
of the function from the operational
functions to ensure that Compliance has
sufficient authority, stature, resources and
access to the management body.
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Directors’ report: Board Risk Committee report (continued)
Primary activities
The Committee discharged its responsibilities in 2022 through reviewing and monitoring Group exposures in the context of the current
and emerging risks facing the Group. The Committee seeks to promote a strong culture of disciplined risk management.
Areas of focus
Matters addressed
Role of Committee
Conclusion/action taken
Risk appetite and
stress testing
i.e. the level of risk
the Group
chooses to take in
pursuit of its
business
objectives,
including testing
whether the
Group’s financial
position and risk
profile provide
sufficient
resilience to
withstand the
impact of severe
but plausible
economic
scenarios.
Treasury and
capital risk
i.e. having
sufficient capital
and financial
resources to meet
the Group’s
regulatory
requirements and
its obligations as
they fall due, to
maintain its credit
rating, to support
growth and
strategic options.
The risk context to the
MTP, the financial
parameters and
constraints and mandate
and scale limits for
specific business risk
exposures; the Group’s
internal stress testing
exercises, including
scenario selection and
financial constraints,
stress testing themes and
the results and
implications of stress
tests, including those run
by the BoE.
• To advise the Board on the
appropriate risk appetite and
tolerance for the Principal Risks,
including the proposed overall
Group risk appetite and limits.
• To discuss and agree stress loss
and mandate and scale limits for
Credit risk, Market risk, Operational
risk and Treasury and Capital risk.
• To consider and approve internal
stress test themes, and consider
the financial constraints and
scenarios, for stress testing risk
appetite for the MTP.
• To evaluate the results of the BoE’s
ACS stress test and the BoE’s
Biennial Exploratory Scenario.
• To consider the feedback from the
FRB on Barclays US LLC’s
Comprehensive Capital Analysis
and Review (CCAR) following the
submission of the CCAR stress test
results.
The Committee recommended the proposed risk
appetite to the Board for approval in early 2022. The
Committee also discussed and approved the mandate
and scale as well as the stress loss limits for the Group
during 2022. Subsequent changes were reviewed and
approved during the course of the year.
During 2022, stress test results were considered and
approved by the Committee including: the 2021 reverse
IST results and risk appetite for the MTP; the 2022 ACS
stress test results; and the 2022 IST results.
The Committee received updates on regulatory stress
testing submissions to regulators, including an
assessment of the models used and overlays applied.
The updates covered both the quantitative and
qualitative results of the submissions.
The Committee reviewed feedback received from the
BoE, including the BoE’s CBES 2021 Round 2 Results
prior to submission to the PRA.
The trajectory to
achieving required
regulatory and internal
targets and capital and
leverage ratios.
• To review, on a regular basis, capital
performance against plan, tracking
the capital trajectory, any
challenges and opportunities and
regulatory policy developments.
The Committee reviewed capital and liquidity
performance and the forecast capital and funding
trajectory, including the actions identified by
management to manage the Group's capital position,
taking into account relevant macroeconomic factors.
• To assess, on a regular basis,
liquidity performance against both
internal and regulatory
requirements.
• To monitor capital and funding
requirements.
• To consider the ICAAP and ILAAP
scenario review.
The Committee received a preliminary assessment of
the ICAAP and the ILAAP in January 2022. Q&A sessions
regarding the ICAAP and the ILAAP were held between
management and Committee members. The
Committee subsequently discussed and approved the
Group's 2022 ICAAP and the Group's 2022 ILAAP prior
to their submission to the PRA.
Regulatory feedback on the ICAAP and ILAAP was noted
throughout the year. As a result of the Over-issuance of
Securities, the Committee considered the trigger for
refresh of each of the ICAAP and ILAAP. The Committee
then approved the results of the Group ICAAP refresh
for submission to the PRA.
The Committee recommended to the Board for
approval the Group Recovery Plan, which forms a part of
the Group’s capital and liquidity risk management
framework.
The Committee also discussed feedback received from
the BoE and the PRA on the Group Resolvability Self-
Assessment and approved, on behalf of the Board, the
public disclosure required to be made in respect of the
Group's resolvability arrangements.
The Committee also considered the structural hedge
programme and reviewed and discussed management’s
hedging strategy proposals.
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Directors’ report: Board Risk Committee report (continued)
Areas of focus
Matters addressed
Role of Committee
Conclusion/action taken
The potential impact on
the Group’s risk profile of
geopolitical and
macroeconomic
developments.
Risk profile
i.e. the impact on
the Group’s risk
profile of
geopolitical and
macroeconomic
developments and
conditions
Climate risk
i.e. the impact on
financial and
operational risks
arising from
climate change
The impact on financial
and operational risks
arising from climate
change through physical
risks and risks associated
with transitioning to a
lower-carbon economy,
and connected risks
arising as a result of
second order impacts of
these two drivers on
portfolios.
Credit risk and
Market risk
i.e. the potential
for financial loss if
customers, clients
or counterparties
fail to fully honour
their obligations;
or due to market
movements
Conditions in the UK
housing market; levels of
UK consumer
indebtedness;
unemployment levels in
the US and UK; the
performance of the UK
and US cards businesses,
including levels of
impairment; and credit
and market risk exposures
within the CIB.
▪ To consider trends in the
economies of our key markets, in
particular the UK and US.
• To assess the geopolitical tensions
across the globe.
• To review exposures to emerging
markets.
• To establish and examine key risk
themes in order to monitor the
evolving risk environment in which
Barclays operates, the response of
management, and the changing risk
profile of the Group.
▪ To consider and assess the impact
of Climate risk on the Group’s
activities.
▪ To assess conditions in the UK
property market and monitor signs
of stress.
• To monitor management’s tracking
and responding to persistent rising
levels of consumer indebtedness,
particularly unsecured credit in both
the UK and US.
• To review leveraged finance
portfolios in order to assess
maintenance within risk appetite
and manageable limits.
• To review business development
activities in the CIB.
The Committee considered macroeconomic trends,
including economic slowdown in most major economies,
inflationary pressures, energy market disruption, rising
interest rates, affordability pressures for consumers,
and increased risk of disorderly market corrections.
The Committee monitored the Group's exposures to
geopolitical risks, including the Russian invasion of
Ukraine, continued US/China political tensions and UK
political uncertainty.
The Committee also considered the risk management
implications of initiatives in emerging markets.
The Committee approved changes to key risk themes,
including the global pandemic being a declining trend and
a new overview on the subject of Challenges to the
Global Order.
The Committee received regular updates on Climate
risk including areas of elevated Climate risk and progress
against sector targets in the form of a Climate Risk
Dashboard.
The Committee reviewed the conclusions of Round 2 of
the CBES and approved the results and conclusions for
submission to the PRA.
The Committee received updates from businesses on
their climate strategies, with a focus on ensuring Climate
risk is appropriately considered in business planning
activities.
In the prevailing macroeconomic conditions, the
Committee reviewed the UK housing market and
affordability criteria and the risk of default on certain
loan portfolios.
The Committee discussed reports from management
on consumer indebtedness, where stress was expected
both in the UK and US, with trends including US
consumer credit weakness.
The Committee received regular updates on Credit and
Market risk within the CIB, with a particular focus on the
structured lending and finance and leveraged finance
portfolios.
The Committee considered updates on the Over-
issuance of Securities, including the hedging
arrangements designed to manage the risks of the
rescission offer.
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Directors’ report: Board Risk Committee report (continued)
Areas of focus
Matters addressed
Role of Committee
Conclusion/action taken
The Group’s operational
risk capital requirements
and any material changes
to the Group’s operational
risk profile and
performance of specific
operational risks against
agreed risk appetite.
Operational risk
and operational
resilience
i.e. the risk of loss
arising from
inadequate or
failed processes
and systems,
human factors or
due to external
events
• To track operational risk key
indicators.
• To consider specific areas of
operational risks, including fraud,
conduct risk, cyber risk, execution
risk, technology and data, including
the controls that had been put in
place for managing and avoiding
such risks.
• To review Barclays’ approach to
scenario analyses as a risk
management tool.
• To consider the operational
resilience tolerance statement and
review status against it.
Model risk
i.e. the potential
for adverse
consequences
from decisions
based on incorrect
or misused model
outputs and
reports
Conduct risk
i.e. the risk of poor
outcomes to
customers, clients
and markets,
arising from the
delivery of the
Group's products
and services
Model risk governance.
▪ To evaluate the appropriateness of
the Model risk management
framework and monitor progress on
the implementation of an enhanced
modelling framework, including
receiving updates on findings in
relation to specific modelling
processes.
• To receive updates from
management on Conduct risk and
consider performance against key
Conduct risk indicators and the
status of initiatives in place to
address those risks to further
strengthen the culture of the
business.
• To review the effectiveness of the
Conduct risk framework.
• To review the Compliance
function’s Annual Compliance Plan.
Conduct robust reviews
of any current and
emerging risks arising
from the delivery of
Barclays' products and
services.
The Committee approved and recommended to the
Board the 2022 Operational Risk Appetite Statement.
The Committee received regular reporting on key
operational risk indicators and was briefed by
management on a number of operational risks topics,
including those relating to third party risk management,
hybrid working, fraud, erroneous payments,
cybersecurity and the use of cloud platforms and the risk
associated with new business activities.
The Committee continued to monitor the review of the
processes for new and amended product approvals
within the Group.
The Committee also considered operational resilience,
including approving a new operational resilience
tolerance statement.
The Committee received updates on cyber resilience
and reviewed the results of, and recommended the
outcome of, the PRA cyber stress test to the Board for
its approval.
The Committee also considered the analysis of a severe
and prolonged ransomware cyber-attack scenario and,
consequently, the importance of the ongoing
Operational resilience work.
The Committee reviewed and discussed regular updates
on Model risk including the ongoing validation of the
Group’s models and whether model assumptions
needed to be updated given the rapidly changing
economic climate.
Through quarterly updates, the Committee monitored
improvements to the Model risk management
framework, including the introduction of a Model
Strategy and Oversight function to steer the approach
to model development across the Group.
During 2022, the Committee was provided with regular
updates on Conduct risk, and assessments of potential
risks to the Group following market events. The
Committee also received updates on lessons learned
reviews undertaken in response to industry
developments and events, and continued to monitor
ongoing remediation activities.
The Committee considered the heightened risks
associated with the rapidly changing Russian sanctions
regime and the impact to clients and customers of
challenging market conditions. The Committee also
received regular updates on the management of the
Group’s financial crime risk.
The Committee received briefings on the Group’s
implementation plans for the FCA’s new Consumer Duty
and the conduct and risk culture within the Group.
During the year, the Committee reviewed the
Compliance function's effectiveness and performance
of activities against its Compliance Plan for 2022, and
towards year end approved the Annual Compliance Plan
for 2023.
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Directors’ report: Board Risk Committee report (continued)
Areas of focus
Legal risk
Risk framework
and governance
Matters addressed
Role of Committee
Conclusion/action taken
Conduct robust reviews
of any current and
emerging legal risks faced
by the Group.
The frameworks, policies
and tools in place to
support effective risk
management and
oversight.
• To monitor the Group's legal risk
profile, including considering potential
material emerging legal risks.
The Committee received regular updates on the Legal
risk faced by the Group, including horizon scanning for
key areas of emerging legal risk and Barclays' ability to
manage these and other risk trends.
▪ To track the progress of significant
risk management projects, achieving
compliance with the Basel Committee
on Banking Supervision (BCBS239)
risk data aggregation and risk
reporting principles.
The Committee discussed the annual refresh of the
Principal Risk Frameworks as well as recommending the
updated ERMF to the Board for approval. Updates
included: (i) the addition of Climate risk as a Principal
Risk; and (ii) the removal of Brexit as a standalone item in
the risk factors.
• To assess risk management matters
raised by Barclays’ regulators and the
actions being taken by management
to respond.
• To review the design of the ERMF.
Remuneration
The scope of any risk
adjustments to be taken
into account by the Board
Remuneration
Committee when making
remuneration decisions
for 2022.
• To debate the Risk and Compliance
function’s view of performance,
making a recommendation to the
Board Remuneration Committee on
the financial and operational risk
factors to be taken into account in
remuneration decisions for 2022.
The Committee continued to oversee management's
progress towards achieving full compliance with all
aspects of BCBS239, receiving regular reports on levels
of compliance and expected milestones.
The Committee reviewed reports from management on
guidance, letters and reviews received from regulators.
The Committee examined management's responses to
the matters raised and monitored remediation
programmes.
The Committee considered reports of the Group Chief
Risk Officer and the Group Chief Compliance Officer and
considered the 2022 ex-ante risk adjustment
methodology.
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Directors’ report: How we comply
Reporting against the Code's
principles and provisions
As Barclays PLC is listed on the London Stock Exchange, the principles and provisions of the Code apply, a copy of which can be found
at frc.org.uk.
For the year ended 31 December 2022, and as at the date of this report, we are pleased to confirm that Barclays PLC has complied in
full with the requirements of the Code. This section and our Board Governance Report sets out how we comply with the Code.
By virtue of the information included in the Annual Report, we comply with the corporate governance statement requirements of the
FCA’s Disclosure and Transparency Rules (DTRs). The information required to be disclosed pursuant to DTR 7.2.6 is located on pages
190 to 196. Information in relation to the Board Diversity Policy, as required to be disclosed pursuant to DTR 7.2.8A, can be found on
pages 161 to 162.
Barclays is permitted by NYSE rules to follow UK corporate governance practices instead of those applied in the US. Any significant
variations must be explained in Barclays' Form 20-F filing, found at the Securities and Exchange Commission’s EDGAR database or on
our website, home.barclays.
Board Leadership
and Company Purpose
Division of
Responsibility
Remuneration
Our Board governance is designed to
deliver an effective and entrepreneurial
Board, which discharges its role effectively
and efficiently. Details can be found on
pages 149 to 153, including our Group-
wide governance framework and the
Board's responsibilities. Key Board
Activities for 2022 are set out on pages
154 to 156.
The Board is fully supportive of The
Barclays Way, which sets out our Purpose,
Values and Mindset, and is our Code of
Conduct, providing a path for achieving a
dynamic and positive culture in the Group.
Refer to page 256 for further detail. Our
Group Whistleblowing Standard enables
colleagues to raise any matters of concern
anonymously and is embedded into our
business. Further information can be found
on page 257.
Throughout 2022, we engaged with our
stakeholders through a variety of means.
Further detail about how we engage with
our stakeholders is set out on pages 21 to
22. You can read more about how the
Board engages with stakeholders in our
Section 172 statement in the Strategic
Report on page 16.
The majority of the Board comprises
Independent Non-Executive Directors.
The Chair and Company Secretary work in
collaboration to ensure an effective and
efficient Board, as further described in Our
Governance Framework on page 153.
The roles of Non-Executive and Executive
Directors on the Board are defined within
the Barclays Charter of Expectations, along
with the behaviours and competencies for
each role, as outlined on page 152.
Directors are expected to commit
sufficient time to ensure they can
discharge their obligations to Barclays
effectively, as detailed in our Board
Nominations Committee report on page
164.
The Board is responsible for setting the
strategy for the Group. The day-to-day
management of the Group is delegated
from the Board to the Group Chief
Executive who is supported by his ExCo,
the composition of which is outlined on
page 148.
The Remuneration report on pages 197 to
245 outlines the purpose and activities of
the Board Remuneration Committee, the
proposed remuneration policies for
Executive and Non-Executive Directors,
and for the wider workforce, as well as the
Directors’ remuneration outcomes for
2022.
The remuneration policies and procedures
support the strategy and enable us to
reward sustainable performance, which is a
key element of our Remuneration
Philosophy, in line with our Values, Mindset
and risk expectations.
All Executive Director and senior
management remuneration policies are
developed in accordance with the Group's
formal and transparent procedures
(ensuring that no Director is involved in
deciding their own remuneration outcome)
and are, where possible, aligned to wider
workforce policies.
Board Remuneration Committee
members exercise independent
judgement and discretion when
determining remuneration outcomes,
considering the company and individual
performance, wider workforce and other
relevant stakeholder considerations.
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Directors’ report: How we comply (continued)
Composition, Succession
and Evaluation
Audit, Risk and
Internal Control
All Board and senior management
appointments are viewed through a diversity
lens and are based on merit and objective
criteria, which focus on the skills and
experience required for the Board's
effectiveness and the delivery of the Group's
strategy. Board appointments are made
following a rigorous and transparent process
facilitated by the Board Nominations
Committee, with the aid of external search
consultancy firms. A revised Board Diversity
Policy was adopted on 15 December 2022.
Refer to the Board Nominations Committee
Report on pages 157 to 168 for further
detail.
Biographies for each member of the Board,
including details of their relevant skills,
experience and contribution to the Board are
provided on pages 143 to 146.
Each year, we carry out an effectiveness
review to evaluate the performance of the
Board, Board Committees and individual
Directors. The review was conducted
internally in 2022, as detailed in the Board
Nominations Committee report on pages
166 to 168.
The Board, together with the Board Audit
Committee, is responsible for ensuring the
integrity of this Annual Report and that the
financial statements as a whole present a
fair, balanced and understandable
assessment of our performance, position
and prospects.
The Board, together with the Board Audit
Committee, is responsible for ensuring the
independence and effectiveness of the
internal audit function and external auditors.
You can read more about the Board Audit
Committee and its work on pages 169 to
177.
The Directors are responsible for ensuring
that management maintains an effective
system of risk management and internal
control and for assessing its effectiveness.
Such a system is designed to identify,
evaluate and manage, rather than eliminate,
the risk of failure to achieve business
objectives and can only provide reasonable,
and not absolute, assurance against material
misstatement or loss.
Processes are in place for identifying,
evaluating and managing the Principal Risks
facing the Group. A key component of The
Barclays Guide is the ERMF. The purpose of
the ERMF is to identify and set minimum
requirements of the main risks to the
strategic objectives of the Group.
The Group is committed to operating within
a strong system of internal control. The
Barclays Guide contains the overarching
framework setting out the approach of the
Group to internal governance.
Key controls are assessed on a regular basis
for both design and operating effectiveness.
Issues arising out of these assessments,
where appropriate, are reported to the
Board Audit Committee. The Board Audit
Committee oversees the control
environment (and remediation of related
issues). The Board Audit Committee also
reviews annually the risk management and
internal control system. It has concluded
that, save for the material weakness relating
to the Over-issuance of Securities,
throughout the year ended 31 December
2022 and to date, the Group has operated an
effective system of internal control that
provides reasonable assurance of financial
and operational controls and compliance
with laws and regulations.
Whilst the control environment was
determined to be effective, the Over-
issuance of Securities underlined to the
Board the need to continue to focus on
embedding Barclays' Values and Mindset at
all levels of the organisation to achieve
operational and controls excellence. The
Board has therefore supported the creation
of a Group-wide programme, established by
the Group Chief Executive. This programme
will seek to identify issues and lessons
learned across the Group's remediation
initiatives to help ensure that Barclays is
consistently excellent, in customer and client
service, in operational capability and in
financial performance, with all activities
underpinned by a strong risk management
culture.
For further information in relation to controls
over financial reporting, including the
remediation of material weakness relating to
the Over-issuance of Securities, please see
pages 194 to 195.
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Directors' report: Over-issuance of Securities – Shareholder Q&A
To help shareholders understand the circumstances relating to the Over-
issuance of Securities and remediation activity taken by Barclays to resolve
this matter, we have set out below a series of questions and answers.
Shareholders should refer to the underlying disclosures, including the
Group’s results and stock exchange announcements, for more information
about the matters discussed below.
What was the legal significance of
the Over-issuance of Securities?
The securities issued in excess of the
registered amounts were considered to be
‘unregistered securities’ for the purposes
of US securities law and certain offers and
sales of these securities were not made in
compliance with the US Securities Act of
1933, which requires that offers and sales
of securities be registered unless there is
an exemption from registration. This gave
rise to rights of rescission for certain
purchasers of relevant securities under US
securities laws, whereby such purchasers
had a right to recover either, upon the
tender of such security, the consideration
paid for such security (together with
interest but less the amount of any income
received), or damages if the purchaser had
sold the security at a loss. As a result,
BBPLC elected to conduct a rescission
offer, as approved by the Board, to eligible
purchasers of relevant securities. The
rescission offer was launched on 1 August
2022 and settled on 15 September 2022.
Why did the Over-issuance of
Securities happen and what were
the findings of Barclays’ review?
Barclays commissioned a review led by
external counsel of the facts and
circumstances relating to the Over-
issuance of Securities and, among other
matters, the control environment related
to such issuances (the Review). The
Review concluded that the Over-issuance
of Securities occurred because Barclays
did not put in place a mechanism to track
issuances after BBPLC became subject to
a limit on such issuances, as a result of
losing WKSI status. Among the principal
causes of the Over-issuance of Securities
were, first, the failure to identify and
escalate to senior executives the
consequences of the loss of WKSI status
and, secondly, a decentralised ownership
structure for securities issuances.
Where did the Over-issuance of
Securities occur?
The Group operates a structured products
business in BBPLC, through which it issues
structured notes and exchange traded
notes to customers in the US and
elsewhere. In order to issue securities of
this nature in the US, BBPLC maintains a
shelf registration statement with the US
SEC.
What securities were over-
issued?
In March 2022, management became
aware that BBPLC had issued securities
materially in excess of the amount
registered under BBPLC's shelf
registration statement on Form F-3, as
declared effective by the SEC in August
2019 (2019 F-3). The amount registered
should have operated as a limit on the
amount of BBPLC’s issuances.
Subsequently, management also became
aware of issuances in excess of the
amount registered under BBPLC's prior
shelf registration statement (the
Predecessor Shelf). Across both shelf
registration statements, BBPLC issued a
cumulative total of approximately $17.7
billion in securities in excess of the
amounts it had registered with the SEC.
Why did BBPLC’s US Shelf have
limited capacity?
In May 2017, Barclays Capital Inc. entered
into a settlement with the SEC in
connection with a matter arising out of its
former Wealth and Investment
Management business. As a result, at the
time the 2019 F-3 was filed and the
Predecessor Shelf was amended, BBPLC
had become an ’ineligible issuer’ thereby
ceasing to be a 'well known seasoned
issuer' (or WKSI). This meant that BBPLC
was not able to take advantage of SEC
rules that allow WKSIs to file shelf
registration statements to register
unspecified amounts of securities (and
then issue securities without limit), and was
instead required to pre-register a fixed
amount of securities under its shelf
registration statements and only issue
securities up to that amount.
The Review further concluded that the
occurrence of the Over-issuance of
Securities was not the result of a general
lack of attention to controls by Barclays,
and that Barclays’ management has
consistently emphasised the importance
of maintaining effective controls.
What was the Board’s response?
The Board has worked to address the root
cause and impacts of the Over-issuance of
Securities, including through the Review,
and deeply regrets its occurrence. The
Over-issuance of Securities also
underlined to the Board the need to
continue to focus on embedding Barclays'
Values and Mindset at all levels of the
organisation to achieve operational and
controls excellence. Further, the Board has
supported the creation of a Group-wide
programme, established by the Group
Chief Executive. This programme will seek
to identify issues and lessons learned
across the Group's remediation initiatives
to help ensure that Barclays is consistently
excellent, in customer and client service, in
operational capability and in financial
performance, with all activities
underpinned by a strong risk management
culture.
What actions has the Board taken
in response to the Over-issuance
of Securities?
The Board spent significant time
throughout 2022 in both scheduled and ad
hoc meetings considering the impacts of
the Over-issuance of Securities and the
Group’s response to it, including through
the work of its Risk and Audit Committees.
This work has included the following:
• the assessment of the financial impacts
of the Over-issuance of Securities and
the associated hedging arrangements
undertaken to help manage the risks
associated with the rescission offer and
Barclays’ financial exposure
• the review and approval of disclosures
to the market regarding the Over-
issuance of Securities
• considering the findings of the Review
and, among other matters, the control
environment related to such issuance
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Directors' report: Over-issuance of Securities – Shareholder Q&A
(continued)
• oversight of discussions with the
Group’s key regulators including the
SEC, PRA, FCA and FRC
• engagement with Barclays’ shareholders
to discuss the Over-issuance of
Securities and Barclays’ response to it;
• consideration of the implications of the
Over-issuance of Securities for BPLC’s
financial statements, including the
approval of the restatement of the
financial statements included in the
BPLC 2021 Annual Report on Form 20-F
filed with the SEC, as well as the
amendment of such report
• noting the approval by BBPLC of the
launch of the rescission offer;
• oversight of the settlement with the
SEC in relation to the Over-issuance of
Securities
• oversight of the remediation of the
material weakness in internal control
over financial reporting which led to the
Over-issuance of Securities, as well as
the work required to address the
specific requirements of the SEC set out
in its order of 29 September 2022.
What were the main financial
consequences of the Over-
issuance of Securities?
In addition to a £0.2bn net attributable loss
referable to the year ended 31 December
2021, Barclays has recognised a net
attributable loss of £0.6bn in the year
ended 31 December 2022 in relation to
the Over-issuance of Securities, materially
in line with the anticipated financial impact
disclosed in BPLC’s and BBPLC’s H1 2022
results announcements. These amounts
represent the net attributable loss to
Barclays in connection with the Over-
issuance of Securities, taking into account
the costs of the rescission offer, the
hedging arrangements entered into to
manage the risks associated with the
rescission offer and the $200m (£165m1)
penalty paid following the resolution of the
SEC’s investigation into the Over-issuance
of Securities (see below for further detail).
How has Barclays reflected the
financial consequences of the
Over-issuance of Securities in its
financial statements?
It was concluded that it was not necessary
or appropriate, under UK company law and
financial reporting standards, to revise the
financial statements of BPLC or BBPLC for
the year ended 31 December 2021
included in their respective 2021 UK
Annual Report and Accounts to reflect the
impact of the Over-issuance of Securities.
Instead, each of BPLC and BBPLC has
restated the prior period comparatives in
the Group’s quarterly and half-year results
in 2022, and in their respective 2022 UK
Annual Report and Accounts, to reflect the
impact of the Over-issuance of Securities.
As a US foreign private issuer, each of
BPLC and BBPLC is required to file with the
SEC annual reports on Form 20-F,
including financial statements. In May
2022, BPLC and BBPLC amended their
respective annual reports on Form 20-F
for the year ended 31 December 2021 to
include restated financial statements for
this period reflecting the impact of the
Over-issuance of Securities. Such
amended annual reports on Form 20-F
also disclosed the existence of a material
weakness in internal control over financial
reporting (as defined in the applicable SEC
rules) and management’s conclusions that
BPLC’s and BBPLC’s internal control over
financial reporting and disclosure controls
and procedures were not effective as at 31
December 2021. The material weakness
that had been identified related to a
weakness in controls over the
identification of external regulatory limits
related to securities issuance and
monitoring against these limits.
What remediation activity has
been taken to address the
material weakness identified?
Since the identification of this material
weakness, the Group has strengthened
the internal controls relating to the
tracking of issuance programme limits
through the implementation and
strengthening of a series of controls
across the Group, together with central
governance. Accordingly, as at 31
December 2022, management concluded
that the previously disclosed material
weakness in internal control had been
resolved. Please see pages 194 to 195 for
details on how this material weakness was
remediated.
Has Barclays been the subject of
any regulatory enforcement
action in relation to the Over-
issuance of Securities?
In September 2022, the SEC issued an
order announcing the resolution of its
investigation of BPLC and BBPLC relating
to the Over-issuance of Securities.
Pursuant to the terms of the resolution,
BPLC and BBPLC paid a combined penalty
of $200m (£165m1) , without admitting or
denying the SEC’s findings, and BBPLC
agreed to undertakings requiring the
adoption and implementation of certain
enhancements to controls and
governance with respect to its shelf
registration statements filed with the SEC.
The SEC found that BBPLC’s previously
announced rescission offer satisfied its
requirements for disgorgement and
prejudgment interest.
How has Barclays assessed the
consequences for remuneration
and for individuals?
The Board Remuneration Committee has
adjusted its remuneration decisions to
reflect the Over-issuance of Securities,
and in doing so has taken into
consideration the financial impact,
reputational impacts and how these
events reflect on the Group’s control
environment. More detail can be found in
the Remuneration report on page 201.
How does the Over-issuance of
Securities continue to impact
Barclays?
The Group is engaged with, and
responding to inquiries and requests for
information from, various other regulators
and BBPLC and/or its affiliates is involved
in purported class action litigation in
relation to the Over-issuance of Securities.
The Group may face other potential
private civil claims, class actions or other
enforcement actions in relation to the
Over-issuance of Securities. Please see
Note 26 (Legal, competition and
regulatory matters) to the audited financial
statements for the year ended 31
December 2022 for further information.
Note:
1 Exchange rate USD/GBP 1.22 as at 30 June 2022
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Directors’ report: Other statutory and regulatory information
The Directors present their report together with the audited
accounts for the year ended 31 December 2022.
Other statutory and
regulatory information
Other information that is relevant to the Directors’ report, and which is incorporated by
reference into this report, can be located as follows:
Remuneration policy, including details of the remuneration of each Director and
Directors’ interests in shares
Corporate Governance Statement
Risk review
Page
209, 240 to
241
186 to 187
264
Disclosures required pursuant to Large and Medium-sized Companies and Groups (Accounts and
Reports) Regulations 2008 as updated by Companies (Miscellaneous Reporting) Regulations 2018
can be found on the following pages:
Engagement with employees (Sch. 7, Para 11 and 11A 2008/2018 Regs)
Policy concerning the employment of disabled persons (Sch. 7, para 10 2008 Regs)
Page
31 to 38
33
Engagement with suppliers, customers and others in a business relationship (Sch.
7, Para 11 B 2008/2018 Regs)
16 to 30 and
39 to 44
Financial instruments (Sch. 7, para 6 2008 Regs)
Hedge accounting policy (Sch. 7, para 6 2008 Regs)
Disclosures required pursuant to Listing Rule 9.8.4R can be found on the following pages:
447
447
Page
488
190
Allotment for cash of equity securities
Waiver of dividends
Section 414A of the Companies Act 2006
requires the Directors to present a
Strategic report in the Annual Report and
Financial Statements. This report can be
found on page 1 to 65.
The Company has chosen, in accordance
with section 414C (11) of the Companies
Act 2006, and as noted in this Directors’
report, to include certain matters in its
Strategic report that would otherwise be
disclosed in this Directors’ report:
• an indication of likely future
developments may be found in the
Strategic report
• the particulars of important events
affecting the Company since the
financial year end can be found in the
Strategic report and Note 26 (Legal,
competition and regulatory matters) to
the financial statements.
Profit and dividends
Statutory profit after tax for 2022 was
£5,973m (2021: £7,056m1). The 2022 full
year dividend of 5.0p per ordinary share will
be paid on 31 March 2023 to shareholders
whose names are on the Register of
Members at the close of business on 24
February 2023. With the 2022 half year
dividend totalling 2.25p per ordinary share,
paid in September 2022, the total dividend
for 2022 is 7.25p (2021: 6.0p) per ordinary
share. The half year and full year dividends
for 2022 amounted to £1,028m (2021:
£512m). BPLC also completed share buy-
back programmes during 2022, further
details of which can be found on page 194.
Shareholders may have their dividends
reinvested in Barclays by joining the
Barclays DRIP. Further details regarding
the DRIP can be found at home.barclays/
dividends and shareview.co.uk/info/drip.
Note
1 2021 financial and capital metrics have been restated to
reflect the impact of the Over-issuance of Securities. See
Impact of the Over-issuance of Securities on page 356 and
Restatement of financial statements (Note 1a) on page 428
for further details
The nominee company of certain
Employee Benefit Trusts (EBTs) holding
shares in Barclays in connection with the
operation of our employee share plans has
lodged evergreen dividend waivers on
shares held by it that have not been
allocated to employees. The total amount
of dividends waived during the year ended
31 December 2022 was £6.28m (2021:
£1.02m).
Board of Directors
The names of the current Directors of
BPLC, along with their biographical details,
are set out on pages 143 to 146 and are
incorporated into this Directors’ report by
reference. Changes to Directors during
the year and up to the date of this report
are set out below.
Name
Robert Berry Non-
Role
Tushar
Morzaria
Anna Cross
Executive
Director
Executive
Director
Executive
Director
Marc Moses Non-
Executive
Director
Effective
date
Appointed
8 February
2022
Resigned
22 April
2022
Appointed
23 April
2022
Appointed
23 January
2023
Appointment and retirement of
Directors
The appointment and retirement of
Directors is governed by our Articles, the
Code, the Companies Act 2006 and
related legislation.
The Articles may be amended only by a
special resolution of the shareholders. The
Board has the power to appoint additional
Directors or to fill a casual vacancy among
the Directors and any Director so
appointed holds office only until the next
AGM and may offer themselves for re-
election. The Code recommends that all
directors of FTSE 350 companies should
be subject to annual re-election. All
Directors who will be continuing in office
intend to offer themselves for election or
re-election at the 2023 AGM save for Mike
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Directors’ report: Other statutory and regulatory information (continued)
Ashley who will step down at the end of the
AGM and who will not stand for re-election.
Directors’ indemnities
‘Qualifying third party indemnity’ provisions
(as defined by Section 234 of the
Companies Act 2006) were in force during
the course of the financial year ended
31 December 2022 for the benefit of the
then Directors of the Company and the
then Directors of certain of the Company's
subsidiaries and, at the date of this report,
are in force for the benefit of the Directors
of the Company and the Directors of
certain of the Company's subsidiaries in
relation to certain losses and liabilities
which they may incur (or have incurred) in
connection with their duties, powers or
office. The Group also maintains Directors’
and Officers’ Liability Insurance which gives
appropriate cover for legal action brought
against its Directors.
Qualifying pension scheme indemnity
provisions (as defined by Section 235 of
the Companies Act 2006) were in force
during the course of the financial year
ended 31 December 2022 for the benefit
of the then directors, and at the date of
this report are in force for the benefit of
directors of Barclays Pension Funds
Trustees Limited as trustee of the Barclays
Bank UK Retirement Fund, and Barclays
Executive Schemes Trustees Limited as
Trustee of Barclays Capital International
Pension Scheme (No.1) and Barclays PLC
Funded Unapproved Retirement Benefits
Scheme. The directors of the trustees are
indemnified against liability incurred in
connection with the trustees’ activities in
relation to the Barclays Bank UK
Retirement Fund, Barclays Capital
International Pension Scheme (No.1) and
Barclays PLC Funded Unapproved
Retirement Benefits Scheme.
Political donations
The Group did not give any money for
political purposes in the UK or outside the
UK, nor did it make any political donations
to political parties or other political
organisations or to any independent
election candidates, nor did it incur any
political expenditure during the year. In
accordance with the US Federal Election
Campaign Act, Barclays provides
administrative support to a federal Political
Action Committee (PAC) in the US, funded
by the voluntary political contributions of
eligible employees. The PAC is not
controlled or funded by Barclays and all
decisions regarding the amounts and
recipients of contributions are directed by
a steering committee comprising
employees eligible to contribute to the
PAC.
Contributions to political organisations
reported by the PAC during the calendar
year 2022 totalled $105,000 (2021:
$29,000).
Country-by-Country reporting
The Capital Requirements (Country-by-
Country reporting) Regulations 2013
require the Company to publish additional
information in respect of the year ended
31 December 2022. This information is
included in the Barclays Country Snapshot
available on the Barclays website:
home.barclays/annualreport.
Environment
Although financed emissions account for
the greatest proportion of our climate
impact, addressing our operational
emissions is also important to meeting our
net zero by 2050 ambition. We are aiming
to integrate sustainability across the way
we run our business, from decarbonising
our operations to managing our impact on
biodiversity and nature.
Defining net zero operations
To reflect our commitment to reducing
operational emissions beyond our Scope 1
and Scope 2 emissions, we are explicitly
adding Scope 3 operational emissions to
our net zero ambition. We now define net
zero operations as the state in which we
will achieve a greenhouse gas reduction of
our Scope 1, Scope 2 and our Scope 3
operationala emissions consistent with a
1.5oC aligned pathway and counterbalance
any residual emissions.
The standards available to understand and
define net zero are rapidly evolving. We will
continue to review and develop our own
approach to net zero operations as this
subject area matures. Please see from
page 78 for more details of our net zero
operations strategy.
Progress to date
We achieved our 90% GHG market-based
emissions reduction target for Scope 1 and
Scope 2, having reduced our Scope 1 and
Scope 2 emissions by 91% since 2018 and
sourced 100% renewable electricity for our
global real estate portfoliob in 2022.
We achieved our renewable electricity
target ahead of schedule by matching 100%
of our electricity consumption with energy
attribute certificates and green tariffs which
is for us a transitional solution as we seek to
increase the proportion of on-site
renewable electricity sources and Power
Purchase Agreements.
In 2022, we expanded our net zero
operations approach to include our supply
chain emissions as they account for the
majority of our operational emissions.
Our supply chain emissions data is currently
indicative. We will continue to develop our
methodology and aim to improve the
accuracy of our supply chain data over time.
In the interim, we intend to work towards the
milestone of a 50% reduction in our supply
chain emissions by 2030 (against a 2018
base year) and a longer-term milestone of a
90% emissions reduction by 2050. In
addition, we aim for 90% of our suppliers by
addressable spend to have science-based
emissions reduction targets in place by 2030.
Also, this year we evolved our energy use
intensity and on-site renewable energy
reporting approach to include our global real
estate portfolio, beyond campuses. We
intend to work towards the milestones of a
115 kWh/m2/year average energy use
intensity across our corporate offices and
installing 10MW on-site renewable
electricity capacity across our global real
estate portfolio by 2035.
We have disclosed global GHG emissions
and energy use data as required by the
Large and Medium-sized Companies and
Groups (Accounts and Reports) Regulations
2008. See the ESG Data Centre for further
details on our annual operational GHG
emissions since 2018, including our Scope 1,
Scope 2 and Scope 3 business travel
location-based and market-based
emissions. We further provide insights on
our annual waste production, energy and
water consumption and renewable
electricity consumption by country.
+ The ESG Data Centre within the ESG Resource Hub
can be found at home.barclays/sustainability/esg-
resource-hub/reporting-and-disclosures
Notes:
a We define our Scope 3 operational emissions to include
supply chain, waste, business travel and leased assets
b Global real estate portfolio includes offices, branches,
campuses and data centres
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Directors’ report: Other statutory and regulatory information (continued)
GHG Emissions Table and Notes
Group GHG Emissionsb (CO2e)
Total CO2e emissons (000' tonnes)
Scope 1 CO2e emissions (000' tonnes)c
Scope 2 CO2e emissions (000' tonnes)d
Scope 3 Business travel CO2e emissions (000' tonnes)e
Energy consumption used to calculate above Scope 1 and 2 emissions (MWh)
Intensity Ratio
Total Full-Time Employees (FTE)
Total CO2e per FTE (tonnes)f
Market-based emissions
Scope 2 CO2e market-based emissions (000' tonnes)d
Total gross Scope 1 and 2 market-based CO2e emissions (000' tonnes)
Current Reporting Year
2022a
Previous Reporting Year
2021
UK &
Offshore Area
Global
GHG Emissions
UK &
Offshore Area
Global
GHG Emissions
68.6
12.8
47.3
8.5
286,727
44,000
1.56
0
12.8
142.9Δ
20.0Δ
103.4Δ
19.4Δ
467,939Δ
86.2
16.5
68.7
0.9
149.8
23.2
124.2
2.4
375,121
559,240
87,400
1.63Δ
44,100
1.95
1.9Δ
21.9
4.0
20.5
81,600
1.84
13.6
36.8
Notes
a The carbon reporting year for our GHG emissions is 1 October to 30 September. The carbon reporting year is not fully aligned to the financial reporting year covered by this Directors’ Report. Details of
our approach to assurance over the data is set out in the 2022 Barclays Strategic Report.
b The methodology used to calculate our GHG emissions follows the 'Greenhouse Gas Protocol (GHG): A Corporate Accounting and Reporting Standard (Revised Edition)', defined by the World
Resources Institute/World Business Council for Sustainable Development (WRI/WBCSD). We have adopted the operational control approach to define our reporting boundary. Emissions from leased
buildings where Barclays do not manage the utility are excluded. Where Barclays is responsible for the utility costs, these emissions are included. Estimating the GHG emissions of working from home is
a new activity with little or no precedent and with no common standard which is why we have not yet included it in our annual GHG inventory. We are evaluating different methodologies to estimate our
remote working emissions moving forward. For 2022, we have applied the latest emission factors as of 31st December 2022. We continuously review and update our performance data based on
updated GHG emission factors, improvements in data quality and updates to estimates previously applied. In 2022 prior year figures have been restated to reflect additional Scope 1 natural gas data
that is now available for two large corporate offices. The restatement has been applied to all prior years to 2018. In addition, there is additional Scope 1 fuel data available for three locations globally that
were not reported in prior years. We have also replaced estimated Scope 2 electricity data for select locations in the US with actual billing from utility providers that was not available at the time of
reporting. Finally, corrections to Scope 2 electricity data in Switzerland and Netherlands have taken place due to incorrect meter reads.
c Scope 1 emissions include our direct GHG emissions from natural gas, fuel oil, company cars and HFC refrigerants. In the case of company-owned vehicles, emissions are limited to UK vehicles only as
this is the only country in which data is available.
d Scope 2 GHG emissions include our direct GHG emissions from purchased electricity, purchased heat, cooling and steam . Market-based emissions have been reported for 2022 and 2021. We have
used a zero emission factor where we have green tariffs or energy attribute certificates in place globally.
e Scope 3 covers indirect emissions from business travel only. Business travel for these purposes compromises of: global flights and ground transport within the UK, US and India, however, in the case of
the US and India ground transport covers onwards car hire only which has been provided directly by the supplier. Ground transportation data (excluding Scope 1 emissions from company-owned
vehicles) covers only countries where robust data is available directly from the supplier.
Intensity ratio calculations have been calculated using location-based emission factors only.
f
g Energy consumption data is captured through utility billing; meter reads or estimates. Principal measures we have undertaken in 2022 to improve energy efficiency include the following:
• We have reduced our operational energy consumption by 30% against a 2018 baseline. At the end of 2021, we launched an Energy Optimisation Programme to help improve the energy efficiency
of our global property portfolio. In the first 12 months of our five-year programme we saved 6GWh of energy, equivalent to the annual electricity consumption of approximately 2,000 UK
households.
• We have also focused on our own data centres, which consume a large amount of energy to operate. For example, we upgraded our cooling systems at our Cranford, New Jersey data centre, In just
four months this upgrade led to an approximately 19% energy reduction for cooling alone, in comparison to the same period in 2021. We will continue to make investments in technology and
systems to reduce the amount of energy we need to power our operations. Please refer to our Achieving net zero operations pillar for more details on our strategy.
Δ 2022 data subject to independent Limited Assurance under ISAE(UK)3000 and ISAE3410. Current and previous limited assurance scope and opinions can be found within the ESG Resource Hub for
further details: home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/
Research and development
In the ordinary course of business, the
Group develops new products and
services in each of its business divisions.
Share capital
Share capital structure
The Company has ordinary shares in issue.
The Company’s Articles also allow for the
issuance of sterling, US dollar, euro and
yen preference shares (preference
shares). No preference shares have been
issued as at 13 February 2023 (the latest
practicable date for inclusion in this report).
Ordinary shares therefore represent 100%
of the total issued share capital as at 31
December 2022 and as at 13 February
2023 (the latest practicable date for
inclusion in this report).
Details of the movement in ordinary share
capital during the year can be found in
Note 28 on page 488.
The rights and obligations attaching to the
Company's ordinary shares and
preference shares are set out in the
Company's Articles, copies of which are
available on the Company's website at
home.barclays/corporategovernance.
Voting
Every member who is present in person or
represented at any general meeting of the
Company, and who is entitled to vote, has
one vote on a show of hands. Every proxy
present has one vote. The proxy will have
one vote for, and one vote against, a
resolution if he/she has been instructed to
vote for, or against, the resolution by
different members or in one direction by a
member while another member has
permitted the proxy discretion as to how
to vote.
On a poll, every member who is present in
person or by proxy and who is entitled to
vote has one vote for every share held. In
the case of joint holders, only the vote of
the senior holder (as determined by the
order in the share register) or his/her proxy
may be counted. If any sum payable
remains unpaid in relation to a member’s
shareholding, that member is not entitled
to vote that share or exercise any other
right in relation to a meeting of the
Company unless the Board otherwise
determines.
If any member, or any other person
appearing to be interested in any of the
Company’s ordinary shares, is served with
a notice under Section 793 of the
Companies Act 2006 and does not supply
the Company with the information
required in the notice, then the Board, in its
absolute discretion, may direct that that
member shall not be entitled to attend or
vote at any meeting of the Company.
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Annual Report 2022 193
Directors’ report: Other statutory and regulatory information (continued)
The Board may further direct that, if the
shares of the defaulting member
represent 0.25% or more of the issued
shares of the relevant class, dividends or
other monies payable on those shares
shall be retained by the Company until the
direction ceases to have effect and no
transfer of those shares shall be registered
(other than certain specified ‘excepted
transfers’). A direction ceases to have
effect seven days after the Company has
received the information requested, or
when the Company is notified that an
excepted transfer of all of the relevant
shares to a third party has occurred, or as
the Board otherwise determines.
Transfers
Ordinary shares may be held in either
certificated or uncertificated form.
Certificated ordinary shares may be
transferred in writing in any usual or other
form approved by the Group Company
Secretary and executed by or on behalf of
the transferor. Transfers of uncertificated
ordinary shares must be made in
accordance with the Companies Act 2006
and the CREST Regulations.
The Board is not bound to register a
transfer of partly paid ordinary shares or
fully paid shares in exceptional
circumstances approved by the FCA. The
Board may also decline to register an
instrument of transfer of certificated
ordinary shares unless (i) it is duly stamped,
deposited at the prescribed place and
accompanied by the share certificate(s)
and such other evidence as reasonably
required by the Board to evidence right to
transfer, (ii) it is in respect of one class of
shares only, and (iii) it is in favour of a single
transferee or not more than four joint
transferees (except in the case of
executors or trustees of a member).
The Company is not aware of any
agreements between holders of securities
that may result in restrictions on the
transfer of securities or voting rights.
Variation of rights
The rights attached to any class of shares
may be varied either with the consent in
writing of the holders of at least 75% in
nominal value of the issued shares of that
class, or with the sanction of a special
resolution passed at a separate meeting of
the holders of the shares of that class. The
rights of shares shall not (unless expressly
provided by the rights attached to such
shares) be deemed varied by the creation
of further shares ranking equally with them
or subsequent to them.
Limitations on foreign shareholders
There are no restrictions imposed by the
Articles or (subject to the effect of any
economic sanctions that may be in force
from time to time) by current UK laws
which relate only to non-residents of the
UK and which limit the rights of such non-
residents to hold or (when entitled to do
so) vote the ordinary shares.
Exercisability of rights under an
employee share scheme
EBTs operate in connection with certain of
the Group’s Employee Share Plans (Plans).
The trustees of the EBTs may exercise all
rights attached to the shares in
accordance with their fiduciary duties,
other than as specifically restricted in the
documents governing the Plans. The
trustees of the EBTs have informed the
Company that their normal policy is to
abstain from voting in respect of the
Barclays shares held in trust. The trustees
of the Global Sharepurchase EBT and UK
Sharepurchase EBT may vote in respect of
Barclays shares held in the EBTs, but only
as instructed by participants in those Plans
in respect of their partnership shares and
(when vested) matching and dividend
shares. The trustees will not otherwise
vote in respect of shares held in the
Sharepurchase EBTs.
Special rights
There are no persons holding securities
that carry special rights with regard to the
control of the Company.
Major shareholders
Major shareholders do not have different
voting rights from those of other
shareholders. Information provided to the
Company by substantial shareholders
(holding voting rights of 3% or more in the
financial instruments of the Company)
pursuant to the DTRs are published via a
Regulatory Information Service and is
available on the Company’s website. As at
31 December 2022, the Company had
been notified under Rule 5 of the DTRs of
the following holdings of voting rights in its
shares.
Person interested
BlackRock Incb
Qatar Holding LLCc
Number of Barclays
Shares
944,022,209
1,017,455,690
% of total voting rights
attaching to issued
share capitala
Nature of holding (direct
or indirect)
5.78
5.99
indirect
direct
Notes
a The percentage of voting rights detailed above was calculated at the time of the relevant disclosures made in accordance with Rule 5 of the DTRs.
b Total shown includes 6,687,206 contracts for difference to which voting rights are attached. Part of the holding is held as American Depositary Receipts. On 7 February 2023, BlackRock, Inc. disclosed
by way of a Schedule 13G filed with the SEC beneficial ownership of 1,383,730,106 ordinary shares of the Company as at 31 December 2022, representing 8.7% of that class of shares.
c Qatar Holding LLC is wholly owned by Qatar Investment Authority. On 16 January 2023, Qatar Investment Authority disclosed by way of a Schedule 13G filed with the SEC beneficial ownership of
800,120,690 ordinary shares of the Company as at 31 December 2022, representing 5.04% of that class of shares.
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Annual Report 2022 194
Directors’ report: Other statutory and regulatory information (continued)
Between 31 December 2022 and
13 February 2023 (the latest practicable
date for inclusion in this report), the
Company has not received any additional
notifications pursuant to Rule 5 of the
DTRs.
Powers of Directors to issue and allot or
buy back the Company’s shares
The powers of the Directors are
determined by the Companies Act 2006
and the Company’s Articles. The Directors
are authorised to issue and allot shares
and to buy back shares subject to, and on
the terms of, the annual shareholder
approval at the AGM. Such authorities
were granted by shareholders at the 2022
AGM. It will be proposed at the 2023 AGM
that the Directors be granted new
authorities to issue and allot and buy back
shares.
Repurchase of shares
On 24 May 2022 and 17 August 2022 the
Company commenced share buy-back
programmes to purchase its ordinary
shares of £0.25p each up a maximum
consideration of £1,000m and £500m,
respectively. The first share buy-back
programme concluded on 16 August 2022
and the second share buy-back
programme concluded on 3 October
2022. The Company repurchased for
cancellation 625,019,884 ordinary shares
at a volume weighted average price of
159.9949 pence per ordinary share during
the first buy-back programme and
306,326,717 ordinary shares at a volume
weighted average price of 163.2241 pence
per ordinary share during the second buy-
back programme. The purpose of the buy-
back programmes was to reduce the
Company’s number of outstanding
ordinary shares.
In aggregate, the Company purchased
931,346,601 ordinary shares during 2022
with an aggregate nominal value of
approximately £233m (this represented
approximately 5.9% of the Company's
issued share capital as at 31 December
2022) for an aggregate consideration of
£1,500m excluding taxes and expenses.
All of the repurchased ordinary shares
have been cancelled.
No further shares have been repurchased
since the completion of the second share
buy-back programme on 3 October 2022.
The maximum number of ordinary shares
which could be repurchased by the
Company as part of any share buy-back
under the authority for on-market share
buy-backs granted at the 2022 AGM is
744,815,359 ordinary shares (being
1,676,161,960 less the 931,346,601
shares repurchased as part of the first and
second share buy-back programmes).
Distributable reserves
As at 31 December 2022, the distributable
reserves of the Company were £21,701m
(2021: £20,750m).
Change of control
There are no significant agreements to
which the Company is a party that take
effect, alter or terminate on a change of
control of the Company following a
takeover bid. There are no agreements
between the Company and its Directors or
employees providing for compensation for
loss of office or employment that occurs
because of a takeover bid.
Controls over financial reporting
A framework of disclosure controls and
procedures is in place to support the
approval of the financial statements of the
Group.
Specific governance committees are
responsible for examining the financial
reports and disclosures to help ensure that
they have been subject to adequate
verification and comply with applicable
standards and legislation.
Where appropriate, these committees
report their conclusions to the Board Audit
Committee, which debates such
conclusions and provides further
challenge. Finally, the Board scrutinises and
approves results announcements and the
Annual Report to ensure that appropriate
disclosures have been made. This
governance process is designed to ensure
that both management and the Board are
given sufficient opportunity to debate and
challenge the financial statements of the
Group and other significant disclosures
before they are made public.
Management’s report on internal control
over financial reporting
Management is responsible for
establishing and maintaining adequate
internal control over financial reporting
under the supervision of the principal
executive and financial officers, to provide
reasonable assurance regarding the
reliability of financial reporting and the
preparation of financial statements, in
accordance with (a) UK-adopted
international accounting standards; and (b)
International Financial Reporting
Standards (IFRS) as issued by the
International Accounting Standards Board
(IASB), including interpretations issued by
the IFRS Interpretations Committee.
Internal control over financial reporting
includes policies and procedures that
pertain to the maintenance of records
that, in reasonable detail:
• accurately and fairly reflect transactions
and dispositions of assets
• provide reasonable assurances that
transactions are recorded as necessary
to permit preparation of financial
statements in accordance with UK-
adopted international accounting
standards and IFRS and that receipts
and expenditures are being made only in
accordance with authorisations of
management and the respective
Directors
• provide reasonable assurance regarding
prevention or timely detection of
unauthorised acquisition, use or
disposition of assets that could have a
material effect on the financial
statements.
Internal control systems, no matter how
well designed, have inherent limitations
and may not prevent or detect
misstatements. Also, projections of any
evaluation of effectiveness to future
periods are subject to the risk that internal
control over financial reporting may
become inadequate because of changes in
conditions or that the degree of
compliance with the policies or procedures
may deteriorate.
Management has assessed internal
control over financial reporting as at 31
December 2022. In making its
assessment, management utilised the
criteria set out in the 2013 COSO
framework. Management has specifically
assessed the controls put in place to
address the material weakness in internal
control over financial reporting relating to
the Over-issuance of Securities, as further
discussed below. Management has
concluded that, based on its assessment,
internal control over financial reporting
was effective as at 31 December 2022.
The system of internal financial and
operational controls is also subject to
regulatory oversight in the UK and
overseas. Further information on
supervision by financial services regulators
is provided under Supervision and
Regulation in the Risk review section on
pages 370 to 377.
Identification and remediation of a
material weakness
A material weakness is a deficiency, or a
combination of deficiencies, in internal
control over financial reporting such that
there is a reasonable possibility that a
material misstatement of the Company’s
annual or interim financial statements will
not be prevented or detected on a timely
basis.
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Directors’ report: Other statutory and regulatory information (continued)
Changes in internal control over financial
reporting
As noted above, management has
strengthened and effectively operated
controls to remediate the material
weakness in respect of the Over-issuance
of Securities which was identified in March
2022. These remediation efforts represent
a significant improvement to the
Company’s internal control environment.
There have been no other changes to
highlight during the period covered by this
report, which have materially affected or
are reasonably likely to materially affect the
Group’s internal control over financial
reporting.
Disclosure of information to the auditor
Each Director confirms that, so far as he/
she is aware, there is no relevant audit
information of which our auditor is
unaware and that each of the Directors
has taken all the steps that he/she ought
to have taken as a Director to make
himself/herself aware of any relevant audit
information and to establish that our
auditor is aware of that information. This
confirmation is given pursuant to Section
418 of the Companies Act 2006 and
should be interpreted in accordance with,
and subject to, those provisions.
Directors’ responsibilities
The following statement, which should be
read in conjunction with the Auditor’s
report set out on pages 399 to 415, is
made with a view to distinguishing for
shareholders the respective
responsibilities of the Directors and of the
auditor in relation to the accounts.
Going concern
The Group’s business activities and factors
likely to affect its future development and
performance are disclosed in the Strategic
report and Risk Review sections of this
report. The financial performance is
disclosed within the Financial Review with
funding, liquidity and capital details
contained within the Risk Performance
section. The Group’s objectives and
policies in managing the financial risks to
which it is exposed are discussed in the
Risk Management section.
The Directors considered it appropriate to
prepare the financial statements on a
going concern basis.
In March 2022, the Company’s
management became aware that BBPLC
had issued securities materially in excess
of the amount BBPLC had registered with
the SEC under its 2019 US shelf
registration statement and subsequently
became aware that securities had also
been issued in excess of the set amount
under the predecessor US shelf
registration statement. A proportion of the
costs associated with the impact of the
Over-issuance of Securities was
attributable to the Company’s financial
statements for the year ended 31
December 2021. Accordingly, in the UK,
the Company has restated the prior period
comparatives in this 2022 Annual Report
and Accounts to reflect the impact of the
Over-issuance of Securities. In the US, the
Company amended its annual report on
Form 20-F for the year ended 31
December 2021 to include restated
financial statements to reflect the impact
of the Over-issuance of Securities.
The fact that the Over-issuance of
Securities occurred and was not
immediately identified highlighted a
weakness in controls over the
identification of external regulatory limits
related to securities issuance and
monitoring against these limits that
constituted a material weakness in internal
control over financial reporting under
“COSO Principle 9: Identifies and Analyses
Significant Change - The organisation
identifies and assesses changes that could
significantly impact the system of internal
control”.
Since the identification of this material
weakness, management has strengthened
the internal controls relating to the
tracking of issuance programme limits
through the implementation and
strengthening of a series of controls
across the Group, together with central
governance, with key actions being:
• development of a Group Issuance
Standard, which includes minimum
control requirements
• documentation of, and agreement on,
roles and responsibilities
• implementation of a Group Issuance
Oversight Committee, with senior
management representation, to
monitor issuance activity against agreed
limits.
The strengthened controls over financial
reporting have operated for a sufficient
period of time and management has
concluded, through testing, that these
controls are operating effectively.
In preparing each of the Group and
company financial statements, the
Directors are required to:
• assess the Group and company’s ability
to continue as a going concern,
disclosing, as applicable, matters related
to going concern
• use the going concern basis of
accounting unless they either intend to
liquidate the Group or the Parent
company or to cease operations, or
have no realistic alternative but to do so.
Preparation of accounts
The Directors are required by the
Companies Act 2006 to prepare Group
and Company accounts for each financial
year and, with regard to Group accounts, in
accordance with UK-adopted international
accounting standards. The Directors have
prepared these accounts in accordance
with (a) UK-adopted international
accounting standards; and (b) IFRS as
issued by the IASB, including
interpretations issued by the IFRS
Interpretations Committee. Pursuant to
the Companies Act 2006, the Directors
must not approve the accounts unless
they are satisfied that they give a true and
fair view of the state of affairs of the Group
and the Company and of their profit or loss
for that period.
The Directors consider that, in preparing
the financial statements, the Group and
the Company have used appropriate
accounting policies, supported by
reasonable judgements and estimates,
and that all accounting standards which
they consider to be applicable have been
followed.
The Directors are satisfied that the Annual
Report and financial statements, taken as a
whole, are fair, balanced and
understandable, and provide the
information necessary for shareholders to
assess the Group and Company’s position
and performance, business model and
strategy.
The Directors are responsible for such
internal controls as they determine are
necessary to enable the preparation of
financial statements that are free from
material misstatement, whether due to
fraud or error.
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.
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Directors’ report: Other statutory and regulatory information (continued)
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 our 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 143 to 146, confirm
to the best of their knowledge that:
(a) the financial statements, prepared in
accordance with (i) UK-adopted
international accounting standards; and (ii)
IFRS as issued by the IASB, including
interpretations issued by the IFRS
Interpretations Committee, 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 2 to
68, 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.
Auditor’s report
The Auditor’s report on the Financial
Statements of Barclays PLC for the year
ended 31 December 2022 was unmodified
and its statement under Section 496 of the
Companies Act 2006 was also unmodified.
By order of the Board
Stephen Shapiro
Company Secretary
14 February 2023
Registered in England.
Company No. 48839
Registered office: 1 Churchill Place,
London E14 5HP
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Remuneration report
Annual statement from the Chair
of the Board Remuneration Committee
Contents
Annual statement
Remuneration philosophy
Fair Pay at a glance
Employee remuneration policy
summary
Directors’ remuneration policy
Annual report on Directors’
remuneration
197
204
207
208
209
218
Board Remuneration
Committee
Brian Gilvary
Chair, Board Remuneration Committee
Committee membership and
meeting attendancea
Member
Brian Gilvary
Dawn Fitzpatrick
Mary Francis
Meetings attended/
eligible to attend
(including ad hoc
meetings)
7/7
6/7
7/7
Note
a There were five scheduled meetings and two ad hoc
meetings of the Committee in 2022. Owing to a prior
commitment, Dawn Fitzpatrick was unable to attend
one scheduled meeting of the Committee.
+ You can find more information on our approach to pay
fairness in our Fair Pay Report at: home.barclays/
annualreport
+ Our UK pay gap figures for 2022 and narrative
explaining them are available at: home.barclays/
diversity
Dear Fellow Shareholders
On behalf of the Board, I am pleased to
present the Remuneration report for 2022.
2022 was another year of extraordinary
economic and political uncertainty, with
far-reaching consequences for our
economy and society. Our strategy and
diversified universal banking model were
once again put to the test and proved
resilient and robust, delivering double-digit
returns in each of our three main lines of
business. We achieved our target of
generating a Group return on tangible
equity (RoTE) greater than 10%, while
providing much-needed support to
customers, clients and communities in
periods of difficulty.
The Group has provided stability and
support in an uncertain economic
environment. Our performance this year is
set against a backdrop of higher inflation,
slower economic growth, political
uncertainty and extreme shock of the
Russian invasion of Ukraine, during an
already-challenging time as the world still
suffers the longer-term impacts of the
COVID-19 pandemic. Our employees have
been steadfast in their commitment to
meeting the needs of our customers and
clients, whether helping retail customers
manage their finances, providing additional
support to vulnerable customers facing
challenges due to inflationary pressures, or
helping institutional and corporate clients
navigate market volatility.
We have considered stakeholder
perspectives carefully when making
remuneration decisions. Those decisions
reflect our financial and non-financial
performance, both absolute and relative,
as well as the execution of our strategy,
our risk and controls and our commitment
to Fair Pay. You can read more about our
approach to pay fairness in our fifth annual
Fair Pay Report, published alongside this
Annual Report. We have also published our
pay gap figures for employees in the UK
and in Ireland.
The Over-issuance of Securities under
BBPLC's US shelf registration statements
was a deeply disappointing feature of
2022. A review of the facts and
circumstances was completed by external
counsel and the Committee has taken the
findings of that review seriously. We have
thoughtfully and deliberately adjusted our
remuneration decisions to ensure that this
over-issuance matter is reflected.
With all of the above in mind, I explain in this
statement our key stakeholder
considerations this year, the remuneration
decisions we’ve made and our areas of
focus for 2023.
Our new Directors’
remuneration policy
I would like to thank shareholders for
supporting the 2021 implementation of
our current Directors’ remuneration policy
(DRP) at our last Annual General Meeting
(AGM), in May 2022, where it received 89%
of votes in favour.
Shareholders approved our current DRP in
2020, to apply for three years. In this report
we set out our proposed new DRP, which –
but for one relatively minor change – is
substantially the same as the current DRP,
for shareholder approval at the upcoming
2023 AGM.
The Committee reviewed the current DRP
and concluded that it has been operating
effectively and is well aligned with our
remuneration philosophy. We were keen to
ensure that the remuneration policy for
Executive Directors remains aligned with
that for the wider workforce wherever
appropriate. Over the three-year life of the
current DRP, we have regularly discussed
remuneration policies and outcomes with
major shareholders, to explain our thinking
and gather feedback, and we are grateful
to those shareholders for their helpful and
productive engagement. As a result, the
only material change proposed is to
simplify the shareholding requirements for
the Executive Directors and align the
operation of those requirements with
market practice, as summarised in the
table overleaf. The full new DRP is set out
later in this Remuneration report.
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Remuneration report (continued)
Proposed changes to the DRP
DRP element
Proposed change and rationale
Shareholding
requirement
The level of shareholding that the Executive Directors are required to build up will remain unchanged.
We propose to align the definition of which shares count towards that requirement with market practice, which is simpler and provides a
more consistent treatment during and after employment. Currently, shares from unvested deferred bonuses and unvested Long Term
Incentive Plan (LTIP) awards do not count towards the shareholding requirement during employment, but do count towards post-
termination shareholding requirements (net of estimated taxes) provided there are no remaining performance conditions. In the new
DRP those shares will count towards the requirement during employment, as well as post-termination.
We also propose to simplify and align with market norms the post-employment requirement. For two years after stepping down as an
Executive Director, they must maintain a shareholding equal to the number of shares required to be held immediately prior to stepping
down as an Executive Director, or the actual number of shares held on stepping down if lower (provided that the Committee is satisfied
that the resulting shareholding is appropriate given the relevant Executive Director’s tenure).
The Bank of England published a
consultation paper in December 2022
setting out joint proposals from the PRA
and FCA to remove the regulatory limit on
the level of variable pay relative to fixed pay
in banks. The consultation timings would
suggest that for Barclays any such change
would come into effect from performance
year 2024. We will consider the
implications of any revised rules – both for
the DRP and more widely within Barclays –
over the course of 2023 and engage with
shareholders if we are considering making
changes to the DRP.
Performance in 2022
Our commitment, as ever, is to a
remuneration approach that rewards
sustainable performance, which is a key
element of our remuneration philosophy,
as outlined on page 204. The robust
operating performance we achieved in
2021 was sustained and extended through
2022. In 2022, we saw broad-based
income momentum across all three of our
operating businesses, delivering a 14%
increase in Group income.
The strength and consistency of our
underlying performance further
demonstrates the value of our diversified
business model in delivering for our
stakeholders through a range of economic
conditions. 2022 saw another year of
strong performance in the Corporate and
Investment Bank (CIB), with Global Markets
income up 38% as we supported our
clients in very challenging market
conditions and performed strongly against
competitors, more than offsetting
subdued Investment Banking fees. Income
was also up in Barclays UK and in
Consumer, Cards and Payments,
supported by balanced growth and rising
interest rates.
We continue to invest in our business while
maintaining focus on costs. Statutory
costs for 2022 were £16.7bn, including the
impact of the Over-issuance of Securities
in the US. Operating costs, which exclude
litigation and conduct, increased 6%
compared to income growth of 14%,
including the impact of sizeable
movements in foreign exchange rates and
inflation. This translated into a 9% increase
in profit before impairment (having moved
from a net credit impairment release in
2021 to a net impairment charge in 2022).
We generated a RoTE of 10.4%, achieving
our greater-than-10% target, and ended
the year with a CET1 ratio of 13.9%, within
our target range of 13% to 14%. We will
return £2.2bn to shareholders in respect of
2022, via a total dividend for the year of
7.25p per share and £1.0bn of announced
share buy-backs, which is equivalent to a
total pay-out of c.13.4p per share.
Colleague remuneration
Our Fair Pay Agenda is at the heart of the
decisions we make on colleague
remuneration. This is particularly pertinent
given the challenges faced by colleagues
due to sharp increases in the cost of living,
particularly for our lower-paid colleagues.
Effective 1 August 2022, Barclays
increased by £1,200 the full-time
equivalent annual pensionable salary for
35,000 more-junior UK employees in
customer-facing and support roles,
bringing forward part of the March 2023
annual pay review. We also brought a
portion of the March 2023 annual pay
review forward into 2022 for junior
employees across most of our main
European offices, or in Germany made
one-off payments as that was more
appropriate under local rules.
We worked closely with Unite, our
recognised UK trade union, to agree a
2023 UK pay deal that, combined with the
increases in August 2022, brought the
total salary increase budget to 11% for our
lowest-paid colleagues, or 6.75% for other
union-recognised colleagues. We
recognise the need to manage costs and
as such these higher-than-normal
increases do not apply to senior
management roles or to most business
areas within CIB.
Paying at least a living wage to all our
colleagues is a central element of our Fair
Pay Agenda and we continue to ensure we
at least meet living wage benchmarks for
each country and consider the inflationary
pressures our employees face. We are
increasing our minimum UK full time
equivalent salary to £22,250 and we
continue to exceed the Living Wage
Foundation's benchmarks. In the US, we
reviewed the pay of our lowest paid
colleagues resulting in a salary increase
budget of 9% and colleagues will be paid at
least $22.50 per hour. Our lowest-paid
colleagues in India will receive an average
increase of 10%. In all other locations, we
continue to exceed the Fair Wage Network
living wage benchmarks for each country.
We are also taking tangible actions to drive
greater transparency in our pay approach,
continuing to simplify reward for junior
colleagues. From March 2023, for our
most junior roles in Barclays UK and
support functions, pay levels and annual
increases will be determined by role type,
bonus approaches will be harmonised for
future years, and starting salaries will be
published. This is simpler and more
transparent, making it easier for colleagues
to understand how their pay is set and
managed.
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Remuneration report (continued)
This year’s incentive pool reflects all the
elements set out at the start of this
statement. The Committee wanted to
recognise the strong performance across
our three operating businesses, and in
particular that of our Global Markets
business. As well as good operating
performance and delivery against our
targets in 2022, colleagues have adapted
to the rapidly changing external
environment to support clients and
customers in an extraordinary year.
Whether it was CIB support for clients in
the immediate aftermath of the Ukraine
invasion or during the pension fund liquidity
issue in the early autumn, or retail and
small business customers requiring urgent
assistance to manage their daily expenses,
colleagues responded with dedication,
pace and professionalism.
Set against those positive factors, the
Committee was mindful of the
unsatisfactory impact of litigation and
conduct issues, including the Over-
issuance of Securities in the US, on both
our financial performance and our
reputation. Our incentive funding
incorporates a significant reduction to
reflect the impact of risk and control
issues, as set out later in this statement.
Taking all of this into account, the
Committee has approved a Group
incentive pool of £1,790m (2021:
£1,945m). This level of incentive pool
funding has enabled us to recognise the
strong performance that has been
achieved and to reward the teams and
individuals responsible for that
performance. It has also allowed us to
continue to manage the challenges of the
competitive global market, to attract and
retain the talent required to deliver against
our objectives. We fully recognised the
importance of maintaining cost discipline,
not paying more than is necessary, and
ensuring the cost of litigation and conduct
issues has a clear impact on pay
outcomes. Furthermore, changes in
foreign exchange rates mean the cost of
paying bonuses outside the UK has
increased year-on-year so in practice the
incentive pool is down more than it
appears at the headline level.
The Committee considered this range of
complex factors and concluded that this
year’s incentive funding achieves the right
balance. A significant downward
adjustment of c.£500m to reflect risk and
control issues, including the Over-
issuance of Securities in the US and the
monetary penalties imposed by the SEC
and CFTC for the use of unauthorised
business communications channels, is
balanced against the strong performance
in most parts of the Group during the year,
which the Committee believes it is right to
recognise. We believe that this level of
incentive funding is appropriate given
delivery against our targets and that it is
consistent with our philosophy of
rewarding sustainable performance, which
in turn supports our long-term strategy to
deliver attractive returns to shareholders.
As always, a significant portion of the pool
is delivered in shares, most of which will be
deferred over a number of years, ensuring
further alignment with shareholders.
Those deferrals are subject to malus
conditions. For Material Risk Takers,
including the Executive Directors, deferrals
and the upfront elements of incentive
awards are also subject to clawback
conditions, which may apply in a broad set
of circumstances including individual
misbehaviour or material failures of risk
management.
Executive Director remuneration
Remuneration arrangements in respect
of the Group Finance Director
succession
On 22 February 2022, Tushar Morzaria
informed the Board of his intention to
retire from the Board and as Group
Finance Director, and the Board agreed
that would take effect on 22 April 2022.
Due to the timing, the remuneration
arrangements in connection with his
retirement from the Board and those for
his successor, Anna Cross, were not
reflected in last year’s Remuneration
report but rather were set out in a separate
announcement to the market on 23
February 2022.
Group income
£24,956m
2021: £21,940m
Group profit before tax
(before impairment)
£8,232m
2021: £7,541ma
Group profit before tax
£7,012m
2021: £8,194ma
Group RoTE
10.4%
2021: 13.1%a
Cost: income ratio
67%
2021: 67%a
CET1 ratio
13.9%
2021: 15.1%a
Group compensation to income ratio
33.5%
2021: 34.7%
Group incentive pool
£1,790m
2021: £1,945m
Note
a 2021 financial and capital metrics have been restated to
reflect the impact of the Over-issuance of Securities. See
Impact of the Over-issuance of Securities on page 356 and
Restatement of financial statements (Note 1a) on page 428
for further details.
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Remuneration report (continued)
For 2022, Anna and Tushar were each
awarded a pro-rata discretionary annual
bonus award for the respective portions of
2022 that they served as Group Finance
Director. They also each received a
separate discretionary incentive award in
respect of the portion of 2022 during
which they were carrying out other roles in
Barclays, which are not included within this
report as they do not relate to service as
an Executive Director.
Determining Executive Directors' pay
outcomes
The Committee considered the Executive
Directors’ annual bonus and LTIP
outcomes in the context of the Group’s
performance, and the performance of
each Executive Director, during 2022.
On the financial measures for the annual
bonus, profit before tax provided a 40.8%
outcome out of 50% and the cost: income
ratio provided a 3.6% outcome out of 10%.
With good performance against the
strategic non-financial measures, this
resulted in a 2022 bonus outcome equal to
75.4% of maximum for C.S.
Venkatakrishnan (known as Venkat), 75.4%
of maximum for Anna and 74.4% of
maximum for Tushar, after factoring in the
performance of each against their
personal objectives.
Neither Venkat nor Anna received a
2020-2022 LTIP award as they were not
Executive Directors at the time it was
granted. The outcome for Tushar’s
2020-2022 LTIP was 70.0%, reflecting
strong pro-forma RoTE and good
performance against the strategic non-
financial measures. In light of the Over-
issuance of Securities, the Committee did
not assess the Control environment
element of the LTIP Risk scorecard but
instead elected to set this element of the
LTIP to zero.
In response to Tushar stepping down as an
Executive Director, the Committee
determined that the 2022-2024 LTIP
award and the 1 March 2022 Fixed Pay
increase for Tushar that were disclosed in
last year’s Remuneration report would not
be implemented. Tushar’s bonus in
respect of performance in 2021 remained
as disclosed in the Remuneration report,
save that a larger portion will vest over
years 3 to 7 and a smaller portion over
years 1 to 2 because of the LTIP award not
being granted. For 2022, Tushar is eligible
to receive a pro-rata discretionary annual
bonus award for his part-year
performance as Group Finance Director, in
line with the DRP. There are no other
remuneration payments in relation to his
stepping down as an Executive Director.
He continues to work within Barclays in
other roles and so is not treated as a leaver
in respect of any deferred bonus or LTIP
awards.
Anna Cross was appointed Group Finance
Director from 23 April 2022. The
remuneration arrangements that the
Committee agreed on her appointment
reflect her role and responsibilities and are
in accordance with the current DRP.
Anna’s Fixed Pay was set at £1,725,000,
delivered 50% in cash, paid monthly, and
50% in Barclays shares. Fixed Pay shares
are delivered quarterly, subject to a holding
period with restrictions lifting over 5 years.
Anna receives a cash allowance in lieu of
pension equal to 5% of Fixed Pay, and
standard benefits including medical cover
and life assurance. Each year, Anna is
eligible to be considered for a discretionary
annual bonus award and LTIP award in line
with the DRP, up to a maximum value of
90% of Fixed Pay for bonus and 134% of
Fixed Pay for the LTIP.
In setting the remuneration for Anna, the
Committee considered the skills and
relevant experience that she brings, and
the benefits of strong and sustainable
leadership in this critical role. We also
considered pay levels at comparable firms
and the competitive market for talent. We
concluded that this level of Fixed Pay was
an appropriate starting point, while noting
that the maximum total compensation
opportunity that this provides is low
compared with our international banking
peer group.
This LTIP award was granted in line with
our usual annual timetable, in March 2020,
at a time when global markets were falling
as the start of the COVID-19 pandemic
unfolded. The market share price at grant
was 22% below the market share price at
the time of the previous year’s LTIP grant.
The Committee reviewed a range of
analyses to assess whether any element of
this LTIP vesting represents a ‘windfall
gain’. The 2020-2022 LTIP was not
granted at the bottom of the market, as
the share price (and the value of the LTIP
awards) dropped by a third over the
following weeks. The Committee did not
consider Barclays’ share price increase
over the performance period since grant,
equivalent to 9% per annum, to have been
excessive but rather that it was
commensurate with underlying corporate
performance. Group RoTE exceeded 10%
in both 2021 and 2022, up from 9.0%a in
the financial year immediately prior to
grant and building on the Group’s RoTE
progression from 2017 through 2019. As a
result, we concluded that there was no
windfall gain and therefore no adjustment
was required. More information on the
Committee's considerations in relation to
windfall gains is provided in the 2020-2022
LTIP section of the Annual report on
Directors' remuneration.
The Committee reflected on the
appropriateness of the outcomes for both
the 2022 bonus and 2020-2022 LTIP. We
reviewed the underlying financial health of
the Group, which is strong and well-
capitalised. We considered the bonus
outcomes in the context of the bonus
outcomes for the wider workforce,
ensuring appropriate alignment both this
year and over a multi-year period, and also
compared to historical outcomes for the
Executive Directors in the context of
performance each year. We concluded
that the outcomes are appropriate in the
context of the performance achieved and
that no further discretionary adjustment
was warranted.
The Committee decided to grant awards
under the 2023-2025 LTIP cycle with a
face value at grant of 140% of Fixed Pay
for Venkat and 134% of Fixed Pay for
Anna, reflecting the personal contribution
made by each to strong 2022
performance and to provide each with a
significant incentive award subject to
forward-looking performance conditions
during 2023-2025.
Note
a Excludes litigation and conduct. Group RoTE for 2019
including litigation and conduct was 5.3%.
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Remuneration report (continued)
Reduction in Executive Director bonus
for 2021 and 2019-2021 LTIP vesting
The Over-issuance of Securities resulted
in the restatement of the 2021 financial
statements, as well as adversely impacting
2022 performance. Consequently, we
revisited the 2021 annual bonus outcomes
for Venkat and Tushar, and the 2019-2021
LTIP outcome for Tushar. The Committee
reduced the outcomes of the financial
measures to reflect that restatement, and
the outstanding deferred elements of
those annual bonus and LTIP awards will be
reduced accordingly. Venkat and Tushar
were both supportive of this.
No changes were made to any in-flight
LTIP awards and the performance
measures and targets for those awards
have not been altered. The Committee will
determine the vesting of those awards in
due course, following the end of the
relevant performance period.
The Executive Directors' pay in 2023
In February 2023, the Committee reviewed
the level of Fixed Pay for Venkat and Anna,
in the same way and at the same time as
fixed pay was reviewed for the wider
workforce. The maximum total
compensation opportunity for each is
driven by their level of Fixed Pay, and for
both is materially behind market when
compared to the equivalent total
compensation opportunity for comparable
roles in our international banking peer
group.
The Committee considered this relative
market positioning, in the context of the
strong performance and significant
personal contribution made by each of the
Executive Directors, and their continued
development in their respective roles.
The Committee increased Fixed Pay by
3.4% for Venkat and 4.3% for Anna, in line
with the current DRP, resulting in Fixed Pay
of £2,875,000 and £1,800,000 respectively
from 1 March 2023. This percentage
increase is significantly lower than the
average increase across the wider
workforce, including the 11% and 6.75%
spend on salary increases that were
agreed as part of the 2023 UK pay deal.
Even after these Fixed Pay increases, the
total compensation opportunity for each
Executive Director remains well behind the
equivalent opportunity across our
international banking peer group.
The Committee carefully considered the
performance measures for the Executive
Directors' 2023 annual bonus and the
2023-2025 LTIP. Our conclusion was that
the measures that we adopted last year
continue to represent the most relevant
building blocks towards our key longer-
term financial and non-financial goals. The
Committee will continue to review the
measures and weightings for the Executive
Directors' incentives to ensure that they
appropriately support the delivery of our
strategy.
Shareholder alignment
Of the total variable pay awards (annual
bonus plus LTIP) to be granted to Venkat
and Anna, 97% and 96% respectively will
be in shares that must be retained for a
period of between one and eight years
from grant, aligning the Executive
Directors' interests more closely to the
shareholder experience. Both Venkat and
Anna already have significant
shareholdings and will continue building
these over the coming years towards the
level stipulated under the personal
shareholding requirements.
Group Chair and Non-Executive
Director fees
The Committee reviews the Group Chair's
fee from time to time and the current DRP
allows for fee increases of up to 20%
during the three-year term of the policy. In
practice, the Group Chair's fee has
remained at the same level since 2015. In
February 2023, the Committee considered
the fee in the context of the chair fees paid
across our international banking peer
group, with a particular focus on the UK
banks, given the regional differences in
both the role and pay for non-executive
directors including chairs. The Committee
approved an increase in the Group Chair's
fee of 5%, from £800,000 to £840,000,
effective 1 January 2023, equivalent to
1.6% per annum compounded over the
three-year life of the current DRP. Of this,
£100,000 each year will continue to be
used to purchase Barclays shares that are
retained on the Group Chair's behalf until
he retires from the Board. No other
changes to the Group Chair's
remuneration arrangements or benefits
were made.
The Board reviewed the other Non-
Executive Directors’ fees during 2022 and
in December approved (with the impacted
Non-Executive Directors having recused
themselves from discussion) an increase in
those fees of 5% with effect from
1 January 2023. This is equivalent to 1.6%
per annum compounded over the period
since any of these fees were last
increased, with effect from 1 January
2020. There have been no other increases
in those fees during the three-year term of
the current DRP.
Risk and control impacts on
remuneration
We have considered the significant impact
on the Group of risk and control issues
during 2022 throughout our remuneration
decision-making this year, including the
financial impact, the reputational impacts
and how these events reflect on our
control environment.
Principally, our consideration has been
focused on the incentive pool for 2022.
Our incentive funding incorporates a
significant reduction to reflect the impact
of risk and control issues, as referenced
above. The Over-issuance of Securities in
the US was a key factor in determining
these remuneration impacts and accounts
for the majority of the incentive pool
reduction. The monetary penalties
imposed by the SEC and CFTC for the use
of unauthorised business communications
channels were also taken into account.
Incentive pool
2022 incentive pool reduction
Reduction
c.£500m
This reduction was c.£500m, which had an
impact across the whole of Barclays but
was more focused in the areas of the
Group closest to where the incidents
occurred, resulting in larger year-on-year
reductions in those areas.
The Committee ensured that certain
individuals who identified and escalated the
over-issuance or who were most central to
its remediation have been specifically
recognised and rewarded, reinforcing the
culture that colleagues should speak out,
raise issues and work collaboratively to
resolve those issues. On the other hand,
our review of individuals who may be
considered responsible or otherwise
accountable for the over-issuance is
progressing. Once concluded, appropriate
action will be taken including negative
adjustment to variable remuneration
where applicable. As that review is
ongoing, unvested variable remuneration
of relevant persons will be suspended as
required to allow the review to run its
course.
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Remuneration report (continued)
For the Executive Directors, the financial
measures for both the 2022 bonus and the
2020-2022 LTIP awards are defined as
excluding material items (material one-off
items that are typically called out within our
financial reporting). The Committee
exercised its discretion not to exclude the
impacts associated with the Over-
issuance of Securities in the US or the
monetary penalties imposed by the SEC
and CFTC for the use of unauthorised
business communications channels. As a
result, the 2022 annual bonus awards were
£403,000, £166,000 and £76,000 lower
than they would otherwise have been, for
Venkat, Anna and Tushar respectively
(after pro-rating for Anna and Tushar). The
2020-2022 LTIP vesting outcome was 5%
less than it might have been, as the
Committee set the Control environment
element of the LTIP Risk scorecard to
zero.
In addition, the Committee reduced the
2021 annual bonus outcomes for Venkat
and Tushar, and the 2019-2021 LTIP
outcome for Tushar, to reflect the impact
of the restatement of the 2021 financial
statements on the financial metrics for
those awards, as outlined earlier.
In summary, the aggregate remuneration
impacts for the Executive Directors in this
respect are as shown in the following table:
Executive Directors' incentive outcomes
Reduction
2022 bonus outcomes
2020-2022 LTIP outcome
2021 bonus outcomes
2019-2021 LTIP outcome
Total
£645,000
£213,000
£30,000
£116,000
£1,004,000
The review by external counsel into the
facts and circumstances relating to the
Over-issuance of Securities concluded
that the occurrence of the over-issuance
was not the result of a general lack of
attention to controls by Barclays, and that
Barclays’ management has consistently
emphasised the importance of maintaining
effective controls. As such, although the
financial impact of the over-issuance on
the Group was significant, the Committee
concluded that reducing the Executive
Directors’ incentive outcomes via the
financial performance metrics, plus setting
the Control environment element of the
2020-2022 LTIP Risk scorecard to zero,
was sufficient and appropriate.
Update in respect of Jes Staley’s
remuneration
As outlined in last year’s Annual Report, on
31 October 2021 the Board agreed with
Jes Staley that he would step down from
the role of Group Chief Executive with
immediate effect. In doing so, Mr Staley
was legally and contractually entitled to 12
months’ notice, during which he continued
to receive his Fixed Pay and other benefits.
Accordingly, his employment came to an
end in the usual way at the end of his
notice period, on 31 October 2022.
No further remuneration decisions have
been made in respect of Mr Staley. As
outlined in last year’s Remuneration report,
his unvested awards remain suspended
pending further developments in respect
of the regulatory and legal proceedings
related to the FCA and PRA investigation
regarding Mr Staley, including LTIP awards
that otherwise might have vested. Those
proceedings are ongoing.
Looking ahead
As the Group Chief Executive sets out in
his review, although we have
demonstrated that our diversified model
can deliver attractive returns, our focus is
to be prepared for the road ahead to
create further value for our customers,
clients, investors and other stakeholders.
As we move into 2023, the Committee
maintains its commitment to rewarding
sustainable performance. We will continue
our focus on supporting management to
use our performance management and
remuneration policies and practices to
incentivise and reward progress as we
deliver our strategic goals, reinforce the
importance of good conduct, strong
controls and risk management, and
support Barclays' Values, Mindset and
culture.
We will continue to engage with our
shareholders and other stakeholders on
pay, and will be meeting with our largest
shareholders to discuss our pay outcomes
for 2022.
Beyond this, we will maintain focus on our
Fair Pay Agenda, continuing to support
colleagues through the challenges we all
face and furthering our work on pay
simplification. We remain committed to
making sure that the way we pay our
people continues to support the long-
term health and success of the Group.
Brian Gilvary
Chair, Board Remuneration Committee
14 February 2023
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Remuneration report (continued)
Executive Director remuneration outcomes at a glance
C.S. Venkatakrishnan
Annual bonus
£1,949k
75.4% of maximum
Annual bonus performance measures (% weighting)
Financial (60%)
Profit before tax (excluding material items) (50%)
Cost:income ratio (excluding material items) (10%)
Strategic non-financial (25%)
Personal objectives (15%)
Anna Cross
Annual bonusb
£803k
75.4% of maximum
Annual bonus performance measures (% weighting)
Financial (60%)
Profit before tax (excluding material items) (50%)
Cost:income ratio (excluding material items) (10%)
Strategic non-financial (25%)
Personal objectives (15%)
Total remuneration outcomesa (£m)
2022
Max for
2022
5.197
9.725
n Fixed Pay n Pension and benefits n Annual bonus n LTIP
Share ownership (£000)
Date of appointment 1 November 2021
C.S. Venkatakrishnan has until
1 November 2026 (five years
from the date of his appointment
as an Executive Director) to meet
this shareholding requirement.
As at 31 December 2022, based
on vested shares only, as per the
current DRP, Q4 2022 average
share price of £1.5315 and an
annualised Fixed Pay of £2,780k
for C.S. Venkatakrishnan.
n Actual
n Requirement
Total remuneration outcomesc (£m)
2022
Max for
2022
n Fixed Pay n Pension and benefits n Annual bonus
Share ownership (£000)
Date of appointment 23 April 2022
2.057
2.321
Anna Cross has until 23 April
2027 (five years from the date of
her appointment as Executive
Director) to meet this
shareholding requirement. As at
31 December 2022, based on
vested shares only, as per the
current DRP, Q4 2022 average
share price of £1.5315 and an
annualised Fixed Pay of £1,725k
for Anna Cross.
n Actual
n Requirement
a C.S. Venkatakrishnan's LTIP value for 2022 is nil as he was not a participant in the 2020-2022 LTIP cycle. The LTIP value shown for his 2022 maximum is the maximum LTIP award value that he could
have been granted under the current DRP (140% of Fixed Pay) multiplied by his 2022 year-end Fixed Pay.
b Anna Cross was appointed as Group Finance Director on 23 April 2022. The bonus shown for 2022 is in respect of her service as an Executive Director during 2022.
c Anna Cross was appointed as Group Finance Director on 23 April 2022. The values shown are in respect of her services as an Executive Director during 2022, with both the actual and maximum values
pro-rated for the proportion of the year in that role. The LTIP value for 2022 is nil as she was not a participant in the 2020-2022 LTIP cycle. No LTIP value is shown for the 2022 maximum as she was
only appointed as an Executive Director during the year.
75.4%81.6%36.0%72.0%86.7%75.4%81.6%36.0%72.0%86.7% Strategic
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Remuneration report (continued)
Remuneration philosophy
To attract and retain the people who can best deliver for our
customers and clients, we must pay fairly and appropriately –
balancing the interests of all our stakeholders. Our policies and
practices are transparently communicated and enable us to
reward sustainable performance in line with our Values, Mindset
and risk expectations. This is our remuneration philosophy.
Philosophy
Attract and retain talent needed to
deliver Barclays’ strategy
Align pay with investor and other
stakeholder interests
Reward sustainable performance
Long-term success depends on the talent of our employees. This means attracting and retaining an
appropriate range of talent to deliver against our strategy, and paying the right amount for that talent.
Remuneration should be designed with appropriate consideration of the views, rights and interests of
stakeholders. This means listening to our shareholders, other investors, regulators, government,
customers and employees and ensuring their views are appropriately represented in remuneration
decision-making.
Sustainable performance means making a positive and enduring difference to investors, customers
and communities, taking pride in leaving things better than we found them and playing a valuable role in
society.
Support Barclays’ Values and culture
Results must be achieved in a manner consistent with our Values. Our Values, culture and Mindset
should drive the way that business is conducted.
Align with risk appetite, risk exposure
and conduct expectations
Be fair, transparent and as simple as
possible
Designed to reward employees for achieving results in line with the Group’s risk appetite and conduct
expectations.
We are committed to ensuring pay is fair, simple and transparent for all our stakeholders. All employees
and stakeholders should understand how we reward our employees, and fairness should be a lens
through which we make remuneration decisions.
Specifically relating to our Executive Directors, we review the
performance measures for the forward-looking incentives each
year to ensure that we maintain alignment with our strategic
priorities and KPIs, and to ensure that the measures we select
continue to be appropriate in light of current circumstances and
challenges. Alongside our key financial measures, our strategic
non-financial performance objectives aim to ensure that the link
between individual incentive outcomes and the delivery of our
strategy, and the achievement of sustainable long-term
performance, continues to be reinforced. The alignment of
executive pay to our culture was further supported by the
continued inclusion in the personal objectives for our Group Chief
Executive of the responsibility to embed our Mindset across the
organisation and continue to develop a high-performing culture in
line with our Values.
Our philosophy in action
Our remuneration philosophy applies to all of our employees
globally, including our Executive Directors. The pay decisions set
out in this report are a result of the application of our
remuneration philosophy during 2022.
Our philosophy and the way that we approach remuneration is
designed to be as simple and clear as possible, while ensuring
strong alignment with risk and conduct as well as our Values and
Mindset. It is closely aligned with Provision 40 of the FRC’s UK
Corporate Governance Code, as shown in the table later in this
section, and we have continued to be transparent on the resulting
outcomes in this report.
We seek to consider the views of all of our stakeholders in
remuneration decision-making. In 2022, we achieved this by
meeting with institutional shareholders to understand their views
on our 2021 pay outcomes, engaging extensively with our
regulators to ensure appropriate compliance with regulatory
requirements, and continuing our partnership with Unite the
Union in the UK to understand the views of their members and
agree a new pay deal. We used our 2021 Fair Pay Report and
internal communication channels to share information on our
approach to pay with colleagues, including how executive
remuneration aligns with the wider workforce pay policy, and we
are now publishing our fifth Fair Pay Report to help do the same
for 2022.
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Remuneration report (continued)
Alignment with strategic priorities and stakeholder groups
Our three strategic priorities are reflected in the measures that
determine colleague incentives, including bonus and LTIP
outcomes for the Executive Directors.
The table below sets out the performance measures used in the
2023 Executive Director bonus and the 2023-2025 LTIP, and
outlines how these align to our strategic priorities, and to each of
our key stakeholder groups.
Some of these performance measures are assessed annually
while the full impact of delivering our strategy will only be seen over
several years.
Performance measures
Included in
2023
annual
bonus
Included in
2023-2025
LTIP
Alignment to strategic pillars
Alignment to
stakeholder groups
Deliver sustainable
growth in the CIB
Capture opportunities
as we transition to a
low-carbon economy
Customers and clients,
Colleagues, Society and
Investors
Deliver next
generation, digitised
consumer
financial services
Financial Profit before tax
with CET1 ratio
underpin
Cost:income ratio
Return on tangible
equity (RoTE)
CET1 ratio
Relative total
shareholder return
(TSR)
Personal
Individual objectives for the
Executive Directors are aligned
to our Purpose and strategic
priorities
Strategic non-financial
A number of sources are used to
assess the success of our
strategy and to provide a
balanced review of our
performance, including both
non-financial and financial
measures
Risk scorecard
Captures a range of risks aligned
with the annual risk alignment
framework
Stakeholder groups
Including Customer
and client measures,
such as:
Including Customer
and client measures,
such as:
Including Climate and
sustainability measures,
such as:
Barclays UK Net
Promoter Score (NPS)
Barclays UK
complaints
Consumer, Cards and
Payments US
customer digital
engagement
Global Markets
revenue ranking and
share
Social, environmental
and sustainability-linked
financing facilitated
Investment Banking
global fee ranking
and share
Reducing our financed
emissions (our current
estimate of our clients’
activities based on our
disclosed
methodology)
Including Colleague
measures, such as:
Measures of
colleague
engagement and
colleague advocacy
Gender and ethnicity
diversity
Achievement against
our Strategic non-
financial measures
also benefits
Investors
The management of risk underpins the execution of our strategy. The internal and external
risks that the Group is exposed to as part of its ongoing activities are managed as part of our
business model. The current LTIP Risk scorecard measures performance against three broad
categories – Capital and liquidity, Control environment and Conduct – using a combination of
quantitative and qualitative metrics
Customers and clients – Supporting our customers and clients to achieve their goals with our products and services.
Colleagues – Helping our colleagues across the world develop as professionals.
Society – Providing support to our communities, and access to social and environmental financing to address societal need.
Investors – Delivering attractive and sustainable shareholder returns on a foundation of a strong balance sheet.
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Remuneration report (continued)
Alignment with Provision 40 of the UK Corporate Governance Code
Code requirements
How the Committee has addressed the requirement
Clarity – remuneration arrangements should be transparent and
promote effective engagement with shareholders and the
workforce
Simplicity – remuneration structures should avoid complexity and
their rationale and operation should be easy to understand
Risk – remuneration arrangements should ensure reputational and
other risks from excessive rewards, and behavioural risks that can
arise from target-based incentive plans, are identified and
mitigated
Predictability – the range of possible values of rewards to individual
Directors and any other limits or discretions should be identified
and explained at the time of approving the policy
Proportionality – the link between individual awards, the delivery of
strategy and the long-term performance of the company should
be clear. Outcomes should not reward poor performance
Alignment to culture – incentive schemes should drive behaviours
consistent with company Purpose, Values and strategy
• A clear remuneration philosophy with aligned policies and practices for
Executive Directors and the wider workforce
• Our Fair Pay Report, which sets out how pay fairness is central to what
we stand for, is used to engage with our shareholders and our
colleagues
• Regular engagement on remuneration with our largest institutional
shareholders
• Clear disclosure of rationale for and operation of each element of the
DRP
• Executive Directors incentivised via annual bonus with deferral and
LTIP
• Prospective disclosure of bonus metrics and LTIP targets, and full
retrospective disclosure of outcomes against financial and non-
financial targets and criteria, with full supporting commentary
• Assessment of 'What' and 'How' performance is achieved
• Ex-ante and ex-post risk factored into the assessment of business
performance
• Significant deferral into shares, to align with shareholder experience
• Committee discretion to adjust all variable remuneration outcomes
• Malus and clawback provisions apply to all elements of variable
remuneration
• Regulatory caps on incentive outcomes
• Scenario charts illustrate potential pay-outs under each element of the
DRP
• Key areas of Committee discretion clearly outlined in the DRP
• Annual bonus and LTIP measures reviewed each year to maintain
alignment to strategic priorities / KPIs
• Very significant deferral into shares, to align with shareholder
experience
• Committee discretion, malus and clawback provisions apply to all
elements of variable remuneration, to ensure risk alignment for the
Executive Directors
• The Committee reviews all policies and practices, including incentive
schemes, ensuring alignment to the Group's Purpose, Values, Mindset
and conduct expectations
• A key aspect of remuneration philosophy is rewarding sustainable
performance
• Executive Directors' bonus and LTIP based on a balanced scorecard of
financial and non-financial measures, with financial measures aligned to
external financial targets and non financial measures aligned to
supporting Customers and clients, Colleagues and Climate and
sustainability
• Commitment to pay fairness across the workforce
• Executive Director remuneration outcomes considered in the context
of outcomes across the wider workforce
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Remuneration report (continued)
Fair pay
at a glance
We have developed our
fair pay approach over a
number of years and we
continue to ensure that
fairness is a key, and
explicit, consideration in
the way we make all of
our pay decisions.
+ Barclays PLC Fair Pay Report 2022 can be found
online at home.barclays/annualreport
With the rising cost of living, our
commitment to fair and appropriate pay is
more important than ever.
During 2022, we continued our work on
this and as a result we were well positioned
to take rapid action to support colleagues
in response to sharp increases in the cost
of living, through pay increases for our
lowest paid colleagues. We also factored in
cost inflation during the annual salary
review impacting 2023 salaries.
We continue to strive for greater
transparency in our approach to pay, and
as part of this during 2022, we simplified
the reward structures for some of our
lowest paid colleagues in the UK and US.
This is our fifth year publishing a Fair Pay
Report and we will continue to use the
report to engage with our stakeholders on
pay, explaining our approach to fair pay,
including the alignment of approaches to
Executive Directors’ and employee pay.
We encourage you to read the full report.
Fair pay for the lowest paid
Paying fairly for work done, in a simple and
transparent way.
• Continued to progress our work on global living
wages, reviewing all our locations around the world
to ensure we pay at least the living wage
• Simplified incentives for colleagues in US contact
centres by replacing four historical plans with a
single, consistent and more transparent approach
Equal opportunities to progress
• Responded to cost-of-living challenges by bringing
forward part of the 2023 pay increase budget,
awarding our most junior colleagues in the UK and
in some European countries a salary increase
effective from August 2022 and November 2022
respectively
•
Introducing a simpler and more transparent
approach to pay for most junior UK roles from
March 2023
Providing equal employment opportunities to all,
so everyone can enjoy a successful career at
Barclays.
• Reinforced the right behaviours through our
recognition programme, with a colleague being
recognised on average every 45 seconds in 2022
• Enhanced our continuous performance
• Achieved our Race at Work Ambition to double the
management cycle to focus on two of our global
priorities, Diversity, Equity and Inclusion, and Risk
and Control, through communication and
eLearning
number of Black Managing Directors by the end of 2022
• Set a new Race at Work Ambition to increase the
population of Managing Directors from
underrepresented ethnicities by at least 50% by
the end of 2025
Communicating with colleagues
Engaging with colleagues to understand their views
on the culture of the organisation and enabling the
representation of employees in our remuneration
decision-making process.
• Engaged with Unite the union on a range of topics
including cost-of-living and fair pay, and agreed a
2023 UK pay deal providing our lowest-paid
colleagues a total average annual salary increase
budget of 11%
• Published additional information for colleagues to
explain how the Group’s pay and performance
approach aligns to the Fair Pay Agenda
• Our Inclusion Index measures how included our
colleagues feel. For 2022 it is 82%, up from 79% in 2021
• Our Wellbeing Index measures how colleagues feel
about their wellbeing. For 2022 it is 86%, up from
84% in 2021
Alignment of employee and Executive Director pay
Linking both Executive and employee pay to
sustainable business performance.
• Pay outcomes continue to be aligned with financial
and non-financial performance
• Our pay policies are strongly aligned across the
wider workforce, senior employees and Executive
Directors of Barclays PLC
• Where pay policies differ, this is aligned to
differences in seniority and ability to influence
business performance
• 2023 salary increase budget for the most junior
colleagues in the UK is 11%, US is 9% and India is
10%. The budget for more senior employees is
smaller. The Group Chief Executive and Group
Finance Director will receive 3.4% and 4.3%
respectively
Equal pay commitment
Rewarding employees fairly for their contribution
and making sure pay and performance decisions
never take into account any protected
characteristics
• Explicit communication to managers that pay
decisions must not take into account gender, age,
ethnicity, disability, sexual orientation, religion,
marital status, pregnancy, maternity, parental
leave or any other protected characteristic
• All grievances raised by employees, including any
issues relating to pay, are investigated
• Robust processes in place to review pay and
performance decisions to ensure outcomes
remain fair and free from bias
Key milestones: Five years of fair pay reporting
Published our Equal Pay
Commitment for the first time
in the 2018 Fair Pay Report
Published additional fair pay communication materials to
our colleagues to explain how the pay and performance
approach aligns to the Fair Pay Agenda
Published our Fair Pay
Agenda for the first time
to articulate how we think
about fair pay at Barclays
First global review of
living wages, increasing
minimum hourly
rates in the US and India
Aligned Executive Directors’ pension contribution
with the wider workforce while simultaneously
increasing the contribution for our most junior UK
colleagues from 10% to 12%
Responded to the cost-of-living
challenges in the UK and Europe by
bringing forward a portion of the
annual salary increase budget
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Remuneration report (continued)
Employee remuneration policy summary
As outlined earlier, Barclays has a clearly articulated remuneration
philosophy. This continues to drive our thinking in how we
structure and determine remuneration for all employees, from the
most senior (including our Executive Directors) to our new
apprentices and graduates. As part of our annual review we
assessed our remuneration policies and practices for alignment
with Barclays’ Purpose, Values and Mindset, our remuneration
philosophy and our Fair Pay agenda, including ensuring
appropriate alignment between the Directors’ remuneration
policy and remuneration approaches for senior management and
the wider workforce.
We continue to ensure that we comply with all prevailing
regulations. We identify individuals whose roles may expose
Barclays to material risk, and assess and structure their pay in a
way which encourages alignment of their interests with those of
Barclays and our shareholders.
The table below provides a summary of the remuneration
approach for employees below Board level.
Summary remuneration policy – employees below Board level
Element
Salary
Operation
Salaries reflect individuals’ skills and experience and are reviewed annually.
Role Based Pay (RBP)
Pension and benefits
Annual bonus
Share plans
Performance management
Risk and conduct
They are increased where justified by role change, increased responsibility or a change in the appropriate
market rate. Salaries may also be increased in line with local statutory requirements and in line with union and
works council commitments.
We have been a living wage employer in the UK since 2013, and continue to work with the Fair Wage Network
to complete an annual review of our pay levels against living wage benchmarks across locations globally.
A small number of senior employees (c.2% UK employees) receive a class of Fixed Pay called RBP to
recognise the seniority, scale and complexity of their role. This may change where justified by role or
responsibility change or a change in the appropriate market rate.
The provision of a competitive package of benefits is important to attracting and retaining the talent needed
to deliver Barclays’ strategy. Employees have access to a range of country-specific company-funded
benefits, including pension schemes, healthcare, life assurance and other voluntary employee-funded
benefits.
Employer pension contributions for the UK workforce are at least at the level of those for the Executive
Directors, and are set at a minimum of 10% of salary (a minimum of 12% for more junior colleagues).
Annual bonuses incentivise and reward the achievement of Group, business and individual objectives, and
reward employees for demonstrating individual behaviours in line with Barclays’ Values and Mindset. All
employees are considered, subject to eligibility criteria.
For senior employees, an appropriate proportion of their annual bonus is deferred to future years. Deferred
bonuses are generally delivered in equal portions as deferred cash and shares. They are subject to either a
three, four, five or seven-year deferral period (and for Material Risk Takers (MRTs) further holding periods of
six or 12 months for deferrals in shares) in line with regulatory requirements.
Consistent with regulation, the remuneration of MRTs is subject to the 2:1 maximum ratio of variable to fixed
remuneration.
We encourage wider employee share ownership through the all-employee share plans, with plans available
to 99% of colleagues globally.
Performance assessment is based on two core dimensions: ‘what’ has been delivered against agreed
individual, team and business objectives, as well as ‘how’ this has been achieved in line with our Barclays’
Values and Mindset. Both dimensions are assessed and rated independently of each other with no
requirement to have an overall rating. This reinforces the equal importance of the ‘what’ and ‘how’.
Risk and conduct is taken seriously at Barclays and the Committee ensures that there are in-year
adjustments, malus or clawback applied to individual remuneration, where appropriate.
In addition to individual adjustments, the Committee considers collective adjustments to the incentive pool
for risk and conduct. For 2022, the total impact of risk and conduct-related collective adjustments is a
reduction of c.£500m.
More information on our approach to performance management, and risk and conduct, as well as information in relation to Material Risk
Takers, are set out in Appendix C of the Barclays PLC Pillar 3 Report 2022.
Barclays PLC Pillar 3 Report 2022 can be found online at home.barclays/annualreport
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Remuneration report (continued)
Directors’ remuneration policy
This section sets out the proposed new Directors’ remuneration
policy, which is intended to apply for three years beginning on the
date of the 2023 AGM, subject to shareholder approval. Key
elements of the policy remain unchanged from the existing policy.
Minor changes have been made to simplify the shareholding
requirement and align its operation with market practice, and to
simplify other elements of the policy wording, including moving
items relating to the implementation of the policy out of the policy
itself and into the Annual report on Directors’ remuneration.
The existing policy can be found on pages 93 to 122 of the 2019
Annual Report or at home.barclays/annualreport.
Remuneration policy – Executive Directors
Element and purpose
Operation
Fixed Pay
To reward skills and
experience appropriate
for the scale, complexity
and responsibilities of
the role and to provide
the basis for a
competitive
remuneration package.
Fixed Pay is determined based on the individual’s role, skills and
experience with reference to market practice and market data
(on which the Committee receives independent advice).
The Committee aims to set the Fixed Pay for each Executive
Director at a level that provides an appropriately competitive
total compensation, within regulatory maximums and policy
limits on the level of variable pay relative to fixed pay. Executive
Directors’ total compensation is benchmarked against similar
roles at a peer group of international banks of comparable size
and complexity, as determined by the Committee. The
Committee may amend the peer group from time to time to
ensure it remains a relevant comparison to Barclays or if
circumstances make this necessary (for example, as a result of
takeovers or mergers).
50% of Fixed Pay is delivered in cash (paid monthly), and 50% is
delivered in shares. The shares are delivered in four equal
quarterly instalments (after deduction of applicable payroll
taxes) and are then subject to a holding period, with restrictions
lifting over five years from the date of delivery (20% each year).
The Executive Directors beneficially own the shares from the
date of delivery and are entitled to receive any dividends that
are subsequently paid on those shares.
Risk and conduct adjustment, malus and clawback provisions
do not apply to Fixed Pay.
Pension
To support Executive
Directors to build long-
term retirement savings.
Executive Directors receive an annual cash allowance in lieu of
participation in a pension arrangement.
Risk and conduct adjustments, malus and clawback provisions
do not apply to pension.
Maximum value and performance measures
Fixed Pay for each Executive Director is
reviewed annually and set to provide an
appropriate total compensation
opportunity compared to the peer group,
as determined by the Committee, taking
into account the Executive Director’s
skills, experience and performance.
Increases will normally be no more than
the average annual increase for UK
employees. The Committee may
determine larger increases in
circumstances such as changes in
responsibilities, when the overall total
compensation opportunity is materially
below the market or when it is justified
based on skills, experience and
performance in the role.
Payment of Fixed Pay is not contingent
on any performance measures.
The maximum annual cash allowance
value is currently 5% of Fixed Pay
(equivalent to 10% of the cash element of
Fixed Pay). The Committee may change
the maximum annual cash allowance in
lieu of pension, provided that the
maximum allowance as a percentage of
the cash element of Fixed Pay will not
exceed the employer pension
contribution rate provided to the wider
UK workforce.
There are no performance measures.
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Remuneration report (continued)
Element and purpose
Operation
Benefits
To provide a competitive
and cost-effective
benefits package
appropriate to the role
and reflecting local
market practice, and to
support the health and
wellbeing of the
Executive Directors.
Executive Directors’ benefits provision includes, but is not
restricted to, private medical cover, annual health check, life
and ill health income protection, and use of a Company vehicle
and driver when required for business purposes (including any
tax liabilities that may arise from these benefits).
If an Executive Director relocates to perform their role,
additional support may be provided for a defined and limited
period of time, in line with Barclays’ general employee mobility
policies and practices. This would include, but is not restricted
to, the provision of temporary accommodation, tax advice,
home leave flights, removals assistance and relocation flights
for the Executive Director and their dependents as well as tax
and/or social security costs arising in connection with such
benefits.
Annual bonus
Determination of annual bonus
To reward delivery of
short-term financial
targets and strategic
objectives, and the
individual performance
of the Executive
Directors in achieving
those.
Delivery in part in shares
with holding periods
increases alignment with
shareholders. Bonus
deferral encourages
longer-term focus and
longer-term share
retention.
Individual bonuses are entirely discretionary and decisions are
based on the Committee’s judgement of Executive Directors’
performance in the year, measured against Group and
personal objectives.
Delivery structure
Annual bonuses are delivered as a combination of cash and
shares, a proportion of which may be deferred and/or subject
to a holding period. Clawback provisions apply to the bonus
(described later in this policy).
Deferral proportions and vesting profiles will be structured so
that, in combination with any LTIP award, the proportion of
variable pay that is deferred is no less than that required by
regulations (currently 60%).
Deferred bonuses are granted subject to the relevant plan
rules, with vesting subject to certain requirements including
continued employment and the malus provisions (described
later in this policy).
The number of deferred bonus shares to be awarded may be
based on a share price discounted by reference to an expected
dividend yield over the vesting period, where dividend
equivalents cannot be awarded due to regulations. In such
circumstances, the Committee has discretion to reduce (not
increase) the number of shares that vest if actual dividends
paid over the period are materially lower than the original
dividend assumption.
Maximum value and performance measures
The maximum value of benefits is
determined by the nature of the benefit
itself and costs of provision may depend
on external factors, e.g. insurance costs.
There are no performance measures.
The maximum annual bonus opportunity
is 93% of Fixed Pay for the Group Chief
Executive and 90% of Fixed Pay for the
Group Finance Director.
Although the Committee takes a
structured approach to considering the
level of bonus outcome each year, as
outlined below, any bonus award is
discretionary and any amount may be
awarded from zero to the maximum
value.
Each year, the Committee sets forward-
looking performance measures,
weightings and targets near the start of
the year, covering financial and non-
financial measures. Financial factors will
normally guide at least 60% of the bonus
opportunity. The Committee will consider
performance against those measures in
determining the annual bonus for the
Executive Directors.
The Committee has the discretion to vary
the measures and their respective
weightings. The measures and weightings
will be disclosed annually as part of the
Annual Report on Directors’
remuneration, at the beginning of the
performance year.
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Remuneration report (continued)
Element and purpose
Operation
Long Term Incentive Plan
(LTIP) award
To incentivise execution
of Barclays’ strategy
over a multi-year period.
Long-term performance
measurement, deferral
into Barclays shares and
holding periods
encourage a long-term
view and align Executive
Directors’ interests with
those of shareholders.
Determination of LTIP award
LTIP awards are determined by the Committee following
discussion of recommendations made by the Chairman (for
the Group Chief Executive’s LTIP award) and by the Group
Chief Executive (for other Executive Directors’ LTIP awards)
based on satisfactory performance over the prior year.
Delivery structure
LTIP awards are granted subject to the plan rules and are
conditional awards to receive Barclays shares at no cost
(although they may be satisfied in other instruments as may be
required by regulation). Vesting is dependent on certain
requirements including the achievement of performance
measures, continued employment and malus and clawback
provisions.
LTIP awards are structured so that when combined with the
annual bonus the proportion of variable pay that is deferred is
no less than that required by regulations (currently 60%). No
award vests before the third anniversary of grant and award
vests no faster than permitted by regulations (currently in five
equal tranches with the first tranche vesting on or around the
third anniversary of grant and the last tranche vesting on or
around the seventh anniversary of grant). Any shares that vest
are subject to an additional holding period with restrictions
lifting no faster than permitted by regulations (currently 1 year
following vesting, though sufficient shares may be sold to
settle personal tax liabilities).
The number of shares to be awarded may be based on a share
price discounted by reference to an expected dividend yield
over the vesting period, where dividend equivalents cannot be
awarded due to regulations. In such circumstances, the
Committee has discretion to reduce (not increase) the
number of shares that vest if actual dividends paid over the
period are materially lower than the original dividend
assumption.
Maximum value and performance measures
The maximum annual LTIP award for the
Group Chief Executive is 140% of Fixed Pay
and 134% of Fixed Pay for the Group
Finance Director.
For each award, the Committee sets
forward-looking performance measures,
weightings and targets at grant. These will
be disclosed prospectively as part of the
Annual Report on Directors’ remuneration,
including the threshold and maximum level
of performance for each financial measure.
Financial measures will normally be at least
70% of the total opportunity. Straight-line
vesting applies between threshold and
maximum performance. For each
measure, no more than 25% will vest at
threshold performance. There is no
retesting allowed of those conditions.
In exceptional circumstances, the
Committee has discretion (permitted
under the plan rules approved by
shareholders) to amend targets, measures,
or the number of shares under awards if an
event happens (for example, a major
transaction) that, in the opinion of the
Committee, causes the original targets or
measures no longer to be appropriate or
such adjustment to be reasonable. The
Committee also has the discretion to
reduce the vesting of any award, including
to nil, if it deems that the outcome is not
consistent with performance delivered.
Risk and conduct
adjustment - malus and
clawback
Malus and clawback
provisions discourage
excessive risk-taking and
inappropriate
behaviours.
Any bonus or LTIP awarded is subject to malus and clawback provisions.
The malus provisions enable the Committee to reduce the amount of unvested bonus or LTIP (including to
nil) prior to vesting in specified circumstances, including, but not limited to:
▪ a participant deliberately misleading Barclays, the market and/or shareholders in relation to the financial
performance of the Barclays Group
▪ a participant causing harm to Barclays’ reputation or where his/her actions have amounted to
misconduct, incompetence or negligence
▪ a material restatement of the financial statements of the Barclays Group or any subsidiary, or the Group
or any business unit suffering a material downturn in its financial performance
▪ a material failure of risk management in the Barclays Group
▪ a significant deterioration in the financial health of the Barclays Group.
The clawback provisions enable amounts to be recovered after they have vested, for a period in line with
applicable regulation – currently seven years from grant (which can be extended to up to ten years in
circumstances where a relevant investigation is ongoing at the end of the initial seven-year period) where (i)
a participant’s actions or omissions have amounted to misbehaviour or material error and/or (ii) Barclays or
the relevant business unit has suffered a material failure of risk management.
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Remuneration report (continued)
Element and purpose
Operation
All-employee share plans
To help increase the
number of employee
shareholders and
increase their
participation as
shareholders. Provides
potential UK tax benefits.
Executive Directors are entitled to participate in the following
all-employee share plans:
(i) Barclays Sharesave under which they can make monthly
savings out of post-tax pay over a period of three or five
years linked to the grant of an option over Barclays’ shares
which can be at a discount of up to 20% on the share price
set at the start.
(ii) Barclays Sharepurchase under which they can make
contributions (monthly or as a lump sum) out of pre-tax pay
(if based in the UK) which are used to acquire Barclays’
shares.
Maximum value and performance measures
(i) Savings per month between £5 and the
maximum set by Barclays (currently
£300), which will be no more than the
statutory maximum that applies for all
employees. There are no performance
measures.
(ii) Contributions per tax year of between
£10 and the maximum set by Barclays
(currently £1,800), which will be no more
than the statutory maximum that applies
for all employees. Barclays may match
contributions up to the statutory
maximum (current match is 1:1 for
employee contributions up to £600 per
tax year). There are no performance
measures.
Shareholding requirement
To further enhance the
alignment of Executive
Directors’ interests with
those of shareholders, in
long-term value
creation.
Executive Directors have a contractual obligation to build up a
shareholding, within five years from their date of appointment
as Executive Director, with a value equivalent to:
No maximum, the requirement sets out
the minimum required shareholding and
timeframes.
• Group Chief Executive: 233% of Fixed Pay
• Group Finance Director: 224% of Fixed Pay
which, for each Executive Director, is equivalent to their
maximum annual variable pay opportunity.
Executive Directors will have a reasonable period to build up to
this requirement again if it is not met because of a significant
share price depreciation.
For two years after stepping down as an Executive Director,
they must maintain a shareholding at a level equal to:
(i) the number of shares to be held under the shareholding
requirement, as determined immediately prior to their
stepping down as an Executive Director; or
(ii) the actual number of shares held on stepping down, if lower
(subject to the Committee determining that the resulting
level of shareholding is appropriate given the relevant
Executive Director’s tenure).
Shares that count towards the shareholding requirement are
those that the Executive Director beneficially owns, plus the
value of any vested share awards subject only to holding
periods (including Fixed Pay shares, vested bonus shares and
vested LTIP awards), the estimated after-tax value of any
shares from unvested deferred share bonuses, and the
estimated after-tax value of any unvested LTIP awards
provided that no performance conditions remain untested.
After the Executive Director has stepped down, the
shareholding requirement will be maintained through self-
certification, to the extent it is not met via shares held within
the Group’s employee share plans and nominee accounts.
In approving the application of this policy to the Executive
Directors, authority is given for the Group to honour any
commitments entered into with current or former Directors prior
to the approval and implementation of the policy (such as the
grandfathering of past deferred compensation awards), provided
that such commitments complied with any applicable
remuneration policy in effect at the time they were entered into.
Any remuneration commitment made prior to an individual
becoming a Director and not in anticipation of their appointment
to the Board may be honoured, even where it is not consistent
with the Directors’ remuneration policy in place at the time the
commitment was made or at the time it is fulfilled. For these
purposes, commitments include but are not restricted to the
satisfaction of past awards of variable remuneration, the terms of
which are set at the time the award is granted.
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Remuneration report (continued)
How shareholder views are taken into account by
the Committee in setting the policy
We recognise that remuneration is an area of particular interest to
some shareholders and that it is important that we listen to
shareholder views and take these into account when setting and
considering changes to remuneration. Accordingly, a series of
meetings are held each year with major shareholders and
shareholder representative groups to understand their views. The
Group Chair or Committee Chair attended these meetings,
accompanied by senior Barclays employees (including the Group
Reward and Performance Director and the Group Company
Secretary).
In developing the new policy, we engaged with shareholders and
had meetings with shareholder representative bodies and proxy
agencies, in the latter part of 2022 and in early 2023. The
Committee notes that shareholder views on some matters are
not always unanimous; however, the interactions are constructive
and insightful. The engagement is meaningful and helpful to the
Committee in its work and contributes directly to the decisions
made by the Committee.
Discretion
In addition to the various operational discretions that the
Committee can exercise in the performance of its duties
(including those discretions set out in the Company’s share plans),
the Committee reserves the right to make either minor or
administrative amendments to the policy to benefit its operation
or to make more material amendments in light of new laws,
regulations and/or regulatory guidance. The Committee would
only exercise this right if it believed it was in the best interests of
the Company to do so and where it is not possible, practicable or
proportionate to seek or await shareholder approval in General
Meeting.
Executive Directors' policy on recruitment
Barclays operates in a highly specialised sector and many of its
competitors for talent are outside of the UK. The Committee’s
approach to remuneration on recruitment is to pay the amount
necessary to fill the role with a suitable candidate.
Approval of the remuneration package offered on appointment to
any new Executive Director is a specific requirement of the
Committee’s Terms of Reference. The terms of such packages
must be approved by the Committee in consultation with the
Chairman and (except for the terms of his own remuneration) the
Group Chief Executive.
Any new Executive Director’s package would include the same
elements as those of the existing Executive Directors, as shown
on the next page.
Performance measures and targets
The Committee selects financial performance measures that are
fundamental to delivery against the Bank’s strategy and are
considered to be the most important financial measures used by
the Executive Directors and the Board to oversee the direction of
the business. The non-financial performance measures are
chosen to represent key indicators of the success of our strategy,
to provide a balanced view of our performance during the period,
that are robustly monitored and reported on to management.
Financial targets for both the annual bonus and LTIP are set to be
stretching but achievable and are aligned to enhancing
shareholder value. In respect of the annual bonus, the financial
measures and weightings will be disclosed at the start of the
relevant performance year. The Committee considers the annual
bonus targets to be commercially sensitive and that it would be
detrimental to disclose the targets at the start of the relevant
performance year so the specific targets, and performance
against those targets, will be disclosed at the end of the relevant
performance year, in that year’s Annual report on Directors’
remuneration, subject to commercial sensitivity no longer
remaining. In respect of the LTIP, the financial measures,
weightings and targets will be disclosed in the Remuneration
report published shortly after at the start of the relevant
performance period.
Alignment between the Executive Directors’
remuneration policy and all employees’ policy of
the Group
The structure of remuneration packages for the Executive
Directors is closely aligned with that for the broader employee
population. Employees receive salary, pension and benefits and
are eligible to be considered for a bonus and to participate in all-
employee share plans. The broader employee population typically
does not have a contractual limit on the quantum of remuneration
(though regulatory limits currently apply for MRTs) and does not
receive any of their fixed pay in shares (with the exception of the
members of the Group Executive Committee and some other
senior employees).
As for the Executive Directors, variable pay for the broader
employee population is performance based. Variable pay for both
the Executive Directors and the broader employee population is
subject to deferral requirements. Executive Directors and other
MRTs are subject to deferral at least equal to that required by
regulation, currently a minimum rate of 40% to 60%, depending
on the total value of variable pay. For non-MRTs, bonuses in
excess of £65,000 are currently subject to a graduated level of
deferral. The terms of deferred bonus awards for Executive
Directors and the wider employee population are broadly the
same, in particular the vesting of all deferred bonuses is subject to
service and malus conditions. The broader employee population
does not participate in the Barclays LTIP.
While we have not sought employee views on the DRP, we have
considered remuneration policies for the broader employee
population when reviewing the DRP. In our Fair Pay Report, we
explain in more detail how employee and Executive Director pay is
aligned.
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Remuneration report (continued)
Element and purpose
Operation
Fixed Pay
Pension
Benefits
Annual bonus and LTIP
award
Buy-out
In line with policy
In line with policy
In line with policy
In line with policy for the Group Chief Executive and Group Finance Director. If any new Executive Director
role is appointed to the Board, the Committee will consider the appropriate maximum annual bonus and
maximum LTIP opportunities for the role, as a multiple of Fixed Pay. Neither of these will exceed the
parameters of the policy for the Group Chief Executive.
The Committee can consider buying out forfeited bonus opportunity and/ or incentive awards that the new
Executive Director has forfeited as a result of accepting the appointment with Barclays, subject to proof of
forfeiture where applicable.
The Committee will take reasonable steps to ensure that any award made to compensate for forfeited
remuneration from the new Executive Director’s previous employment is not more generous than, and
mirrors as far as possible the expected value, timing and form of delivery of, the terms of the forfeited
remuneration, and ensure the award is in the long-term best interests of Barclays. Barclays’ deferral policy
shall however apply as a minimum to any buy-out of annual bonus opportunity.
The value of any buy-out is not included within the maximum incentive levels above since it relates to a buy-
out of forfeited bonus opportunity or incentive awards from a previous employer.
Where a senior executive is promoted to the Board, his or her existing contractual commitments agreed prior to his or her appointment
will still be honoured in accordance with the terms of the relevant commitment, including vesting of any pre-existing deferred bonus or
long-term incentive awards, even where it is not consistent with the Directors’ remuneration policy that is in place at the time it is
fulfilled. Prior to his appointment to the Board.
Executive Directors’ policy on payment for loss of office (including following a takeover)
The Committee’s approach to payments in the event of termination is to take account of the individual circumstances including the
reason for termination, individual performance, contractual obligations and the terms of the deferred bonus plans and LTIPs in which
the Executive Director participates.
Standard provision
Commentary
Notice period in Executive
Directors' service
contracts
Notice from the Company and from the Executive Director will normally be 6 months.
Executive Directors may be required to work during the notice period or may be placed on garden leave or, if
not required to work the full notice period, may be provided with pay in lieu of notice.
For C.S. Venkatakrishnan, the contractual notice period is 12 months’ notice from the Company and six
months’ notice from the Executive Director, as his existing notice period prior to his appointment to
the Board was honoured when he was promoted to the Board. For Anna Cross, the contractual notice
period is six months’ notice from the Company and six months’ notice from the Executive Director (she
did not have any pre-existing contractual commitment to a longer period).
Pay during notice period or
payment in lieu of notice
per service contracts
Fixed Pay delivered in cash and pension allowance will continue to be paid monthly, and other contractual
benefits provided, through the notice period. Fixed Pay delivered in shares will also continue to be delivered
quarterly for the notice period and the final quarterly award will be pro-rated for the number of days from the
start of the relevant quarter to the termination date.
Where Barclays elects to terminate employment with immediate effect by making a payment in lieu of
notice, the Executive Director will receive Fixed Pay delivered in cash as a lump sum or in instalments but will
not receive any Fixed Pay shares that would otherwise have been payable during the period for which the
payment in lieu is made (unless required otherwise by regulations or local law).
Any payments whether in instalments or as a lump sum may be subject to mitigation as relevant.
In the event of termination for gross misconduct neither notice nor payment in lieu of notice is given.
Eligibility for annual bonus
and LTIP awards
There is no automatic entitlement to be granted a bonus or LTIP award for the year of termination, but
eligibility for either or both may be considered at the Committee’s discretion, pro-rated for service, and
subject to performance measures being met.
No annual bonus or LTIP award would be granted in the case of gross misconduct or resignation.
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Remuneration report (continued)
Standard provision
Commentary
Treatment of unvested
deferred bonus and LTIP
awards
Repatriation
Other
The treatment of unvested deferred bonus or LTIP awards will be in accordance with the relevant plan rules.
Unvested deferred bonus and LTIP awards normally lapse if the Executive Director leaves by reason of
resignation prior to fifth anniversary of the date of grant, is terminated for gross misconduct or cause, or is
otherwise not an ‘eligible leaver’. ‘Eligible leaver’ is defined as leaving due to injury, disability or ill health,
retirement, redundancy, the business or company which employs the Executive Director ceasing to be part
of the Group, or otherwise at the discretion of the Committee. The Committee will normally apply its
discretion to apply eligible leaver status in the event of resignation after the fifth anniversary of grant, or in
the case of deferred bonuses if it is the employer that terminates employment (other than in circumstances
that amount to gross misconduct or dismissal for cause).
Where ‘eligible leaver’ treatment applies, deferred bonus and LTIP awards will normally continue to vest, on
the scheduled vesting dates and subject to the rules of the relevant plan, unless the Committee determines
otherwise in exceptional circumstances. On death, deferred bonus and LTIP awards are accelerated and
deferred bonus awards are released in full. In an ‘eligible leaver’ situation and in the case of death, LTIP
awards are pro-rated for time (over the whole performance period, including the assessment period prior to
grant) and with the proportion that vests remaining subject to performance against the performance
conditions, subject to the Committee’s discretion to determine otherwise, in accordance with the plan rules,
as amended from time to time. After release, the shares are subject to an additional holding period to the
extent required by regulations (currently a minimum 12 month holding period applies).
Unvested awards that continue beyond termination remain subject to malus provisions, which enable the
Committee to reduce the vesting level of deferred bonuses and LTIP awards (including to nil), and after
vesting awards remain subject to clawback provisions (as described in the main policy).
In the event of a takeover or other major corporate event, the Committee has absolute discretion to
determine whether all outstanding awards would vest early (subject to achievement of any performance
conditions for the LTIP and applicable regulation) or whether they should continue in the same or revised
form following the change of control. The Committee may also determine that participants may exchange
existing awards for awards over shares in an acquiring company with the agreement of that company. In the
event of an internal reorganisation, the Committee may determine that outstanding awards will be
exchanged for equivalent awards in another company.
Except in the case of gross misconduct or resignation, where an Executive Director has been relocated at
the commencement of or during their employment, the Company may pay for the Executive Director’s
repatriation costs in line with Barclays’ general employee mobility policy including temporary
accommodation, payment of removal costs and relocation flights for the Executive Director, spouse and
children. The Company will pay the Executive Director’s tax on the relocation costs but will not tax equalise
and will also not pay tax on his or her other income relating to the termination of employment.
Except in the case of gross misconduct or resignation, the Company may pay for the Executive Director’s
legal fees and tax advice relating to the termination of employment and provide outplacement services and
any other reasonable costs. The Company may pay the Executive Director’s tax on these particular costs.
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Remuneration report (continued)
Illustrative scenarios for Executive Directors'
remuneration
The charts below show the potential value of the current
Executive Directors’ 2023 total remuneration in four scenarios:
‘Minimum’ (i.e. Fixed Pay, pension and benefits), ‘Mid-point’ (i.e.
Fixed Pay, pension, benefits and 50% of the maximum variable pay
that may be awarded), ‘Maximum’ (i.e. Fixed Pay, pension, benefits
and the maximum variable pay that may be awarded) and
‘Maximum with illustrative share price increase’ (‘Maximum’
scenario, assuming share price appreciation of 50% on the LTIP).
The value of benefits in these charts is based on an estimated
annual value for regular contractual benefits provision during
2023. Additional ad hoc benefits may arise, for example, overseas
relocation of Executive Directors, but will always be provided in
line with the DRP.
A significant proportion of the potential remuneration of the
Executive Directors is performance related, delivered in Barclays
shares and subject to deferral, additional holding periods, malus
and clawback. These charts assume a constant share price, save
for the share price appreciation applied to the LTIP value only in
the 'Maximum with illustrative share price increase' scenario.
Group Chief Executive
£m
Group Finance Director
£m
n Fixed Pay
n Pension and benefitsa
n Annual bonus
a. Pension and benefits include the value of cash in lieu of pension and the anticipated value of taxable benefits. For C.S. Venkatakrishnan this includes relocation costs to which he is contractually entitled,
n LTIP
n Potential outcome of a 50% share price
increase on the LTIP
including temporary accommodation in London (annualised figure including tax gross up is expected to be c.£140k as well as shipping costs c.£118k).
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Remuneration report (continued)
Remuneration policy – Non-Executive Directors
Element and purpose
Operation
Maximum value
Fees
Reflect individual
responsibilities and
membership of Board
Committees and are set
to attract Non-Executive
Directors who have
relevant skills and
experience to oversee the
implementation of our
strategy
Fees are set at a level
which reflects the role,
responsibilities and time
commitment which are
expected from the Chair
and Non-Executive
Directors
The Chair is paid an all-inclusive fee for all Board
responsibilities. The Chair has a time commitment equivalent
of up to 80% of a full-time role. The other Non-Executive
Directors receive a basic Board fee, with additional fees
payable where individuals take on additional roles or
responsibilities, including, but not limited to, serving as a
member or Chair of a Committee of the Board or as a Senior
Independent Director.
Fees are periodically reviewed by the Board.
Non-Executive Directors may also receive fees where they
serve as directors of subsidiary companies of Barclays PLC. In
the case of certain subsidiary appointments, such additional
remuneration is approved by the Barclays PLC Board
Remuneration Committee.
No variable pay is provided, enabling the Chair and Non-
Executive Directors to maintain appropriate independence,
focus on long-term decision-making and constructively review
and challenge the performance of the Executive Directors.
Fees are reviewed against those for Non-
Executive Directors in banks and other
companies of similar size and complexity.
Other than in exceptional circumstances,
fees will not increase by more than 20%
above the current fee levels during this
policy period.
Additional fees may be paid for new
Committees of the Board and / or where a
Non-Executive Director takes on additional
responsibilities and / or performs an
additional role, provided these are not
greater than fees payable for the existing
roles on the Committees of the Board as
detailed in the Annual report on Directors'
remuneration.
Any increases to such additional fees over
the period of the policy will be made in
accordance with the principles set out
above for current fees.
Benefits
To provide a competitive
and cost effective
benefits package
appropriate to the role
and location
Expenses
Bonus and share plans
Shareholding requirements
Notice and termination
provisions
The Chair is provided with private medical cover subject to the terms of the Barclays’ scheme rules from
time to time, and is provided with the use of a Company vehicle and driver when required for business
purposes (including settlement of any tax liabilities that may arise from this benefit).
Benefits which are minor in nature and in any event do not exceed a cost of £500 may be provided to Non-
Executive Directors.
Non-Executive Directors are not eligible to join Barclays’ pension plans.
The Chair and Non-Executive Directors are reimbursed for any reasonable and appropriate expenses
incurred for business reasons. Any tax that arises on these reimbursed expenses is paid by Barclays.
The Chair may be invited to participate in Sharesave, an HMRC employee tax advantaged share scheme,
due to the level of their time commitment to the role. The Chair is not eligible to participate in any other
Barclays’ cash, share or long-term incentive plans.
All other Non-Executive Directors are not eligible to participate in Barclays’ cash, share or long-term
incentive plans.
An element of the basic fee before deduction of tax and other statutory deductions, equal to £100,000 for
the Chair and £30,000 for each Non-Executive Director, is used to purchase Barclays’ shares which are
retained on the Non-Executive Director’s behalf until they retire from the Board.
Instead of service contracts, the Chair and the Non-Executive Directors each have a letter of appointment
that reflect their responsibilities and time commitments. Non-Executive Directors are entitled to notice
under their letters of appointment but, other than in respect of the Chair, no compensation is due in the
event of termination, other than standard payments for the period served up to the termination date.
Each Director’s appointment is for an initial three-year term, renewable at Barclays’ discretion for a further
term of three years thereafter and subject to annual re-election by shareholders. Non-Executive Directors
appointed beyond six years will be at the discretion of the Board Nominations Committee.
Notice period
Chair: Six months from the Company, six months from the Chair.
Termination payment policy
The Chair’s appointment may be terminated by Barclays on six months’ notice or immediately in which case
six months’ fees are payable in instalments at the times they would have been received had the
appointment continued, but subject to mitigation if they were to obtain alternative employment. No
continuing payments of fees (or benefits) are due if a Non-Executive Director is not re-elected by
shareholders at the Barclays PLC AGM.
In accordance with the policy table above, any new Chair would be
paid an all-inclusive fee only and any new Non-Executive Director
would be paid a basic fee for their appointment as a Non-
Executive Director, plus fees for their participation on and/or
chairing of any Board committees and for taking on additional
responsibilities and/ or performing an additional role, time
apportioned in the first year as necessary. No sign-on payments
are offered to Non-Executive Directors.
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Remuneration report (continued)
Annual report on Directors’ remuneration
This section explains how our Directors’ remuneration policy was implemented for 2022
Executive Directors
Single total figure for 2022 remuneration (audited)
The following table shows a single total figure for 2022 remuneration in respect of qualifying service for each Executive Director
together with comparative figures for 2021.
1) Fixed Pay
£000
2) Pension
£000
3) Taxable
benefits
£000
Total
Fixed Pay
£000
C.S. Venkatakrishnana
Anna Crossd
Tushar Morzariae
2022
2021
2022
2021
2022
2021
2,767
450
1,185
—
540
1,688
138
343
23
59
—
27
84
6
10
—
30
52
4) Annual
bonus
£000
1,949
395
803
—
362
3,248
479
1,254
—
597
1,824
1,467
6) Reduction
of unvested
awards
£000
—
(8)c
—
—
—
(138)c
5) LTIP
£000
—b
—b
—b
—b
2,974f
1,599g
Total variable
pay
£000
1,949
387
803
—
3,336
2,928
Total
£000
5,197
866
2,057
—
3,933
4,752
Notes
a C. S. Venkatakrishnan was appointed to the Board and as Group Chief Executive on 1 November 2021. The remuneration shown for 2021 is in respect of his services as Group Chief Executive during
2021. On his appointment as Group Chief Executive, the Remuneration Committee set his level of Fixed Pay (and the resulting maximum total compensation opportunity) at a lower level than he
received for his previous role as Head of Global Markets and Co-President of Barclays Bank PLC.
b The LTIP amount shown for 2022 relates to awards granted in 2020, and the amount shown for 2021 relates to awards granted in 2019. No LTIP award was granted to C.S. Venkatakrishnan or Anna
Cross in 2020 or 2019 as neither was an Executive Director at that time.
c Financial outcomes for 2021 bonus and 2019-2021 LTIP were recalculated to reflect the restatement of the 2021 financial statements. The figures shown reflect reductions that will be applied to
outstanding deferred elements of the impacted awards, the 2021 bonus for C.S. Venkatakrishnan and 2021 bonus and 2019-2021 LTIP for Tushar Morzaria. More details are provided on page 228.
d Anna Cross was appointed to the Board and as Group Finance Director on 23 April 2022. The remuneration shown for 2022 is in respect of her services as Group Finance Director during 2022.
e Tushar Morzaria stepped down as Group Finance Director and an Executive Director on 22 April 2022. The remuneration included in the table above for 2022 is in respect of his services as an Executive
Director during 2022, plus the value of the 2020-2022 LTIP award (described in note f).
f The LTIP amount for 2022 relates to awards granted in 2020, with vesting based on performance measured over 2020 to 2022. The value shown includes a 23% share price appreciation between the
date of grant and the vesting date of the first tranche, estimated based on the share price on the date of grant (pre discounting of share price to reflect that shares under award are not entitled to
dividends or dividend equivalents) and the Q4 2022 average share price of £1.53, as the 2022 Annual Report was finalised prior to the vesting date.
g The LTIP amount for 2021 relates to awards granted in 2019, with vesting based on performance measured over 2019 to 2021. The values shown include a 1% share price appreciation between the
date of grant and the vesting date, based on the share price on the date of grant (pre discounting of share price to reflect that shares under award are not entitled to dividends or dividend equivalents)
and share price on the vesting date of the first tranche, which was £1.61. The 2021 LTIP values disclosed in the 2021 Remuneration report were estimates, based on the Q4 2021 average share price,
as the 2021 Annual Report was finalised prior to the vesting date.
Additional information in respect of each element
of pay for the Executive Directors (audited)
1) Fixed Pay
Fixed Pay is delivered 50% in cash, paid monthly, and 50% in shares, delivered quarterly. The shares are subject to a holding period, with
restrictions lifting over five years, 20% each year.
On appointment as Group Finance Director, Fixed Pay for Anna Cross was set at £1,725,000, to deliver an appropriate starting total
compensation opportunity, in line with the DRP. More information on the Committee's considerations in respect of the Executive
Directors' Fixed Pay is set out on page 231.
2) Pension
Executive Directors are paid cash in lieu of pension contributions equal to 5% of their Fixed Pay (equivalent to 10% of the cash element
of Fixed Pay). The pension cash allowance paid during 2022 was £138,350 for C.S. Venkatakrishnan, and was £59,300 for Anna Cross
and £27,050 for Tushar Morzaria for the respective periods they each served as Group Finance Director during the year. No other
benefits were received by Executive Directors from any Barclays' pension plan.
3) Taxable benefits
Taxable benefits include private medical cover, life assurance, income protection, tax advice and the use of a Company vehicle and
driver when required for business purposes.
For C.S. Venkatakrishnan, the benefits figure also includes the cost to the Company during 2022 of providing him with relocation
support, in line with the current DRP, including immigration assistance, temporary accommodation and home search support in
London. Those costs came to c.£284,000 including the cost to Barclays of paying the income tax and social security resulting from the
provision of that relocation support. As referenced in last year's Remuneration report, under the terms of his relocation to London,
temporary accommodation in London will be provided to him for a period of up to two years following his appointment in November
2021 as Group Chief Executive.
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Remuneration report (continued)
4) 2022 annual bonus
The bonus amount included in the single total figure is the value awarded or scheduled to be awarded in Q1 following the financial year
to which it relates.
In determining the bonus in respect of 2022 performance, the Committee considered the performance achieved against the Financial
(60% weighting) and Strategic non-financial (25% weighting) performance measures that had been set to reflect Company priorities for
2022. Performance against their personal objectives (15% weighting) for 2022 was assessed on an individual basis.
The approach taken to assessing financial performance against each of the financial measures was based on a straight-line outcome
between the amount that vests for threshold performance, which was nil for the profit before tax measure or 20% for the cost: income
ratio measure, and 100% applicable to each measure for achievement of maximum performance. A summary of the assessment is
provided in the table that follows.
2022 annual bonus outcomes
Profit before tax (excluding
material items), with CET1 ratio
underpin
Cost: income ratio (excluding
material items)
Strategic non-financial
Personal
Weighting
Threshold
Maximum
50 %
£5.0bn
£8.0bn
2022 Actual
£7.445bna
C.S. Venkatakrishnan
Anna Cross
Tushar Morzaria
40.8 %
40.8 %
40.8 %
Outcome
10 %
66.1 %
62.1 %
65.3%a
25 %
Performance against strategic
measures, organised around three
main categories: Customers and
clients, Colleagues
and Climate and Sustainability
15 % Individual performance against each of
the Executive Director's personal
objectives assessed by the
Committee
3.6%
18.0 %
3.6%
18.0 %
3.6%
18.0 %
13.0 %
13.0 %
12.0 %
Total
Final 2022 annual bonus outcome approved by the Committee
75.4 %
75.4 %
75.4 %
75.4 %
74.4 %
74.4 %
Note
a Material items excluded from the above measures consist of structural cost actions £151m (2021: £648m) and a customer remediation provision of £282m relating to legacy loan portfolios.
As disclosed in the 2021 Annual Report, the financial measures for the 2022 bonus are defined as excluding material items (material
one-off items that are typically called out within our financial reporting). The Committee however exercised its discretion not to exclude
the impacts associated with the Over-issuance of Securities in the US or the monetary penalties imposed by the SEC and CFTC for the
use of unauthorised business communications channels in the assessment of the 2022 bonus.
Based on the assessment outlined above, the Committee determined an overall formulaic bonus outcome for C.S. Venkatakrishnan,
Anna Cross and Tushar Morzaria respectively that equates to £1,949,000, £803,000 and £362,000 respectively, after pro-rating the
bonus opportunity for both Anna and Tushar for the proportion of 2022 that each served as Group Finance Director. Of those amounts,
79%, 66% and 65% respectively will be deferred under the Share Value Plan, and a total of 90%, 83% and 83% respectively will be
delivered in Barclays shares.
The Committee reflected on the appropriateness of these outcomes for the 2022 bonus, in the context of the performance achieved
against the Financial measures, Strategic non-financial measures and Personal objectives. The Committee considered the underlying
financial health of the Group, which is strong and well-capitalised. Consideration was also given holistically to the performance and
contribution of each Executive Director during 2022. The bonus outcomes were considered in the context of the bonus outcomes for
the wider workforce, ensuring appropriate alignment both this year and over a multi-year period, and also by comparing to historical
outcomes for the Executive Directors in the context of performance year on year. The Committee believes that the overall 2022 bonus
outcomes above are aligned appropriately with stakeholder considerations and with the performance achieved. Based on this, the
Committee concluded that no discretionary adjustment was warranted.
In line with the DRP, and due to the regulations prohibiting dividend equivalents being paid on unvested deferred share awards, the
number of shares awarded to each Executive Director under the Share Value Plan (the Group's main employee share plan for granting
deferred bonus shares to employees) will be calculated using the share price at the date of award, discounted to reflect the absence of
dividend equivalents during the vesting period. The valuation will be aligned to IFRS 2, with the market expectations of dividends during
the deferral period being assessed by an independent adviser. The deferred bonus shares in respect of the 2022 annual bonus for C.S.
Venkatakrishnan and Anna Cross will vest in two equal tranches on the first and second anniversary of grant. The deferred bonus shares
for Tushar Morzaria will vest in equal tranches on the first four anniversaries of grant, which is the standard based on the nature of his
current role. All shares (whether deferred or not) are subject to a further one-year holding period from the point of vesting. 2022
bonuses are subject to clawback provisions and the deferred elements of 2022 bonuses are subject to malus provisions, which enable
the Committee to delay or reduce the vesting of unvested deferred bonuses (including reducing to nil).
Further detail follows on the assessment of the Strategic non-financial measures, and performance against Personal objectives where
applicable.
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Assessment of the Strategic non-financial measures for the 2022 annual bonus
For 2022, the weighting of the Strategic non-financial element was 25%, within which the Customers and clients and Colleagues
sections are each weighted at 7.5% and the Climate and sustainability section is weighted at 10%. Progress in relation to each of the
Strategic non-financial measures was assessed by the Committee. The overall assessment was based on the following scale:
For Customer and Clients and
Colleagues (max weighting 7.5%)
0% to 1%
For Climate and sustainability
(max weighting 10%)
0% to 2%
1.5% to 3.0%
3.5% to 6.0%
6.5% to 7.5%
2.5% to 4.5%
5.0% to 7.5%
8% to 10%
Overall outcome
Behind track on most measures
Slightly behind track on most measures
On track or slightly ahead of track for most measures
Ahead of track on most measures
On this basis, the Committee agreed an overall outcome for the Strategic non-financial measures of 18% out of a maximum of 25%.
The detail supporting this assessment is provided in the table that follows. The measures used in the Strategic non-financial
assessment for bonus reflect key strategic priorities of the Bank. Most outcomes are either measured by an external provider, such as
NPS or Banking fee ranking and share, or are subject to independent ‘limited assurance’ (indicated by the KPMG Δ in other sections of
the Annual Report), which includes all Climate and sustainability measures with the exception of the Unreasonable Impact measure
(delivered in partnership with the Unreasonable Group).
Customers and clients
Measure
Criteria
Performance
Commentary
• Global Markets revenue ranking maintained with an
increase in revenue share. Largest non-US bank
Outcome
Slightly ahead
of track
Global Markets
revenue
ranking and
share
Investment
Banking fee
ranking and
share
Maintain client
rankings and
market share
Net promoter
scores® (NPS)
Improve
Complaints
Reduce BUK
customer
complaints and
improve
resolution time
6th (maintained since 2021)
Revenue share increased
to 7.3% (from 6.4% in
2021)a
6th (maintained since
2021)
Fee share decreased to
3.1% (down from 3.6% in
2021)b
Barclays UK: +11
(2021: +11)
Barclaycard UK: +12
(2021: +4)
US Consumer Bank Care
tNPSc: +44 (2021: +43)
BUK Total Complaints (%
movement year on year):
-18%
• Maintained our overall revenue share ranking of sixth
globally across Investment Banking and Global Markets,
narrowing the gap to fifth
Slightly
behind track
• Investment Banking fees decreased in 2022, driven by
significant declines in overall market opportunity, with
decrease in fee share in comparison to 2021
• NPS score for Barclays UK remained at +11 for 2022
On track
• Barclaycard NPS continued to trend upwards throughout
2022, as usage and availability of credit became more
important to customers
• US Consumer Bank Care tNPS increased slightly, driven by
a focus during 2022 on improving the customer experience
by fixing identified pain points in customer interactions
• Rate of complaints per 10k interaction reduced by 24%,
despite an 8% increase in interactions with the bank across
channels, driven by continued stability of our platforms,
alongside actions taken to mitigate potential increases
from changes to our servicing model
• 61% of complaints resolved within 3 days (2020: 60%)
Ahead of
track
Digital
Increase digital
engagement
Percentage of customer
journeys digitally enabled:
76% (2021: 72%)
• Number of mobile active customers continues to increase.
Reached 10.5m mobile active customers and hit a record of
15.4m logins to the Barclays App in a single day
On track
Mobile active customers:
10.5m (2021: 9.7m)
CCP US customer digital
engagement: 74.1%d
(2021: 71.8%)
• Made significant improvements to our Barclays App,
including enabling mortgage customers to switch onto a
new rate up to 180 days before their current rate expires
without the need to book an appointment when advice is
not required
• The US Consumer business continued to invest in the
digital servicing model, partner app functionalities and
expanding the product range. Digital active user rate
increased from 2021
a Global Markets share and rank for Barclays is based on our share of Top 10 banks reported revenues. Peer banks include Bank of America, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank,
Goldman Sachs, JP Morgan Chase & Co, Morgan Stanley and UBS.
b Dealogic for the period covering 1 January 2021 to 31 December 2022. FY21 market share has been restated from last year’s published value based on latest analysis.
c Care tNPS provides an accurate measure of customer sentiment across our Fraud, Dispute, Credit and Care channels and replaces the relationship NPS reported in 2021 Annual Report.
d Excludes new Gap customers.
Total Customers and clients: 5.0%
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Colleagues
Measure
Diversity
Criteria
Performance
Commentary
Outcome
33% females at
Managing Director and
Director level by 2025
Increase under-
represented minority
representation in the UK
to 5% and in the US to
21% by 2025
Double the number of
Black Managing Directors
by 2022
29% in 2022, increasing
from 28% in 2021
UK: 4.6% (2020 baseline
of 4.1%)
US: 20.3% (2020
baseline of 18.1%)a
18 Black MDs globally, up
from 9 at the end of 2020
• Continued to make progress towards 2025 Gender
On track
and Race at Work Ambitions
• In the UK, females occupied 31% of Managing
Director and Director level roles at the end of 2022
• Achieved our Ambition to double the number of
Black MDs by end of 2022
Inclusion
Improve inclusion
indicators
Inclusion Index score
from Your View survey
82% (2021: 79%)
Engagement Maintain engagement at
healthy levels
Conduct and
culture
Maintain culture and
conduct indicators
Employee Engagement
score from Your View
survey 84% (2021: 82%)b
85% of employees in
Your View survey would
recommend Barclays to
people they know as a
great place to work
(2021: 82%)
92% of employees in
Your View survey believe
that they and their team
do a good job of role
modelling the Values
every day (2021: 92%)
92% of employees in
Your View survey
believe that they and
their team do a good
job of role modelling our
Mindset every day
(2021: 89%)
• 88% of employees in ‘Your View’ employee survey
told us they feel included in their team (2021: 88%)
On track
• 84% of employee in Your View survey told us they
believe that senior leaders are truly committed to
building a diverse workforce (2021: 82%)
• Overall Wellbeing Index score from Your View survey
of 86% (2021: 84%)
Slightly ahead
of track
• 90% of employees in Your View survey told us that
their line managers are supporting their efforts to
maintain their wellbeing (2021: 88%)
On track
• Improvement in the percentage of employees in
Your View survey who said they feel it is “safe to
speak up at Barclays”, up four percentage points on
2021
• Over 90% of employees in Your View survey believe
that they and their teams do a good job of role
modelling the Values and our Mindset every day and
the three Mindset Indices in the Your View survey
have all improved on 2021
Notes
a Represented to 1dp for the purposes of the assessment, rounded to 0dp in the Strategic Report.
b As part of our efforts to improve our measurement frameworks, we have transitioned to a new 3 question engagement model. This was after collecting 4 years of concurrent data and running analysis
to affirm the new model’s validity. Historic figures have been updated to reflect results from the new “3 question” model.
Total Colleagues: 5.0%
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Climate and sustainability
Measure
Green
financing
Emissions
financing
Global
greenhouse
gas (GHG)
emissions
reduction in
our operations
Outcome
Ahead of
track
Criteria
Performance
Commentary
£25.5bn (2021: £29.8bn)
Progress towards our
commitment to facilitate
£100bn of green
financing by 2030
• Significant increase in green financing, with a total of
£87.8bn of green financing facilitated since 2018
against our 2030 target of £100bn
• Social, Environment and Sustainability linked
financing commitment of £150bn for 2018-2025
delivered four years early in 2021. A further £54.3bn
of financing delivered in 2022 bring the cumulative
outcome to £247.6bn
• In December 2022 we announced a new target to
facilitate $1trn of Sustainable and Transition
Financing between 2023 and the end of 2030
• In 2022 invested £35m in sustainability-focused
start-ups through our Sustainable Impact Capital
programme
Power portfolio
emissions intensity (in
KgCO2e/MWh): 9%
down versus 2020
Energy portfolio absolute
emissions (in MtCO2e):
32% down versus 2020
• Good progress in setting out strategy to be a net
On track
zero bank by 2050 and to align our financing with the
Paris Agreement, including setting targets for two
new high emitting sectors, Cement and Steel, in
2022
• Financed emissions target for Automotive
manufacturing in addition to a Portfolio
convergence point for Residential Real Estate
announced with 2022 FY results, five high emitting
sectors now covered by targets
• Currently ahead of target for Energy and broadly on-
track for Power, though progress is likely to be non-
linear and will be reflective of the specific pathways
that companies take
91% reduction against
2018 baseline
• Achieved our 90% GHG market-based emissions
reduction target for Scope 1 and Scope 2
Ahead of
track
Deliver the strategy to
achieve our ambition to
be a net zero bank by
2050 and our
commitment to align our
financing with the goals
and timelines of the Paris
Agreement
30% reduction in power
portfolio emissions
intensity (2020-2025)
15% reduction in energy
portfolio absolute
emissions (2020-2025)
GHG scope 1 and 2
emissions (market-
based) reduced against
2018 baseline by 90% by
2025
Renewable
electricity
100% renewable
electricity by 2025
100% (2021: 94%)
• Sourced 100% renewable electricity for our global
real estate portfolio operationsa
Ahead of
track
• Moving forward, continue to purchase 100%
renewable electricity, and improve the energy
efficiency of our buildings and data centres
LifeSkills –
people
upskilled
LifeSkills –
people placed
into work
Unreasonable
Impact
(partnership
with the
Unreasonable
Group)
10 million people
upskilled (2018-2022)
2.7 million upskilled in
2022 (2021: 2.9 million)
• Exceeded our target of upskilling 10 million people
between 2018 and 2022, with 12.6 million people
upskilled by the end of 2022
Ahead of
track
250,000 people placed
into work (2019-2022)
77,200 people placed
into work in 2022 (2021:
77,100)
• Exceeded our target of 250,000 people placed into
work between 2019 and 2022, with 270,600 people
placed into work by the end of 2022
250 businesses solving
social and environmental
challenges to be
supported (2016-2022)
269 growth-stage
ventures had joined the
programme by end of
2022
• Surpassed 2022 target
• Barclays and Unreasonable Group celebrated six
years of partnership, with Unreasonable Impact now
supporting 269 growth-stage ventures solving
social and environmental challenges and collectively
supporting thousands of jobs across the world
Slightly ahead
of track
Slightly ahead
of track
Total Climate and sustainability: 8.0%
Overall strategic non-financial outcome (out of a maximum possible 25%)
18.0%
a Global real estate portfolio includes offices, branches, campuses and data centres.
Further details on our approach to Key Performance Indicators are included in the Strategic report.
Refer to home.barclays/sustainability/esg-resource-hub/ for more information on the ESG measures.
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Assessment of performance against the Personal objectives set for the 2022 annual bonus (15% weighting)
Individual performance against each of the Executive Directors’ personal objectives for 2022 (15% weighting overall) was assessed by
the Committee.
C.S. Venkatakrishanan’s performance was assessed against the individual objectives set for him as the Group Chief Executive and those
set for him jointly with the Group Finance Director. As Anna Cross succeeded Tushar Morzaria as Group Finance Director on 23 April
2022, the Committee assessed her performance against the objectives that were originally set for Tushar Morzaria in early 2022, both
the joint objectives with the Group Chief Executive and the individual objectives as the Group Finance Director. The Committee
separately assessed Tushar Morzaria’s contributions towards the achievement of these same objectives alongside his overall
contribution to the smooth transition of responsibilities to Anna Cross.
The table below summarises performance against the shared personal objectives.
Shared objectives for
C.S. Venkatakrishnan,
Anna Cross and Tushar Morzaria
Deliver improving shareholder
returns, with a focus on RoTE
Maintain robust capital ratios
across the Group and within
the main operating entities
Actively deploy the range of
Barclays’ businesses and
capabilities to support
customers and clients as we
collectively transition to a low
carbon economy
Continue to deliver
sustainable growth in the
Corporate and Investment
Bank
Continue to drive our
technology agenda across the
Group to support improving
customer and client services
and experience
Outcomes
• The benefits of Barclays diversified business model continue to be demonstrated, with each
operating division delivering double-digit returns
• Group RoTE remained aligned with our medium-term target of greater than 10%, for the second
consecutive year
• Delivered Group profit before impairment of £8.2bn, up 9% on 2021
• Total shareholder distributions in respect of 2022 equivalent to c.13.4p per share
• Strong capital position maintained, with Group CET1 of 13.9%, within our target range of 13% to
14%
• Similarly strong capital ratios prevail in all main operating entities: at the end of 2022, Barclays Bank
PLC’s CET1 ratio was 12.7% and Barclays Bank UK PLC’s CET1 ratio was 14.7%, well in excess of
regulatory minimums
• Continued to develop green and sustainable banking products, including green mortgages, bonds,
loans and investment funds
• Launched the Barclays Green Home Buy-to-Let Mortgage product and the Greener Home Reward
pilot, offering Barclays UK mortgage customers cash rewards to install energy-efficient measures
• For Barclays UK business customers, launched a partnership with Propel, helping provide asset
financing to support investment in renewable assets
• Advised and helped companies raise capital for emerging climate technology, including the Haffner
Energy IPO
• Announced a new target to facilitate $1 trillion of Sustainable and Transition Financing between
2023 and the end of 2030 and increased the investment mandate for sustainability-focused start-
ups to £500m by 2027
• Grew income in CIB by 8%, driven by the best full year for both Global Markets and FICC and strong
performance in Transaction Banking, more than offsetting the impact of a reduced fee pool in
Investment Banking
• Maintained our overall ranking of 6th globally across Investment Banking and across Global Markets,
narrowing the gap to 5th, as well as increased the diversity and predictability of our income, growing
our financing business in Global Markets, including in Prime
• Integrated International Corporate Banking with our Investment Banking business, with a focus on
growing our Transaction Banking share, and actively recruited to strengthen our teams
• Continued to invest in enhancing our Global Markets digital proposition, including our electronic
trading capabilities and our digital self-service platform, and our financing platforms across Fixed
Income and Equities
• Continued to adapt our service model by building out Barclays Local – an alternative branch
presence for those who need in-person support
• Enhanced the Barclays App to enable all mortgage customers to manage their mortgage through
the app, including switching onto a new rate
• Rolled out Microsoft Teams across all geographies to help colleagues to collaborate and support
customers and clients
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In addition to the shared personal objectives described above, the table below summarises performance against the personal
objectives specific to C.S. Venkatakrishnan.
C.S. Venkatakrishnan's objectives
Outcomes
Ensure a continued focus on
customer and client
outcomes
Continue to embed the
Mindset across the
organisation in support of our
Purpose
Continue to develop a high-
performing culture in line with
our Values, with a focus on
employee engagement,
succession planning, talent
and diversity
• Continued to act as a market maker and liquidity provider to clients across the globe, helping them
find opportunities and manage risk during a continued period of heightened market disruption
• Continued the focus on improving the overall customer experience in Barclays UK by identifying the
root causes of customer complaints and supporting their removal. Complaints in Barclays UK
reduced by 18% vs. 2021, despite an 8% rise in interactions with the bank across all channels
• Introduced additional support for vulnerable customers who may be experiencing financial
vulnerability due to inflationary pressures, including training over 16,000 colleagues to better
recognise signs of vulnerability, raising awareness of tools and support available and adapting
products, including increased resource in our Barclays Financial Assistance team
• Reached an agreement to acquire Kensington Mortgage Company, a specialist mortgage lending
platform focused on customers with complex incomes, which will enable us to provide residential
mortgages to more customers
• Significantly grew our customer care teams globally, including nearly doubling our footprint in our
US Contact Centre in the US following the acquisition of the GAP credit card portfolio, with over
1,800 new hires
• Further embedded the Barclays Mindset into our hiring, performance management, reward and
recognition frameworks
• Increased the number of colleagues who believe that they and their team do a good job of role
modelling our Mindset every day (2022: 92%; 2021: 89%)
• Over 260,000 recognitions were sent to colleagues during 2022 specifically recognising our
Mindset in action
• Colleague engagement increased across the Group to 84%, an increase of 2% points versus 2021,
with the annual YourView survey also showing positive results across most other measures
• Inclusion Index score for 2022 was 82%, up 3% points on 2021, with 88% of colleagues telling us
that they feel included in their team
• Launched a refreshed DEI vision and strategy to our colleagues and the community, incorporating
‘Equity’ into how we talk about our DEI strategy and take action to progress that strategy
• Continued to make progress towards our 2025 Gender and Race at Work Ambitions, increasing
senior female representation globally and representation of underrepresented minority groups in
the UK and the US
• Appointed Anna Cross as an internal successor to our Group Finance Director role
Empower the effective
management of the risk and
controls agenda
• Drove sustainable improvements to the internal control environment, including in response to the
Over-issuance of Securities, both in specific controls and also the control mindset required at all
levels in the organisation
• Established a change programme, alongside our Purpose, Values and Mindset, to set a standard of
consistent excellence and help ensure that Barclays performs at a very high level, consistently, day
in and day out
Effectively manage
relationships with key external
stakeholders and society
more broadly
• Venkat has built strong connections and proactively collaborated with UK and US regulators
throughout the year, working to support the broader UK economy
• Engaged extensively with stakeholders, including in relation to Barclays' climate strategy, the Say on
Climate advisory vote at the 2022 AGM and the Over-issuance of Securities
Recognising C.S. Venkatakrishnan's very strong performance against both his individual and shared personal objectives, and his
leadership of the organisation through 2022, the Committee assessed that an outcome of 13% out of a maximum of 15% was
appropriate.
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The table below summarises performance against the personal objectives for the Group Finance Director, which were originally set for
Tushar Morzaria but also applied to Anna Cross after she succeeded him in that role.
Objectives for the Group Finance
Director
Continue to optimise financial
management and reporting
(particularly through
technology) to drive benefits
across the Group
Continue to progress the
transformation of the
Treasury function, including
strategic treasury and liquidity
platforms
Oversee the effective
management of the risk and
controls agenda across Group
Finance, Strategy, Tax and
Treasury
Retain focus on the colleague
agenda across Group Finance,
Strategy, Tax and Treasury,
driving employee
engagement, continuing to
improve diversity, developing
senior talent and succession
planning
Effectively manage
relationships with key external
stakeholders including
regulators and investors
Outcomes
• Enhancements made to delivery of quarterly results, providing more granular performance
commentary, greater transparency on notable items and more accessible narrative
• Leveraged technology to enhance the delivery of financial management reporting, increase
efficiency and automation
• Liquidity Transformation delivered, resulting in greater automation, accelerated reporting,
improved controls, and improved liquidity buffer management
• Successful delivery of the Bank of England-mandated programme to ensure Barclays is able to
manage its funding and liquidity in a resolution scenario, commented on in the Bank of England UK
bank resolvability assessment as ‘above peers’
• Control Environment and Management Control Approach overall rated satisfactory in 2022
• Strong personal contribution to the response and remediation of the Over-issuance of Securities
• The risk-free rates transition is in progress with USD LIBOR exposures decreasing throughout 2022
• High level of colleague engagement across Finance, at 85% (2021: 82%)
• Strong progress again this year against three key areas of people focus: Diversity, Equity &
Inclusion; Skills for the Future; and Operational Efficiency & Ways of Working
• Continued focus on embedding the Barclays Mindset with positive increases on all three indices:
Empower at 89% (2021:86%); Challenge at 85% (2021:83%); and Drive at 87% (2021:84%)
• Established effective and open relationships with regulators and the investment community
The Committee recognised the high level of achievement during 2022 against these objectives. Anna Cross stepped into the Group
Finance Director role as a natural successor, considering the skills and relevant experience that she brings, and the Committee’s
assessment was that during 2022 she provided strong leadership in this critical role. She performed exceptionally well in her first eight
months as Group Finance Director and was instrumental in the delivery against both the personal objectives set for the Group Finance
Director and those shared with the Group Chief Executive. Based on her contribution to those achievements, the Committee assessed
that an outcome of 13% out of a maximum of 15% was appropriate.
The Committee separately assessed Tushar Morzaria’s contribution in the earlier part of 2022 to the achievement against these same
objectives, noting his strong contribution throughout his tenure as Group Finance Director, including over the last few months in this
role. His key achievements in 2022 in relation to his Executive Director role included supporting a highly effective transition of
responsibilities to Anna, positioning her well to succeed him as part of a clear and effective internal succession plan, and the
contributions he made from the beginning of 2022 through the delivery of full-year results for 2021 and Q1 results for 2022.
Based on his contribution to the achievements against the personal objectives above, the Committee assessed that an outcome of
12% out of a maximum of 15% was appropriate.
5) Vesting of the 2020-2022 LTIP cycle
The LTIP value included in the single total figure for 2022 for Tushar Morzaria is based on the amount that will be released on 8 March
2023 in relation to the 2020-2022 LTIP award granted in 2020. The value that will vest has been estimated using the Q4 2022 average
share price of £1.5315. Release is dependent on, among other things, performance over the period from 1 January 2020 to 31
December 2022, with straight-line vesting applied between the threshold and maximum points for the financial measures.
The performance achieved against the performance targets is shown in the table that follows.
No LTIP awards were granted to C.S. Venkatakrishnan and Anna Cross in 2020 as they were not Executive Directors at that time.
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2020-2022 LTIP outcomes
Performance measure
Average return on
tangible equity (RoTE)
(excluding litigation and
conduct and other
material items)a,b
Average cost: income
ratio (excluding litigation
and conduct and other
material items)c
Risk scorecard
(detailed below)
Weighting
50%
Threshold
10% of award vests for RoTE of
9.0%
Maximum vesting
50% of award vests for RoTE of
10.5%
A CET1 underpin also applied
% of award
vesting
Actual
10.7% 50.0%
20%
15%
4% of award vests for average
cost: income ratio of 60%
20% of award vests for Cost:
income ratio of 58.5%
62.9% 0.0%
The Risk scorecard captures a range of risks and is aligned with the annual
incentive risk alignment framework reviewed with the regulators. The current
framework measures performance against three broad categories – Capital
and liquidity, Control environment and Conduct – using a combination of
quantitative and qualitative metrics.
8.0%
Strategic non-financial
15%
(detailed on pages
227 and 228)
Total
Performance is measured against the Strategic non-financial measures. The
Committee determined the percentage of the award that may vest between
0% and 15%. The measures are organised around three categories:
Customers and clients, Colleagues and Society. Each of the three main
categories has equal weighting.
Final 2020-2022 LTIP vesting outcome approved by the Committee
12.0%
70.0%
70.0%
Notes
a Based on adjusting tangible equity to be consistent with a CET1 ratio that aligns with the assumptions the Group uses for capital planning purposes (13.0% to 13.5% over the performance period and
broadly in line with the Group CET1 ratio target).
b Material items consist of post-tax structural cost actions (2022: £110m, 2021: £489m, 2020: £268m), Barclays’ 2020 COVID-19 Community Aid package (post-tax £66m) and re-measurement of UK
DTAs (2022: £346m, 2021: -£462m). The litigation and conduct impacts from the Over-issuance of Securities and the devices settlements are not excluded.
c Material items consist of structural cost actions (2022: £151m, 2021: £648m, 2020: £368m) and Barclays’ 2020 COVID-19 Community Aid package (£95m). The litigation and conduct impacts from
the Over-issuance of Securities and the devices settlements are not excluded.
Assessment of the Risk scorecard for the 2020-2022 LTIP
A summary of the Committee’s assessment against the Risk scorecard performance measure over the three-year performance period
is provided below. Each category was equally weighted at 5%.
Category
Performance
Capital and liquidity
• Group CET1 ratio stands at 13.9%, toward the upper end of the 13% to 14% target range.
Outcome
5.0%
• Stress tests results indicate that Barclays is positioned to withstand a severe recession
scenario featuring considerable affordability pressures on consumers from high and persistent
inflation.
• Our Liquidity Coverage Ratio was significantly above the 100% regulatory requirement in the
period, and there were no breaches.
Control environment
• In light of the Over-issuance of Securities, the Committee did not assess the Control
0.0%
Conduct
environment element of the LTIP Risk scorecard but instead elected to set this element of the
LTIP to zero.
• Trading Entity conduct risk dashboards, setting out key indicators in relation to conduct risk
are provided to the respective Board Risk Committees and senior management to support
effective oversight and decision making.
3.0%
• These dashboards provide an insight into the Conduct Risk Control Environment to ensure
any issues are addressed in a timely and effective manner, so that the Group continues to
operate within Risk Appetite.
Overall Risk scorecard outcome for the 2020-2022 LTIP
8.0%
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Remuneration report (continued)
Assessment of the Strategic non-financial measures for the 2020-2022 LTIP
A summary of the Committee’s assessment against the Strategic non-financial performance measures over the three-year
performance period follows. Each category was equally weighted at 5%.
Measure
Criteria
Performance
Outcome
3.5%
Customer and clients
Global Markets ranking
Global Markets revenue
share
Investment Banking ranking
Investment Banking fee
share
Maintain client
ranking and
increase market
share
Barclays UK NPS®
Improve
Barclaycard UK NPS®
US Consumer Bank Care
tNPS®c
Barclays UK complaints
reduction (ex PPI)
Reduce
complaints
BUK digitally active
customers
Increase digital
engagement
Mobile Active Customers
CCP US Customer Digital
Engagement
Colleagues
Diversity
% of females at Managing
Director and Director level
• Global Markets ranking was maintained at 6th over the period, fee
share increased from 6.2% in 2019 to 7.3% in 2022a
• Global Banking fee rank was 6th in 2019 and remains at 6th in 2022,
fee share fell from 4.1% in 2019 to 3.1% in 2022b
• Barclays UK NPS ranking remained broadly consistent over the period,
starting and ending at 7th, while Barclaycard UK NPS ranking improved
from 4th in 2019 to 2nd in 2022
• Barclays UK NPS score reduced over the period in line with what has
been observed for UK peers over the COVID-19 pandemic.
Barclaycard UK NPS score reduced initially, but recovered in 2022
• US Consumer Care tNPS has only been measured since 2020. After a
reduction in 2021, Care tNPS improved in 2022
• Consistent progress in Complaints reduction in Barclays UK each year
since 2019
• In 2022, reduction in customer complaints despite an increase in
interactions with the bank across our channels
• Steady increase in BUK digitally active customers over the period
• Significant increase in number of Mobile Active Customers over the
period from 8.4m in 2019 to 10.5m in 2022, with new app features
introduced throughout this period
• CCP US Customer Digital Engagement increased to 74.1d
2025 target of
33%
• Women in senior leadership (Managing Directors and Directors)
increased from 25% in 2019 to 29% in 2022, making steady progress
towards the 2025 target of 33%
3.5%
Inclusion
"I feel included in my team"
Maintain at healthy
levels
• Equivalent figure for Barclays in the UK is now 31%
• The percentage of employees in Your View survey who feel included in
their team has increased from 85% in 2019 to 88% in 2022
• The Inclusion Index is at 82% for 2022 up from 76% in 2020, the first
year it was introduced
Employee engagement
Maintain at healthy
levels
• Engagement levels across Barclays are now at 84%, up 10% points
since 2019e
"Enable" measures,
including measures relating
to tools and resources
Improve key
metrics from
2019, including
Enable scores
• The percentage of employees in Your View survey who would
recommend Barclays as a good place to work has remained at healthy
levels throughout the period, 80% or above in each year
• Significant improvement over the period in percentage of employees
in Your View survey who report that they have the tools and resources
they need to achieve excellent performance
• Began measuring "getting things done at Barclays is simple and
straightforward" in 2021 as an outcome related to enable, with a slight
improvement observed from 2021 to 2022
Notes
a Global Markets share and rank for Barclays is based on our share of Top 10 banks reported revenues. Peer banks include Bank of America, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank,
Goldman Sachs, JP Morgan Chase & Co, Morgan Stanley and UBS.
b Dealogic for the period covering 1 January 2019 to 31 December 2022. FY21 market share has been restated from last year’s published value based on latest analysis.
c Care tNPS provides an accurate measure of customer sentiment across our Fraud, Dispute, Credit and Care channels and replaces the relationship NPS reported in 2021 Annual Report.
d Excludes new Gap customers.
e As part of our efforts to improve our measurement frameworks, we have transitioned to a new 3 question engagement model. This was after collecting 4 years of concurrent data and running
analysis to affirm the new model’s validity. Historic figures have been updated to reflect results from the new “3 question” model.
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Remuneration report (continued)
Measure
Society
Criteria
Performance
Outcome
5.0%
Social, environmental and
sustainability-linked
financing
Facilitate £150bn
over 2018-2025
• On a cumulative basis, a total of £247.6bn of social, environmental and
sustainability-linked financing facilitated between 2018 and the end of
2022, exceeding the 2025 target
GHG emissions reduction in
our operations and
renewable energy usage
LifeSkills
GHG scope 1 and
2 emissions
(market-based)
reduced by 90% by
2025
Renewable
electricity to 100%
by 2025
Upskill 10 million
people from
2018-2022
Place 250,000
people into work
from 2019-2022
• In December 2022, we announced a new target to facilitate $1trn of
Sustainable and Transition Financing between 2023 and the end of
2030
• GHG scope 1 and 2 emissions (market-based) reduced each year of
the performance period. Achieved our target in 2022, three years
ahead of target
• Significant increase in renewable electricity use over the period, with
100% of electricity now coming from renewable sources
• 12.6m people upskilled between 2018 and 2022, exceeding aspiration
of helping 10m people by 2022
• LifeSkills - placed into work target also exceeded, with more than
270,600 people placed into work since 2019
Overall Strategic non-financial outcome for the 2020-2022 LTIP
12.0%
The Committee was satisfied that the level of vesting appropriately reflected the underlying financial health of the Group, and
accordingly determined that the award should vest at 70.0% of the maximum number of shares under the total award, to be released in
five equal tranches annually, starting from March 2023. After release, the shares are subject to an additional 12-month holding period.
The 2020-2022 LTIP award was granted in line with our usual annual timetable, in early March 2020. This coincided with the start of a
period of particularly high market volatility, as the start of the COVID-19 pandemic unfolded, and meant that the share price at grant
(124.46p) was 22% lower than the share price at the time of the prior year LTIP grant. The Committee recognised that awards made in
periods of unusual share price volatility have the potential to give rise to 'windfall gains' related solely to the timing of the grant rather
than the underlying performance of the business. They carefully considered a range of analyses in advance of determining the vesting
of the award, based on which they concluded that the value vesting appropriately reflected corporate performance over the
performance period and did not represent a windfall gain. This included consideration of the following:
• The 22% fall in the Barclays share price between successive grants was not in itself unusual. The Barclays share price has moved by
20% or more several times over the past ten years and so a year-on-year movement of this kind is not exceptional.
• The timing of the grant was in line with the usual annual process and this LTIP award was not granted at the bottom of the market.
The share price (and the value of the LTIP awards) dropped by a further third over the following weeks, to less than 80.24p. By the end
of the performance period, the share price had increased to 158.52p. While this corresponds to share price growth of 28% per
annum from the low point, from the share price at grant it corresponds to share price growth of 9% per annum. The Committee
concluded that this is within the range of share price movements that might be expected over an LTIP cycle.
• Furthermore, the Committee considers Barclays’ overall share price increase over the performance period since grant to have been
commensurate with the improvement in underlying corporate performance. For example, Group RoTE was 10.4% for 2022,
exceeding the Group’s medium-term target for the second successive year, up from 9%a in 2019 (the financial year immediately prior
to grant) and building on the RoTE progression in 2017 through 2019.
As a result, the Committee concluded that there is no windfall gain and that therefore no adjustment was required.
6) Reduction of unvested awards
As set out earlier in the Remuneration report, the 2021 financial statements were restated in 2022 to include a £220m provision and a
contingent liability in respect of the Over-issuance of Securities under the BBPLC's US shelf registration statement.
As a result, the Committee revisited the 2021 annual bonus outcomes for C.S. Venkatakrishnan and Tushar Morzaria, and the
2019-2021 LTIP outcome for Tushar Morzaria, and reduced those outcomes to reflect the impact of the restatement on the financial
measures for those awards. The impact on each financial measure, and associated impact on the incentive pay-out, is shown in the
table that follows. The outstanding deferred elements of these awards will be reduced accordingly. Tushar Morzaria and
C.S.Venkatakrishnan were both supportive of the reductions. Anna Cross was not subject to these reductions because she did not
participate in the Executive Director 2021 annual bonus or the 2019-2021 LTIP, as she was not an Executive Directors at that time.
Note
a Excluding litigation and conduct. Group RoTE for 2019 including litigation and conduct was 5.3%.
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Remuneration report (continued)
Adjustment of 2021 annual bonus and 2019-2021 LTIP vesting outcomes
Incentive
Financial measure
2021 annual
bonus
2019-2021
LTIP
Profit before tax (excluding material
items), with CET1 ratio underpina
Cost: income ratio (excluding
material items)a
Average return on tangible equity
(RoTE) (excluding litigation and
conduct and other material items)b,c
2021 Cost: income ratio (excluding
litigation and conduct and other
material items)d
Outcome
determined in
2021
£9.1bn
Pay-out (% max) Restated outcome
Resulting pay-out
(% max)
C.S.
Venkatakrishnan
Tushar Morzaria
Reduction of unvested awards (£000)
100 %
£8.8bn
100 %
62.9%
100 %
63.9%
9.6
64%
9.4
86 %
56%
—
8
n/a
—
22
116
62.1%
0%
63.1%
0%
n/a
—
Notes
a £648m of structural cost actions treated as material items and excluded from 2021 profit before tax and cost: income ratio. Structural cost actions primarily relate to the real estate review in Q221 and
Barclays UK transformation costs.
b Based on adjusting tangible equity to be consistent with a CET1 ratio that aligns with the assumptions the Group uses for capital planning purposes (13.0% to 13.5% over the performance period and
broadly in line with the Group CET1 ratio target).
c RoTE excludes material items and litigation & conduct. Material items for 2021 consist of structural cost actions (£489m post-tax) and a tax benefit (£462m) due to the remeasurement of UK deferred
tax assets. Material items for 2020 consist of structural cost actions (post-tax £268m) and Barclays’ COVID -19 Community Aid package (post-tax £66m). Structural cost actions for 2021 primarily
relate to the real estate review in Q221 and Barclays UK transformation costs.
d 2021 CIR excludes material items and litigation & conduct. Material items for 2021 consist of structural cost actions (£648m). Structural cost actions primarily relate to the real estate review in Q221
and Barclays UK transformation costs.
LTIP awards granted during 2022
An award was granted to C.S. Venkatakrishnan on 9th March 2022 under the 2022-2024 LTIP, based on a value per share of £1.2495,
which was derived from the share price less a discount to reflect the absence of dividends or equivalents during the vesting period, in
accordance with the DRP. This is the value used to calculate the number of shares below.
No LTIP award was granted in March 2022 to Tushar Morzaria, as he was due to step down as an Executive Director on 22 April 2022, or
to Anna Cross, as she was not an Executive Director at that time.
C.S. Venkatakrishnan
140%
3,025,210
£3,780,000
2022-2024
% of Fixed Pay
Number of shares
Face value at grant
Performance period
The performance measures for the 2022-2024 LTIP awards are as follows:
Performance measure
Weighting
Threshold
Maximum vesting
0% of award vests for RoTE of 7.0%, rising on a straight-line
basis
25% of award vests for RoTE of
11.0% or higher
Average return on tangible
equity (RoTE) (excluding
material items)a
Average cost: income ratio
(excluding material items)
Maintain CET 1 ratio within
the target range
25%
10%
10%
0% of award vests for average cost: income ratio of 65.0%,
rising on a straight-line basis
If CET1 is below MDA hurdleb +190bps during the period, the
Committee will consider what portion of this element should
vest, based on the causes of the CET1 reduction.
If CET1 is above MDA hurdle +290bps but does not make
progress towards the range over the period, the Committee
will consider what portion of this element should vest, based
on the reasons for the elevated levels of CET1 versus target
range and the associated impacts.
10% of award vests for average cost:
income ratio of 59.0% or lower
If CET1 ratio between 190bps and
290bps above the MDA hurdle
throughout the period or if CET1 is
above MDA hurdle +290bps but
making progress towards the target
range
25% of award vests for performance
at or above the peer groupd upper
quartile
Relative Total Shareholder
Return (TSR)c
25%
6.25% of award vests for performance at the median of the
peer groupd, rising on a straight-line basis
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Remuneration report (continued)
Performance measure
Weighting
Threshold
Strategic non-financials
20%
Risk scorecard
10%
The evaluation will focus on key performance measures from the Performance Measurement
Framework, with a detailed retrospective narrative on progress against each category throughout
the period. Performance against the strategic non-financial measures will be assessed by the
Committee to determine the percentage of the award that may vest between 0% and 20%. The
measures are organised around three main categories and measures will likely include, but not be
limited to, the following:
Customers and clients (weighted 5%) – drive world class outcomes for customers and clients:
Improve Net Promoter Scores; reduce BUK customer complaints and improve resolution time;
maintain client rankings and market share within CIB; and increase digital engagement.
Colleagues (weighted 5%) – protect and strengthen our culture through our Purpose, Values and
Mindset: Continue to improve diversity in leadership roles; improve inclusion indicators; maintain
engagement at healthy levels; and maintain culture and conduct indicators.
Climate and sustainability (weighted 10%) – progress to be measured against four key objectives:
Progress towards our green financing commitments; reduce operational and supply chain carbon
footprint and increase use of renewable energy; progress towards achieving our ambition to be a net
zero bank by 2050 and our commitment to aligning our financing with the goals and timelines of the
Paris Agreement; and continue to invest in our communities.
The Risk scorecard captures a range of risks and is aligned with the annual incentive risk alignment
framework shared with the regulators. The current framework measures performance against three
broad categories – Capital and liquidity, Control environment and Conduct – using a combination of
quantitative and qualitative metrics. The framework may be updated from time to time in line with
the Group’s risk strategy. Specific targets within each of the categories are deemed to be
commercially sensitive. Retrospective narrative on performance will be disclosed in the 2024
Remuneration report, subject to commercial sensitivity no longer remaining.
Notes
a Based on an assumed CET1 ratio at the mid-point of the Group range, 13-14%.
b Currently 11.3%.
c Performance assessed over the period from 1 January 2022 to 31 December 2024. Start and end TSR data will be the Q4 average for 2021 and 2024 respectively and will be measured in GBP for each
company.
d The peer group is comprised of multinational banks in the UK, Europe and North America of comparable size to Barclays and whose weekly returns have a high degree of correlation with Barclays’. The
peer group for the 2022–2024 LTIP award is: Banco Santander, Bank of America, BBVA, BNP Paribas, Citigroup, Credit Agricole, Credit Suisse, Deutsche Bank, HSBC, ING Groep, Lloyds Banking Group,
Morgan Stanley, NatWest Group, Societe Generale, Standard Chartered, UBS, Unicredit.
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Remuneration report (continued)
Executive Directors:
Statement of implementation of remuneration policy in 2023
An overview of how the DRP will be implemented for Executive Directors in 2023 is set out in the subsequent sections. The following
chart illustrates how 2023 remuneration will be delivered to the Executive Directors.
Implementation of policy in 2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
Implementation
2023
Cash
Fixed
Pay
Shares
Restrictions lifting over 5 years
Pension Cash in lieu
of pension
Annual
bonus
Performance
period
Cash
LTIP
Preliminary
performance
period
Shares Holding
period
Shares Holding
period
Shares Holding
period
Performance period
Shares Holding
period
Shares Holding
period
Shares Holding
period
Shares Holding
period
Shares Holding
period
C.S.
Venkatakrishnan
£2,875,000
Anna Cross
£1,800,000
C.S.
Venkatakrishnan
5% of Fixed Pay
Anna Cross 5% of
Fixed Pay
C.S.
Venkatakrishnan up
to 93% of Fixed Pay
Anna Cross up to
90% of Fixed Pay
C.S.
Venkatakrishnan up
to 140% of Fixed
Pay
Anna Cross up to
134% of Fixed Pay
2023 Fixed Pay and market competitiveness of the Executive Directors’ total compensation opportunity
Tushar Morzaria informed the Board on 22 February 2022 of his intention to retire from the Board and step down as Group Finance
Director. Immediately following the decision that Anna Cross would be appointed to succeed him with effect from 23 April 2022, the
Committee considered the level of Fixed Pay Anna Cross should receive, taking into account the role, her relevant skills and experience,
and pay levels at other comparable firms (on which the Committee receives independent advice), in the context of wider workforce pay
levels and the experience of our stakeholders. Banking regulation in the UK and Europe caps variable pay as a percentage of Fixed Pay
for senior roles including the Executive Directors and so providing a suitable level of total compensation within the constraint of those
regulations is a key driver of the Executive Directors’ Fixed Pay levels.
Pay benchmarking data is used as a reference point to ensure that the total compensation opportunity provided to the Executive
Directors is appropriately positioned compared to other similar large and complex international banks. Comparing the Executive
Directors' pay solely with other UK-listed banks would not recognise the Group's global footprint and diversified universal banking
model, which includes significant corporate banking, investment banking and global markets businesses. The international banking peer
group used by the Committee when considering the Executive Directors' pay includes other large universal banks from continental
Europe, and the large US universal and investment banks, plus the most comparable to Barclays of the larger UK-listed banks and BNP
Paribas in France, to help maintain balance.
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Remuneration report (continued)
The Committee determined the level of Fixed Pay for Anna Cross on appointment as Group Finance Director as £1,725,000 per annum.
In doing so, they concluded that the total compensation opportunity that this provides was an appropriate starting point, while noting
that it was low compared with international banking peers and that this should be kept under review each year.
An annual review of the Executive Directors' Fixed Pay, in the same way and at the same time as for the wider workforce, is a feature of
the DRP approved by shareholders in 2020. In February 2023, the Committee reviewed the Fixed Pay for each Executive Director as
part of the year-end pay review process for colleagues across the Group. The Committee considered the maximum total
compensation opportunity of each Executive Director, driven by their respective levels of Fixed Pay, and noted that in each case the
total compensation opportunity is materially less than that offered for the equivalent role at most companies within the international
banking peer group. As a result, the Committee determined that Fixed Pay would be increased to £2,875,000 for C.S. Venkatakrishnan,
a 3.4% increase, and to £1,800,000 for Anna Cross, a 4.3% increase, effective 1 March 2023. The Committee noted that these are
lower percentage increases than the average fixed pay increase for the wider workforce, and in particular for other UK colleagues within
the scope of the 2023 UK pay deal with Unite the Union, with an 11% budget for salary increases for the most-junior UK employees and
a 6.75% budget for the remainder of the union-recognised population.
The 2:1 cap on variable pay relative to fixed pay in banks results in the need to provide both Executive Directors with a level of Fixed Pay
that is higher than the Committee might otherwise choose, to ensure the total compensation opportunity is competitive. To mitigate
some of the impacts of that higher Fixed Pay, it is delivered half in cash, paid monthly via payroll in a similar way to salary for other
employees, and half in shares, which are granted quarterly and released in instalments over 5 years, creating significant alignment with
shareholder interests over the longer term.
The charts that follow compare each Executive Director's maximum total compensation opportunity for 2023 against the equivalent
opportunity across international banking peers. This shows that even after these Fixed Pay increases the maximum total compensation
opportunity is significantly behind international banking peers, falling in the lower part of the third quartile for C.S. Venkatakrishnan and
in the bottom quartile for Anna Cross.
The charts also show a comparison of the maximum total compensation opportunity of each Executive Director with the equivalent
roles at the companies that make up the FTSE 30 (i.e. the 30 largest FTSE 100 constituents by market capitalisation). This shows that
the Executive Directors’ maximum total compensation opportunity is more competitive, but not inappropriate, compared to the FTSE
30 group. The Committee noted that it would be unlikely for the Group to fill either of the Executive Director roles by recruiting from the
other FTSE 30 companies, recognising the necessity for candidates for these roles to have the right breadth and depth of banking
knowledge and experience, particularly given that Barclays’ diversified business model includes significant corporate banking,
investment banking and global markets businesses. However, this comparison is provided alongside the international banking peer
group to provide additional UK context.
Executive Director total maximum compensation opportunity relative to market benchmarks
Group Chief Executive
C.S Venkatakrishnan
International banking peer group
Group Finance Director
Anna Cross
International banking peer group
FTSE 30
FTSE 30
n Bottom Quartile n 3rd Quartile
n Top Quartile
Positioning of maximum total compensation opportunity at Barclays relative to market
benchmarks
n 2nd Quartile
Notes:
• Barclays and market benchmark data reflects maximum total compensation opportunity, excluding pensions and benefits.
• Benchmark data for the international banking peer group and FTSE 30 was provided by Willis Towers Watson, based on publicly disclosed data in respect of each firm's 2021 or 2021/22 financial years,
incorporating assumptions where companies do not disclose a maximum total compensation opportunity.
• Barclays’ current peer group comprises the following international banks: Bank of America, BNP Paribas, Citigroup, Credit Suisse Group, Deutsche Bank, Goldman Sachs, HSBC Holdings, JP Morgan
Chase & Co, Lloyds Banking Group, Morgan Stanley, Standard Chartered and UBS Group. The Committee added Goldman Sachs to the peer group during 2022.
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Remuneration report (continued)
2023 annual bonus performance measures
Performance measures with appropriately stretching targets have been selected to cover a range of financial and non-financial goals
that support the key strategic objectives of the Company. The bonus measures for 2023 are in line with those for 2022.
The performance measures and weightings are shown below:
Performance measure
Weighting
Metrics
Profit before tax
(excluding material items)
50%
Cost: income ratio
(excluding material items)
Strategic non-financial
10%
25%
The evaluation will focus on
a range of key metrics
across stakeholder groups,
with a detailed
retrospective narrative on
progress against each
category throughout the
period. Performance
against the measures will be
assessed by the
Committee to determine
the percentage of the
award that may vest
between 0% and 25%. Each
of the three main
categories is weighted as
shown.
Personal
15%
A performance target range has been set for this financial measure, which will be disclosed in
the next Remuneration report. Pay-out of this element will also depend on the CET1 ratio at
the end of the performance year. In line with regulatory requirements, if the CET1 ratio is
below the MDA hurdle at the end of the performance year, the Committee will consider what
part if any of this element should pay out.
A performance target range has been set for this financial measure, which will be disclosed in
the next Remuneration report.
The measures are organised around three main categories and measures will likely include,
but not be limited to, the following:
Customers and clients (weighted 7.5%) - drive world class outcomes for customers and clients
• Improve Net Promoter Scores
• Reduce BUK customer complaints and improve resolution time
• Maintain client ranking and market share within CIB
• Increase digital engagement
Colleagues (weighted 7.5%) - protect and strengthen our culture through our Purpose,
Values and Mindset:
• Continue to improve diversity in leadership positions
• Improve inclusion indicators
• Maintain engagement at healthy levels
• Maintain culture and conduct indicators
Climate and sustainability (weighted 10%) - progress to be measured against four key objectives:
• Reduce operational emissions
• Progress towards our Sustainability and Transition financing target
• Reducing our financed emissions
• Supporting our communities
Joint personal objectives:
• Deliver improving shareholder returns, with a focus on RoTE
• Maintain robust capital ratios across the Group and within the main operating entities
• Continue to invest in capabilities to deliver next-generation, digitised consumer financial
services
• Continue to deliver sustainable growth in the Corporate and Investment Bank
• Actively deploy the range of Barclays’ businesses and capabilities to support customers and
clients and capture opportunities as we collectively transition to a low carbon economy
• Continue to drive our data strategy and technology agenda across the Group to support
improving customer and client services and experience
C.S. Venkatakrishnan:
• Ensure a continued focus on customer and client outcomes
• Continue to embed the Mindset across the organisation in support of our Purpose
• Continue to develop a high-performing culture in line with our Values, with a focus on
employee engagement, succession planning, talent and diversity
• Effectively manage relationships with key external stakeholders, including societal stewardship
• Drive leadership accountability to further strengthen our risk management and controls culture
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Remuneration report (continued)
Performance measure
Personal (continued)
Metrics
Anna Cross:
• Support the Business to grow sustainably, in line with the Group’s strategy, with specific
focus on climate, capital and costs
• Continue to optimise financial management reporting (particularly through technology) to drive
benefits across the Group and to ensure a smooth transition to new rules and regulations
• Continue to progress the transformation of the Treasury function, including strategic
treasury and liquidity platforms
• Oversee the effective management of the risk and controls agenda across Group
Finance, and transform for the future where necessary
• Retain focus on the colleague agenda across Group Finance – driving employee engagement,
continuing to improve diversity, developing senior talent and succession planning
• Effectively manage relationships with key external stakeholders including regulators
and investors
2023-2025 LTIP awards and performance measures
The Committee decided to grant awards under the 2023-2025 LTIP cycle to C.S. Venkatakrishnan and Anna Cross with face values at
grant equal to 140% and 134% of Fixed Pay respectively, which will be based on Fixed Pay before applying the 1 March 2023 increases
outlined earlier in this Remuneration report. Those maximum award multiples were determined following a detailed review of their
individual performance throughout 2022 and recognising their significant personal contributions. This share-based award ensures
alignment with future performance over the three-year assessment period, as well as shareholder alignment over the long release
period (up to eight years from initial date of grant).
The Committee carefully considered the performance measures for the Executive Directors' 2023-2025 LTIP and concluded that the
measures adopted last year for the 2022-2024 LTIP continue to represent the most relevant building blocks toward our key longer-
term financial and non-financial goals.
The 2023-2025 LTIP award will be subject to the following forward-looking performance measures.
Performance measure
Weighting
Threshold
Maximum vesting
Average return on tangible
equity (RoTE) (excluding
material items)a
Average cost: income ratio
(excluding material items)
25%
10%
Maintain CET1 ratio within
the target rangeb
10%
Relative Total Shareholder
Return (TSR)c
25%
0% of award vests for RoTE of 8.0%, rising on
a straight-line basis
25% of award vests for RoTE of 12.5% or
higher
0% of award vests for average cost: income
ratio of
62.5%, rising on a straight-line basis
If CET1 is below the target range during the
period, the Committee will consider what
portion of this element should vest, based on
the reasons for the CET1 shortfall
If CET1 is above the range and does not
make progress towards the range over the
period, the Committee will consider what
portion of the element should vest, based on
the reasons for the elevated levels of CET1
versus target range and the associated
impacts
6.25% vests for performance at the median
of the peer groupd, rising on a straight-line
basis
10% of award vests for average cost:
income ratio of 58.0% or lower
10% vests if either:
• CET1 is within the range during the period
or
• CET1 is above but making progress
towards the target range
25% of award vests for performance at or
above the peer groupd upper quartile
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Remuneration report (continued)
Performance measure
Weighting
Threshold
Maximum vesting
Strategic non-financials
20%
Risk scorecard
10%
The evaluation will focus on key performance measures from the Performance
Measurement Framework, with a detailed retrospective narrative on progress against each
category throughout the period. Performance against the strategic non-financial measures
will be assessed by the Committee to determine the percentage of the award that may vest
between 0% and 20%. The measures are organised around three main categories and
measures will likely include, but not be limited to, the following:
Customers and clients (weighted 5%) – drive world class outcomes for customers and clients;
Improve Net Promoter Scores; reduce BUK customer complaints and improve resolution
time; maintain client rankings and market share within CIB; and increase digital engagement.
Colleagues (weighted 5%) – protect and strengthen our culture through our Purpose, Values
and Mindset; Continue to improve diversity in leadership roles; improve inclusion indicators;
maintain engagement at healthy levels; and maintain culture and conduct indicators.
Climate and sustainability (weighted 10%) – progress to be measured against four key
objectives:
Reduce operational emissions; progress towards our Sustainability and Transition financing
target; reducing our financed emissions; and supporting our communities.
The Risk scorecard captures a range of risks and is aligned with the annual incentive risk
alignment framework shared with the regulators. The current framework measures
performance against three broad categories – Capital and liquidity, Control environment and
Conduct – using a combination of quantitative and qualitative metrics. The framework may
be updated from time to time in line with the Group’s risk strategy. Specific targets within
each of the categories are deemed to be commercially sensitive. Retrospective narrative on
performance will be disclosed in the 2025 Remuneration report, subject to commercial
sensitivity no longer remaining.
Notes
a Calculated assuming a CET1 ratio at the mid-point of the Group target range, 13-14%.
b Currently 13-14%.
c Performance assessed over the period from 1 January 2023 to 31 December 2025. Start and end TSR will be the Q4 average for 2022 and 2025 respectively and will be measured in GBP for each
company.
d The peer group is comprised of banks in the UK, Europe and North America of comparable size to Barclays and whose weekly returns have a high degree of correlation with Barclays'.The peer group for
the 2023-2025 LTIP award is Banco Santander, Bank of America, BBVA, BNP Paribas, Citigroup, Credit Agricole, Credit Suisse, Deutsche Bank, HSBC, ING Groep, Lloyds Banking Group, Morgan
Stanley, NatWest Group, Societe Generale, Standard Chartered, UBS, Unicredit.
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Remuneration report (continued)
Additional remuneration disclosures
Group performance graph and Group Chief Executive remuneration
The performance graph below compares the total shareholder return of Barclays shares with the total shareholder return of the FTSE
100 index over the ten years ended 31 December 2022. The FTSE 100 index has been selected because it represents a cross-section
of leading UK companies, of which Barclays is a long-standing constituent.
Total Shareholder Return – rebased to 100 in 2012
Year ended 31 December
Year
2013
2014
2015
2016
2017
2018
2019
2020
2021
Antony
Jenkins
1,602
Antony
Jenkins
5,467a
Antony
Jenkins
John
McFarlane
3,399
305
Jes
Staley
277
Jes
Staley
Jes
Staley
Jes
Staley
Jes
Staley
4,233
3,873
3,362
5,929
Jes
Staley
4,220b
Jes
Staley
2,121c
C.S.
Venkata-
krishnan
866d
2022
C.S.
Venkata-
krishnan
5,197
0.0% 57.0%
48.0%
n/a
n/a
60.0% 48.5% 48.3% 75.0% 38.6%
n/ac 92.6%d
75.4%
n/ae
30.0% 39.0%
n/ae
n/ae
n/ae
n/ae
n/ae
48.5% 23.0%
n/ac
n/ae
n/ae
Group Chief Executive
Single total remuneration
figure Group Chief
Executive
Annual bonus award as a
% of maximum
Long-term incentive plan
vesting as a % of
maximum
Notes
a Antony Jenkins’ 2014 pay is higher than in 2013 since he declined a bonus and did not have an LTIP vesting in 2013.
b 2020 remuneration outcomes reflect 2018-2020 LTIP value restated for the actual share price on the date of vesting.
c Jes Staley stepped down as Group Chief Executive on 31 October 2021. The remuneration shown for 2021 is in respect of his services as an Executive Director between 1 January 2021 and 31
October 2021. This figure does not include variable remuneration as the Committee has made no decisions in respect of Mr Staley's variable remuneration in respect of performance during 2021, and
has suspended the vesting of all of his unvested deferred remuneration awards including the LTIP award granted to him in March 2019, as explained earlier in this Remuneration report.
d The 2021 remuneration shown is in respect of C.S. Venkatakrishnan's services during 2021 following his appointment as Group Chief Executive on 1 November 2021. It includes the subsequent
reduction to reflect the lower outcomes of the financial measures following the restatement of the 2021 financial statements and as a result the figure has been restated from the value disclosed in
the 2021 Annual Report.
e Not applicable as the individual was not a participant in a long-term incentive award that vested in the period.
10011510597102947189739483100119119118140157143168149176184BarclaysFTSE10020122013201420152016201720182019202020212022 Strategic
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Remuneration report (continued)
Group Chief Executive pay ratio
The table below shows the ratios of the Group Chief Executive’s total remuneration to the total remuneration of UK employees since
2018 and the change in the pay ratios for 2022 is explained below.
2022
2021a
2020
2019
2018
Option
25th percentile
Median
75th percentile
A
A
A
A
A
154 x
95 x
144 x
213 x
126 x
101 x
62 x
95 x
140 x
85 x
58 x
35 x
53 x
77 x
45 x
Note
a 2021 Group Chief Executive pay ratio figures are calculated using the sum of the 2021 single total figure for remuneration for C.S. Venkatakrishnan and Jes Staley for their respective periods of service
as Group Chief Executive in 2021. The 2021 pay ratio figures have been recalculated to reflect the reduction that will be applied to the deferred elements of C.S. Venkatakrishnan’s 2021 bonus, after
the financial outcomes were recalculated to reflect the restatement of the 2021 financial statements, though after rounding the pay ratios shown are unchanged from those disclosed in the 2021
Annual Report.
The regulations provide three options that companies may use to calculate total pay for the employees at the 25th percentile, median
and 75th percentile. Option A was selected as this is the most robust methodology, calculating total pay for all employees on the same
basis that the single total figure for remuneration is calculated for Executive Directors. Total pay for each employee includes earned
fixed pay, which is made up of salary, any Role Based Pay and relevant allowances, annual incentives awarded for the 2022 calendar year,
and an estimate of pension and benefits for 2022. Other elements of pay such as overtime and shift allowances have been excluded.
The estimate of pension for each employee is based on the percentage currently available to new hires in the UK (10% of salary for the
more senior and 12% for the more junior corporate grades). The estimate of benefits is based on the cost of core benefits available at
each corporate grade, including private medical insurance, income protection and life assurance. Calculations use full-time equivalent
pay data taken from our HR systems for all UK employees, for each year using the employee population on 31 December.
Total pay and fixed pay for the UK employees at the 25th percentile, median and 75th percentile are set out in the table below.
2022
2021
2020
2019
2018
25th percentile
Median
75th percentile
Total pay
£33,711
£31,404
£29,380
£27,875
£26,587
Fixed Pay
£28,300
£26,035
£24,706
£23,348
£21,899
Total pay
£51,493
£48,253
£44,631
£42,362
£39,390
Fixed Pay
£41,608
£39,461
£37,460
£35,158
£32,202
Total pay
£89,911
£85,407
£79,324
£77,488
£74,685
Fixed Pay
£71,071
£67,408
£64,272
£62,263
£60,000
The Group Chief Executive pay ratios for 2022 are higher than the pay ratios for 2021. The 2021 pay ratios were calculated using the
sum of the 2021 single total remuneration figure for C.S. Venkatakrishnan and Jes Staley for their respective periods of service during
2021 as Group Chief Executive. The figure for Jes Staley did not include any value for bonus or LTIP as no remuneration decisions were
made in respect of Mr Staley for performance-year 2021, and the 2019-2021 LTIP award granted to him in March 2019 that would
otherwise have vested to him in March 2022 was suspended, as explained earlier in this Remuneration report. On a like-for-like
annualized basis, C.S. Venkatakrishnan’s bonus for 2022 is lower than his 2021 bonus as Group Chief Executive, while the median bonus
for UK employees has increased by 3% in 2022, as is discussed in more detail on the next page. The Group Chief Executive pay ratios for
2022 are more similar to the 2020 pay ratios, which is the most recent year that the single figure for remuneration included a full-year
bonus for the Group Chief Executive.
Looking back over the four-year period shown in the tables, total pay for the more junior employees in the UK has increased by almost a
third (27% at 25th percentile and 31% at median), and fixed pay has increased by a similar amount (29% at both 25th percentile and
median). Pay at the 75th percentile (more senior colleagues) has increased by less (20% for total pay and 18% for fixed pay). This is
consistent with our commitment to fair pay for the lowest paid. Salary levels are reviewed annually to ensure these exceed living wage
benchmarks and salary increases are focused on the more junior colleagues. In addition, more junior employees are largely protected
from decreases in bonus pool.
Barclays remuneration philosophy is set out earlier in this report, and all remuneration decisions for Executive Directors and the wider
workforce are made within this framework. The Group Chief Executive pay ratio is one of the outcomes of all of these decisions, which
are explained in more detail in the Committee Chair’s annual statement. To ensure that Executive Director remuneration outcomes are
commensurate with experience for the wider workforce, the Remuneration Committee each year specifically considers whether the
bonus and LTIP outcomes for the Executive Directors appropriately reflect the Group’s performance, shareholder experience and the
remuneration outcomes for the wider workforce, as part of determining whether a discretionary adjustment should be made to the
Executive Directors’ incentive outcomes. The Committee concluded that this remains the case for this year's remuneration outcomes.
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Remuneration report (continued)
Annual percentage change in remuneration of Directors and employees
The table below shows the percentage change in the Executive Directors’ Fixed Pay, benefits and bonus each year between 2020 and
2022 compared with the percentage change in each of those components of pay for UK-based employees of Barclays Group and for
employees of the Barclays PLC (BPLC), the parent company of the Group.
2021/2022
2020/2021
2019/2020
C.S. Venkatakrishnana
Anna Crossb
Tushar Morzariac
Median UK employee
Median employee of BPLCd
C.S. Venkatakrishnana
Tushar Morzariac
Jes Staleye
Median UK employee
Median employee of BPLCd
Tushar Morzaria
Jes Staley
Median UK employee
Median employee of BPLCd
Fixed pay
Benefits
Annual bonus
2%
n/a
2%
5%
10%
n/a
2%
1%
5%
11%
0%
0%
7%
7%
853%
n/a
82%
10%
15%
n/a
(10%)
(12%)
6%
0%
9%
10%
20%
26%
(16%)
n/a
(20%)
3%
(2%)
n/a
152%
n/a
42%
38%
(49%)
(49%)
(16%)
(16%)
Notes
a C.S. Venkatakrishnan was appointed as Group Chief Executive with effect from 1 November 2021. His remuneration figures for 2021 are pro-rated up to a full-year equivalent for the purpose of this
comparison. The value of his benefits in 2022 includes the cost of providing relocation support, including immigration assistance, temporary accommodation and home search support in London. No
percentage change figures can be calculated for 2020/21 as he did not receive any remuneration in respect of services provided as an Executive Director in 2020.
b Anna Cross was appointed as Group Finance Director with effect from 23 April 2022. No percentage change figures can be calculated for 2021/22 as she did not receive any remuneration in respect of
services provided as an Executive Director in 2021.
c Tushar Morzaria retired from the Board and stepped down as Group Finance Director on 22 April 2022. His remuneration figures for 2022 are pro-rated up to a full-year equivalent for the purpose of
this comparison. The value of his benefits in 2022 includes the cost of advice on tax return preparation incurred in 2021 and 2022 that were all invoiced in 2022. The annual bonus percentage change
for Tushar Morzaria reflects the reduction that will be applied to the deferred elements of his 2021 bonus, to reflect the restatement of the 2021 financial statements, and as a result the 2020/2021
percentage change has been restated from the value disclosed in the 2021 Annual Report.
d The BPLC comparison is included because this is a statutory requirement, though BPLC employs only a very small number of Head Office employees (51 for 2022).
e Jes Staley's remuneration figures for 2021 are pro-rated up for the purpose of this comparison. The Committee has not made any remuneration decisions to date in respect of 2021 variable pay, as
explained earlier in this Remuneration report.
For the Executive Directors, percentage change figures for 2021 to 2022 are calculated using the single total figures for remuneration.
For the purpose of this comparison, these have been pro-rated up to full year based on their respective periods of service as Executive
Directors each year. As such, C.S. Venkatakrishnan’s 2021 single total figure for remuneration, which reflects remuneration for his two
months’ service as an Executive Director in 2021, was pro-rated up to a full-year equivalent, as was Tushar Morzaria’s single total figure
for 2022, which reflects remuneration from the start of 2022 until he stepped down as Group Finance Director and an Executive
Director on 22 April 2022.
For Fixed Pay, the 2021 to 2022 increase shown for C.S. Venkatakrishnan is due to the 3% Fixed Pay increase agreed for him with effect
from 1 March 2022. The increase shown for Tushar Morzaria is due to the 4.5% Fixed Pay increase implemented with effect from 1 July
2021, which was originally approved by shareholders at the 2020 AGM and postponed due to the COVID-19 pandemic. The large
percentage change in benefits for C.S. Venkatakrishnan from 2021 to 2022 is predominantly due to the cost during 2022 of providing
him with relocation support, including immigration assistance, temporary accommodation and home search support in London, in line
with the current DRP. As referenced in last year's Remuneration report, under the terms of his relocation to London, temporary
accommodation in London will be provided to him for a period of up to two years following his appointment as Group Chief Executive in
November 2021. Tushar’s benefits (on an annualised basis) have increased in comparison to 2021 largely due to the cost of advice on
tax return preparation incurred in 2021 and 2022 all being invoiced in 2022, the total value of which is c.£15,000.
The bonus outcomes for C.S. Venkatakrishnan and Tushar Morzaria are down 16% and 20% respectively (based on full-time
equivalents each year). This is reflective of the financial and non-financial performance factors outlined earlier in this Remuneration
report, in the section on the 2022 annual bonus outcomes, including the impact of the Over-issuance of Securities on the financial
results for 2022.
For UK employees across the Group overall, the 5% increase in median fixed pay reflects increases awarded during 2022 in the normal
course of business and the decision taken to bring forward part of the 2023 pay increase, to give 35,000 UK-based junior colleagues a
£1,200 salary increase effective from August 2022 to provide support to colleagues in light of high cost-of-living inflation, ahead of our
annual salary review (which will be effective 1 March 2023). The increase in benefits is largely due an increase in the cost to Company of
income protection and private medical insurance.
For bonus, although the overall incentives pool is down on 2021, the Committee chose to focus the reductions on more-senior
colleagues so that year-on-year bonus outcomes for junior colleagues see less of a decline, consistent with our Fair Pay Agenda. As a
result, the greatest reductions in incentives from 2021 to 2022 were seen for more senior colleagues. This is reflected in the bonus
percentage change figure for the median employee, which is up 3% from 2021 to 2022, despite the overall incentives pool reduction.
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Remuneration report (continued)
BPLC only employs a very small number of Head Office employees (51 for 2022) and there is frequent movement of employees
between BPLC and other entities within the Barclays Group. To make a meaningful year-on-year comparison, the figures are therefore
based on those individuals who were employed by BPLC in both years (34 individuals). The fixed pay increase for this population of 10%
is due to a few fixed pay increases following material changes in role in this very small population. The average bonus decrease of 2% is
principally a consequence of the decrease in Group-wide incentive pool in 2022. The benefits value has increased due an increase in the
cost of income protection and private medical insurance.
The table below shows the percentage change in fees each year between 2019 and 2022 for the Chairman and the Non-Executive
Directors serving on Barclays PLC Board during 2022, including fees for Board Committee memberships and/or subsidiary board
positions. Non-Executive Directors who joined on or after 1 January 2022 are not included. The changes in fees shown relate to
changes in responsibilities of the Non-Executive Directors.
Nigel Higgins
Mike Ashley
Tim Breedon
Mohamed A. El-Erian
Dawn Fitzpatrick
Mary Francis
Crawford Gillies
Brian Gilvary
Diane Schueneman
Julia Wilson
2021 / 2022 Feesa
2020 / 2021 Feesa
2019 / 2020 Feesa
0%
(2%)
(19%)b
3%
18%c
5%
(2%)
3%
4%
13%d
0%
0%
64%
11%
14%
8%
108%
95%
(4%)
n/a
0%
19%
24%
n/a
36%
(3%)
4%
n/a
3%
n/a
Notes
a For those who were appointed to Barclays PLC Board or those who stood down from Barclays PLC Board in any of the years covered by the table, fees are pro-rated up for the relevant year for the
purpose of this comparison. Additional information has been provided where 2021/2022 percentage changes in fees were greater than 10%.
b The decrease in fees from 2021 to 2022 is primarily due to Tim Breedon having retired from his responsibilities as a member of the Board Remuneration Committee of Barclays PLC and Barclays Bank
PLC on 31 October 2021; he also retired as Chair of the Board Risk Committee of Barclays PLC and Barclays Bank PLC, and as a member of the Barclays Bank PLC Board, in each case with effect from
28 February 2022.
c Dawn Fitzpatrick joined the Board Remuneration Committee with effect from 1 July 2021 and the BCSL Board with effect from 27 September 2021 and received pro-rata fees for that year. For 2022,
the full year fees of £30,000 and £20,000 respectively were paid, therefore increasing the fees paid from 2021 to 2022.
d The increase in fees from 2021 to 2022 is primarily due to Julia Wilson's additional responsibilities in 2022, including becoming a member of the Board Risk Committee and the Board Nominations
Committee with effect from 1 September 2022.
Relative importance of spend on pay
A year-on-year comparison of Group compensation costs and of distributions to shareholders is shown below. The distributions shown
relate to dividends paid and share buyback programmes completed during the year. The distributions for 2022 do not include the
dividends and share buyback programme announced on 15 February 2023.
Group compensation costs
£m
2022
2021
n Other compensation-related income statement chargesa
n Performance costs
Distribution to shareholdersb
£m
2022
2021
n Share buybacks
n Dividends
Notes
a Relates to costs arising from salaries and other elements of fixed pay, social security costs, post-retirement benefits and other compensation costs.
b The chart shows dividends paid and share buyback programmes completed during the year, i.e. for 2022, the figure represents the 2021 full year dividend paid, the share buyback programme
announced with the 2021 results, the 2022 half year dividend, and the share buyback programme announced with the half year results. The shareholder distributions announced on 15 February 2023
are not reflected in this chart.
8,3497,6246,5135,8791,8361,7452,5281,7121,5001,2001,028512 Strategic
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Remuneration report (continued)
Chairman and Non-Executive Directors
Remuneration for Non-Executive Directors reflects their responsibilities, time commitment and the level of fees paid to Non-Executive
Directors of comparable major UK companies. Fees are pro-rated for periods of service.
Non-Executive Directors are reimbursed expenses that are incurred for business reasons. Any tax that arises on these reimbursed
expenses is paid by Barclays.
Chairman and Non-Executive Directors: Single total figure for 2022 remuneration (audited)
Chairman
Nigel Higginsb
Non-Executive Directors
Mike Ashley
Robert Berryc
Tim Breedond
Mohamed A. El-Erian
Dawn Fitzpatricke
Mary Francis
Crawford Gillies
Brian Gilvary
Diane Schueneman
Julia Wilsonf
Total
2022
£000
800
260
213
392
155
200
170
490
241
388
135
Feesa
2021
£000
800
265
—
483
150
170
162
502
234
374
90
3,444
3,230
2022
£000
7
—
—
—
—
—
—
—
—
—
—
7
Benefits
2021
£000
8
—
—
—
—
—
—
—
—
—
—
8
2022
£000
807
260
213
392
155
200
170
490
241
388
135
Total
2021
£000
808
265
—
483
150
170
162
502
234
374
90
3,451
3,238
Notes
a The annual fees received in 2022 by each Non-Executive Director include fees for Board Committee memberships and/or subsidiary Board positions. Fees shown in the table above are pro-rated
(where appropriate) for periods of service. Key changes in appointments during 2022 are identified in notes c to f below.
b Nigel Higgins does not receive a fee in respect of his role as Chairman of Barclays Bank PLC.
c Robert Berry was appointed to the Board with effect from 8 February 2022 and as Chair of the Board Risk Committee and a member of the Board Audit Committee with effect from 1 March 2022. The
2022 figure includes £90,000, £80,000 and £20,000 respectively, for these appointments (pro-rated for service in 2022).
d Tim Breedon retired as Chair of the Board Risk Committee of Barclays PLC and Barclays Bank PLC, and as a member of the Barclays Bank PLC Board, with effect from 28 February 2022, but remains a
member of the Board and Chair of Barclays Bank Ireland PLC.
e Dawn Fitzpatrick joined the Board Remuneration Committee with effect from 1 July 2021 and the BCSL Board with effect from 27 September 2021 and received pro-rated fees for that year. For 2022,
the full year fees of £30,000 and £20,000 respectively were paid, therefore increasing the fees paid from 2021 to 2022.
f Julia Wilson was appointed as a member of the Board Risk Committee and the Board Nominations Committee with effect from 1 September 2022. The 2022 figure includes £30,000 and £15,000
respectively for these appointments (pro-rated for service in 2022).
Chairman and Non-Executive Directors: Statement of implementation of remuneration policy in 2023
The fees for the Chairman and Non-Executive Directors were reviewed in December 2022 and early 2023. With effect from 1 January
2023, the fee for the Chairman was increased by 5% from £800,000 to £840,000 and the fees for Non-Executive Directors for all other
roles on the Board and Board Committees of Barclays PLC were increased by 5%.
Fees for the Chairman and Non-Executive Directors are shown below, before those increases in the column headed 1 January 2022
and after the increases in the column headed 1 January 2023.
Chairmana
Board member
Additional responsibilities
Senior Independent Director
Chair of Board Audit or Risk Committee
Chair of the Board Remuneration Committee
Membership of Board Audit, Remuneration or Risk Committee
Membership of Board Nominations Committee
Note
a The Chairman does not receive any fees in addition to the Chairman fees.
1 January 2023
1 January 2022
£
840,000
94,500
£
800,000
90,000
37,800
84,000
73,500
31,500
15,750
36,000
80,000
70,000
30,000
15,000
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Remuneration report (continued)
Directors’ shareholdings and share interests
Interests in Barclays PLC shares (audited)
The table below shows the number of shares owned beneficially by each person who served as a Director during 2022 (including any
shares owned beneficially by their connected persons). For the Executive Directors, it shows the number of shares over which each
holds awards that are subject to either deferral terms or to deferral terms plus performance measures, and the number of shares
owned outright includes shares purchased by the Director as well as shares received in relation to remuneration. The numbers shown
for shares that are subject to performance measures represent the maximum number of shares that may be released if those
performance measures were to be satisfied in full.
The total share interests at 13 February 2023 were the same as shown below for all Directors in service as at 31 December 2022.
Interests in Barclays PLC shares as at 31 December
(or date of retirement from the Board, if earlier)
Owned outright
Unvested deferred awards
Subject to
performance
measures
Not subject to
performance
measures
Total
Executive Directors
C.S. Venkatakrishnan
Anna Crossa
Chairman
Nigel Higgins
Non-Executive Directors
Mike Ashley
Robert Berryb
Tim Breedon
Mohamed A. El-Erian
Dawn Fitzpatrick
Mary Francis
Crawford Gillies
Brian Gilvary
Diane Schueneman
Julia Wilson
Former Directors
Tushar Morzariac
2,019,218
3,025,210
3,223,154
8,267,582
400,910
774,557
1,175,467
1,614,611
1,614,611
382,362
4,786
202,399
141,014
944,925
67,944
221,016
212,200
106,844
21,263
382,362
4,786
202,399
141,014
944,925
67,944
221,016
212,200
106,844
21,263
5,263,505
4,310,037
2,362,888
11,936,430
Notes
a Anna Cross was appointed to the Board with effect from 23 April 2022.
b Robert Berry was appointed to the Board with effect from 8 February 2022.
c Tushar Morzaria stepped down as an Executive Director with effect from 22 April 2022 and as a result his shareholdings are shown as at that date.
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Annual Report 2022 242
Remuneration report (continued)
Executive Directors’ shareholdings and share interests (audited)
The charts below show the value of Barclays shares held as at 31 December 2022 by C.S. Venkatakrishnan and Anna Cross, or as at 22
April 2022 for Tushar Morzaria, being his last day of active service as an Executive Director, in each case using the Q4 2022 average
Barclays ordinary share price of £1.5315. The values of unvested shares are shown after deduction of estimated income tax and social
security withholdings. For the unvested shares subject to performance conditions, the proportion that is ultimately released may range
from 0% to 100%, depending on the achievement of the performance measures for each award, and on continued employment in
accordance with the plan rules and the DRP.
For C.S. Venkatakrishnan, the shareholding requirement is 233% of year-end Fixed Pay and for Anna Cross it is 224% of year-end Fixed
Pay. C.S. Venkatakrishnan and Anna Cross have five years from their respective dates of appointment as Executive Directors to meet
this requirement. Barclays shares held beneficially by each Executive Director count towards the shareholding requirement under the
existing DRP, which was in operation during 2022. Under the proposed new DRP, which aligns the shareholding and post-employment
shareholding requirements with market practice (as described earlier in the Remuneration report), unvested shares that are not subject
to performance conditions will also count toward the shareholding requirement (net of estimated tax and social security).
Tushar Morzaria is subject to a two year post-employment shareholding requirement of 224% of his Fixed Pay as at his last day of active
service as an Executive Director. Shares that count towards the requirement are beneficially owned shares, plus unvested shares not
subject to performance conditions (net of estimated tax and social security).
Unvested shares that are still subject to performance conditions do not count towards the shareholding requirements, but contribute
to aligning the Executive Directors' interests with shareholder experience through share price exposure.
C.S. Venkatakrishnan
£000
Anna Cross
£000
C.S. Venkatakrishnan has until 1 November 2026, being five
years from the date of his appointment as an Executive
Director, to meet this shareholding requirement.
Anna Cross has until 23 April 2027, being five years from the
date of her appointment as an Executive Director, to meet
this shareholding requirement.
Tushar Morzaria
£000
Having stepped down as an Executive Director on 22 April
2022, Tushar Morzaria has a contractual obligation to
maintain his shareholding requirement (as detailed above) for
two years following his last day of active service as an
Executive Director.
n Vested shares
n Unvested shares not subject to performance conditions
n Unvested shares subject to performance conditions
6,477Requirement3,0922,3642,219Actual 3,864614629RequirementActual3,8648,0611,9183,498RequirementActual
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Remuneration report (continued)
Service contracts and letters of appointment
Each Executive Director has a service contract, whereas the Chairman and Non-Executive Directors each have a letter of appointment.
Copies of the service contracts and letters of appointment are available for inspection at the Company’s registered office. The
effective dates of the current Directors’ appointments disclosed in their service contracts or letters of appointment are shown in the
table below.
As stated in the letters of appointment, the Chairman and Non-Executive Directors are appointed for an initial term of three years and
are subject to annual re-election by shareholders. On expiry of the initial term and subject to the needs of the Board, Non-Executive
Directors may be invited to serve a further three years. Non-Executive Directors appointed beyond six years will be at the discretion of
the Board Nominations Committee.
Chairman
Nigel Higgins
Executive Directors
C.S. Venkatakrishnan
Anna Cross
Non-Executive Directors
Mike Ashley
Robert Berry
Tim Breedon
Mohamed A. El-Erian
Dawn Fitzpatrick
Mary Francis
Crawford Gillies
Brian Gilvary
Marc Moses
Diane Schueneman
Julia Wilson
Effective date of appointment
1 March 2019 (as a Non-Executive Director)
2 May 2019 (as Chairman)
1 November 2021
23 April 2022
18 September 2013
8 February 2022
1 November 2012
1 January 2020
25 September 2019
1 October 2016
1 May 2014
1 February 2020
23 January 2023
25 June 2015
1 April 2021
Payments to former Directors (audited)
Former Group Chief Executive: Jes Staley
On stepping down from his role as Group Chief Executive and as an Executive Director of Barclays PLC, on 31 October 2021, Mr Staley
was entitled to 12 months' notice from Barclays, under his contract of employment. During his notice period, he continued to receive
his Fixed Pay (£2,400,000 per annum delivered half in cash, paid monthly, and half in Barclays shares, awarded each quarter), pension
allowance (£120,000 per annum, paid monthly) and other benefits, in line with the DRP. The amounts that he received during 2022, up
to the end of his notice period on 31 October, amounted to Fixed Pay in cash of £1,000,000, Fixed Pay in shares of £1,000,000, pension
allowance of £100,000 and other benefits with a value of approximately £46,600. He was also contractually entitled to receive
reimbursement of repatriation costs to the US, in line with the DRP, and these amounted to £107,000. Mr Staley will continue to be
entitled to annual advice on UK and US tax compliance in respect of Barclays employment income. Pending further developments in
respect of the regulatory and legal proceedings related to the ongoing FCA and PRA investigation regarding Mr Staley, no further
remuneration decisions have been made with regards to his deferred share and LTIP awards which remain suspended.
Former Group Finance Director: Tushar Morzaria
On stepping down from his role as Group Finance Director and as an Executive Director of Barclays PLC, on 23 April 2022, Mr Morzaria
commenced a new role within Barclays as Chairman of Global Financial Institutions Group and Adviser to the Group Chief Executive. He
will continue to be entitled to annual advice on UK and US tax compliance until such time as he ceases receiving deferred income related
to his period serving as an Executive Director, the total cost of which was c.£15,000 in 2022. Mr Morzaria continues to work within
Barclays in other roles and so is not treated as a leaver in respect of any deferred bonus or LTIP awards, which will continue to vest in
accordance with the relevant plan rules.
Former Group Finance Director: Chris Lucas
In 2022, Chris Lucas continued to be eligible to receive life assurance cover, private medical cover and payments under the Executive
Income Protection Plan (EIPP). Full details of his eligibility under the EIPP were disclosed in the 2013 Remuneration report (page 115 of
the 2013 Annual Report). He did not receive any other payment or benefit in 2022.
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Remuneration report (continued)
Previous AGM voting outcomes
The table below shows the shareholder voting result in respect of our 2021 Remuneration report (approved by shareholders at the
AGM held on 4 May 2022) and Directors’ remuneration policy (approved by shareholders at the AGM held on 7 May 2020).
Vote on the 2021 Remuneration Report at the 2022 AGM
89.03%
10.97%
10,193,013,827
1,255,388,727
15,189,796
Vote on the Directors’ remuneration policy at the 2020 AGM
96.29%
3.71%
11,308,670,932
436,091,600
201,020,969
For % of votes cast
Number
Against % of votes cast
Number
Withheld Number
At the AGM held on 24 April 2014, 96.02% (10,364,453,159 votes) of shareholders of Barclays PLC voted for the resolution in respect of
a fixed to variable remuneration ratio of 1:2 for ‘Remuneration Code Staff ’ (now known as MRTs). On 14 December 2017, the Board of
Barclays PLC as shareholder of Barclays Bank PLC approved the resolution that Barclays Bank PLC and any of its current and future
subsidiaries be authorised to apply a ratio of the fixed to variable components of total remuneration of their MRTs that exceeds 1:1,
provided the ratio does not exceed 1:2. On 15 November 2018, the Board of Barclays PLC as shareholder of Barclays Bank UK PLC
approved an equivalent resolution in relation to MRTs within Barclays Bank UK PLC and any of its subsidiaries.
Barclays Board Remuneration Committee
The Committee is responsible for overseeing Barclays’ remuneration as described in more detail below.
Terms of Reference
The role of the Committee is to:
• set the overarching principles and parameters of remuneration policy across the Group;
• consider and approve the remuneration arrangements of (i) the Chair, (ii) the Executive Directors, (iii) members of the Barclays Group
Executive Committee and any other senior executives specified by the Committee from time to time, and (iv) all other Group
employees whose total annual compensation exceeds an amount determined by the Committee from time to time; and
• exercise oversight over remuneration issues.
The Committee considers the overarching objectives, principles and parameters of remuneration policy across the Group, ensuring
that it is adopting a coherent approach in respect of all employees. In discharging this responsibility, the Committee seeks to ensure
that the policy is fair and transparent, avoids complexity and assesses, among other things, the impact of pay arrangements in
supporting the Group’s culture, Values and strategy and on all elements of risk management. The Committee also approves
incentive pools for each of the Group, Barclays Bank PLC, Barclays Bank UK PLC and BX, periodically reviews (at least annually) all
material matters of retirement benefit design and governance, and exercises judgement in the application of remuneration policies
to promote the long-term success of the Group for the benefit of shareholders. The Committee and its members work as
necessary with other Board Committees, and the Committee is authorised to select and appoint its own advisers as required.
+ The Committee’s terms of reference are available at
home.barclays/who-we-are/our-governance/board-committees
Advisers to the Committee
The Committee appointed PricewaterhouseCoopers (PwC) as its independent adviser in October 2017. The Committee considered
the advice provided by PwC to the Committee during the year and was satisfied that the advice is independent and objective. PwC is a
signatory to the voluntary code of conduct in relation to executive remuneration consulting in the UK.
PwC was paid £173,000 (excluding VAT) in fees for their advice to the Committee in 2022 relating to the remuneration of the Directors
(either exclusively or along with other employees within the Committee’s Terms of Reference). In addition to advising the Committee,
PwC provided unrelated consulting advice to the Group in respect of strategic advice on business, regulation, operational models and
cost, corporate taxation, technology, pensions and HR issues.
Throughout 2022, Willis Towers Watson (WTW) provided the Committee with market data on compensation, as context when
considering incentive levels and remuneration packages. WTW were paid £82,000 (excluding VAT) in fees for these services. In addition
to the services provided to the Committee, WTW also provides market data on compensation for other roles below Board level,
pensions and benefits advice and insurance brokerage services to the Barclays Group, and pensions advice and administration services
to a number of the Group's pension funds.
In the course of its deliberations, the Committee also considered the views of the Group Chairman, the Group Chief Executive, the
Group Human Resources Director and the Group Reward and Performance Director. The Group Finance Director and the Group Chief
Risk Officer provided regular updates on Group and business financial performance and risk profiles, respectively. The Head of
Corporate Communications attended when requested to advise on reward communications and disclosures. The Group General
Counsel and Company Secretary advised on legal and governance-related matters.
No Barclays employee or Director participates in discussions with, or decisions of, the Committee relating to his or her own
remuneration. No other advisers provided services to the Committee in the year.
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Remuneration report (continued)
Committee effectiveness in 2022
The 2022 Committee effectiveness review was facilitated internally in accordance with the Code. This internal review involved
completion of a tailored questionnaire by Committee members and standing attendees, in line with the approach adopted for all Board
Committees in 2022. The review is an important part of the way Barclays monitors and improves Committee performance and
effectiveness, maximising strengths and highlighting areas for further development.
The results of the review confirm the Committee is operating effectively. It is considered to be well constituted, providing an effective
and appropriate level of challenge and oversight of the areas within its remit, including in respect of complex judgements. The review
noted that the Committee allocates time appropriately to cover its remit effectively in meetings, with sufficient time for discussion and
challenge.
The review acknowledged that Committee meetings are chaired effectively, with the Chair encouraging debate through an inclusive
approach. In light of Crawford Gillies having stepped down as Committee Chair in February 2021, and the role of Chair having been
assumed by an existing Committee member, consideration will be given to adding an additional member of the Committee in due
course.
The Committee’s interaction with the Board, Board Committees and senior management is considered effective, with the review
noting the strong level of support provided to the Committee by senior management.
Following the consolidation of the membership of the Committee with the BBPLC Board Remuneration Committee in September 2019
(with the exception of the Committee Chair, who attends as an observer only for matters relating to BBPLC), coverage of BBPLC
matters within aligned meetings is considered adequate. The Committee’s interaction with the BBPLC and BBUKPLC Board
Remuneration Committees was also considered effective, and operates in line with regulatory requirements.
Committee activity in 2022
The following table summarises the Committee’s activity during 2022, and at the January and February 2023 meetings at which 2022
remuneration decisions were finalised. The Committee is also provided with updates at each scheduled meeting on: the operation of
the Committee’s Control Framework on hiring, retention and termination; headcount and employee attrition; and extant LTIP
performance.
January
2022
February
2022
June
2022
October
2022
December
2022
January
2023
February
2023
Overall
remuneration
Finance and Risk updates
Incentive funding proposals including risk
and control adjustments
2021 Remuneration Report
Group Fixed Pay budgets
Wider workforce considerations
Incentive funding approach
Barclays’ Fair Pay Agenda and Report
Directors' Remuneration Policy
2022 Remuneration Report
Executive Directors’ and senior
executives’ bonus outcomes
Annual bonus and LTIP performance
measures and target calibration
Executive
Directors’ and
senior
executives’
remuneration
Governance
Regulatory and stakeholder matters
Discussion with independent adviser
Remuneration Review Panel update
Review of Committee effectiveness
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
There were two additional Committee meetings, one each in February 2022 and November 2022, the first to consider the
remuneration aspects related to Group Finance Director succession and the second to consider remuneration for a number of senior
positions.
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Other Governance
This section aims to provide an overview of certain governance matters of
particular relevance to ESG ratings agencies and investors across a range of
ESG matters. It covers topics such as our Code of Conduct, Whistleblowing,
Tax, Financial crime, Health and Safety and how we manage our Data privacy
and Security as well as Resilience. This section also includes our approach to
managing social and environmental impacts as well as our Governance
disclosures as part of the TCFD recommendations.
This section does not discuss general corporate governance
matters. Refer to the Board Governance report from page 142 in
the Annual Report for information relating to the Board, ExCo and
Board Committees, our Board governance framework and how
we complied with the requirements of the 2018 UK Corporate
Governance Code during 2022.
Climate and sustainability governance
Managing impacts in lending and financing
The Barclays Way
Whistleblowing
Tax
Financial crime
Health and safety
Managing data privacy, security and resilience
247
253
256
257
258
260
261
262
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ESG: Governance
Climate and sustainability governance
Oversight and management of climate-related issues are embedded within our governance structure.
Barclays’ governance structure consists of the Barclays PLC Board (Board) and its Committees along with Executive and Management
Committees which span across both business and legal entity lines. The Board sets the Group’s climate-related strategy and oversees
its implementation by senior management.
Governance structure
Barclays PLC Board
The Barclays PLC Board sets the strategy for the group
Board Risk Committee
Board Audit Committee
Board Remuneration Committee
Group Executive Committee (Group ExCo)
Group
Reputation Risk
Committee
(GRRC)
Group
Risk
Committee
(GRC)
Accountable
Function’s COO
Executive
Committee
Climate
Transaction
Review
Committee
(CTRC)
Climate
Risk &
Controls
Forum
(CFRF)
Climate
Risk
Committee
(CRC)
Operational
Sustainability
Steering
Committee
Climate
Portfolio
Governance
Board
Disclosure
Committee
Legal &
Technical
Committee
Group
Chief
Compliance
Officer
Group
Chief Risk
Officer
Group
Chief Operating
Officer
Group
Head of
Climate Risk
BX Risk and
Finance Chief
Operating
Officer
CEOs -
Corporate &
Investment Bank
and Barclays UK
Heads of
Sustainable
Finance -
Corporate &
Investment Bank
and Barclays UK
Group
Head of
PPCR
Group
Finance
Director
Group
Head of
Sustainability
Group Head of
Finance -
Sustainability
and ESG
Business / Legal Entity Committees and Forums
Climate and Sustainable Finance Council
Principal Investments Equity Committee
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ESG: Governance (continued)
Roles and Responsibilities of Board and Board Committees with respect to Climate matters
Board / Board Committee
Board
Roles and Responsibilities
Responsible for the overall leadership of the Group (with direct oversight of matters relating to strategy,
reputation and culture). The Board sets the Group’s strategy and has responsibility for overseeing
Reputation risk, in respect of which climate matters are a relevant consideration.
Board Audit
Committee
Board Risk
Committee
Responsible for overseeing the integrity of the Group's financial disclosures, the effectiveness of the
internal control environment and consideration of non-financial reporting. The Committee oversees
financial and narrative reporting which encompasses ESG and climate disclosures within the Annual
Report.
Responsible for monitoring Principal Risks (including Climate risk), considering the Group’s risk appetite
and tolerances, along with reviewing the Group’s risk profile and commissioning, receiving and
considering reports on key risk issues. The Committee has responsibility for reviewing the impact of
Climate risk on financial and operating risk arising from climate change through physical risks, risks
associated with transitioning towards a lower-carbon economy and connected risk (excluding Reputation
risk).
Board Remuneration
Committee
Responsible for setting the overarching principles and parameters of remuneration policy across the
Group. The Committee has responsibility for aligning Executive Director remuneration with strategic
priorities, including in relation to climate and sustainability matters.
Climate and sustainability governance
Board and Board Committee
oversight of climate-related risks
and opportunities
Barclays PLC Board
The Board is responsible for the overall
leadership of Barclays PLC, including
establishing its purpose, values and
strategy and assessing and monitoring
that these and its culture are aligned. As
part of this, the Board and, as appropriate,
its Committees are responsible for the
oversight of social and environmental
matters, including climate-related risks
and opportunities.
The Board is supported in its work by its
Committees (including in respect of
climate-related matters), each of which
has its own Committee Terms of
Reference clearly setting out its remit and
decision-making powers. The Chairs of
each of the Board Committees provide a
report on the work of the Committee at
every Board meeting.
Board Risk Committee (BRC)
The BRC monitors and recommends the
risk appetite for the Group's Principal Risks,
including risks associated with climate
change. It considers and reports on key
financial and non-financial risk issues, and
oversees conduct and compliance. It also
monitors the Group’s Financial,
Operational, Conduct and Legal risk
profile.
During 2022, the Board received five
climate-related updates from the Group
Head of Public Policy and Corporate
Responsibility (PPCR) and the Group Head
of Sustainability. These covered matters
such as progress on our climate strategy,
policy updates, industry trends,
stakeholder engagement and target-
setting. In addition to these Board
briefings, the Group Head of PPCR
engaged with Board members on matters
relating to the Group’s climate strategy.
The Board also received updates from the
businesses (including Barclays UK and
Barclays International), either directly or
through the reports of the Board Risk
Committee, regarding their climate
strategy.
See the ‘Climate spotlight’ on the next
page for details of key Board activities and
decisions in 2022 in relation to climate-
related matters.
As reported in our 2021 Annual Report,
Climate risk was elevated to a Principal Risk
within our Enterprise Risk Management
Framework (ERMF) from 1 January 2022.
Following a detailed training session on the
financial and operational risks of climate
change delivered to the BRC at the
beginning of 2022, the BRC received
quarterly Climate risk updates from the
Head of Climate Risk and also received
reports from the businesses on their
climate strategy, with a focus on ensuring
Climate risk is adequately considered as
part of business-planning activities across
the Group.
As part of the updates provided by the
Head of Climate Risk, the BRC received
and considered updates in relation to:
• areas of elevated climate risk and
progress against sector targets,
received in the form of a Climate Risk
Dashboard
• stakeholder views on climate risk
• the impact of the war in Ukraine on the
transition towards a low-carbon
economy
• the SEC’s consultation on climate-
related financial reporting
• the PRA’s focus on nature-related
financial reporting
• heightened regulatory focus on
‘greenwashing’ activities in the financial
services sector
• physical risks associated with climate,
including the impact of heatwaves and
droughts.
Following on from the Bank of England’s
2021 Climate Biennial Exploratory Scenario
(CBES), the BRC received and discussed
the conclusions of Round 2 of the CBES in
2022 and subsequently approved the
results and conclusions for submission to
the PRA. These exercises assist the
continued deepening of Barclays’
understanding of climate risks.
As part of the Group’s strategic planning
process, the BRC recommended to the
Board for approval the Barclays Risk
Appetite Statement, which covers all
Principal Risks, including Climate risk.
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ESG: Governance (continued)
Board Remuneration
Committee (RemCo)
The RemCo is responsible for setting the
overarching principles and parameters of
remuneration policy across the Group. The
RemCo has responsibility for aligning
Executive Director remuneration with
strategic priorities, including in relation to
climate and sustainability matters. The
performance measures for the 2023
annual bonus and 2023-2025 Long Term
Incentive Plan (LTIP) for the Executive
Directors both include a 'Climate and
sustainability' category, focusing on
climate-related measures including
progress towards our new Sustainable and
Transition Financing target, reducing GHG
emissions associated with our operations
and supply chain, as well as delivering the
ambition to be a net zero bank by 2050.
The BRC also reviewed the ERMF and
recommended the same to the Board for
its approval, and reviewed each of the
Principal Risk frameworks, including the
Climate Risk Framework.
Board Audit Committee (BAC)
The BAC assesses the integrity of the
Group’s financial statements and
evaluates the effectiveness of the Group’s
internal controls. The BAC provides
oversight of the Group’s climate and
sustainability disclosures, and supported
the integration of the 2022 TCFD
disclosures into the 2022 Annual Report.
The impact of climate change on the
Group’s financial statements continues to
not be material at this time, but this is an
area that the BAC will continue to monitor.
Spotlight
Climate
Barclays’ climate strategy and ambition
is set by the Board which oversees its
implementation by management. The
Board remained focused on climate in
2022, and key activities of the Board in
relation to climate included:
• considering updates on Climate risk
through the reports of the Chair of
the BRC
• reviewing updates on amendments
to climate policies and targets,
including our oil sands and thermal
coal policies
• delivering on Barclays' commitment
• considering climate-related data
to offer shareholders a ‘Say on
Climate’ advisory vote at the 2022
AGM
• engaging with our private shareholder
base at the 2022 AGM on Barclays’
climate strategy and targets, and
considering feedback received
following the 'Say on Climate' advisory
vote passed at the AGM
• ongoing engagement with
institutional investors and
shareholder representative groups
regarding Barclays’ climate strategy
and targets
and reporting, and discussing areas
in which the Group could make
further progress in its strategic
climate leadership ambition.
Key decisions:
ü reaffirmed Barclays’ desire to
maintain a leading position on the
climate agenda and supported
broader engagement with
shareholders on climate matters
ü approved the Group’s Task Force
on Climate-related Financial
Disclosures Report for 2021
ü approved the form of resolution
to be put to shareholders at the
2022 AGM seeking
endorsement of Barclays’
climate strategy, targets and
progress
ü endorsed management’s
proposal for new or updated
climate policies and targets.
+ You can read more about our 'Say on
Climate' advisory vote in our Section
172 statement in the Strategic Report
on page 19.
Your can read more about Barclays’
updated policies and targets in the
Climate and Sustainability report.
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ESG: Governance (continued)
Management's role in assessing
and managing climate-related
risks and opportunities
Oversight and management of climate
strategy is increasingly embedded in
business-as-usual management
structures, including a number of
executive committees. These committees
are mandated and form part of Barclays’
formal governance architecture. They are
convened to oversee a specific attribute of
the Barclays control framework. Each
committee is itself governed by Terms of
Reference that lay out the duties,
decision-making authority and escalation
route of any material issues.
The executive management committees
receive regular briefings on matters
including climate change. Both risks and
opportunities are considered by
management. Climate-related risks are
assessed and escalated as appropriate
through the various risk forums, and in
2022 the Barclays Climate and Sustainable
Finance Council was established as a
dedicated forum to identify and discuss
climate-related opportunities across the
Group.
Group Executive Committee
(Group ExCo)
Throughout 2022 Group ExCo has been
provided with regular updates on our
climate strategy, including progress on our
commitments, stakeholder engagement
and expectations, and target-setting. The
Group Head of PPCR is a member of
Group ExCo and is accountable for
ensuring the Group’s societal purpose is
present in strategic decision-making at the
highest levels in the organisation. The
Group Head of PPCR, and their team,
regularly updates Group ExCo on a range
of Public Policy and Corporate
Responsibility matters, covering key
government and regulatory policy,
regulator engagement and ESG matters,
including climate. These updates include
information about key industry trends and
events, such as Barclays' involvement in
the Net Zero Delivery Summit and the
Sustainable Markets Initiative as well as the
evolving regulatory focus on climate
change across different jurisdictions. The
Chief Risk Officer is a member of Group
ExCo and is accountable for the approach
to managing climate-related financial and
operational risks to Barclays; this is
implemented within the Group's Enterprise
Risk Management Framework (ERMF).
Group ExCo was regularly updated on the
scope, approach and engagement relating
to the 'Say on Climate' advisory resolution
that was put to our shareholders at the
AGM in May 2022.
Capturing the opportunity as we transition
towards a low-carbon economy was
identified as a key strategic growth pillar for
Barclays in 2022. As a result, Group ExCo
was provided with updates on the global
market opportunity for sustainable
financing with a focus on the next 10 years.
This work informed the setting of a $1tn
Sustainable and Transition Financing
target by the end of 2030, an increase of
our Sustainable Impact Capital target to
£500m by the end of 2027, and the
appointment of new Heads of Sustainable
Finance in both the Corporate and
Investment Bank and Barclays UK.
All submissions to the Barclays Group
Board on Climate Strategy and climate-
related matters are reviewed either by
Group ExCo or the relevant Group ExCo
member in advance.
The Group Head of Sustainability also
served as an ex-officio member of Group
ExCo for Q1 of this year, recognising the
importance of climate and sustainability to
the group.
Executive Director annual bonus and Long
Term Incentive Plan (LTIP) outcomes are
assessed against a framework of
measures set by the Remuneration
Committee at the start of the
performance period for each award. A
proportion of both bonus and LTIP is
driven by non-financial performance
measures, including measures relating to
climate and sustainability. For the annual
2023 bonus and 2023-2025 LTIP awards,
10% of the overall outcome for each will be
determined by performance against
climate and sustainability measures,
reflecting our ambition to be a net zero
bank by 2050, including our commitment
to align our financing with the goals and
timelines of the Paris Climate Agreement.
+ Further details can be found in our Remuneration
report from page 197
Group Risk Committee (GRC)
The GRC is the designated forum to review
and recommend, where necessary,
submissions to the BRC. The GRC is the
most senior risk executive body, and it
monitors Principal Risks and key topics of
material nature to Barclays, such as
climate change. In 2022, the GRC
reviewed:
• key regulatory, global policy and
geopolitical themes and management
action proposed and taken
• physical and transition risk metrics,
including portfolio alignment progress
against net zero sector targets
• an overview of credible potential third-
party scenarios in addition to Network
for Greening the Financial System
(NGFS)
• the Climate Risk Framework and Climate
Risk Appetite constraint.
In relation to Principal Risks, the Group Risk
Committee undertakes the following:
• review and monitor the risk profile of
material nature for each Principal Risk
• approve for consideration by Barclays
PLC Board and BBPLC Board Risk
Committee the Risk Appetite
Statement for each Principal Risk
• annually review and approve the
Principal Risk Framework for
consideration by the Barclays PLC Board
and BBPLC Board Risk Committee.
The Group Risk Committee receives
escalations from the Climate Risk
Committee, noting none were received in
2022.
Climate Risk Committee (CRC)
To support the oversight of Barclays
Group climate risk profile, a Climate Risk
Committee (CRC) has been established, as
a sub-committee of the GRC. The
authority of the CRC is delegated by the
GRC. The CRC is chaired by the Head of
Climate Risk. CRC has reviewed and
approved a range of updates including a
refreshed Climate Risk Vision, updates
from each of the financial and operational
risks and from the material legal entities of
the firm, along with key regulatory, policy
and legal themes, the risk register and
appetite statement, and reviewed the
control environment.
Climate Risk Control Forum (CRCF)
The CRCF was established in July 2022 and
escalates to the GRC via the Group
Controls Committee. The purpose of the
CRCF is to oversee the consistent and
effective implementation and operation of
the Barclays Controls Framework in
relation to Climate Risk. It reviews the
control environment, including risk events,
policy and issues management.
Climate Transaction Review Committee
(CTRC)
The CTRC is composed of members of
Group ExCo and escalates directly to the
Group CEO. The key function of the CTRC
is to consider the reputation risks
associated with certain transactions and
clients with reference to our stated
position on climate that could prevent
Barclays from progressing its commitment
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ESG: Governance (continued)
to align our financing portfolio with the
goals and timelines of the Paris Agreement
and/or present significant reputation risk.
Operational Sustainability Steering
Committee
Barclays’ Operational Sustainability
Steering Committee (OSSCo) is
responsible for the development and
implementation of the Bank’s operational
sustainability strategy, including its carbon
reduction plan and pillar one of the net
zero bank ambition.
OSSCo is chaired by BX Risk & Finance
COO and comprises leadership from
Corporate Real Estate Solutions (CRES)
and Location Strategy, Barclays UK COO,
CIB and BBPLC COO, Group HR,
Procurement and Sourcing, Group CIO/
GTIS, Corporate Communications,
Climate risk, Sustainability & ESG, CFO BX,
ESG Legal Counsel. OSSCo reviews and
approves environmental operational
targets, shares and reviews operational
sustainability programmes and third-party
solutions and identifies and mitigates risks
to the delivery of the operational climate
strategy, among other activities that
ensure coordination and alignment across
the strategic groups responsible for
implementing the operational net zero
strategy.
OSSCo provides updates to Barclays PLC
Board twice a year and provides quarterly
performance updates to the group change
programme on climate. Also, key material
projects that entail Board approval are first
approved by OSSCo and then presented
to the Board by the accountable Function’s
COO Executive Committee. For example,
net zero operations real estate related
projects will be presented by the Group
Real Estate SteerCo (GRESCo).
Additionally, reports on progress are
submitted to GRESCo monthly and COO
Executive Committee biannually.
Disclosure Committee (DisCom)
The DisCom, which is chaired by the Group
Finance Director, has been set up as a sub-
committee of the Group ExCo. DisCom is
convened to review and monitor the
integrity of the Group’s financial and
narrative statements and other
information provided to stakeholders,
whether by means of announcement or
otherwise. In addition to reporting to the
Executive Committee, DisCom also
reports to the Barclays PLC Board Audit
Committee.
DisCom is convened to undertake a
number of specific duties, including:
• financial reporting: to review and
monitor the integrity of the Group’s
financial statements, interim
management statements, preliminary
announcements (if prepared), and any
other formal announcements relating to
the Group’s financial performance.
• narrative reporting: to review and
monitor the integrity of the Group’s
narrative statements, including but not
limited to the Country Snapshot, ESG
disclosures, the TCFD disclosures and
the Modern Slavery Statement.
Legal & Technical Committee
The Legal & Technical Review Committee
(L&T) is an accounting, legal and
regulatory compliance committee. L&T
submits its findings and recommendations
concerning the legal and technical status
of the documents to DisCom.
L&T’s activities cover:
• review of compliance with UK and
relevant non-UK legislation, accounting
and regulatory rules, guidance and best
practice
• review of the external financial reporting
documents as relevant to satisfy itself
that disclosures are materially fair and
not misleading
• identification of potential areas of
challenge for divisional CFOs and points
for consideration for the members of
the DisCom. As the Chairman of the
Disclosure Committee, the Barclays
Finance Director would also be
appraised of these matters
• liaison with the Group’s Auditors and
external legal advisers to monitor
compliance with IFRS and SEC reporting
requirements.
Reputation Risk Committee
The Reputation Risk Committee is a sub-
committee of the Group ExCo which
manages material reputation risks and
issues as they are brought to the attention
of the Committee via relevant reputation
risk assessment and escalation processes.
Group Change Programme on Climate
The group change programme on climate
(“the programme”) is focused on driving
the execution of one of the three pillars of
our Group Climate Strategy, ‘Reducing our
Financed Emissions’, within which Barclays
is committed to aligning its financing with
the goals and timelines of the Paris
Agreement, consistent with scenarios
limiting the increase in global
temperatures to 1.5°C. The programme is
set up in line with the Barclays Change
Delivery Management standard, with
established governance and regular
reporting and oversight at the Group’s
Mission Critical Forum. The overall
Accountable Executive of the programme
is the Group Head of Sustainability, also
the chair of its governance body (Climate
Portfolio Governance Board), represented
by key businesses and functions across
the Group, such as Sustainability & ESG,
Risk, Business (Corporate and Investment
Bank and Barclays UK), Finance and
Technology.
Key focus areas of the programme since
its inception include setting targets for
some of our highest emitting sectors,
establishing Climate risk as a new Principal
Risk (as part of the Enterprise Risk
Management Framework), embedding
required processes and frameworks within
the business to implement and manage
sector targets, evaluating absolute
emissions across the in scope balance
sheet, and delivering to a technology
roadmap to meet climate data
requirements.
Group Chief Executive Officer (Group
CEO)
The Group CEO is responsible for driving
Barclays’ focus on external societal and
environmental stewardship, and
overseeing progress towards Barclays’
ambition to be a net zero bank by 2050.
The Group CEO is Chair of Group ExCo.
The Group CEO is closely involved in
identifying, accelerating and promoting the
development of Barclays’ climate and
sustainable finance growth opportunities
as we transition towards a low-carbon
economy. In January 2022 the Group CEO
established Barclays’ Climate and
Sustainable Finance Council to catalyse
sustainable finance developments for our
customers and clients across all our
businesses, products and services.
During 2022, the Group CEO joined a
number of global initiatives advocating for
a just transition towards a low-carbon
economy. The Group CEO is an active
member of the Sustainable Markets
Initiative (SMI), and attended the SMI CEO
Summit in October 2022. Barclays is a
member of the United Nations
Environment Programme Finance Initiative
(UNEP FI), where the Group CEO has
recently joined the UNEP FI Leadership
Council (November 2022).
Chief Risk Officer (CRO)
The Group CRO is accountable for the
approach to managing climate-related
financial and operational risks to Barclays.
This encompasses the measurement,
monitoring and limit setting for Climate risk
and the supporting governance.
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ESG: Governance (continued)
entity. Other governance bodies/ forums
typically operate across the Group and
oversee climate-related issues, risks and
opportunities within their remit and
escalate material issues as appropriate.
These committees and forums follow the
established escalation process for
climate-related items, bringing updates
first to the relevant Group ExCo member,
then the Group ExCo, and ultimately to the
Board.
Implementation - business
working level committees,
forums and reports
Principal Investments Equity Committee
The Principal Investments Equity
Committee (the “Committee”) undertakes
the senior approval responsibilities relating
to the execution and management of all
principal strategic equity and workout
equity transactions managed on behalf of
Barclays PLC and all other Barclays Group
entities. The formation and authority of
this Committee comes from the Group
CEO, acting through the Group Executive
Committee. The Committee consists of
senior stakeholders that meet on a regular
basis which, when considering the
‘Sustainable Impact Capital’ portfolio,
includes the Global Head of Sustainable
Finance and Group Head of Sustainability
for CIB.
Climate and Sustainable Finance Council
The Climate and Sustainable Finance
Council (C&SFC), created by the Group
CEO in 2022, is a forum of senior
stakeholders that meet monthly. The
C&SFC aims to identify, accelerate and
promote the development of Barclays’
climate and sustainable finance growth
opportunities for the benefit of our
customers and clients across all our
businesses, products and services. The
C&SFC is not a decision-making body and
sits outside of the formal executive
governance structure; it does, however,
provide guidance, encouragement and
challenge to internal stakeholders on
climate and sustainable financing solutions
and related activities across the Group.
Group Head of PPCR
The Group Head of PPCR leads the bank’s
overall sustainability and citizenship
agendas. Specifically, the role is
responsible for leading Barclays’ efforts in
tackling climate change, and for integrating
our ambition and commitments to help
embed the transition towards a low-
carbon economy into the business.
Group Head of Sustainability
The Group Head of Sustainability leads the
Sustainability and ESG team, and the
strategic direction and execution of
Barclays’ policies and practices across a
broad range of sustainability and ESG
matters, including climate change. The role
also oversees the development of
standards and metrics to advance green
and sustainable finance and to steward
early innovation in sustainable product and
service development.
This role is responsible for Reputation risk
issues arising from climate change,
although the Board has overall
responsibility for reputation matters
generally. The Group Head of Sustainability
reports directly to the Group Head of
PPCR.
Group Head of Climate Risk
The Head of Climate Risk was appointed in
July 2020 and is the Principal Risk Lead for
Climate Risk. Being the Head of the
Climate risk team, the role encompasses
the development of Climate risk
governance, including ownership of the
Group’s Climate Risk Framework, and
making recommendations on risk appetite,
constraints and exclusions to BRC,
informed by Barclays’ net zero ambition.
Further responsibilities include leading the
development of Climate risk
methodologies and our approach to
carbon modelling, including the
BlueTrack™ model. The Head of Climate
Risk reports directly to the Group CRO,
and is the Chair of CRC.
Group Head of Finance - Sustainability
and ESG
The Group Head of Finance - Sustainability
and ESG was appointed in January 2022.
The role encompasses leading Barclays
global external, internal and regulatory
reporting capabilities relating to
sustainability and ESG, and tracking
progress made across our businesses to
meet our climate targets, which is
fundamental to support our ambitions.
This includes embedding climate-related
disclosures such as the TCFD into our
framework of disclosure procedures,
governance and controls supporting the
approval of the Group’s financial
statements. Further responsibilities
include embedding climate-related risks
and opportunities into financial planning.
Global Head of Sustainable Finance -
Corporate & Investment Bank
The Global Head of Sustainable Finance for
the Corporate and Investment Bank (CIB)
is a member of the CIB Management
Team, reporting to the Global Head of the
Corporate and Investment Bank and the
Group Head of Public Policy and Corporate
Responsibility. The role was created in
2022 to develop a centre of excellence for
sustainable finance to support Barclays’
clients navigate the opportunities and
challenges of transitioning towards a low-
carbon economy. Barclays has a target to
facilitate $1tn of Sustainable and
Transition Financing by the end of 2030.
The Group Head of Sustainable Finance
for CIB is also a member of the Barclays
Sustainable Impact Capital portfolio
Investment Committee, which is investing
up to £500m in sustainability-focused
start-ups by 2027. The role partners
closely with Barclays’ Sustainability and
ESG teams on our Net Zero targets and
environmental and social risk management
and with the Head of Sustainable Finance
in Barclays UK to deliver change across the
firm.
Head of Sustainable Finance - Barclays
UK
The role of Barclays UK Head of
Sustainable Finance was created in 2022
with responsibility for the strategic
direction and execution of the Barclays UK
sustainability strategy. The role oversees
the development and delivery of Barclays
UK products and propositions to enable
our retail and small business customers to
adopt more sustainable practices –
covering finance, tools, education and
partnerships. The role also partners closely
with the Barclays UK Government
Relations team to develop advocacy
positions, as well as Legal, Risk and
Compliance functions to embed
sustainability into processes and
frameworks. The Head of Sustainable
Finance is a member of the Barclays UK
ExCo.
Business / Legal Entity committees /
forums
Oversight and management of climate-
related risks and opportunities occur at a
number of levels in the organisation and
across business lines and legal entities.
Barclays operates through a combination
of formal mandated committees and
governance bodies/forums. The
mandated committee structure operates
on a legal entity basis and will oversee
climate-related issues relevant to that
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ESG: Governance (continued)
Managing impacts in lending and financing
Appropriate management of environmental and social impacts helps to
ensure the longevity of our business and our ability to serve our clients.
Enhanced Due Diligence
Our standards include an enhanced due
diligence approach for certain clients
operating in energy sub-sectors covered
by our Climate Change Statement
(thermal coal mining, coal-fired power
generation, mountain-top coal removal, oil
sands, Arctic oil and gas projects and
hydraulic fracturing ('fracking')) and clients
in-scope of our Forestry and Agricultural
Commodities, World Heritage and Ramsar
Wetlands and Defence and Security
standards where a similar approach is
taken.
All in-scope clients in these sub-sectors
must be assessed annually via a detailed
due diligence questionnaire, which is used
to evaluate their performance on a range
of environmental and social issues, and
may be supplemented by a review of client
policies / procedures, further client
engagement and adverse media checks as
appropriate. This annual review either
generates an Environmental and Social
Impact (ESI) risk rating (low, medium, high),
or in the case of Defence and Security an
assessment against risk appetite, which in
turn determines whether further review
and client engagement may be required
throughout the year.
Typically, high and certain medium ESI
rated clients require further risk
assessment prior to execution of
transactions with those clients.
We undertook 869 reviews in 2022, being a
combination of annual due diligence
reviews and individual transaction reviews,
slightly fewer than the 903 we undertook in
2021. The number of reviews for 2022
reflects the maturity of the due diligence
process and a reduction of out of scope
referrals.
At Barclays, we recognise the importance
of risk identification and management in
the provision of financial services to our
customers and clients.
Our assessment of environmental and
social risks informs our wholesale credit
risk management and helps safeguard our
reputation. This supports the longevity of
our business and also enhances our ability
to serve our clients and support them in
improving their own sustainability practices
and disclosures.
Managing environmental and
social risks
Environmental and social risks are
governed and managed through our
Enterprise Risk Management Framework
(ERMF), setting our strategic approach for
risk management by defining standards,
objectives and responsibilities for all areas
of Barclays. The ERMF is complemented
by a number of other frameworks, policies
and standards, all of which are aligned to
individual Principal Risks.
Our Climate Change Statement sets out
our approach in relation to our climate
change ambition and to managing the
impact of our climate-related activities,
including setting restrictive policies in
respect of certain sensitive energy sub-
sectors (thermal coal mining, coal-fired
power generation, mountain-top coal
removal, oil sands, Arctic oil and gas and
hydraulic fracturing ('fracking').
We have also established positions on
Forestry and Agricultural Commodities,
World Heritage and Ramsar Wetlands and
in the Defence and Security sector.
In addition, we have developed internal
standards for each of these which reflects
these positions in more detail. These
standards, which sit under the
management of Reputation risk in the
ERMF, determine our approach to climate
change and relevant sensitive sectors and
are considered as part of our existing
transaction origination, review and
approval process.
Escalation and decision
Where client relationships or transactions
are assessed as higher-risk (high or
medium ESI risk rating) or outside appetite
(in the case of Defence and Security)
following an enhanced due diligence
review, they are then considered for
escalation to the appropriate business unit
review committee (e.g. Transaction
Review Committee) or for clients in scope
of our Climate Change standard, the
Climate Transaction Review Committee
(CTRC) for consideration and a decision on
whether to proceed if transaction related.
Business unit review committees comprise
Business management and
representatives from the control
functions, including Reputation risk,
whereas the CTRC includes
representation from the Group Executive
Committee.
Should the front office business team, the
Sustainability and ESG team and / or
Climate risk team believe the issues are
sufficiently material, these clients/
relationships would be escalated to the
Group Reputation Risk Committee for
more senior consideration and decision.
GRRC also includes representation from
the Group Executive Committee. These
Committees may make the following
determinations:
• approve the transaction or relationship
• reject the transaction or relationship
• approve the transaction or relationship,
subject to prescribed modifications
• escalate the review of the transaction or
relationship to the Barclays Group CEO.
Monitoring
As part of our management of
environmental and social risks, we may
require further client engagement in
relation to the specific environmental and
social risks that we have identified as part
of our enhanced due diligence process. We
have used this engagement as an
opportunity to gain a more detailed
understanding of the risks and challenges
that the client is facing and to better
understand any climate transition plan that
they may have.
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ESG: Governance (continued)
Environmental risk identification
in Barclays UK
Our property and land valuers can use our
environmental screening product, Barclays
SiteGuard, to assess the history of a piece
of land and the operational implications of
a site’s current or intended commercial
use. In 2022, 386 (2021: 891) commercial
properties were screened using a Barclays
SiteGuard Report, with 155 cases in the
waste sector referred (2021: 256 cases).
The difference in the number of referrals
made in 2022 reflect enhancements made
to our assessment process.
+ Further details can be found in our Environmental risk
in lending statement at: home.barclays/citizenship/
the-way-we-do-business/environmental-risks-in-
lending/
Training
To support Climate risk becoming a
Principal risk from January 2022,
mandatory training was completed by over
14,600 colleagues in selected teams
across Risk, Compliance, Internal Audit,
Markets Post Trade and the Business
Bank. The training provided an overview of
physical and transition risks to enable
colleagues to identify, assess and manage
Climate risk.
Sustainability and ESG training with detail
on our policies and approach to certain
sensitive sub-sectors was delivered to
12,200 colleagues in selected teams
across the Corporate and Investment
Bank, Trade and Working Capital,
Wholesale Onboarding and Group FCO,
Finance and Public Policy and Corporate
Responsibility.
+ Further details can be found on page 118
Environmental credit risks
Environmental risk is regarded as a credit
risk driver, and is considered within our
credit risk assessment process. The
Environmental Risk team is responsible for
advising on the environmental and
climate-related credit risks to Barclays
associated with particular transactions.
Environmental risks in credit are governed
under the Client Assessment and
Aggregation, Environmental Risk and
Nuclear Industry Risk standards. These
standards are part of the overall ERMF.
In 2022, 361 (2021: 417) Environmental
risk reviews were referred to the
Environmental risk team across
transaction originations and annual review
cycles. The lower number of transaction
reviews compared with last years's reflects
increased awareness of environmental
risks across the Credit risk function.
Transactions and client relationships
subject to social and environmental risk
review
14
11
n Agriculture
n Business and
professional
services
n Chemicals
n Commodity
traders
n Construction
and
engineering
n Defence,
aerospace and
security
n Infrastructure
and
transportation
n Manufacturing
n Metals and
mining
n Oil and gas
n Paper and
forestry
n Power and
utilities
n Waste
n Other
6
13
14
4
12
14
2022
2021
Total 869
Total 903
Equator Principles
For project-related finance, we apply our
Environmental Risk standard, which
implements the Equator Principles and
relevant International Finance Corporation
(IFC) Performance Standards. Barclays was
one of the four banks which collaborated in
developing the Principles, ahead of their
launch in 2003.
During 2022, 1 of the 869 (2021: 3 of 903)
transactions reviewed for social and
environmental risks was captured in the
scope of the Equator Principles.
Our Environmental risk standard is
supported by a toolkit for employees
comprising a range of practical guidance
documents.
+ Further details can be found at:
equator-principles.com/
Equator Principles transactions 2022
Sector
Mining
Infrastructure
Oil & Gas
Power
Others
Region
Americas
EMEA
APAC
Country designation
Designated
Non-designated
Independent review
Yes
No
Finance type
Project finance
Category
A
B
C
1
B
1
B
1
B
1
B
1
C
C
C
C
A
A
A
A
Category A: Projects with potentially significant adverse social
or environmental impacts that are diverse, irreversible or
unprecedented.
Category B: Projects with potentially limited adverse social and
environmental impacts that are few in number, generally site-
specific, largely reversible and readily addressed through
mitigation measures.
Category C: Projects with minimal or no social or environmental
impacts.
Country Designation is based on the World Bank's income
criteria. Projects in designated countries (High Income OECD
members) are assessed only according to local laws. Projects in
'non-designated' countries are assessed according to local laws
and the IFC's standards.
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ESG: Governance (continued)
Deforestation and agricultural
commodities
Barclays recognises that deforestation is a
key driver of climate change and
biodiversity loss and is frequently linked
with significant adverse human rights
impacts. We are a signatory to the New
York Declaration on Forests and its
objectives of ending deforestation by
2030. We seek to support clients that
promote sustainable land management
practices while respecting the rights of
workers and local communities.
A major cause of deforestation is the
production of agricultural commodities
such as timber products, palm oil and soy,
for which we have established a position
statement and due diligence approach
that applies to clients involved in these
activities. Our approach is outlined in our
Forestry and Agricultural Commodities
Statement and includes specific
requirements for clients in these sectors,
such as requiring that they:
• prohibit the conversion or degradation
of primary forests, High Conservation
Value (HCV) and High Carbon Stock
(HCS) areas and peatlands
• adhere to recognised certification
schemes, such as the Forest
Stewardship Council (FSC), Roundtable
on Sustainable Palm Oil (RSPO) or
Round Table on Responsible Soy
Association (RTRS)
• work to obtain the consent of
indigenous and local communities
affected by their operations through a
credible, 'free, prior and informed
consent' process.
We have established a detailed due
diligence questionnaire which we require
these clients to complete on an annual
basis to assess their alignment with the
requirements of the Forestry and
Agricultural Commodities Statement and
other environmental and social criteria and
seek to evaluate whether they are
appropriately managing their material
environmental and social impacts. We
intend to update the Forestry and
Agricultural Commodities Statement and
client due diligence questionnaire in Q2
2023.
Human rights
Barclays is committed to operating in
accordance with the International Bill of
Human Rights and takes account of other
internationally accepted human rights
standards and frameworks, including the
UN Guiding Principles on Business and
Human Rights (UNGPs) and the OECD
Guidelines for Multinational Enterprises
(OECD Guidelines). We take steps to
ensure we are respecting human rights in
our own operations through our
employment policies, in our screening and
engagement within our supply chain and
through the responsible provision of our
products and services.
We have continued to progress our efforts
to identify salient human rights risks
associated with our client financing
portfolio and on our plan to review our
approach to managing these risks.
We seek to proactively monitor issues and
developments globally that may present
new or elevated human rights risks and
work to investigate our potential exposure
to these and consider our responsibilities
to seek to mitigate these risks.
Our position statements and related due
diligence approach for clients operating in
certain sectors with elevated
environmental and social impacts, seek to
include consideration of human rights
impacts. For example, we include specific
due diligence questions around respect for
Indigenous Peoples’ rights, health and
safety and provision of security in our due
diligence questionnaires for clients in
energy sub-sectors such as fracking and
oil sands which are covered under our
Climate Change Statement.
Modern slavery in our supply
chain
We recognise that the nature of our
business means we may be exposed to
modern slavery risks across our
operations, supply chain, and customer
and client relationships. We are conscious
of the links between human rights abuse,
labour exploitation, human trafficking and
environmentally destructive practices.
Therefore, we are focusing our efforts on
the delivery of actions specifically designed
to seek to identify and try to address
modern slavery and other exploitative
practices in our supply chain, in
collaboration with our environmental
experts.
Regardless of the industry or geography in
which our suppliers operate, we require of
them to comply with applicable laws and
regulations. Barclays' standard approach
to new supplier onboarding and renewal
begins by assessing the services that are
being provided and ascertaining the level
of risk. Suppliers that are assessed as
being at a heightened risk of exposure
from a business risk perspective are
subject to Barclays' Supplier Control
Obligations. Assessment of suppliers
against these controls may include, but is
not limited to, reviewing copies of
employment and health and safety policies
and requesting suppliers to attest to
supporting our expectations defined in the
Third Party Code of Conducta (TPCoC).
+ Further details on Barclays Supplier Control
Obligations can be found at: home.barclays/who-we-
are/our-suppliers/our-requirements-of-external-
suppliers/external-supplier-control-obligations/
The TPCoC makes specific reference to
the International Labour Orgnization (ILO)
Core Conventions and the UK Modern
Slavery Act 2015 and is owned by Barclays’
Chief Procurement Officer. It outlines the
behaviours we encourage in our supply
chain and seeks to align the practices of
our suppliers with our own policies. This
includes on issues such as freely chosen
employment (work that is completed
voluntarily and without slavery, servitude,
forced or compulsory labour and human
trafficking) and practices, the absence of
which could lead to exploitation in any
complex global supply chain, such as lack
of access to an independent
whistleblowing process and grievance
mechanism.
In 2022, we incorporated new contract
clauses focusing on modern slavery into
our standard supplier terms and
conditions, which will apply to new
contracts and contract renewals moving
forward. Specifically, these clauses
prohibit suppliers from using forced,
bonded or involuntary prison labour,
human trafficking, child labour or modern
slavery practices, which include practices
such as the retention of personal
identification or immigration
documentation and denying individuals the
freedom to leave their employment. Our
contract negotiators are being supported
by a dedicated in-house expert advisor
during implementation of these new
terms.
We continue to include modern slavery
and sustainability-related considerations
during the sourcing processes for key
products or services in categories
identified as presenting with an elevated
inherent risk of modern slavery, such as
the renewal of our major IT services
contract, purchase of large IT hardware
and printing solutions.
We aim to work with the service providers
that make up 70% of our Addressable
Spendb to encourage them to have a
Modern Slavery policy or standard in place
by 2025. We continue to track our
progress in line with this target.
+ Further details on our Forestry and Agricultural
Commodities Statement and Barclays Group
Statement on Modern Slavery can be found at:
home.barclays/sustainability/esg-resource-hub/
reporting-and-disclosures/
Notes
a We do have relationships with financial institutions and market
counterparties which, because of the nature of the services
being provided (such as international account holding services),
are not subject to our usual supplier on-boarding procedures
and which are therefore not subject to the TPCoC.
Addressable Spend is defined as external costs incurred by
Barclays in the normal course of business where Barclays has
influence over where the spend is placed. It excludes costs
such as regulatory fines or charges, exchange fees, taxation,
employee expenses or litigation costs.
b
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ESG: Governance (continued)
The Barclays Way
The Barclays Way is our Code of Conduct. Together with more formal
policies and practices, this provides a clear path towards achieving a
positive and dynamic culture within the Group.
The Barclays Way was launched in 2013,
replacing a number of existing codes of
conduct with a single document. Endorsed
by our Chairman, it governs our way of
working across our business globally and
constitutes a reference point covering all
aspects of colleagues’ working
relationships, specifically but not
exclusively with other Barclays employees,
customers and clients, governments,
regulators, business partners, suppliers,
competitors and the broader community.
It is aligned to the Code of Professional
Conduct, published by the Chartered
Banker Professional Standards Board,
which sets out the ethical and professional
attitudes and behaviours expected of
bankers. Barclays subscribes to this code
and is committed to embedding its broad
principles into our business.
The Barclays Way includes information and
guidance on how employees are expected
to behave and take personal accountability
for making decisions. We apply a range of
criteria, over and above financial
considerations, aimed at building a
sustainable, strong and profitable business
for the long term and adding value to our
business relationships and the broader
communities in which we live and work. We
provide guidance across all key
stakeholder groups, including servicing our
customers and clients, promoting respect,
diversity and performance in the workplace
and maintaining strong governance,
robust controls and strict ethical
standards.
The Barclays Way also includes advice and
guidance on speaking up and raising
concerns. It is important for the success of
Barclays, and for the safety and wellbeing
of our customers, clients and colleagues,
that we encourage a culture that supports
speaking up when things aren’t as they
should be. All colleagues are required to
undertake training on The Barclays Way.
We know that our success over the long
term is based not just on how well we run
the organisation commercially, but also on
how well we manage it to protect the
environment, support positive social
progress and make responsible, well-
governed decisions. We are focused on
the areas where we can have the greatest
long-term impact: making growth ‘green’,
sustainable and inclusive; managing the
environmental and social impacts of our
business; running a responsible business;
and investing in our communities.
Employee survey results
%
"I believe that my team and I do a good job
of role modelling the Values every day"
2022
2021
% of colleagues completing mandatory
training on The Barclays Way
99%
+ The Barclays Way Code of Conduct is available at:
home.barclays/citizenship/the-way-we-do-business/
code-of-conduct/
Our commitment to being a responsible
business includes seeking to ensure that:
• we conduct ourselves in line with The
Barclays Way, our Code of Conduct, to
create the best possible working
environment for our colleagues
• we treat our customers fairly and the
products and services we deliver are
transparent and responsible
• we operate in line with relevant laws and
regulations including those applicable to
financial crime
• we safeguard the data that has been
entrusted to us.
Our Code of Conduct reflects the trust
that millions of people place in us every
day. We know that trust is earned by
repeatedly doing the right thing. We
believe the best way to build that trust is to
invest in our culture and support our
people in the choices they make every day,
with guidance and policies that help them
do this.
That starts with our Purpose, Values and
Mindset, and is locked into our
organisation through The Barclays Way,
the touchstone for everyone in Barclays on
the standard of conduct we expect, setting
an unequivocal tone from the top about
who we are and what we stand for.
In challenging times such
as these, it is more
important than ever that
we conduct ourselves in
the right way. The Barclays
Way sets out the standards
of behaviour we should all
aspire to in our professional
lives. It is a guiding light for
everyone in Barclays,
helping us to make the
right decisions every day.
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ESG: Governance (continued)
Whistleblowing
We want to continue to foster a culture
where our colleagues feel safe to speak up.
Barclays is committed to providing a
respectful and inclusive environment to
work in and colleagues are encouraged to
speak up about actions and behaviours
that have no place in the organisation.
Individuals are encouraged to speak up
directly to their management, Compliance,
HR or Legal. However, where they do not
feel comfortable using these avenues, the
Raising Concerns process is in place. 83%
of global respondents of the 2022 Your
View survey said it was 'safe to speak up'.
The Raising Concerns team will carefully
assess the concerns raised and refer them
to the most appropriate team for review
and, where appropriate, investigation. All
concerns are taken seriously and managed
sensitively and confidentially. Details about
the Raising Concerns reporting channels
are available both internally and externally.
Whistleblowing is a core element of Raising
Concerns at Barclays and any concerns
assessed as whistleblowing will be directed
to a dedicated team within Compliance.
Whistleblowing relates to concerns which
fall within the wider public interest, such as
a breach of our policies and procedures;
breaches of law and regulation; and
behaviour that harms or is likely to harm
the reputation or financial wellbeing of the
Group. All whistleblowing reports are taken
seriously, and controls are in place to
protect whistleblowers’ identities and
confidentiality.
Barclays has a zero-tolerance approach to
retaliation against any whistleblower or any
individual who has provided information as
part of an investigation. Any confirmed
instances of retaliation will be dealt with
extremely seriously and may result in
disciplinary action, including dismissal.
Annual mandatory training is delivered to
colleagues regarding the whistleblowing
programme.
In 2022, the whistleblowing team opened a
total of 52 whistleblowing concerns, down
61% from the year before (2021: 134),
including 13 retaliation concerns. The fall in
concerns is attributed to a number of
factors, including the impact of the
pandemic. 72 whistleblowing matters were
closed in 2022, of which 15% were found
to have some level of substantiation. None
of the retaliation concerns closed in 2022
were substantiated.
Other issues were identified in a further
25% of whistleblowing concerns. 66
actions were defined to address issues
identified during the course of
whistleblowing investigations. These
primarily included recommendations to
enhance processes and procedures.
The Chair of the Group Board Audit
Committee is the Group Whistleblowers’
Champion and the Chair of the Barclays
Bank UK PLC (BBUKPLC) Board Audit
Committee is the BBUKPLC
Whistleblowers’ Champion.
They have responsibility for ensuring and
overseeing the integrity, independence
and effectiveness of Barclays’
whistleblowing programme across their
respective entities. Their oversight is
supported by periodic impartial reviews of
the end-to-end whistleblowing process.
Barclays also works with Protect, the UK
Whistleblowing Charity.
Whistleblowing cases closed by region
72
Cases closed
in 2022
Whistleblowing cases opened by (top 4) categories
1. Breach of controls,
process or other
6
4
C
a
s
e
s
o
p
e
n
e
d
i
n
2
0
2
2
2. Retaliation
3. Breach of policy
15
13
11
4. Financial crime
5
5. Other
8
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ESG: Governance (continued)
Tax
Barclays supports a fair and transparent tax system.
Barclays was ranked as the fifth-largest
UK taxpayer; in terms of taxes paid, in the
December 2022 PwC Total Tax Contribution
survey of the One Hundred Group.
Barclays has a responsible approach to tax,
strong governance and risk management
over tax risk and is committed to
transparency around tax.
+ For further details, see our Country Snapshot Report
at: home.barclays/annualreport
Taxes paid globally
£2,255m
Taxes paid globally
£m
n Corporation tax and
withholding taxes
n Employer payroll taxes
n Irrecoverable VAT
n Bank levy
n Other taxes including
business rates
2021 taxes paid globally
£2,781m
Tax contribution
We continue to make substantial tax
contributions across the jurisdictions in
which we operate, both in terms of taxes
paid and taxes collected. Our total tax
contribution for 2022 was £5,572m. This
includes taxes paid of £2,255m which
represent a cost to us, and taxes collected
on behalf of governments of £3,317m.
Barclays was ranked as the fifth-largest UK
taxpayer, in terms of taxes paid, in the
most recent PwC Total Tax Contribution
survey of the One Hundred Group (‘100
Group’). The 100 Group represents
members of the FTSE 100 along with
several large UK private companies. Over
the last decade, we have consistently been
ranked as one of the top five largest UK
taxpayers, paying over £14bn of taxes in
the UK alone.
Approach to tax
Barclays’ Purpose is to deploy finance
responsibly to support people and
businesses, acting with empathy and
integrity, championing innovation and
sustainability, for the common good and
the long term. Our approach to taxation,
also known as our tax strategy, is aligned
with this Purpose as well as our Values of
Respect, Integrity, Service, Excellence and
Stewardship.
Our approach to tax has three core
objectives:
• responsible approach to tax,
• effective interaction with tax authorities
and
• transparency in relation to our tax
affairs.
We manage our tax affairs in accordance
with our Tax Principles, Tax Code of
Conduct and HMRC’s Code of Practice on
Taxation for Banks and aim to file our
returns on time and pay the correct
amount of tax. We are committed to only
dealing with customer or client assets that
have been appropriately declared to the
relevant tax authority.
We are committed to being a leader in tax
transparency. We have published details of
the taxes we pay by country and our
approach to tax since 2013, and have
chosen to expand external publications
such as the Country Snapshot. We make
clear disclosures to tax authorities.
Our Country Snapshot is publicly available
and sets out our approach to tax in detail,
including our Tax Principles. Our Country
Snapshot, including our UK tax strategy is
reviewed and approved annually by the
Barclays PLC Board Audit Committee.
Key highlights on our approach to
tax include:
• we follow clear Tax Principles that we
have published. These allow us to
balance the needs of all our
stakeholders and make clear that tax
planning must support genuine
commercial activity,
• as a result of this approach, transactions
which artificially transfer profits into a
low tax jurisdiction would not be
consistent with our Tax Principles,
• we seek to comply with the spirit as well
as the letter of the law and we take
account of established practice in the
territories in which we operate. We are
transparent in both the disclosure of our
tax affairs to tax authorities as well as
our tax reporting to other stakeholders;
and
• we aim to comply with all of our tax
obligations in the territories in which we
operate and where there is uncertainty
we may seek external tax advice in order
to help ensure our tax filings are
appropriate.
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ESG: Governance (continued)
Tax governance, control and
risk management
As a Globally Systemically Important Bank,
our Group-wide risk and governance
procedures are subject to continuous
review and scrutiny. More details on our
approach to tax governance, control and
risk management can be found in our
Country Snapshot, the key highlights of
which include:
• our Board has ultimate responsibility for
tax matters and the Board Audit
Committee oversees our approach
to tax,
• at Barclays, risks are identified and
managed through our ERMF, which
supports the business in its aim to
embed effective risk management and a
strong risk management culture. Under
the ERMF risk, including tax risk is
managed in accordance with a ‘three
lines of defence’ model,
• as part of the ‘first line of defence’ the
tax department identifies and manages
tax risk by developing appropriate
policies, standards and controls to apply
across our organisation. Risk and
Compliance comprise the ‘second line
of defence’, and Barclays Internal Audit
are the ‘third line of defence’, and these
functions review, challenge and provide
assurance to the Board in relation to the
effectiveness of governance, risk
management and controls including
those relating to tax risk,
• we are subject to the Sarbanes-Oxley
Act control requirements in relation to
financial statements disclosures
including those related to tax,
• our tax department comprises
appropriately qualified in-house
professionals who are subject to clear
standards including that they uphold our
Tax Principles and follow our tax code of
conduct, which is an integral part of how
we operate,
• our governance requires that suitably
qualified people are involved in decisions
related to tax, tax is fully taken into
account when making business
decisions and tax risk is identified,
assessed and kept under review, and
• we have no tolerance for tax evasion and
have well-established mechanisms for
raising concerns about unethical or
unlawful behaviour through our
‘Whistleblowing’ policy, which applies
equally to tax matters.
Stakeholder engagement and
management of concerns
related to tax:
Our reputation is very important to us and
we take our external stakeholders’
expectations into account when we make
decisions in relation to our tax affairs. More
details on our approach to stakeholder
engagement and managing stakeholder
concerns related to tax can be found in our
Country Snapshot, and key highlights
include:
• we believe that it is important to be
transparent in the disclosure of our tax
affairs both to tax authorities and
stakeholders more broadly,
• our dealings with tax authorities are
handled proactively, constructively and
transparently, in real-time where
possible,
• we recognise that early resolution of our
tax affairs is in everyone’s interest. We
have ongoing engagement with tax
authorities to discuss their inquiries and
material issues in relation to our tax
affairs, and we respond to feedback
from tax authorities,
• where we face significant uncertainty in
relation to the application of tax law, we
may seek to agree with the tax authority
how the tax law should apply,
• where relevant we seek to reach
agreement with tax authorities using
mechanisms available to all taxpayers
including Advance Pricing Agreements
and Mutual Agreement Procedures to
clearly establish in which territories our
profits should be taxed,
• we engage with governments, tax
authorities and NGOs through public
consultations and other discussions to
assist with the development of tax policy
and the improvement of tax systems,
and maintain our transparency with
these stakeholders; and
• we cooperate with tax authorities
globally to reduce the scope for
individuals and companies to evade tax,
and have met all of our 2022 information
reporting obligations under the
Common Reporting Standard and
Foreign Account Tax Compliance Act.
+ The BPLC Board Audit Committee is responsible for
considering the Group's tax strategy and overseeing
compliance with the Group's Tax Principles. Please
refer to page 174 for details of BPLC Board Audit
Committee oversight of tax related matters
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ESG: Governance (continued)
Financial crime
Barclays recognises that economic crimes have an adverse effect on
individuals and communities wherever they occur. Endemic economic crime
can threaten laws, democratic processes and basic human freedoms,
impoverishing states and distorting free trade and competition.
Barclays recognises that financial crimes
have an adverse effect on individuals and
communities wherever they occur.
Endemic financial crime (particularly when
associated with organised crime and
terrorist financing) can threaten laws,
democratic processes and basic human
freedoms, impoverishing states and
distorting free trade and competition.
Barclays is committed to conducting its
global activities with integrity and
respecting its regulatory, ethical and social
responsibilities to:
a. protect employees, customers, and
others with whom we do business
b. support governments, regulators and
law enforcement in wider financial crime
prevention.
We will not tolerate any deliberate breach
of financial crime laws and regulations that
apply to our business and the transactions
we undertake.
Barclays has adopted a holistic approach
to financial crime and has one Group-wide
Financial Crime Policy that sets the control
requirements in four key risk areas. The
Financial Crime Policy applies to all our
businesses, legal entities and employees.
Employees receive training on financial
crime risk management and are made
aware that failure to comply with the
Financial Crime Policy may give rise to
disciplinary action, up to and including
dismissal.
Anti-Bribery & Corruption
Bribery and corruption constitutes of:
a. improperly obtaining or retaining
business; and/or
b. improperly securing a business or
personal advantage; and/or
c. inducing another person to perform
their role in breach of an expectation of
good faith, impartiality or trust.
Barclays and its employees are prohibited
from engaging in or facilitating any form of
bribery and corruption (giving and
receiving, directly or indirectly). The
Financial Crime Policy contains the
minimum risk-based control requirements
that all our businesses, legal entities and
employees must follow. The Financial
Crime Policy is designed to ensure that
Barclays’ employees know how to identify
and manage the legal, regulatory and
reputational risks associated with all forms
of bribery and corruption.
Anti-Money Laundering
Money laundering (including terrorist
financing and the proliferation of nuclear,
chemical or biological weapons) has been
identified as a major threat to the
international financial services community
and therefore to Barclays. The Financial
Crime Policy is designed to ensure that all
our businesses and legal entities have
adequate systems and controls in place to
mitigate the risk of the firm being used to
facilitate money laundering. As a
transatlantic bank, the Financial Crime
Policy takes into account EU and US anti-
money laundering requirements, as well as
guidance issued by bodies such as the
Wolfsberg Group and the European
Banking Authority.
Anti-Tax Evasion Facilitation
Tax evasion is a financial crime and a
predicate offence to money laundering in
the UK and many other countries in which
we operate. Barclays takes a zero-
tolerance approach to deliberate
facilitation of tax evasion in any country
and has procedures in place to prevent it.
We also expect the same from our
employees and third parties providing
services for or on our behalf. Barclays is
committed to:
a. dealing only with customers who have
appropriately declared their assets to
the relevant tax authorities; and
b. preventing tax evasion facilitation by our
employees or third parties acting for or
on our behalf.
Sanctions
Sanctions are restrictions on activity with
targeted countries, regions, governments,
entities, individuals and industries that are
imposed by bodies such as the European
Union, the United Nations, groups of
countries, or individual countries, such as
the United Kingdom and the United States.
In order to protect its reputation and other
legitimate business interests, in certain
circumstances, Barclays' risk appetite for
sanctions may be stricter than its legal
obligations.
The Financial Crime Policy is designed to
ensure that all our businesses, legal
entities and employees know how to
identify and manage the risks associated
with sanctions, including the risk that
activity is undertaken through Barclays in
breach of sanctions regulations.
+ For further details of the Barclays approach to
Financial Crime compliance and prevention, please
see our Financial Crime Compliance Statement in the
ESG Resource Hub at home.barclays/esg-resource-
hub/reporting-and-disclosures/
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ESG: Governance (continued)
Health and Safety
Barclays has a comprehensive Health and
Safety Management System (HSMS)
operating globally, which is independently
certified to the international standard
ISO45001 in the USA, UK, India and Asia
PAC.
Barclays has a suite of Health and Safety
(H&S) Policies and Standards that combine
together under a single high-level
statement of commitment endorsed by
the Group ExCo. H&S policies are owned
by three risk horizontals – Premises,
People and Physical Security. Each
Horizontal manages specific hazards
through the Group Policies and Standards.
Barclays has global risk assessments,
which identify the hazards and controls
needed to reduce risks to as low as
reasonably practicable.These are
underpinned by local regulatory
requirements and procedures. The
Barclays H&S Hazard Register is published
on the Barclays H&S Service intranet and
all required changes to controls and policy
content are tracked through to completion
within the annual policy standard refresh.
Where applicable, our suppliers are
subjected to obligations to adhere to our
minimum H&S requirements and vetted
during the onboarding process and
through annual reviews by conducting an
assessment of their activities to identify
applicable controls (including Health and
Safety). Barclays is supported by a Health
and Safety Team, operating globally, who
provide support, competent advice and
assurance where required.
Measure
Number of High or Exceptional Accidents
Lost Time Incidents (per 100 employees)
% Completion Mandatory Training
Q1 2022
Q2 2022
Q3 2022
Q4 2022
0
0.0074
99%
0
0.012
99%
0
0.019a
99.6%b
0
0.023a
99.9%b
Notes:
a.
b.
Increase to LTIR is due to increased activities on site following Covid restrictions being lifted
Reason for change from Q1&Q2, is due to new H&S Mandatory training launched at end of Q2
Information and knowledge is available
through our intranet global safety hub,
which provides key information on minimal
H&S requirements, hazard register, risk
assessments, training and templates (for
fire evacuation personal plans, Display
Screen Equipment (DSE), stress, lone
working etc).
This year, we have taken learnings from
the coronavirus pandemic and maintained
a number of enhanced procedures put into
place during that time such as enhanced
hygiene and cleaning which kept our
colleagues and customers safe and
included within a refresh of our mandatory
training for H&S achieved 99.8%
completion. We have also introduced
additional health, safety and wellbeing
training for working at home.
There is a programme of technical and site
risk assessments to ensure the hazards
and risk controls remain relevant and to
identify emerging themes and trends.
On-site monitoring is undertaken across
our portfolio by the Barclays H&S team
through our building facilities management
partners for corporate sites, and
Customer Care Leads for our retail
network. Working with the Chief Security
Office (CSO), there are processes and
procedures in place to cover terrorism,
disasters, fire and other emergency
evacuations. These are tested on a
programme schedule as required by our
minimum requirements or (if more
stringent) local regulatory requirements.
Incident reporting systems exist to ensure
incidents are captured and investigated
enabling a review to take place of the
hazard profile of the organisation. Review
of incident data is completed by each
region, reviewed at the Group H&S Forum
and lessons learned shared. Incidents are
reported and escalated as required by local
regulatory statute, along with the principle
of Barclays’ risk framework for risk issues
and events.
The Health and Safety Risk Management Framework over view is as follows:
Leadership
H&S Data
Health and Safety Forum
Statement of Commitment for Health and Safety
Data: Performance against commitment
Horizontal
Premises
People
Physical Security
Risks
Harm to people through physical injury
(excluding injuries caused by Physical
Security related incidents)
Harm to people related to mental health
or mismanagement of employees
impacting personal welfare L.3
Physical security incidents resulting in
harm to staff or external parties L3
Policies
Health and Safety
(Premises & Infrastructure) Policy
People Risk
Health & Wellbeing Policy
Group Physical Security Policy
Standards
Health and Safety
(Premises & Infrastructure) Standard
People Risk
Health & Wellbeing Standard
Group Physical Security Standard
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ESG: Governance (continued)
Managing data privacy,
security and resilience
We have strict policies to protect privacy and keep data secure.
Barclays provides a public mailbox and
secure channels via its website to enable
individuals to make their privacy requests
and receive responses from a dedicated
team.
Barclays requires its suppliers to comply
with data protection and privacy laws,
regulations and standards relevant to the
jurisdictions in which they operate and
relevant to any transferred personal data.
Our requirements are set out and
managed through the Barclays Supplier
Control Obligations, available online, which
look to provide assurance that all new and
existing suppliers commit to ensuring
personal data shared with them is
safeguarded and respected throughout
the supply chain.
Data security
In 2022, we continued to strengthen our
data security policies and controls to
protect Barclays' sensitive information and
the data that has been entrusted to us by
customers and clients.
Barclays assesses its cybersecurity
programme against the industry-
recognised National Institute of Standards
and Technology (NIST) Cyber security
Framework, and we have adopted the
extended Financial Services Sector Profile.
During 2022, we have continued to deploy
automated controls which work to
discover data that is highly sensitive that
needs to be protected in line with our
standards.
As Barclays accelerates the migration of
digital services to the cloud, we apply the
same design principles that underpin our
existing control environment. We have
strong controls and monitoring in place
designed to secure cloud-hosted data and
maintain its integrity.
Barclays has continued to take steps in
2022 to address the security of data we
share with third parties, including
conducting remote and on-site
inspections with certain suppliers to review
their controls against contractual
obligations and industry standards. A Third
Party Service Provider Framework is in
place which sets out control requirements
for business units to manage the
operational, reputational, conduct and
legal risks to Barclays through its supply
chain.
As we have transitioned to a more hybrid
working model, we have augmented the
education we provide to colleagues and
strengthened the monitoring of how
customer and client data is accessed and
used to help minimise the risk of
exploitation or leakage.
Data resilience
The Barclays CSO has a set of
preventative key controls that mitigate
cyber-related risks. These focus on
understanding internal and external
threats and delivering our capability to
counteract them. Large-scale data
corruption is one cyber threat on which we
are focused.
Major risk events have been seen in other
organisations and Barclays is focused on
continuously reviewing and improving our
response and recovery plans in
preparation for these evolving threats. Our
teams use intelligence to create plausible
cybersecurity and data compromise
scenarios which we simulate to help us
focus on continuous improvement.
Data privacy
Most of the jurisdictions in which Barclays
operates have privacy and data protection
laws in effect. While these may vary in
detail, generally they reflect internationally
recognised privacy principles found in the
UN’s Universal Declaration of Human
Rights, the European Convention on
Human Rights and the European Union’s
Charter of Fundamental Rights.
We strive to operate in accordance with
these standards and recognise that
respect for privacy rights is a key element
of good corporate governance and social
responsibility. We strive to be transparent
about our use of personal information
when delivering our products and services
and acknowledge the responsibility we
have for safeguarding privacy.
As Barclays increasingly adopts digital
solutions to deliver next-generation
consumer financial services, we appreciate
our clients, customers and others may
have concerns about the use of their
personal information. A globally applicable
Barclays Data Privacy Standard sets out
what is expected of all Barclays businesses
and functions when collecting, using and
sharing personal information.
To promote clear accountability, the
Standard includes the requirement for
each business to appoint an accountable
executive who has ultimate responsibility
for the processing of personal data within
that business. An agreed assurance
programme measures compliance with
the Data Privacy Standard. Barclays
colleagues must complete annual privacy
training which is reviewed and refreshed
each year, with additional tailored training
provided as necessary. The Group Data
Protection Officer (DPO) reports on data
privacy issues to the highest level of
management.
Through customer and employee privacy
notices, we endeavour to explain clearly
and openly how and why we use personal
information and the legal grounds we rely
on. When we receive complaints we seek
to address them fairly. Several jurisdictions
also provide individuals with specific rights,
such as the right to have access to or
request deletion of their personal
information.
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ESG: Governance (continued)
Operational resilience
Customers and clients have increased
expectations for us to be ‘Always On’ and
the interconnectivity of the financial sector
means the stability and resilience of our
systems, workforce and continued
provision of third-party services all have a
direct impact on the quality of our service.
Barclays continues to invest in a multi-year
resilience programme which is focused on
our ability to recover from ‘severe but
plausible’ scenarios which could cause
detriment to our customers and clients
and the broader financial market.
To enable this, we define Group-wide
business services and their
interdependencies across the Group,
including technology, third-party services
and our workforce and develop the
recovery plans and business response
plans required should a disruption event
occur. We work to review and validate
these mechanisms on an ongoing basis
through regular testing, with the aim of
reducing the volume and impact of
operational incidents year on year. We also
conduct regular assurance on third parties
to assess their capability.
Resilience and security is set as a priority
from the Barclays PLC Board and is the
responsibility of everyone within the
Group. Every colleague must complete
mandatory training at regular intervals
across the year.
Please refer to pages 184 for details of Barclays PLC Board
Risk Committee oversight relating to operational resilience.
Please refer to the 'Material existing and emerging risks'
section in our Risk review on pages 269 to 281 for further
details on cyber-attacks, data management and information
protection.
Please refer to the 'Supervision and regulation' section in our
Risk review on pages 370 to 377 for further details on our
regulatory approach to managing such risks.
Chief Security Office
The Chief Security Officer for the Group
heads the Chief Security Office and
reports directly to the Chief Operating
Officer, who sits on the Group Executive
Committee. The Global Chief Information
Security Officer (CISO) for the Group
reports directly to the Chief Security
Officer and is supported by a team of
CISOs for individual business units and
jurisdictions. CSO leadership manages
Barclays’ cybersecurity programme and is
accountable for the day-to-day
monitoring of residual risk, identification of
gaps, oversight of remedial actions and
implementation of strategy.
The Group has an Information and Cyber
Security Policy supported by 10 Standards
which define the minimum requirements
for cyber security matters across the
entire Barclays Group. These Standards
cover topics such as Vulnerability
Management, Cryptography, Network and
Data Security, Access Management,
Insider Threat and Incident Response.
An important part of Barclays’
cybersecurity programme is its Joint
Operations Centres (JOCs), which operate
24x7x365 from three globally strategic
locations, linking CSO’s security
professionals and incident response
managers with control functions and
business unit representatives.
Within CSO, Barclays has a dedicated
External Cybersecurity Assurance &
Monitoring (ECAM) team that uses a risk-
based approach to assess, monitor and
respond to threats relating to third-party
service providers.
Certifications
Barclays holds three ISO27001
certifications (being the international
standard on how to manage information
security) and successfully renewed the
Triennial Recertification for Barclays
Corporate Banking (Government Banking
Service). Barclays also has a UK
certification for Digital Banking.
Reporting phishing
The CSO performs a number of key
activities related to identifying,
investigating, responding to and
containing phishing / malicious email
incidents. The CSO has embedded an
operational process that provides
education and awareness content via
email to colleagues who clicked a malicious
link or attachment in a phishing email, with
escalating training exercises and
management interventions for repeated
instances.
All colleagues have a reporting tool
integrated into their email account,
enabling them to report suspected
phishing mails to Barclays JOC for further
investigation and receive feedback on
whether the reported mail was suspect,
genuine or part of an educational
campaign.
Training
Barclays has adopted a 65-day window for
mandatory training completion to allow
colleagues sufficient time to complete
training. The consequence of non-
completion is a breach which can lead to
disciplinary action and impact
compensation.
The 65-day window covers many different
colleague situations, including new joiners,
returners from sick leave or parental leave
and internal movers. Some of these
situations are required by law to have a
reasonable adjustment time to enable the
successful completion of training. This
process is managed by Barclays HR and
Compliance.
Risk review
The management of risk is a critical underpinning to
the execution of Barclays’ strategy. The material risks
and uncertainties the Group faces across its
business and portfolios are key areas of
management focus.
Risk management strategy
Overview of Barclays’ approach to risk
management. A detailed overview together
with more specific information on policies
that the Group determines to be of
particular significance in the current
operating environment can be found in the
Barclays PLC Pillar 3 Report 2022 or at
barclays.com
Material existing and emerging risks
Insight into the level of risk across our
business and portfolios, the material existing
and emerging risks and uncertainties we face
and the key areas of management focus.
Enterprise Risk Management
Segregation of duties – the ‘Three Lines
of Defence’ model
Principal risks
Credit risk
Market risk
Treasury and Capital risk
Liquidity risk
Capital risk
IRRBB
Operational risk
Tax risk
Model risk
Conduct risk
Reputation risk
Legal risk
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268
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274
275
275
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Principal risk management
Barclays’ approach to risk management
for each principal risk with focus on
organisation and structure and roles
and responsibilities.
Climate risk management
Credit risk management (audited)
Market risk management (audited)
Treasury and capital risk management
Model risk management
Operational risk management
Conduct risk management
Reputation risk management
Legal risk management
Climate risk performance
Carbon-related assets
Risk performance
Credit risk performance
Elevated risk sectors
Financing (capital markets)
Risk performance
Maximum exposure and effects of netting,
collateral and risk transfer
Expected Credit Losses
Movement in gross exposures and impairment
allowance including provisions for loan commitments
and financial guarantees
Management adjustments to models
for impairment (audited)
Measurement uncertainty and sensitivity analysis
Analysis of the concentration of credit risk
The approach to management
and representation of credit quality
Analysis of specific portfolios and asset types
Credit cards, unsecured loans and other retail lending
335
Market risk performance
Market risk overview and summary of performance
Treasury and capital risk performance Treasury and Capital risk
Forbearance
Operational risk performance
Capital risk overview and summary of performance
Interest rate risk in the banking book
Operational risk overview and summary
of performance
Operational risk profile
Model risk performance
Model risk overview
Conduct risk performance
Conduct risk overview
Reputation risk performance
Reputation risk overview
Legal risk performance
Legal risk overview
Supervision and regulation
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341
343
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364
366
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368
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Risk management
Barclays’ risk
management strategy
This section introduces the Group’s approach to managing and identifying
risks, and for fostering a sound risk culture.
Enterprise Risk Management
Framework (ERMF)
The ERMF outlines the highest level
principles for risk management by setting
out standards, objectives and key
responsibilities of different groups of
employees of the Group.
It is approved by the Barclays PLC Board
on recommendation of the Group Board
Risk Committee and the Group Chief Risk
Officer.
The ERMF sets out:
▪ principal risks faced by the Group, which
guide the organisation of risk
management processes
▪
▪
▪
risk appetite requirements. This helps
define the level of risk we are willing to
undertake in our business
risk management and segregation of
duties: The ERMF defines a Three Lines
of Defence model
roles and responsibilities for key risk
management and governance: The
accountabilities of the Group CEO,
Group CRO and other senior managers,
as well as an overview of Barclays PLC
committees.
The ERMF is complemented by
frameworks, policies and standards which
are mainly aligned to individual principal
risks:
▪
frameworks cover high level principles
guiding the management of principal
risks, and set out details of which policies
are needed, and high level governance
arrangements
▪ policies set out the control objectives
and high level requirements to address
the key principles articulated in their
associated frameworks. Policies state
‘what’ those within scope are required to
do
▪ standards set out the detail of the
control requirements to ensure the
control objectives set by the policies are
met.
Segregation of duties – the ‘Three Lines
of Defence’ model
The ERMF sets out a clear lines of defence
model. All colleagues are responsible for
understanding and managing risks within
the context of their individual roles and
responsibilities, as set out below.
▪ The First line comprises all employees
engaged in the revenue-generating and
client-facing areas of the Group and all
associated support functions, including
Finance, Operations, Treasury, and
Human Resources. The first line is
responsible for identifying and managing
the risks in which they are engaged,
operating within applicable limits, and
escalating risk events or issues as
appropriate. Employees in the first line
have primary responsibility for their risks
and their activities are subject to
oversight from the relevant parts of the
second and third lines.
▪ The Second line is comprised of the Risk
and Compliance functions. The role of
the second line is to establish the limits,
rules and constraints, and the
frameworks, policies and standards
under which all activities shall be
performed, consistent with the risk
appetite of the Group, and to oversee
the performance of the firm against
these limits, rules and constraints .
Controls for first line activities will
ordinarily be established by the control
officers operating within the control
framework of the firm. These will remain
subject to oversight by the second line.
▪ The Third line of defence is Internal
Audit, who are responsible for providing
independent assurance over the
effectiveness of governance, risk
management and controls over current,
systemic and evolving risks.
▪ The Legal function provides support to
all areas of the bank and is not formally
part of any of the three lines of defence,
The Legal function is responsible for the
identification of all Legal and Regulatory
Risks. Except in relation to the legal
advice it provides or procures, it is
subject to second line oversight with
respect to its own operational and
conduct risks, as well as with respect to
the Legal and Regulatory Risks to which
the bank is exposed.
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Risk management (continued)
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Risk management (continued)
Principal risks
The ERMF identifies nine principal risks
namely: credit risk, market risk, treasury
and capital risk, climate risk, operational
risk, model risk, conduct risk, reputation
risk and legal risk. Note that climate risk
was added in January 2022; see page 273
for more information.
Each of the principal risks is overseen by an
accountable executive within the Group
who is responsible for overseeing and/or
assigning responsibilities for the
framework, policies and standards that set
out associated responsibilities and
expectations and detail the related
requirements around risk management. In
addition, certain risks span across more
than one principal risk.
Risk appetite
Risk appetite is defined as the level of risk
which the Group is prepared to accept in
carrying out its activities. It provides a basis
for ongoing dialogue between
management and Board with respect to
the Group’s current and evolving risk
profile, allowing strategic and financial
decisions to be made on an informed
basis.
Risk appetite is approved by the Barclays
PLC Board in aggregate and disseminated
across legal entities and businesses,
supported by limits to enable and control
specific exposures and activities that have
material concentration risk implications.
Risk committees
Barclays various risk committees consider
risk matters relevant to their business, and
escalate as required to the Group Risk
Committee (GRC), whose Chair, in turn,
escalates to the Barclays PLC Board
Committees and the Barclays PLC Board.
In addition to setting the risk appetite of
the Group, the Board is responsible for
approving the ERMF, and reviewing
reputation risk matters. It receives regular
information on the risk profile of the
Group, and has ultimate responsibility for
risk appetite and capital plans.
Further, there are two Board-level
committees which oversee the application
of the ERMF and implementation of key
aspects, the Barclays PLC Board Risk
Committee (BRC) and the Barclays PLC
Board Audit Committee (BAC).
Additionally, the Barclays PLC Board
Remuneration Committee oversee pay
practices focusing on aligning pay to
sustainable performance.
• The Barclays PLC Board Risk
Committee (BRC): the BRC monitors
the Group’s risk profile against the
agreed appetite. Where actual
performance differs from expectations,
the actions taken by management are
reviewed to ascertain that the BRC is
comfortable with them. The BRC also
reviews certain key risk methodologies,
the effectiveness of risk management,
and the Group’s risk profile, including the
material issues affecting each business
portfolio and forward risk trends. The
committee also commissions in-depth
analysis of significant risk topics, which
are presented by the Group CRO or
senior risk managers.
• The Barclays PLC Board Audit
Committee (BAC): the BAC receives
regular reports on the effectiveness of
internal control systems, quarterly
reports on material control issues of
significance, quarterly papers on
accounting judgements (including
impairment), and a quarterly review of
the adequacy of impairment allowances,
relative to the risk inherent in the
portfolios, the business environment,
and Barclays policies and
methodologies.
• The Barclays PLC Board Remuneration
Committee (RemCo): the RemCo
receives proposals on ex-ante and ex-
post risk adjustments to variable
remuneration based on risk
management performance including
events, issues and the wider risk profile.
These inputs are considered in the
setting of performance incentives.
The terms of reference and additional
details on membership and activities for
each of the principal Board committees
are available from the corporate
governance section of the Barclays
website at: home.barclays/who-we-are/
our-governance/board-committees/
The GRC is the most senior executive
body responsible for reviewing and
monitoring the risk profile of the Group.
This includes coverage of all principal risks,
and any other material risks, to which the
Group is exposed. The GRC reviews and
recommends the proposed risk appetite
and relative limits to the BRC. The
committee covers all business units and
legal entities of the Group and
incorporates specific coverage of Barclays
Bank Group.
Barclays’ risk culture
Risk culture can be defined as the norms,
attitudes and behaviours related to risk
awareness, risk taking and risk
management. This is reflected in how the
Group identifies, escalates and manages
risk matters.
Barclays is committed to maintaining a
robust risk culture in which:
• management expect, model and reward
the right behaviours from a risk and
control perspective
• colleagues identify, manage and
escalate risk and control matters, and
meet their responsibilities around risk
management.
The Group CEO works with the Executive
Management to embed a strong risk
culture within the firm, with particular
regard to the identification, escalation and
management of risk matters, in
accordance with the ERMF. Specifically, all
employees regardless of their positions,
functions or locations must play their part
in the Group’s risk management.
Employees are required to be familiar with
risk management policies which are
relevant to their responsibilities, know how
to escalate actual or potential risk issues,
and have a role-appropriate level of
awareness of the risk management
process as defined by the ERMF.
Our Code of Conduct – the Barclays Way
Globally, all colleagues must attest to the
‘Barclays Way’, our Code of Conduct, and
comply with all frameworks, policies and
standards applicable to their roles. The
Code of Conduct outlines the Purpose,
Values and Mindset which govern our
‘Barclays Way’ of working across our
business globally. It constitutes a
reference point covering all aspects of
colleagues’ working relationships, and
provides guidance on working with other
Barclays employees, customers and
clients, governments and regulators,
business partners, suppliers, competitors
and the broader community. See
home.barclays/sustainability/esg-
resource-hub/statements-and-policy-
positions/ for more details.
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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 global conflicts, acts of
terrorism, natural disasters, pandemics
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
changes in global and local economic and
market conditions, as well as geopolitical
developments, which may have a material
impact on the Group’s business, results of
operations, financial condition and
prospects.
A deterioration in global or local economic
and market conditions may result in
(among other things): (i) deteriorating
business, consumer or investor
confidence and lower levels of investment
and productivity growth, which in turn may
lead to lower customer and client activity,
including lower demand for borrowing; (ii)
higher default rates, delinquencies, write-
offs and impairment charges as borrowers
struggle with their debt commitments; (iii)
subdued asset prices, which may impact
the value of any collateral held by the
Group and require the Group and its
customers to post additional collateral in
order to satisfy margin calls; (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 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 can
also cause financial instability and affect
economic growth.
In particular:
• Global GDP growth in 2022 was severely
hampered by inflationary pressures
resulting from; (a) the disruptive legacy
of the COVID-19 pandemic on supply
chains; (b) restricted labour markets and
upward pressure on employment costs;
and (c) escalating energy and food
prices intensified by the conflict in
Ukraine. These pressures have led to
the on-going 'cost of living' pressures in
much of the world, but particularly in the
UK and Europe.
• In response to persistent inflationary
pressures, throughout 2022, central
banks pursued policies of raising interest
rates while also curtailing quantitative
easing and in some cases commencing
quantitative tightening.
• Both the elevated inflationary
environment and higher interest rates
are likely to adversely affect economic
growth globally in 2023, particularly in
developed markets, with the possibility
of elevated unemployment as a result,
with potentially negative implications for
the Group's performance, including
through increased impairment
allowances. It remains possible that a
resurgence in COVID-19 and/or
restrictions on movement imposed
locally to combat outbreaks or new
strains, could exacerbate the expected
slowdown in global economic
performance.
• In the UK and Europe, governments
responded to escalating energy prices
via short term subsidies for consumers
and industry, in part funded by windfall
taxes on targeted sectors. Revisions to
these schemes during 2023 may cause
upward pressure on household and
corporate finances, which could result in
higher impairment charges.
• Trading arrangements between the UK
and the European Union (EU), following
the UK's exit from the EU, may: (i) raise
costs for UK customers trading with the
EU, and/or otherwise adversely affect
their business; and (ii) impact the
Group's EU operations.
• Further, any trading disruption between
the EU and the UK may have a significant
impact on economic activity in the EU
and the UK which, in turn, could have a
material adverse effect on the Group’s
business, results of operations, financial
condition and prospects. Unstable
economic conditions could result in
(among other things):
– a deeper recession in the UK and/or
one or more member states of the EU
in which it operates, with lower
growth, higher unemployment and
falling property prices, which could
lead to increased impairments in
relation to a number of the Group’s
portfolios (including, but not limited
to, the UK mortgage portfolio,
unsecured lending portfolio (including
credit cards) and commercial real
estate exposures.
– increased market volatility (in
particular in currencies and interest
rates), which could impact the
Group’s trading book positions and
affect the underlying value of assets in
the banking book and securities held
by the Group for liquidity purposes
– a credit rating downgrade for one or
more members of the Group (either
directly or indirectly as a result of a
downgrade in the UK sovereign credit
ratings), which could significantly
increase the Group’s cost of funding
and/or reduce its access to funding,
widen credit spreads and materially
adversely affect the Group’s interest
margins and liquidity position and/or
– a widening of credit spreads more
generally or reduced investor appetite
for the Group’s debt securities, which
could negatively impact the Group’s
cost of and/or access to funding
• 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
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 between the US and China), and
increased interest rates (particularly if
accompanied by rise in unemployment)
could lead to increased levels of
impairment, which may have a material
adverse effect on the Group's results of
operations and profitability.
• An escalation in geopolitical tensions or
increased use of protectionist measures
(such as the US and China implementing
reciprocal trade tariffs) may have a
material adverse effect on the Group’s
business in the affected regions.
• In China the level of debt, particularly in
the property sector, remains a concern,
given the high level of leverage and
despite government and regulatory
action. The rapid unwinding of “zero
COVID-19” policies may initially result in
economic slowdown should large
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Material existing and emerging risks (continued)
numbers of the population catch
COVID-19. Longer term, the shift away
from market-based reforms towards
state led initiatives to increase self-
sufficiency and economic security, with
potentially negative implications for
world trade.
• Higher US interest rates and slowing
demand for natural resources could
cause economic deterioration in
emerging markets, with a material
adverse effect on the Group's results
from operations if these stresses lead to
higher impairment charges from a
deterioration in sovereign or corporate
creditworthiness.
ii) Risks relating to the impact of
COVID-19
The COVID-19 pandemic has had a
material adverse impact on businesses
around the world and the economic and
social environments in which they operate.
Consequently there are a number of
factors associated with the COVID-19
pandemic and its impact on global
economies that have had and could
continue to have a material adverse effect
on the profitability, capital and liquidity of
the Group.
The COVID-19 pandemic caused
disruption to the Group’s customers,
suppliers and staff globally. Most
jurisdictions in which the Group operates
implemented severe restrictions on the
movement of their respective populations,
with a resultant significant impact on
economic activity. It remains unclear how
the COVID-19 pandemic will evolve
through 2023 and the risks from further
waves, new strains and/or vaccines
proving ineffective, cannot be ruled out
and could result in the reintroduction of, or
additional, restrictions placed on local
populations . The Group continues to
monitor the situation.
Macroeconomic expectations are that the
effects of the COVID-19 pandemic will be
long lasting with the level and speed of
economic recovery still uncertain. To the
extent that the residual impacts of the
COVID-19 pandemic continue to
adversely affect the global economy and/
or the Group, it may also have the effect of
increasing the likelihood and/or magnitude
of other risks described herein or may
pose other risks which are not presently
known to the Group or not currently
expected to be significant to the Group’s
profitability, capital and liquidity.
Further waves or new strains of COVID-19
could impact the Group's ability to conduct
business in the jurisdictions in which it
operates through disruptions to
infrastructure and supply chains, business
processes and technology services
provided by third parties, and unavailability
of staff due to illness. These interruptions
to business may be detrimental to
customers (who may seek reimbursement
from the Group for costs and losses
incurred as a result of such interruptions),
and result in potential litigation costs
(including regulatory fines, penalties and
other sanctions), as well as reputational
damage.
Changes in macroeconomic variables such
as gross domestic product (GDP) and
unemployment have a significant impact
on the modelling of expected credit losses
(ECLs) by the Group. The economic
environment remains uncertain and future
impairment charges may be subject to
additional volatility (including from changes
to macroeconomic variable forecasts)
caused by further waves or new strains of
the COVID-19 pandemic and related
containment measures and the continued
efficacy of vaccines and/or boosters, as
well as the longer- term effectiveness of
central bank, government and other
support measures. For further details on
macroeconomic variables used in the
calculation of ECLs, refer to the credit risk
performance section.
Any and all such events mentioned above
could have a material adverse effect on the
Group’s business, results of operations,
financial condition, prospects, liquidity,
capital position and credit ratings (including
potential credit rating agency changes of
outlooks or ratings), as well as on the
Group’s customers, employees and
suppliers.
iii) The impact of interest rate changes
on the Group’s profitability
Changes to interest rates are significant for
the Group, especially given the uncertainty
as to the size and frequency of such
changes, particularly in the Group’s main
markets of the UK, the US and the EU.
Interest rate rises result in higher funding
costs but could positively impact the
Group’s profitability as retail and corporate
business net interest income increases
due to margin decompression, as
observed for the interest rate rises in
2022. However, 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.
This, combined with the impact interest
rate rises may have on the affordability of
loan arrangements for borrowers
(especially when combined with
inflationary pressures), could cause stress
in the lending portfolio and underwriting
activity of the Group with resultant higher
credit losses driving an increased
impairment charge which 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.
Interest rate cuts may affect, and 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.
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 Fair Value through Other
Comprehensive Income (FVOCI) reserve
and could adversely affect the profitability
and prospects of the Group.
iv) Competition in the banking and
financial services industry
The Group operates in a highly
competitive environment in which it must
evolve and adapt to significant changes as
a result of regulatory reform,
technological advances, increased public
scrutiny and prevailing economic
conditions. The Group expects that
competition in the financial services
industry will continue to be intense and
may have a material adverse effect on the
Group’s future business, results of
operations, financial condition and
prospects.
New competitors in the financial services
industry continue to emerge.
Technological advances and the growth of
e-commerce have made it possible for
non- banks to offer products and services
that traditionally were banking products
such as electronic securities trading,
payments processing and online
automated algorithmic-based investment
advice. Furthermore, payments
processing and other services could be
significantly disrupted by technologies,
such as blockchain (used in cryptocurrency
systems) and 'buy now pay later' lending,
both of which are currently subject to
lower levels of regulatory oversight.
Furthermore, the introduction of Central
Bank Digital Currencies could potentially
have significant impact on the banking
system and the role of commercial banks
within it by disrupting the current provision
of banking products and services. This
disruption could allow new competitors,
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Material existing and emerging risks (continued)
some previously hindered by banking
regulation (such as FinTechs), to provide
customers with access to banking facilities
and increase disintermediation of banking
services.
New technologies and changing consumer
behaviour have required and could require
the Group to incur additional cost to
modify or adapt its products or make
additional capital investments in its
businesses to attract and retain clients and
customers or to match products and
services offered by its competitors,
including technology companies.
Ongoing or increased competition and/or
disintermediation of banking services may
put pressure on the pricing of the Group’s
products and services, which could reduce
the Group’s revenues and profitability, or
may cause the Group to lose market share,
particularly with respect to traditional
banking products such as deposits, bank
accounts and mortgage lending. This
competition may be on the basis of quality
and variety of products and services
offered, transaction execution, innovation,
reputation and/or price. These factors
may be exacerbated by further industry
wide initiatives to address access to
banking. The failure of any of the Group’s
businesses to meet the expectations of
clients and customers, whether due to
general market conditions,
underperformance, a decision not to offer
a particular product or service, branch
closures, changes in client and customer
expectations or other factors, could affect
the Group’s ability to attract or retain
clients and customers. Any such impact
could, in turn, reduce the Group’s
revenues.
v) Regulatory change agenda and impact
on business model
The Group’s businesses are subject to
ongoing regulation and associated
regulatory risks, including the effects of
changes in the laws, regulations, policies,
voluntary codes of practice and
interpretations in the UK, the US, the EU
and the other markets in which it operates.
Many regulatory changes relevant to the
Group’s business may have an effect
beyond the country in which they are
enacted, either because the Group’s
regulators deliberately enact regulation
with extra-territorial impact or its global
operations mean that the Group is obliged
to give effect to local laws and regulations
on a wider basis.
In recent years, regulators and
governments have focused on reforming
both the prudential regulation of the
financial services industry and the ways in
which the business of financial services is
conducted. Measures taken include
enhanced capital, liquidity and funding
requirements, the separation or
prohibition of certain activities by banks,
changes in the operation of capital
markets activities, the introduction of tax
levies and transaction taxes, changes in
compensation practices and more detailed
requirements on how business is
conducted. The governments and
regulators in the UK, the US, the EU or
elsewhere may intervene further in relation
to areas of industry risk already identified,
or in new areas, which could adversely
affect the Group.
Current and anticipated areas of particular
focus for the Group’s regulators, where
regulatory changes could have a material
effect on the Group’s business, financial
condition, results of operations, prospects,
capital position, and reputation, include,
but are not limited to:
• the increasing focus by regulators,
international bodies, organisations and
unions on how institutions conduct
business, particularly with regard to the
delivery of fair outcomes for customers,
promoting effective competition in the
interests of consumers and ensuring the
orderly and transparent operation of
global financial markets, including the
proposed introduction in the UK of a
new consumer duty and measures
resulting from ongoing thematic reviews
into the workings of the retail, small- and
medium-sized enterprise and wholesale
banking sectors and the provision of
financial advice to consumers;
• the implementation of any conduct
measures as a result of regulators’ focus
on organisational culture, employee
behaviour and whistleblowing;
• the demise of certain benchmark
interest rates and the transition to new
risk-free reference rates (as discussed
further under ‘vi) Impact of benchmark
interest rate reforms on the Group’
below);
• reviews of regulatory frameworks
applicable to the wholesale financial
markets, including reforms and other
changes to conduct of business, listing,
securitisation and derivatives related
requirements;
• the focus globally on technology
adoption and digital delivery,
underpinned by customer protection,
including the use of artificial intelligence
and digital assets (data, identity and
disclosures), financial technology risks,
payments and related infrastructure,
operational resilience, virtual currencies
(including central bank digital currencies
and global stable coins) and
cybersecurity. This also includes the
introduction of new and/or enhanced
regulatory standards in these areas;
• increasing regulatory expectations of
firms around governance and risk
management frameworks, particularly
for management of climate change,
diversity and inclusion and other ESG
risks and enhanced ESG disclosure and
reporting obligations;
• the continued evolution of the UK’s
regulatory framework following the UK's
withdrawal from the EU, including in light
of the UK financial services regulatory
reform agenda announced in December
2022 and the proposals in the Financial
Services and Markets Bill, and similarly
regarding the access of UK and other
non-EU financial institutions to EU
markets;
• the implementation of the reforms to
the Basel III package, which includes
changes to the RWA approaches to
credit risk, market risk, counterparty risk,
operational risk, and credit valuation
adjustments and the application of RWA
floors and the leverage ratio;
• the implementation of more stringent
capital, liquidity and funding
requirements;
• the ongoing regulatory response to the
COVID-19 pandemic and its
implications for banks’ credit risk
management and provisioning
processes, capital adequacy and
liquidity, and a renewed focus on
vulnerable customers including the
treatment of customers and
consideration of longer-term initiatives
to support borrowers in financial
difficulty and measures designed to
maximise access to cash for consumers;
• the incorporation of climate change
within the global prudential framework,
including the transition risks resulting
from a shift to a low carbon economy
and its financial effects;
• increasing requirements to detail
management accountability within the
Group (for example, the requirements of
the Senior Managers and Certification
Regime in the UK and similar regimes
elsewhere that are either in effect or
under consideration/implementation),
as well as requirements relating to
executive remuneration;
• changes in national or supra-national
requirements regarding the ability to
offshore or outsource the provision of
services and resources or transfer
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Material existing and emerging risks (continued)
material risk to financial services
companies located in other countries,
which impact the Group’s ability to
implement globally consistent and
efficient operating models;
• financial crime, fraud and market abuse
standards and increasing expectations
for related control frameworks, to
ensure firms are adapting to new threats
such as those arising from the
COVID-19 pandemic, and are
protecting customers from cyber-
enabled crime;
• the application and enforcement of
economic sanctions including those with
extra-territorial effect and those arising
from geopolitical tensions;
• requirements flowing from
arrangements for the resolution
strategy of the Group and its individual
operating entities that may have
different effects in different countries;
• the increasing regulatory expectations
and requirements relating to various
aspects of operational resilience,
including an increasing focus on the
response of institutions to operational
disruptions;
• continuing regulatory focus on data
privacy, including the collection and use
of personal data, and protection against
loss and unauthorised or improper
access;
• the regulatory focus on policies and
procedures for identifying and managing
cybersecurity risks, cybersecurity
governance and the corresponding
disclosure and reporting obligations; and
• continuing regulatory focus on the
effectiveness of internal controls and
risk management frameworks, as
evidenced in regulatory fines and other
measures imposed against the Group
and other financial institutions.
+ For further details on the regulatory supervision of,
and regulations applicable to, the Group, refer to the
Supervision and regulation section on page 370.
vi) Impact of benchmark interest rate
reforms on the Group
Global regulators and central banks in the
UK, the US and the EU have driven
international efforts to reform key
benchmark interest rates and indices, such
as the London Interbank Offered Rate
(LIBOR), used to determine the amounts
payable under a wide range of transactions
and make them more reliable and robust.
These benchmark reforms have resulted in
significant changes to the methodology
and operation of certain benchmarks and
indices, the adoption of alternative risk-
free reference rates (RFRs), the
discontinuation of certain reference rates
(including LIBOR), and the introduction of
implementing legislation and regulations.
Specifically, certain LIBOR tenors either
ceased at the end of 2021 or became
permanently unrepresentative.
Furthermore, certain US dollar LIBOR
tenors are to cease by the end of June
2023, and restrictions have been imposed
on new use of US dollar LIBOR.
Notwithstanding these developments,
given the unpredictable consequences of
benchmark reform, any of these
developments could have an adverse
impact on market participants, including
the Group, in respect of any financial
instruments linked to, or referencing, any
of these benchmark interest rates.
Uncertainty associated with such potential
changes, including the availability and/or
suitability of alternative RFRs, the
participation of customers and third party
market participants in the transition
process, challenges with respect to
required documentation changes, and
impact of legislation to deal with certain
legacy contracts that cannot convert into
or add fall-back RFRs before cessation of
the benchmark they reference, may
adversely affect a broad range of
transactions (including any securities,
loans and derivatives which use LIBOR or
any other affected benchmark to
determine the interest payable which are
included in the Group’s financial assets and
liabilities) that use these reference rates
and indices, and present 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 (such as LIBOR) to new
alternative RFRs, the Group faces
conduct risks. These may lead to
customer complaints, regulatory
sanctions or reputational impact if the
Group is considered to be (among other
things): (i) 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 a consistent approach to
remediation for customers in similar
circumstances; (v) unduly delaying the
communication and migration activities
in relation to client exposure, leaving
them insufficient time to prepare; or (vi)
colluding or inappropriately sharing
information with competitors.
• Litigation risk: members of the Group
may face legal proceedings, regulatory
investigations and/or other actions or
proceedings regarding (among other
things): (i) the conduct risks identified
above, (ii) the interpretation and
enforceability of provisions in LIBOR-
based contracts and securities, and (iii)
the Group’s preparation and readiness
for the replacement of LIBOR with
alternative RFRs.
• Financial risk: the valuation of certain of
the Group’s financial assets and liabilities
may change. Moreover, transitioning to
alternative RFRs 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 certain alternative
RFRs (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 cash flows.
• Pricing risk: changes to existing
reference rates and indices,
discontinuation of any reference rate or
indices and transition to alternative
RFRs 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 RFRs
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.
• Accounting risk: an inability to apply
hedge accounting in accordance with
IAS 39 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,
prospects and reputation.
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Material existing and emerging risks (continued)
+ For further details on the impacts of benchmark
interest rate reforms on the Group, refer to Note 41.
vii) Change delivery and execution risks
The Group will need to adapt and/or
transform the way it conducts business in
response to changing customer behaviour
and needs, technological developments,
regulatory expectations, increased
competition and cost management
initiatives. Accordingly, effective
management of transformation projects is
required to successfully deliver the
Group's strategic priorities, involving
delivering both on externally driven
programmes, as well as key business
initiatives to deliver revenue growth,
product enhancement and operational
efficiency outcomes. The magnitude,
complexity and, at times, concurrent
demands of the projects required to meet
these priorities can result in heightened
execution risk.
The ability to execute the Group’s strategy
may be limited by operational capacity and
the increasing complexity of the regulatory
environment in which the Group operates.
In addition, whilst the Group continues to
pursue cost management initiatives, they
may not be as effective as expected and
cost saving targets may not be met.
The failure to successfully deliver or
achieve any of the expected benefits of
these strategic initiatives and/or the failure
to meet customer and stakeholder
expectations could have a material
adverse effect on the Group’s business,
results of operations, financial condition,
customer outcomes, prospects and
reputation.
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 capital
distributions (such as dividends to ordinary
shareholders and share buybacks).
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 the
financial performance of such subsidiaries
and entities and prevailing macroeconomic
conditions but also to applicable local laws,
capital regulations (including internal MREL
requirements) and other restrictions
(including restrictions imposed by
governments and/or regulators, which
limit management’s flexibility in managing
the business and taking action in relation
to capital distributions and capital
allocation). 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 make
capital distributions (such as dividends to
ordinary shareholders and share
buybacks).
ix) Application of resolution measures
and stabilisation powers under the
Banking Act
Under the Banking Act 2009, as amended
(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 (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, transfer or
dilution of the relevant entities’ equity
(including Barclays PLC’s ordinary share
capital) 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, Tier 2 capital instruments and
internal MREL prior to, or together with,
the exercise of any stabilisation option.
Any such action could result in the dilution
of Barclays PLC’s ordinary share capital,
restrict Barclays PLC’s ability to meet its
obligations and/or to pay dividends to
ordinary shareholders.
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) Climate risk
The risks associated with climate change
are subject to rapidly increasing societal,
regulatory and political focus, both in the
UK and internationally. In line with
regulatory expectations and requirements,
the Group has embedded climate risk
within the Enterprise Risk Management
Framework (ERMF), to address the
financial and operational risks resulting
from: (i) the physical risk of climate change;
and (ii) the risk from the transition to a low-
carbon economy. Climate risk is
considered to be a driver of financial and
operational risks.
Physical risks from climate change arise
from a number of factors and relate to
specific weather events (acute) and
longer-term shifts in the climate (chronic).
The nature and timing of extreme weather
events are uncertain, but they are
increasing in frequency and in the potential
severity of economic impact.
The potential impact on the economy
includes, but is not limited to, lower GDP
growth, higher unemployment, shortage
of raw materials and products due to
supply chain disruptions and significant
changes in asset prices and profitability of
industries. Damage to the properties and
operations of borrowers could decrease
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Material existing and emerging risks (continued)
production capacity, increase operating
costs, impair asset values and the
creditworthiness of customers leading to
increased default rates, delinquencies,
write-offs and impairment charges in
Barclays' 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 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 assets. As new
policies and regulations are enforced,
market sentiment and societal
preferences change and new
technologies emerge, this may result in
increased costs and reduced demand of
product and services of a company, early
retirement and impairment of assets,
decreased revenue and profitability for
Barclays customers. This in turn may
impact creditworthiness of customers and
their ability to repay loans. Additionally, 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.
Furthermore, 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 expected credit
losses (ECLs), and increased charge-offs
and defaults among retail customers.
From January 2022, climate risk became
one of the principal risks within the Group’s
ERMF. Failure to adequately embed the
financial and operational 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 failure to adapt the
Group's strategy and business model to
the changing regulatory requirements and
market expectations on a timely basis, 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.
occur on a timely basis, the Group may fail
to achieve its climate-related ambitions
and targets and this could have a material
adverse effect on the Group’s business,
results of operations, financial condition,
prospects and reputation.
In March 2020, the Group announced its
ambition to become a net zero bank by
2050 and its commitment to align all of its
financing activities with the goals and
timelines of the Paris Agreement. In order
to reach these ambitions and targets or
any other climate-related ambitions or
targets the Group may commit to in
future, the Group will need to continue to
incorporate climate considerations into its
strategy, business model, the products
and services it provides to customers and
its financial and non-financial risk
management processes (including
processes to measure and manage the
various financial and non-financial risks the
Group faces as a result of climate change).
The Group also needs to ensure that its
strategy and business model adapt to
changing, and sometimes conflicting,
national and international standards,
industry and scientific practices, regulatory
requirements and market expectations
regarding climate change, which remain
under continuous development and vary
between regions, sometimes to a
significant extent. There can be no
assurance that these standards, practices,
requirements and expectations will not
change in a manner that substantially
increases the cost or effort for the Group
to achieve such ambitions and targets. In
addition, the Group’s ambitions and
targets may prove more challenging to
achieve due to changing circumstances
and potentially volatile external factors
which are beyond our control, including
geopolitical issues, energy security, energy
poverty and other considerations such as
just transition to a low carbon economy.
This may be exacerbated if the Group
chooses or is required to accelerate its
climate-related ambitions or targets as a
result of UK or international regulatory
developments or stakeholder
expectations.
Achieving the Group’s climate-related
ambitions and targets will also depend on a
number of factors outside the Group’s
control, including reliable forecast of
hazards from the physical climate models,
availability of data and models to measure
and assess the climate impact of the
Group’s customers, advancements of low-
carbon technologies and supportive public
policies in the markets where the Group
operates. If these external factors and
other changes do not occur, or do not
For further details on the Group’s
approach to climate change, refer to the
climate risk management section.
ii) 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. Credit risk
is impacted by a number of factors outside
the Group’s control, including wider
economic conditions.
a) Impairment
Impairment is calculated in line with the
requirements of IFRS9 which results in
recognition of loss allowances, based on
ECLs, on a forward-looking basis using a
broad scope of financial metrics.
Measurement involves complex
judgement and impairment charges are
potentially volatile and may not
successfully predict actual credit losses,
particularly under stressed conditions. Any
failure by the Group to accurately estimate
credit losses through ECLs could have a
material adverse effect on the Group's
business, results of operations, financial
condition and prospects.
+ For further details, refer to Note 8.
b) Specific portfolios, sectors and
concentrations
The Group is subject to risks arising from
changes in credit quality and recovery
rates for loans and advances due from
borrowers and counterparties and is
subject to a concentration of those risks
where the Group has significant exposures
to borrowers and counterparties in specific
sectors, or to particular types of borrowers
and counterparties. Any deterioration in
the credit quality of such borrowers and
counterparties could lead to lower
recoverability from loans and advances
and higher impairment charges.
Accordingly, any of the following areas of
uncertainty could have a material adverse
impact on the Group's business, results of
operations, financial condition and
prospects:
• Consumer affordability: remains a key
area of focus, particularly in unsecured
lending, as the 'cost of living' pressures
grow. Macroeconomic factors, such as
unemployment, higher interest rates or
broader inflationary pressures, that
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Material existing and emerging risks (continued)
impact a customer’s ability to service
debt payments could lead to increased
arrears in both unsecured and secured
products.
• UK retail, hospitality and leisure: falling
demand, rising costs and, for UK retail, a
structural shift to online shopping,
continue to pressurise sectors heavily
reliant on consumer discretionary
spending. Such sectors may also be
adversely impacted by cost of living
pressures and other macroeconomic
factors which affect consumers This
represents a potential risk in the Group’s
UK corporate portfolio as a higher
probability of default exists for retailers,
hospitality providers and their landlords
while these pressures remain.
• UK real estate: UK property represents a
significant portion of the Group's overall
retail and corporate credit exposure and
the Group remains at risk of increased
impairment from a material fall in
property prices. During 2021 and
continuing through the first half of 2022,
property prices rose, particularly in the
residential property market where
customers sought more space as home
working became more prevalent.
However, rising mortgage interest rates
and increasing economic concerns have
reduced demand and borrowing
capacity which resulted in small house
price decreases in Q4 2022. This is likely
to continue in 2023, especially in London
and the South East of the UK where the
Group has a high exposure. Additionally,
as mortgages roll off existing rates and
onto new rates at higher levels, there is a
risk of increasing borrower defaults
which could then put further downward
pressure on property prices and in turn
impact the Group’s impairment and
capital position. Furthermore, small
segments of the housing market could
be subject to specific valuation impacts
(for example, certain properties within
the Group's residential loan portfolio
may be subject to remediation activities
relating to fire safety standards). The
Group’s corporate exposure is
vulnerable to a deteriorating economic
environment and (for offices in
particular) post COVID-19 pandemic
structural shifts, such as the
normalisation of remote working.
Landlords serving discretionary
consumer spending sector tenants are
also at risk from reduced rent collection.
• Leveraged finance underwriting: the
Group takes on non-investment grade
underwriting exposure, including single
name risk, particularly in the US and the
UK. The Group is exposed to credit
events and market volatility during the
underwriting period, which may result in
losses for the Group, or increased
capital requirements should there be a
need to hold the exposure for an
extended period.
• Oil & Gas sector: High market energy
prices during 2022 have helped restore
balance sheet strength to companies
operating in this sector. However, in the
longer term, costs associated with the
transition towards renewable sources of
energy may place greater financial
demands on oil and gas companies.
• Air travel: the sector struggled to
resource for the recovery in lower
margin (tourist) demand for air travel
evidenced in 2022 (after the drop in
demand during the pandemic), and to
adjust to the structural decline in higher
margin business travel. While this
transition plays out, there remains a
heightened risk to the revenue streams
of the Group’s clients and,
consequentially, their ability to service
debt obligations. Increasing concerns
about the impact of air travel on climate
change will also influence consumer
behaviour, representing additional risks
for the sector.
The Group also has large individual
exposures to single name counterparties,
(such as brokers, central clearing houses,
dealers, banks, mutual and hedge funds
and other institutional clients) both in its
lending and trading activities, including
derivative trades. The default of one such
counterparty could cause contagion
across clients involved in similar activities
and/or adversely impact asset values
should margin calls necessitate rapid asset
disposals by that counterparty to raise
liquidity. In addition, where such
counterparty risk has been mitigated by
taking collateral, credit risk may remain
high if the collateral held cannot be
monetised, 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, refer to the credit risk management and credit risk
performance sections.
iii) Market risk
Market risk is the risk of loss arising from
potential adverse changes 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.
Economic and financial market
uncertainties remain elevated, driven by
elevated inflation and tightening monetary
policy, both of which are exacerbated by
the conflict in Ukraine and supply-chain
disruptions caused by the COVID-19
pandemic. A disruptive adjustment to
higher interest rate levels and
deteriorating trade and geopolitical
tensions 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 adversely affects market 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
higher hedging costs from rebalancing
risks that need to be managed dynamically
as market levels and their associated
volatilities change.
Changes in market conditions 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, refer to the market risk management and
market risk performance sections.
iv) 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 and/or
internal liquidity requirements, make
repayments of principal or interest as they
fall due or to support day-to-day business
activities. Key liquidity risks that the Group
faces include:
• Stability of the Group’s deposit funding
profile: deposits which are payable on
demand or at short notice could be
adversely affected by the Group failing
to preserve the current level of
customer and investor confidence or as
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Material existing and emerging risks (continued)
a result of competition in the banking
industry.
• Ongoing access to wholesale funding:
the Group regularly accesses the money
and capital markets to provide short-
term and long-term unsecured and
secured funding to support its
operations. A loss of counterparty
confidence, or adverse market
conditions (such as the recent rises in
interest rates) could lead to a reduction
in the tenor, or an increase in the costs,
of the Group’s unsecured and secured
wholesale funding or affect the Group’s
access to such funding.
• Impacts of market volatility: adverse
market conditions, with increased
volatility in asset prices could: (i)
negatively impact the Group’s liquidity
position through increased derivative
margin requirements and/or wider
haircuts when monetising liquidity pool
securities; and (ii) make it more difficult
for the Group to execute secured
financing transactions.
• Intraday liquidity usage: increased
collateral requirements for payments
and securities settlement systems could
negatively impact the Group’s liquidity
position, as cash and liquid assets
required for intraday purposes are
unavailable to meet other outflows.
• Off-balance sheet commitments:
deterioration in economic and market
conditions could cause customers to
draw on off-balance sheet
commitments provided to them, for
example revolving credit facilities,
negatively affecting the Group’s liquidity
position.
• Credit rating changes and impact on
funding costs: 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
(for example, this could lead to
increased costs of funding and wider
credit spreads, the triggering of
additional collateral or other
requirements in derivative contracts and
other secured funding arrangements, or
limits on the range of counterparties
who are willing to enter into transactions
with the Group).
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 and stressed conditions
(both actual and as defined for internal
planning or regulatory stress testing
purposes). This also 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 in
respect of its shares and/or additional
tier 1 instruments), leading to the
inability to comply with the Group's
dividend policy 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 technical provision and/or IAS 19
accounting basis. This could lead to the
Group making substantial additional
contributions to its pension plans and/or
a deterioration in its capital position. The
market value of pension fund assets
might decline; or investment returns
might reduce. 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 hedging programmes for interest
rate risk in the banking book rely on
behavioural assumptions and, as a result,
the effectiveness of the hedging strategy
cannot be guaranteed. A potential
mismatch in the balance or duration of the
hedging assumptions could lead to
earnings deterioration if there are interest
rate movements which are not adequately
hedged. A decline in interest rates may
also compress net interest margin on retail
and corporate portfolios. In addition, the
Group’s liquid asset portfolio is exposed to
potential capital and/or income volatility
due to movements in market rates and
prices which may have a material adverse
effect on the capital position of the Group.
+ For further details on the Group’s approach to
treasury and capital risk, refer to the treasury and
capital risk management and treasury and capital risk
performance sections.
v) 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 Group functions in a highly
competitive market, with customers and
clients that expect consistent and smooth
business processes. 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 failures in the
Group’s technology systems, closure of
the Group's 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 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) Cyberattacks
Cyberattacks continue to be a global
threat that is inherent across all industries,
with the number and severity of attacks
continuing to rise. The financial sector
remains a primary target for
cybercriminals, hostile nation states,
opportunists and hacktivists. The Group,
like other financial institutions, experiences
numerous attempts to compromise its
cybersecurity protections.
The Group dedicates significant resources
to reducing cybersecurity risks, but it
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Material existing and emerging risks (continued)
cannot provide absolute security against
cyberattacks. Malicious actors are
increasingly sophisticated in their
methods, tactics, techniques and
procedures, seeking to steal money, gain
unauthorised access to, destroy or
manipulate data, and disrupt operations,
and some of their attacks may not be
recognised or discovered until launched or
after initial entry into the environment,
such as novel or zero-day attacks that are
launched before patches are available and
defences can be readied. Malicious actors
are also increasingly developing methods
to avoid prevention, detection and alerting
capabilities, including employing counter-
forensic tactics making response activities
more difficult. Cyberattacks can originate
from a wide variety of sources and target
the Group in numerous ways, including
attacks on networks, systems, applications
or devices used by the Group or parties
such as service providers and other
suppliers, counterparties, employees,
contractors, customers or clients,
presenting the Group with a vast and
complex defence perimeter. Moreover,
the Group does not have direct control
over the cybersecurity of the systems of
its clients, customers, counterparties and
third-party service providers and suppliers,
limiting the Group’s ability to effectively
protect and defend against certain threats.
Some of the Group’s third-party service
providers and suppliers have experienced
successful attempts to compromise their
cybersecurity. These included
ransomware attacks that disrupted the
service providers’ or suppliers’ operations
and, in some cases, had an impact on the
Group's operations. Such cyberattacks are
likely to continue.
A failure in the Group’s adherence to its
cybersecurity policies, procedures or
controls, employee malfeasance, and
human, governance or technological error
could also compromise the Group’s ability
to successfully prevent and defend against
cyberattacks. Furthermore, certain legacy
technologies that are at or approaching
end-of-life may not be able to maintain
acceptable levels of security. The Group
has experienced cybersecurity incidents
and near-misses in the past, and it is
inevitable that additional incidents will
occur in the future. Cybersecurity risks are
expected to increase, due to factors such
as the increasing demand across the
industry and customer expectations for
continued expansion of services delivered
over the Internet; increasing reliance on
Internet-based products, applications and
data storage; and changes in ways of
working by the Group’s employees,
contractors, and third party service
providers and suppliers and their
subcontractors as a long-term
consequence of the COVID-19 pandemic.
Bad actors have taken advantage of
remote working practices and modified
customer behaviours, exploiting the
situation in novel ways that may elude
defences. Additionally, geopolitical turmoil
may serve to increase the risk of a
cyberattack that could impact Barclays
directly, or indirectly through its critical
suppliers or national infrastructure. In
2022, the Group faced a heightened risk of
cyberattack as a result of the conflict in
Ukraine.
Common types of cyberattacks include
deployment of malware to obtain covert
access to systems and data; ransomware
attacks that render systems and data
unavailable through encryption and
attempts to leverage business interruption
or stolen data for extortion; novel or zero-
day exploits; denial of service and
distributed denial of service (DDoS)
attacks; infiltration via business email
compromise; social engineering, including
phishing, vishing and smishing; automated
attacks using botnets; third-party
customer, vendor, service provider and
supplier account take-over; malicious
activity facilitated by an insider; and
credential validation or stuffing attacks
using login and password pairs from
unrelated breaches. A successful
cyberattack of any type has the potential
to cause serious harm to the Group or its
clients and customers, including exposure
to potential contractual liability, claims,
litigation, regulatory or other government
action, loss of existing or potential
customers, damage to the Group’s brand
and reputation, and other financial loss.
The impact of a successful cyberattack
also is likely to include operational
consequences (such as unavailability of
services, networks, systems, devices or
data) remediation of which could come at
significant cost.
Regulators worldwide continue to
recognise cybersecurity 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 to
cyberattacks. A successful cyberattack
may, therefore, result in significant
regulatory fines on the Group. In addition,
any new regulatory measures introduced
to mitigate these risks are likely to result in
increased technology and compliance
costs for the Group.
+ For further details on the Group’s approach
to cyberattacks, see the operational risk
performance section. For further details on
cybersecurity regulation applicable to the
Group, refer to the Supervision and regulation
section.
c) New and emergent technology
Technology is fundamental to the Group’s
business and the financial services
industry. 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. For
example, payment services and securities,
futures and options trading are
increasingly occurring electronically, both
on the Group’s own systems and through
other alternative systems, and becoming
automated. Whilst increased use of
electronic payment and trading systems
and direct electronic access to trading
markets could significantly reduce the
Group’s cost base, it may, conversely,
reduce the commissions, fees and margins
made by the Group on these transactions
which could have a material adverse effect
on the Group’s business, results of
operations, financial condition and
prospects.
Introducing new forms of technology,
however, has the potential to increase
inherent risk. Failure to evaluate, actively
manage and closely monitor risk during all
phases of business development and
implementation 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 nature of fraud is wide-ranging and
continues to evolve, as criminals seek
opportunities to target the Group’s
business activities and exploit changes in
customer behaviour and product and
channel use (such as the increased use of
digital products and enhanced online
services) or exploit new products. Fraud
attacks can be very sophisticated and are
often orchestrated by organised crime
groups who use various techniques to
target customers and clients directly to
obtain confidential or personal information
that can be used to commit fraud. The UK
market has also seen significant growth in
‘scams’ where the Group takes increased
levels of liability as part of a voluntary code
to provide additional safeguards to
customers and clients who are tricked into
making payments to fraudsters. The
impact from fraud can lead to customer
detriment, financial losses (including the
reimbursement of losses incurred by
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Material existing and emerging risks (continued)
to clients and counterparties in a timely
manner; (ii) failing to settle and/or confirm
transactions; (iii) causing funds transfers,
capital markets trades and/or other
transactions to be executed erroneously,
illegally or with unintended consequences;
and (iv) adversely affecting financial,
trading or currency markets. Any of these
events could materially disadvantage the
Group’s customers, clients and
counterparties (including them suffering
financial loss) and/or result in a loss of
confidence in the Group which, in turn,
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 to its customers and
clients for risks arising from the actions of
suppliers and may not be able to recover
from its suppliers any amounts paid to
customers and clients for losses suffered
by them. 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.
customers), loss of business, missed
business opportunities and reputational
damage, all of which could have a material
adverse impact on the Group’s business,
results of operations, financial condition
and prospects.
e) Data management and information
protection
The Group holds and processes large
volumes of data, including personal
information, financial data and other
confidential information, and the Group’s
businesses are subject to complex and
evolving laws and regulations governing
the privacy and protection of data,
including Regulation (EU) 2016/679
(General Data Protection Regulation as it
applies in the EU and the UK). This data
could relate to: (i) the Group’s clients,
customers, prospective clients and
customers and their employees; (ii) clients
and customers of the Group’s clients and
customers and their employees;(iii) the
Group’s suppliers, counterparties and
other external parties, and their
employees; and (iv) the Group’s
employees and prospective employees.
The international nature of both the
Group’s business and its IT infrastructure
also means that data and personal
information may be available in countries
other than those from where the
information originated. Accordingly, the
Group must ensure that its collection, use,
transfer and storage of data, including
personal information, complies with all
applicable laws and regulations in all
relevant jurisdictions, which could: (i)
increase the Group’s compliance and
operating costs; (ii) impact the
development of new products or services
or the offering of existing products or
services; (iii) affect how products and
services are offered to clients and
customers; (iv) demand significant
oversight by the Group’s management;
and (v) require the Group to review some
elements of the structure of its
businesses, operations and systems in less
efficient ways. Concerns regarding the
effectiveness of the Group’s measures to
safeguard data, including personal
information, or even the perception that
those measures are inadequate, could
expose the Group to the risk of loss or
unavailability of data or data integrity
issues and/or cause the Group to lose
existing or potential clients and customers,
and thereby reduce the Group’s revenues.
Furthermore, any failure or perceived
failure by the Group to comply with
applicable privacy or data protection laws
and regulations may subject it to potential
contractual liability, claims, litigation,
regulatory or other government action
(including significant regulatory fines) and
require changes to certain operations or
practices which could also inhibit the
Group’s development or marketing of
certain products or services, or increase
the costs of offering them to customers.
Any of these events could damage the
Group’s reputation, subject the Group to
material fines or other monetary penalties,
make the Group liable to the payment of
compensatory damages, divert
management's time and attention, lead to
enhanced regulatory oversight and
otherwise materially adversely affect its
business, results of operations, financial
condition and prospects.
+ For further details on data protection regulation
applicable to the Group, refer to the supervision and
regulation section.
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, prospects and
reputation.
g) Processing errors
The Group’s businesses are highly
dependent on its ability to process and
monitor, on a daily basis, a very large
number of transactions, many of which are
highly complex and occur at high volumes
and frequencies, across numerous and
diverse markets in many currencies. As the
Group’s customer base and geographical
reach expand and the volume, speed,
frequency and complexity of transactions,
especially electronic transactions (as well
as the requirements to report such
transactions on a real-time basis to clients,
regulators and exchanges) increase,
developing, maintaining and upgrading
operational systems and infrastructure
becomes more challenging, and the risk of
systems or human error in connection with
such transactions increases, as well as the
potential consequences of such errors due
to the speed and volume of transactions
involved and the potential difficulty
associated with discovering errors quickly
enough to limit the resulting
consequences. Furthermore, events that
are wholly or partially beyond the Group’s
control, such as a spike in transaction
volume, could adversely affect the Group’s
ability to process transactions or provide
banking and payment services.
Processing errors could result in the
Group, among other things: (i) failing to
provide information, services and liquidity
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Material existing and emerging risks (continued)
i) Estimates and judgements relating to
critical accounting policies and
regulatory disclosures
The preparation of financial statements
requires the application of accounting
policies and judgements to be made in
accordance with IFRS. Regulatory returns
and capital disclosures are prepared in
accordance with the relevant capital
reporting requirements and also require
assumptions and estimates to be made.
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
provisions, taxes, fair value of financial
instruments, goodwill and intangible
assets, pensions and post-retirement
benefits, and provisions including conduct
and legal, competition and regulatory
matters (refer to the notes to the audited
financial statements for further details).
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 accounting standards and
regulatory interpretations could also
materially impact the Group’s results of
operations, financial condition and
prospects.
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
(including where the Group’s interpretation
of such laws differs from the interpretation
of tax authorities), 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, the introduction of new
international tax regimes, increasing tax
authority focus on reporting and disclosure
requirements around the world as well as
the digitisation of the administration of tax
have the potential to increase the Group’s
tax compliance obligations further. The
OECD and G20 Inclusive Framework on
Base Erosion and Profit Shifting has
announced plans to introduce a global
minimum tax from 2023. UK legislation to
implement these rules is expected to apply
from 1 January 2024 which will increase
the Group's tax compliance obligations. In
addition, the US enacted the Inflation
Reduction Act in August 2022 which
introduced a corporate alternative
minimum tax on adjusted financial
statement income effective from 1
January 2023. These new tax regimes may
require systems and process changes. Any
systems and process changes introduce
additional operational risk.
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 macroeconomic
factors, labour and immigration policy in
the jurisdictions in which the Group
operates, industry-wide headcount
reductions in particular sectors, regulatory
limits on compensation for senior
executives and the potential effects on
employee engagement and wellbeing from
long-term periods of working remotely.
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 customer detriment and
reputational damage.
+ For further details on the Group’s approach
to operational risk, refer to the operational
risk management and operational risk
performance sections.
vi) Model risk
Model risk is the potential for adverse
consequences from 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,
calculating RWAs and assessing capital
adequacy, supporting new business
acceptance, risk and reward evaluation,
managing client assets, and meeting
reporting requirements.
Models are, by their nature, imperfect
representations of reality and have some
degree of uncertainty because they rely on
assumptions and inputs, and so are subject
to intrinsic uncertainty, errors and
inappropriate use affecting the accuracy of
their outputs. This may be exacerbated
when dealing with unprecedented
scenarios, as was the case during the
COVID-19 pandemic, due to the lack of
reliable historical reference points and
data. 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. Model uncertainty, errors and
inappropriate use may result in (among
other things) the Group making
inappropriate business decisions and/or
inaccuracies or errors 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, refer to the model risk
management and model risk performance
sections.
vii) Conduct risk
Conduct risk is the risk of poor outcomes
for, or harm to, customers, clients and
markets, arising from the delivery of the
Group's products and services. This risk
could manifest itself in a variety of ways,
including:
a) Market conduct
The Group’s businesses are exposed to
risk from potential non-compliance with its
policies and standards and instances of
wilful and negligent misconduct by
employees, all of which could result in
potential customer and client detriment,
enforcement action (including regulatory
fines and/or sanctions), increased
operation and compliance costs, redress
or remediation or reputational damage
which in turn could have a material adverse
effect on the Group’s business, financial
condition and prospects. Examples of
employee misconduct which could have a
material adverse effect on the Group’s
business include: (i) improperly selling or
marketing the Group’s products and
services; (ii) engaging in insider trading,
market manipulation or unauthorised
trading; or (iii) misappropriating
confidential or proprietary information
belonging to the Group, its customers or
third parties. These risks may be
exacerbated in circumstances where the
Group is unable to rely on physical
oversight and supervision of employees,
noting the move to a hybrid working model
for many colleagues.
b) Customer protection
The Group must ensure that its
customers, particularly those that are
vulnerable, are able to make well-informed
decisions on how best to use the Group’s
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Material existing and emerging risks (continued)
financial services and understand the
protection available to them if something
goes wrong. Poor customer outcomes can
result from the failure to: (i) communicate
fairly and clearly with customers; (ii)
provide services in a timely and fair
manner; (iii) handle and protect customer
data appropriately; and (iv) undertake
appropriate activity to address customer
detriment, including the adherence to
regulatory and legal requirements on
complaint handling. The Group is at risk of
financial loss and reputational damage as a
result.
A key area of focus is the implementation
and embedment of the FCA’s new
Consumer Duty, with rules for open
products and services due to take effect at
the end July 2023. This will impact areas
including governance and accountability,
MI and reporting, communications,
product design and end-to-end customer
journeys. The Group may be required to
incur significant additional expense in
connection with this regulatory change.
c) Product design and review risk
Products and services must meet the
needs of clients, customers, markets and
the Group throughout their life cycle,
However, there is a risk that the design and
review of the Group’s products and
services fail to reasonably consider and
address potential or actual negative
outcomes for customers, which may result
in customer detriment, enforcement
action (including regulatory fines and/or
sanctions), redress and remediation and
reputational damage. Both the design and
review of products and services are a key
area of focus for regulators and the Group.
d) 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, 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, prospects and
reputation.
e) Conflicts of interest
Identifying and managing Conflicts of
Interest is fundamental to the conduct of
the Group's business, relationships with
Customers, and the markets in which the
Group operates. Understanding the
Conflicts of Interest that impact or
potentially impact the Group enables
them to be handled appropriately. Even if
there is no evidence of improper actions, a
Conflict of Interest can create an
appearance of impropriety that
undermines confidence in the Group and
its Employees. If the Group does not
identify and manage Conflicts of Interest
(business or personal) appropriately, it
could have an adverse effect on the
Group’s business, customers and the
markets within which it operates.
f) 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 reinforce
additional accountabilities for individuals
across the Group, with an increased focus
on governance and rigour, with similar
requirements also introduced in other
jurisdictions globally. 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, refer to the conduct risk
management and conduct risk performance
sections.
viii) 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
(including its employees, clients and other
associations) 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 (refer to ‘v) Operational risk’ above).
+ For further details on the Group’s approach
to reputation risk, refer to the reputation
risk management and reputation risk
performance sections.
ix) 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/or conflict, and
may be 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 obligations,
including legal, regulatory or contractual
requirements. Legal risk may arise in
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Material existing and emerging risks (continued)
relation to any number of the material
existing and emerging risks identified
above.
against the Group for financing or
contributing to climate change and
environmental degradation.
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 (and any provision made
in the Group’s financial statements relating
to those matters may not be sufficient to
cover actual losses). 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 or censure; 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
(including formerly active matters or those
arising after the date of this Annual Report)
will not have a material adverse effect on
the Group’s business, results of
operations, financial condition and
prospects.
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 or not being enforced
in the manner intended or desired by the
Group.
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 and may (from time to
time) be subject to legal proceedings and
other investigations relating to financial
and non-financial disclosures made by
members of the Group (including, but not
limited to, in relation to ESG disclosures).
Additionally, due to the increasing number
of new climate and sustainability-related
laws and regulations (or laws and
regulatory processes and policies
(including approach to fiduciary duties)
seeking to protect the energy and other
high carbon sectors from any risks of
divestment or challenges in accessing
finance), growing demand from investors
and customers for environmentally
sustainable products and services, and
regulatory scrutiny, financial institutions,
including the Group, may through their
business activities face increasing
litigation, conduct, enforcement and
contract liability risks related to climate
change, environmental degradation and
other social, governance and
sustainability-related issues. Furthermore,
there is a risk that shareholders, campaign
groups, customers and other interest
groups could seek to take legal action
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Principal risk management
Climate risk management
The impact on Financial and Operational
Risks arising from climate change through
physical risks, risks associated with
transitioning to a lower carbon economy
and connected risks arising as a result of
second order impacts of these two drivers
on portfolios.
Overview
Given the risks associated with climate
change, and to support the Group’s
ambition to be a net zero bank by 2050,
climate risk became a Principal Risk in
January 2022. To support the embedment
of the Principal Risk, in 2022 the Group
delivered a Climate Risk Plan with three
overarching objectives:
1. Governance Framework: Establish a
Climate Risk Committee, a Climate Risk
Controls Forum, and refresh the Board
Risk Committee reporting
2. Scenario Analysis: Build out the vision
and plan for undertaking scenario
analysis exercises. This involved
developing a climate scenario analysis
framework
3. Carbon Modelling: Expand the
BlueTrackTM model for measuring and
tracking financed emissions to cover our
automobiles and residential real estate
portfolios, in addition to energy, power,
cement and steel.
Organisation, roles and responsibilities
On behalf of the Board, the Board Risk
Committee (BRC) reviews and approves
the Group’s approach to managing the
financial and operational risks associated
with climate change. Reputation risk is the
responsibility of the Board, which directly
handles the most material issues facing
the Group. Broader sustainability matters
and other reputation risk issues associated
with climate change are coordinated by
the Sustainability Team. The Head of
Climate Risk reports directly to the Group
Chief Risk Officer.
The Group Risk Committee (GRC) is the
most senior executive body responsible
for review and challenge of risk practices
and risk profile, for climate risk and other
principal risk types.
To support the oversight of Barclays’
climate risk profile, a Climate Risk
Committee (CRC) has been established as
a sub-committee of the GRC. Authority of
the CRC is delegated by the GRC.
CRC is chaired by Head of Climate Risk.
CRC has reviewed and approved a range of
updates including a refreshed Climate Risk
Vision, updates from each of the financial
and operational risks and from the material
legal entities of the firm, along with key
regulatory, policy and legal themes, the risk
register and appetite statement and
constraint, and reviewed the control
environment.
The Climate Risk Control Forum (CRCF)
was established in July 2022 and escalates
to GRC via the Group Controls
Committee. The purpose of the CRCF is to
oversee the consistent and effective
implementation and operation of the
Barclays Controls Framework as relating to
Climate risk. It reviews the control
environment relating to Climate risk,
including risk events, policy and issues
management. Climate risk assurance
groups have been established and are
responsible for performing Climate risk
specific reviews to ensure we are
continually improving and addressing
identified issues in our risk practices.
Barclays entities, namely Barclays Bank UK,
Barclays International, Barclays Bank
Ireland and the US Intermediate Holding
Company, also continued to implement
Climate risk within their frameworks, where
Heads of Climate Risk have been
appointed.
The elevation of climate risk to Principal
Risk included establishment of governance
elements, including:
• a Climate Risk Framework that defines
climate risk and summarises the
approach to identification,
measurement, monitoring and reporting
of climate risk
• Climate Risk Appetite and constraint at
Group level established in line with the
Group’s risk appetite approach and
informed by scenario analysis
• Climate Risk Register is used to inform
risk appetite. This includes a breakdown
of key risk drivers for physical and
transition risks, and materiality ratings
which are inferred from the results of
the 2020 climate Internal Stress Test
and 2021 Bank of England’s Climate
Biennial Exploratory Scenario (CBES).
The Climate Risk Register continues to
align with the Group’s Risk Register
Taxonomy.
+ Further details on our Scenario Analysis can be found
from page 128
Climate risk across Financial and
Operational Risks is managed via a Climate
Change Financial Risk and Operational Risk
Policy (CCFOR), which is embedded in
each of the Financial and Operational
Principal Risk Frameworks.
Climate risk across Model, Conduct,
Reputation and Legal Principal Risks are
out of the scope of the Climate Risk
Framework and continue to be managed
under their respective Principal Risk
Frameworks.
Enterprise Risk Framework (ERMF)
Governance
Climate Risk Framework (CRF)
Reputation Risk Management
Framework (RRMF)
Board Risk Committee (BRC)
Board
Risk
Credit, market, treasury & capital
and operational risks
Sustainability matters and reputation
risk associated with climate change
Group Risk Committee (GRC)
Global Head of Public Policy and
Corporate Responsibility
Ownership
Climate Risk Committee (CRC)
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Principal risk management (continued)
Risk appetite
In 2022, as part of establishing Climate risk
as a principal risk, Barclays defined a risk
appetite statement and constraint for
climate risk. The statement outlines that
Barclays views climate change as a driver
of financial and operational risk. Barclays
has appetite to manage climate risk in line
with its climate ambition and to reduce
financed emissions in line with disclosed
targets. Targets to 2025 are set for Energy
and Power. Targets to 2030 are set for
Energy, Power, Cement, Steel and
Automotive Manufacturing.
An assessment of progress to reduce
financed emissions against the disclosed
targets was made. It noted that reaching
even the lower emissions reduction in the
disclosed ranges may prove challenging
and that a clearer forward plan be defined
to set out the range of management
actions that could be taken to meet the
disclosed target ranges, including a more
detailed understanding of client transition
expectations and the external
dependencies and variables beyond
Barclays' control that may determine the
pace of transition. Work has commenced
on a Client Transition Framework which will
support our evaluation of our corporate
clients' current and expected future
progress as they transition to a low-carbon
business model and we are continuing to
invest in developing tools that will enhance
the quality of our forecasting and better
understand the potential volatility in our
progress over the remaining target period.
+ Further details on Barclays' disclosed targets can be
found in the Climate and Sustainability report
The table below sets out how climate risk is integrated across Barclays using the ERMF aligned Climate Risk Framework, CCFOR and
the Climate Change Standard.
Enterprise Risk Management Framework (ERMF)
Climate Risk Framework
Responsibilities
Climate Risk
Credit Risk
Market Risk
Treasury and Capital Risk Operational Risk
Reputation Risk
Climate Change Financial Risk and Operational Risk Policy
Climate Change
Standard
•
Identify and
Assess climate-
related risk factors
• Apply stress
scenarios, assess
stress losses and
set risk limits
• Oversight by
Market Risk
Committee and
Board Risk
Committee
•
Identify exposure
to climate risk
• Consider key risk
indicators and
limits to support
risk management
•
Include in ICAAP
and ILAAP
• Oversight by
Treasury & Capital
Risk Committee
and Board Risk
Committee
•
•
Integrate climate
change across
different risk
categories, e.g.
Operational
Recovery Planning
and Premises
Include climate
change within risk
assessment
processes
including Strategic
Risk Assessment
• Outline minimum
requirements and
controls for
Reputation Risk
management
relating to client
relationships or
transactions
• Outline the
expected business
behaviours in
relation to these
issues
• Outline the
approach to
enhanced due
diligence.
• Monitor portfolio
level exposure to
the physical and
transition risks of
climate change
• Review individual
obligors’ exposure
to climate risk via
the Climate Lens
questionnaire
• Assess climate risk
within Sovereign
Credit Risk reviews
•
Include material
exposures to
climate risk within
the Internal Capital
Adequacy
Assessment
Process (ICAAP)
• Oversight by Legal
Entity Climate Risk
Forums and
relevant Risk
Management
Committees as
appropriate,
including regular
climate risk
reporting up to
Board Risk
Committee level
• Provide climate
horizon scanning
information and
emerging trends
to BRC and
Principal Risk
Leads
• Recommend risk
appetite
statement,
constraints and
exclusions to BRC
• Define areas of
concern and
recommend
scenario analysis
priorities
• Lead the
development of
climate-specific
risk
methodologies
Interpret stress
test results for
relevance as
drivers of risk
•
• Review and
challenge risk type
approaches and
support
consistency
across risk types
• Aggregate and
monitor a central
climate risk view
across in scope
risk types
Ownership
Climate Risk
Accountable Officer
Credit Risk
Accountable Officer
Market Risk
Accountable Officer
Treasury & Capital
Risk Accountable
Officer
Operational Risk
Accountable Officer
Group Head of
Sustainability
+ Read more on
pages 285-286
+ Read more on
pages 286-287
+ Read more on
pages 287-288
+ Read more on
pages 288-289
+ Read more on
page 289
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Principal risk management (continued)
Climate-related Risk Management Processes
Frequency of
assessment
Risk identification
Risk assessment
Credit Risk
Annually
Market Risk
Quarterly
Treasury and Capital Risk
Operational Risk
Various (quarterly for
pensions, IRRBB and liquidity
risk; annually for capital risk)
Annually
Identified by assessing
climate-related risk factors
across asset classes,
sectors and geographies,
and aggregating market risk
exposures from climate-
related risks.
Identified through risk
assessment activity across
certain industries and asset
classes to analyse and
assess exposures which may
be impacted by climate-
related risks.
Confirmed operational risks
associated with climate
change are included in the
Bank’s Operational Risk
Taxonomy. Climate risks are
included within the Strategic
Risk Assessment process.
Measured by using adverse
multi-asset stress scenarios
applied to individual risk
factors reflecting climate
risks across sectors,
countries and regions.
Measured as part of stress
testing and key risk indicator
monitoring.
Established reporting on
internal and external
climate-related risk events
to the Climate Risk Control
Forum. Risk tolerances for
premises and resilience risks
are reviewed so these
adequately capture climate-
related risk drivers.
Exposure in mortgage
portfolio identified through a
concentration risk
framework.
Exposure in BBPLC
Identified as part of
sovereign, portfolio and
obligor credit annual reviews.
Portfolios are monitored
through regular reporting of
climate metrics and are
assessed against mandates
and limits where appropriate
Clients in elevated risk
sectors above a threshold
exposure will have their
credit risk exposure to
Climate risk qualitatively
assessed through the Credit
Climate Lens questionnaire.
Future exposure to Climate
risk as a driver to Credit risk
is quantified through
scenario analysis and stress
testing exercises.
In addition to the Credit
Climate Lens questionnaire,
Sovereign Credit Reviews
are also carried out for
Sovereigns above a
threshold exposure to
assess their susceptibility to
Climate risks.
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Principal risk management (continued)
TCFD Climate risk
management
Credit Risk
Definition
The risk of loss to the Group from the
failure of clients, customers or
counterparties, including sovereigns, to
fully honour their financial obligations to
the Group, including the whole and timely
payment of principal, interest, collateral
and other receivables.
Climate Risk Identification
Risk identification is driven by assessing
portfolios’ sensitivity and susceptibility to
the financial and operational risks of
climate change. Sectors are categorised
into elevated and non-elevated risk. These
sectors have been identified through the
analysis of Barclays Industrial
Classifications by portfolio, informed by
results of scenario analysis exercises.
Across corporate and industrial sectors,
elevated risk sectors are those with high
exposure to both physical and transition
risks of climate change. These are defined
in the Climate Change Financial Risk and
Operational Risk (CCFOR) Policy and apply
across the Group. This assessment is
updated on an annual basis. The list of
Elevated Sectors is revisited on an annual
basis to ensure that the risks identified as
impacting the sector are still accurately
articulated and assessed, and that
emerging risks are being captured within
the assessment.
Each sector is assessed by climate risk
drivers and impacts. Physical and transition
risk drivers and impacts were designed
internally and are based on rating agencies’
climate change assessments,
recommendations of the TCFD and our
involvement in UNEP FI’s TCFD Banking
Pilot Project Phase II.
To assist in determining the level of
potential credit risk arising from climate
change for Sovereigns with material
exposure, risks are reviewed annually at a
minimum.
Climate Risk Assessment
Corporate Risk Assessment
In 2019,the Credit Climate Lens was
developed to identify and assess how
Climate Change may impact the Group’s
wholesale credit risk exposures, against
physical and transition risks.
The Credit Climate Lens review is
completed for wholesale clients operating
in elevated risk sectors with material
exposure of more than £10m (£5m for
BUK clients). It is completed by either
Banking or Credit Risk teams across all
Barclays entities.
Risk Type
Focus area
Sample question
Physical
Acute: Frequency and intensity of
extreme weather events
Reducing availability of financial
protection/insurance
What is the exposure of operations and
supporting assets to direct damage
from extreme weather events?
What is the severity of the potential lack
of insurance covering business
interruptions caused by extreme
weather events?
Transition
Regulatory, policy and supervisory
change
Does the company have an adaptation
plan in place?
Technology change
Each lens question has a threshold
assigned to it that corresponds to a rating
of Low, Moderate or High risk. These are
aggregated to provide an overall rating for
the client with rationale for the assigned
rating, and comments on both physical and
transition risks.
In 2022, a Climate Lens review was carried
out on annual review, origination or other
purpose facility review of 382 transactions
in Barclays International. In Barclays UK,
181 clients have been assessed by
Relationship Teams using the Credit
Climate Lens.
As part of Barclays ongoing focus to review
implementation and adherence to principal
risk frameworks, and our drive to develop
our capabilities in this area, the climate lens
will be evolved to further improve
implementation and to become more
quantitative.
Non-Corporate Risk Assessment
To support our scenario analysis
modelling, in 2021 we developed risk factor
assessments for Municipalities, Financial
Institutions and Non-Bank Financial
Institutions, building on initial work to
develop our Sovereign approach. Each of
these portfolios uses a risk matrix
approach across tailored physical,
transition and connected risk factors.
These factors include, for example, the
proportion of institution’s exposure to
sectors exposed to climate risk, reputation
risk scores from climate-related issues.
In addition to the risk assessment
completed for these areas, scenario
analysis and stress testing are used as
primary tools to support climate risk
assessment and the overall resilience of
Barclays’ strategy.
What is the likelihood of accelerating
contingent liabilities, with alternative
technologies displacing existing
operations and supporting assets?
Sovereign Risk Assessment
Our assessment of climate risk for
sovereigns includes a risk factors matrix
incorporating physical, transition and
connected risk factors and is part of our
ongoing risk identification as part of the
CCFOR Policy challenges, including seven
Transition Risk factors, three Physical Risk
factors and three Economic & Fiscal
Strength factors. A number of external
metrics have also been utilised, including
the University of Notre Dame’s Global
Adaptation Index and Climate Change
Performance Index – Climate Policy. These
factors are then applied to all countries
Barclays has exposure to. Sovereigns that
are most impacted to these factors are
monitored on an ongoing basis.
Climate Risk Management
On an annual basis, where an overall Credit
Climate Lens rating for a client is assessed
as Medium or High, clients are referred to
the Climate Risk team. Following their
analysis, the Climate Risk team provides
recommendations and guidance on how to
proceed, addressing any issues identified
during the EDD process and the results of
EDD are factored into credit decisions.
Information and insights gained from the
EDD and Credit Climate Lens rating
process also inform portfolio review
meetings, which itself forms part of the
overall risk appetite control framework.
Climate Risk Reporting
A Group-level Climate Risk Dashboard is
presented to the Climate Risk Committee
and Board Risk Committee on a quarterly
basis, informing senior management and
the Board of current climate risk
exposures, concentrations and to monitor
trends across both sectors, portfolios and
regions. The dashboard was updated in
2022 to incorporate learnings from the
Bank of England's Climate Biannual
Exploratory Scenario (CBES). It includes
exposure to portfolios with elevated
transition or physical risk and progress
against sector emissions targets. Climate
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Principal risk management (continued)
risk dashboards were also developed for
material legal entities in 2022.
Portfolio Reviews and Mandate & Scale
Mandate & Scale Exposure Controls are a
portfolio risk management tool and form
part of the overall risk appetite control
framework to review and control business
activities. Mandates and scales are
introduced to avoid the build-up of
adverse exposure concentrations within
portfolios through ensuring exposure is
within Barclays’ mandate (i.e. aligned with
expectations), and of an appropriate scale
(relative to the risk and reward of the
underlying activities).
Limits and triggers are put in place to avoid
concentrations that may lead to
unexpected losses detrimental to the
stability of the relevant business or the
Group. They take the broader economic
outlook, wider Group strategy, and risk/
return considerations into account and are
set for a number of sectors and products.
Climate risks have been integrated into
Mandate & Scale annual credit portfolio
reviews for elevated risk sectors since
2020. In 2021 Barclays Bank UK introduced
a flood risk mandate within the UK
Mortgage portfolio to monitor the
percentage of properties (stock) in high
flood risk areas. This mandate was
enhanced in 2022, and a high subsidence
risk mandate has also been introduced to
the UK Mortgage portfolio.
As a part of the bank’s general approach to
portfolio management, Barclays considers
macroeconomic and other drivers and
events which may impact on certain
sectors or geographies. This includes
impacts on the identified climate elevated
risk sectors and may lead to action for
specific sectors or geographies. For
example, in the oil & gas sector, we have
considered longer-term impacts from
climate transition and physical risks into
our assessments and approach to the
sector. In keeping with our overall aim to
maintain a portfolio with a high credit
quality, we take a number of
considerations into account for our oil &
gas portfolio – including location of assets,
the economic profile (profitability) of
assets, geopolitical risks, size and
resilience of counterparties, and liquidity
considerations.
Physical, transition and connected risks
arising from climate change are
considered as part of the wider risk
management decision process to account
for the potential credit risk consequences
of climate change on affected portfolios. In
2022, portfolio deep dives were conducted
to supplement the existing analysis
provided in the existing Mandate & Scale
reviews. This included identifying and
evaluating the credit risk implications of
Climate risk on elevated sectors within the
portfolio.
Market Risk
Definition
The risk of loss arising from potential
adverse changes 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.
Climate Risk Identification
Climate change may lead to Market risk
through a disorderly transition to a low-
carbon economy or via physical climate
events and shifts in supply and demand for
financial instruments, which may then
impact market prices for susceptible
sectors or countries.
Climate-related risks are determined at a
Group level and used in the Market risk
identification process.
The table below outlines the climate-related risks, transition and physical, considered for all market risks under each asset class
Asset Class
Traded credit
Securitised products
Equities
Macro (FX, rates,
commodities)
Physical Risk
Transition Risk
Country impact
Sector impact
Sector impact
Countries most susceptible
to climate change
• Sectors reliant on stable
weather conditions and
power/water supply (e.g.
agriculture, soft
commodities, tourism,
mining, manufacturing,
transportation)
• Financial protection –
insurance against
weather events
• Carbon intensive sectors:
– Primary producers (e.g. coal miner, oil and gas)
– Consumers (e.g. petrochemicals, transport)
– Supply chain (e.g. auto, retailer)
• Additional cost to meet new regulatory requirements,
financial penalties, carbon taxes, green energy subsidies
•
•
Increased capex/cost for primary producers and
consumers due to:
– Technological/regulatory-driven shifts in consumer
demand
– Tightening efficiency/emissions
Increases in cost, impaired quality of goods and speed
of delivery due to weaknesses within the supply chain,
need for alternative suppliers/products
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Principal risk management (continued)
Climate Risk Assessment
Market risk arising from climate change is
measured by applying a range of stress
scenarios, that stress the core risks
susceptible to climate change over long
and short-term horizons to individual risk
factors.
Initially a Climate Internal Stress Test
(Climate-IST) was run in 2020 to further
inform understanding of climate risks.
Market Risk performed an assessment of
the impact of a disorderly transition to a
low-carbon economy on the market risk
portfolios across Barclays Group.
In addition to the main Markets portfolios,
Cross Markets and Commodities
portfolios were also included. This risk
assessment was enabled by
enhancements in system technology
allowing the exploration of climate change
impact on less-climate risk exposed
sectors.
Market Risk continues to run such
Climate-IST scenarios every quarter, and
has further refined the existing sector/
country taxonomy to reflect the climate
risk sensitivity. Although Market Risk was
out of scope of the 2021 Bank of England
Climate Biennial Exploratory Scenario
(CBES), the existing Market Risk scenario
analysis has been more closely aligned to
the CBES scenarios.
Market Risk Climate Scenario Narrative
The scenario is designed to explore a
disorderly transition to a low-carbon
economy until 2050, assuming insufficient
progress in climate policy changes until
2030.
In 2030, the climate policy changes are put
in place at speed in order to meet the
global climate targets by 2050 which
causes global macroeconomic shock and
adverse market reaction in 2030, followed
by markets recovery in 2031 (no other risk-
off episodes until 2050):
• severe and prolonged global recession,
elevated risk premium, rise in
unemployment and borrowing cost,
sharp drop in global demand and in
economic activity, housing market
slump
• supply disruptions alongside currency
weakness and trade war causes sharp
increase in inflation. Central Banks
attempt to contain rising prices by hiking
the Bank Rate by several percentage
points. This causes the usual “safe-
havens” such as Treasuries, Gilts or
Bonds to sell off along with Equity and
Credit markets
• the scenario is meant to test the bank’s
ability to absorb a large shock by
combining Transition and Physical risks.
Stress losses arising from this scenario
measure and aggregate climate-related
risks, and are calculated quarterly.
Climate Risk Management
The pattern of stress losses arising from
the stress scenario is used to estimate and
set ongoing limits, consistent with the
Board-approved maximum stress loss
capacity for Market risk, under which
Barclays monitors and controls Market risk
arising from climate change. These limits
are reviewed on an annual basis and must
include consideration of potential portfolio
impacts arising from climate-related risks.
Furthermore, climate-related Market risk is
managed through ongoing monitoring that
is reported through the existing risk
committee structures so that key risk
indicators are monitored and escalated as
required.
Treasury and Capital Risk
Definition
Capital Risk
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
testing purposes).
Pension Risk
The risk that the Group's capital and/or
distributable earnings are reduced due to
changes in the value of the Group's
defined benefit obligations or the assets
funding these defined benefit obligations.
Liquidity Risk
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.
Interest Rate Risk in the Banking Book
(IRRBB)
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.
Climate Risk Identification
Climate change may lead to additional
levels of risk within Treasury & Capital Risk
through physical, transition or connected
climate risks. Climate related risks within
Treasury & Capital Risk are identified as
part of the climate risk register
preparation. The climate related risks are
identified using severe yet plausible
climate related scenarios to provide
qualitative and/or quantitative impacts on,
or in addition to financial risk drivers.
Climate Risk Assessment
Treasury & Capital Risk have focused on
building awareness of how the areas within
our risk oversight may be impacted by
physical, transition and connected risks,
and calibration of key indicators for regular
reporting and monitoring. The function has
continued to build upon our understanding
of climate risks, including through Barclays’
participation in CBES and the addition of
climate risk elements to internal stress
tests.
Capital Risk
Barclays’ capital position is indirectly
subject to climate risk through Group-wide
exposures across all risk types. Treasury &
Capital Risk oversees the bank’s capital
management and planning activities and
use the output of Group-wide climate
stress tests to inform our understanding
of how capital management may be
impacted. Further consideration to climate
risk has also been incorporated into the
Group’s ICAAP narrative.
Pension Risk
Pension exposures are subject to climate
stresses impacting market conditions.
Pension holdings are primarily affected by
interest rates, inflation and credit spreads
which may be impacted by longer term
climate change effects. To identify key
areas of focus pension scheme assets
have been categorised based on their
country and industry risk through the lens
of climate change.
Liquidity Risk
Barclays proactively reviews its approach
to managing funding and liquidity risks that
may arise from certain physical risks such
as extreme weather events, or transition
risks such as a move to a low-carbon
economy. An enhanced risk assessment
has been performed during 2022 to
explore the potential vulnerabilities to
certain industries and asset classes that
may be subject to a lack of available
liquidity under a climate stress scenario.
Additional scenario analysis has been
carried out during 2022 to further explore
specific climate related liquidity risks.
Further consideration to climate risk has
also been incorporated into the Group’s
ILAAP.
Interest Rate Risk in the Banking Book
(IRRBB)
Fair value positions such as those within
the Liquid Asset Buffer are exposed to
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Principal risk management (continued)
general market conditions which could
deteriorate under longer term climate
stress. Physical or transition risks may lead
to government fiscal responses that would
impact market volatility. Building on
analysis from 2021 exercises, updates
have been made to climate related
categorisation of investments and
subsequent stress methodologies specific
to climate risk reporting.
Fair value private equity positions
managed by the Principal Investments
team are most likely to be impacted by
stresses to energy markets and carbon
transition changes. The future investment
strategy of the team and long-term
revenue of these investments may be
influenced by changing climate and
legislative conditions. In line with Barclays’
strategy, the team has continued to
increase exposure to new initiatives
through the Sustainable Impact Capital
programme. At the same time the
divestment of legacy natural resource
investments has accelerated and total
exposure to the Oil & Gas sector has
significantly decreased.
Accrual Banking Book Net Interest Income
may be moderately impacted by climate
change through both physical and
transition risks. Such risks could
materialise through impact on deposit
levels and lead to potential changes in
composition and performance of asset
portfolios, pricing and changes to longer
term interest rate risk management
strategies. In 2021, an assessment was
completed focusing on the economic
impact of potential forced unwind of
structural hedges on the deposit base as a
result of significant outflows triggered by
concerns about Barclays’ climate change
credentials.
Climate Risk Management
Insights on climate-related risks and
potential impacts are incorporated as
appropriate to inform the setting of
relevant key indicators and risk limits,
which are overseen by the Treasury and
Capital Risk Committee on a quarterly
basis. Barclays’ assessment of capital and
liquidity requirements factors in climate
considerations as part of Barclays annual
ICAAP and ILAAP submissions.
Operational Risk
Definition
The risk of loss to the Group from
inadequate or failed processes, systems,
human factors or due to external events
(for example, extreme weather events)
where the root cause is not due to credit
or market risks.
Climate Risk Identification
From a climate risk perspective, Barclays is
exposed to climate change risks in its
operations, either directly or via the
operations of its suppliers. This exposure is
predominantly related to physical risks
such as extreme weather events (e.g.
cyclones, hurricanes and floods), along
with longer-term changes in weather
patterns (e.g. increased mean
temperatures, sea levels, changing rain
patterns, water stress/scarcity or drought
conditions).
The Operational Risk Framework includes
risks that are associated with climate
change as well as the activities required to
identify, measure and manage these risks
as part of the operational risk profile.
Operational Risk maintains a taxonomy of
operational risks on behalf of the Group,
which includes the operational risks across
Principal Risks (e.g. Conduct risk, Legal risk,
Model risk) as well as operational failures
associated with the financial Principal Risks
(Credit, Market, Treasury and Capital).
The Operational Risk Taxonomy forms
part of the Operational Risk Framework.
This framework is reviewed and updated,
where appropriate, on an annual basis. As
physical risk events related to extreme
weather events could impact Barclays’
operational capabilities, climate change is
already integrated into the Operational
Risk Framework. The risks categories most
likely to be impacted by physical risks are
Premises Risk and Operational Recovery
Planning.
Premises Risk
Ensures that operational risk requirements
are understood, monitored and mitigated
appropriately, and are managed to ensure
compliance with relevant legal and
regulatory requirements, including any
required authorisations, permissions and
licenses. Premises risk is managed under
the Group Property Policy and Standards,
which outline Barclays’ approach to
addressing environmental risks with
respect to the availability of operational
premises. This Policy defines a low
tolerance threshold for premises
unavailability which covers the risk of the
physical impacts of climate change, and
aims to ensure that Barclays’ premises do
not become unavailable and/or do not
affect at least one Barclays product/
service for a sustained period of time.
Additionally, any potential strategic site’s
exposure to extreme weather events is
considered. Similarly, this Policy defines no
tolerance for failures in Barclays Premises
that result, or are likely to result, in harm to
the environment.
Operational Recovery Planning
An integral part of the firm’s approach to
Operational Resilience. The purpose is to
enable Barclays to minimise the impact of
disruption when it occurs, which could be
caused by climate related events. Barclays
maintains and annually reviews recovery
plans and capabilities.
Climate Risk Assessment
Operational Risk continues to identify,
manage and measure climate risk as part
of the existing operational risk profile
through its business as usual activities.
These activities include working with
Premises and Operational Recovery
Planning Horizontal Owners to identify and
respond to any new emerging climate risk
related impacts or regulatory
requirements, and consideration of
changes to approach or taxonomy in line
with regulatory requirements. We continue
to explore different approaches to provide
a quantification assessment, albeit
challenges for quantification relating to the
lack of appropriately granular, business-
relevant data and tools remain. Quantifying
operational risk through existing
structured scenarios would allow us to
better examine and size the potential
incremental impact arising from climate
risks. However, the challenge of
determining scenarios that are business
orientated, sourcing available and relevant
information to support the effort, and
connecting the given scenario to the
idiosyncrasies of operational risk, remains
a factor under consideration.
In 2022, a third party organisation
conducted a climate risk assessment on
our mission critical buildings and data
centres. The results of the analysis
identified risks and opportunities. These
included physical and transition risks such
as flooding and market risks and
opportunities such as embedding energy
and material efficiency and installing low
carbon heating and cooling technologies.
Furthermore, the assessment identified
the potential average annual loss (AAL) to
our operational portfolio following different
climate scenarios. In a low emissions
scenario, it was estimated we have an AAL
of £40 million and in a high emissions
scenario it was estimated we could
experience an AAL of £60 million. These
findings will inform our risk management
and decision-making process.
Additionally, Barclays has a portfolio of
structured scenarios that are assessed for
Group and certain Legal Entities, for which
Operational Risk coordinates the process.
These scenarios map to the risk taxonomy
and cover a range of risks where climate
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Principal risk management (continued)
operational risk profile through business as
usual activities.
This includes working with Premises and
Operational Recovery Planning Horizontal
Owners to identify and respond to any new
emerging climate change related impacts
or regulatory requirements, and
consideration of changes to approach or
taxonomy in line with regulatory
requirements.
Reputation Risk
Definition
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.
Barclays is linked to clients across a wide
range of sectors and geographies,
including those that have the potential to
cause or contribute to significant adverse
impacts on the climate.
Climate Risk Management
Environmental and social risks are
governed and managed through our
ERMF, setting our strategic approach for
risk management by defining standards,
objectives and responsibilities for all areas
of Barclays. The ERMF is complemented
by a number of other frameworks, policies
and standards, all of which are aligned to
individual Principal Risks.
Our assessment of environmental and
social risks not only helps safeguard our
reputation, which supports longevity of the
business but also enhances our ability to
serve our clients and support them in
improving their own sustainability practices
and disclosures. Our approach to
identification, assessment/escalation and
monitoring can be located within the
Managing Impact section of this report
(from page 253) while the oversight and
management of climate-related issues are
embedded with the Barclays governance
framework (from page 141).
Credit risk management
(audited)
The risk of loss to the Group from the
failure of clients, customers or
counterparties, including sovereigns, to
fully honour their obligations to the Group,
including the whole and timely payment of
principal, interest, collateral and other
receivables.
implications could be an incremental
factor. The potential effect of climate
change has been considered qualitatively
in the latest scenario assessment cycle,
where climate has been found not to be an
immediate factor impacting most
scenarios, although greenwashing at
product level, and disclosures about our
green credentials, are two topical areas
subject to further analysis.
Climate Risk Management
The Group Property Standard outlines
Barclays’ approach to addressing climate
risks with respect to the availability of
operational premises. Additionally,
exposure to extreme weather events is
considered during the design or
refurbishment of new and existing
strategic sites.
The Operational Recovery Planning
standards outline Barclays’ requirements
to anticipate, prevent, adapt, respond to,
recover and learn from internal or external
disruption. Our focus is on continuing to
deliver Important Business Services to
customers and clients, and minimise any
impact on the wider financial system, in the
event of operational disruption. The
Operational Recovery Planning risk from
climate change is expected to manifest
through premises and supplier risk in the
first instance, and if this leads to
operational disruption, our operational
recovery planning framework would help
mitigate the impacts through invocation of
crisis management, and response and
recovery plans. Our approach to
Operational Recovery Planning evolves in
response to the changing threat
landscape, and this will include
consideration of climate change and its
associated impacts.
Barclays deploys and validates appropriate
recovery strategies for its critical
processes, including the ability to transfer
processing to alternative locations or
premises. In addition to maintaining
response plans in the event of a third party
disruption, for our third party service
providers Operational Recovery Planning
requirements are articulated through our
Supplier Control Obligations (SCOs). Each
third party service provider is required to
attest to their compliance with the SCOs
on an annual basis and further assurance is
undertaken on a risk-based approach.
Management, reporting and oversight is in
place to monitor internal and external risk
events that may be attributable to climate
change. Operational Risk continues to
identify, manage and measure climate
change risks as part of the existing
Overview
The credit risk that the Group faces arises
from wholesale and retail loans and
advances together with the counterparty
credit risk arising from derivative contracts
with clients; trading activities, including:
debt securities, settlement balances with
market counterparties, fair value through
other comprehensive income (FVOCI)
assets and reverse repurchase loans.
Credit risk management objectives are to:
• maintain a framework of controls to
oversee credit risk
• identify, assess and measure credit risk
clearly and accurately across the Group
and within each separate business, from
the level of individual facilities up to the
total portfolio
• control and plan credit risk taking in line
with external stakeholder expectations
and avoiding undesirable concentrations
• monitor credit risk and adherence to
agreed controls.
Organisation, roles and responsibilities
The first line of defence has primary
responsibility for managing credit risk
within the risk appetite and limits set by the
Risk function, supported by a defined set
of policies, standards and controls. In the
entities, business risk committees
(attended by the first line) monitor and
review the credit risk profile of each
business unit where the most material
issues are escalated to the Retail Credit
Risk Management Committee, Wholesale
Credit Risk Management Committee and
Group Risk Committee.
Wholesale and retail portfolios are managed
separately to reflect the differing nature of
the assets; wholesale balances tend to be
larger and are managed on an individual basis,
while retail balances are greater in number
but lesser in value and are, therefore,
managed in aggregated segments.
The responsibilities of the credit risk
management teams in the businesses, the
sanctioning team and other shared
services include: sanctioning new credit
agreements (principally wholesale); setting
strategies for approval of transactions
(principally retail); setting risk appetite;
monitoring risk against limits and other
parameters; maintaining robust
processes, data gathering, quality, storage
and reporting methods for effective credit
risk management; performing effective
turnaround and workout scenarios for
wholesale portfolios via dedicated
restructuring and recoveries teams;
maintaining robust collections and
recovery processes/units for retail
portfolios; and review and validation of
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Principal risk management (continued)
credit risk measurement models. The
credit risk management teams in each
legal entity are accountable to the relevant
Legal Entity CRO, who reports to the
Group CRO.
For wholesale portfolios, credit risk
managers are organised in sanctioning
teams by geography, industry and/or
product. In wholesale portfolios, credit risk
approval is undertaken by experienced
credit risk professionals operating within a
clearly defined delegated authority
framework, with only the most senior
credit officers assigned the higher levels of
delegated authority. The largest credit
exposures, which are outside the Risk
Sanctioning Unit or Risk Distribution
Committee authority, require the support
of a legal entity Senior Credit Officer. For
exposures in excess of the legal entity
Senior Credit Officer’s authority, approval
by Group Senior Credit Officer/Board Risk
Committee is also required. The Group
Credit Risk Committee, attended by legal
entity Senior Credit Officers, provides a
formal mechanism for the Group Senior
Credit Officer to exercise the highest level
of credit authority over the most material
Group single name exposures.
Credit risk mitigation
The Group employs a range of techniques
and strategies to actively mitigate credit
risks. These can broadly be divided into
three types:
• netting and set-off
• collateral
• risk transfer.
Netting and set-off
Credit risk exposures can be reduced by
applying netting and set-off. For derivative
transactions, the Group’s normal practice
is, on a legal entity basis, to enter into
standard master agreements with
counterparties (e.g. ISDAs). These master
agreements typically allow for netting of
credit risk exposure to a counterparty
resulting from derivative transactions
against the obligations to the counterparty
in the event of default, and so produce a
lower net credit exposure. These
agreements may also reduce settlement
exposure (e.g. for foreign exchange
transactions) by allowing payments on the
same day in the same currency to be set-
off against one another.
Collateral
The Group has the ability to call on
collateral in the event of default of the
counterparty, comprising:
• home loans: a fixed charge over
residential property in the form of
houses, flats and other dwellings
• wholesale lending: a fixed charge over
commercial property and other physical
assets, in various forms
• other retail lending: includes charges
over motor vehicles and other physical
assets; second lien charges over
residential property; and finance lease
receivables
• derivatives: the Group also often seeks
to enter into a margin agreement (e.g.
Credit Support Annex) with
counterparties with which the Group has
master netting agreements in place.
These annexes to master agreements
provide a mechanism for further
reducing credit risk, whereby collateral
(margin) is posted on a regular basis
(typically daily) to collateralise the mark
to market exposure of a derivative
portfolio measured on a net basis
• reverse repurchase agreements:
collateral typically comprises highly liquid
securities which have been legally
transferred to the Group subject to an
agreement to return them for a fixed
price
• financial guarantees and similar off-
balance sheet commitments: cash
collateral may be held against these
arrangements.
Risk transfer
A range of instruments including
guarantees, credit insurance, credit
derivatives and securitisation can be used
to transfer credit risk from one
counterparty to another. These mitigate
credit risk in two main ways:
• if the risk is transferred to a
counterparty which is more
creditworthy than the original
counterparty, then overall credit risk is
reduced
• where recourse to the first counterparty
remains, both counterparties must
default before a loss materialises. This is
less likely than the default of either
counterparty individually so credit risk is
reduced.
+ Detailed policies are in place to appropriately
recognise and record credit risk mitigation. For more
information, refer to pages 118 to 120 of the Barclays
PLC Pillar 3 Report 2022 (unaudited).
Governance and oversight of ECLs under
IFRS 9
The Group’s organisational structure and
internal governance processes oversee
the estimation of ECL across several
areas, including: i) setting requirements in
policy, including key assumptions and the
application of key judgements; ii) the
design and execution of models; and iii)
review of ECL results.
i) Impairment policy requirements are set
and reviewed regularly, at a minimum
annually, to maintain adherence to
accounting standards. Key judgements
inherent in policy, including the estimated
life of revolving credit facilities and the
quantitative criteria for assessing the
significant increase in credit risk (SICR), are
separately supported by analytical study. In
particular, the quantitative thresholds used
for assessing SICR are subject to a number
of internal validation criteria, particularly in
retail portfolios where thresholds decrease
as the origination Probability of Default
(PD) of each facility increases. Key policy
requirements are also typically aligned to
the Group’s credit risk management
strategy and practices, for example,
wholesale customers that are risk
managed on an individual basis are
assessed for ECL on an individual basis
upon entering Stage 3; furthermore, key
internal risk management indicators of
high risk are used to set SICR policy, for
example, retail customers identified as
high risk account management are
automatically deemed to have met the
SICR criteria.
ii) ECL is estimated in line with internal
policy requirements using models which
are validated by a qualified independent
party to the model development area, the
Independent Validation Unit (IVU), before
first use and on a regular basis, at a
minimum every three years. Each model is
designated an owner who is responsible
for:
• model maintenance: monitoring of
model performance including
backtesting by comparing predicted
ECL versus flow into stage 3 and
coverage ratios; proposing material
changes for independent IVU approval;
and recalibrating model parameters on
more timely data
• proposing post-model adjustments
(PMA) to address model weaknesses or
to account for situations where known
or expected risk factors and information
have not been considered in the
modelling process. All PMAs relating to
model deficiencies, regardless of value
are approved by IVU for a set time
period. PMAs representing Expert
Judgement are validated by Risk, as the
second line of defence and approved for
a set time period. The most material
PMAs are also approved by the CRO.
Models must also assess ECL across a
range of future economic conditions.
These economic scenarios are generated
via an independent model and ultimately
set by the Senior Scenario Review
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Principal risk management (continued)
Committee. Economic scenarios are
regenerated at a minimum twice annually
but more frequently if deemed
appropriate, and also to align with the
Group’s medium term planning exercise.
Each model used in the estimation of ECL,
including key inputs, are governed by a
series of internal controls, which include
the validation of completeness and
accuracy of data in golden source
systems, documented data
transformations and documented lineage
of data transfers between systems.
i) The Group Impairment Committee,
formed of members from both Finance
and Risk and attended by both the Group
Finance Director and the Group CRO, is
responsible for overseeing impairment
policy and practice across the Group and
will approve impairment results. Reported
results and key messages are
communicated to the BAC, which has an
oversight role and provides challenge of
key assumptions, including the basis of the
scenarios adopted. Impairment results are
then factored into management decision
making, including but not limited to,
business planning, risk appetite setting and
portfolio management.
Market risk management
(audited)
The risk of loss arising from potential
adverse changes 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.
Overview
Market risk arises primarily as a result of
client facilitation in wholesale markets,
involving market-making activities, risk
management solutions and execution of
syndications. Upon execution of a trade
with a client, the Group will look to hedge
against the risk of the trade moving in an
adverse direction. Mismatches between
client transactions and hedges result in
market risk due to changes in asset prices,
volatility or correlations.
Organisation, roles and responsibilities
Market risk in the businesses resides
primarily in Barclays International and
Treasury. These businesses have the
mandate to assume market risk. The front
office and Treasury trading desks are
responsible for managing market risk on a
day-to-day basis, where they are required
to understand and adhere to all limits
applicable to their businesses. The Market
Risk team supports the trading desks with
the day-to-day limit management of
market risk exposures through
governance processes which are outlined
in supporting market risk policies and
standards.
Market risk oversight and challenge is
provided by business committees and
Group committees, including the Market
Risk Committee (MRC).
The objectives of market risk management
are to:
• identify, understand and control market
risk by robust measurement, limit
setting, reporting and oversight
• facilitate business growth within a
controlled and transparent risk
management framework
• control market risk in the businesses
according to the allocated appetite.
To meet the above objectives, a
governance structure is in place to
manage these risks consistent with the
ERMF.
The BRC recommends market risk
appetite to the Board for their approval.
The Market Risk Principal Risk Lead (PR
Lead) is responsible for the Market Risk
Control Framework and, under delegated
authority from the Group CRO, agrees
with the business CROs a limit framework
within the context of the approved market
risk appetite.
The Market Risk Committee (MRC) reviews
and makes recommendations concerning
the group-wide market risk profile. This
includes overseeing the operation of the
Market Risk Framework and associated
policies and standards, monitoring market
and regulatory changes, and reviewing limit
utilisation levels. The committee is chaired
by the PR Lead and attendees include the
business heads of market risk and business
aligned market risk managers.
In addition to MRC, the Corporate and
Investment Bank Risk Committee (‘CIBRC’)
is the main forum in which market risk
exposures are discussed and reviewed
with senior business heads. The
Committee is chaired by the CRO of
Barclays International and meets weekly,
covering current market events, notable
market risk exposures, and key risk topics.
New business initiatives are generally
socialised at CIBRC before any changes to
risk appetite or associated limits are
considered in other governance
committees.
The head of each business is accountable
for all market risks associated with its
activities, while the head of the market risk
team covering each business is
responsible for implementing the risk
control framework for market risk.
For more information on market risk
management, refer to the Barclays PLC
Pillar 3 Report 2022 (unaudited).
Management value at risk (VaR)
VaR is an estimate of the potential loss
arising from unfavourable market
movements if the current positions were
to be held unchanged for one business
day. For internal market risk management
purposes, a historical simulation
methodology with a one-year equally
weighted historical period, at the 95%
confidence level is used for all trading
books and some banking books.
Limits are applied at the total level as well
as by risk factor type, which are then
cascaded down to particular trading desks
and businesses by the market risk
management function.
+ See the market risk performance section for a
review of management VaR.
Treasury and capital risk
management
This comprises:
Liquidity risk: 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.
Capital risk: 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 and stressed conditions
(both actual and as defined for internal
planning or regulatory testing purposes).
This also includes the risk from the Group’s
pension plans.
Interest rate risk in the banking book: 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 Treasury function manages treasury
and capital risk exposure on a day-to-day
basis with the Group Treasury Committee
acting as the principal management body.
The Treasury and Capital Risk function is
responsible for oversight and provides
insight into key capital, liquidity, interest
rate risk in the banking book (IRRBB) and
pension risk management activities.
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Principal risk management (continued)
Liquidity risk management
(audited)
Overview
The efficient management of liquidity is
essential to the Group in order to retain
the confidence of the financial markets
and maintain the sustainability of the
business. Treasury and Capital Risk have
created a framework to manage all liquidity
risk exposures under both normal and
stressed conditions. The framework is
designed to maintain liquidity resources
that are sufficient in amount, quality and
funding tenor profile to remain within the
liquidity risk appetite as expressed by the
Barclays PLC Board. The liquidity risk
appetite is monitored against both internal
and regulatory liquidity metrics.
Organisation, roles and responsibilities
Treasury has the primary responsibility for
managing liquidity risk within the set risk
appetite. Both Risk and Treasury
contribute to the production of the
Internal Liquidity Adequacy Assessment
Process (ILAAP). The Treasury and Capital
Risk function is responsible for the
management and governance of the
liquidity risk mandate, as defined by the
Board.
The framework established by Treasury
and Capital Risk is designed to deliver the
appropriate term and structure of funding,
consistent with the liquidity risk appetite
set by the Board. The framework
incorporates a range of ongoing business
management tools to monitor, limit and
stress test the Group’s balance sheet,
contingent liabilities and the recovery plan.
Limit setting and transfer pricing are tools
designed to control the level of liquidity risk
taken and drive the appropriate mix of
funds. Adherence to limits reduces the
likelihood that a liquidity stress event could
lead to an inability to meet Group’s
obligations as they fall due.
The Board approves the Group funding
plan, internal stress tests, regulatory stress
test results, recovery plan and liquidity risk
appetite. The Group Treasury Committee
is responsible for monitoring and
managing liquidity risk in line with the
Group’s funding management objectives,
funding plan and risk appetite. The
Treasury and Capital Risk Committee
monitors and reviews the liquidity risk
profile and control environment, providing
second line oversight of the management
of liquidity risk. The BRC reviews the risk
profile, and reviews liquidity risk appetite at
least annually and the impact of stress
scenarios on the Group funding plan/
forecast in order to agree the Group’s
projected funding abilities.
Capital risk management
(audited)
Overview
Capital risk is managed through ongoing
monitoring and management of the capital
position, regular stress testing and a
robust capital governance framework. The
objectives of the framework are to
maintain adequate capital for the Group
and legal entities to withstand the impact
of the risks that may arise under normal
and stressed conditions, and maintain
adequate capital to cover current and
forecast business needs and associated
risks to provide a viable and sustainable
business offering.
Organisation, roles and responsibilities
Treasury has the primary responsibility for
managing and monitoring capital
adequacy. The Treasury and Capital Risk
function provides oversight of capital risk.
Production of the Barclays PLC Internal
Capital Adequacy Assessment Process
(ICAAP) is the responsibility of Treasury.
Capital risk management is underpinned by
a control framework and policy. The capital
management strategy, outlined in the
Group and legal entity capital plans, is
developed in alignment with the control
framework and policy for capital risk, and is
implemented consistently in order to
deliver on the Group’s objectives.
The Board approves the Group capital
plan, internal stress tests and results of
regulatory stress tests, and the Group
recovery plan. The Group Treasury
Committee is responsible for monitoring
and managing capital risk in line with the
Group’s capital management objectives,
capital plan and risk frameworks. The
Treasury and Capital Risk Committee
monitors and reviews the capital risk profile
and control environment, providing
second line oversight of the management
of capital risk. The BRC reviews the risk
profile, and reviews risk appetite at least
annually and the impact of stress scenarios
on the Group capital plan/forecast in order
to agree the Group’s projected capital
adequacy.
Local management assures compliance
with an entity’s minimum regulatory capital
requirements by reporting to local Asset
and Liability Committees (ALCOs) with
oversight by the Group Treasury
Committee, as required. In 2022, Barclays
complied with all regulatory minimum
capital requirements.
Pension risk
The Group maintains a number of defined
benefit pension schemes for past and
current employees. The ability of schemes
to meet pension payments is achieved
with investments and contributions.
Pension risk arises because the market
value of pension fund assets might decline;
investment returns might reduce; or the
estimated value of pension liabilities might
increase. The Group monitors the pension
risks arising from its defined benefit
pension schemes and works with the
relevant pension fund’s trustees to
address shortfalls. In these circumstances,
the Group could be required or might
choose to make extra contributions to the
pension fund. The Group’s main defined
benefit scheme was closed to new
entrants in 2012.
Interest rate risk in the banking
book management (IRRBB)
Overview
Interest rate risk in the banking book is
driven by customer deposit taking and
lending activities, investments in the liquid
asset portfolio and funding activities. As
per the Group’s policy to remain within the
defined risk appetite, hedging strategies
are executed to mitigate the various IRRBB
risks that result from these activities.
However, the Group remains susceptible
to interest rate risk and other non-traded
market risks from the following key
sources:
• Interest rate and repricing risk: the risk
that net interest income could be
adversely impacted by a change in
interest rates, differences in the timing
of interest rate changes between assets
and liabilities, and other constraints on
interest rate changes as per product
terms and conditions.
• Customer behavioural risk: the risk that
net interest income could be adversely
impacted by the discretion that
customers and counterparties may have
in respect of being able to vary from
their contractual obligations with
Barclays. This risk is often referred to by
industry regulators as ‘embedded option
risk’.
• Investment risks in the liquid asset
portfolio: the risk that the fair value of
assets held in the liquid asset portfolio
and associated risk management
portfolios could be adversely impacted
by market volatility, creating volatility in
capital directly.
Organisation, roles and responsibilities
The entity ALCOs and/or treasury
committees, together with the Group
Treasury Committee, are responsible for
monitoring and managing IRRBB risk in line
with the Group’s management objectives
and risk frameworks. The GRC and
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Principal risk management (continued)
Treasury and Capital Risk Committee
monitors and reviews the IRRBB risk profile
and control environment, providing
second line oversight of the management
of IRRBB. The BRC reviews the interest
rate risk profile, including review of the risk
appetite at least annually and the impact of
stress scenarios on the interest rate risk of
the Group’s banking books.
In addition, the Group’s IRRBB policy sets
out the processes and key controls
required to identify all IRRBB risks arising
from banking book operations, to monitor
the risk exposures via a set of metrics with
a frequency in line with the risk
management horizon, and to manage
these risks within agreed risk appetite and
limits.
Model risk management
The potential for adverse consequences
from decisions based on incorrect or
misused model outputs and reports.
Overview
The Group uses models to support a broad
range of activities, including informing
business decisions and strategies,
measuring and limiting risk, valuing
exposures, conducting stress testing,
assessing capital adequacy, managing
client assets, and meeting reporting
requirements.
Organisation, roles and responsibilities
The Group has a dedicated Model Risk
Management (MRM) function that consists
of five teams: (i) Independent Validation
Unit (IVU), responsible for model validation
and approval; (ii) Group Model Risk
Governance , responsible for model risk
governance, controls and reporting, as well
as providing oversight for compliance of
the Model Owner community with the
Model Risk Framework; (iii) Framework
team, responsible for the Model Risk Policy
and associated standards; (iv) Strategy and
Transformation, responsible for inventory,
strategy, communications and business
management; and v) Model Risk
Measurement and Quantification (MRMQ),
responsible for the design of the
framework and methodology to measure
and, where possible, quantify model risk. It
is also responsible for the strategic
Validation Centre of Excellence (VCoE),
which is an independent quality assurance
function within MRM with the mandate to
review and challenge validation outcomes.
The Model Risk Framework consists of
the Model Risk Policy and standards. The
policy prescribes Group-wide, end-to-end
requirements for the identification,
measurement and management of model
risk, covering model documentation,
development, monitoring, annual review,
independent validation and approval,
change and reporting processes. The
policy is supported by global standards
covering model inventory, documentation,
validation, testing and monitoring,
overlays, risk appetite, and stress testing
challenger models.
The function reports to the Group CRO
and operates a global framework.
Implementation of best practice standards
is a central objective of the Group.
The key model risk management activities
include:
• Correctly identifying models across all
relevant areas of the Group, and
recording models in the Group Models
Database (GMD), the Group-wide model
inventory.
• Enforcing that every model has a model
owner who is accountable for the model.
The model owner must sign off models
prior to submission to IVU for validation
and maintain that the model presented
to IVU is and remains fit for purpose.
• Overseeing that every model is subject
to validation and approval by IVU, prior
to being used and on a continual basis.
• Defining model risk appetite in terms of
risk tolerance, and qualitative metrics
which are used to track and report
model risk.
Operational risk management
The risk of loss to the Group from
inadequate or failed processes or systems,
human factors or due to external events
(for example, fraud) where the root cause
is not due to credit or market risks.
Overview
The management of operational risk has
three key objectives:
• deliver an operational risk capability
owned and used by business leaders to
enable sound risk decisions over the
long term
• provide the frameworks, policies and
standards to enable management to
meet their risk management
responsibilities while the second line of
defence provides robust, independent,
and effective oversight and challenge
• deliver a consistent and aggregated
measurement of operational risk that
will provide clear and relevant insights,
so that the right management actions
can be taken to keep the operational risk
profile consistent with the Group’s
strategy, the stated risk appetite and
stakeholder needs.
The Group operates within a system of
internal controls that enables business to
be transacted and risk taken without
exposing it to unacceptable potential
losses or reputational damages.
Organisation, roles and responsibilities
The prime responsibility for the
management of operational risk and the
compliance with control requirements
rests within the business and functional
units where the risk arises. The operational
risk profile and control environment is
reviewed by management through
business risk committees and control
committees. Operational risk issues
escalated from these meetings are
considered through the second line of
defence review meetings. Depending on
their nature, the outputs of these
meetings are presented to the Operational
Risk Profile Forum, the Operational Risk
Committee, the BRC or the BAC. In
addition, specific reports are prepared by
Operational Risk on a regular basis for the
GRC and the BRC.
Legal entities, businesses and functions
are required to report their operational
risks on both a regular and an event-driven
basis. The reports include a profile of the
material risks that may threaten the
achievement of their objectives and the
effectiveness of key controls, operational
risk events and a review of scenarios.
The Group Head of Operational Risk is
responsible for establishing, owning and
maintaining an appropriate group-wide
Operational Risk Framework and for
overseeing the portfolio of operational risk
across the Group.
The Operational Risk function acts in a
second line of defence capacity, and is
responsible for defining and overseeing
the implementation of the framework and
monitoring the Group’s operational risk
profile. The Operational Risk function
alerts management when risk levels
exceed acceptable tolerance in order to
drive timely decision- making and actions
by the first line of defence.
Operational risk categories
Operational risks are grouped into risk
categories to support effective risk
management, measurement and
reporting. These comprise: Data
Management Risk; Financial Reporting
Risk; Fraud Risk; Information Security Risk;
Operational Recovery Planning Risk;
Payments Process Risk; People Risk;
Premises Risk; Physical Security Risk;
Change Delivery Management Risk;
Supplier Risk; Tax Risk; Technology Risk;
and Transaction Operations Risk.
In addition to the above, operational risk
encompasses risks associated with
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Principal risk management (continued)
compliance with Group Resolution
Planning Prudential regulatory
requirements.
Connected risks
Barclays also recognises that there are
certain threats/risk drivers which are
interconnected and have the potential to
impact the Group’s strategic objectives.
These are referred to as Connected Risks
and require an overarching and integrated
risk management and/or reporting
approach. The Group’s Connected Risks
include Cyber, Data, Resilience and Third-
Party Service Providers.
+ For definitions of the Group’s Operational Risk
Categories and connected risks, refer to the
management of operational risk section in the Barclays
PLC Pillar 3 Report 2022.
Conduct Risk management
The risk of poor outcomes for, or harm to,
customers, clients and markets, arising
from the delivery of the Group’s products
and services.
Overview
The Group defines, manages and
mitigates conduct risk with the objective of
providing good customer and client
outcomes and protecting market integrity.
Conduct risk incorporates market
integrity, customer protection, financial
crime and product design and review risks.
Organisation, roles and responsibilities
The Conduct Risk Management
Framework (CRMF) outlines how the
Group manages and measures its conduct
risk profile. The Group Chief Compliance
Officer is accountable for developing,
maintaining and overseeing the CRMF.
This includes defining and owning the
relevant conduct risk policies which detail
the control objectives, principles and other
core requirements for the activities of the
Group. It is the responsibility of the first line
of defence to establish controls to manage
its performance and assess conformance
to these policies and controls.
Senior managers are accountable within
their areas of responsibility for owning and
managing conduct risk in accordance with
the CRMF, as defined within their
regulatory Statement of Responsibilities.
Compliance as an independent second line
function oversees that conduct risks are
effectively identified, managed, monitored
and escalated, and has a key role in helping
Barclays achieve the right conduct
outcomes and evolve a conduct-focused
culture.
The governance of conduct risk within the
Group is fulfilled through management
committees and forums operated by the
first and second lines of defence with clear
escalation and reporting lines to the Board.
The Barclays Group and Barclays Bank
Group Risk Committee and the Barclays
Bank UK Group Risk Committee are the
primary second line governance
committees for the oversight of the
Conduct Risk Profile. The risk committees’
responsibilities include the identification
and discussion of any emerging conduct
risks exposures in their respective entities.
Conduct
By effectively managing Conduct risks, we
can continue to strengthen the culture of
Barclays.
Culture and conduct
We believe the stronger our culture, the
better the choices our people will make;
and the stronger our business will be for all
our stakeholders. While our culture helps
us reduce the impact of poor conduct on
our customers, we also do not intend to
repeat the errors of the past.
Our most senior leaders spend significant
time setting the right tone at Barclays and
our Purpose and Values are now deeply
embedded in their messages. The Barclays
Way sets out the standards and behaviour
all employees must demonstrate and
guides the execution of our business. We
also strengthen our culture with clear and
effective controls. We continue investing
to enhance our controls to support our
commitment to conducting all activities
with integrity.
+ For details of the Board's role in embedding our
Culture, Purpose, Values and Mindset, please refer to
page 154 of the Directors' Report.
The Barclays Mindset
Our Mindset acts as an operating manual
for how to get things done at Barclays. It
focuses on three key elements that are
core to our success – Empower, Challenge
and Drive. Our research shows that when
we demonstrate behaviours aligned to
these three elements, outcomes are
better, colleagues are more engaged and
they are more likely to stay longer to build
their career at Barclays.
+ For further details, see page 31 in the Strategic
Report for more information on the Barclays
Mindset.
Managing Conduct risks
See page 184 in the Directors' report in addition to pages ,
279 and 368 in the risk review section for more information
on how the Group defines, manages and mitigates Conduct
risks.
Product design and review risk
It is important that the design of our
products and services meets the needs of
clients, customers, markets as well as
being aligned with Barclays' policies. We do
this by operating two processes, which
together form our product design and
review risk framework.
We have a process that supports the
Group in the approval and implementation
of New and Amended Products and
Approval process (known as the NAPA
Process, set out in the Barclays NAPA
Policy and Standards).
This process outlines the requirements
and risk assessment standards that must
be met to help ensure that new and
amended products and services are
appropriately designed prior to their
launch.
In addition we have a complementary
process that reviews the existing portfolio
of products and services throughout their
lifecycle (known as the Product Review
Process, set out in the Barclays Product
Review Policy and Standard). This process
considers information about the
performance and operation of the product
or service through a conduct lens.
Wherever a product or service is found to
be outside appetite, the product or service
owner must seek to ensure actions are
taken to address it. These actions are
validated by functional areas, including
Legal and Compliance.
Areas of Barclays that undertake
Investment activity also operate additional
product governance processes and
controls, reflecting the higher risk of these
more complex products and the
importance of products and services
meeting the needs of our Clients.
+ The BPLC, BBPLC and BBUKPLC Board Risk
Committees review, on behalf of their respective
Boards, the management of Conduct risk and the
Conduct risk profile for their respective entities.
Please refer to the report of the BPLC Board Risk
Committee on pages 179 and 184 and the reports of
the BBPLC and BBUKPLC Board Risk Committees
within the BBPLC and BBUKPLC 2022 Annual Reports
available at home.barclays/investor-relations/reports-
and-events/annual-reports/ for more information.
Customer communications
It is important that our engagement with
our customers is open and honest and that
we treat them fairly to avoid foreseeable
harm and to make sure they are not
exploited or misled. Barclays continues to
take steps to ensure that our customers’
needs and priorities are understood before
making recommendations and that the
communications we provide allow
informed decisions to be made. We work
to achieve this through a number of
controls which focus on ensuring our
customers receive clear information in
order to understand the risks and benefits
of the products we offer. For example:
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Principal risk management (continued)
identification of legal risks by legal
professionals, engagement of legal
professionals in situations that have the
potential for legal risk, and escalation of
legal risk as necessary. Notwithstanding
these mitigating actions, the Group
operates with a level of residual legal risk,
for which the Group has limited tolerance.
Organisation, roles and responsibilities
The Group's businesses and functions
have responsibility for identifying and
escalating to the Legal Function legal risk in
their area, as well as responsibility for
adherence to control requirements.
The Legal Function organisation and
coverage model aligns legal expertise to
businesses, functions, products, activities
and geographic locations so that the
Group receives legal advice and support
from appropriate legal professionals,
working in partnership proactively to
identify, manage and escalate legal risks as
necessary.
The senior management of the Legal
Function oversees, challenges and
monitors the legal risk profile and
effectiveness of the legal risk control
environment across the Group. The Legal
Function does not sit in any of the three
lines of defence but supports them all.
Except in relation to the legal advice it
provides or procures, the Legal Function is
subject to oversight from the second line
of defence.
The Group General Counsel is responsible
for developing and maintaining a Group-
wide legal risk management framework.
This includes defining the relevant legal risk
policies, developing Group-wide risk
appetite for legal risk, and oversight of the
implementation of controls to manage and
escalate legal risk.
The legal risk profile and control
environment is reviewed by management
through business risk committees and
control committees. The Group Risk
Committee is the most senior executive
body responsible for reviewing and
monitoring the effectiveness of risk
management across the Group. Escalation
paths from this committee exist to the
Barclays PLC Board Risk Committee.
• communications are sufficient, targeted
and distributed to recipients whom
Barclays knows or reasonably believes
may stand to benefit from the
communication, and are communicated
in a manner and style that will be
understood by the average recipient (or
likely recipient),
• communications are withdrawn from
further circulation when they are no
longer accurate or fit for purpose, and
• customers do not receive inadequate
advice, misleading information,
unsuitable products or unacceptable
service.
Our processes include a review of relevant
communications which are supported by
the Compliance, Privacy and Legal
functions to help ensure we meet both
internal customer engagement standards
and we are compliant with external
regulations. Furthermore annual
mandatory training is completed by
marketing colleagues. The training covers
key customer and brand standards along
with the role and key policies set by
external regulators e.g. regulatory
requirements may require
communications to be provided that are
accessible to customers, or provide
customers with the option to 'opt out'.
Remediation and redress
Barclays recognises that customer
detriment may occur as a result of our
error, actions or inactions, and that we
must undertake appropriate activity
designed to ensure our customers are put
back in the position they would have been
in had the issue not occurred.
Remediation can be proactive, where we
have identified the issue ourselves (for
example through identifying a pattern in
customer complaints), or reactive, where
identified by a third party such as a
regulator of Barclays.
Where it is appropriate, Barclays works to
ensure the operation of consistent
principles for remediation which includes
timely notification to the relevant
regulatory bodies.
Reputation Risk management
The risk that an action, transaction,
investment, event, decision, or business
relationship will reduce trust in the Group’s
integrity and/or competence.
Overview
A reduction of trust in the Group’s integrity
and competence may reduce the
attractiveness of the Group to
stakeholders and could lead to negative
publicity, loss of revenue, regulatory or
legislative action, loss of existing and
potential client business, reduced
workforce morale and difficulties in
recruiting talent. Ultimately it may destroy
shareholder value.
Organisation, roles and responsibilities
Barclays PLC Board is the most senior
body responsible for reviewing and
monitoring the effectiveness of the
Group’s management of reputation risk.
The Group Chief Compliance Officer is
accountable for developing a Reputation
Risk Management Framework (RRMF), and
the Group Head of Public Policy and
Corporate Responsibility is responsible for
developing a reputation risk policy and
associated standards, including tolerances
against which data is monitored, reported
on and escalated, as required. The RRMF
sets out what is required to manage
reputation risk across the Group.
The primary responsibility for identifying
and managing reputation risk and
adherence to the control requirements
sits with the business and support
functions where the risk arises.
Barclays Bank Group and Barclays Bank UK
Group are required to operate within
established reputation risk appetite, and
their component businesses prepare
reports highlighting their most significant
current and potential reputation risks and
issues and how they are being managed.
These reports are a key internal source of
information for the quarterly reputation
risk reports which are prepared for
Barclays Group ExCo and reviewed by the
Group Board twice-yearly.
The Group Reputation Risk Committee is a
sub-committee of the Group Executive
Committee, authorised to manage
material reputation risks and issues as they
are brought to the attention of the
committee via relevant reputation risk
assessment and escalation processes.
Legal Risk management
The risk of loss or imposition of penalties,
damages or fines from the failure of the
Group to meet its legal obligations,
including regulatory or contractual
requirements.
Overview
The Group has no tolerance for wilful
breaches of laws, regulations or other legal
obligations. However, the multitude of laws
and regulations across the globe are highly
dynamic and their application to particular
circumstances is often unclear. This
results in a high level of inherent legal risk
which the Group seeks to mitigate through
the operation of a Group-wide legal risk
management framework, which requires
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Risk performance - Climate risk
Climate risk performance
The impact on Financial and Operational Risks arising from climate change through, physical risks, risks associated with transitioning to
a lower carbon economy and connected risks arising as a result of second order impacts of these two drivers on portfolios. risks arising
from the second order impacts of these two drivers on portfolios. As part of climate risk performance, we monitor carbon-related
assets and elevated risk sectors, which are identified as portfolios with 'elevated' exposure to the physical and transition risks of climate
change.
Carbon-related assets
We disclose concentrations of credit exposure to carbon-related assets. The TCFD recommends that carbon-related assets are those
assets tied to the energy, transportation, materials and buildings and agriculture, food and forest products sectors. All of the sectors
that the TCFD now considers to be carbon-related assets include the sectors that Barclays considers at elevated risk from the impacts
of climate change. These can be found in the table on the following page.
Elevated risk sectors
Credit exposures
Barclays is working to understand the risks associated with sectors sensitive to the impacts from climate change. Disclosing risk
management metrics and quantitative credit exposures supports this approach and our ongoing alignment with the TCFD
recommendations. The sectors highlighted blue in the table represent those that the Group considers at an elevated risk from the
impacts of climate change. However, in each sector there will exist a range of vulnerabilities and as such these figures do not represent
elevated carbon emission exposures and should not be interpreted as an indicator of relative carbon intensity. These sectors have been
identified through an analysis of Barclays Industrial Classifications by portfolio and benchmarked against external sources, with
additional input from subject matter experts.
UK Retail Mortgages
For 2022, UK Mortgage assets have been included in the table below. Mortgages do not meet the TCFD definition of a carbon-related
asset. However, Mortgages are considered carbon-related, and have been covered as part of our work to assess the financed
emissions across our portfolio and measure the baseline emissions that we finance across sectors.
Elevated risk sector
Drivers of risk
Aviation
Automotive
Cement
More stringent air emission and carbon regulations, requiring high levels of capital investment and Research &
Development (R&D) expenditure.
Policy pressure to cut emissions to meet emission requirements, requiring high levels of capital investment and R&D
expenditure. Phase out of fossil fuel vehicles and introduction of low emission zones in city centres.
Being one of the hard to abate sectors, policy pressure to cut emissions requires high levels of capital investment and R&D
expenditure.
Coal Mining and Coal
Terminals
Reduction in demand of thermal coal, as utilities transition away from fossil fuel. More stringent air emissions regulation,
resulting in higher levels of capital investment.
Chemicals
Mining (including
diversified miners)
Oil and Gas
Increasing environmental regulation, including carbon regulations. The increasing efforts to eliminate single-use plastics
and improve recycling to prevent marine pollution could also impact demand for products used in plastic manufacture.
Rising costs as a result of tighter environmental regulations and increasing water stress.
Policy pressure to cut emissions, exposure to carbon taxes and overall increasing environmental regulation of operations
and restrictions on access to new resources. Over time, falling demand for fossil fuels
Power Utilities
Policy pressure to cut emissions, leading to increased capital expenditure costs, plus potential exposure to carbon taxes.
Agriculture
Shipping
Steel
Evolving taxation on emissions may impact production methods, supply chain and farm viability. Reduced demand for meat
and dairy as a consequence of shifts in consumer behaviour. Volatile weather conditions and extreme weather events may
impact farm credit quality.
Policy pressure to cut emissions, requiring higher levels of capital investment.
Being an energy-intensive sector, the sector is exposed to the policy pressure to cut emissions and evolving air pollution
regulation
Road Haulage
Policy pressure to cut emissions, requiring high levels of capital investment.
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Risk performance - Climate risk (continued)
Carbon-related assets (Incl. sub-sector breakdown)
2022
£m
Loans &
advances
Loan commitments
Agriculture, Food and Forest Products
Agriculture
Food, Bev and Tobacco
Paper and Forest Products
Energy
Coal Mining and Coal Terminals
Oil and Gas
Power Utilities
Materials and Building
Cement
Chemicals
Construction and Materials
Homebuilding and Property Development
Manufacturing
Metals
Mining (Incl. diversified miners)
Packaging Manufacturers: Metal, Glass and Plastics
Real Estate Management and Development
Steel
Transport
Automotive
Aviation
Other Transport Services
Ports
Road Haulage
Shipping
5,639
3,765
1,669
205
5,233
—
2,752
2,481
31,610
222
584
1,574
3,513
3,406
327
201
95
21,648
40
2,937
968
465
647
95
453
309
2021
£m
Loans &
advances
Loan
commitments
Total
% Change
(1%)
9,489
1,111
7,497
881
15,207
5,192
8,925
1,090
24,352
27,910
14%
9,425
894
7,886
645
Total
15,064
4,659
9,555
850
26,578
31,811
—
12,608
13,970
36,295
160
4,377
2,128
2,121
—
15,360
16,451
67,905
382
4,961
3,702
5,634
13,110
16,516
656
2,262
314
983
2,463
409
5,718
4,081
1,428
209
3,558
—
2,365
1,193
29,945
37
498
1,416
4,014
3,326
247
152
85
10,983
32,631
20,135
184
224
10,123
13,060
5,493
2,221
1,170
87
429
723
6,461
2,686
1,817
182
882
1,032
35
3,211
879
553
622
99
671
387
45
12,477
11,830
33,336
353
4,227
1,989
2,066
45
14,842
13,023
63,281
390
4,725
3,405
6,080
12,141
15,467
553
1,769
288
9,723
227
9,129
5,133
1,663
1,181
115
419
618
800
1,921
373
29,858
262
12,340
6,012
2,216
1,803
214
1,090
1,005
7%
6%
3%
10%
5%
12%
Carbon-related assets in UK Retail Mortgages
Subtotal (Elevated risk sectors)
Carbon-related Assets Grand Total
162,263
12,240
207,682
12,103
43,321
174,366
158,113
55,561
10,851
11,315
39,872
169,428
50,723
94,524
302,206
200,545
87,621
288,166
Total Loans & Advances & Loan Commitments
398,779
395,508
794,287
361,451
345,711
707,162
Carbon-related assets / Total Loans & Advances
& Loan Commitments
52%
24%
38%
55%
25%
41%
Notes:
The scope has been widened to 1) include UK Retail Mortgages (£169bn increase in reported exposure) and 2) include all Barclays entities as opposed to just material entities (£15bn increase in reported
exposure, predominantly driven by ESHLA loans in BBUKPLC) in 2021. The prior year comparatives have been represented, in line with the expanded scope.
The carbon-related assets classification excluded £5.9bn of Fronting Stand By Letter of Credits (SBLCs) that are part of Total loans & advances commitments, since these amounts are counter-
indemnified by other lenders.
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Risk performance - Climate risk (continued)
Financing
To facilitate greater understanding and transparency of our capital markets financing, we disclose the total capital raised for clients
across all sectors using data sourced from Dealogic. We have provided the breakdown of our 2021 and 2022 financing below. Barclays
discloses the total capital raised for clients across all sectors using data sourced from Dealogic. We then align each transaction by issuer
to a sector according to the Barclays Industry Classification (BIC) we apply to that issuer. BIC is Barclays' internal sector classification
system. The industry sector categories are designated by Dealogic General and Specific Industry Group classifications. Financing
volumes are reported on a manager-proceeds basis including bonds, equities, loans and securitised bonds and no modifications have
been made by Barclays. This data represents a third party view of our financing and is subject to Dealogic’s league table methodology,
which pro-rates volume across lead-managers. We are presenting the data in this format to support transparency and comparability
but it should be noted that this data is subject to further analysis and methodological enhancements, before it is included in
BlueTrack™.
Carbon-related sectors in wholesale credit (Dealogic Industry Classification)
31.12.2022 ($m)
31.12.2021 ($m)
Agriculture, Food and Forest Products
Agriculture
Food, Bev and Tobacco
Paper and Forest Products
Energy
Coal Mining and Coal Terminals
Oil and Gas
Power Utilities
Materials and Building
Cement
Chemicals
Construction and Materials
Homebuilding and Property Development
Manufacturing
Metals
Mining (Incl. diversified miners)
Packaging Manufacturers: Metal, Glass and Plastics
Real Estate Management and Development
Steel
Transport
Automotive
Aviation
Other Transport Services
Ports
Road Haulage
Shipping
Carbon-related assets in UK Retail Mortgages
Carbon-related Sectors Grand Total
Capital Market Financing Total
9,486
-
8,609
877
43,042
-
9,747
33,295
33,750
200
2,800
3,006
760
14,062
744
436
33
11,271
438
9,904
3,865
2,132
2,648
-
-
1,259
-
96,182
18,416
382
14,997
3,037
39,294
-
12,558
26,736
63,473
-
4,876
3,181
976
28,482
1,130
2,515
932
20,860
521
23,559
9,961
6,221
3,947
124
1,062
2,244
-
144,742
374,899
549,118
Financing to Carbon-related Sector over Total Capital Market Financing
26 %
26 %
% Change (2022
vs. 2021)
(48) %
10 %
(47) %
(58) %
-
(34) %
(32) %
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Risk performance - Climate risk (continued)
Subsidence: Total Volume of stock (as % of total UK Mortgage
book) per risk band
Subsidence is driven by the interplay of precipitation, temperature
and soil type factors, which result in volumetric changes to the
soil. Increased volatility in weather conditions, as a result of
climate change, contributes to the acceleration of subsidence
impacts. Some areas, particularly those with high concentrations
of clay soil (i.e. London), are more susceptible to subsidence. This
shrink-swell impact can cause localised property level impacts,
resulting in impacts to the valuation of a property, or impacts to
affordability through remediation costs and high insurance
premiums.
In 2022 Barclays on-boarded a third party to support climate risk
data enhancements within the UK Mortgages portfolio, which
included the ability to map the UK Mortgage portfolio to
subsidence risk bands based on the near surface subsidence
hazard level. The scoring is based on soil properties, in particular
the extent to which the soil will shrink under hot and dry weather
conditions, as well as the predicted temperature and probability of
extreme rainfall. These variables are combined with subsidence
claims per postcode to generate a pseudo-quantitative score,
where a property in class 10 is around ten times as likely as a
property in class 1 to make a subsidence claim.
Flood: Total Volume of stock (as % of total UK Mortgage book)
per risk band
Flooding in the UK is forecast to increase over time, with the
potential for this increase to accelerate if greenhouse gas
emissions are not reduced. The increased risk of flooding has the
potential to impact the valuation of properties directly, as well as
indirectly where a particular area becomes high risk and property
demand falls. Remediation costs, high insurance premiums or
potential lack of insurance coverage have the potential to impact
affordability.
In 2022, Barclays on-boarded a third party to support climate risk
data enhancements within the UK Mortgages portfolio, this
resulted in improvements in granularity, moving from postcode
level to property level flood data. Flood Risk bands are based on
average annual loss, generated using flood hazard frequency and
flood depth from tidal, surface, pluvial and fluvial flooding and
accounting for the mitigating impact of flood defences where
these are present. Properties in the Moderate and High Risk bands
are expected to face above average insurance costs given their
elevated exposure to flood risk. Those within the Very High band
are considered likely to cede to Flood Re.
As at 30 September 2022
As at 30 September 2022
Risk Band
1
2
3
4
5
6
7
8
9
10
Missing
Risk Band
Negligible
Very Low
Volume %
9.5%
Low
Moderate
High
Very High
Missing
35.3%
23.0%
4.6%
4.6%
3.3%
2.4%
0.0%
0.2%
9.9%
7.0%
Volume %
78.8%
8.0%
2.0%
1.8%
2.8%
1.3%
5.4%
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Risk performance - Credit risk
Credit risk
Credit risk: summary of contents
Credit risk represents a significant risk and mainly arises
from exposure to wholesale and retail loans and advances
together with the counterparty credit risk arising from
derivative contracts entered into with clients.
This section outlines the expected credit loss allowances,
the movements in allowances during the period, material
management adjustments to model output and
measurement uncertainty and sensitivity analysis.
The Group reviews and monitors risk concentrations in a
variety of ways. This section outlines performance against
key concentration risks.
Credit risk monitors exposure performance across a range
of significant portfolios.
The Group monitors exposures to assets where there is a
heightened likelihood of default and assets where an actual
default has occurred. From time to time, suspension of
certain aspects of client credit agreements are agreed,
generally during temporary periods of financial difficulties
where the Group is confident that the client will be able to
remedy the suspension. This section outlines the current
exposure to assets with this treatment.
Credit risk overview and summary of performance
Maximum exposure and effects of netting, collateral and risk
transfer
Expected Credit Losses
– Loans and advances at amortised cost by stage
– Loans and advances at amortised cost by product
– Movement in gross exposure and impairment allowance for
loans and advances at amortised cost
– Stage 2 decomposition
– Stage 3 decomposition
Management adjustments to models for impairment
Measurement uncertainty and sensitivity analysis
Analysis of the concentration of credit risk
– Geographic concentrations
– Industry concentrations
Approach to management and representation of credit quality
– Asset credit quality
– Debt securities
– Balance sheet credit quality
– Credit exposures by internal PD grade
Analysis of specific portfolios and asset types
– Secured home loans
– Credit cards, unsecured loans and other retail lending
– Government supported loans
Forbearance
– Retail forbearance programmes
– Wholesale forbearance programmes
This section provides an analysis of credit risk on debt
securities and derivatives.
Analysis of debt securities
Analysis of derivatives
Page
301
302
304
304
306
308
313
314
315
317
326
326
326
328
328
328
329
331
333
333
335
336
337
338
339
339
340
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Risk performance - Credit risk (continued)
Charge
Credit impairment charges were £1,220m
(2021: £(653)m release). The charges
reflect an updated macroeconomic
scenario together with a partial return to
more normalised levels of customer
behaviour.
Management Adjustments
Macroeconomic uncertainty PMAs at 31
December 2022 amount to £317m (2021:
£1,692m). The reduction is informed by the
release of COVID-19 related adjustments
as credit performance stabilises at or below
pre-pandemic levels which is reflected in
the models, and a rebuild of certain models
to better capture the macroeconomic
outlook. Refer to the Management
adjustment to models for impairment
section on page 315 for further details.
+ Refer to the Management adjustment to models for
impairment section on page 315 for further details.
Climate
Whilst there have been no separately
identifiable charges relating to climate risk
in the 2022 reported ECL, it is
acknowledged that impairment could
increase over time as risks become more
tangible and impact consumers and clients
through physical risk or via impacts from
the transition to a low carbon economy.
+ Further detail can be found in the Financial
statements section in Note 8 Credit impairment
charges/(releases). Description of terminology can
be found in the glossary, available at home.barclays/
annualreport.
+ Refer to credit risk management section for the
details of governance, policies and procedures.
Credit risk
All disclosures in this section are unaudited
unless otherwise stated.
Overview
Credit risk represents a significant risk to
the Group and mainly arises from exposure
to wholesale and retail loans and advances
together with the counterparty credit risk
arising from derivative contracts entered
with clients.
Credit risk disclosures include many of the
recommendations of the Taskforce on
Disclosures about Expected Credit Losses
(DECL) and it is expected that relevant
disclosures will continue to be developed in
future periods.
Credit risk disclosures exclude other
financial assets not subject to credit risk,
mainly equity securities. For off-balance
sheet exposures certain contingent
liabilities not subject to credit risk such as
performance guarantees are excluded.
Summary of performance in the
period
Loans
Gross loans and advances at amortised
cost to customers and banks have
increased by £37bn compared to £367bn in
2021. This includes £14bn increase in debt
securities driven by Treasury investments.
Of the remaining growth, £21bn is
attributable to strong lending activity in
investment banking and home loans.
Further, £9bn in credit cards and unsecured
lending is driven by increased customer
spending and strategic acquisitions.
Maximum exposure
The Group’s net exposure to credit risk
increased 13% to £1,033bn (2021: £912bn)
which is mainly driven by increase in off-
balance sheet loan commitments (£53bn),
cash collateral and settlement balances
(£20bn), cash held at central banks (£18bn)
and debt securities issued by governments
(£13bn), all of which are considered to be
lower risk. Overall, the extent to which the
Group held mitigation against its total
exposure remained stable at 44% (2021:
44%).
Credit quality
A gradual increase in delinquencies has
been observed driven by resumption of
more regular spend activity in retail. A range
of activities are in progress to protect our
existing defensive positioning against the
current macroeconomic headwinds.
Gross exposures for government
supported loan schemes stands at £8bn as
at 2022 (2021: £11.4bn).
In wholesale, loans to high-risk sectors as
well as the broader portfolio benefited from
high-quality exposure and credit
protection.
+ Further analysis on the credit quality of assets is
presented in the approach to management and
representation of credit quality section.
Stage Decomposition
A net increase of £5.6bn is observed in
Stage 2 gross exposures driven by a weaker
macroeconomic forecast in wholesale
lending (£4.5bn) and normalisation of PDs in
retail lending (£1.1bn), predominantly credit
cards.
Stage 3 balances have decreased by £0.2bn
to £7.1bn compared to 2021 primarily
driven by write-offs partially offset by
delinquencies in retail unsecured lending.
+ Refer to pages 313 to 314 for further details.
Scenario
During the year, the economic risk from the
COVID-19 pandemic has receded;
however, economic uncertainty linked to
high inflation in major economies and
heightened geopolitical tensions persists.
For Q422, macroeconomic scenarios have
been refreshed and are designed around a
broad range of economic outcomes. The
Downside 2 scenario has been updated
with reference to the most recent BoE
Annual Cyclical Scenarios (ACS) stress test.
This has resulted in a movement in weights
from the upside scenarios to the downside
scenarios.
ECL
Impairment allowances on loans and
advances at amortised cost including off-
balance sheet has decreased to £6,175m
(2021:£6,284m) primarily driven by write-
offs. On-balance sheet coverage has
reduced to 1.4% (2021: 1.6%) due to
movement in portfolio mix towards lower
ECL balances, revised recovery
expectations and evolving macroeconomic
scenarios. Coverage levels remain strong.
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Risk performance - Credit risk (continued)
Maximum exposure and effects of netting, collateral and risk transfer
The following tables present a reconciliation between the Group's maximum exposure and its net exposure to credit risk, reflecting the
financial effects of risk mitigation reducing the Group's exposure.
The Group mitigates the credit risk to which it is exposed through netting and set-off, collateral and risk transfer. Further detail on the
Group’s policies to each of these forms of credit enhancement is presented on pages 118 to 120 of the Barclays PLC Pillar 3 Report
2022 (unaudited).
Collateral obtained
Where collateral has been obtained in the event of default, the Group does not, ordinarily, use such assets for its own operations and
they are usually sold on a timely basis. The carrying value of assets held by the Group as at 31 December 2022, as a result of the
enforcement of collateral, was £31m (2021: £22m).
Maximum exposure and effects of netting, collateral and risk transfer (audited)
As at 31 December 2022
On-balance sheet:
Cash and balances at central banks
Cash collateral and settlement balances
Loans and advances at amortised cost:
Home loans
Credit cards, unsecured loans and other retail lending
Wholesale loans
Total loans and advances at amortised cost
Of which credit-impaired (Stage 3):
Home loans
Credit cards, unsecured loans and other retail lending
Wholesale loans
Total credit-impaired loans and advances at amortised cost
Reverse repurchase agreements and other similar secured lending
Trading portfolio assets:
Debt securities
Traded loans
Total trading portfolio assets
Financial assets at fair value through the income statement:
Loans and advances
Debt securities
Reverse repurchase agreements
Other financial assets
Maximum
exposure
Netting and
set-off
Cash
collateral
Non-cash
collateral
£m
—
—
£m
—
—
Risk transfer Net exposure
£m
£m
—
256,351
—
112,597
£m
256,351
112,597
173,770
50,704
£m
—
—
—
—
(328) (173,308)
(98)
36
(1,220)
(4,161)
(243)
45,080
174,305
(4,442)
(660)
(61,335)
(17,367)
90,501
398,779
(4,442)
(2,208) (238,804)
(17,708) 135,617
2,000
844
2,023
4,867
776
55,475
13,198
68,673
39,429
3,249
164,681
118
—
—
—
—
—
—
—
—
—
—
—
—
—
(1)
(1,996)
(32)
(6)
(323)
(742)
(39)
(3,061)
—
—
—
—
(776)
(530)
(250)
(780)
—
(3)
(709)
(712)
—
3
486
566
1,055
—
—
54,945
(48)
12,900
(48)
67,845
(17)
(31,544)
(9)
—
(321)
(3,672) (160,347)
—
—
—
—
—
7,859
2,928
662
118
(3,689) (192,212)
(9)
11,567
Total financial assets at fair value through the income statement
207,477
Derivative financial instruments
302,380
(238,337)
(34,547)
(11,434)
(7,275)
10,787
Financial assets at fair value through other comprehensive income
Other assets
Total on-balance sheet
Off-balance sheet:
Contingent liabilities
Loan commitments
Total off-balance sheet
65,054
1,656
—
—
—
—
(222)
(711)
64,121
—
—
1,656
1,413,743
(242,779)
(40,444) (444,228)
(25,751) 660,541
24,205
395,508
419,713
—
—
—
(1,295)
(1,596)
(280)
21,034
(129)
(41,917)
(1,666) 351,796
(1,424)
(43,513)
(1,946) 372,830
Total
1,833,456
(242,779)
(41,868) (487,741)
(27,697) 1,033,371
Off-balance sheet exposures are shown gross of provisions of £583m (2021: £542m). See Note 25 for further details. In addition to the
above, the Group holds forward starting reverse repos with notional contract amounts of £48.4bn (2021: £39.3bn). These balances are
fully collateralised. Wholesale loans and advances at amortised cost include £8bn (2021: £11.4bn) of BBLS, CBILS and CLBILS
supported by UK government guarantees of £7.6bn (2021: £11bn), which are included within the Risk transfer column in the table. For
further information on credit risk mitigation techniques, refer to the Credit risk management section.
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Risk performance - Credit risk (continued)
Maximum exposure and effects of netting, collateral and risk transfer (audited)
Maximum
exposure
Netting and
set-off
Cash
collateral
Non-cash
collateral
As at 31 December 2021
On-balance sheet:
Cash and balances at central banks
Cash collateral and settlement balances
Loans and advances at amortised cost:
Home loans
Credit cards, unsecured loans and other retail lending
Wholesale loans
Total loans and advances at amortised cost
Of which credit-impaired (Stage 3):
Home loans
Credit cards, unsecured loans and other retail lending
Wholesale loans
Total credit-impaired loans and advances at amortised cost
Reverse repurchase agreements and other similar secured lending
Trading portfolio assets:
Debt securities
Traded loans
Total trading portfolio assets
Financial assets at fair value through the income statement:
Loans and advances
Debt securities
Reverse repurchase agreements
Other financial assets
£m
238,574
92,542
169,205
41,793
150,453
361,451
1,725
828
2,161
4,714
3,227
50,864
12,525
63,389
38,667
2,305
145,014
111
Total financial assets at fair value through the income statement
186,097
£m
—
—
—
—
£m
—
—
£m
—
—
Risk transfer Net exposure
£m
£m
—
238,574
—
92,542
(339)
(168,627)
(1,050)
(4,560)
(146)
(252)
93
35,931
(5,001)
(128)
(42,691)
(23,104)
79,529
(5,001)
(1,517)
(215,878)
(23,502) 115,553
—
—
—
—
—
—
—
—
—
—
—
—
—
(11)
(29)
(1)
(41)
—
—
—
—
—
—
(1,714)
(229)
(717)
(2,660)
(3,227)
(461)
(268)
(729)
(31,263)
(319)
(1,428)
(143,057)
—
—
(1,428)
(174,639)
—
(3)
(765)
(768)
—
—
—
—
—
—
—
—
—
—
567
678
1,245
—
50,403
12,257
62,660
7,404
1,986
529
111
10,030
Derivative financial instruments
262,572
(202,519)
(34,598)
(5,887)
(5,738)
13,830
Financial assets at fair value through other comprehensive income
Other assets
Total on-balance sheet
Off-balance sheet:
Contingent liabilities
Loan commitments
Total off-balance sheet
Total
60,851
1,212
—
—
—
—
(53)
(1,164)
59,634
—
—
1,212
1,269,915
(207,520)
(37,543)
(400,413)
(30,404) 594,035
21,346
345,711
367,057
—
—
—
(906)
(1,367)
(256)
18,817
(141)
(44,777)
(1,668) 299,125
(1,047)
(46,144)
(1,924) 317,942
1,636,972
(207,520)
(38,590)
(446,557)
(32,328) 911,977
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Risk performance - Credit risk (continued)
Expected Credit Losses
Loans and advances at amortised cost by stage
The table below presents a stage allocation and business segment analysis of loans and advances at amortised cost by gross exposure,
impairment allowance, impairment charge and coverage ratio as at 31 December 2022. Also included are stage allocation of off-
balance sheet loan commitments and financial guarantee contracts by gross exposure, impairment allowance and coverage as at 31
December 2022.
Impairment allowance under IFRS 9 considers both the drawn and the undrawn counterparty exposure. For retail portfolios, the total
impairment allowance is allocated to gross loans and advances to the extent allowance does not exceed the drawn exposure and any
excess is reported on the liabilities side of the balance sheet as a provision. For wholesale portfolios, impairment allowance on undrawn
exposure is reported on the liability side of the balance sheet as a provision.
Loans and advances at amortised cost by stage (audited)
Gross exposure
Impairment allowance
As at 31 December 2022
Barclays UK
Barclays International
Head Office
Stage 1
Stage 2
Stage 3
£m
£m
£m
Total
£m
160,424
24,837
2,711
187,972
33,735
3,644
4,399
252
1,793
39,927
661
4,557
Total Barclays Group retail
197,803
29,488
5,165
232,456
Barclays UK
34,858
2,954
805
38,617
Barclays International
117,692
14,298
1,098
133,088
192
—
18
210
152,742
17,252
1,921
171,915
Stage 1
Stage 2
Stage 3
Total
Net exposure
£m
232
392
3
627
129
301
—
430
£m
718
1,200
24
£m
485
949
359
£m
£m
1,435
186,537
2,541
37,386
386
4,171
1,942
1,793
4,362
228,094
109
265
—
374
96
312
18
426
334
38,283
878
132,210
18
192
1,230
170,685
Head Office
Total Barclays Group wholesalea
Total loans and advances at
amortised cost
Off-balance sheet loan
commitments and financial
guarantee contractsb
Totalc
As at 31 December 2022
Barclays UK
Barclays International
Head Office
Total Barclays Group retail
Barclays UK
Barclays International
Head Office
Total Barclays Group wholesalea
Total loans and advances at
amortised cost
Off-balance sheet loan
commitments and financial
guarantee contractsb
Other financial assets subject to
impairmentc
Totald
350,545
46,740
7,086
404,371
1,057
2,316
2,219
5,592
398,779
372,945
723,490
30,694
77,434
1,180
404,819
8,266
809,190
245
1,302
315
2,631
23
583
404,236
2,242
6,175
803,015
Coverage ratio
Stage 1
Stage 2
Stage 3
Total
Loan impairment charge and
loan loss rate
Loan
impairment
charge/
(release)
Loan loss
rate
%
0.1
1.2
0.1
0.3
0.4
0.3
—
0.3
0.3
%
2.9
27.3
9.5
6.6
3.7
1.9
—
2.2
5.0
%
17.9
52.9
54.3
34.7
11.9
28.4
100
22.2
31.3
%
0.8
6.4
8.5
1.9
0.9
0.7
8.6
0.7
1.4
0.1
1.0
1.9
0.1
bps
9
191
40
27
10
14
29
£m
169
763
—
932
106
127
—
233
1,165
18
37
0.2
3.4
27.1
0.8
1,220
Notes
a
Includes Wealth and Private Banking exposures measured on an individual customer exposure basis, and excludes Business Banking exposures, including lending under the government backed Bounce
Back Loan Scheme (BBLS) of £6.6bn that are managed on a collective basis and reported within BUK Retail. The net impact is a difference in total exposure of £3.8bn of balances reported as wholesale
loans in the Loans and advances at amortised cost by product disclosure.
b Excludes loan commitments and financial guarantees of £14.9bn carried at fair value.
c Other financial assets subject to impairment not included in the table above include cash collateral and settlement balances, financial assets at fair value through other comprehensive income and
other assets. These have a total gross exposure of £180.1bn and impairment allowance of £163m. This comprises £10m ECL on £178.4bn Stage 1 assets, £9m on £1.5bn Stage 2 fair value through
other comprehensive income assets, other assets, cash collateral and settlement assets and £144m on £149m Stage 3 other assets.
d The loan loss rate is 30bps after applying the total impairment charge of £1,220m
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Risk performance - Credit risk (continued)
Loans and advances at amortised cost by stage (audited)
Gross exposure
Impairment allowance
As at 31 December 2021
Barclays UK
Barclays International
Head Office
Stage 1
Stage 2
Stage 3
£m
£m
£m
Total
£m
160,695
22,779
2,915
186,389
25,981
3,735
2,691
429
1,566
30,238
705
4,869
Total Barclays Group retail
190,411
25,899
5,186
221,496
35,571
92,341
542
1,917
13,275
969
38,457
1,059
106,675
2
21
565
128,454
15,194
2,049
145,697
Stage 1
Stage 2
Stage 3
Total
Net exposure
£m
261
603
2
866
153
187
—
340
£m
949
795
36
£m
728
858
347
£m
£m
1,938
184,451
2,256
27,982
385
4,484
1,780
1,933
4,579
216,917
43
192
—
235
111
458
19
588
307
38,150
837
105,838
19
546
1,163
144,534
Barclays UK
Barclays International
Head Office
Total Barclays Group wholesalea
Total loans and advances at
amortised cost
Off-balance sheet loan
commitments and financial
guarantee contractsb
Totalc
As at 31 December 2021
Barclays UK
Barclays International
Head Office
Total Barclays Group retail
Barclays UK
Barclays International
Head Office
Total Barclays Group wholesalea
Total loans and advances at
amortised cost
Off-balance sheet loan
commitments and financial
guarantee contractsb
Other financial assets subject to
impairmentc
Total
318,865
41,093
7,235
367,193
1,206
2,015
2,521
5,742
361,451
312,142
631,007
34,815
75,908
1,298
348,255
8,533
715,448
217
1,423
302
2,317
23
542
347,713
2,544
6,284
709,164
Coverage ratio
Stage 1
Stage 2
Stage 3
Total
%
0.2
2.3
0.1
0.5
0.4
0.2
—
0.3
0.4
%
4.2
29.5
8.4
6.9
2.2
1.4
—
1.5
4.9
%
25.0
54.8
49.2
37.3
11.5
43.2
90.5
28.7
34.8
%
1.0
7.5
7.9
2.1
0.8
0.8
3.4
0.8
1.6
Loan impairment charge and
loan loss rate
Loan
impairment
charge
Loan loss
rate
£m
(227)
181
—
(46)
122
(197)
—
(75)
(121)
bps
—
60
—
—
32
—
—
—
—
0.1
0.9
1.8
0.2
(514)
0.2
3.1
29.8
0.9
(18)
(653)
Notes
a
Included in the above analysis are Wealth and Private Banking exposures measured on an individual customer exposure basis, and excludes Business Banking exposures including BBLS of £9.4bn that
are managed on a collective basis and reported within BUK Retail. The net impact is a difference in total exposure of £6.0bn of balances reported as wholesale loans in the Loans and advances at
amortised cost by product disclosure.
b Excludes loan commitments and financial guarantees of £18.8bn carried at fair value.
c Other financial assets subject to impairment not included in the table above include cash collateral and settlement balances, financial assets at fair value through other comprehensive income and
other assets. These have a total gross exposure of £155.2bn and impairment allowance of £114m. This comprises £6m ECL on £154.9bn Stage 1 assets, £1m on £0.157bn Stage 2 fair value through
other comprehensive income assets, cash collateral and settlement balances and £107m on £110m Stage 3 other assets.
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Risk performance - Credit risk (continued)
Loans and advances at amortised cost by product (audited)
The table below presents a breakdown of loans and advances at amortised cost and the impairment allowance with stage allocation by
asset classification.
Loans and advances at amortised cost by product (audited)
As at 31 December 2022
Gross exposure
Home loans
Credit cards, unsecured loans and other retail lending
Wholesale loans
Total
Impairment allowance
Home loans
Credit cards, unsecured loans and other retail lending
Wholesale loans
Total
Net exposure
Home loans
Credit cards, unsecured loans and other retail lending
Wholesale loans
Total
Coverage ratio
Home loans
Credit cards, unsecured loans and other retail lending
Wholesale loans
Total
As at 31 December 2021
Gross exposure
Home loans
Credit cards, unsecured loans and other retail lending
Wholesale loans
Total
Impairment allowance
Home loans
Credit cards, unsecured loans and other retail lending
Wholesale loans
Total
Net exposure
Home loans
Credit cards, unsecured loans and other retail lending
Wholesale loans
Total
Coverage ratio
Home loans
Credit cards, unsecured loans and other retail lending
Wholesale loans
Total
Stage 1 Not past due
Stage 2
<=30 days
past due
>30 days past
due
£m
£m
£m
153,672
15,990
1,684
44,175
152,698
350,545
7,126
20,194
43,310
397
150
2,231
1,199
29
582
446
1,057
53
1,483
403
1,939
11
129
6
146
153,643
15,937
1,673
43,593
152,252
349,488
5,643
19,791
41,371
%
—
1.3
0.3
0.3
%
0.3
20.8
2.0
4.5
£m
£m
148,058
17,133
37,840
132,967
318,865
5,102
15,246
37,481
268
144
2,085
%
0.7
32.5
4.0
6.5
£m
1,660
300
306
19
824
363
1,206
46
1,493
248
1,787
6
85
4
95
148,039
17,087
1,654
37,016
132,604
317,659
3,609
14,998
35,694
215
302
2,266
1,346
2,171
1,213
%
—
2.2
0.3
0.4
%
0.3
29.3
1.6
4.8
%
0.4
28.3
1.3
4.2
%
1.0
49.6
0.8
9.9
£m
526
576
97
9
220
2
231
517
356
95
968
%
1.7
38.2
2.1
19.3
£m
707
248
391
7
123
3
133
700
125
388
Total
Stage 3
Total
£m
£m
£m
18,200
8,099
20,441
46,740
73
1,832
411
2,316
18,127
6,267
20,030
44,424
%
0.4
22.6
2.0
5.0
2,414
174,286
2,122
54,396
2,550
175,689
7,086
404,371
414
1,278
527
2,219
516
3,692
1,384
5,592
2,000
173,770
844
50,704
2,023
174,305
4,867
398,779
%
17.1
60.2
20.7
31.3
%
0.3
6.8
0.8
1.4
£m
£m
£m
19,500
5,650
15,943
41,093
59
1,701
255
2,015
19,441
3,949
15,688
39,078
%
0.3
30.1
1.6
4.9
2,122
169,680
2,332
45,822
2,781
151,691
7,235
367,193
397
1,504
620
2,521
475
4,029
1,238
5,742
1,725
169,205
828
41,793
2,161
150,453
4,714
361,451
%
18.7
64.5
22.3
34.8
%
0.3
8.8
0.8
1.6
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Risk performance - Credit risk (continued)
Loans and advances at amortised cost by selected sectors
The table below presents a breakdown of drawn exposure and impairment allowance for loans and advances at amortised cost with
stage allocation for selected industry sectors within the wholesale loans portfolio. As the nature of macroeconomic uncertainty has
evolved from the COVID-19 pandemic towards high inflation, supply chain constraints and consumer demand headwinds, so has the
selected population under management focus. The credit risk industry concentration disclosure in the analysis of the concentration of
credit risk section represents all the industry categories and the below only covers a subset of that table.
The gross loans and advances to selected sectors has declined during the year. The increased provisions is informed by the current
macroeconomic outlook and underlying portfolio performance. The wholesale portfolio also benefits from a hedge protection
programme that enables effective risk management against credit losses. An additional £115m (December 2021: £123m) impairment
allowance has been applied to the undrawn exposures not included in the table below
Loans and advances at amortised cost by selected sectors
Gross exposure
Impairment allowance
Stage 1
Stage 2
Stage 3
Stage 1
Stage 2
Stage 3
Total
As at 31 December 2022
Autos
Consumer Manufacture
Discretionary retail and wholesale
Hospitality and leisure
Passenger travel
Real Estate
Steel and Aluminium manufacturers
Total
Total of wholesale exposures (%)
As at 31 December 2021
Autos
Consumer Manufacture
Discretionary retail and wholesale
Hospitality and leisure
Passenger travel
Real Estate
Steel and Aluminium manufacturers
Total
Total of wholesale exposures (%)
£m
881
3,845
5,143
3,902
744
13,042
486
28,043
18 %
£m
194
1,729
1,711
1,316
267
3,049
85
8,351
41 %
Total
£m
1,106
5,773
7,103
5,647
1,062
16,590
589
£m
31
199
249
429
51
499
18
£m
6
45
41
40
9
91
7
£m
5
41
37
31
7
66
1
1,476
37,870
58 %
22 %
239
54 %
188
46 %
£m
6
46
51
70
13
123
8
317
60 %
£m
17
132
129
141
29
280
16
744
54 %
Gross exposure
Impairment allowance
Stage 1
Stage 2
Stage 3
£m
656
3,904
5,413
4,348
856
13,620
415
29,212
22 %
£m
295
1,304
1,197
1,613
285
3,314
75
8,083
51 %
£m
2
211
230
384
143
518
6
1,494
54 %
Total
£m
953
5,419
6,840
6,345
1,284
17,452
496
38,789
26 %
Stage 1
Stage 2
Stage 3
Total
£m
3
18
47
28
30
65
2
£m
3
22
20
33
8
53
3
£m
0
43
54
44
40
93
1
193
53 %
142
56 %
275
44 %
£m
6
83
121
105
78
211
6
610
49 %
Exposure to UK Commercial Real Estate (CRE) £9.7bn (2021: £10bna) remained stable and was predominantly in Stage1 81% (2021:
78%). The loan portfolio was well collateralised, hence a low coverage of 1.1% (ECL: £0.1bn). Exposure at Stage 3 was 2% (2021: 3%)
with a coverage ratio of 12% (2021: 18%).
However, UK CRE has been included within selected sector scoping as the broader real estate sector remains under pressure due to
pricing and affordability concerns, as well as construction input costs and supply chain issues adding to the uncertainty, in particular
across non-investment grade exposures.
The coverage ratio for selected sectors has increased from 1.6% as at 31 December 2021 to 2.0% as at 31 December 2022. Non-
default coverage ratio has increased from 0.9% as at 31 December 2021 to 1.2% as at 31 December 2022.
Note
a From 2022, Barclays has enhanced the process of identifying UK CRE exposures.
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Risk performance - Credit risk (continued)
Movement in gross exposures and impairment allowance including provisions for loan commitments and
financial guarantees
The following tables present a reconciliation of the opening to the closing balance of the exposure and impairment allowance. An
explanation of the methodology used to determine credit impairment provisions is included in Note 8. Transfers between stages in the
tables have been reflected as if they had taken place at the beginning of the year. The movements are measured over a 12-month
period.
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Risk performance - Credit risk (continued)
Loans and advances at amortised cost (audited)
Home loans
As at 1 January 2022
Transfers from Stage 1 to Stage 2
Transfers from Stage 2 to Stage 1
Transfers to Stage 3
Transfers from Stage 3
Business activity in the yeara
Refinements to models used for calculation
Net drawdowns, repayments, net re-measurement
and movements due to exposure and risk parameter
changes
Final repaymentsb
Disposals
Write-offsc
As at 31 December 2022d
Credit cards, unsecured loans and other retail
lending
As at 1 January 2022
Transfers from Stage 1 to Stage 2
Transfers from Stage 2 to Stage 1
Transfers to Stage 3
Transfers from Stage 3
Business activity in the yeara
Refinements to models used for calculatione
Net drawdowns, repayments, net re-measurement
and movements due to exposure and risk parameter
changes
Final repaymentsb
Disposalsf
Write-offsc
As at 31 December 2022d
Wholesale loans
As at 1 January 2022
Transfers from Stage 1 to Stage 2
Transfers from Stage 2 to Stage 1
Transfers to Stage 3
Transfers from Stage 3
Business activity in the yeara
Refinements to models used for calculatione
Net drawdowns, repayments, net re-measurement
and movements due to exposure and risk parameter
changesg
Final repaymentsb
Disposalsf
Write-offsc
As at 31 December 2022d
Stage 1
Stage 2
Stage 3
Total
Gross
exposure
£m
ECL
£m
Gross
exposure
£m
148,058
(8,747)
7,489
(400)
32
30,028
—
19
(1)
24
—
1
10
—
19,500
8,747
(7,489)
(725)
229
1,142
—
ECL
£m
59
1
(24)
(6)
4
7
—
Gross
exposure
£m
ECL
£m
Gross
exposure
£m
2,122
—
—
1,125
(261)
6
—
397
—
—
6
(5)
—
—
169,680
—
—
—
—
31,176
—
ECL
£m
475
—
—
—
—
17
—
(8,846)
(22)
(1,081)
36
(125)
52
(10,052)
66
(13,942)
—
—
153,672
37,840
(3,474)
1,941
(649)
87
11,339
—
(2,123)
(2)
—
—
29
—
—
18,200
(4)
—
—
73
(426)
—
(27)
2,414
(9)
—
(27)
414
(16,491)
—
(27)
174,286
824
(80)
489
(20)
33
177
86
5,650
3,474
(1,941)
(707)
25
769
—
1,701
80
(489)
(307)
13
186
(45)
2,332
—
—
1,356
(112)
157
—
1,504
—
—
327
(46)
126
96
45,822
—
—
—
—
12,265
—
(15)
—
(27)
516
4,029
—
—
—
—
489
137
1,246
(887)
1,199
736
179
787
2,624
636
(3,996)
(159)
—
44,175
132,967
(9,488)
5,258
(1,480)
204
40,490
—
(36)
(4)
—
582
(341)
(29)
—
8,099
(32)
(11)
—
1,832
(228)
(275)
(1,287)
2,122
(60)
(169)
(1,287)
1,278
(4,565)
(463)
(1,287)
54,396
363
(67)
55
(6)
21
83
(64)
15,943
9,488
(5,258)
(684)
339
4,104
—
255
67
(55)
(11)
28
86
(66)
2,781
—
—
2,164
(543)
239
—
620
—
—
17
(49)
30
(374)
151,691
—
—
—
—
44,833
—
(128)
(184)
(1,287)
3,692
1,238
—
—
—
—
199
(504)
12,799
103
352
154
(1,504)
693
11,647
950
(26,540)
(1,512)
—
152,698
(42)
—
—
446
(3,812)
(31)
—
20,441
(47)
—
—
411
(232)
(49)
(306)
2,550
(57)
(47)
(306)
527
(30,584)
(1,592)
(306)
175,689
(146)
(47)
(306)
1,384
Notes
a Business activity in the year does not include additional drawdowns on the existing facility which are reported under 'Net drawdowns, repayments, net re-measurement and movements due to
exposure and risk parameter changes'. Business activity reported within Credit cards, unsecured loans and other retail lending portfolio includes GAP portfolio acquisition in US cards of £2.7bn.
b Final repayments include repayment from the facility closed during the year whereas partial repayments from existing facility are reported under 'Net drawdowns, repayments, net remeasurement and
movements due to exposure and risk parameter changes'.
c In 2022, gross write-offs amounted to £1,620m (2021: £1,836m). In Q422, £329m of balances with de minimis recovery expectations were written off in line with policy in UK Cards and Unsecured
loans. Post write-off recoveries amounted to £64m (2021: £66m). Net write-offs represent gross write-offs less post write-off recoveries and amounted to £1,556m (2021: £1,770m).
d Other financial assets subject to impairment not included in the table above include cash collateral and settlement balances, financial assets at fair value through other comprehensive income and
other assets. These have a total gross exposure of £180.1bn (December 2021: £155.2bn) and impairment allowance of £163m (December 2021: £114m). This comprises £10m ECL (December 2021:
£6m) on £178.4bn Stage 1 assets (December 2021: £154.9bn), £9m (December 2021: £1m) on £1.5bn Stage 2 fair value through other comprehensive income assets, cash collateral and settlement
assets (December 2021: £157m) and £144m (December 2021: £107m) on £149m Stage 3 other assets (December 2021: £110m)
e Refinements to models used for calculation reported within Credit cards, unsecured loans and other retail lending portfolio include a £0.3bn movement in US Cards and £(0.2)bn in UK Cards. Wholesale
loans include a £(0.5)bn movement in Business Banking. Refinement to models reflect model enhancements made during the year. Barclays continually review the output of models to determine
accuracy of the ECL calculation including review of model monitoring, external benchmarking and experience of model operation over an extended period of time. This ensures that the models used
continue to reflect the risks inherent across the businesses.
f The £0.5bn disposals reported within Credit cards, unsecured loans and other retail lending portfolio includes £0.2bn sale of NFL portfolio within US Cards and £0.3bn of debt sales undertaken during
g
the year. The £1.6bn disposal reported within Wholesale loans includes sale of debt securities as part of Group Treasury Operations.
'Net drawdowns, repayments, net re-measurement and movements due to exposure and risk parameter changes' reported within Wholesale loans also include assets of £1.3bn de-recognised due to
payment received on defaulted loans from government guarantees issued under government’s Bounce Back Loans Scheme.
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Risk performance - Credit risk (continued)
Reconciliation of ECL movement to credit impairment charge/(release) for the period
Home loans
Credit cards, unsecured loans and other retail lending
Wholesale loans
ECL movement excluding assets derecognised due to disposals and write-offs
ECL movement on loan commitments and other financial guarantees
ECL movement on other financial assetsa
Recoveries and reimbursementsb
Total exchange and other adjustmentsc
Total credit impairment charge for the year
Stage 1
Stage 2
Stage 3
£m
10
(238)
83
(145)
28
4
£m
14
142
156
312
13
8
£m
44
1,230
260
1,534
—
37
(122)
(63)
(78)
Total
£m
68
1,134
499
1,701
41
49
(263)
(308)
1,220
Notes
a Other financial assets subject to impairment not included in the table above include cash collateral and settlement balances, financial assets at fair value through other comprehensive income and
other assets. These have a total gross exposure of £180.1bn (December 2021: £155.2bn) and impairment allowance of £163m (December 2021: £114m). This comprises £10m ECL (December 2021:
£6m) on £178.4bn Stage 1 assets (December 2021: £154.9bn), £9m (December 2021: £1m) on £1.5bn Stage 2 fair value through other comprehensive income assets, cash collateral and settlement
assets (December 2021: £157m) and £144m (December 2021: £107m) on £149m Stage 3 other assets (December 2021: £110m).
b Recoveries and reimbursements includes £199m for reimbursements expected to be received under the arrangement where Group has entered into financial guarantee contracts which provide
credit protection over certain assets with third parties and cash recoveries of previously written off amounts of £64m.
Includes foreign exchange and interest and fees in suspense.
c
Loan commitments and financial guarantees (audited)
Stage 1
Stage 2
Stage 3
Total
Home loans
As at 1 January 2022
Net transfers between stages
Business activity in the year
Net drawdowns, repayments, net re-
measurement and movement due to exposure
and risk parameter changes
Limit management and final repayments
As at 31 December 2022
Gross
exposure
£m
10,833
8
8,034
(6,793)
(368)
11,714
Credit cards, unsecured loans and other retail
lending
As at 1 January 2022
Net transfers between stages
Business activity in the year
122,819
(3,390)
38,204
ECL
£m
—
—
—
—
—
—
50
47
25
Gross
exposure
£m
532
(17)
—
(21)
(44)
450
5,718
3,050
451
Net drawdowns, repayments, net re-
measurement and movement due to exposure
and risk parameter changes
Limit management and final repayments
As at 31 December 2022
9,633
(54)
(1,949)
(8,212)
159,054
(7)
61
(503)
6,767
Wholesale loans
As at 1 January 2022
Net transfers between stages
Business activity in the year
Net drawdowns, repayments, net re-
measurement and movement due to exposure
and risk parameter changes
178,490
167
28,565
5,826
43,683
60
28
(5,759)
4,233
28,353
(42)
5,953
ECL
£m
—
—
—
—
—
—
61
(42)
27
67
(23)
90
241
(64)
54
59
Gross
exposure
£m
3
9
—
(6)
—
6
218
340
14
(151)
(89)
332
ECL
£m
—
—
—
—
—
—
Gross
exposure
£m
11,368
—
8,034
(6,820)
(412)
12,170
ECL
£m
—
—
—
—
—
—
20
128,755
131
(5)
—
2
5
38,669
7,533
—
54
18
(2)
(8,804)
20
166,153
(32)
171
208,132
411
1,077
(67)
15
3
4
—
—
47,931
138
(2)
34,444
—
82
15
(96)
412
Limit management and final repayments
(54,175)
(29)
(9,515)
(65)
(321)
(2)
(64,011)
As at 31 December 2022
202,177
184
23,477
225
842
3
226,496
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Risk performance - Credit risk (continued)
Loans and advances at amortised cost (audited)
Home loans
As at 1 January 2021
Transfers from Stage 1 to Stage 2
Transfers from Stage 2 to Stage 1
Transfers to Stage 3
Transfers from Stage 3
Business activity in the yeara
Refinements to models used for calculationb
Net drawdowns, repayments, net re-
measurement and movements due to exposure
and risk parameter changes
Final repaymentsc
Disposalsd
Write-offse
As at 31 December 2021f
Credit cards, unsecured loans and other retail
lending
As at 1 January 2021
Transfers from Stage 1 to Stage 2
Transfers from Stage 2 to Stage 1
Transfers to Stage 3
Transfers from Stage 3
Business activity in the yeara
Refinements to models used for calculationb
Net drawdowns, repayments, net re-
measurement and movements due to exposure
and risk parameter changesg
Final repaymentsc
Disposalsd
Write-offse
As at 31 December 2021f
Wholesale loans
As at 1 January 2021
Transfers from Stage 1 to Stage 2
Transfers from Stage 2 to Stage 1
Transfers to Stage 3
Transfers from Stage 3
Business activity in the yeara
Refinements to models used for calculationb
Net drawdowns, repayments, net re-
measurement and movements due to exposure
and risk parameter changes
Final repaymentsc
Disposalsd
Write-offse
As at 31 December 2021f
Stage 1
Stage 2
Stage 3
Total
Gross
exposure
£m
138,639
(7,672)
5,336
(282)
35
32,744
—
ECL
£m
33
(2)
32
—
1
7
—
Gross
exposure
£m
19,312
7,672
(5,336)
(469)
203
1,243
—
ECL
£m
84
2
(32)
(9)
5
5
(4)
Gross
exposure
£m
ECL
£m
Gross
exposure
£m
2,234
—
—
751
(238)
4
—
421
—
—
9
(6)
—
38
160,185
—
—
—
—
33,991
—
ECL
£m
538
—
—
—
—
12
34
(8,131)
(50)
(1,090)
12
(216)
(26)
(9,437)
(64)
(12,039)
(572)
—
148,058
(2)
—
—
19
(2,009)
(26)
—
19,500
(4)
—
—
59
33,021
(1,894)
4,717
(529)
55
7,842
—
680
(78)
1,174
(22)
26
119
(5)
10,320
1,894
(4,717)
(790)
32
257
—
2,769
78
(1,174)
(370)
19
62
(33)
(392)
—
(21)
2,122
3,172
—
—
1,319
(87)
42
—
(18)
—
(21)
397
(14,440)
(598)
(21)
169,680
2,251
—
—
392
(45)
19
14
46,513
—
—
—
—
8,141
—
(24)
—
(21)
475
5,700
—
—
—
—
200
(24)
(2,793)
(1,030)
(848)
389
(165)
620
(3,806)
(21)
(2,579)
—
—
37,840
119,304
(6,115)
9,137
(804)
580
34,804
—
(40)
—
—
824
320
(19)
257
(4)
23
95
8
(498)
—
—
5,650
21,374
6,115
(9,137)
(377)
410
1,774
—
(39)
—
—
1,701
(212)
(287)
(1,450)
2,332
(92)
(205)
(1,450)
1,504
(3,289)
(287)
(1,450)
45,822
(171)
(205)
(1,450)
4,029
711
19
(257)
(21)
22
18
11
3,591
—
—
1,181
(990)
283
—
1,066
—
—
25
(45)
50
—
144,269
—
—
—
—
36,861
—
2,097
—
—
—
—
163
19
(417)
(268)
721
(68)
(211)
67
93
(269)
(22,219)
(1,303)
—
132,967
(34)
(15)
—
363
(4,734)
(203)
—
15,943
(174)
(6)
—
255
(545)
(163)
(365)
2,781
(131)
(47)
(365)
620
(27,498)
(1,669)
(365)
151,691
(339)
(68)
(365)
1,238
Notes
a Business activity in the year does not include additional drawdowns on the existing facility which are reported under 'Net drawdowns, repayments, net re-measurement and movements due to
exposure and risk parameter changes'.
b Refinements to models used for calculation include a £34m movement in Home loans, £(24)m in Credit cards, unsecured loans and other retail lending and £19m in Wholesale loans. These reflect
methodology changes made during the year. Barclays continually review the output of models to determine accuracy of the ECL calculation including review of model monitoring, external
benchmarking and experience of model operation over an extended period of time. This ensures that the models used continue to reflect the risks inherent across the businesses.
Final repayments include repayment from the facility closed during the year whereas partial repayments from existing facility are reported under 'Net drawdowns, repayments, net remeasurement and
movements due to exposure and risk parameter changes'.
c
d The £598m disposals reported within Home loans relate to transfer of facilities to a non-consolidated special purpose vehicle for the purpose of securitisation. The £287m disposals reported within
Credit cards, unsecured loans and other retail lending portfolio relate to debt sales undertaken during the year. The £1.7bn disposal reported within Wholesale loans include a £1.0bn sale of Barclays
Asset Finance and a £0.7bn of debt sales.
In 2021, gross write-offs amounted to £1,836m (2020: £1,964m) and post write-off recoveries amounted to £66m (2020: £35m). Net write-offs represent gross write-offs less post write-off
recoveries and amounted to £1,770m (2020: £1,929m).
e
f Other financial assets subject to impairment not included in the table above include cash collateral and settlement balances, financial assets at fair value through other comprehensive income and
other assets. These have a total gross exposure of £155.2bn (December 2020: £180.3bn) and impairment allowance of £114m (December 2020: £165m). This comprises £6m ECL (December 2020:
£11m) on £154.9bn Stage 1 assets (December 2020: £175.7bn), £1m (December 2020: £9m) on £157m Stage 2 fair value through other comprehensive income assets, cash collateral and settlement
assets (December 2020: £4.4bn) and £107m (December 2020: £145m) on £110m Stage 3 other assets (December 2020: £154m).
g Transfers and risk parameters change include a £0.3bn (2020: £0.6bn) net release in ECL arising from reclassification of £1.9bn (2020: £2.0bn) gross loans and advances from Stage 2 to Stage 1 in
Credit cards, unsecured loans and other retail lending. The reclassification followed a review of back-testing of results which indicated that accuracy of origination probability of default characteristics
require management adjustments to correct and was first established in Q220.
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Risk performance - Credit risk (continued)
Reconciliation of ECL movement to credit impairment charge/(release) for the period
Stage 1
Stage 2
Stage 3
Total
Home loans
Credit cards, unsecured loans and other retail lending
Wholesale loans
ECL movement excluding assets derecognised due to disposals and write-offs
ECL movement on loan commitments and financial guarantees
ECL movement on other financial assetsa
Recoveries and reimbursementsb
Total exchange and other adjustmentsc
Total credit impairment release for the year
£m
(14)
144
58
188
(39)
(5)
59
£m
(25)
(1,068)
(450)
(1,543)
(456)
(8)
224
£m
(3)
908
(34)
871
(27)
(2)
(43)
£m
(42)
(16)
(426)
(484)
(522)
(15)
240
128
(653)
Notes
a Other financial assets subject to impairment not included in the table above include cash collateral and settlement balances, financial assets at fair value through other comprehensive income and
other assets. These have a total gross exposure of £155.2bn (December 2020: £180.3bn) and impairment allowance of £114m (December 2020: £165m). This comprises £6m ECL (December 2020:
£11m) on £154.9bn Stage 1 assets (December 2020: £175.7bn), £1m (December 2020: £9m) on £157mn Stage 2 fair value through other comprehensive income assets, cash collateral and
settlement assets (December 2020: £4.4bn) and £107m (December 2020: £145m) on £110m Stage 3 other assets (December 2020: £154m).
b Recoveries and reimbursements includes a net reduction in amounts recoverable from financial guarantee contracts held with third parties of £306m and cash recoveries of previously written off
amounts of £66m.
Includes foreign exchange and interest and fees in suspense.
c
Loan commitments and financial guarantees (audited)
Stage 1
Stage 2
Stage 3
Total
Gross
exposure
£m
11,861
(131)
7,034
(7,556)
(375)
10,833
ECL
£m
—
—
—
—
—
—
Gross
exposure
£m
516
124
—
(64)
(44)
532
ECL
£m
—
—
—
—
—
—
Gross
exposure
£m
5
7
—
(4)
(5)
3
ECL
£m
—
—
—
—
—
—
Gross
exposure
£m
12,382
—
7,034
(7,624)
(424)
11,368
Home loans
As at 1 January 2021
Net transfers between stages
Business activity in the year
Net drawdowns, repayments, net re-
measurement and movement due to exposure
and risk parameter changes
Limit management and final repayments
As at 31 December 2021
Credit cards, unsecured loans and other retail
lending
As at 1 January 2021
Net transfers between stages
Business activity in the year
114,371
5,769
11,206
55
206
—
12,117
(6,379)
430
305
(213)
—
229
610
2
23
126,717
7
—
—
11,638
Net drawdowns, repayments, net re-
measurement and movement due to exposure
and risk parameter changes
Limit management and final repayments
As at 31 December 2021
Wholesale loans
As at 1 January 2021
Net transfers between stages
Business activity in the year
(742)
(207)
217
(7,785)
122,819
(4)
50
(667)
5,718
(24)
(7)
61
(526)
(97)
218
(10)
(1,051)
0
20
(8,549)
128,755
163,707
8,227
44,085
201
221
14
40,258
453
2,096
(7,174)
(215)
(1,053)
4,658
102
10
27
206,061
(6)
—
—
48,753
Net drawdowns, repayments, net re-
measurement and movement due to exposure
and risk parameter changes
8,819
(229)
(151)
Limit management and final repayments
(46,348)
(40)
(9,026)
As at 31 December 2021
178,490
167
28,565
7
(106)
241
515
(491)
1,077
(11)
9,183
(7)
(55,865)
3
208,132
ECL
£m
—
—
—
—
—
—
383
—
—
(241)
(11)
131
681
—
116
(233)
(153)
411
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Risk performance - Credit risk (continued)
Stage 2 decomposition
Loans and advances at amortised costa
Gross Exposure
Impairment Allowance
Quantitative
test
Qualitative test
30 days past due
backstop
Total Stage 2
Quantitative
test
Qualitative test
30 days past due
backstop
Total Stage 2
As at 31 December 2022
Home Loans
Credit cards, unsecured
loans and other retail lending
Wholesale loans
Total Stage 2
£m
9,467
6,009
17,274
32,750
£m
8,232
1,986
3,024
13,242
Loans and advances at amortised costa
£m
501
104
143
748
£m
18,200
8,099
20,441
46,740
£m
47
1,379
324
1,750
£m
19
428
82
529
£m
7
25
5
37
£m
73
1,832
411
2,316
Gross Exposure
Impairment Allowance
As at 31 December 2021
Home Loans
Credit cards, unsecured
loans and other retail lending
Wholesale loans
Total Stage 2
Quantitative
test
Qualitative test
30 days past due
backstop
£m
11,997
4,045
13,054
29,096
£m
6,900
1,503
2,488
10,891
£m
603
102
401
1,106
Total Stage 2
£m
19,500
5,650
15,943
41,093
Quantitative
test
Qualitative test
30 days past due
backstop
£m
38
1,368
206
1,612
£m
10
318
44
372
£m
11
15
5
31
Total Stage 2
£m
59
1,701
255
2,015
Note
a Where balances satisfy more than one of the above three criteria for determining a significant increase in credit risk, the corresponding gross exposure and ECL has been assigned in order of
categories presented.
Stage 2 exposures are predominantly identified using quantitative tests where the lifetime PD has deteriorated more than a pre-
determined amount since origination during the year. This is augmented by inclusion of accounts meeting the designated high risk
criteria (including watchlist) for the portfolio under the qualitative test. Qualitative tests predominantly include £9.8bn (2021: £8.3bn) in
Barclays UK of which £8.2bn (2021: £6.8bn) relates to UK Home Finance, £0.8bn (2021: £1.0bn) relates to Business Banking and £0.5bn
(2021: £0.2bn) relates to Barclaycard UK. A further £3.4bn (2021: £2.6bn) relates to Barclays International of which £2.1bn (2021:
£1.4bn) relates to Corporate and Investment Bank and £1.2bn (2021: £1.1bn) relates to Consumer, Cards and Payments.
A small number of other accounts (2% of impairment allowances and 2% of gross exposure) are included in Stage 2. These accounts
are not otherwise identified by the quantitative or qualitative tests but are more than 30 days past due. The percentage triggered by
these backstop criteria is a measure of the effectiveness of the Stage 2 criteria in identifying deterioration prior to delinquency. These
balances include items in the Corporate and Investment Bank for reasons such as outstanding interest and fees rather than principal
balances.
+ For further detail on the three criteria for determining a significant
increase in credit risk required for Stage 2 classification, refer to Note 8.
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Risk performance - Credit risk (continued)
Stage 3 decomposition
Loans and advances at amortised cost
As at 31 December 2022
Home Loans
Credit cards, unsecured loans and other retail
lending
Wholesale loans
Total Stage 3
Loans and advances at amortised cost
As at 31 December 2021
Home Loans
Credit cards, unsecured loans and other retail
lending
Wholesale loans
Total Stage 3
Gross Exposure
Impairment Allowance
Exposures not
charged-off
including within
cure perioda
Exposures
individually
assessed or in
recovery book
Total Stage 3
Exposures not
charged-off
including within
cure perioda
Exposures
individually
assessed or in
recovery book
£m
1,481
1,056
1,525
4,062
£m
933
1,066
1,025
3,024
£m
2,414
2,122
2,550
7,086
£m
75
609
110
794
£m
339
669
417
1,425
Exposures not
charged-off
including within
cure perioda
Gross Exposure
Exposures
individually
assessed or in
recovery book
£m
1,159
929
1,806
3,894
£m
963
1,403
975
3,341
Impairment Allowance
Exposures not
charged-off
including within
cure perioda
Exposures
individually
assessed or in
recovery book
£m
65
477
115
657
£m
332
1,027
505
1,864
Total Stage 3
£m
2,122
2,332
2,781
7,235
Total Stage 3
£m
414
1,278
527
2,219
Total Stage 3
£m
397
1,504
620
2,521
Note
a
Includes £2.2bn (2021: £2.9bn) of gross exposure in a cure period that must remain in Stage 3 for a minimum of 12 months before moving to Stage 2.
Stage 3 is comprised of exposures that are considered to be credit impaired. An asset is considered credit impaired when one or more
events occur that have a detrimental impact on the estimated future cash flows of the financial asset. This comprises assets defined as
defaulted and other individually assessed exposures where imminent default or actual loss is identified. Stage 3 exposures have
reduced compared to 2021 driven by de-recognition of defaulted Wholesale Bounce Back Loans and Cards and Unsecured balances
with de minimis recovery expectations, offset by on-going flows into default. In Home Loans, the increase is driven by adoption of the
new definition of default under the Capital Requirements Regulation.
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Risk performance - Credit risk (continued)
Management adjustments to models for impairment (audited)
Management adjustments to impairment models are applied in order to factor in certain conditions or changes in policy that are not
fully incorporated into the impairment models, or to reflect additional facts and circumstances at the period end. Management
adjustments are reviewed and incorporated into future model development where applicable.
Management adjustments are captured through “Economic uncertainty” and “Other” adjustments presented by product below:
Management adjustments to models for impairment allowance presented by product (audited)a
Impairment
allowance pre
management
adjustmentsb
Economic
uncertainty
adjustments
(a)
Other
adjustments
(b)
Management
adjustments
(a+b)
Total
impairment
allowanceC
Proportion of
Management
adjustments to
total impairment
allowance
As at 31 December 2022
Home loans
Credit cards, unsecured loans and other retail lending
Wholesale loans
Total
As at 31 December 2021
Home loans
Credit cards, unsecured loans and other retail lending
Wholesale loans
Total
Economic uncertainty adjustments presented by stage (audited)
As at 31 December 2022
Home loans
Credit cards, unsecured loans and other retail lending
Wholesale loans
Total
As at 31 December 2021
Home loans
Credit cards, unsecured loans and other retail lending
Wholesale loans
Total
£m
427
3,543
1,680
5,650
£m
372
2,798
1,628
4,798
£m
4
118
195
317
£m
72
1,217
403
1,692
£m
85
202
(79)
208
£m
31
145
(382)
(206)
£m
89
320
116
525
£m
103
1,362
21
1,486
£m
516
3,863
1,796
6,175
£m
475
4,160
1,649
6,284
Stage 1
Stage 2
Stage 3
£m
1
24
181
206
£m
3
93
14
110
£m
—
1
—
1
Stage 1
Stage 2
Stage 3
£m
5
403
333
741
£m
35
803
70
908
£m
32
11
—
43
%
17.2
8.3
6.5
8.5
%
21.7
32.7
1.3
23.6
Total
£m
4
118
195
317
Total
£m
72
1,217
403
1,692
Notes
a Positive values reflect an increase in impairment allowance and negative values reflect a reduction in the impairment allowance.
b Includes £4.8bn (December 2021: £4.2bn) of modelled ECL, £0.4bn (December 2021: £0.5bn) of individually assessed impairments and £0.5bn (December 2021: £0.1bn) ECL from non-modelled
exposures.
c Total impairment allowance consists of ECL stock on drawn and undrawn exposure.
Economic uncertainty adjustments
Models have been developed with data from non-inflationary periods establishing a relationship between input variables and customer
delinquency based on past behaviour. Additionally, models are trying to interpret significant rates of change in macroeconomic
variables and applying these to stable probability of default (PD) levels. As such there is a risk that the modelled output fails to capture
the appropriate response to changes in macroeconomic variables and rising costs with modelled impairment provisions impacted by
uncertainty.
This uncertainty continues to be captured in two ways. Firstly, customer uncertainty: the identification of customers and clients who
may be more vulnerable to economic instability; and secondly, model uncertainty: to capture the impact from model limitations and
sensitivities to specific macroeconomic parameters which are applied at a portfolio level.
In 2022, previously established economic uncertainty adjustments have been partially released, informed by some normalisation of
customer behaviour, refreshed scenarios and a rebuild of certain models to better capture the macroeconomic outlook.
The balance as at 31 December 2022 is £317m (December 2021: £1,692m) and includes:
Customer and client uncertainty provisions of £423m (December 2021: £1,508m) includes:
Credit cards, unsecured loans and other retail lending includes an adjustment of £118m (December 2021: £1,203m) which has been
applied to customers and clients considered most vulnerable to affordability pressures. This adjustment is predominantly held in Stage
2 in line with customer risk profiles.
The reduction is informed by the release of COVID-19 related adjustments as credit performance stabilises at or below pre-pandemic
levels which is reflected in the models, and a rebuild of certain models to better capture the macroeconomic outlook.
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Risk performance - Credit risk (continued)
Wholesale loans: £301m (December 2021: £305m) includes an adjustment of £205m for exposures considered most at risk from
inflationary concerns, supply chain constraints and consumer demand headwinds. The adjustment involves applying stage 2 coverage
rates to stage 1 exposures assessed as most vulnerable. Sectors in scope are presented in the selected sectors disclosure on page
307. The remaining adjustment includes £92m to reflect possible cross default risk on Barclays’ lending in respect of clients who have
taken bounce back loans.
Model uncertainty provisions of £(106)m (December 2021: £184m) includes:
Wholesale loans: £(106)m (December 2021: £98m) includes an adjustment to correct for the deterioration in wholesale PDs impacted
by model over-sensitivity to certain macroeconomic variables. In 2021, this adjustment was held at £98m driven by an unintuitive model
output from certain Q421 macroeconomic variables.
Management adjustments of £72m within home loans in 2021 primarily comprised of a now retired adjustment, reflecting the non-
linearity of the UK mortgages portfolio in order to generate a more appropriate level of predicted results.
Other adjustments
Other adjustments are operational in nature and are expected to remain in place until they can be reflected in the underlying models.
These adjustments result from data limitations and model performance related issues identified through model monitoring and other
established governance processes.
Other adjustments of £208m (December 2021: £(206)m) includes:
Home loans: £85m (December 2021: £31m) primarily includes adjustments for model performance informed by model monitoring and
an adjustment for the adoption of the new definition of default under the Capital Requirements Regulation.
Credit cards, unsecured loans and other retail lending: £202m (December 2021: £145m) primarily includes an adjustment for
adoption of the new definition of default under the Capital Requirements Regulation and an adjustment to the qualitative measures
used in identification of high-risk account management (HRAM) accounts for US cards, partially offset by a recalibration of Loss Given
Default (LGD) to reflect revised recovery expectations.
The £145m adjustments held in December 2021 primarily included adjustments for model performance informed by model monitoring,
partially offset by an adjustment for reclassification of loans and advances from Stage 2 to Stage 1 in credit cards. The reclassification
followed a review of back-testing results which indicated that accuracy of origination probability of default characteristics require
management adjustment. These adjustments are no longer required due to model enhancements made during the year.
Wholesale loans: £(79)m (December 2021: £(382)m) includes adjustments for model performance informed by model monitoring.
Management adjustments of £(382)m within wholesale loans in 2021 consisted of an adjustment of £(380)m applied on bounce back
loans to reverse out the modelled charge which did not consider the government guarantee. This adjustment is no longer needed due
to model enhancements made during the year.
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Risk performance - Credit risk (continued)
Measurement uncertainty and sensitivity analysis
The measurement of modelled ECL involves complexity and judgement, including estimation of probabilities of default (PD), loss given
default (LGD), a range of unbiased future economic scenarios, estimation of expected lives, estimation of exposures at default (EAD)
and assessing significant increases in credit risk. The Group uses a five-scenario model to calculate ECL. An external consensus
forecast is assembled from key sources, including HM Treasury (short and medium term forecasts) and Bloomberg (based on median
of economic forecasts) which forms the Baseline scenario. In addition, two adverse scenarios (Downside 1 and Downside 2) and two
favourable scenarios (Upside 1 and Upside 2) are derived, with associated probability weightings. The adverse scenarios are calibrated
to a broadly similar severity to the Group's internal stress tests and stress scenarios provided by regulators whilst also considering IFRS
9 specific sensitivities and non-linearity. The favourable scenarios are designed to reflect plausible upside risks to the Baseline scenario
which are broadly consistent with the economic narrative approved by the Senior Scenario Review Committee. All scenarios are
regenerated at a minimum semi-annually. The scenarios include key economic variables, (including GDP, unemployment, House Price
Index (HPI) and base rates in both the UK and US markets), and expanded variables using statistical models based on historical
correlations. The upside and downside shocks are designed to evolve over a five-year stress horizon, with all five scenarios converging
to a steady state after approximately seven years.
Scenarios used to calculate the Group’s ECL charge were refreshed in Q422 with the Baseline scenario reflecting the latest consensus
macroeconomic forecasts available at the time of the scenario refresh. In the Baseline scenario, further deterioration in major
economies, as inflation pressures continue to squeeze household income, along with significant monetary policy tightening, contribute
to lower growth prospects. UK GDP is expected to continue falling into 2023 and the US economy dips into mild recession in 2023.
Slight increases in the UK and US unemployment rates are expected, peaking at 4.9% in Q423 and 4.7% in Q124 respectively. Central
banks continue raising interest rates, peaking during 2023, and consumer price inflation eases over 2023.
In the Downside 2 scenario, inflation continues to accelerate amid increasing gas and oil prices and persistent supply-chain pressures as
a result of the conflict in Ukraine. Central banks are forced to raise interest rates sharply with the UK bank rate reaching 8.0% and the
US federal funds rate peaking at 7.0%. Unemployment peaks at 8.5% in the UK and 8.6% in the US. Given already stretched valuations,
the sharp increase in borrowing costs sees house prices decrease significantly. In the Upside 2 scenario, lower energy prices add
downward pressure on prices globally, while recovering labour force participation limits wage growth. Asa result of easing inflation,
central banks lower interest rates to support the economic recovery.
The methodology for estimating scenario probability weights involves simulating a range of future paths for UK and US GDP using
historical data with the five scenarios mapped against the distribution of these future paths. The median is centred around the Baseline
with scenarios further from the Baseline attracting a lower weighting before the five weights are normalised to total 100%. The same
scenarios used in the estimation of expected credit losses are also used to inform Barclays' internal planning. The impacts across the
portfolios are different because of the sensitivities of each of the portfolios to specific macroeconomic variables, for example,
mortgages are highly sensitive to house prices, credit cards and unsecured consumer loans are highly sensitive to unemployment. The
increase in the Downside weightings and the decrease in the Upside weightings reflected the deteriorating economic outlook which
moved the Baseline UK/US GDP paths closer to the Downside scenarios For further details see page 320.
The economic uncertainty adjustments of £0.3bn (2021: £1.7bn) have been applied as overlays to the modelled ECL output. These
adjustments consist of a customer and client uncertainty provision of £0.4bn (2021: £1.5bn) which has been applied to customers and
clients considered most vulnerable to affordability pressures, and a model uncertainty adjustment of £(0.1)bn (2021: £0.2bn). For
further details see pages 315 to 316.
The tables below show the key macroeconomic variables used in the five scenarios (5 year annual paths), the probability weights applied
to each scenario and the macroeconomic variables by scenario using ‘specific bases’ i.e. the most extreme position of each variable in
the context of the scenario, for example, the highest unemployment for downside scenarios and the lowest unemployment for upside
scenarios. 5-year average tables and movement over time graphs provide additional transparency. Annual paths show quarterly
averages for the year (unemployment and base rate) or change in the year (GDP and HPI).
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Risk performance - Credit risk (continued)
Baseline average macroeconomic variables used in the calculation of ECL
As at 31 December 2022
UK GDPa
UK unemploymentb
UK HPIc
UK bank rate
US GDPa
US unemploymentd
US HPIe
US federal funds rate
As at 31 December 2021
UK GDPa
UK unemploymentb
UK HPIc
UK bank rate
US GDPa
US unemploymentd
US HPIe
US federal funds rate
2022
%
3.3
3.7
8.4
1.8
1.8
3.7
11.2
2.1
2021
%
6.2
4.8
4.7
0.1
5.5
5.5
11.8
0.2
Downside 2 average macroeconomic variables used in the calculation of ECL
As at 31 December 2022
UK GDPa
UK unemploymentb
UK HPIc
UK bank rate
US GDPa
US unemploymentd
US HPIe
US federal funds rate
As at 31 December 2021
UK GDPa
UK unemploymentb
UK HPIc
UK bank rate
US GDPa
US unemploymentd
US HPIe
US federal funds rate
Notes
a Average Real GDP seasonally adjusted change in year.
b Average UK unemployment rate 16-year+.
c Change in year end UK HPI = Halifax All Houses, All Buyers index, relative to prior year end.
d Average US civilian unemployment rate 16-year+.
e Change in year end US HPI = FHFA house price index, relative to prior year end.
2022
%
3.3
3.7
8.4
1.8
1.8
3.7
11.2
2.1
2021
%
6.2
4.8
4.7
0.1
5.5
5.5
11.8
0.2
2023
%
(0.8)
4.5
(4.7)
4.4
0.5
4.3
1.8
4.8
2024
%
0.9
4.4
(1.7)
4.1
1.2
4.7
1.5
3.6
2022
2023
%
4.9
4.7
1.0
0.8
3.9
4.2
4.5
0.3
2023
%
(3.4)
6.0
(18.3)
7.3
(2.7)
6.0
(3.1)
6.6
2022
%
0.2
7.2
(14.3)
2.2
(0.8)
6.4
(6.6)
2.1
%
2.3
4.5
1.9
1.0
2.6
3.6
5.2
0.9
2024
%
(3.8)
8.4
(18.8)
7.9
(3.4)
8.5
(4.0)
6.9
2023
%
(4.0)
9.0
(21.8)
3.9
(3.5)
9.1
(9.0)
3.4
2025
%
1.8
4.1
2.2
3.8
1.5
4.7
2.3
3.1
2024
%
1.9
4.3
1.9
1.0
2.4
3.6
4.9
1.2
2025
%
2.0
8.0
(7.7)
6.6
2.0
8.1
(1.9)
5.8
2024
%
2.8
7.6
11.9
3.1
2.5
8.1
5.9
2.6
2026
%
1.9
4.2
2.2
3.4
1.5
4.7
2.4
3.0
2025
%
1.7
4.2
2.3
0.8
2.4
3.6
5.0
1.3
2026
%
2.3
7.4
8.2
5.5
2.6
7.1
4.8
4.6
2025
%
4.3
6.3
15.2
2.2
3.2
6.4
6.7
2.0
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Risk performance - Credit risk (continued)
Downside 1 average macroeconomic variables used in the calculation of ECL
As at 31 December 2022
UK GDPa
UK unemploymentb
UK HPIc
UK bank rate
US GDPa
US unemploymentd
US HPIe
US federal funds rate
As at 31 December 2021
UK GDPa
UK unemploymentb
UK HPIc
UK bank rate
US GDPa
US unemploymentd
US HPIe
US federal funds rate
Upside 2 average macroeconomic variables used in the calculation of ECL
As at 31 December 2022
UK GDPa
UK unemploymentb
UK HPIc
UK bank rate
US GDPa
US unemploymentd
US HPIe
US federal funds rate
As at 31 December 2021
UK GDPa
UK unemploymentb
UK HPIc
UK bank rate
US GDPa
US unemploymentd
US HPIe
US federal funds rate
Notes
a Average Real GDP seasonally adjusted change in year.
b Average UK unemployment rate 16-year+.
c Change in year end UK HPI = Halifax All Houses, All Buyers index, relative to prior year end.
d Average US civilian unemployment rate 16-year+.
e Change in year end US HPI = FHFA house price index, relative to prior year end.
2022
%
3.3
3.7
8.4
1.8
1.8
3.7
11.2
2.1
2021
%
6.2
4.8
4.7
0.1
5.5
5.5
11.8
0.2
2022
%
3.3
3.7
8.4
1.8
1.8
3.7
11.2
2.1
2023
%
(2.1)
5.2
(11.7)
5.9
(1.1)
5.1
(0.7)
5.8
2022
%
2.8
6.2
(6.8)
1.6
1.6
5.4
(1.2)
1.3
2024
%
(1.5)
6.4
(10.6)
6.1
(1.1)
6.6
(1.3)
5.4
2023
%
(0.7)
6.8
(10.5)
2.7
(0.4)
6.6
(2.1)
2.3
2025
%
1.9
6.0
(2.8)
5.3
1.7
6.4
0.2
4.4
2024
%
2.3
6.0
6.9
2.3
2.4
6.1
4.8
2.1
2026
%
2.1
5.8
5.2
4.6
2.1
5.9
3.6
3.9
2025
%
2.9
5.3
8.6
1.6
2.7
5.2
5.2
1.8
2023
2024
2025
2026
%
2.8
3.5
8.7
3.1
3.3
3.3
5.8
3.6
%
3.7
3.4
7.5
2.6
3.5
3.3
5.1
2.9
%
2.9
3.4
4.4
2.5
2.8
3.3
4.5
2.8
%
2.4
3.4
4.2
2.5
2.8
3.3
4.5
2.8
2021
2022
2023
2024
2025
%
6.2
4.8
4.7
0.1
5.5
5.5
11.8
0.2
%
7.2
4.5
8.5
0.2
5.3
3.9
10.6
0.3
%
4.0
4.1
9.0
0.5
4.1
3.4
8.5
0.4
%
2.7
4.0
5.2
0.5
3.5
3.3
7.2
0.7
%
2.1
4.0
4.2
0.3
3.4
3.3
6.6
1.0
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Risk performance - Credit risk (continued)
Upside 1 average macroeconomic variables used in the calculation of ECL
As at 31 December 2022
UK GDPa
UK unemploymentb
UK HPIc
UK bank rate
US GDPa
US unemploymentd
US HPIe
US federal funds rate
As at 31 December 2021
UK GDPa
UK unemploymentb
UK HPIc
UK bank rate
US GDPa
US unemploymentd
US HPIe
US federal funds rate
Notes
a Average Real GDP seasonally adjusted change in year.
b Average UK unemployment rate 16-year+.
c Change in year end UK HPI = Halifax All Houses, All Buyers index, relative to prior year end.
d Average US civilian unemployment rate 16-year+.
e Change in year end US HPI = FHFA house price index, relative to prior year end.
Scenario probability weighting (audited)a
As at 31 December 2022
Scenario probability weighting
As at 31 December 2021
Scenario probability weighting
Note
a For further details on changes to scenario weights see page 317.
2022
%
3.3
3.7
8.4
1.8
1.8
3.7
11.2
2.1
2021
%
6.2
4.8
4.7
0.1
5.5
5.5
11.8
0.2
2023
%
1.0
4.0
1.8
3.5
1.9
3.8
3.8
3.9
2022
%
6.0
4.6
5.0
0.6
4.6
4.0
8.3
0.3
2024
%
2.3
3.9
2.9
3.3
2.3
4.0
3.3
3.4
2023
%
3.1
4.3
5.0
0.8
3.4
3.5
7.0
0.6
2025
%
2.4
3.8
3.3
3.0
2.2
4.0
3.4
3.0
2024
%
2.3
4.2
3.9
0.8
2.9
3.5
6.0
1.0
2026
%
2.1
3.8
3.2
2.8
2.2
4.0
3.4
3.0
2025
%
1.9
4.1
3.3
0.5
2.9
3.5
5.7
1.1
Upside 2
Upside 1
Baseline
Downside 1
Downside 2
%
%
%
%
10.9
20.9
23.1
27.2
39.4
30.1
17.6
14.8
%
9.0
7.0
Specific bases shows the most extreme position of each variable in the context of the downside/upside scenarios, for example, the
highest unemployment for downside scenarios, average unemployment for baseline scenarios and lowest unemployment for upside
scenarios. GDP and HPI downside and upside scenario data represents the lowest and highest cumulative position relative to the start
point, in the 20 quarter period.
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Risk performance - Credit risk (continued)
Macroeconomic variables (specific bases) (audited)a
Upside 2
Upside 1
Baseline
Downside 1
Downside 2
As at 31 December 2022
UK GDPb
UK unemploymentc
UK HPId
UK bank rate
US GDPb
US unemploymentc
US HPId
US federal funds rate
As at 31 December 2021
UK GDPb
UK unemploymentc
UK HPId
UK bank rate
US GDPb
US unemploymentc
US HPId
US federal funds rate
%
13.9
3.4
37.8
0.5
14.1
3.3
35.0
0.1
21.4
4.0
35.7
0.1
22.8
3.3
53.3
0.1
%
9.4
3.6
21.0
0.5
9.6
3.6
27.5
0.1
18.3
4.1
23.8
0.1
19.6
3.5
45.2
0.1
%
1.4
4.2
1.2
3.5
1.3
4.4
3.8
3.3
3.4
4.5
2.4
0.7
3.4
4.1
6.2
0.8
%
(3.2)
6.6
(17.9)
6.3
(2.5)
6.7
3.7
6.0
(1.6)
7.0
(12.7)
2.8
1.5
6.8
2.2
2.3
%
(6.8)
8.5
(35.0)
8.0
(6.3)
8.6
0.2
7.0
(1.6)
9.2
(29.9)
4.0
(1.3)
9.5
(5.0)
3.5
Average basis represents the average quarterly value of variables in the 20 quarter period with GDP and HPI based on yearly average
and quarterly CAGRs respectively.
Macroeconomic variables (5 year averages) (audited)a
Upside 2
Upside 1
Baseline
Downside 1
Downside 2
As at 31 December 2022
UK GDPe
UK unemploymentf
UK HPIg
UK bank rate
US GDPe
US unemploymentf
US HPIg
US federal funds rate
As at 31 December 2021
UK GDPe
UK unemploymentf
UK HPIg
UK bank rate
US GDPe
US unemploymentf
US HPIg
US federal funds rate
%
3.0
3.5
6.6
2.5
2.9
3.4
6.2
2.8
4.4
4.3
6.3
0.3
4.4
3.9
8.9
0.5
%
2.2
3.8
3.9
2.9
2.1
3.9
5.0
3.1
3.9
4.4
4.4
0.5
3.9
4.0
7.7
0.6
%
1.4
4.2
1.2
3.5
1.3
4.4
3.8
3.3
3.4
4.5
2.4
0.7
3.4
4.1
6.2
0.8
%
0.7
5.4
(2.6)
4.7
0.7
5.5
2.5
4.3
2.7
5.8
0.3
1.7
2.4
5.7
3.6
1.5
%
0.0
6.7
(6.4)
5.8
0.0
6.7
1.2
5.2
1.8
7.0
(2.0)
2.3
1.3
7.1
1.4
2.1
Notes
a UK GDP = Real GDP growth seasonally adjusted; UK unemployment = UK unemployment rate 16-year+; UK HPI = Halifax All Houses, All Buyers Index; US GDP = Real GDP growth seasonally adjusted;
US unemployment = US civilian unemployment rate 16-year+; US HPI = FHFA house price index. 20 quarter period starts from Q121 (2020: Q120).
b Maximum growth relative to Q420 (2021: Q419), based on 20 quarter period in Upside scenarios; 5-year yearly average CAGR in Baseline; minimum growth relative to Q420 (2021: Q419), based on 20
quarter period in Downside scenarios.
c Lowest quarter in Upside scenarios; 5-year average in Baseline; highest quarter in Downside scenarios. Period based on 20 quarters from Q121 (2021: Q120).
d Maximum growth relative to Q420 (2021: Q419), based on 20 quarter period in Upside scenarios; 5-year quarter end CAGR in Baseline; minimum growth relative to Q420 (2021: Q419), based on 20
quarter period in Downside scenarios.
e 5-year yearly average CAGR, starting 2021 (2021: 2020).
f 5-year average, Period based on 20 quarters from Q121 (2021: Q120).
g 5-year quarter end CAGR, starting Q420 (2021: Q419).
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Risk performance - Credit risk (continued)
The graphs below plot the historical data for GDP growth rate and unemployment rate in the UK and US as well as the forecasted data
under each of the five scenarios.
UK GDP
(%)
UK unemployment
(%)
US GDP
(%)
US unemployment
(%)
GDP growth based on year on year growth each quarter (Q/(Q-4)).
ECL under 100% weighted scenarios for modelled portfolios (audited)
The table below shows the modelled ECL assuming each of the five modelled scenarios are 100% weighted with the dispersion of
results around the Baseline, highlighting the impact on exposure and ECL across the scenarios.
Model exposure uses exposure at default (EAD) values and is not directly comparable to gross exposure used in prior disclosures.
U2U1BLD1D22020202220242026202820302032-30-20-100102030U2U1BLD1D22020202220242026202820302032-15-10-5051015U2U1BLD1D22020202220242026202820302032012345678910U2U1BLD1D2202020222024202620282030203202468101214 Strategic
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Risk performance - Credit risk (continued)
As at 31 December 2022
Stage 1 Model exposure (£m)
Home loans
Credit cards, unsecured loans and other retail
lendingb, c
Wholesale loans
Stage 1 Model ECL (£m)
Home loans
Credit cards, unsecured loans and other retail lending
Wholesale loans
Stage 1 Coverage (%)
Home loans
Credit cards, unsecured loans and other retail lending
Wholesale loans
Stage 2 Model exposure (£m)
Home loans
Credit cards, unsecured loans and other retail
lendingb, c
Wholesale loans
Stage 2 Model ECL (£m)
Home loans
Credit cards, unsecured loans and other retail lending
Wholesale loans
Stage 2 Coverage (%)
Home loans
Credit cards, unsecured loans and other retail lending
Wholesale loans
Stage 3 Model exposure (£m)d
Home loans
Credit cards, unsecured loans and other retail lending
Wholesale loans
Stage 3 Model ECL (£m)
Home loans
Credit cards, unsecured loans and other retail lending
Wholesale loanse
Stage 3 Coverage (%)
Home loans
Credit cards, unsecured loans and other retail lending
Wholesale loanse
Total Model ECL (£m)
Home loans
Credit cards, unsecured loans and other retail lending
Wholesale loanse
Total ECL
Reconciliation to total ECL
Total weighted model ECL
ECL from individually assessed impairmentse
ECL from non-modelled exposures and others
ECL from post model management adjustments
Of which: ECL from economic uncertainty adjustments
Total ECL
Weighteda
Upside 2
Upside 1
Baseline
Downside 1
Downside 2
Scenarios
144,701
147,754
146,873
145,322
142,599
138,619
81,329
81,772
81,457
81,171
80,921
80,529
186,838
194,970
192,218
188,746
181,247
167,848
7
592
325
—
0.7
0.2
3
562
245
—
0.7
0.1
3
579
274
—
0.7
0.1
4
594
308
—
0.7
0.2
9
604
382
—
0.7
0.2
30
610
431
—
0.8
0.3
18,723
15,670
16,551
18,102
9,414
8,131
8,817
9,535
25,634
17,503
20,255
23,726
20,825
10,377
31,226
24,805
11,456
44,624
33
1,786
603
0.2
19.0
2.4
1,553
1,606
2,855
332
1,033
49
21.4
64.3
1.7
372
3,411
977
4,760
15
1,487
392
0.1
18.3
2.2
1,553
1,606
2,855
311
1,011
45
20
63
1.6
329
3,060
682
4,071
18
1,629
463
0.1
18.5
2.3
1,553
1,606
2,855
317
1,023
47
20.4
63.7
1.6
338
3,231
784
4,353
23
1,785
562
0.1
18.7
2.4
1,553
1,606
2,855
323
1,034
49
20.8
64.4
1.7
350
3,413
919
4,682
45
2,004
809
0.2
19.3
2.6
1,553
1,606
2,855
347
1,048
57
22.3
65.3
2
401
3,656
1,248
5,305
151
2,274
1,288
0.6
19.8
2.9
1,553
1,606
2,855
405
1,059
64
26.1
65.9
2.2
586
3,943
1,783
6,312
£m
4,760
434
456
525
317
6,175
Notes
a Model exposures are allocated to a stage based on an individual scenario rather than a probability-weighted approach, as required for Barclays reported impairment allowances. As a result, it is not
possible to back solve the final reported weighted ECL from individual scenarios given balances may be assigned to a different stage dependent on the scenario.
b For Credit cards, unsecured loans and other retail lending, the model exposure movement between stages 1 and 2 across scenarios differs due to additional impacts from the undrawn exposure.
c For Credit cards, unsecured loans and other retail lending, the dispersion of results around Baseline has narrowed following model enhancements made during the year.
d Model exposures allocated to Stage 3 does not change in any of the scenarios as the transition criteria relies only on an observable evidence of default as at 31 December 2022 and not on
macroeconomic scenario.
e Material wholesale loan defaults are individually assessed across different recovery strategies. As a result, ECL of £434m is reported as an individually assessed impairment in the reconciliation table.
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Risk performance - Credit risk (continued)
The use of five scenarios with associated weighting results in a total weighted ECL uplift from the Baseline ECL of 1.7%
Home loans: Total weighted ECL of £372m represents a 6.3% increase over the Baseline ECL (£350m), with coverage ratios remaining
steady across the Upside scenarios, Baseline and Downside 1 scenario. Under the Downside 2 scenarios, total ECL increases to
£586m, driven by a significant fall in UK HPI (18.3)% in 2023 reflecting the non-linearity of the UK portfolio.
Credit cards, unsecured loans and other retail lending: Total weighted ECL of £3,411m is aligned to the Baseline ECL (£3,413m). The
impact of the deteriorated Baseline scenario relative to the severity of the downside scenarios is greater than the impact of the higher
weights applied to the Downside scenarios when compared to 2021. This results in a convergence between Baseline and Weighted ECL
in 2022. Total ECL increases to £3,943m under the Downside 2 scenario, mainly driven by significant increase in UK unemployment rate
to 6% and US unemployment rate to 6% in 2023
Wholesale loans: Total weighted ECL of £977m represents a 6.3% increase over the Baseline ECL (£919m). Total ECL increases to
£1,783m under Downside 2 scenario, driven by a significant decrease in UK GDP to (3.4)% and US GDP to (2.7)% in 2023
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Risk performance - Credit risk (continued)
As at 31 December 2021
Stage 1 Model exposure (£m)
Weighteda
Upside 2
Upside 1
Baseline
Downside 1
Downside 2
Scenarios
Home loans
Credit cards, unsecured loans and other retail lendingb, c
Wholesale loans
137,279
139,117
138,424
137,563
135,544
133,042
56,783
54,758
55,771
56,821
57,698
55,315
174,249
177,453
176,774
175,451
169,814
161,998
Stage 1 Model ECL (£m)
Home loans
Credit cards, unsecured loans and other retail lending
Wholesale loans
Stage 1 Coverage (%)
Home loans
Credit cards, unsecured loans and other retail lending
Wholesale loans
Stage 2 Model exposure (£m)
Home loans
Credit cards, unsecured loans and other retail lendingb, c
Wholesale loans
Stage 2 Model ECL (£m)
Home loans
Credit cards, unsecured loans and other retail lending
Wholesale loans
Stage 2 Coverage (%)
Home loans
Credit cards, unsecured loans and other retail lending
Wholesale loans
Stage 3 Model exposure (£m)d
Home loans
Credit cards, unsecured loans and other retail lending
Wholesale loans
Stage 3 Model ECL (£m)
Home loans
Credit cards, unsecured loans and other retail lending
Wholesale loanse
Stage 3 Coverage (%)
Home loans
Credit cards, unsecured loans and other retail lending
Wholesale loanse
Total Model ECL (£m)
Home loans
Credit cards, unsecured loans and other retail lending
Wholesale loanse
Total ECL
Reconciliation to total ECL
Total weighted model ECL
ECL from individually assessed impairmentse
ECL from non-modelled exposures and others
ECL from post model management adjustmentsf
Of which: ECL from economic uncertainity adjustments
Total ECL
4
324
290
—
0.6
0.2
2
266
240
—
0.5
0.1
2
272
262
—
0.5
0.1
3
279
286
—
0.5
0.1
6
350
327
—
0.6
0.2
14
418
350
—
0.8
0.2
22,915
7,500
32,256
21,076
6,447
29,052
21,769
6,757
29,732
22,631
7,084
31,054
24,649
10,689
36,692
27,151
18,452
44,507
15
1,114
572
0.1
14.9
1.8
1,724
1,922
1,811
303
1,255
323
17.6
65.3
17.8
322
2,693
1,185
4,200
10
925
431
—
14.3
1.5
1,724
1,922
1,811
292
1,236
321
16.9
64.3
17.7
304
2,427
992
3,723
11
988
467
0.1
14.6
1.6
1,724
1,922
1,811
295
1,245
322
17.1
64.8
17.8
308
2,505
1,051
3,864
12
1,058
528
0.1
14.9
1.7
1,724
1,922
1,811
299
1,255
323
17.3
65.3
17.8
314
2,592
1,137
4,043
22
1,497
851
0.1
14.0
2.3
1,724
1,922
1,811
320
1,277
326
18.6
66.4
18.0
348
3,124
1,504
4,976
47
3,295
1,510
0.2
17.9
3.4
1,724
1,922
1,811
346
1,297
332
20.1
67.5
18.3
407
5,010
2,192
7,609
£m
4,200
524
74
1,486
1,692
6,284
Notes
a Model exposures are allocated to a stage based on an individual scenario rather than a probability-weighted approach, as required for Barclays reported impairment allowances. As a result, it is not
possible to back solve the final reported weighted ECL from individual scenarios given balances may be assigned to a different stage dependent on the scenario.
b For Credit cards, unsecured loans and other retail lending, the model exposure movement between stages 1 and 2 across scenarios differs due to additional impacts from the undrawn exposure.
c
In 2021, Loans & Advances at Amortised Cost were used as Modelled Exposure for the International Consumer Bank within this disclosure. The process was revised in 2022 to incorporate Exposure at
Default (EAD) with no impact to ECL. This has been represented in Prior Year comparatives.
d Model exposures allocated to Stage 3 does not change in any of the scenarios as the transition criteria relies only on an observable evidence of default as at 31 December 2021 and not on
macroeconomic scenario.
e Material wholesale loan defaults are individually assessed across different recovery strategies. As a result, ECL of £524m is reported as an individually assessed impairment in the reconciliation table.
f Post Model Adjustments include negative adjustments reflecting operational post model adjustments.
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Risk performance - Credit risk (continued)
Analysis of the concentration of credit risk
A concentration of credit risk exists when a number of counterparties are located in a common geographical region or are engaged in
similar activities and have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly
affected by changes in economic or other conditions. The Group implements limits on concentrations in order to mitigate the risk. The
analysis of credit risk concentrations presented below are based on the location of the counterparty or customer or the industry in
which they are engaged. Further detail on the Group policies with regard to managing concentration risk is presented in the Barclays
PLC Pillar 3 Report 2022 (unaudited).
Geographic concentrations
As at 31 December 2022, the geographic concentration of the Group’s assets remained broadly consistent with 2021. Exposure
concentrated in the UK was 38% (2021: 40%), in the Americas 37% (2021: 35%) and in Europe 18% (2021: 19%).
Credit risk concentrations by geography (audited)
As at 31 December 2022
On-balance sheet:
Cash and balances at central banks
Cash collateral and settlement balances
Loans and advances at amortised cost
Reverse repurchase agreements and other
similar secured lending
Trading portfolio assets
Financial assets at fair value through the income
statement
Derivative financial instruments
Financial assets at fair value through other
comprehensive income
Other assets
Total on-balance sheet
Off-balance sheet:
Contingent liabilities
Loan commitments
Total off-balance sheet
Total
As at 31 December 2021
On-balance sheet:
Cash and balances at central banks
Cash collateral and settlement balances
Loans and advances at amortised cost
Reverse repurchase agreements and other
similar secured lending
Trading portfolio assets
Financial assets at fair value through the income
statement
Derivative financial instruments
Financial assets at fair value through other
comprehensive income
Other assets
Total on-balance sheet
Off-balance sheet:
Contingent liabilities
Loan commitments
Total off-balance sheet
Total
United
Kingdom
£m
129,000
42,442
270,554
—
9,333
30,024
99,053
7,692
1,473
589,571
6,485
103,575
110,060
699,631
114,959
34,249
270,261
9
12,926
28,737
78,710
7,661
949
548,461
5,527
105,844
111,371
659,832
Americas
£m
Europe
£m
Asia
£m
Africa and Middle
East
£m
49,830
36,572
74,851
127
35,490
106,741
101,407
25,666
115
430,799
11,297
240,356
251,653
682,452
38,735
28,469
51,599
123
29,539
95,478
92,010
27,391
223
363,567
10,328
192,303
202,631
566,198
73,677
22,058
32,484
380
16,970
41,355
77,146
18,842
61
282,973
4,811
44,479
49,290
332,263
76,846
21,822
24,352
401
15,092
30,083
75,247
19,235
39
263,117
3,957
40,523
44,480
307,597
3,553
10,467
15,504
262
5,299
20,538
22,299
12,562
4
90,488
1,210
4,334
5,544
96,032
7,789
7,260
11,039
2,508
4,943
21,800
14,709
6,164
1
76,213
1,131
5,104
6,235
82,448
291
1,058
5,386
7
1,581
8,819
2,475
292
3
19,912
402
2,764
3,166
23,078
245
742
4,200
186
889
9,999
1,896
400
—
18,557
403
1,937
2,340
20,897
Total
£m
256,351
112,597
398,779
776
68,673
207,477
302,380
65,054
1,656
1,413,743
24,205
395,508
419,713
1,833,456
238,574
92,542
361,451
3,227
63,389
186,097
262,572
60,851
1,212
1,269,915
21,346
345,711
367,057
1,636,972
Industry concentrations
The concentration of the Group’s assets by industry remained broadly consistent year on year. As at 31 December 2022, total assets
concentrated in banks and other financial institutions was 39% (2021: 38%), predominantly within derivative financial instruments. The
proportion of the overall balance concentrated in governments and central banks was 22% (2021: 23%), cards, unsecured loans and
other personal lending was 11% (2021: 10%) and in home loans remained stable at 10% (2021: 11%). Further details on material and
emerging risks can be found on pages 269 to 281 .
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Risk performance - Credit risk (continued)
Credit risk concentrations by industry (audited)
Other
financial
insti-
tutions
Manu-
facturing
Const-
ruction
and
property
Govern-
ment and
central
bank
Energy
and
water
Whole-
sale
and retail
distri-
bution
and
leisure
Business
and other
services
£m
£m
£m
£m
£m
£m
£m
Banks
£m
Cards,
unsecured
loans and
other
personal
lending
£m
Home
loans
£m
Other
£m
Total
£m
As at 31 December 2022
On-balance sheet:
Cash and balances at
central banks
Cash collateral and
settlement balances
Loans and advances at
amortised cost
agreements and other
similar secured lending
Trading portfolio assets
through the income
statement
Derivative financial
instruments
Financial assets at fair value
through other
comprehensive income
Other assets
731
63
—
—
255,557
—
—
—
15,083
78,740
229
67
17,265
269
136
167
—
—
—
55
—
256,351
586
112,597
9,726
49,181
8,025
26,029
33,989
5,626
11,362
19,020
173,815
50,913
11,093
398,779
634
92
—
—
50
—
—
—
4,663
9,314
5,007
1,405
36,355
2,330
789
2,782
—
—
—
—
776
—
6,028
68,673
30,838
149,328
712
3,524
16,609
197
479
4,053
1,255
—
482
207,477
127,391
153,013
4,095
597
3,027
4,778
1,541
3,175
—
—
4,763
302,380
14,205
3,918
494
975
—
9
758
45,682
3
1
—
1
—
1
112
118
—
17
—
28
379
9
65,054
1,656
Total on-balance sheet
203,765
444,624
18,077
32,383
408,535
13,201
14,308
29,427
175,087
50,996
23,340
1,413,743
Off-balance sheet:
Contingent liabilities
Loan commitments
1,108
6,193
3,695
1,430
1,818
3,891
1,165
2,627
—
143
2,135
24,205
1,840
65,671
44,951
12,599
1,501
29,607
16,759
25,137
12,223
158,599
26,621
395,508
Total off-balance sheet
2,948
71,864
48,646
14,029
3,319
33,498
17,924
27,764
12,223
158,742
28,756
419,713
Total
206,713
516,488
66,723
46,412
411,854
46,699
32,232
57,191
187,310
209,738
52,096
1,833,456
As at 31 December 2021
On-balance sheet:
Cash and balances at
central banks
Cash collateral and
settlement balances
Loans and advances at
amortised cost
Reverse repurchase
agreements and other
similar secured lending
52
74
—
—
238,448
—
14,811
61,581
320
79
14,526
390
—
60
—
366
—
—
—
68
—
238,574
341
92,542
8,519
32,332
6,701
25,722
30,827
4,345
11,455
19,113
169,205
42,198
11,034
361,451
Trading portfolio assets
2,586
8,817
4,881
1,097
32,574
4,043
1,734
4,716
645
2,049
—
—
533
—
—
—
—
—
—
—
3,227
—
2,941
63,389
Financial assets at fair value
through the income
statement
Derivative financial
instruments
Financial assets at fair value
through other
comprehensive income
Other assets
26,074
131,264
771
7,999
13,945
87
181
3,753
1,595
—
428
186,097
120,666
117,400
4,169
1,898
7,233
3,544
1,172
2,696
—
—
3,794
262,572
14,441
4,274
618
450
—
1
662
40,872
3
8
—
—
—
2
455
104
—
—
—
21
147
60,851
5
1,212
Total on-balance sheet
188,412
358,241
16,843
37,460
378,966
12,409
14,604
31,203
170,800
42,287
18,690
1,269,915
Off-balance sheet:
Contingent liabilities
1,006
5,356
3,080
1,341
1,682
3,284
1,209
2,518
—
73
1,797
21,346
Loan commitments
1,395
55,071
42,587
16,673
1,362
26,461
16,299
25,682
11,656
121,680
26,845
345,711
Total off-balance sheet
2,401
60,427
45,667
18,014
3,044
29,745
17,508
28,200
11,656
121,753
28,642
367,057
Total
190,813
418,668
62,510
55,474
382,010
42,154
32,112
59,403
182,456
164,040
47,332
1,636,972
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Risk performance - Credit risk (continued)
The approach to management and representation of credit quality
Asset credit quality
The credit quality distribution is based on the IFRS 9 12-month probability of default (PD) at the reporting date to ensure comparability
with other ECL disclosures in the Expected Credit Losses section.
The following internal measures are used to determine credit quality for loans:
PD Range %
Internal Default
Grade Band
0.00 to < 0.15
0.15 to < 0.25
0.25 to < 0.50
0.50 to < 0.75
0.75 to < 2.50
2.50 to < 10.00
10.00 to < 100.00
100.00 (Default)
1
2
3
4
5
6
7
8
9
10
11
12
12
13
14
15
15
16
17
18
19
19
20
21
22
Default Probability
Mid
0.01%
0.03%
0.04%
0.08%
0.13%
0.18%
0.23%
0.28%
0.35%
0.45%
0.55%
0.68%
0.98%
1.38%
1.85%
2.33%
2.78%
3.75%
5.40%
7.50%
9.35%
10.68%
15.00%
30.00%
<=Max
0.02%
0.03%
0.05%
0.10%
0.15%
0.20%
0.25%
0.30%
0.40%
0.50%
0.60%
0.75%
1.20%
1.55%
2.15%
2.50%
3.05%
4.45%
6.35%
8.65%
10.00%
11.35%
18.65%
99.99%
>Min
0.00%
0.02%
0.03%
0.05%
0.10%
0.15%
0.20%
0.25%
0.30%
0.40%
0.50%
0.60%
0.75%
1.20%
1.55%
2.15%
2.50%
3.05%
4.45%
6.35%
8.65%
10.00%
11.35%
18.65%
100%
Credit Quality
description
Moody’s
Standard and
Poor’s
Aaa, Aa1, Aa2 AAA, AA+, AA
Strong
Strong
Strong
Strong
Aa3
A1, A2, A3
A1, A2, A3
Baa1
Baa2
Baa3
Baa3
Baa3
Ba1
Ba1
Satisfactory
Ba2, Ba3
Ba2, Ba3
Satisfactory
Ba3
Ba3
B1
B1
B2
Satisfactory
B3, Caa1
B3, Caa1
B3, Caa1
B3, Caa1
Caa2
Caa3, Ca, C
D
D
Higher risk
Credit
Impaired
AA-
A+
A, A-
BBB+
BBB
BBB
BBB-
BBB-
BB+
BB+
BB, BB-
BB, BB-
BB-
B+
B+
B+
B+
B
B-
CCC+
CCC+
CCC
CCC-,
CC+ ,CC, C
For retail clients, a range of analytical tools is used to derive the probability of default of clients at inception and on an ongoing basis.
For loans that are not past due, these descriptions can be summarised as follows:
Strong: there is a very high likelihood of the asset being recovered in full.
Satisfactory: while there is a high likelihood that the asset will be recovered and therefore, of no cause for concern to the Group, the
asset may not be collateralised, or may relate to unsecured retail facilities. At the lower end of this grade there are customers that are
being more carefully monitored, for example, corporate customers which are indicating some evidence of deterioration, home loans
with a high loan to value, and unsecured retail loans operating outside normal product guidelines.
Higher risk: there is concern over the obligor’s ability to make payments when due. However, these have not yet converted to actual
delinquency. There may also be doubts over the value of collateral or security provided. However, the borrower or counterparty is
continuing to make payments when due and is expected to settle all outstanding amounts of principal and interest.
Loans that are past due are monitored closely, with impairment allowances raised as appropriate and in line with the Group’s
impairment policies.
Debt securities
For assets held at fair value, the carrying value on the balance sheet will include, among other things, the credit risk of the issuer. Most
listed and some unlisted securities are rated by external rating agencies. The Group mainly uses external credit ratings provided by
Standard & Poor’s, Fitch or Moody’s. Where such ratings are not available or are not current, the Group will use its own internal ratings
for the securities.
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Risk performance - Credit risk (continued)
Balance sheet credit quality
The following tables present the credit quality of the Group’s assets exposed to credit risk.
Overview
As at 31 December 2022, the ratio of the Group’s on-balance sheet assets classified as strong (0.0 to <0.60%) remained stable at 87%
(2021: 87%) of total assets exposed to credit risk. Further analysis of debt securities by issuer and issuer type and netting and collateral
arrangements on derivative financial instruments is presented in the Analysis of debt securities section and Analysis of derivatives
section.
Balance sheet credit quality (audited)
PD range
PD range
0.0 to <0.60%
0.60 to
<11.35%
11.35 to
100%
Total
0.0 to <0.60%
0.60 to
<11.35%
11.35 to
100%
As at 31 December 2022
Cash and balances at central banks
Cash collateral and settlement balances
Loans and advances at amortised cost:
Home loans
Credit cards, unsecured loans and other retail
lending
Wholesale loans
Total loans and advances at amortised cost
Reverse repurchase agreements and other
similar secured lending
Trading portfolio assets:
Debt securities
Traded loans
Total trading portfolio assets
Financial assets at fair value through the
income statement:
Loans and advances
Debt securities
Other financial assets
Total financial assets at fair value through the
income statement
Derivative financial instruments
Financial assets at fair value through other
comprehensive income
Other assets
Total on-balance sheet
£m
£m
£m
£m
%
256,351
101,365
—
10,944
—
288
256,351
112,597
167,368
3,866
2,536
173,770
22,364
128,881
318,613
26,107
40,327
70,300
2,233
5,097
9,866
50,704
174,305
398,779
100
90
97
45
74
80
776
—
—
776
100
50,253
3,214
4,891
8,273
53,467
13,164
331
1,711
2,042
55,475
13,198
68,673
14,684
24,630
2,122
1,062
115
65
39,429
3,249
98
20
—
118
141,698
284,491
64,051
17,606
1,728
207,477
283
302,380
90
24
78
38
65
76
83
68
94
65,051
1,599
1,223,411
3
57
176,125
65,054
1,656
1,413,743
14,207
100
97
87
Reverse repurchase agreements
124,794
38,339
1,548
164,681
%
—
10
2
51
23
18
—
9
63
19
62
33
23
17
31
6
—
3
12
%
—
—
1
4
3
2
—
1
13
3
—
2
1
—
1
—
—
—
1
Total
%
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
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Risk performance - Credit risk (continued)
Balance sheet credit quality (audited)
PD range
PD range
0.0 to <0.60%
0.60 to
<11.35%
11.35 to
100%
Total
0.0 to <0.60%
0.60 to
<11.35%
11.35 to
100%
As at 31 December 2021
Cash and balances at central banks
Cash collateral and settlement balances
Loans and advances at amortised cost:
Home loans
Credit cards, unsecured loans and other retail
lending
Wholesale loans
Total loans and advances at amortised cost
Reverse repurchase agreements and other
similar secured lending
Trading portfolio assets:
Debt securities
Traded loans
Total trading portfolio assets
Financial assets at fair value through the
income statement:
Loans and advances
Debt securities
Reverse repurchase agreements
Other financial assets
Total financial assets at fair value through the
income statement
Derivative financial instruments
Financial assets at fair value through other
comprehensive income
Other assets
Total on-balance sheet
£m
£m
£m
£m
%
238,574
83,257
—
9,275
—
10
238,574
92,542
100
90
161,314
5,547
2,344
169,205
25,664
104,823
291,801
14,293
40,437
60,277
1,836
5,193
9,373
41,793
150,453
361,451
3,141
86
—
3,227
44,652
2,172
46,824
5,735
10,144
15,879
477
209
686
50,864
12,525
63,389
19,642
1,389
108,437
93
129,561
246,628
60,845
1,155
18,979
864
36,047
18
55,908
15,678
6
55
46
52
530
—
38,667
2,305
145,014
111
628
266
186,097
262,572
—
2
60,851
1,212
1,101,786
157,164
10,965
1,269,915
96
62
70
80
97
88
17
74
51
61
75
84
70
94
100
95
87
%
—
10
3
34
27
17
3
11
81
25
49
37
25
16
30
6
—
5
12
%
—
—
1
4
3
3
—
1
2
1
—
2
—
—
—
—
—
—
1
Total
%
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
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Risk performance - Credit risk (continued)
Credit exposures by internal PD grade
The below tables represent credit risk profile by PD grade for loans and advances at amortised cost, contingent liabilities and loan
commitments.
Stage 1 higher risk assets, presented gross of associated collateral held, are of weaker credit quality but have not significantly
deteriorated since origination.
IFRS 9 Stage 1 and Stage 2 classification is not dependent solely on the absolute probability of default but on elements that determine a
Significant Increase in Credit Risk (see Note 8), including relative movement in probability of default since initial recognition. There is
therefore no direct relationship between credit quality and IFRS 9 stage classification.
Credit risk profile by internal PD grade for loans and advances at amortised cost (audited)
PD range
Grading
%
As at 31 December 2022
Gross carrying amount
Allowance for ECL
Credit quality
description
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
£m
£m
£m
£m
£m
£m
£m
Total
£m
Net
exposure
Coverage
ratio
£m
%
1 - 3
4 - 5
6 - 8
9 - 11
12 - 14
15 - 19
19
0.0 to <0.05%
0.05 to <0.15%
0.15 to <0.30%
0.30 to <0.60%
Strong
Strong
Strong
Strong
108,494
1,787
5
110,286
120,780
9,093
—
129,873
27,895
7,339
—
35,234
39,868
3,635
—
43,503
0.60 to <2.15%
Satisfactory
27,855
6,856
—
34,711
2.15 to <10%
Satisfactory
12,212
3,932
—
16,144
10 to <11.35%
Satisfactory
12,320
9,189
—
21,509
20 - 21
11.35 to <100% Higher Risk
22
Total
100%
Credit Impaired
1,121
—
4,909
—
—
7,081
6,030
7,081
16
27
37
120
302
160
328
67
—
23
6
23
28
247
539
488
962
—
3
—
—
—
—
—
—
42
110,244
33
129,840
60
35,174
148
43,355
549
34,162
699
15,445
816
20,693
—
2,216
1,029
2,216
5,001
4,865
350,545
46,740
7,086
404,371
1,057
2,316
2,219
5,592
398,779
As at 31 December 2021
1 - 3
4 - 5
6 - 8
9 - 11
12 - 14
15 - 19
19
0.0 to <0.05%
0.05 to <0.15%
0.15 to <0.30%
0.30 to <0.60%
Strong
Strong
Strong
Strong
95,795
1,554
83,818
3,584
58,409
9,722
35,794
3,649
0.60 to <2.15%
Satisfactory
30,654
7,090
2.15 to <10%
Satisfactory
7,977
6,645
10 to <11.35%
Satisfactory
5,572
4,364
—
97,349
—
87,402
—
68,131
—
39,443
—
37,744
—
14,622
—
9,936
20 - 21
11.35 to <100% Higher Risk
22
Total
100%
Credit Impaired
846
—
4,485
—
—
7,235
5,331
7,235
283
19
41
129
326
230
99
79
—
8
3
12
29
264
780
326
593
—
—
—
—
—
—
291
97,058
22
87,380
53
68,078
158
39,285
590
37,154
—
1,010
13,612
—
425
9,511
—
2,521
672
2,521
4,659
4,714
318,865
41,093
7,235
367,193
1,206
2,015
2,521
5,742
361,451
—
—
0.2
0.3
1.6
4.3
3.8
17.1
31.3
1.4
0.3
—
0.1
0.4
1.6
6.9
4.3
12.6
34.8
1.6
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Risk performance - Credit risk (continued)
Credit risk profile by internal PD grade for contingent liabilities (audited)a
PD range
Grading
%
As at 31 December 2022
Credit quality
description
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
£m
£m
£m
£m
£m
£m
£m
Total
£m
Net
exposure
Coverage
ratio
£m
%
Gross carrying amount
Allowance for ECL
1 - 3
4 - 5
6 - 8
9 - 11
12 - 14
15 - 19
19
20 - 21
22
Total
0.0 to <0.05%
0.05 to <0.15%
0.15 to <0.30%
0.30 to <0.60%
Strong
Strong
Strong
Strong
0.60 to <2.15%
Satisfactory
2.15 to <10%
Satisfactory
10 to <11.35%
Satisfactory
11.35 to <100% Higher Risk
100%
Credit Impaired
5,695
4,210
2,733
3,161
1,989
910
716
58
—
149
348
180
214
751
496
190
440
—
—
5,844
—
4,558
—
2,913
—
3,375
—
2,740
—
1,406
—
—
542
906
498
542
19,472
2,768
542
22,782
As at 31 December 2021
1 - 3
4 - 5
6 - 8
9 - 11
12 - 14
15 - 19
19
20 - 21
22
Total
Strong
0.0 to <0.05%
Strong
0.05 to <0.15%
Strong
0.15 to <0.30%
Strong
0.30 to <0.60%
Satisfactory
0.60 to <2.15%
Satisfactory
2.15 to <10%
10 to <11.35%
Satisfactory
11.35 to <100% Higher Risk
100%
Credit Impaired
6,389
2,929
1,996
2,794
1,990
817
607
141
—
17,663
172
503
199
216
287
479
254
1,162
—
3,272
—
—
—
—
—
—
—
—
180
180
6,561
3,432
2,195
3,010
2,277
1,296
861
1,303
180
21,115
Credit risk profile by internal PD grade for loan commitments (audited)a
7
2
3
8
21
8
41
2
—
92
8
2
2
4
19
5
21
3
—
64
1
1
3
1
6
17
18
64
—
111
1
2
2
1
8
10
42
77
—
143
—
—
—
—
—
—
—
—
3
3
—
—
—
—
—
—
—
—
2
2
8
3
6
9
5,836
4,555
2,907
3,366
27
2,713
25
1,381
59
66
3
206
847
432
539
22,576
9
4
4
5
27
15
63
80
2
209
6,552
3,428
2,191
3,005
2,250
1,281
798
1,223
178
20,906
0.1
0.2
0.2
0.3
1.0
1.8
6.5
13.3
0.6
0.9
0.1
0.1
0.2
0.2
1.2
1.2
7.3
6.1
1.1
1.0
PD range
Grading
%
As at 31 December 2022
Gross carrying amount
Allowance for ECL
Credit quality
description
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
£m
£m
£m
£m
£m
£m
£m
Total
£m
Net
exposure
Coverage
ratio
£m
%
1 - 3
4 - 5
6 - 8
9 - 11
12 - 14
15 - 19
19
20 - 21
22
Total
0.0 to <0.05%
0.05 to <0.15%
0.15 to <0.30%
0.30 to <0.60%
Strong
Strong
Strong
Strong
78,077
752
—
78,829
85,917
4,004
—
89,921
67,381
2,349
—
69,730
57,553
2,081
—
59,634
0.60 to <2.15%
Satisfactory
33,465
6,681
—
40,146
2.15 to <10%
Satisfactory
19,398
4,010
—
23,408
Satisfactory
10 to <11.35%
11.35 to <100% Higher Risk
10,976
4,058
706
3,991
—
15,034
—
4,697
100%
Credit Impaired
—
—
638
638
3
7
13
15
50
32
30
3
—
1
1
2
4
28
38
48
82
—
353,473
27,926
638
382,037
153
204
As at 31 December 2021
1 - 3
4 - 5
6 - 8
9 - 11
12 - 14
15 - 19
19
0.0 to <0.05%
0.05 to <0.15%
0.15 to <0.30%
0.30 to <0.60%
0.60 to <2.15%
2.15 to <10%
Strong
Strong
Strong
Strong
Satisfactory
Satisfactory
104,204
3,034
68,986
5,524
30,968
2,387
40,539
2,524
30,065
7,091
4,713
3,516
10 to <11.35%
Satisfactory
10,407
3,091
—
107,238
—
74,510
—
33,355
—
43,063
—
—
34,778
10,607
—
13,498
20 - 21
11.35 to <100% Higher Risk
22
Total
100%
Credit Impaired
2,219
—
6,754
—
—
1,118
8,973
1,118
294,479
31,543
1,118
327,140
153
159
Note
a Excludes loan commitments and financial guarantees of £14.9bn (2021: £18.8bn) carried at fair value.
6
10
8
8
81
21
8
11
—
4
5
6
6
30
37
13
58
—
—
—
—
—
—
—
—
—
20
20
—
—
—
—
—
—
—
—
21
21
4
8
78,825
89,913
15
69,715
19
59,615
78
40,068
70
23,338
78
14,956
85
4,612
20
618
377
381,660
10
107,228
15
74,495
14
33,341
14
43,049
111
58
34,667
10,549
21
13,477
69
21
8,904
1,097
333
326,807
—
—
—
—
0.2
0.3
0.5
1.8
3.1
0.1
—
—
—
—
0.3
0.5
0.2
0.8
1.9
0.1
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Risk performance - Credit risk (continued)
Analysis of specific portfolios and asset types
This section provides an analysis of principal portfolios and businesses, in particular, home loans, credit cards, unsecured loans and
other retail lending and a summary of government supported loans.
Secured home loans
The UK home loans portfolio comprises first lien home loans and accounts for 93% (2021: 93%) of the Group’s total home loan
balances.
Home loans principal portfolios
As at 31 December
Gross loans and advances (£m)
>90 day arrears, excluding recovery book (%)
Annualised gross charge-off rates (%)
Recovery book proportion of outstanding balances (%)
Recovery book impairment coverage ratio (%)
Within the UK home loans portfolio:
Barclays UK
2022
162,380
2021
158,192
0.1
0.5
0.5
5.2
0.1
0.5
0.6
4.2
• gross loans and advances increased by £4.2bn (2.7%) following an increase in Residential (3.2%), while Buy to Let (BTL) remained
broadly stable.
• owner-occupied interest-only home loans comprised 17% (2021: 19%) of total balances. The average balance weighted LTV on
owner occupied loans remained stable at 50.0% (2021: 50.3%).
• BTL home loans comprised 12.7% (2021: 13.1%) of total balances. In BTL, the average balance weighted LTV remained stable at
53.2% (2021: 53.4%).
Home loans principal portfolios - distribution of balances by LTVa
Barclays UK
As at 31 December 2022
<=75%
>75% and <=90%
>90% and <=100%
>100%
As at 31 December 2021
<=75%
>75% and <=90%
>90% and <=100%
>100%
Distribution of Balances
Distribution of impairment allowance
Coverage ratio
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
%
%
%
%
%
%
%
%
%
%
%
%
78.8
8.8
0.6
—
77.2
9.3
0.9
0.0
10.5
0.5
—
—
11.3
0.6
—
—
0.8
—
—
—
0.7
—
—
—
90.1
9.3
0.6
—
89.2
9.9
0.9
0.0
10.2
3.9
0.3
0.1
8.3
4.8
0.9
0.2
30.8
9.7
0.3
0.6
17.7
10.7
1.0
1.0
33.2
5.2
2.4
3.3
31.9
11.7
2.9
8.9
74.2
18.8
3.0
4.0
57.9
27.2
4.8
10.1
—
—
—
0.4
—
0.0
0.1
0.4
0.2
1.4
1.5
21.4
0.1
1.0
1.9
6.4
2.9
30.8
85.0
64.9
2.4
22.6
87.5
100.0
0.1
0.1
0.4
13.1
—
0.1
0.3
14.1
Note
a Portfolio marked to market based on the most updated valuation including recovery book balances. Updated valuations reflect the application of the latest HPI available as at 31 December 2022.
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Risk performance - Credit risk (continued)
Home loans principal portfolios – average LTV
As at 31 December
Overall portfolio LTV (%):
Balance weighted %
Valuation weighted %
For >100% LTVs:
Balances £m
Marked to market collateral £m
Average LTV: Balance weighted %
Average LTV: Valuation weighted %
% of Balances in Recoveries
Home loans principal portfolios - new lending
As at 31 December 2022
New Home loan bookings (£m)
New home loan proportion above 90% LTV (%)
Average LTV on new home loan: balance weighted (%)
Average LTV on new home loan: valuation weighted (%)
Barclays UK
2022
50.4
37.3
34
26
210.6
145.5
18.9
2021
50.7
37.5
58
47
160.9
129.1
14.5
Barclays UK
2022
30,307
2.8
68.1
59.6
2021
33,945
1.9
69.5
61.9
New bookings: New lending in 2022 was £30.3bn, a reduction of 11% on 2021. This was mainly driven by economic conditions that
resulted in general mortgage market suppression, including higher mortgage payments as rates continued to rise and increased cost of
living factors in line with inflation.
Head Office: Italian home loans and advances at amortised cost reduced to £4.5bn (2021: £4.7bn) and continue to run-off since new
bookings ceased in 2016. The portfolio is secured on residential property with an average balance weighted mark to market LTV of
58.8% (2021: 60.4%). 90-day arrears decreased to 1.2% (2021: 1.3%), gross charge-off rate increased to 0.6% (2021: 0.3%) due to a
combination of affordability stress related to rising inflation and interest rates, and the particularly low rate observed in 2021 due to the
COVID portfolio improvements.
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Risk performance - Credit risk (continued)
Credit cards, unsecured loans and other retail lending
The principal portfolios listed below accounted for 85% (2021: 82%) of the Group’s total credit cards, unsecured loans and other retail
lending.
Credit cards and unsecured loans principal portfolios
Gross exposure
30 day arrears rate,
excluding
recoveries book
90 day arrears rate,
excluding
recoveries book
Annualised gross
write-off rates
Annualised net
write-off rates
£m
%
%
%
%
As at 31 December 2022
Barclays UK
UK cards
UK personal loans
Barclays Partner Finance
Barclays International
US cards
Germany consumer lending
As at 31 December 2021
Barclays UK
UK cards
UK personal loans
Barclays Partner Finance
Barclays International
US cards
Germany consumer lending
9,939
4,023
2,612
25,554
4,269
9,933
4,011
2,471
17,779
3,559
0.9
1.4
0.5
2.2
1.7
1.0
1.5
0.4
1.6
1.5
0.2
0.6
0.2
1.2
0.7
0.2
0.7
0.2
0.8
0.7
3.7
4.1
0.7
2.4
0.7
4.1
3.5
1.4
4.3
0.9
3.6
3.8
0.7
2.3
0.6
4.0
3.2
1.4
4.2
0.8
UK cards: 30 day arrears rate reduced marginally to 0.9% (2021: 1.0%) and 90 day arrears rate remained stable at 0.2% (2021: 0.2%),
whilst total exposure was stable at £9.9bn. Both the gross and net write off rates decreased by 0.4% due to reduced debt sales and
monthly delinquency flows.
UK personal loans: 30 and 90 day arrears rates have reduced marginally to 1.4% (2021: 1.5%) and 0.6% (2021: 0.7%) respectively,
whilst total exposure was stable at £4.0bn. Both the annualised gross and net write off rates increased by 0.6% due to increased regular
debt sales.
Barclays Partner Finance: 30 day arrears rate increased slightly to 0.5% (2021: 0.4%) and 90 day arrears rate remained stable at 0.2%
(2021: 0.2%), reflecting marginally higher entry rates with stable flows through the delinquency cycles. Total exposure grew by £0.1bn to
£2.6bn (2021: £2.5bn) as a result of increased sales. Both the annualised gross and net write off rates decreased by 0.7% as a result of
the reducing delinquent stock and subsequent flow into recoveries.
US cards: Balances increased due to the acquisition of the Gap portfolio in June 2022, movement in the USD/GBP exchange rate and
core portfolio growth. 30 and 90 day arrears rates increased to 2.2% (2021: 1.6%) and 1.2% (2021: 0.8%) due to the partial
normalisation of customer behaviour and the acquisition of the Gap portfolio, though rates remain below pre-pandemic levels. Write-
off rates decreased reflecting portfolio growth and the impact of lower charge offs in 2021 due to the benefit of government support
schemes .
Germany consumer lending: 30 day arrears rate increased to 1.7% (2021: 1.5%) due to increased macroeconomic uncertainty in
Europe, though the rate was consistent with pre-pandemic levels.
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Risk performance - Credit risk (continued)
Government supported loans
Throughout the COVID-19 pandemic Barclays has supported its customers and clients by participating in the UK Government's
Bounce Back Loan Scheme (BBLS), Coronavirus Business Interruption Loan Scheme (CBILS), Coronavirus Large Business Interruption
Loan Scheme (CLBILS) and Recovery Loan Scheme (RLS).
Government supported loans
Gross exposure
Impairment allowance
Impairment coverage
As at 31 December 2022
Barclays UK
BBLS
CBILS
RLS
Barclays International
CBILS
CLBILS
RLS
Total
As at 31 December 2021
Barclays UK
BBLS
CBILS
RLS
Barclays International
CBILS
CLBILS
RLS
Total
Stage 1
Stage 2
Stage 3
£m
£m
£m
3,066
286
13
306
67
17
3,755
7,881
900
11
619
163
1
9,575
2,903
396
4
154
32
3
3,492
797
110
—
146
56
—
1,109
618
66
1
8
13
1
707
704
47
1
6
2
—
760
Total
£m
6,587
748
18
468
112
21
7,954
9,382
1,057
12
771
221
1
11,444
Modelled
impairment
Management
adjustment
Impairment
post
management
adjustment
Pre
management
adjustment
Post
management
adjustment
£m
£m
£m
%
%
6
22
—
5
2
—
35
396
12
—
5
1
—
414
27
(9)
—
—
—
—
18
(380)
(7)
—
—
—
—
(387)
33
13
—
5
2
—
53
16
5
—
5
1
—
27
0.1
2.9
—
1.1
2.1
1.5
0.4
4.2
1.1
2.7
0.6
0.4
4.7
3.6
0.5
1.7
—
1.1
2.1
1.5
0.7
0.2
0.5
2.7
0.6
0.4
4.7
0.2
Government
guaranteed
exposure
Total
£m
6,554
598
14
375
89
16
7,646
9,366
845
10
617
177
1
11,016
The BBLS and CBILS schemes were launched to provide financial support to smaller and medium-sized businesses and CLBILS for
larger businesses in the UK who may experience financial difficulties as a result of the COVID-19 outbreak. The RLS aims to help UK
businesses access finance as they recover and grow following the COVID-19 pandemic. These loans are guaranteed by the
government at 100% for BBLS and 80% for CBILS, CLBILS and RLS (70% for RLS issued post January 1, 2022) as at the balance sheet
date.
Management adjustment of £(380)m applied in December 2021 has been discontinued following an update in the underlying ECL model
that now fully recognises the 100% government guarantee against BBLS exposure within BUK Business Banking. However, we continue
to hold the £(9)m (December 2021: £(7)m) adjustment against CBILS as the 80% government guarantee is not fully recognised in the
models. In instances where Barclays has assessed the BBLS exposure to have not met strict assessment criteria, no claim has been
made against the government guarantee resulting in an impairment allowance against these loans of £33m (December 2021: £16m) as
at the balance sheet date.
Additionally, while the government supported loans are covered by guarantees, many BBLS customers have other financing
arrangements with Barclays which are not covered by the government guarantee. Noting the elevated levels of delinquency across the
BBLS population, Barclays has continued to apply management adjustment of £0.1bn to BBLS customers outside the scheme.
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Risk performance - Credit risk (continued)
Forbearance
Forbearance measures consist of concessions towards a debtor that is experiencing or about to experience difficulties in meeting their
financial commitments ("financial difficulties").
Analysis of forbearance programmes
Balances
Impairment allowance
As at 31 December 2022
Barclays UK
Barclays International
Head Office
Total retail
Barclays UK
Barclays International
Head Office
Total wholesale
Group total
As at 31 December 2021
Barclays UK
Barclays International
Head Office
Total retail
Barclays UK
Barclays International
Head Office
Total wholesale
Group total
Stage 1
Stage 2
Stage 3
£m
£m
£m
83
1
20
104
58
—
—
58
162
140
1
—
141
59
—
—
59
200
151
3
30
184
127
903
—
455
243
101
799
519
698
—
1,030
1,214
1,217
2,016
140
3
—
143
76
1,051
—
1,127
1,270
737
244
116
1,097
494
961
—
1,455
2,552
Total
£m
689
247
151
1,087
704
1,601
—
2,305
3,392
1,017
248
116
1,381
629
2,012
—
2,641
4,022
Stage 1
Stage 2
Stage 3
£m
1
—
—
1
1
—
—
1
2
2
—
—
2
—
—
—
—
2
£m
26
—
2
28
4
21
—
25
53
46
1
—
47
2
38
—
40
87
£m
145
114
15
274
47
108
—
155
429
284
152
15
451
48
321
—
369
820
Total
£m
172
114
17
303
52
129
—
181
484
332
153
15
500
50
359
—
409
909
Retail balances on forbearance decreased by 21%, reflecting a decrease in UK cards and UK personal loans, driven by lower entries into
forbearance.
Wholesale balances subject to forbearance decreased to £2.3bn (2021: £2.6bn) with reductions in exposure in Corporate Bank and
Investment Bank of £204m and £127m respectively. Impairment allowances reduced to £181m (2021: £409m) following a range of
notable write offs. Barclays International accounted for 69% of wholesale forbearance with corporate cases representing 84% of these
balances.
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Risk performance - Credit risk (continued)
Retail forbearance programmes
Forbearance on the Group’s principal retail portfolios is presented below. The principal portfolios account for 99% (2021: 99%) of total
retail forbearance balances.
Analysis of Key Portfolios in Forbearance Programmes
Balances on Forbearance Programmes
Marked to market
LTV of forbearance
balances: balance
weighted
Marked to market
LTV of forbearance
balances: valuation
weighted
Impairment
allowances marked
against balances
on forbearance
programmes
Total balances on
forbearance
programmes
coverage ratio
% of gross retail
loans and advances
As at 31 December 2022
Barclays UK
UK Home Loans
UK cards
UK personal loans
Barclays Partner Finance
Barclays International
US cards
Germany consumer lending
Head Office
Italy Mortgages
As at 31 December 2021
Barclays UK
UK Home Loans
UK cards
UK personal loans
Barclays Partner Finance
Barclays International
US cards
Germany consumer lending
Head Office
Italy Mortgages
Total
£m
263
338
59
16
206
40
151
293
577
120
15
196
51
116
£m
%
%
£m
%
0.2
3.4
1.5
0.6
0.8
0.9
3.4
0.2
5.8
3.0
0.6
1.1
1.4
2.4
39.6
n/a
n/a
n/a
n/a
n/a
28.3
n/a
n/a
n/a
n/a
n/a
61.1
45.2
42.2
n/a
n/a
n/a
n/a
n/a
30.0
n/a
n/a
n/a
n/a
n/a
58.4
41.9
4
118
33
10
87
27
17
3
242
69
9
122
31
15
1.5
34.9
55.9
62.5
42.2
67.5
11.3
1.0
41.9
57.9
61.6
62.2
60.7
13.2
UK home loans: Forbearance balances decreased to £263m (2021: £293m) driven by a run down in repayment-to-interest-only
switches that entered forbearance during the COVID-19 period.
UK cards: Balances on forbearance decreased to £338m (2021: £577m), reflecting lower entries into forbearance and the impact of a
year-end strategy change to align the point of charge off and write off.
UK personal loans: Balances on forbearance programmes decreased to £59m (2021: £120m), reflecting lower entries into forbearance
and the impact of a year-end strategy change to align the point of charge off and write off.
Barclays Partner Finance: Balances on forbearance remain relatively stable and aligned to the total delinquent stock.
US cards: Forbearance balances increased to £206m (2021: £196m) reflecting a small underlying decrease, more than offset by the
movement in the USD/GBP exchange rate.
Germany consumer lending: Forbearance balances decreased to £40m (2021: £51m) due to lower customer demand.
Italian home loans: Forbearance balances increased to £151m (2021: £116m) due to a standardisation of the definition of forbearance
to comply with EBA Reporting rules.
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Risk performance - Credit risk (continued)
Wholesale forbearance programmes
The table below details balance information for wholesale forbearance cases.
Analysis of wholesale balances in forbearance programmes
As at 31 December 2022
Barclays UK
Barclays International
Total
As at 31 December 2021
Barclays UK
Barclays International
Total
Balances on forbearance programmes
Total balances
£m
704
1,601
2,305
629
2,012
2,641
% of gross
wholesale loans
and advances
%
1.8
1.2
1.3
1.6
1.9
1.8
Impairment
allowances marked
against balances
on forbearance
programmes
Total balances on
forbearance
programmes
coverage ratio
£m
52
129
181
50
359
409
%
7.4
8.1
7.9
7.9
17.8
15.5
Analysis of debt securities
Debt securities include government securities held as part of the Group’s treasury management portfolio for liquidity and regulatory
purposes, and are for use on a continuing basis in the activities of the Group.
The following tables provide an analysis of debt securities held by the Group for trading and investment purposes by issuer type, and
where the Group held government securities exceeding 10% of shareholders’ equity. Further information on the credit quality of debt
securities is presented in the Balance sheet credit quality section.
Debt securities
As at 31 December
Of which issued by:
Governments and other public bodies
Corporate and other issuers
US agency
Mortgage and asset backed securities
Total
Government securities
As at 31 December
United States
United Kingdom
Japan
Germany
2022
£m
106,676
41,794
6,399
14,174
169,043
%
63.1
24.7
3.8
8.4
2021
£m
94,730
36,916
4,364
9,788
100
145,798
Fair value
2022
£m
34,187
22,329
16,938
7,666
%
65.0
25.3
3.0
6.7
100
2021
£m
30,023
27,409
8,555
3,520
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Risk performance - Credit risk (continued)
Analysis of derivatives
The tables below set out the fair values of the derivative assets together with the value of those assets subject to enforceable
counterparty netting arrangements for which the Group holds offsetting liabilities and eligible collateral.
Derivative assets (audited)
As at 31 December
Foreign exchange
Interest rate
Credit derivatives
Equity and stock index
Commodity derivatives
Total derivative assets
Cash collateral held
Net exposure less collateral
2022
Balance sheet
assets
Counterparty
netting
£m
109,938
134,579
5,423
48,665
3,775
£m
88,096
101,646
4,356
41,200
3,039
302,380
238,337
2021
Balance sheet
assets
Counterparty
netting
£m
76,975
125,905
5,682
51,723
2,287
£m
60,525
92,669
4,525
43,084
1,717
262,572
202,520
Net
exposure
£m
21,842
32,933
1,067
7,465
736
64,043
34,547
29,496
Net
exposure
£m
16,450
33,236
1,157
8,639
570
60,052
34,598
25,454
Derivative asset exposures would be £273bn (2021: £237bn) lower than reported under IFRS if netting were permitted for assets and
liabilities with the same counterparty or for which the Group holds cash collateral. Similarly, derivative liabilities would be £(264)bn (2021:
£(235)bn) lower reflecting counterparty netting and collateral placed. In addition, non-cash collateral of £11bn (2021: £6bn) was held in
respect of derivative assets. The Group received collateral from clients in support of over the counter derivative transactions. These
transactions are generally undertaken under International Swaps and Derivative Association (ISDA) agreements governed by either UK
or New York law.
The table below sets out the fair value and notional amounts of OTC derivative instruments by type of collateral arrangement.
Derivatives by collateral arrangement
Unilateral in favour of Barclays
Foreign exchange
Interest rate
Credit derivatives
Equity and stock index
Total unilateral in favour of Barclays
Unilateral in favour of counterparty
Foreign exchange
Interest rate
Credit derivatives
Equity and stock index
Total unilateral in favour of counterparty
Bilateral arrangement
Foreign exchange
Interest rate
Credit derivatives
Equity and stock index
Commodity derivatives
Total bilateral arrangement
Uncollateralised derivatives
Foreign exchange
Interest rate
Credit derivatives
Equity and stock index
Commodity derivatives
Total uncollateralised derivatives
Notional contract
amount
£m
37,149
17,967
823
19
2022
Fair value
Assets
£m
1,130
151
26
3
55,958
1,310
22,673
61,158
144
492
638
2,270
—
96
Liabilities
£m
Notional contract
amount
£m
(677)
(57)
(224)
(2)
(960)
(637)
(2,752)
—
(26)
26,905
6,790
1,200
245
35,140
22,987
36,230
152
507
84,467
3,004
(3,415)
59,876
2021
Fair value
Assets
£m
437
816
24
33
1,310
385
3,162
1
159
3,707
5,381,723
14,566,844
582,943
393,664
4,303
102,077
124,463
3,635
9,505
14
(95,377)
5,261,708
(107,895)
13,956,001
(3,790)
(12,280)
(50)
570,968
259,066
4,485
71,624
116,656
3,635
12,749
54
Liabilities
£m
(635)
(6)
(202)
(4)
(847)
(883)
(3,684)
—
(21)
(4,588)
(68,186)
(108,723)
(4,190)
(15,965)
(102)
20,929,477
239,694
(219,392)
20,052,228
204,718
(197,166)
349,569
287,026
35,933
16,101
108
688,737
5,638
3,119
601
3,075
—
(6,979)
(6,864)
(717)
(4,416)
(1)
403,523
227,093
34,184
18,865
185
4,348
3,244
347
5,881
2
(4,526)
(1,759)
(360)
(8,478)
(5)
12,433
256,441
(18,977)
683,850
(242,744)
20,831,094
13,822
223,557
(15,128)
(217,729)
Total OTC derivative assets/(liabilities)
21,758,639
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Risk performance - Market risk
Market risk
Summary of contents
Outlines key measures used to summarise the market risk
profile of the bank such as value at risk (VaR).
The Group discloses details on management measures of
market risk. Total management VaR includes all trading
positions and is presented on a diversified basis by risk
factor.
This section also outlines the macroeconomic conditions
modelled as part of the Group’s risk management
framework.
Market risk overview and summary of performance
Traded market risk
Review of management measures
– The daily average, maximum and minimum values of management
– Business scenario stresses VaR
Page
341
341
341
342
342
Summary of performance in the
period
Average management VaR increased 89%
to £36m (2021: £19m) driven by higher
market volatility. The conflict in Ukraine
and elevated inflation increased volatility
across all asset classes as central banks
increased base rates, equity markets
declined, and credit spreads widened
during this period. The Global Markets
business maintained a generally short and
defensive risk profile (i.e. positioned to gain
as the market sells off) for most of 2022.
VaR increased in Q4 2022 from an
increase in funded, fair-value leverage loan
exposure in Investment Banking. Risk
taking remained within agreed risk appetite
limits at all times in 2022.
Traded market risk review
Review of management measures
The following disclosures provide details
on management measures of market risk.
Refer to the market risk management
section of the Barclays PLC Pillar 3 Report
2022 (unaudited) for more detail on
management measures and the
differences when compared to regulatory
measures.
The table below shows the total
management VaR on a diversified basis by
risk factor. Total management VaR
includes all trading positions in CIB and
Treasury and it is calculated with a one-day
holding period, measured to a confidence
level of 95%.
Limits are applied against each risk factor
VaR as well as total management VaR,
which are then cascaded further by risk
managers to each business.
Market risk
All disclosures in this section are unaudited
unless otherwise stated.
Overview
This section contains key statistics
describing the market risk profile of the
Group. The market risk management
section provides a description of
management VaR.
Measures of market risk in the
Group and accounting measures
Traded market risk measures such as VaR
and balance sheet exposure measures
have fundamental differences:
• balance sheet measures show accruals-
based balances or marked to market
values as at the reporting date;
• VaR measures also take account of
current marked to market values, but in
addition hedging effects between
positions are considered;
• market risk measures are expressed in
terms of changes in value or volatilities
as opposed to static values.
For these reasons, it is not possible to
present direct reconciliations of traded
market risk and accounting measures.
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Risk performance - Market risk (continued)
The daily average, high and low values of management VaR
Management VaR (95%, one day) (audited)
For the year ended 31 December
Credit risk
Interest rate risk
Equity risk
Basis risk
Spread risk
Foreign exchange risk
Commodity risk
Inflation risk
Diversification effecta
Total management VaR
2022
Average
Higha
£m
25
13
10
12
7
8
—
6
(45)
36
£m
71
23
29
24
11
25
1
17
n/a
73
Lowa
£m
8
4
4
4
3
2
—
3
n/a
13
2021
Average
Higha
£m
14
7
9
6
4
4
—
3
(28)
19
£m
30
15
29
10
6
16
1
5
n/a
36
Lowa
£m
7
4
4
3
3
1
—
2
n/a
6
Note
a Diversification effects recognise that forecast losses from different assets or businesses are unlikely to occur concurrently, hence the expected aggregate loss is lower than the sum of the expected
losses from each area. Historical correlations between losses are taken into account in making these assessments. The high and low VaR figures reported for each category did not necessarily occur
on the same day as the high and low VaR reported as a whole. Consequently, a diversification effect balance for the high and low VaR figures would not be meaningful and is therefore omitted from the
above table.
Group Management VaR
(£m)
Jan 2021
Jan 2022
Dec 2022
Business scenario stresses
As part of the Group’s risk management framework, on a regular basis the performance of the trading business in hypothetical
scenarios characterised by severe macroeconomic conditions is modelled. Up to seven global scenarios are modelled on a regular
basis, for example, a sharp deterioration in liquidity, a slowdown in the global economy, global recession, and a sharp increase in
economic growth.
In 2022, the scenario analyses showed that the largest market risk related impacts would be due to a severe deterioration in financial
liquidity and an associated global recession.
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Risk performance - Treasury and Capital risk
Treasury and Capital risk
Treasury and Capital risk: summary of contents
Liquidity risk performance
The risk that the firm 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 section provides an overview of the Group’s liquidity risk.
Liquidity overview and summary of performance
Liquidity risk stress testing
– Liquidity risk appetite
– Liquidity regulation
– Liquidity coverage ratio
– Net stable funding ratio
The liquidity pool is held unencumbered and is intended to offset stress outflows.
Liquidity pool
The basis for sound liquidity risk management is a funding structure that reduces the
probability of a liquidity stress leading to an inability to meet funding obligations as they
fall due.
Provides details on the contractual maturity of all financial instruments and other assets
and liabilities.
Capital risk performance
Capital risk is the risk that the firm 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 testing purposes). This also includes the risk
from the firm’s pension plans.
This section details the Group’s capital position providing information on both capital
resources and capital requirements. It also provides details of the leverage ratios and
exposures.
This section outlines the Group’s capital ratios, capital composition, and provides
information on significant movements in CET1 capital during the year.
– Composition of the liquidity pool
– Liquidity pool by currency
– Management of the liquidity pool
– Contingent liquidity
Funding structure and funding relationships
– Deposit funding
– Wholesale funding
Contractual maturity of financial assets and
liabilities
Capital risk overview and summary of performance 355
Regulatory minimum capital, leverage and MREL
requirements
– Capital
– Leverage
Analysis of capital resources
Capital ratios
– Capital resources
– Movement in CET1 capital
This section outlines risk weighted assets by risk type, business and macro drivers.
Analysis of risk weighted assets
This section outlines the Group’s leverage ratios, leverage exposure composition, and
provides information on significant movements in the IFRS and leverage balance sheet.
– Risk weighted assets by risk type and business
– Movement analysis of risk weighted assets
Analysis of leverage ratios and exposures
– Leverage ratios and exposures
This section outlines the Group’s Minimum requirement for own funds and Eligible
Liabilities (MREL) position and ratios.
– Minimum requirement for own funds and eligible
liabilities
The Group discloses the two sources of foreign exchange risk that it is exposed to.
Foreign exchange risk
A review focusing on the UK retirement fund, which represents the majority of the
Group’s total retirement benefit obligation.
– Transactional foreign currency exposure
– Translational foreign exchange exposure
– Functional currency of operations
Pension risk review
– Assets and liabilities
– IAS 19 position
– Risk measurement
Page
344
344
344
345
346
346
346
346
347
347
347
347
348
348
351
355
355
355
357
357
357
358
359
359
359
360
360
361
362
362
362
362
362
362
363
363
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Risk performance - Treasury and Capital risk (continued)
Interest rate risk in the banking book performance
A description of the non-traded market risk framework is provided.
The Group discloses a sensitivity analysis on pre-tax net interest income for non-
trading financial assets and liabilities. The analysis is carried out by business unit and
currency.
The Group measures some non-traded market risks, in particular prepayment,
recruitment, and residual risk using an economic capital methodology.
The Group discloses the overall impact of a parallel shift in interest rates on other
comprehensive income and cash flow hedges.
The Group measures the volatility of the value of the FVOCI instruments in the liquidity
pool through non-traded market risk VaR.
Net interest income sensitivity
– by business unit
– by currency
Analysis of equity sensitivity
Volatility of the FVOCI portfolio in the liquidity pool
Page
364
364
365
365
365
Liquidity risk
All disclosures in this section are
unaudited unless otherwise stated.
Overview
The Group Liquidity Risk is managed within
Treasury and Capital Risk framework that
meets the PRA standards and is designed
to maintain liquidity resources that are
sufficient in amount and quality, and a
funding profile that is appropriate to meet
the Group’s Liquidity Risk Appetite. The
liquidity risk framework is delivered via a
combination of policy formation, review
and governance, analysis, stress testing,
limit setting and monitoring.
This section provides an analysis of the
Group’s: (i) summary of performance, (ii)
liquidity risk stress testing, iii) liquidity
regulation, iv) liquidity pool, (v) funding
structure and funding relationships, (vi)
credit ratings, and (vii) contractual
maturity of financial assets and liabilities.
For further detail on liquidity risk
governance and framework, refer to
pages 156 to 163 of the Barclays PLC Pillar
3 Report 2022 (unaudited).
Key metrics
Liquidity Coverage Ratio
165%
Net Stable Funding Ratioa
137%
a Average represents the last four spot quarter end positions
Summary of performance
The liquidity pool at £318bn (December
2021: £291bn) reflects the Group’s
prudent approach to liquidity
management. The Liquidity Coverage
Ratio (LCR) remained well above the 100%
regulatory requirement at 165%
(December 2021: 168%), equivalent to a
surplus of £117bn (December 2021:
£116bn).
The increase in the liquidity pool over the
year was driven by continued deposit
growth and an increase in wholesale
funding, partly offset by an increase in
business funding consumption. An
increase in net stress outflows and
trapped liquidity within Barclays’
subsidiaries led to a modest reduction in
the LCR ratio. The Net Stable Funding
Ratio (average of last four quarter ends)
was 137%, which represents £155bn
surplus above 100% regulatory
requirement.
During the year, the Group issued £15bn
of minimum requirement for own funds
and eligible liabilities (MREL) instruments in
a range of tenors and currencies.
Barclays Bank PLC continued to issue in
the shorter-term and medium-term
markets and Barclays Bank UK PLC
continued to issue in the shorter-term
markets and maintain active secured
funding programmes. This funding
capacity enables the respective entities to
maintain their stable and diversified
funding bases.
The Group’s reliance on short-term
wholesale funding, as measured by the
proportion of wholesale funding maturing
in less than one year decreased year-on-
year to 39% (December 2021: 40%).
Liquidity Liquidity risk stress
testing
Barclays’ Liquidity Risk is managed within
the Principal Risk: Treasury and Capital
Risk Framework. Under this framework,
the Group has established a liquidity risk
appetite together with the appropriate
limits for the management of the liquidity
risk. This is the level of liquidity risk the
Group chooses to take in pursuit of its
business objectives and in meeting its
regulatory obligations. The Group sets its
internal liquidity risk appetite based on
internal liquidity risk stress tests and,
external regulatory requirements namely
the Liquidity Coverage Ratio (LCR) and
Net Stable Funding Ratio (NSFR).
Liquidity risk appetite (LRA)
The internal liquidity risk stress test
measures the potential contractual and
contingent stress outflows under a range
of internally defined stress scenarios,
which are then used to determine the size
of the liquidity pool that is immediately
available to meet anticipated outflows
should a stress occur.
As part of the LRA, the Group runs four
liquidity stress scenarios, aligned to the
PRA’s prescribed stresses:
• 90 days market-wide stress event
• 30 days Barclays-specific stress event
• 30 days combined market-wide and
Barclays-specific stress event
• 12 months market wide stress
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Risk performance - Treasury and Capital risk (continued)
Key LRA assumptions
For the year ended 31 December 2022
Drivers of Liquidity Risk
LRA Combined stress – key assumptions
Wholesale Secured and Unsecured Funding Risk
Zero rollover of maturing wholesale unsecured funding
Partial loss of repo capacity on non-extremely liquid repos at contractual maturity date
Roll of repo for extremely liquid repo at wider haircut at contractual maturity date
Withdrawal of contractual buyback obligations, excess client futures margin, Prime Brokerage
(PB) client cash and overlifts
Haircuts applied to the market value of marketable assets held in the liquidity buffer
Retail and Corporate Funding Risk
Retail and Corporate deposit outflows as counterparties seek to diversify their deposit balances
Intraday Liquidity Risk
Intra-Group Liquidity Risk
Cross-Currency Liquidity Risk
Liquidity held to meet increased intraday liquidity usage due to payment and receipts volatility,
loss of unsecured credit lines and haircuts applied to collateral values used to back secured credit
lines, in a stress
Liquidity support for material subsidiaries. Surplus liquidity held within certain subsidiaries is not
taken as a benefit to the wider Group
Deterioration in FX market capacity that may result in restriction in net currency positions
(managed as a separate framework)
Off-Balance Sheet Liquidity Risk
Drawdown on committed facilities based on facility and counterparty type
Collateral outflows due to a two-notch credit rating downgrade
Increase in the Group's initial margin requirement across all major exchanges
Variation margin outflows from collateralised risk positions
Outflow of collateral owing but not called
Loss of internal sources of funding within the PB synthetics business
Franchise-Viability Risk
Liquidity held to enable the firm to meet select non-contractual obligations to ensure market
confidence in the firm is maintained, including debt buy-backs, swap tear-ups and increased
prime brokerage margin debits
Funding Concentration Risk
Funding from counterparties providing greater than 1% of total funding
As at 31 December 2022, the Group held eligible liquid assets well in excess of 100% of net stress outflows of the 30 days combined
scenario, which has the highest net outflows of the three short-term liquidity stress scenarios.
The Group also runs a long term liquidity stress test, which measures the anticipated outflows over a 12 months market-wide scenario.
As at 31 December 2022, the Group remained compliant with this internal metric.
Liquidity regulation
Certain Basel III standards including those relating to the introduction of the liquidity adequacy requirement measured through the LCR
were implemented in EU law through CRR, as amended by CRRII, and the Capital Requirements Directive IV. These standards were
retained in the UK regulatory framework via a series of onshoring instruments as part of the UK’s withdrawal from the EU. In October
2021, the PRA published the final policy statement setting out its planned implementation of supplementary Basel III standards,
including the Net Stable Funding Ratio (NSFR). These came into effect in the UK on 1 January 2022 from which date the Group monitors
its position against both the LCR and NSFR.
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Risk performance - Treasury and Capital risk (continued)
Liquidity coverage ratio
The external LCR requirement is designed to promote short-term resilience of a bank’s liquidity risk profile by holding sufficient High
Quality Liquid Assets (HQLA) to survive an acute stress scenario lasting for 30 days.
As at 31 December
LCR Eligible High Quality Liquid Assets (HQLA)
Net stress outflows
Surplus
Liquidity coverage ratio
2022
£bn
295
(178)
117
165 %
2021
£bn
285
(169)
116
168 %
Net Stable Funding Ratio (NSFR)
The external NSFR metric requires banks to maintain a stable funding profile taking into account both on and certain off balance sheet
exposures over a medium to long term period. The ratio is defined as the Available Stable Funding (capital and certain liabilities which are
defined as stable sources of funding) relative to the Required Stable Funding (assets on balance sheet and certain off balance sheet
exposures). The NSFR was 137% at December 2022 (average of last four quarter ends) equivalent to a surplus of £155bn above the
regulatory requirement and demonstrates Barclays’ stable funding profile in relation to our on- and certain off-balance sheet activities.
Net Stable Funding Ratio (NSFR)a
Total Available Stable Funding
Total Required Stable Funding
Surplus
Net Stable Funding Ratio
2022
£bn
576
421
155
137 %
Note
a Average represents the last four spot quarter end positions
As part of the liquidity risk appetite, Barclays establishes minimum LCR, NSFR and internal liquidity stress test limits. The Group plans to
maintain its surplus to the internal and regulatory requirements at an efficient level. Risks to market funding conditions, the Group’s
liquidity position and funding profile are assessed continuously, and actions are taken to manage the size of the liquidity pool and the
funding profile as appropriate.
Liquidity pool
The Group liquidity pool as at 31 December 2022 was £318bn (2021: £291bn). During 2022, the month-end liquidity pool ranged from
£309bn to £359bn (2021: £290bn to £337bn), and the month-end average balance was £331bn (2021: £303bn). The liquidity pool is
held unencumbered and is intended to offset stress outflows. It comprises the following cash and unencumbered assets.
Composition of the Group liquidity pool as at 31 December 2022
LCR eligible High Quality Liquid Assets (HQLA)a
Liquidity pool
Cash and deposits with central banksb
Government bondsc
AAA to AA-
A+ to A-
BBB+ to BBB-
Total government bonds
Other
Government guaranteed issuers, PSEs and GSEs
International organisations and MDBs
Covered bonds
Other
Total other
Total as at 31 December 2022
Total as at 31 December 2021
Cash
£bn
248
—
—
—
—
—
—
—
—
—
248
243
Level 1
Level 2A
Level 2B
£bn
£bn
£bn
21
1
—
22
5
2
2
—
9
31
37
10
2
—
12
1
—
2
—
3
15
3
—
—
—
—
—
—
—
1
1
1
2
Total
£bn
248
31
3
—
34
6
2
4
1
13
295
285
2022
£bn
263
39
3
—
42
6
2
5
—
13
318
2021
£bn
245
26
2
—
28
6
5
6
1
18
291
Notes
a The LCR eligible HQLA is adjusted for operational restrictions upon consolidation under Article 8 of the Liquidity Coverage Ratio section of the PRA rulebook (CRR) such as trapped liquidity within
b
Barclays subsidiaries. It also reflects differences in eligibility of assets between the LCR and Barclays’ Liquidity Pool.
Includes cash held at central banks and surplus cash at central banks related to payment schemes. Of which over 99% (2021: over 99%) was placed with the Bank of England, US Federal Reserve,
European Central Bank, Bank of Japan and Swiss National Bank.
c Of which over 79% (2021: over 82%) comprised UK, US, French, German, Japanese, Swiss and Dutch securities.
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Risk performance - Treasury and Capital risk (continued)
The Group liquidity pool is well diversified by major currency and the Group monitors LRA stress scenarios for major currencies.
Liquidity pool by currency
Liquidity pool as at 31 December 2022
Liquidity pool as at 31 December 2021
USD
£bn
72
59
EUR
£bn
79
52
GBP
£bn
142
132
Other
£bn
25
48
Total
£bn
318
291
Management of the liquidity pool
The composition of the liquidity pool is subject to limits set by the Board and the independent liquidity risk, credit risk and market risk
functions. In addition, the investment of the liquidity pool is monitored for concentration risk by issuer, currency and asset type. Given
the returns generated by these highly liquid assets, the risk and reward profile is continuously managed.
As at 31 December 2022, 60% (2021: 58%) of the liquidity pool was located in Barclays Bank PLC, 25% (2021: 30%) in Barclays Bank UK
PLC and 9% (2021: 7%) in Barclays Bank Ireland PLC. The residual portion of the liquidity pool is held outside of these entities,
predominantly in the US subsidiaries, to meet entity-specific stress outflows and local regulatory requirements. To the extent the use
of this portion of the liquidity pool is restricted due to local regulatory requirements, it is assumed to be unavailable to the rest of the
Group in calculating the LCR.
Contingent liquidity
In addition to the Group liquidity pool, the Group has access to other unencumbered assets which provide a source of contingent
liquidity. While these are not relied on in the Group’s LRA, a portion of these assets may be monetised in a stress to generate liquidity
through their use as collateral for secured funding or through outright sale.
In a Barclays-specific, market-wide or combined liquidity stress, liquidity available via market sources could be severely disrupted. In
circumstances where market liquidity is unavailable or available only at significantly elevated prices, the Group could generate liquidity
via central bank facilities. To this end, as at 31 December 2022, the Group had £83.3bn (December 2021: £93.3bn) of assets positioned
at various central banks.
For more detail on the Group’s other unencumbered assets, see pages 180 to 182 of the Barclays PLC Pillar 3 Report 2022 (unaudited).
Funding structure and funding relationships
The basis for sound liquidity risk management is a funding structure that reduces the probability of a liquidity stress leading to an inability
to meet funding obligations as they fall due. The Group’s overall funding strategy is to develop a diversified funding base (geographically,
by type and by counterparty) and maintain access to a variety of alternative funding sources, to provide protection against unexpected
fluctuations, while minimising the cost of funding.
Within this, the Group aims to align the sources and uses of funding. As such, retail and corporate loans and advances are largely funded
by deposits in the relevant entities, with the surplus primarily funding the liquidity pool. The majority of reverse repurchase agreements
are matched by repurchase agreements. Derivative liabilities and assets are largely matched. A substantial proportion of balance sheet
derivative positions qualify for counterparty netting and the remaining portions are largely offset when netted against cash collateral
received and paid. Wholesale debt and equity is used to fund residual assets.
These funding relationships are summarised below:
Assets
Loans and advances at amortised
costa
Group liquidity pool
Reverse repurchase agreements,
trading portfolio assets, cash collateral
and settlement balances
Derivative financial instruments
Other assetsb
2022
£bn
385
318
412
302
97
2021
£bn
358
291
388
263
84
Liabilities
Deposits at amortised cost
<1 Year wholesale funding
>1 Year wholesale funding
Repurchase agreements, trading
portfolio liabilities, cash collateral and
settlement balances
Derivative financial instruments
Other liabilities
Equity
2022
£bn
546
73
111
370
290
55
69
Restatedc
2021
£bn
519
67
101
330
257
40
70
Total assets
1,514
1,384
Total liabilities
1,514
1,384
Notes
a Adjusted for liquidity pool debt securities reported at amortised costs of £14bn (December 2021: £3bn).
b Other assets include fair value assets that are not part of reverse repurchase agreements or trading portfolio assets, and other asset categories.
c
2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See Impact of the Over-issuance of Securities on page 356 and Restatement of financial
statements (Note 1a) on page 428 for further details.
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Risk performance - Treasury and Capital risk (continued)
Deposit funding
Funding of loans and advances
As at 31 December 2022
Barclays UK
Barclays International
Head Office
Barclays Group
2022
2021
Loans and
advances at
amortised cost
Deposits at
amortised cost
Loan: deposit
ratioa
Loan: deposit
ratio
£bn
225
170
4
399
£bn
258
288
—
546
%
87 %
59 %
73 %
%
85 %
52 %
70 %
Note
a The loan: deposit ratio is calculated as loans and advances at amortised cost divided by deposits at amortised cost.
As at 31 December 2022, £224bn (2021: £222bn) of total customer deposits were insured through the UK Financial Services
Compensation Scheme (FSCS) and other similar schemes. In addition to these customer deposits £5.7bn (2021: £1.3bn) of other
liabilities are insured by other governments.
Contractually current accounts are repayable on demand and savings accounts at short notice. In practice, their observed maturity is
typically longer than their contractual maturity. Similarly, repayment profiles of certain types of assets e.g. mortgages, overdrafts and
credit card lending, differ from their contractual profiles. The Group therefore assesses the behavioural maturity of both customer
assets and liabilities to identify structural balance sheet funding gaps. In doing so, it applies quantitative modelling and qualitative
assessments which take into account historical experience, current customer composition, and macroeconomic projections.
The Group’s broad base of customers, numerically and by depositor type, helps protect against unexpected fluctuations in balances
and hence provides a stable funding base for the Group’s operations and liquidity needs.
Wholesale funding
Barclays Bank Group and Barclays Bank UK Group maintain access to a variety of sources of wholesale funds in major currencies,
including those available from term investors across a variety of distribution channels and geographies, short-term funding markets and
repo markets.
Barclays Bank Group has direct access to US, European and Asian capital markets through its global investment banking operations and
to long-term investors through its clients worldwide. Key sources of wholesale funding include money markets, certificates of deposit,
commercial paper, medium term issuances (including structured notes) and securitisations.
Key sources of wholesale funding for Barclays Bank UK Group include money markets, certificates of deposit, commercial paper,
covered bonds and other securitisations.
The Group expects to continue issuing public wholesale debt from Barclays PLC (the Parent company), in order to maintain compliance
with indicative MREL requirements and maintain a stable and diverse funding base by type, currency and market. During the year, the
Group issued £15.3bn of MREL instruments from Barclays PLC (the Parent company) in a range of different currencies and tenors.
Barclays Bank PLC continued to issue in the shorter-term markets and maintain active medium-term notes programmes. Barclays
Bank UK PLC continued to issue in the shorter-term markets and maintain active secured funding programmes. This funding capacity
enables the respective entities to maintain their stable and diversified funding bases.
As at 31 December 2022, the Group’s total wholesale funding outstanding (excluding repurchase agreements) was £184.0bn (2021:
£167.5bn), of which £19.2bn (2021: £16.6bn) was secured funding and £164.8bn (2021: £150.9bn) unsecured funding. Unsecured
funding includes £59.7bn (2021: £59.7bn) of privately placed senior unsecured notes issued through a variety of distribution channels
including intermediaries and private banks.
Wholesale funding of £72.5bn (2021: £66.7bnd) matures in less than one year, representing 39% (December 2021: 40%d) of total
wholesale funding outstanding. This includes £15.0bn (2021: £24.9bnd) related to term fundingb. Although not a requirement, the
liquidity pool exceeded the wholesale funding maturing in less than one year by £246bn (2021: £224bnd).
Barclays Bank Group and Barclays Bank UK Group also support various central bank monetary initiatives, such as the Bank of England’s
Term Funding Scheme with additional incentives for SMEs (TFSME), and the European Central Bank’s Targeted Long-Term Refinancing
Operations (TLTRO). These are reported under ‘repurchase agreements and other similar secured borrowing’ on the balance sheet.
In 2022, Barclays repaid £1.1bn of its TLTRO drawings reducing its outstanding balance to £1.4bn as at 31 December 2022. In addition,
Barclays had £22.0bn TFSME balances outstanding at the year-end.
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Risk performance - Treasury and Capital risk (continued)
Maturity profile of wholesale fundinga,b
<1 month
1-3
months
3-6
months
6-12
months
<1 year
1-2 years
2-3 years
3-4 years
4-5 years
>5 years
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Total
£bn
Barclays PLC (the Parent company)
Senior unsecured (Public benchmark)
Senior unsecured (Privately placed)
Subordinated liabilities
Barclays Bank PLC (including
subsidiaries)
Certificates of deposit and commercial
paper
Asset backed commercial paper
Senior unsecured (Public benchmark)
Senior unsecured (Privately placed)c
Asset backed securities
Subordinated liabilities
Barclays Bank UK PLC (including
subsidiaries)
Certificates of deposit and commercial
paper
Senior unsecured (Public benchmark)
Covered bonds
Total as at 31 December 22
Of which secured
Of which unsecured
Total as at 31 December 21d
Of which secured
Of which unsecured
—
—
—
0.3
3.6
—
1.2
—
—
4.7
—
1.3
11.1
4.9
6.2
14.1
2.4
11.7
—
—
—
0.2
—
—
1.7
0.2
—
1.9
0.2
—
5.8
0.1
1.0
1.5
—
1.0
41.8
11.0
—
10.5
11.0
0.3
0.3
1.8
0.2
4.7
—
1.8
72.5
13.1
59.4
66.7
9.9
56.8
—
—
—
22.4
1.8
20.6
15.4
1.9
13.5
5.6
—
—
0.6
—
—
9.9
0.7
0.1
—
—
—
16.9
0.7
16.2
15.1
2.0
13.1
8.3
—
1.6
0.1
—
—
3.7
0.5
0.3
—
—
—
14.5
0.5
14.0
9.9
0.1
9.8
4.5
—
—
—
—
—
4.2
0.5
—
—
—
0.5
9.7
1.0
8.7
11.4
0.3
11.1
18.0
44.1
1.0
7.0
1.3
9.6
—
—
—
19.1
1.2
0.7
44.0
11.0
1.0
58.4
5.0
1.6
—
0.1
0.9
4.7
0.1
3.2
48.0
184.0
2.1
19.2
45.9
164.8
49.0
167.5
2.4
16.6
46.6
150.9
17.7
12.8
11.0
6.6
—
2.1
0.1
—
—
—
—
26.5
6.7
19.8
21.7
6.4
15.3
0.8
—
2.1
—
—
—
—
0.5
16.4
1.3
15.1
15.5
0.6
14.9
—
—
5.1
0.2
0.3
—
—
—
18.5
0.2
18.3
15.4
0.5
14.9
Notes
a The composition of wholesale funds comprises the balance sheet reported financial liabilities at fair value, debt securities in issue and subordinated liabilities. It does not include participation in the
central bank facilities reported within repurchase agreements and other similar secured borrowing.
b Term funding comprises public benchmark and privately placed senior unsecured notes, covered bonds, asset-backed securities and subordinated debt where the original maturity of the instrument
was more than one year.
Includes structured notes of £48.4bn, of which £9.4bn matures within one year.
c
d 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See Impact of the Over-issuance of Securities on page 356 and Restatement of financial
statements (Note 1a) on page 428 for further details.
Currency composition of wholesale debt
As at 31 December 2022, the proportion of wholesale funding by major currencies was as follows:
Currency composition of wholesale funding
Certificates of deposit and commercial paper
Asset backed commercial paper
Senior unsecured (Public benchmark)
Senior unsecured (Privately placed)
Covered bonds / Asset backed securities
Subordinated liabilities
Total as December 31, 2022
Total as December 31, 2021
USD
%
64
84
60
54
61
61
61
59
EUR
%
28
11
23
21
12
20
22
24
GBP
Other
%
7
5
9
14
27
16
11
11
%
1
—
8
11
—
3
6
6
To manage cross currency refinancing risk, the Group manages to currency mismatch limits, which limit risk at specific maturities.
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Risk performance - Treasury and Capital risk (continued)
Credit ratings
In addition to monitoring and managing key metrics related to the financial strength of the Group, Barclays also solicits independent
credit ratings from Standard & Poor’s Global (S&P), Moody’s, Fitch, and Rating and Investment Information (R&I). These ratings assess
the creditworthiness of the Group, its subsidiaries and its branches, and are based on reviews of a broad range of business and financial
attributes including capital strength, profitability, funding, liquidity, asset quality, strategy and governance.
Credit ratings
As at 31 December 2022
Barclays Bank PLC
Long term
Short term
Barclays Bank UK PLC
Long term
Short term
Barclays PLC
Long term
Short term
Standard & Poor's
Moody's
Fitch
A/Positive
A-1
A/Positive
A-1
A1/Negative
P-1
A1/Stable
P-1
A+/Stable
F1
A+/Stable
F1
BBB/Positive
Baa2/Review for upgrade A/Stable
A-2
P-2
F1
In June 2022, S&P affirmed all ratings for Barclays PLC, Barclays Bank PLC and Barclays Bank UK PLC and maintained positive outlooks.
In June 2021, S&P revised the outlooks of Barclays PLC, Barclays Bank PLC and Barclays Bank UK PLC to positive from stable reflecting
the view that Barclays is delivering a stronger, more consistent business profile and financial performance.
In October 2022, Moody’s revised the outlook of Barclays Bank PLC to negative from stable alongside other major UK bank operating
subsidiaries, reflecting Moody’s view of the potentially weaker capacity of the UK Government to support the country's systemic banks.
However, Moody’s also noted that the impact of a UK sovereign downgrade could be offset by an upgrade of Barclays PLC, because
lower support from a weakening sovereign would be offset by higher support from a strengthening parent. In December 2022, Moody’s
revised the outlook of Barclays PLC to review for upgrade from positive, whilst affirming all ratings. The revision reflects Moody’s view
that the Group's earnings has improved, driven by repositioning and investments in the capital markets and US credit cards businesses,
higher net interest income following rate hikes in the UK, US and EU, and low cost of risk.
In September 2022, Fitch affirmed all ratings for Barclays PLC, Barclays Bank PLC and Barclays Bank UK PLC.
Barclays also solicits issuer ratings from R&I and the ratings of A for Barclays PLC and A+ for Barclays Bank PLC were affirmed in
November 2022 with stable outlooks.
A credit rating downgrade could result in outflows to meet collateral requirements on existing contracts. Outflows related to credit
rating downgrades are included in the LRA stress scenarios and a portion of the liquidity pool is held against this risk. Credit ratings
downgrades could also result in reduced funding capacity and increased funding costs.
The contractual collateral requirement following one- and two-notch long-term and associated short-term downgrades across all
credit rating agencies, would result in outflows of £1bn and £3bn respectively, and are provided for in determining an appropriate
liquidity pool size given the Group’s liquidity risk appetite. These numbers do not assume any management or restructuring actions that
could be taken to reduce posting requirements. These outflows do not include the potential liquidity impact from loss of unsecured
funding, such as from money market funds, or loss of secured funding capacity. However, unsecured and secured funding stresses are
included in the LRA stress scenarios and a portion of the liquidity pool is held against these risks.
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Risk performance - Treasury and Capital risk (continued)
Contractual maturity of financial assets and liabilities
The table below provides detail on the contractual maturity of all financial instruments and other assets and liabilities. Derivatives (other
than those designated in a hedging relationship) and trading portfolio assets and liabilities are included in the ‘on demand’ column at
their fair value. Liquidity risk on these items is not managed on the basis of contractual maturity since they are not held for settlement
according to such maturity and will frequently be settled before contractual maturity at fair value. Derivatives designated in a hedging
relationship are included according to their contractual maturity.
Contractual maturity of financial assets and liabilities (audited)
On
demand
Not more
than three
months
Over three
months but
not more
than six
months
Over six
months but
not more
than nine
months
Over nine
months but
not more
than one
year
Over one
year
but not
more than
two years
Over two
years but
not more
than three
years
Over three
years but
not more
than five
years
Over five
years but
not more
than ten
years
Over ten
years
As at 31 December 2022
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Total
£m
256,097
254
2,977
109,620
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
256,351
—
112,597
17,764
12,719
9,716
8,275
11,942
34,790
29,325
56,519
40,539
177,190
398,779
Assets
Cash and balances at
central banks
Cash collateral and
settlement balances
Loans and advances at
amortised cost
Reverse repurchase
agreements and other
similar secured lending
Other assets
Total assets
Liabilities
Deposits at amortised
cost
Cash collateral and
settlement balances
Repurchase agreements
and other similar secured
borrowing
Financial liabilities
designated at fair value
Derivative financial
instruments
Trading portfolio assets
133,813
127
648
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1
776
—
133,813
Financial assets at fair
value through the income
statement
Derivative financial
instruments
Financial assets at fair
value through other
comprehensive income
Other financial assets
32,071
147,644
6,771
4,718
2,047
6,491
4,922
3,292
2,292
3,320
213,568
301,647
54
66
70
—
110
352
44
21
16
302,380
8
433
6,433
1,177
4,535
1,687
1,395
9,206
7,560
16,418
10,385
7,435
65,062
—
—
43
—
—
1
—
2
1,656
Total financial assets
744,937
278,549
21,088
14,750
15,427
50,597
42,159
76,274
53,237
187,964
1,484,982
443,736
63,076
19,388
5,090
8,575
4,263
327
499
589
239
545,782
2,932
93,995
—
—
—
—
—
—
—
—
96,927
28,717
1,513,699
256
9,562
—
—
943
Debt securities in issue
—
33,109
13,259
5,582
6,294
Subordinated liabilities
—
Trading portfolio liabilities
72,924
17
—
—
—
83
—
179
—
1,105
9,435
1,181
—
5,034
10,069
—
83
27,052
6,817
14,808
15,526
8,051
112,881
—
—
1,987
6,493
1,483
—
—
—
11,423
72,924
10,844
186,733
14,352
5,292
3,812
14,000
10,548
8,528
6,708
10,820
271,637
Other financial liabilities
86
7,803
288,573
45
63
43
5
43
2
41
157
261
105
148
273
247
56
391
341
289,620
93
9,156
Total financial liabilities
819,351
394,340
47,105
16,095
19,846
30,402
22,979
36,411
29,763
21,110
1,437,402
Other liabilities
Total liabilities
7,037
1,444,439
Cumulative liquidity gap (74,414) (190,205) (216,222) (217,567) (221,986) (201,791) (182,611) (142,748) (119,274) 47,580
69,260
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Risk performance - Treasury and Capital risk (continued)
Contractual maturity of financial assets and liabilities (audited)a
On
demand
Not more
than three
months
Over three
months but
not more
than six
months
Over six
months but
not more
than nine
months
Over nine
months but
not more
than one
year
Over one
year
but not
more than
two years
Over two
years but
not more
than three
years
Over three
years but
not more
than five
years
Over five
years but
not more
than ten
years
Over ten
years
As at 31 December 2021
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Total
£m
238,369
205
2,807
89,735
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
238,574
—
92,542
19,749
8,670
8,879
5,291
10,192
23,716
26,037
47,614
39,822
171,481
361,451
Assets
Cash and balances at
central banks
Cash collateral and
settlement balances
Loans and advances at
amortised cost
Reverse repurchase
agreements and other
similar secured lending
Other assets
Total assets
Liabilities
Deposits at amortised
cost
Cash collateral and
settlement balances
Repurchase agreements
and other similar secured
borrowing
Financial liabilities
designated at fair value
Derivative financial
instruments
Trading portfolio assets
147,035
—
58
2,984
—
—
—
—
—
—
184
—
—
—
—
—
—
—
1
3,227
—
147,035
Financial assets at fair
value through the income
statement
Derivative financial
instruments
Financial assets at fair
value through other
comprehensive income
Other financial assets
24,257
127,085
9,281
7,042
3,451
5,889
5,394
2,590
2,564
4,419
191,972
261,678
58
48
—
—
82
145
537
15
9
262,572
—
707
4,280
1,488
1,245
1,419
3,834
8,205
13,188
18,226
9,868
61,753
474
26
2
—
1
—
—
1
2
1,213
Total financial assets
694,660
233,491
19,722
13,580
15,062
33,706
39,781
63,929
60,628
185,780
1,360,339
454,961
40,755
13,524
2,994
3,724
2,025
433
241
545
231
519,433
2,983
76,388
—
—
—
—
—
—
—
—
79,371
23,946
1,384,285
20
6,621
—
—
Debt securities in issue
—
24,399
12,606
5,845
Subordinated liabilities
—
1,007
Trading portfolio liabilities
54,169
—
—
—
74
—
—
3,254
1,218
—
2,195
9,792
27
—
8,925
10,504
—
8,957
12,948
12,218
1,063
1,885
5,603
—
—
—
87
8,848
1,882
—
28,352
98,867
12,759
54,169
21,339
157,900
16,857
10,268
3,588
6,540
6,114
7,734
7,366
13,254
250,960
Other financial liabilities
184
4,331
255,747
4
22
43
18
42
5
40
124
691
177
145
302
266
122
420
362
256,883
139
6,301
Total financial liabilities
789,403
311,405
43,052
19,241
11,829
21,394
25,814
33,880
26,274
24,803
1,307,095
Other liabilities
Total liabilities
7,149
1,314,244
Cumulative liquidity gap
(94,743) (172,657) (195,987) (201,648) (198,415) (186,103) (172,136) (142,087) (107,733) 53,244
70,041
Note
a 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See Impact of the Over-issuance of Securities on page 356 and Restatement of financial
statements (Note 1a) on page 428 for further details.
Expected maturity date may differ from the contractual dates, to account for:
• trading portfolio assets and liabilities and derivative financial instruments, which may not be held to maturity as part of the Group’s
trading strategies
• corporate and retail deposits, reported under deposits at amortised cost, are repayable on demand or at short notice on a
contractual basis. In practice, their behavioural maturity is typically longer than their contractual maturity, and therefore these
deposits provide stable funding for the Group’s operations and liquidity needs because of the broad base of customers, both
numerically and by depositor type
• loans to corporate and retail customers, which are included within loans and advances at amortised cost and financial assets at fair
value, may be repaid earlier in line with terms and conditions of the contract
• debt securities in issue, subordinated liabilities, and financial liabilities designated at fair value, may include early redemption features.
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Contractual maturity of financial liabilities on an undiscounted basis
The table below presents the cash flows payable by the Group under financial liabilities by remaining contractual maturities at the
balance sheet date. The amounts disclosed in the table are the contractual undiscounted cash flows of all financial liabilities (i.e. nominal
values).
The balances in the below table do not agree directly to the balances in the consolidated balance sheet as the table incorporates all
cash flows, on an undiscounted basis, related to both principal as well as those associated with all future coupon payments.
Derivative financial instruments held for trading and trading portfolio liabilities are included in the on demand column at their fair value.
Contractual maturity of financial liabilities - undiscounted (audited)
On
demand
Not more
than three
months
Over three
months but
not more
than six
months
Over six
months but
not more
than one year
Over one
year
but not
more than
three years
Over three
years but
not more
than five
years
Over five
years but
not more
than ten
years
Over ten
years
£m
£m
£m
£m
£m
£m
£m
£m
Total
£m
As at 31 December 2022
Deposits at amortised cost
443,736
63,235
19,393
13,798
4,606
499
706
376
546,349
Cash collateral and settlement
balances
Repurchase agreements and other
similar secured borrowing
Debt securities in issue
Subordinated liabilities
Trading portfolio liabilities
72,924
2,932
94,183
256
9,575
—
—
—
—
—
946
6,920
33,226
13,375
12,165
16,964
17
—
—
—
263
—
1,274
—
12,234
16,790
2,356
—
—
—
—
97,115
252
30,183
19,207
14,871
126,598
7,902
2,429
—
—
14,241
72,924
Financial liabilities designated at fair
value
10,844
187,126
14,905
9,399
25,662
9,847
8,345
24,754
290,882
Derivative financial instruments
288,573
107
7,813
101
56
8
109
290
488
321
308
71
455
722
290,193
109
9,424
819,351
395,282
47,830
36,688
56,204
42,355
36,686
43,513
1,477,909
Other financial liabilities
Total financial liabilities
Restateda
As at 31 December 2021
Cash collateral and settlement
balances
Repurchase agreements and other
similar secured borrowing
Debt securities in issue
Subordinated liabilities
Deposits at amortised cost
454,961
40,755
13,524
6,718
2,461
239
559
261
519,478
2,983
76,388
—
—
6,621
24,450
12,625
1,063
—
—
—
—
—
9,075
1,379
—
—
—
11,356
19,225
1,213
—
10,885
14,060
2,316
—
—
—
—
79,371
146
29,028
14,147
13,690
107,272
6,627
2,867
—
—
15,465
54,169
Trading portfolio liabilities
54,169
Financial liabilities designated at fair
value
21,339
158,070
16,887
13,946
12,944
8,086
7,544
21,638
260,454
Derivative financial instruments
255,747
5
Other financial liabilities
184
4,344
22
57
24
111
305
932
316
327
134
502
449
257,002
162
6,619
Total financial liabilities
789,403
311,696
43,115
31,253
48,436
36,229
29,513
39,213
1,328,858
Note
a 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See Impact of the Over-issuance of Securities on page 356 and Restatement of financial
statements (Note 1a) on page 428 for further details.
—
—
86
20
—
—
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Risk performance - Treasury and Capital risk (continued)
Maturity of off-balance sheet commitments received and given
The table below presents the maturity split of the Group’s off-balance sheet commitments received and given at the balance sheet
date. The amounts disclosed in the table are the undiscounted cash flows (i.e. nominal values) on the basis of earliest opportunity at
which they are available.
Maturity analysis of off-balance sheet commitments received (audited)
Over
three
months
but not
more than
six
months
Over six
months
but not
more than
nine
months
Over nine
months
but not
more than
one year
Over one
year but
not more
than two
years
Over two
years but
not more
than three
years
Over
three
years but
not more
than five
years
Over five
years but
not more
than ten
years
Over ten
years
On
demand
Not more
than three
months
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Total
£m
As at 31 December 2022
Guarantees, letters of credit and credit
insurance
Other commitments received
Total off-balance sheet
commitments received
As at 31 December 2021
Guarantees, letters of credit and credit
insurance
Other commitments received
Total off-balance sheet
commitments received
19,301
7,473
26,774
25,613
455
26,068
92
—
92
31
—
31
102
—
102
21
—
21
10
—
10
10
—
10
46
—
46
12
—
12
16
—
16
4
—
4
37
—
37
12
—
12
76
—
76
83
—
83
96
—
96
65
—
65
1
19,777
—
7,473
1
27,250
19
25,870
—
455
19
26,325
Maturity analysis of off-balance sheet commitments given (audited)
Over
three
months
but not
more than
six
months
Over six
months
but not
more than
nine
months
Over nine
months
but not
more than
one year
Over one
year but
not more
than two
years
Over two
years but
not more
than three
years
Over
three
years but
not more
than five
years
Over five
years but
not more
than ten
years
Over ten
years
On
demand
Not more
than three
months
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Total
£m
As at 31 December 2022
Contingent liabilities and financial
guarantees
Documentary credits and other short-
term trade related transactions
24,103
1,740
Standby facilities, credit lines and other
commitments
393,723
Total off-balance sheet
commitments given
419,566
86
3
—
89
As at 31 December 2021
Contingent liabilities and financial
guarantees
21,207
135
Documentary credits and other short-
term trade related transactions
1,582
Standby facilities, credit lines and other
commitments
344,055
2
—
Total off-balance sheet
commitments given
366,844
137
14
5
—
19
4
—
—
4
1
—
1
—
—
—
—
24,205
—
1
—
—
—
—
—
—
—
—
—
—
37
38
—
—
72
72
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,748
—
393,760
—
419,713
—
21,346
—
1,584
—
344,127
—
367,057
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Risk performance - Treasury and Capital risk (continued)
Summary of performance in the
period
The Group continues to be in excess of
overall capital, leverage and MREL
regulatory requirements.
The reported CET1 ratio decreased by
c.120bps to 13.9% (December 2021:
15.1%) as RWAs increased by £22.4bn to
£336.5bn and CET1 capital decreased by
£0.4bn to £46.9bn
▪ c.150bps increase from 2022
attributable profit
▪ c.80bps returned to shareholders
including the 2.25p half year dividend
paid in September 2022, £1.5bn of share
buybacks announced with FY21 and
H122 results and a FY22 dividend
accrual
▪ c.80bps reduction due to the impact of
regulatory change on 1 January 2022 as
CET1 capital decreased £1.7bn and
RWAs increased £6.6bn
▪ c.70bps reduction from decreases in the
fair value of the bond portfolio through
other comprehensive income and other
capital deductions
▪ c.40bps reduction due to pension
contributions, including the accelerated
cash settlement to the UK Retirement
Fund (UKRF) of earlier deficit reduction
contributions and deficit reduction
payments made in 2022
▪ A £14.1bn increase in RWAs as a result
of foreign exchange movements was
broadly offset by a £2bn increase in the
currency translation reserve
The UK leverage ratio increased to 5.3%
(December 2021: 5.2%) primarily due to a
decrease in the leverage exposure of
£7.9bn to £1,130.0bn and an increase in
Tier 1 Capital of £0.6bn to £60.1bn.
Capital risk
All disclosures in this section are unaudited
unless otherwise stated.
Overview
The CET1 ratio, among other metrics, is a
measure of the capital strength and
resilience of Barclays. Maintenance of our
capital resources is vital in order to meet
the overall regulatory capital requirement,
to withstand the impact of the risks that
may arise under normal and stressed
conditions, and maintain adequate capital
to cover current and forecast business
needs and associated risks to provide a
viable and sustainable business offering.
This section provides an overview of the
Group’s: (i) CET1 capital, leverage and own
funds and eligible liabilities requirements;
(ii) capital resources; (iii) risk weighted
assets (RWAs); (iv) leverage ratios and
exposures; and (v) own funds and eligible
liabilities.
More details on monitoring and managing
capital risk may be found in the risk
management sections of the Barclays PLC
Pillar 3 Report 2022 (unaudited).
Key metrics
Common Equity Tier 1 ratio
13.9%
UK leverage ratio
5.3%
Average UK leverage ratio
4.8%
Own funds and eligible liabilities ratio as a
percentage of RWAs
33.5%
Minimum capital requirements
The Group’s Overall Capital Requirement
for CET1 is 11.3% comprising a 4.5% Pillar
1 minimum, a 2.5% Capital Conservation
Buffer (CCB), a 1.5% Global Systemically
Important Institution (G-SII) buffer, a 2.4%
Pillar 2A requirement and a 0.4%
Countercyclical Capital Buffer (CCyB).
The Group’s CCyB is based on the buffer
rate applicable for each jurisdiction in which
the Group has exposures. On 13
December 2021, the Financial Policy
Committee (FPC) announced the re-
introduction of a CCyB rate of 1% for UK
exposures with effect from 13 December
2022. The buffer rates set by other
national authorities for non-UK exposures
are not currently material. Overall, this
results in a 0.4% CCyB for the Group. On 5
July 2022, the FPC announced that the UK
CCyB rate will be increased from 1% to 2%
with effect from 5 July 2023.
The Group’s updated Pillar 2A requirement
as per the PRA’s Individual Capital
requirement is 4.3% of which at least
56.25% needs to be met with CET1 capital,
equating to 2.4% of RWAs. The Pillar 2A
requirement, based on a point in time
assessment, has been set as a proportion
of RWAs and is subject to at least annual
review.
The Group’s CET1 target ratio of 13-14%
takes into account headroom above
requirements which includes a confidential
institution-specific PRA buffer. The Group
remains above its minimum capital
regulatory requirements including the PRA
buffer.
Minimum leverage requirements
The Group is subject to a leverage ratio
requirement of 4.0% as at 31 December
2022. This comprises the 3.25% minimum
requirement, a G-SII additional leverage
ratio buffer (G-SII ALRB) of 0.53% and a
countercyclical leverage ratio buffer
(CCLB) of 0.2%. Although the leverage
ratio is expressed in terms of Tier 1 (T1)
capital, 75% of the minimum requirement,
equating to 2.4375%, needs to be met
with CET1 capital. In addition, the G-SII
ALRB and CCLB must be covered solely
with CET1 capital. The CET1 capital held
against the 0.53% G-SII ALRB was £5.9bn
and against the 0.2% CCLB was £2.3bn.
The Group is also required to disclose an
average UK leverage ratio which is based
on capital on the last day of each month in
the quarter and an exposure measure for
each day in the quarter.
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Risk performance - Treasury and Capital risk (continued)
Minimum requirements for own
funds and eligible liabilities
The Group is required to meet the higher
of: (i) two times the sum of 8% Pillar 1 and
4.3% Pillar 2A equating to 24.5% of RWAs;
and (ii) 6.75% of leverage exposures. In
addition, the higher of regulatory capital
and leverage buffers apply. CET1 capital
cannot be counted towards both MREL
and the buffers, meaning that the buffers,
including the above mentioned
confidential institution-specific PRA buffer,
will effectively be applied above MREL
requirements.
Significant regulatory updates in
the period
Capital and RWAs
On 1 January 2022, the PRA’s
implementation of Basel III standards took
effect including the re-introduction of the
100% CET1 capital deduction for qualifying
software intangible assets and the
introduction of the Standardised Approach
for Counterparty Credit Risk (SA-CCR)
which replaces the Current Exposure
Method for Standardised derivative
exposures as a more risk sensitive
approach. In addition, the PRA also
implemented IRB roadmap changes which
includes revisions to the criteria for
definition of default, probability of default
and loss given default estimation to ensure
supervisory consistency and increase
transparency of IRB models.
On 30 November 2022, the PRA published
its consultation paper 'Implementation of
the Basel 3.1 standards', which covers the
remaining parts of the Basel III standards
to be implemented in the UK. Changes are
expected to come in to force from 1
January 2025, other than those areas
subject to transitional provisions. Barclays
currently expects the impact on RWAs on
1 January 2025 to be at the lower end of
the prior 5-10% RWA inflation guidance.
The PRA is currently consulting on the rule
changes, and there will be a review of the
Pillar 2A framework in 2024 which may
offset some of the impact.
Leverage
From 1 January 2022, UK banks became
subject to a single UK leverage ratio
requirement meaning that the CRR
leverage ratio no longer applies. Under the
revised UK leverage ratio framework,
central bank claims have been excluded
from the UK leverage exposure measure
where they are matched by qualifying
liabilities (rather than deposits).
In the disclosures that follow, references
to CRR, as amended by CRR II, mean the
capital regulatory requirements, as they
form part of domestic law by virtue of the
European Union (Withdrawal) Act 2018, as
amended.
Impact of Over-issuance of
Securities in the US
In March 2022, the Group became aware
that Barclays Bank PLC had issued
securities materially in excess of the
amount it had registered with the SEC
under Barclays Bank PLC’s 2019 F-3.
Subsequently, the Group became aware
that securities had also been issued in
excess of the amount it had registered
with the SEC under the Predecessor Shelf.
The securities issued in excess of the
registered amount included structured
products and exchange traded notes. As
these securities were not issued in
compliance with the Securities Act, a right
of rescission arose for certain purchasers
of the securities. A portion of the costs
associated with the right of rescission
were attributable to the financial
statements for the year ended 31
December 2021, resulting in the
restatement of the 2021 figures in the
disclosures below.
Prior to the restatement, litigation and
conduct charges in the income statement
in relation to 2021 were underreported by
£220m (pre-tax). This resulted in a CET1
capital decrease of £170m from £47,497m
to £47,327m. Both the transitional and fully
loaded CET1 ratios remained unchanged
at 15.1% and 14.7% respectively. The T1
ratio moved from 19.2% to 19.1% and the
total capital ratio moved from 22.3% to
22.2%.
The leverage exposure increased £1.9bn
to recognise on a regulatory basis, the
potential commitment relating to the
rescission offer. This resulted in the UK
leverage ratio moving from 5.3% to 5.2%
whilst the average UK leverage ratio
remained unchanged at 4.9%.
Total own funds and eligible liabilities
decreased £0.2bn to £108bn, which was in
excess of a restated requirement to hold
£94bn of own funds and eligible liabilities.
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Risk performance - Treasury and Capital risk (continued)
Capital resources
Capital ratiosb,c
As at 31 December
CET1
Tier 1 (T1)
Total regulatory capital
Capital resources (audited)
As at 31 December
Total equity excluding non-controlling interests per the balance sheet
Less: other equity instruments (recognised as AT1 capital)
Adjustment to retained earnings for foreseeable ordinary share dividends
Adjustment to retained earnings for foreseeable other equity coupons
Other regulatory adjustments and deductions
Additional value adjustments (PVA)
Goodwill and intangible assets
Deferred tax assets that rely on future profitability excluding temporary differences
Fair value reserves related to gains or losses on cash flow hedges
Excess of expected losses over impairment
Gains or losses on liabilities at fair value resulting from own credit
Defined benefit pension fund assets
Direct and indirect holdings by an institution of own CET1 instruments
Adjustment under IFRS 9 transitional arrangements
Other regulatory adjustments
CET1 capital
AT1 capital
Capital instruments and related share premium accounts
Qualifying AT1 capital (including minority interests) issued by subsidiaries
Other regulatory adjustments and deductions
AT1 capital
T1 capital
T2 capital
Capital instruments and related share premium accounts
Qualifying T2 capital (including minority interests) issued by subsidiaries
Credit risk adjustments (excess of impairment over expected losses)
Other regulatory adjustments and deductions
Total regulatory capital
Total RWAs (Unaudited)
2022
13.9 %
17.9 %
20.8 %
2022
£m
68,292
(13,284)
(787)
(37)
(1,726)
(8,224)
(1,500)
7,237
(119)
(620)
(3,430)
(20)
700
396
46,878
Restateda
2021
15.1 %
19.1 %
22.2 %
2021
£m
69,052
(12,259)
(666)
(32)
(1,585)
(6,804)
(1,028)
852
—
892
(2,619)
(50)
1,229
345
47,327
13,284
12,259
—
(60)
637
(80)
13,224
12,816
60,102
60,143
9,000
1,095
35
(160)
8,713
1,113
73
(160)
70,072
69,882
336,518
314,136
Notes
a Capital and leverage metrics as at 31 December 2021 have been restated to reflect the impact of the Over-issuance of Securities.See Impact of Over-issuance of Securities on page 356 for further
details.
b CET1, T1 and T2 capital, and RWAs are calculated applying the transitional arrangements of the CRR as amended by CRR II. This includes IFRS 9 transitional arrangements and the grandfathering of
CRR II non-compliant capital instruments. December 2021 comparatives include the grandfathering of CRR non-compliant capital instruments.
c The fully loaded CET1 ratio, as is relevant for assessing against the conversion trigger in Barclays PLC AT1 securities, was 13.7%, with £46.2bn of CET1 capital and £336.3bn of RWAs calculated
without applying the transitional arrangements of the CRR as amended by CRR II.
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Risk performance - Treasury and Capital risk (continued)
Movement in CET1 capital
Opening balance as at 1 January 2022a
Profit for the period attributable to equity holders
Own credit relating to derivative liabilities
Ordinary share dividends paid and foreseen
Purchased and foreseeable share repurchase
Other equity coupons paid and foreseen
Increase in retained regulatory capital generated from earnings
Net impact of share schemes
Fair value through other comprehensive income reserve
Currency translation reserve
Other reserves
Increase in other qualifying reserves
Pension remeasurements within reserves
Defined benefit pension fund asset deduction
Net impact of pensions
Additional value adjustments (PVA)
Goodwill and intangible assets
Deferred tax assets that rely on future profitability excluding those arising from temporary differences
Excess of expected loss over impairment
Direct and indirect holdings by an institution of own CET1 instruments
Adjustment under IFRS 9 transitional arrangements
Other regulatory adjustments
Decrease in regulatory capital due to adjustments and deductions
Closing balance as at 31 December 2022
2022
£m
47,327
5,928
(85)
(1,149)
(1,500)
(910)
2,284
108
(1,277)
2,032
138
1,001
(281)
(811)
(1,092)
(141)
(1,420)
(472)
(119)
30
(529)
9
(2,642)
46,878
Note
a Opening balance as at 1January 2022 has been restated to reflect the impact of the Over-issuance of Securities.See Impact of Over-issuance of Securities on page 356 for further details.
CET1 capital decreased £0.4bn to £46.9bn (December 2021: £47.3bn).
CET1 capital decreased by £1.7bn as a result of regulatory changes that took effect from 1 January 2022 including the re-introduction
of the 100% CET1 capital deduction for qualifying software intangible assets and a reduction in IFRS9 transitional relief due to the relief
applied to the pre-2020 impairment charge reducing to 25% in 2022 from 50% in 2021 and the relief applied to the post-2020
impairment charge reducing to 75% in 2022 from 100% in 2021.
£5.9bn of capital generated from profit, after absorbing the £0.6bn net of tax impact of the Over-issuance of Securities, was partially
offset by distributions of £3.5bn comprising:
• £1.5bn of total buybacks including the £1bn buyback announced with FY21 results and the £0.5bn buyback announced with H122
results
• £1.1bn of ordinary share dividends paid and foreseen reflecting the £0.4bn half year 2022 dividend paid and a £0.8bn accrual towards
a full year 2022 dividend
• £0.9bn of equity coupons paid and foreseen
Other significant movements in the period were:
• £1.3bn reduction from decreases in the fair value of the bond portfolio through other comprehensive income
• £2.0bn increase in the currency translation reserve driven by the appreciation of period end USD against GBP
• £1.1bn decrease due to the net impact of pensions primarily as a result of the accelerated cash settlement to the UKRF of earlier
deficit reduction contributions as well as deficit reduction payments made in 2022
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Risk performance - Treasury and Capital risk (continued)
Risk weighted assets
Risk weighted assets (RWAs) by risk type and business
As at 31 December 2022
Barclays UK
Credit risk
Counterparty credit risk
Market risk
Operation
al risk
Total
RWAs
Std
£m
IRB
£m
6,836
54,752
Std
£m
167
Settlemen
t risk
£m
—
IRB
£m
—
CVA
£m
72
Std
£m
233
IMA
£m
—
£m
£m
11,023
73,083
Corporate and Investment Bank
35,738
75,413
16,814
21,449
80
3,093
13,716
22,497
27,064
215,864
Consumer, Cards and Payments
27,882
3,773
214
46
—
61
—
388
6,559
38,923
Barclays International
63,620
79,186
17,028
21,495
80
3,154
13,716
22,885
33,623
254,787
Head Office
Barclays Group
2,636
6,843
—
—
—
—
—
—
(831) 8,648
73,092
140,781
17,195
21,495
80
3,226
13,949
22,885
43,815
336,518
As at 31 December 2021
Barclays UK
7,195
53,408
426
—
—
138
100
—
11,022
72,289
Corporate and Investment Bank
29,420
64,416
15,223
19,238
105
2,289
17,306
27,308
25,359
200,664
Consumer, Cards and Payments
Barclays International
20,770
50,190
2,749
67,165
215
15,438
18
19,256
—
105
21
2,310
—
17,306
57
27,365
6,391
31,750
30,221
230,885
Head Office
Barclays Group
4,733
7,254
—
—
—
—
—
—
(1,025) 10,962
62,118
127,827
15,864
19,256
105
2,448
17,406
27,365
41,747
314,136
Movement analysis of risk weighted assets
Risk weighted assets
As at 31 December 2021
Book size
Acquisitions and disposals
Book quality
Model updates
Methodology and policy
Foreign exchange movement a
Total RWA movements
As at 31 December 2022
Credit risk
£m
189,945
15,371
(1,187)
(2,236)
—
2,961
9,019
23,928
213,873
Counterparty
credit risk
Market risk
Operational risk
Total RWAs
£m
£m
37,673
(3,254)
44,771
(9,707)
£m
41,747
2,068
—
1,320
—
2,952
3,305
4,323
41,996
—
—
—
—
1,770
(7,937)
36,834
—
—
—
—
—
2,068
43,815
£m
314,136
4,478
(1,187)
(916)
—
5,913
14,094
22,382
336,518
Note
a Foreign exchange movements does not include impact of foreign exchange for modelled market risk or operational risk.
Overall RWAs increased £22.4bn to £336.5bn (December 2021: £314.1bn)
Credit risk RWAs increased £23.9bn:
• A £15.4bn increase in book size primarily driven by an increase in lending activities across CIB, CC&P and growth in mortgages within
Barclays UK
• A £1.2bn decrease in acquisitions and disposals primarily driven by the disposal of Barclays' equity stake in Absa, offset by Gap
portfolio acquisition
• A £2.2bn decrease in RWAs due to book quality primarily driven by the benefit in mortgages from an increase in the HPI, partially
offset by movements in risk parameters primarily within Barclays UK
• A £3.0bn increase in methodology and policy primarily as a result of regulatory changes relating to implementation of IRB roadmap
changes, partially offset by the reversal of the software intangibles benefit
• A £9.0bn increase in FX primarily due to appreciation of USD against GBP
Counterparty Credit risk RWAs increased £4.3bn:
• A £3.3bn decrease in book size primarily driven by derivative mark-to-market movements
• A £1.3bn increase in RWAs due to book quality primarily driven by movements in risk parameters within CIB
• A £3.0bn increase in methodology and policy as a result of regulatory changes relating to the introduction of SA-CCR
• A £3.3bn increase in FX primarily due to appreciation of USD against GBP
Market risk RWAs decreased £7.9bn:
• A £9.7bn decrease in book size primarily driven by a £6.7bn in Stressed Value at Risk (SVaR) model adjustment as a result of changes
in portfolio composition, a £2.3bn decrease due to client and trading activities and a £0.7bn reduction in Structural FX
• A £1.8bn increase in FX primarily due to appreciation of USD against GBP
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Risk performance - Treasury and Capital risk (continued)
Operational risk RWAs increased £2.1bn:
• A £2.1bn increase in book size primarily driven by the inclusion of higher 2022 CIB income compared to 2019
Leverage ratios and exposures
The Group is required to disclose a UK leverage ratio based on capital and exposure on the last day of the quarter. The Group is also
required to disclose an average UK leverage ratio which is based on capital on the last day of each month in the quarter and an exposure
measure for each day in the quarter.
Leverage ratiosb,c
As at 31 December
Average UK leverage ratio
Average T1 capital
Average UK leverage exposure
UK leverage ratio
CET1 capital
AT1 capital
T1 capital
UK leverage exposure
UK leverage exposure
As at 31 December
Accounting assets
Derivative financial instruments
Derivative cash collateral
Securities financing transactions (SFTs)
Loans and advances and other assets
Total IFRS assets
Regulatory consolidation adjustments
Derivatives adjustments
Derivatives netting
Adjustments to collateral
Net written credit protection
Potential future exposure (PFE) on derivatives
Total derivatives adjustments
SFTs adjustments
Regulatory deductions and other adjustments
Weighted off-balance sheet commitments
Qualifying central bank claims
Settlement netting
UK leverage exposure
2022
£m
4.8 %
60,865
1,280,972
Restateda
2021
£m
4.9 %
59,739
1,229,041
5.3 %
5.2 %
46,878
13,224
60,102
47,327
12,179
59,506
1,129,973
1,137,904
2022
£m
2021
£m
302,380
69,048
189,637
952,634
1,513,699
262,572
58,177
170,853
892,683
1,384,285
(8,278)
(3,665)
(256,309)
(52,715)
16,190
84,168
(208,666)
(236,881)
(50,929)
15,509
137,291
(135,010)
24,203
24,544
(21,447)
(20,219)
124,169
115,047
(272,321)
(210,134)
(21,386)
(16,944)
1,129,973
1,137,904
Notes
a Capital and leverage metrics as at 31 December 2021 have been restated to reflect the impact of the Over-issuance of Securities. See Impact of Over-issuance of Securities on page 356 for further
details.
b Fully loaded average UK leverage ratio was 4.7%, with £60.1bn of T1 capital and £1,280.2bn of leverage exposure. Fully loaded UK leverage ratio was 5.3%, with £59.4bn of T1 capital and £1,129.3bn of
leverage exposure. Fully loaded UK leverage ratios are calculated without applying the transitional arrangements of the CRR as amended by CRR II.
c Capital and leverage measures are calculated applying the transitional arrangements of the CRR as amended by CRR II.
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Risk performance - Treasury and Capital risk (continued)
The UK leverage ratio increased to 5.3% (December 2021: 5.2%) primarily due to a £7.9bn decrease in the leverage exposure and a
£0.6bn increase in Tier 1 capital. The UK leverage exposure decreased to £1,130.0bn (December 2021: £1,137.9bn) largely due to the
following movements:
• £53.1bn decrease in PFE on derivatives largely driven by increased netting eligibility due to the introduction of SA-CCR
• £42.0bn decrease in cash at central banks net of the qualifying central bank claims exemption primarily due to the matching of
allowable liabilities rather than deposits introduced under the UK leverage ratio framework and a decrease in Swiss Franc cash assets
• £33.0bn increase in loans and advances and other assets (excluding cash and settlement balances which are subject to regulatory
exemptions) primarily due to increased lending
• £29.5bn increase in derivative financial instruments post additional regulatory netting and adjustments for cash collateral primarily
driven by market volatility, increased activity in CIB and the application of a 1.4 multiplier introduced under SA-CCR
• £18.4bn increase in SFTs primarily driven by increased reverse repurchase activity in CIB
The average UK leverage ratio decreased to 4.8% (December 2021: 4.9%) due to a £51.9bn increase in average leverage exposure
partially offset by a £1.1bn increase in average T1 capital. The average UK leverage exposure increased to £1,281.0bn (December 2021:
£1,229.0bn) mainly driven by increased activity during the year that was partially offset by the impact of regulatory changes that came
into effect from 1 January 2022 under the UK leverage ratio framework.
Minimum requirement for own funds and eligible liabilities
MREL requirements including buffersa,b,c,d
Requirement (£m):
Restateda
Restateda
Requirement (%):
As at 31.12.2022
As at 31.12.2021
As at 31.12.2022
As at 31.12.2021
Requirement based on RWAs
Requirement based on UK leverage exposured
97,387
91,213
77,302
93,975
28.9 %
8.1 %
Own funds and eligible liabilitiesa,c
CET1 capital
AT1 capital instruments and related share premium accountse
T2 capital instruments and related share premium accountse
Eligible liabilities
Total Barclays PLC (the Parent company) own funds and eligible liabilities
Total RWAs
Total UK leverage exposured
£m
46,878
13,224
8,875
43,851
112,828
336,518
1,129,973
24.6 %
6.9 %
Restateda
£m
47,327
12,179
8,626
39,889
108,021
314,136
1,356,191
Restateda
Own funds and eligible liabilities ratios as a percentage of:a
Total RWAs
Total UK leverage exposured
As at 31.12.2022
As at 31.12.2021
33.5 %
10.0 %
34.4 %
8.0 %
Notes
a Opening balance as at 1 January 2022 has been restated to reflect the impact of the Over-issuance of Securities. See Impact of Over-issuance of Securities on page 356 for further details.
b Minimum requirement excludes the confidential institution-specific PRA buffer.
c CET1, T1 and T2 capital, and RWAs are calculated applying the transitional arrangements of the CRR as amended by CRR II including IFRS 9 transitional arrangements.
d As at 31 December 2021, MREL requirements were on a CRR leverage basis which, from 1 January 2022, was no longer applicable for UK banks.
e
Includes other AT1 capital regulatory adjustments and deductions of £60m (December 2021: £80m), and other T2 credit risk adjustments and deductions of £125m (December 2021: £87m).
As at 31 December 2022, Barclays PLC (the Parent company) held £112.8bn of own funds and eligible liabilities equating to 33.5% of
RWAs. This was in excess of the Group's MREL requirement, excluding the PRA buffer, to hold £97.4bn of own funds and eligible
liabilities equating to 28.9% of RWAs. The Group remains above its MREL regulatory requirement including the PRA buffer.
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Risk performance - Treasury and Capital risk (continued)
Foreign exchange risk (audited)
The Group is exposed to two sources of foreign exchange risk.
a) Transactional foreign currency exposure
Transactional foreign currency exposures represent exposure on banking assets and liabilities, denominated in currencies other than
the functional currency of the transacting entity.
The Group’s risk management policies are designed to prevent the holding of significant open positions in foreign currencies outside
the trading portfolio managed by Barclays International which is monitored through VaR.
Banking book transactional foreign exchange risk outside of Barclays International is monitored on a daily basis by the market risk
function and minimised by the businesses.
b) Translational foreign exchange exposure
The Group’s investments in overseas subsidiaries and branches create capital resources denominated in foreign currencies, principally
USD and EUR. Changes in the GBP value of the net investments due to foreign currency movements are captured in the currency
translation reserve, resulting in a movement in CET1 capital.
The Group’s strategy is to minimise the volatility of the capital ratios caused by foreign exchange movements, by matching the CET1
capital movements to the revaluation of the Group’s foreign currency RWA exposures.
Functional currency of operations (audited)
31 December 2022
USD
EUR
JPY
Other currencies
Total
31 December 2021
USD
EUR
JPY
Other currencies
Total
Foreign currency
net investments
Borrowings which
hedge the net
investments
Derivatives which
hedge the net
investments
Structural
currency
exposures pre-
economic hedges
Economic hedges
Remaining
structural currency
exposures
£m
£m
£m
£m
£m
£m
27,441
9,776
689
3,330
(7,363)
(5,461)
—
—
41,236
(12,824)
(2,086)
17,992
(3)
(197)
(1,676)
(3,962)
4,312
492
1,654
24,450
25,958
8,453
614
2,448
(7,707)
(3,408)
(97)
—
(2,356)
15,895
(3)
—
(64)
5,042
517
2,384
(8,688)
(283)
—
(279)
(9,250)
(7,389)
(268)
—
—
9,304
4,029
492
1,375
15,200
8,506
4,774
517
2,384
37,473
(11,212)
(2,423)
23,838
(7,657)
16,181
Economic hedges relate to exposures arising on foreign currency denominated preference share and AT1 instruments. These are
accounted for at historical cost under IFRS and do not qualify as hedges for accounting purposes. The gain or loss arising from changes
in the GBP value of these instruments is recognised on redemption in retained earnings.
During 2022, total structural currency exposure net of hedging instruments decreased by £1.0bn to £15.2bn (2021: £16.2bn). Foreign
currency net investments increased by £3.7bn to £41.2bn (2021: £37.5bn) driven predominantly by a £1.5bn increase in USD, £1.3bn
increase in EUR and £0.9bn increase in other currencies. The hedges associated with these investments increased by £3.2bn to
£16.8bn (2021: £13.6bn).
Pension risk review
The UK Retirement Fund (UKRF) represents approximately 96% (2021: 97%) of the Group’s total retirement benefit obligations globally.
As such this risk review section focuses exclusively on the UKRF. The UKRF is closed to new entrants and there is no new final salary
benefit being accrued. Existing active members accrue a combination of a cash balance benefit and a defined contribution element.
Pension risk arises as the market value of the pension fund assets may decline, investment returns may reduce or the estimated value
of the pension liabilities may increase.
Refer to the Management of pension risk section in the Barclays PLC Pillar 3 Report 2022 (unaudited) for more information on how
pension risk is managed.
Assets
The Trustee Board of the UKRF defines its overall long-term investment strategy with investments across a broad range of asset
classes. This results in an appropriate mix of return seeking assets as well as liability matching assets to better match future pension
obligations. The two largest market risks within the asset portfolio are credit spread and growth assets. The split of scheme assets is
shown within Note 33 to the financial statements. The fair value of the UKRF assets was £24.7bn as at 31 December 2022 (2021:
£34.7bn).
Liabilities
The UKRF retirement benefit obligations are a series of future cash flows with relatively long duration. On an IAS 19 basis these cash
flows are sensitive to changes in the expected long-term price inflation rate (RPI) and the discount rate (GBP AA corporate bond yield):
• An increase in long-term expected inflation corresponds to an increase in liabilities;
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Risk performance - Treasury and Capital risk (continued)
• A decrease in the discount rate corresponds to an increase in liabilities.
Pension risk is generated through the Group’s defined benefit schemes and this risk is set to reduce over time as the main defined
benefit scheme is closed to new entrants. The chart below outlines the shape of the UKRF’s liability cash flow profile as at 31 December
2022 that takes account of the future inflation indexing of payments to beneficiaries. The majority of the cash flows (approximately
95%) fall between 0 and 40 years, peaking between 11 and 20 years and reducing thereafter. The shape may vary depending on
changes to inflation and longevity expectations and any members who elect to transfer out. Transfers out will bring forward the liability
cash flows.
For more detail on the UKRF’s financial and demographic assumptions, see Note 33 to the financial statements.
Proportion of liability cash flows
(%)
Net IAS 19 position
(£bn)
n 0-10 years
n 11-20 years
n 21-30 years
n 31-40 years
n 41-50 years
n 51+ years
28.6
31.4
23.2
12.1
4.3
0.5
6
5
4
3
2
1
0
The graph above shows the evolution of the UKRF’s net IAS 19 position over the last two years. During 2022 the increase in the IAS 19
pension surplus was primarily driven by scheduled deficit reduction contributions, including payments made to unwind Heron
transactions. The significant increase in interest rates over 2022 has had a broadly neutral impact on the net funding position. Benefit
obligation reductions due to higher discount rates have been broadly offset by the changes in the fair value of scheme assets. Higher
realised inflation over the year had a negative impact by increasing the projected liabilities, which was partially offset by updates to the
demographic assumptions.
Refer to Note 33 to the financial statements for the sensitivity of the UKRF to changes in key assumptions.
Risk measurement
In line with Barclays’ risk management framework the assets and liabilities of the UKRF are modelled within a VaR framework to show the
volatility of the pension position at a total portfolio level. This enables the risks, diversification and liability matching characteristics of the
UKRF obligations and investments to be adequately captured. VaR is measured and monitored on a monthly basis. Risks are reviewed
and reported regularly at forums including the Board Risk Committee, the Group Risk Committee and the Pension Executive Board. The
VaR model takes into account the valuation of the liabilities on an IAS 19 basis (see Note 33 to the financial statements). The Trustee
receives quarterly VaR measures on a funding basis.
The pension liability is also sensitive to post-retirement mortality assumptions which are reviewed regularly (See Note 33 to the
financial statements). To mitigate part of this risk the UKRF has entered into longevity swaps hedging approximately three quarters of
current pensioner liabilities.
In addition, the impact of pension risk to the Group is taken into account as part of the stress testing process. Stress testing is
performed internally on at least an annual basis. The UKRF exposure is also included as part of regulatory stress tests.
Barclays defined benefit pension schemes affects capital in two ways:
• An IAS 19 deficit is treated as a liability on the Group’s balance sheet. Movement in a deficit due to remeasurements, including
actuarial losses, are recognised immediately through Other Comprehensive Income and as such reduces shareholders’ equity and
CET1 capital. An IAS 19 surplus is treated as an asset on the balance sheet and increases shareholders’ equity; however, it is
deducted for the purposes of determining CET1 capital.
• In the Group’s statutory balance sheet an IAS 19 surplus or deficit is partially offset by a deferred tax liability or asset respectively.
These may or may not be recognised for calculating CET1 capital depending on the overall deferred tax position of the Group at the
particular time.
Pension risk is taken into account in the Pillar 2A capital assessment undertaken by the PRA at least annually. The Pillar 2A requirement
forms part of the Group’s Overall Capital Requirement for CET1 capital, Tier 1 capital and total capital. More detail on minimum
regulatory requirements can be found in the Overall capital requirements section.
1.77bn3.82bn4.63bnDec 2020Dec 2021Dec 2022
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Risk performance - Treasury and Capital risk (continued)
Summary of performance in the
period
• NII sensitivity to a -25bp rates shock has
decreased year on year due to the
timing impact of customer rate changes
following the rate shock, combined with
changes in balance sheet composition.
Net interest income sensitivity
The table below shows a sensitivity
analysis on pre-tax net interest income for
non-traded financial assets and liabilities,
including the effect of any hedging. This
analysis is not a forward guidance on NII
and is intended as a quantification of risk
exposure utilising the Net Interest Income
(NII) metric as described on page 162 of
the Barclays PLC Pillar 3 Report 2022
(unaudited), which includes
documentation of the main model
assumptions.
Interest rate risk in the banking
book
All disclosures in this section are unaudited
unless otherwise stated.
Overview
The treasury and capital risk framework
covers interest rate sensitive exposures
held in the banking book, mostly relating to
accrual accounted and FVOCI
instruments. The potential volatility of net
interest income is measured by an Annual
Earnings at Risk (AEaR) metric which is
monitored regularly and reported to senior
management and the Barclays PLC Board
Risk Committee as part of the limit
monitoring framework.
For further detail on the interest rate risk in
the banking book governance and
framework refer to pages 160 to 162 of
the Barclays PLC Pillar 3 Report 2022
(unaudited).
Key metrics
AEaR
-73m
AEaR across the Group from a -25bps
shock to forward interest rate curves.
Net interest income sensitivity (AEaR) by business unit (audited)
As at 31 December
2022
+25bps
-25bps
2021
+25bps
-25bps
Notes
Barclays UK
Barclays
International
Head Office
£m
£m
£m
15
(59)
(2)
(54)
25
(29)
68
(99)
(15)
15
5
(5)
Total
£m
25
(73)
71
(158)
The Group’s customer banking book hedging activity is risk reducing from an NII sensitivity perspective. The hedges in place remove
interest rate risk and smooth income over the medium term. The NII sensitivity for the Group at 31 December 2022 without hedging in
place for +/-25bp rate shocks would be £233m/£(281)m respectively.
NII sensitivity asymmetry is due to the timing impact of customer rate changes following the rate shock and also due to changes in the
balance sheet composition. Reduction in overall NII sensitivity in both shock scenarios is due to the current rate levels removing the
impact of embedded floors on product margins.
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Risk performance - Treasury and Capital risk (continued)
Net interest income sensitivity (AEaR) by currency (audited)
As at 31 December
GBP
USD
EUR
Other currencies
Total
2022
2021
+25 basis points
-25 basis points
+25 basis points
-25 basis points
£m
(6)
43
3
(15)
25
£m
(40)
(45)
(4)
16
(73)
£m
14
58
5
(6)
71
£m
(85)
(62)
(15)
4
(158)
Analysis of equity sensitivity
Equity sensitivity measures the overall impact of a +/-25bps movement in interest rates on retained earnings, FVOCI, cash flow hedge
reserves and pensions. For non-NII items a DV01 metric is used, which is an indicator of the shift in value for a 1bp movement in the
yield curve.
Analysis of equity sensitivity (audited)
As at 31 December
Net interest income
Taxation effects on the above
Effect on profit for the year
As percentage of net profit after tax
Effect on profit for the year (per above)
Fair value through other comprehensive income reserve
Cash flow hedge reserve
Taxation effects on the above
Effect on equity
As percentage of equity
2022
2021
+25 basis
points
-25 basis
points
+25 basis
points
£m
25
(5)
20
£m
(73)
15
(58)
£m
71
(15)
56
0.3%
(1.0%)
0.8%
20
(291)
(774)
288
(757)
(1.1%)
(58)
302
774
(291)
727
1.0%
56
(479)
(859)
361
(921)
(1.3%)
-25 basis
points
£m
(158)
33
(125)
(1.7%)
(125)
408
859
(342)
800
1.2%
Movements in the FVOCI reserve impact CET1 capital. However, movements in the cash flow hedge reserve and pensions
remeasurement reserve recognised in FVOCI do not affect CET1 capital.
Volatility of the FVOCI portfolio in the liquidity pool
Changes in value of FVOCI exposures flow directly through capital via the FVOCI reserve. The volatility of the value of the FVOCI
investments in the liquidity pool is captured and managed through a value measure rather than an earning measure, i.e. non-traded
market risk VaR.
Although the underlying methodology to calculate the non-traded VaR is identical to the one used in traded management VaR, the two
measures are not directly comparable. The non-traded VaR represents the volatility to capital driven by the FVOCI exposures. These
exposures are in the banking book and do not meet the criteria for trading book treatment.
Analysis of volatility of the FVOCI portfolio in the liquidity pool
For the year ended 31 December
Non-traded market value at risk (daily, 95%)
Average
£m
48
2022
High
£m
62
Low
£m
35
Average
£m
51
2021
High
£m
62
Low
£m
34
Value at risk decreased in the first half of the year driven by a reduction in interest rate risk positioning. This was partially offset by an
increase in H2 due to elevated market volatility.
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Risk performance - Operational risk
Operational risk
All disclosures in this section are unaudited unless otherwise stated.
Key metrics
84%
of the Group’s net reportable operational
risk events had a loss value of £50,000 or
less
86%
of events by number are due to External
Fraud
46%
of losses are from events aligned to
External Fraud
53%
of losses are from events aligned to
Execution, Delivery and Process
Management
Summary of performance in the
period
During 2022, total operational risk lossesa
remained stable at £159m (2021: £163m)
while the number of recorded events for
2022 (2,965) increased from the level for
2021 (2,724). The total operational risk
losses for the year were mainly driven by
events falling within the Execution, Delivery
& Process Management and External
Fraud BASEL Event Type categories, which
tend to be high volume but low impact
events.
Operational risk profile
Within operational risk, there are a large
number of smaller value risk events. In
2022, 84% (2021: 84%) of the Group’s
reportable operational risk events by
volume had a value of less than £50,000
each. Cumulatively, events under this
£50,000 threshold accounted for only 31%
(2021: 28%) of the Group’s total net
operational risk losses. A small proportion
of operational risk events have a material
impact on the financial results of the
Group.
Overview
Operational risks are inherent in the
Group’s business activities and it is not
cost effective or possible to attempt to
eliminate all operational risks. The
Operational Risk Framework is therefore
focused on identifying operational risks,
assessing them and managing them within
the Group’s approved risk appetite.
The Operational Risk principal risk
comprises the following risks: Change
Delivery Management Risk; Data
Management Risk; Financial Reporting
Risk; Fraud Risk; Information Security Risk;
Operational Recovery Planning Risk;
Payments Process Risk; People Risk;
Physical Security Risk; Premises Risk; Risk
Reporting; Supplier Risk; Tax Risk;
Technology Risk and Transaction
Operations Risk. The operational risk
profile is also informed by a number of
connected risks: Cyber, Data, and
Resilience. These represent threats to the
Group that extend across multiple risk
types, and therefore require an integrated
risk management approach.
For definitions of these risks refer to the
Operational Risk section of the Barclays
PLC Pillar 3 Report 2022. To provide
complete coverage of the potential
adverse impacts on the Group arising from
operational risk, the operational risk
taxonomy extends beyond the risks listed
above to cover operational risks
associated with other principal risks too.
This section provides an analysis of the
Group’s operational risk profile, including
events above the Group’s reportable
threshold, which have had a financial
impact in 2022. The Group’s operational
risk profile is informed by bottom-up risk
assessments undertaken by each business
unit and top-down qualitative review for
each risk type. Fraud, Transaction
Operations, Information Security and
Technology continue to be highlighted as
key operational risk exposures.
For information on conduct risk events,
see the conduct risk section.
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Risk performance - Operational risk (continued)
The analysis below presents the Group’s operational risk events
by Basel event category:
Operational risk events by BASEL
event categorya
% of total risk events by count
% of total risk events by value
Internal fraud
Internal fraud
2022
2021
2022
2021
External fraud
External fraud
2022
2021
2022
2021
Execution delivery
and process management
Execution delivery
and process management
2022
2021
2022
2021
Employment practices
and workplace safety
Employment practices
and workplace safety
2022
2021
2022
2021
Damage to physical assets
Damage to physical assets
2022
2021
2022
2021
Clients, products
and business practices
Clients, products
and business practices
2022
2021
2022
2021
Business disruption
and system failures
Business disruption and system
failures
2022
2021
2022
2021
Note
a The data disclosed includes operational risk losses for reportable events impacting the Barclays Bank UK Group business
areas, having impact of > £10,000 and excludes events that are conduct or legal risk, aggregate and boundary events. A
boundary event is an operational risk event that results in a credit risk impact. Due to the nature of risk events that keep
evolving, prior year losses are updated.
• External Fraud remains the category with
the highest frequency of events at 86% of
total events in 2022 (2021: 84%). Impacts
from events arising from External Fraud
decreased in 2022 to £73m (2021: £82m)
and accounted for 46% of total 2022
losses (2021: 51%). In this category, high
volume, low value events are driven by
transactional fraud often related to debit
and credit card usage.
• Execution, Delivery and Process
Management impacts increased to
£84m (2021: £77m) and accounted for
53% (2021: 47%) of total operational risk
losses. The events in this category are
typical of the banking industry as a whole
where high volumes of transactions are
processed on a daily basis, mapping
mainly to Barclays Transaction
Operations risk type. The overall
frequency of events in this category
remained stable at 14% of total events
by volume (2021: 14%).
Investment continues to be made in
improving the control environment across
the Group. Particular areas of focus include
new and enhanced fraud prevention systems
and tools to combat the increasing level of
fraud attempts being made whilst minimising
disruption to genuine transactions. Fraud
remains an industry wide threat and the
Group continues to work closely with external
partners on various prevention initiatives.
Operational Resilience remains a key area of
focus for the Group, having been reinforced
in recent years due to potential operational
disruption from the COVID-19 pandemic.
The Group continues to strengthen its
resilience approach across its most
important business services to improve
recoverability and assurance thereof by
reviewing scenarios based on current global
climates.
Operational risk associated with
cybersecurity remains a top focus for the
Group. The sophistication of threat actors
continues to grow as noted by multiple
external risk events observed throughout the
year. Ransomware attacks across the global
Barclays supplier base were observed and we
worked closely with the affected suppliers to
manage potential impacts to the Group and
its clients and customers. The Group’s
cybersecurity events were managed within
its risk tolerances and there were no material
loss events associated with cybersecurity
recorded within the event categories above.
For further information, refer to the operational risk
management section.
0.2085.684.113.6140.30.30.1000.10.31.50.7045.950.652.747.20.30.10.200.10.20.21.9 Strategic
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Risk performance - Model risk, Conduct risk, Reputation risk and Legal risk
Model risk, Conduct risk, Reputation risk and Legal risk
All disclosures in this section are unaudited unless otherwise stated.
Model risk
Barclays is committed to continuously
improving model risk management and
made a number of enhancements in 2022,
including:
• Improved transparency and oversight of
models risk through implementation of
upgrades to model risk governance
structure.
• Upgraded model risk standards to
improve readability, consistency and
framework cohesiveness.
• Refreshed the model risk controls suite,
providing additional clarity on several
controls and ensuring evidentiary
requirements are aligned to MRM’s BAU
processes.
• Enhanced the Group Model Risk
Appetite Statement, incorporating
model quality and uncertainty around a
model’s output.
• Strengthened validation practices
through expansion of model-level
validation procedures, implementation
of an on-going validation training
program and embedment of a validation
quality assurance process.
• Executed on hiring strategy by
expanding the model risk team to
support a wider range of model
validation demand and newly emerging
model risks.
• Progressed model inception validation
by bringing more than 95% of model risk
(by model output) into compliance with
the model risk management framework.
Conduct risk
Barclays is committed to continuing to
drive the right culture throughout all levels
of the organisation. The Group will
continue to enhance effective
management of conduct risk and
appropriately consider the relevant tools,
governance and management information
in decision-making processes. Focus on
management of conduct risk is ongoing
and, alongside other relevant business and
control management information, the
Trading Entity conduct risk dashboard is a
key component of this.
The Group continues to review the role
and impact of conduct risk events and
issues in remuneration decisions at both
the individual and business level.
In 2022, the Group maintained focus on
new and heightened inherent conduct
risks, including those relating to the cost of
living crisis, and continues to monitor
these on an ongoing basis.
Businesses have continued to assess the
potential customer, client and market
impacts of strategic change. As part of the
2022 medium-term planning process,
material conduct risks associated with
strategic and financial plans were
assessed.
Throughout 2022, conduct risks were
raised by each business area for
consideration by relevant Board level
committees. These committees reviewed
the risks raised and whether
management’s proposed actions were
appropriate to mitigate the risks
effectively.
The Group continued to incur costs in
relation to litigation and conduct matters,
refer to Note 26 Legal, competition and
regulatory matters and Note 24 Provisions
for further details. Costs include customer
redress and remediation, as well as fines
and settlements. Resolution of these
matters remains a necessary and
important part of delivering the Group’s
strategy and an ongoing commitment to
improve oversight of culture and conduct.
Trading Entity conduct risk dashboards,
setting out key indicators in relation to
conduct and risk, are provided to the
respective Board Risk Committees and
senior management. These continue to be
evolved and enhanced to allow effective
oversight and decision-making. Work is
ongoing to enhance the Conduct Risk
Control Environment in a timely and
effective manner to ensure the Group
operates within Risk Appetite. The
tolerance adherence is assessed by the
business areas through key indicators and
reported to the relevant Trading Entity
Board Committees as part of the conduct
risk dashboard governance process.
The Group remains focused on the
continuous improvements being made to
manage risk effectively with an emphasis
on enhancing governance and
management information to identify risk at
earlier stages.
Reputation risk
Barclays is committed to identifying
reputation risks and issues as early as
possible and managing them appropriately.
At a Group level throughout 2022,
reputation risks and issues were overseen
by the Board which reviews the processes
and policies which Barclays identifies and
manages reputation risk. Within the
Barclays Bank UK Group and the Barclays
Bank Group reputation risks and issues
were overseen by the respective risk and
Board risk committees. The top live and
emerging reputation risks and issues within
the Barclays Bank UK Group and the
Barclays Bank Group are included within an
over-arching quarterly report at the
respective Board level.
The Board reviewed risks escalated by the
businesses and considered whether
management’s proposed actions, for
example attaching conditions to proposed
client transactions or increased
engagement with impacted stakeholders,
were appropriate to mitigate the risks
effectively. The Board also received regular
updates with regard to key reputation risks
and issues, including: Barclays' response to
the conflict in Ukraine; Barclays’
association with sensitive sectors; access
to banking; lending practices and the
resilience of key Barclays systems and
processes.
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Risk performance - Model risk, Conduct risk, Reputation risk and Legal risk
(continued)
The Group continued to incur costs in
relation to litigation and conduct matters,
refer to Note 26 Legal, competition and
regulatory matters and Note 24 Provisions
for further details. Costs include customer
redress and remediation, as well as fines
and settlements. Resolution of these
matters remains an ongoing commitment
to improve oversight of culture and
conduct and management of reputation
risks.
As part of Barclays 2022 Medium Term
Planning process, material reputation risks
associated with strategic and financial
plans were also assessed.
Legal risk
The Group remains committed to
continuous improvements in managing
legal risk effectively. At the end of 2022,
enhancements were made to the Group-
wide legal risk management framework
primarily relating to the Legal Function's
responsibility for the identification of legal
risks and the escalation of legal risk as
necessary.
Other improvements during 2022 included
a review and update of the supporting legal
risk policies, standards and mandatory
training, reinforced by ongoing
engagement with and education of the
Group’s businesses and functions by Legal
Function colleagues. Legal risk tolerances
and legal risk appetite have also been
reviewed.
Tolerances adherence is assessed
through key indicators, which are also used
to evaluate the legal risk profile and are
reviewed, at least annually, through the
relevant risk and control committees.
Mandatory controls to manage legal risks
are set out in the legal risk standards and
are subject to ongoing monitoring. The
changes to the legal risk management
framework referred to above are intended
to provide continuing improvements to
the effectiveness of the legal risk control
environment as they are implemented
through 2023.
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Supervision and regulation
Supervision of the Group
The Group’s operations, including its
overseas branches, subsidiaries and
associates, are subject to a large number
of rules and regulations applicable to the
conduct of banking and financial services
business in each of the jurisdictions in
which the Group operates. These apply to
business operations, impact financial
returns and include capital, leverage and
liquidity requirements, authorisation,
registration and reporting requirements,
restrictions on certain activities, conduct
of business regulations and many others.
Regulatory developments impact the
Group globally. We focus particularly on
UK, US and EU regulation due to the
location of the Group’s principal areas of
business. Regulations elsewhere may also
have a significant impact on the Group due
to the location of its branches, subsidiaries
and, in some cases, clients. For more
information on the risks related to the
supervision and regulation of the Group,
including regulatory change, see the
material existing and emerging risk entitled
‘Regulatory Change agenda and impact on
Business Model’ in the Material existing and
emerging risks section.
Supervision in the UK
In the UK, day-to-day regulation and
supervision of the Group is divided
between the Prudential Regulation
Authority (PRA) (a division of the Bank of
England (BoE)) and the Financial Conduct
Authority (FCA). In addition, the Financial
Policy Committee (FPC) of the BoE has
influence on the prudential requirements
that may be imposed on the banking
system through its powers of direction and
recommendation. Certain members of the
Group are also subject to regulatory
initiatives undertaken by the UK Payment
Systems Regulator (PSR), as a participant
in payment systems regulated by the PSR.
Barclays Bank PLC and Barclays Bank UK
PLC are authorised with permission to
accept deposits, amongst other things,
and subject to prudential supervision by
the PRA and subject to conduct regulation
and supervision by the FCA. The Barclays
Bank Group is subject to prudential
supervision on a solo-consolidated basis
and the Barclays Bank UK Group is subject
to prudential supervision on a group
consolidated basis and on an individual
basis. The Group is also subject to
prudential supervision by the PRA on a
group consolidated basis. Barclays PLC
has been approved by the PRA as a
financial holding company.
Barclays Capital Securities Limited is
authorised and subject to prudential
supervision by the PRA as a PRA-
designated investment firm and subject to
conduct regulation and supervision by the
FCA. Barclays Execution Services Limited
is an appointed representative of Barclays
Bank PLC, Barclays Bank UK PLC and
Clydesdale Financial Services Limited.
The PRA’s supervision of the Group is
conducted through a variety of regulatory
tools, including the collection of
information by way of prudential returns or
cross-firm reviews, reports obtained from
skilled persons, regular supervisory visits to
firms and regular meetings with
management and directors to discuss
issues such as strategy, governance,
financial resilience, operational resilience,
risk management, and recovery and
resolution.
Further, the BoE, as the UK resolution
authority, informs prudential requirements
and sets requirements for the Group
relating to resolution preparedness.
The FCA’s supervision of the UK firms in
the Group is carried out through a
combination of proactive engagement,
regular thematic work and project work
based on the FCA’s sector assessments,
which analyse the different areas of the
market and the risks that may lie ahead.
The FCA and the PRA also apply the Senior
Managers and Certification Regime (the
SMCR) which imposes a regulatory
approval, individual accountability and
fitness and propriety framework in respect
of senior or key individuals within relevant
firms.
FCA supervision has focused on conduct
risk and customer/client outcomes,
including product design, customer
behaviour, market operations, fair pricing,
affordability, access to cash, and fair
treatment of vulnerable customers.
PRA supervision has focused on financial
resilience, credit risk management, Board
effectiveness, operational resilience,
climate risk and resolvability, where
resolvability is reviewed in conjunction with
the Resolution Directorate (a separate
division of the BoE).
Both the PRA and the FCA apply standards
that generally either anticipate or go
beyond requirements established by global
or EU standards, whether in relation to
capital, leverage and liquidity, resolvability
and resolution or matters of conduct. The
UK is in the process of reviewing and
revising the EU legislation that was
onshored into English law following the
UK's departure from the EU. This process
is at a very early stage, but based on
current indications, it is not expected to
result in a materially different standard of
regulation with respect to PRA and FCA
standards. The medium term outlook for
the costs and impact of operating under
the post-Brexit UK regime remains unclear
until details of any changes are confirmed.
There is potential for an increase in
regulatory implementation costs in the
near term to adapt systems and controls.
Both the PRA and the FCA have assessed
the impact of COVID-19 and Brexit on UK
financial markets and customers as well as
the orderly transition away from LIBOR
and have issued guidance for regulated
entities accordingly. In each case, the
guidance focussed on customer / client
outcomes and conduct risk, as well as
ensuring fair and orderly markets .
Supervision in the EU
The Group’s operations in Europe are
authorised and regulated by a combination
of its home regulators and host regulators
in the European countries where the
Group operates.
Barclays Bank Ireland PLC is licensed as a
credit institution by the Central Bank of
Ireland (CBI) and is designated as a
significant institution falling under direct
supervision on a solo basis by the
European Central Bank (ECB) for
prudential purposes. Barclays Bank Ireland
PLC’s EU branches are supervised by the
ECB and are also subject to direct
supervision for local conduct purposes by
national supervisory authorities in the
jurisdictions where they are established.
Barclays Bank Ireland PLC is subject to the
requirements set by the Single Resolution
Board (SRB) as the host resolution
authority of Barclays Bank Ireland PLC.
Barclays Bank Ireland PLC is also subject to
supervision by the CBI as home state or
competent authority under various EU
financial services directives and
regulations.
The Group provides the majority of its
cross-border banking and investment
services to EEA clients via Barclays Bank
Ireland PLC. Additionally, in certain EEA
Member States, Barclays Bank PLC and
Barclays Capital Securities Limited (BCSL)
have cross-border licences to enable them
to continue to conduct a limited range of
activities, including accessing EEA trading
venues and interdealer trading. Barclays
Bank PLC also has a Paris branch (to
facilitate access to Target 2), which is
regulated by the ACPR.
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Supervision and regulation (continued)
Supervision in the US
Barclays PLC, Barclays Bank PLC and its
New York branch, and Barclays Bank PLC’s
US subsidiaries are subject to a
comprehensive regulatory framework
involving numerous statutes, rules and
regulations in the US. For example, the
Group’s US activities and operations are
subject to supervision and regulation by
the Board of Governors of the Federal
Reserve System (FRB), as well as additional
supervision, requirements and restrictions
imposed by other federal and state
regulators and self-regulatory
organisations (SROs). In some cases, US
requirements may impose restrictions on
the Group’s global activities, in addition to
its activities in the US.
Barclays PLC, Barclays Bank PLC, Barclays
US Holdings Limited (BUSHL), Barclays US
LLC (BUSL), and Barclays Group US Inc.
(BGUS) are regulated as bank holding
companies (BHCs) by the FRB.
BUSL is the Group’s ultimate US holding
company that holds substantially all of the
Group’s US subsidiaries (including Barclays
Capital Inc. (BCI) and Barclays Bank
Delaware). BUSL is subject to
requirements in respect of capital
adequacy, capital planning and stress
testing, risk management and governance,
liquidity, leverage limits, large exposure
limits, activities restrictions and financial
regulatory reporting. Barclays Bank PLC’s
New York branch is also subject to
enhanced prudential standards relating to,
among other things, liquidity and risk
management.
Barclays PLC, Barclays Bank PLC, BUSHL
and BUSL have financial holding company
(FHC) status under the Bank Holding
Company Act of 1956. FHC status allows
these entities to engage in a variety of
financial and related activities, directly or
through subsidiaries, including
underwriting, dealing and market making in
securities. Failure to maintain FHC status
could result in increasingly stringent
penalties and, ultimately, in the closure or
cessation of certain operations in the US.
In addition to oversight by the FRB,
Barclays Bank PLC’s New York branch and
many of the Group’s subsidiaries are
regulated by additional US authorities
based on the location or activities of those
entities. The New York branch of Barclays
Bank PLC is subject to supervision and
regulation by the New York State
Department of Financial Services
(NYSDFS). Barclays Bank Delaware, a
Delaware chartered bank, is subject to
supervision and regulation by the Delaware
Office of the State Bank Commissioner,
the Federal Deposit Insurance Corporation
(FDIC), the FRB and the Consumer
Financial Protection Bureau (CFPB). The
deposits of Barclays Bank Delaware are
insured by the FDIC, up to applicable limits.
Barclays PLC, Barclays Bank PLC, BUSHL,
BUSL, and BGUS are required to act as a
source of strength for Barclays Bank
Delaware. This could, among other things,
require these entities to provide capital
support to Barclays Bank Delaware if it fails
to meet applicable regulatory capital
requirements.
The Group’s US securities broker/dealer
and investment banking operations are
conducted primarily through BCI, and are
also subject to ongoing supervision and
regulation by the Securities and Exchange
Commission (SEC), the Financial Industry
Regulatory Authority (FINRA) and other
government agencies and SROs under US
federal and state securities laws. BCI is also
registered as a Futures Commission
Merchant with the Commodity Futures
Trading Commission (CFTC), through
which the Group conducts its US futures
and options on futures business, including
client clearing operations, which are
subject to ongoing supervision and
regulation by the CFTC, the National
Futures Association and other SROs.
Under the US framework for regulating
swaps and security-based swaps
established under Title VII of the Dodd-
Frank Act, the CFTC has regulatory
authority over swaps, the SEC has
regulatory authority over security-based
swaps, and the CFTC and SEC jointly
regulate mixed swaps (as such terms are
defined in the relevant legislation).
Accordingly, the Group’s activities related
to US swaps and security-based swaps are
principally conducted by Barclays Bank
PLC and are subject to ongoing
supervision and regulation by the CFTC
and the SEC, respectively. Barclays Bank
PLC is provisionally registered as a swap
dealer with the CFTC and conditionally
registered as a Security-based swap dealer
with the SEC. Barclays Bank PLC is also
subject to the FRB swaps rules with
respect to margin and capital
requirements. In addition, Barclays Bank
Ireland PLC is provisionally registered as a
swap dealer with the CFTC and is subject
to the FRB swaps rules with respect to
margin and capital.
Supervision in Asia Pacific
The Group’s operations in Asia Pacific are
supervised and regulated by a broad range
of national banking and financial services
regulators.
Prudential regulation
Certain Basel III standards were
implemented in EU law through the Capital
Requirements Regulation (CRR) and the
Capital Requirements Directive IV (CRD
IV), as amended by CRR II and CRD V.
These standards were retained in the UK
regulatory framework via a series of
onshoring instruments as part of the UK’s
withdrawal from the European Union.
Beyond the minimum standards required
by CRR, the PRA has expected the Group,
in common with other major UK banks and
building societies, to meet a 7% Common
Equity Tier 1 (CET1) ratio at the level of the
consolidated group since 1 January 2016.
The 7% CET1 ratio is made up of a Pillar 1
minimum capital requirement of 4.5%
CET1 and a capital conservation buffer
which must be met entirely with CET1
capital.
Global systemically important banks (G-
SIBs), such as the Barclays Group, are
subject to a number of additional
prudential requirements, including the
requirement to hold additional loss-
absorbing capacity and additional capital
buffers above the level required by Basel III
standards. The level of the G-SIB buffer is
set by the Financial Stability Board (FSB)
according to a bank’s systemic importance
and can range from 1% to 3.5% of risk-
weighted assets (RWAs). The G-SIB buffer
must be met with CET1. In November
2022, the FSB published an update to its
list of G-SIBs, maintaining the 1.5% G-SIB
buffer that applies to the Group.
The Group is also subject to a ‘combined
buffer requirement’ consisting of (i) a
capital conservation buffer of 2.5%, and (ii)
a countercyclical capital buffer (CCyB). The
CCyB is based on rates determined by the
regulatory authorities in each jurisdiction in
which the Group maintains exposures. In
March 2020, the FPC cut the UK CCyB rate
to 0% with immediate effect in order to
support the supply of credit expected as a
result of the COVID-19 pandemic. In
December 2021, the FPC raised the UK
CCyB to 1% with effect from 13 December
2022. In July 2022, the FPC announced
that it would raise the UK CCyB rate to 2%
with effect from 5 July 2023.
The PRA requires UK firms to hold
additional capital to cover risks which the
PRA assesses are not fully captured by the
Pillar 1 capital requirement. The PRA sets
this additional capital requirement (Pillar
2A) at least annually, derived from each
firm’s individual capital guidance. Under
current PRA rules, the Pillar 2A must be
met with at least 56.25% CET1 capital and
no more than 25% tier 2 capital. In addition,
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Supervision and regulation (continued)
the capital that firms use to meet their
minimum requirements (Pillar 1 and Pillar
2A) cannot be counted towards meeting
the combined buffer requirement.
The PRA may also impose a confidential
'PRA buffer' to cover risks over a forward
looking planning horizon, including with
regard to firm-specific stresses or
management and governance
weaknesses. If the PRA buffer is imposed
on a specific firm, it must be met
separately to the combined buffer
requirement, and must be met fully with
CET1 capital.
As part of its approach to ring fencing, the
FPC established a framework to apply a
firm-specific systemic risk buffer (SRB)
which could be set between 0% and 3% of
RWAs and which had to be met solely with
CET1 capital. The purpose of the SRB was
to increase the capacity of ring-fenced
bodies, such as Barclays Bank UK PLC, to
absorb stress. The buffer rate applicable to
the Group’s ring-fenced sub-group was
set at 1% with effect from August 2019.
With the implementation of CRD V, the
Other Systemically Important Institutions
Buffer (O-SII buffer) replaced the SRB. As
part of the implementation of CRD V, the
PRA and FPC confirmed that the Barclays
Bank UK PLC O-SII buffer would be held at
the historic SRB rate of 1% until
reassessment in December 2021. On 8
October 2021, the PRA extended the O-
SII buffer rate of 1% for a further year, with
any future adjustment to the O-SII buffer
applicable from January 2024. In addition,
in May 2022, the FPC decided to change
the metric used to determine O-SII buffer
rates from total assets to the UK leverage
exposure measure and to recalibrate the
thresholds used to determine O-SII buffer
rates to prevent an overall tightening or
loosening of the framework relative to its
pre-Covid level. The FPC determined that
the average of firms’ quarter-end leverage
exposure measure over the year will be
used to determine O-SII buffer rates,
rather than the year-end value and that
this change will only take effect after the
PRA’s December 2023 review. Thus, the
December 2023 review will be based on
end-2022 leverage exposure measure.
Rates set in 2023 will apply from January
2025. In addition, Barclays Bank Ireland
PLC is identified as a O-SII by the CBI, who
have imposed an O-SII buffer on Barclays
Bank Ireland PLC.
In July 2021 and October 2021, the PRA,
respectively, published a policy statement
and confirmation, setting out its planned
implementation of certain Basel III
standards, including the net stable funding
ratio (NSFR), the new counterparty credit
risk standard (SA-CCR) and rules on large
exposures. As part of this policy
statement, the PRA also confirmed that it
would maintain its approach of requiring
the deduction of software assets from
capital. On 30 November 2022, the PRA
published consultation paper CP16/22
concerning the implementation of the
remaining Basel III standards, which include
a revised standardised approach for credit
risk, the elimination of modelled
approaches for certain credit risk exposure
categories, a new standardised approach
for operational risk, a new market risk
approach and the implementation of an
output floor requiring reported RWAs
calculated under standardised and
modelled approaches to be a minimum of
72.5% of fully standardised calculations.
The EU has also launched its legislative
process for implementing these remaining
Basel III reforms. In October 2021, the FPC
and PRA published a policy statement
setting out changes to the leverage ratio
framework, including applying the leverage
ratio requirement on an individual basis and
making sub-consolidation available as an
alternative to individual application where a
firm has subsidiaries that can be
consolidated, which apply from 1 January
2023.
In the US, in October 2019, the FRB and
other US regulatory agencies released final
rules to tailor the applicability of prudential
requirements for large domestic US
banking organisations, foreign banking
organisations and their intermediate
holding companies (IHCs), including BUSL.
BUSL is a “Category III” IHC. BUSL (and
Barclays Bank Delaware) is therefore
subject to reduced (calibrated at 85%)
standardised liquidity requirements,
including the liquidity coverage ratio and
NSFR.
In June 2018 and October 2019, the FRB
finalised rules regarding single
counterparty credit limits (SCCL). The
SCCL apply to the largest US BHCs and
foreign banks’ (including the Group’s) US
operations. The SCCL creates two
separate limits for foreign banks, the first
on combined US operations (CUSO) and
the second on the US IHC (BUSL). The
SCCL for US BHCs, including BUSL,
requires that exposure to an unaffiliated
counterparty of BUSL not exceed 25% of
BUSL’s tier 1 capital. With respect to the
CUSO, the SCCL rule allows certification to
the FRB that a foreign bank complies with
comparable home country regulation.
Barclays Bank PLC was not required to
comply with the CUSO requirement until 1
January 2022, with the first certification
applicable for Q1 2022 results.
Stress testing
The Group and certain of its members are
subject to supervisory stress testing
exercises in a number of jurisdictions,
designed to assess the resilience of banks
to adverse economic or financial
developments and ensure that they have
robust, forward-looking capital planning
processes that account for the risks
associated with their business profile.
Assessment by regulators is on both a
quantitative and qualitative basis, the latter
focusing on such elements as data
provision, stress testing capability
including model risk management and
internal management processes and
controls.
Recovery and Resolution
Stabilisation and resolution framework
The UK framework for recovery and
resolution was established by the Banking
Act 2009, as amended. The EU framework
was established by the 2014 Bank
Recovery and Resolution Directive (BRRD),
as amended by BRRD II.
The BoE, as the UK resolution authority,
has the power to resolve a UK financial
institution that is failing or likely to fail by
exercising certain stabilisation tools,
including (i) bail-in: the cancellation,
transfer or dilution of a relevant entities’
equity and write-down or conversion of
the claims of a relevant entities' unsecured
creditors (including holders of capital
instruments) and conversion of those
claims into equity as necessary to restore
solvency; (ii) the transfer of all or part of a
relevant entities' business to a private
sector purchaser; and (iii) the transfer of all
or part of a relevant entities' business to a
“bridge bank” controlled by the BoE. When
exercising any of its stabilisation powers,
the BoE must generally provide that
shareholders bear first losses, followed by
creditors in accordance with the priority of
their claims in insolvency.
In order to enable the exercise of its
stabilisation powers, the BoE may impose
a temporary stay on the rights of creditors
to terminate, accelerate or close out
contracts, or override events of default or
termination rights that might otherwise be
invoked as a result of a resolution action
and modify contractual arrangements in
certain circumstances (including a
variation of the terms of any securities).
HM Treasury may also amend the law for
the purpose of enabling it to use its powers
under this regime effectively, potentially
with retrospective effect.
In addition, the BoE has the power, under
the Banking Act, to permanently write-
down or convert into equity tier 1 capital
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Supervision and regulation (continued)
instruments, tier 2 capital instruments and
internal eligible liabilities at the point of
non-viability of an institution.
The BoE’s preferred approach for the
resolution of the Group is a bail-in strategy
with a single point of entry at Barclays PLC.
Under such a strategy, Barclays PLC’s
subsidiaries would remain operational while
Barclays PLC’s capital instruments and
eligible liabilities would be written down or
converted to equity in order to recapitalise
the Group and allow for the continued
provision of services and operations
throughout the resolution. The order in
which the bail-in tool is applied reflects the
hierarchy of capital instruments under UK
CRD IV and otherwise respecting the
hierarchy of claims in an ordinary
insolvency. Accordingly, the more
subordinated the claim, the more likely
losses will be suffered by owners of the
claim.
The PRA has made rules that require
authorised firms to draw up recovery plans
and resolution packs, as required by the
BRRD. Recovery plans are designed to
outline credible actions that authorised
firms could implement in the event of
severe stress in order to restore their
business to a stable and sustainable
condition. Removal of potential
impediments to an orderly resolution of a
banking group or one or more of its
subsidiaries is considered as part of the
BoE’s and PRA’s supervisory strategy for
each firm, and the PRA can require firms to
make significant changes in order to
enhance resolvability. The submission of
resolution packs was suspended by the
PRA in 2018 until further notice and
replaced by annual EBA resolution
reporting. The Group has provided the
PRA with a recovery plan annually,
however, the PRA notified in October 2022
that it has moved submission to a biennial
submission cycle. The Barclays Group
continues to maintain the recovery plan
annually.
Under the Resolvability Assessment
Framework (RAF) firms are required to
have in place capabilities covering three
resolvability outcomes: (i) adequate
financial resources; (ii) being able to
continue to do business through
resolution and restructuring; and (iii) being
able to communicate and co-ordinate
within the firm and with authorities. The
first self-assessment report on these
capabilities was submitted by the Group to
the PRA/BoE in 2021 and public
disclosures by both firms and the PRA/BoE
were made in June 2022 (and are required
every two years thereafter). The Bank of
England’s assessment concluded that
there are no shortcomings, deficiencies or
substantive impediments identified in the
Group’s resolution capabilities that could
impede its ability to execute the preferred
resolution strategy. In future, should any
such issues be identified, the PRA/BoE
could exercise its various powers to direct
the Group to address the relevant issues.
While regulators in many jurisdictions have
indicated a preference for single point of
entry resolution for the Group, additional
resolution or bankruptcy provisions may
apply to certain Group entities or
branches.
In the US, BUSL is subject to the Orderly
Liquidation Authority established by Title II
of the Dodd-Frank Act (DFA), a regime for
the orderly liquidation of systemically
important financial institutions by the
FDIC, as an alternative to proceedings
under the US Bankruptcy Code. In addition,
the licensing authorities of Barclays Bank
PLC New York branch and of Barclays Bank
Delaware have the authority to take
possession of the business and property
of the applicable branch or entity they
license and/or to revoke or suspend such
licence.
In the US, Title I of the DFA, as amended,
and the implementing regulations issued
by the FRB and the FDIC require each bank
holding company with assets of $250bn or
more, including those within the Group, to
prepare and submit a plan for the orderly
resolution of subsidiaries and operations in
the event of future material financial
distress or failure. The Group submitted a
“targeted plan” in December 2021. The
agencies did not identify any shortcomings
or deficiencies with the Group’s 2021 US
Resolution Plan. The Group’s next
submission of the US Resolution Plan in
respect of its US operations will be a “full
plan” due in 2024.
Barclays Bank Ireland PLC is required by
the ECB to submit a standalone BRRD
compliant recovery plan on an annual
basis. As a Significant Institution under
direct ECB supervision, Barclays Bank
Ireland PLC falls within the remit of the EU
Single Resolution Board (SRB), as the
resolution authority for the Eurozone.
Under the provisions of the BRRD and EU
Single Resolution Mechanism Regulation
(SRMR), the SRB is required to determine
the optimal resolution strategy for
Barclays Bank Ireland PLC and, also, to
prepare a resolution plan for the bank. The
SRB undertakes this work within the
context of the BoE’s preferred resolution
strategy of single point of entry with bail in
at Barclays PLC. In order to carry out its
mandate, the SRB collects detailed
structural and other information from
Barclays Bank Ireland PLC on a regular
basis, as well as engaging with the bank to
identify and address impediments to
resolution. This work is done in
coordination with the BoE, as the Group
resolution authority. Barclays Bank Ireland
PLC will need to meet the SRB’s
requirements for resolution as set out in
the SRB’s ‘Expectations for Banks’
document by 31 December 2023.
TLAC and MREL
The Group is under the supervision of the
BoE, as the UK resolution authority, and is
subject to a Minimum Requirement for
own funds and Eligible Liabilities (MREL),
which includes a component reflecting the
FSB’s standards on total loss absorbency
capacity (TLAC).
The MREL requirements were fully
implemented by 1 January 2022, from
which time G-SIBs with resolution entities
incorporated in the UK are required to
meet an MREL equivalent to the higher of:
(i) two times the sum of their Pillar 1 and
Pillar 2A requirements; or (ii) the higher of
two times their leverage ratio requirement
or 6.75% of leverage exposures. Internal
MREL for operating subsidiaries is subject
to a scalar in the 75-90% range of the
external requirement that would apply to
the subsidiary if it were a resolution entity.
The starting point for the scalar is 90% for
ring-fenced bank sub-groups.
Barclays Bank Ireland PLC is subject to the
SRB’s MREL policy, as issued in June 2022,
in respect of the internal MREL that it will
be required to issue to the Group. The
SRB’s current calibration of internal MREL
for non-resolution entities is expressed as
two ratios that have to be met in parallel:
(a) two times the sum of: (i) the firm’s Pillar
1 requirement; and (ii) its Pillar 2
requirement; and (b) two times the
leverage ratio requirement. The SRB’s
policy does not apply any scalar in respect
of the internal MREL requirement. Under
the SRB MREL policy, a bank specific
adjustment can be applied by the SRB to
MREL requirements.
In the US, the FRB’s TLAC rule includes
provisions that require BUSL to have: (i) a
specified outstanding amount of eligible
long-term debt; (ii) a specified outstanding
amount of TLAC (consisting of common
and preferred equity regulatory capital plus
eligible long-term debt); and (iii) a specified
common equity buffer. In addition, the
FRB’s TLAC rule prohibits BUSL, for so
long as the Group’s overall resolution plan
treats BUSL as a non-resolution entity,
from issuing TLAC to entities other than
those within the Group.
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Supervision and regulation (continued)
Bank Levy and FSCS
The BRRD established a requirement for
EU member states to set up a pre-funded
resolution financing arrangement with
funding equal to 1% of covered deposits
by 31 December 2024 to cover the costs
of bank resolutions. The UK has
implemented this requirement by way of a
tax on the balance sheets of banks known
as the ‘Bank Levy’.
In addition, the UK has a statutory
compensation fund called the Financial
Services Compensation Scheme (FSCS),
which is funded by way of annual levies on
most authorised financial services firms.
Structural reform
In the UK, the Financial Services (Banking
Reform) Act 2013 put in place a framework
for ring-fencing certain operations of large
banks. Ring-fencing requires, among other
things, the separation of the retail and
smaller deposit-taking business activities
of UK banks into a legally distinct,
operationally separate and economically
independent entity, which is not permitted
to undertake a range of activities. This
regime was independently reviewed in
2021, with the final report published in
March 2022. The review recommended
that HM Treasury should review the
practicalities of aligning the ring-fencing
and resolution regimes, amongst other
things, and the government has stated
that it intends to issue a public call for
evidence on this issue in the first quarter of
2023 and to consult on reforms to the
ring-fencing regime in mid 2023 in line with
the recommendations in the independent
review.
US regulation places further substantive
limits on the activities that may be
conducted by banks and holding
companies, including foreign banking
organisations such as the Group. The
‘Volcker Rule’, which was part of the DFA
and which came into effect in the US in
2015, prohibits banking entities from
undertaking certain proprietary trading
activities and limits such entities’ ability to
sponsor or invest in certain private equity
funds and hedge funds (in each case
broadly defined). As required by the rule,
the Group has developed and
implemented an extensive compliance and
monitoring programme addressing
proprietary trading and covered fund
activities (both inside and outside of the
US).
Market infrastructure regulation
In recent years, regulators as well as
global-standard setting bodies such as the
International Organisation of Securities
Commissions (IOSCO) have focused on
improving transparency and reducing risk
in markets, particularly risks related to
over-the-counter (OTC) derivative
transactions. This focus has resulted in a
variety of new regulations across the G20
countries and beyond that require or
encourage on-venue trading, clearing,
posting of margin and disclosure of pre-
trade and post-trade information.
In particular, the Markets in Financial
Instruments Directive and Markets in
Financial Instruments Regulation
(collectively referred to as MiFID II) have
affected many of the markets in which the
Group operates, the instruments in which
it trades and the way it transacts with
market counterparties and other
customers. MiFID II is currently undergoing
a review process in both the EU and the
UK, including as part of the EU’s ongoing
focus on the development of a stronger
Capital Markets Union and the UK’s
Wholesale Markets Review.
Regulation of benchmarks
The EU and UK Benchmarks Regulation
apply to the administration, contribution
and use of benchmarks within the EU and
the UK, respectively. Financial institutions
within the EU or the UK, as applicable, are
prohibited from using benchmarks unless
their administrators are authorised,
registered or otherwise recognised in the
EU or the UK, respectively. The FCA has
also been working to phase out use of
LIBOR, with GBP LIBOR ceasing to be
published in its original form from the end
of 2021 and synthetic versions of GBP
LIBOR being made available only for a
limited period of time. Similarly, USD LIBOR
will cease to be published in its current
form in June 2023 and other LIBOR and
IBOR rates are also being wound down.
Global regulators in conjunction with the
industry have developed and are
continuing to develop alternative
benchmarks and risk-free rate fallback
arrangements, including updates to
existing, as well as new, applicable
legislation.
Regulation of the derivatives market
The European Market Infrastructure
Regulation (EMIR) has introduced
requirements designed to improve
transparency and reduce the risks
associated with the derivatives market.
EMIR has operational and financial impacts
on the Group, including by imposing new
collateral requirements on a broader range
of market participants with effect from
2022. Access to the clearing services of
certain Central Clearing Counterparties
(CCPs) used by Group entities is currently
permitted under temporary equivalence
and recognition regimes and decisions in
the UK and EU. If not extended or made
permanent, the EU’s equivalence decision
for UK Central Clearing Counterparties
(CCPs), and exemption for certain
intragroup transactions from the EMIR
derivatives clearing and margin obligations,
both due to expire at the end of June 2025,
could also have operational and financial
impacts on the Group, as could the
removal of temporary recognition of non-
UK CCPs by the UK. EMIR is currently
undergoing a review process in the EU
which may result in changes to the
intragroup transactions exemption,
potentially making it easier to rely on.
However, the review is in its very early
stages so it is not yet certain what changes
may result from it.
US regulators have imposed similar rules
as the EU with respect to the mandatory
on-venue trading and clearing of certain
derivatives, and post-trade transparency,
as well as in relation to the margining of
OTC derivatives. US regulators have
finalised certain aspects of their rules with
respect to their application on a cross-
border basis, including with respect to their
registration requirements in relation to
non-US swap dealers and security-based
swap dealers. The regulators may adopt
further rules, or provide further guidance,
regarding cross-border applicability. In
December 2017, the CFTC and the
European Commission recognised the
trading venues of each other’s jurisdiction
to allow market participants to comply with
mandatory on-venue trading
requirements while trading on certain
venues recognised by the other
jurisdiction. In December 2022, the CFTC
extended temporary relief that would
permit trading venues and market
participants located in the UK to continue
to rely on this mutual recognition
framework following the withdrawal of the
UK from the EU.
Certain participants in US swap markets
are required to register with the CFTC as
‘swap dealers’ or ‘major swap participants’
and/or, with the SEC as ‘security-based
swap dealers’ or ‘major security-based
swap participants’. Such registrants are
subject to CFTC and/or SEC regulation
and oversight. Entities required to register
as swap dealers and/or security-based
swap dealers are subject to business
conduct, record-keeping and reporting
requirements under either or both CFTC
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Supervision and regulation (continued)
and SEC rules. Barclays Bank PLC is also
subject to regulation by the FRB, and is
both provisionally registered with the
CFTC as a swap dealer and conditionally
registered with the SEC as a security-
based swap dealer. In addition, Barclays
Bank Ireland PLC is provisionally registered
as a Swap Dealer with the CFTC.
Accordingly, Barclays Bank PLC and
Barclays Bank Ireland PLC are subject to
CFTC rules on business conduct, record-
keeping and reporting and to FRB rules on
capital and margin. The CFTC has
approved certain comparability
determinations that permit substituted
compliance with non-US regulatory
regimes for certain swap regulations.
Substituted compliance is a recognition
program whereby compliance with a
comparable regulatory requirement of a
foreign jurisdiction is deemed to serve as a
substitute for compliance with comparable
requirements of the U.S. Commodity
Exchange Act and the CFTC’s regulations.
Substituted compliance has been granted
only in respect of certain requirements
promulgated by regulatory authorities in
certain identified jurisdictions that the
CFTC believes are sufficiently comparable
to its own requirements. Substituted
compliance was granted in respect of
certain European Union requirements in
December 2013. In December 2022, the
CFTC extended temporary relief that
would permit swap dealers located in the
UK to continue to rely on existing CFTC
substituted compliance determinations
with respect to EU requirements in the
event of a withdrawal of the UK from the
EU. Barclays Bank PLC and Barclays Bank
Ireland PLC rely upon the CFTC’s grant of
substituted compliance as a means to
comply with certain swap dealer
requirements.
Barclays Bank PLC conditionally registered
as a security-based swap dealer with the
SEC as of 1 November 2021. As a
registered security-based swap dealer,
Barclays Bank PLC is subject to SEC
business conduct, recordkeeping and
reporting rules similar to the CFTC rules
noted above. Like the CFTC, the SEC
approved certain comparability
determinations that permit conditional
substituted compliance with non-US
regulatory regimes for certain security-
based swap regulations. Due to the
imposition by the SEC of more stringent
requirements on which its grant of
substituted compliance is conditioned,
Barclays Bank PLC is relying on substituted
compliance only with respect to a limited
number of SEC security-based swap
dealer rules.
Many of the regulations under the CFTC
and SEC regimes are similar in scope of
application. The rules of both the SEC and
the CFTC are roughly divided into
“transaction-level rules” and “entity-level
rules”. Transaction-level rules apply only in
circumstances in which at least one of the
parties to the swap or security-based swap
transaction has sufficient nexus to the
United States. Entity-level rules apply to
swap dealers or security-based swap
dealers across all their swap or security-
based swaps without distinction as to the
counterparty or location of the
transaction. Unlike the CFTC, certain SEC
rules apply to transactions entered into by
non-US security-based swap dealers
based on the location from which certain
activities are undertaken. These SEC rules
apply to security-based swap transactions
facing non-US person counterparties that
are “arranged, negotiated or executed” by
US-based security-based swap dealer
personnel. This distinction expands the
scope and impact of the SEC regime to
transactions with a greater number of
non-US counterparties.
As noted above, Barclays Bank PLC and
Barclays Bank Ireland PLC are subject to
FRB rules on capital and margin.
In 2022, the SEC proposed Rule 10B-1 that
would require any person with a security-
based swap position (aggregated across all
affiliated persons) that exceeds any of the
thresholds specified by the SEC to
promptly report certain information by the
next business day, including the identity of
the reporting person and the security-
based swap position, as well as the
ownership of securities positions related
to the security-based swap position. Such
reports would be available publicly. If
adopted as proposed, this rule could
increase the burden and cost to Barclays
Bank PLC of utilising security-based
swaps.
Other regulatory developments in the
US
The SEC has also put forth a number of
other recent proposals that, if adopted,
could have a significant impact on the
Group’s business and operations,
including: (i) proposed amendments to
Exchange Act Rule 15c6-1 that would
shorten the standard settlement cycle for
most broker-dealer transactions in
securities from two business days after the
trade (T+2) to one business day after the
trade (T+1), which could require significant
changes to BCI’s settlement procedures
and practices, and new Exchange Act Rule
15c6-2 which would generally require
market-wide improvements in the rate of
same-day affirmations and on central
matching service providers; (ii) a proposed
rule that would mandate central clearing of
many US Treasury securities transactions
and would amend the broker-dealer
customer protection rule as it applies to
margin posted for transactions in US
Treasury securities, which could impose
additional costs on the Group’s Treasury
securities trading activity; and (iii) a series
of market structure proposals which would
have a significant impact on securities
trading activity by BCI and other Group
entities, as the SEC proposals would (a)
impose a new SEC best execution
obligation on securities broker-dealers,
including BCI, (b) require that certain
individual investor orders be exposed to
auctions before they could be executed
internally by certain trading centres, and (c)
amend certain rules under Regulation NMS
(National Market System) to adopt variable
minimum pricing increments, reduce
access fee caps for protected quotations,
require that the amount of exchange fees
and rebates be determinable at the time of
execution, and update and expand to
certain broker-dealers the disclosures
required for order executions in NMS
stocks, among other changes.
Other regulation
Consumer protection, culture, and
diversity and inclusion
In May 2021, the FCA published a
consultation paper proposing the
imposition of a new consumer duty on
firms. The duty looks to set higher
expectations for the standard of care that
firms provide to customers and will impact
all aspects of Barclays' retail businesses,
including every customer journey, product
and service as well as our relationships with
partners, suppliers and third parties. This
will result in significant implementation
costs and there will also be higher ongoing
costs for the industry as a result of
extensive monitoring and evidential
requirements. Final rules were published in
July 2022 and will come into force on 31
July 2023 for new and existing products or
services that are open to sale or renewal,
and on 31 July 2024 for closed products or
services.
Our regulators have enhanced their focus
on the promotion of cultural values as a
key area for banks, although they generally
view the responsibility for reforming
culture as primarily sitting with the
industry. The UK regulators have also
begun focusing on diversity and inclusion in
financial services firms, with the Bank of
England, PRA and FCA having published a
joint discussion paper and the FCA having
published a policy statement on this topic
in April 2022.
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Supervision and regulation (continued)
Data protection
Most countries where the Group operates
have comprehensive laws requiring
openness and transparency about the
collection and use of personal information,
and protection against loss and
unauthorised or improper access.
Regulations regarding data protection are
increasing in number, as well as levels of
enforcement, as manifested in increased
amounts of fines and the severity of other
penalties. We expect that personal privacy
and data protection will continue to receive
attention and focus from regulators, as
well as public scrutiny and attention.
The EU’s General Data Protection
Regulation (GDPR) created a broadly
harmonised privacy regime across EU
member states, introducing mandatory
breach notification, enhanced individual
rights, a need to openly demonstrate
compliance, and significant penalties for
breaches. The extraterritorial effect of the
GDPR means entities established outside
the EU may fall within the Regulation’s
ambit when offering goods or services to
European based customers or clients.
Following the UK’s withdrawal from the EU,
the UK continues to apply the GDPR
framework (as onshored into UK law and
hence now referred to as the ‘UK GDPR’ -
this sits alongside an amended version of
the UK Data Protection Act 2018).
Following the invalidation by the European
Court of Justice (CJEU) of the EU-US
Privacy Shield as a mechanism for
transferring EU personal data to the US,
the European Commission published new
standard contractual clauses (SCCs) in
2021 to meet the requirements of GDPR
and the CJEU decision, known as Schrems
II. In early 2022, the UK Information
Commissioner set out its own
international data transfer agreement, and
the international data transfer addendum
to the European Commission’s SCCs for
international data transfers. Implementing
the new EU SCCs and/or the UK
addendum, which involve case-by-case
transfer impact assessments and other
safeguards, is likely to result in increased
compliance costs for the Group. In 2021,
China adopted its first comprehensive law
in relation to personal information called
the Personal Information Protection Law
(PIPL). The PIPL applies to processing
activities within mainland China, but similar
to the GDPR, the PIPL has extraterritorial
reach. As the global data protection
regulatory landscape develops,
noncompliance with any such
requirements could lead to regulatory
fines and other penalties.
In the US, Barclays Bank Delaware is
subject to the US Federal Gramm-Leach-
Bliley Act (GLBA) and the California Privacy
Rights Act of 2020, which amended the
California Consumer Privacy Act of 2018
and came into effect on 1 January 2023
(CPRA). The GLBA limits the use and
disclosure of non-public personal
information to non-affiliated third parties,
and requires financial institutions to
provide written notice of their privacy
policies and practices and implement
certain information security policies and
practices. Any violations of the GLBA could
subject Barclays Bank Delaware to
additional reporting requirements or
regulatory investigation or audits by the
financial regulators. More broadly, the
Group's US operations are subject to the
CPRA which applies to personal
information that is not collected,
processed, sold or disclosed subject to the
GLBA. The CPRA requires applicable
members of the Group to both provide
California residents with additional
disclosures regarding the collection, use
and sharing of personal information and
grant California residents access, deletion,
correction and other rights, including the
right to opt-out of certain sales or
transfers of personal information and the
right to limit the processing of sensitive
personal information to certain purposes.
Any violations of the CPRA may be subject
to enforcement by the California Privacy
Protection Agency and the California
Attorney General and the imposition of
monetary penalties, as well as potential
lawsuits arising from the private right of
action provided to California residents in
the case of certain data breaches. Bills
proposed in the United States Congress
and in the legislatures of various US states,
if enacted, may have further impact on the
data privacy practices of Barclays’ US
operations. In addition, all 50 states have
laws including obligations to provide
notification of security breaches of
computer databases that contain personal
information to affected individuals, state
officers and others.
Cybersecurity and operational resilience
Regulators globally continue to focus on
cybersecurity risk management,
organisational operational resilience and
overall soundness across all financial
services firms, with customer and market
expectations of uninterrupted access to
financial services remaining at an all-time
high.
The regulatory focus has been further
heightened by the increasing number of
high-profile ransomware and other supply
chain attacks seen across the industry in
recent years and the growing reliance of
financial services on Cloud and other third
party service providers. This is evidenced
by the continuing introduction of new laws
and regulatory frameworks directed at
enhancing resilience of both firms and
their critical third party providers. A new UK
framework introduced last year requires
firms to be able to remain within impact
tolerances set for their important business
services by no later than 31 March 2025,
with further legislation focusing on the
resilience of critical third party providers
now in the pipeline. The European Union’s
Digital Operational Resilience Act (DORA)
entered into force in January 2023 and will
apply in early 2025 (after a two-year
implementation period), introducing
comprehensive and sector specific
regulation on Information Communication
Technologies( ICT) incident reporting,
testing and third party risk management,
and providing for direct oversight of critical
third party providers servicing the EU
financial services sector. The existing and
anticipated requirements for increased
controls will serve to improve industry
standardisation and resilience capabilities,
enhancing our ability to deliver services
during periods of potential disruption.
However, such measures are likely to
result in increased technology and
compliance costs for the Group.
In 2022, the SEC published proposed
disclosure rules and amendments
regarding cybersecurity risk management,
governance and incident reporting by US-
listed companies, including foreign private
issuers such as Barclays PLC and Barclays
Bank PLC. Also in 2022, NYDFS both
increased enforcement of and published
proposed amendments to its main
cybersecurity regulation applying to the
New York Branch of Barclays Bank PLC.
Final versions of the SEC proposed
disclosure rules and NYDFS proposed
amendments are expected in 2023.
Regulatory initiatives on ESG disclosure
The EU Regulation on Sustainability-
Related Disclosures introduces disclosure
obligations requiring financial institutions
to explain how they integrate
environmental, social and governance
factors in their investment decisions for
certain financial products. In addition, the
EU Taxonomy Regulation provides for a
general framework for the development of
an EU-wide classification system for
environmentally sustainable economic
activities. The EU Corporate Sustainability
Reporting Directive will introduce
sustainability related reporting obligations
for various entities including EU banks and
certain listed companies, with reporting to
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Supervision and regulation (continued)
commence on a phased basis from the
financial year 2024. Draft sustainability
reporting standards are being developed
by the European Financial Reporting
Advisory Group.
From June 2022, the EU’s Capital
Requirements Regulation requires certain
large financial institutions to disclose
information on environmental, social and
governance risks, including physical risks
and transition risks.
The EU has also proposed a Directive on
Corporate Sustainability Due Diligence
which, if adopted, would require EU firms,
including financial institutions, to carry out
due diligence on companies in their value
chain and identify and prevent, bring to an
end or mitigate the impact of their
activities on human rights and the
environment.
In the UK, the UK Government has
confirmed its intention to develop a UK
Green Taxonomy, and the Green
Technical Advisory Group has published
advice on development of a Green
Taxonomy with further advice expected to
follow. Reporting against the Taxonomy
will form part of the UK’s new Sustainability
Disclosure Requirements (SDR). Certain
companies will be required to disclose
which portion of their activities are
Taxonomy-aligned. The structure of the
Taxonomy draws on the EU approach and
has six environmental objectives (climate
change mitigation, climate change
adaptation, sustainable use and protection
of water and marine resources, transition
to a circular economy, pollution prevention
and control and protection and restoration
of biodiversity). The UK regulators are also
consulting on a new SDR Framework for
firms as well as investment product
disclosures, including a new sustainable
investment labelling regime. Additionally,
TCFD-aligned reporting requirements now
apply to UK publicly quoted companies,
large private companies and LLPs with
financial years starting on or after 6 April
2022 (in addition to existing TCFD-related
reporting requirements under the Listing
Rules).
In March 2022, the SEC proposed climate
related-disclosure requirements for US-
listed companies (which would include
Barclays PLC and Barclays Bank PLC) that
would, among other things, require
disclosure of direct and indirect
greenhouse gas emissions, with certain
emissions disclosures subject to third-
party attestation requirements; climate-
related scenario analysis (if the issuer
conducts scenario analysis), together with
qualitative and quantitative information
about the hypothetical future climate
scenarios used in its analysis; climate
transition plans or climate-related targets
or goals, along with disclosure of progress
against any such plans, targets or goals;
climate-related risks over the short-,
medium- and long-term; qualitative and
quantitative information regarding
climate-related risks and historical impacts
in audited financial statements; corporate
governance of climate-related risks; and
climate-related risk-management
processes.
Sanctions and financial crime
The UK Bribery Act 2010 introduced a new
form of corporate criminal liability focused
broadly on a company’s failure to prevent
bribery on its behalf. The Criminal Finances
Act 2017 introduced new corporate
criminal offences of failing to prevent the
facilitation of UK and overseas tax evasion.
Both pieces of legislation have broad
application and in certain circumstances
may have extraterritorial impact on
entities, persons or activities located
outside the UK, including Barclays PLC’s
subsidiaries outside the UK. The UK Bribery
Act requires the Group to have adequate
procedures to prevent bribery which, due
to the extraterritorial nature of the Act,
makes this both complex and costly.
Additionally, the Criminal Finances Act
requires the Group to have reasonable
prevention procedures in place to prevent
the criminal facilitation of tax evasion by
persons acting for, or on behalf of, the
Group.
The Sanctions and Anti-Money Laundering
Act (the Sanctions Act) became law in the
UK in 2018. The Sanctions Act allows for
the adoption of an autonomous UK
sanctions regime, as well as a more flexible
licensing regime post-Brexit. On 6 July
2020, the UK Government announced the
first sanctions that have been
implemented independently by the UK
outside the auspices of the UN and EU.
The autonomous UK sanctions regime
came into force on 1 January 2021. The
sanctions apply within the UK and in
relation to the conduct of all UK persons
wherever they are in the world; they also
apply to overseas branches of UK
companies (including the Barclays Bank
PLC New York branch).
In the US, the Bank Secrecy Act, the USA
PATRIOT Act 2001, the Anti-Money
Laundering Act of 2020 and regulations
thereunder contain numerous anti-money
laundering and anti-terrorist financing
requirements for financial institutions. In
addition, the Group is subject to the US
Foreign Corrupt Practices Act, which
prohibits, among other things, corrupt
payments to foreign government officials.
It is also subject to various economic
sanctions laws, regulations and executive
orders administered by the US
government, which prohibit or restrict
some or all business activities and other
dealings with or involving certain
individuals, entities, groups, countries and
territories.
In some cases, US state and federal
regulations addressing sanctions, money
laundering and other financial crimes may
impact entities, persons or activities
located or undertaken outside the US,
including Barclays PLC and its subsidiaries.
US government authorities have
aggressively enforced these laws against
financial institutions in recent years.
As a result of the conflict in Ukraine, there
has been an increased regulatory focus on
sanctions compliance in various
jurisdictions, including in the US, UK and
EU.
Failure of a financial institution to ensure
compliance with such laws could have
serious legal, financial and reputational
consequences for the institution.
Financial review
A review of the Group’s performance, including
the key performance indicators, and the contribution
of each of our businesses to the overall performance
of the Group.
Key performance indicators
Consolidated summary income statement
Income statement commentary
Consolidated summary balance sheet
Balance sheet commentary
Analysis of results by business
Non-IFRS performance measures
379
381
382
383
384
385
392
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Key performance indicators
In assessing the financial performance of the Group, management uses a range of KPIs which focus on the Group’s financial strength,
the delivery of sustainable returns and cost management. Barclays continues to target return on tangible equity ( RoTE) of greater than
10% over the medium-term. Cost discipline remains a priority and management continues to target a cost: income ratio below 60%.
Non-IFRS performance measures
The Group’s management believes that the non-IFRS performance measures included in this document provide valuable information
to the readers of the financial statements as they enable the reader to identify a more consistent basis for comparing the businesses’
performance between financial periods, and provide more detail concerning the elements of performance which the managers of these
businesses are most directly able to influence or are relevant for an assessment of the Group.
They also reflect an important aspect of the way in which operating targets are defined and performance is monitored by management.
However, any non-IFRS performance measures in this document are not a substitute for IFRS measures and readers should consider
the IFRS measures as well. Refer to the non-IFRS performance measures section for further information and calculations of non-IFRS
performance measures included throughout this section and the most directly comparable IFRS measures.
Definition
Common Equity Tier 1 (CET1)
ratio
Capital requirements are part of the
regulatory framework governing how banks
and depository institutions are supervised.
Capital ratios express a bank’s capital as a
percentage of its Risk Weighted Assets
(RWAs) as defined by the PRA.
CET1 ratio is a measure of capital as
defined within the Definition of Capital
section of the PRA's Prudential and
Resolution Policy - Banking Index.
CET1 ratioa
13.9%
2021: 15.1%
2020: 15.1%
Why is it important and how the Group performed
The Group’s capital management objective is to maximise
shareholder value by prudently managing the level and mix of
its capital to: ensure the Group and all of its subsidiaries are
appropriately capitalised relative to their regulatory minimum
and stressed capital requirements, support the Group’s risk
appetite, growth and strategic options, while seeking to
maintain a robust credit proposition for the Group and its
subsidiaries.
The CET1 ratio decreased to 13.9% (2021: 15.1%) as £5.0bn
of attributable profit was offset by returns to shareholders,
impacts of regulatory change from 1 January 2022, pension
deficit contribution payments and decreases in the fair value of
the bond portfolio through other comprehensive income and
other capital deductions.
Increases in RWAs, largely as a result of foreign exchange
movements, were broadly offset by an increase in the
currency translation reserve within CET1.
Group target: a CET1 ratio in the range of 13-14%.
Return on average tangible
shareholders’ equity
RoTE is calculated as profit after tax
attributable to ordinary shareholders, as a
proportion of average shareholders’ equity
excluding non-controlling interests and
other equity instruments adjusted for the
deduction of intangible assets and goodwill.
This measure indicates the return generated by the
management of the business based on ordinary
shareholders’ tangible equity. Achieving a target RoTE
demonstrates the organisation’s ability to execute its
strategy and align management’s interests with the
shareholders’. RoTE lies at the heart of the Group’s capital
allocation and performance management process.
RoTE was 10.4% (2021: 13.1%) from the normalisation of
credit impairment charges and higher litigation and conduct
costs, partially offset by income growth across all operating
divisions.
Group target: RoTE of greater than 10%.
Group RoTEa
10.4%
2021: 13.1%
2020: 3.2%
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Key performance indicators (continued)
Definition
Total operating expenses
Why is it important and how the Group performed
Barclays views total operating expenses as a key strategic
area for banks; those who actively manage costs and
control them effectively will gain a strong competitive
advantage.
Group operating expenses increased to £16.7bn (2021:
£14.7bn) mainly due to higher litigation and conduct
charges:
Group operating expenses excluding litigation and conduct
increased 6% to £15.1bn, reflecting the impact of inflation
and the appreciation of average USD against GBP.
Litigation and conduct charges were £1.6bn (2021: £0.4bn)
including £1.0bn impact from the Over-issuance of
Securities in the US (Over-issuance of Securities)b.
Total operating expensesa
£16.7bn
2021: £14.7bn
2020: £13.9bn
Cost: income ratio
Total operating expenses divided by total
income.
This is a measure management uses to assess the
productivity of the business operations. Managing the cost
base is a key execution priority for management and
includes a review of all categories of discretionary spending
and an analysis of how we can run the business to ensure
that costs increase at a slower rate than income.
Cost: income ratioa
67%
2021: 67%
2020: 64%
The Group cost: income ratio was 67% (2021: 67%), as
increased income was offset by higher litigation and
conduct charges, primarily from the Over-issuance of
Securities.
Group target: a cost: income ratio below 60%.
Notes
a 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See impact of Over-issuance of Securities on page 356 and Restatement of financial
statements (Note 1a) on page 428 for further details.
b Denotes the Over-issuance of Securities under Barclays Bank PLC’s (BBPLC) US shelf registration statements on Form F-3 filed with the SEC in 2018 and 2019.
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Consolidated summary income statement
For the year ended 31 December
Interest income
Interest expense
Net interest income
Fee and commission income
Fee and commission expense
Net fee and commission income
Other income
Total income
Operating costs
UK bank levy
GMP chargeb
Litigation and conduct
Total operating expenses
Other net income
Profit before impairment
Credit impairment (charges)/releases
Profit before tax
Tax charge
Profit after tax
Non-controlling interests
Other equity instrument holders
Attributable profit
Selected financial statistics
Basic earnings per share
Diluted earnings per share
Return on average tangible shareholders’ equity
Cost: income ratio
2022
£m
19,096
(8,524)
10,572
9,637
(3,038)
6,599
7,785
24,956
Restateda
2021
£m
11,240
(3,167)
8,073
9,880
(2,206)
7,674
6,193
21,940
2020
£m
11,892
(3,770)
8,122
8,641
(2,070)
6,571
7,073
21,766
2019
£m
15,456
(6,049)
9,407
9,122
(2,362)
6,760
5,465
21,632
2018
£m
14,541
(5,479)
9,062
8,893
(2,084)
6,809
5,265
21,136
(14,957)
(14,092)
(13,434)
(13,359)
(13,627)
(176)
—
(1,597)
(16,730)
(170)
—
(397)
(299)
—
(153)
(14,659)
(13,886)
(226)
—
(1,849)
(15,434)
6
8,232
(1,220)
7,012
(1,039)
5,973
(45)
(905)
5,023
30.8p
29.8p
10.4%
67%
260
7,541
653
8,194
(1,138)
7,056
(47)
(804)
6,205
36.5p
35.6p
13.1%
67%
23
7,903
(4,838)
3,065
(604)
2,461
(78)
(857)
1,526
8.8p
8.6p
3.2%
64%
71
6,269
(1,912)
4,357
(1,003)
3,354
(80)
(813)
2,461
14.3p
14.1p
5.3%
71%
(269)
(140)
(2,207)
(16,243)
69
4,962
(1,468)
3,494
(911)
2,583
(234)
(752)
1,597
9.4p
9.2p
3.6%
77%
Notes
a 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See impact of Over-issuance of Securities on page 356 and Restatement of financial
statements (Note 1a) on page 428 for further details.
b Guaranteed minimum pensions (GMP)
The financial information above is extracted from the published accounts. This information should be read together with the
information included in the accompanying consolidated financial statements.
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Income statement commentary
2022 compared to 2021a
Barclays delivered a profit before tax of £7,012m (2021: £8,194m), RoTE of 10.4% (2021: 13.1%) and earnings per share (EPS) of 30.8p
(2021: 36.5p).
The Group has a diverse income profile across businesses and geographies including a significant presence in the US. The 10%
appreciation of average USD against GBP positively impacted income and profits and adversely impacted credit impairment charges
and total operating expenses.
Group income increased to £24,956m (2021: £21,940m). Excluding the income benefit of £292m relating to hedging arrangements to
manage the risks of the rescission offer in relation to the Over-issuance of Securities, total Group income was £24,664m, up 12% year-
on-year.
Group operating expenses increased to £16,730m (2021: £14,659m) mainly due to higher litigation and conduct charges:
Group operating expenses excluding litigation and conduct charges increased 6% to £15,133m, reflecting the impact of inflation and
the appreciation of average USD against GBP.
Litigation and conduct charges were £1,597m (2021: £397m) including £966m from the Over-issuance of Securities.
Credit impairment charges were £1,220m (2021: £653m net release). The increase in charges reflect macroeconomic deterioration
and a gradual increase in delinquencies, partially offset by the utilisation of macroeconomic uncertainty post-model adjustments
(PMAs) and the release of COVID-19 related adjustments informed by refreshed scenarios. Total coverage ratio decreased to 1.4%
(December 2021: 1.6%) driven by changes in portfolio mix and write-offs. Coverage levels remain strong.
The effective tax rate (ETR) was 14.8% (2021: 13.9%). The tax charge included a £346m re-measurement of the Group’s UK deferred
tax assets (DTAs) due to the enactment of legislation to reduce the UK banking surcharge rate. Excluding this DTAs downward re-
measurement, the ETR was 9.9%, reflecting tax benefits in the current year, primarily arising from tax relief related to government
bonds linked to the high prevailing rate of inflation in 2022, as well as beneficial adjustments in respect of prior years.
Attributable profit was £5,023m (2021: £6,205m).
Note
a 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See impact of Over-issuance of Securities on page 356 and Restatement of financial
statements (Note 1a) on page 428 for further details.
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Consolidated summary balance sheet
As at 31 December
Assets
Cash and balances at central banks
Cash collateral and settlement balances
Loans and advances at amortised cost
Reverse repurchase agreements and other similar secured
lending
Trading portfolio assets
Financial assets at fair value through the income statement
Derivative financial instruments
Financial assets at fair value through other comprehensive
income
Other assets
Total assets
Liabilities
Deposits at amortised cost
Cash collateral and settlement balances
Repurchase agreements and other similar secured borrowings
Debt securities in issueb
Subordinated liabilities
Trading portfolio liabilities
Financial liabilities designated at fair value
Derivative financial instruments
Other liabilities
Total liabilities
Equity
Called up share capital and share premium
Other equity instruments
Other reserves
Retained earnings
Total equity excluding non-controlling interests
Non-controlling interests
Total equity
Total liabilities and equity
Net asset value per ordinary share
Tangible net asset value per share
2022
£m
256,351
112,597
398,779
776
133,813
213,568
302,380
65,062
30,373
Restateda
2021
£m
238,574
92,542
361,451
3,227
147,035
191,972
262,572
61,753
25,159
2020
£m
2019
£m
2018
£m
191,127
101,367
342,632
9,031
127,950
175,151
302,446
78,688
21,122
150,258
83,256
339,115
3,379
114,195
133,086
229,236
65,750
21,954
177,069
77,222
326,406
2,308
104,187
149,648
222,538
52,816
21,089
1,513,699
1,384,285
1,349,514
1,140,229
1,133,283
545,782
519,433
481,036
415,787
394,838
96,927
27,052
112,881
11,423
72,924
271,637
289,620
16,193
79,371
28,352
98,867
12,759
54,169
250,960
256,883
13,450
85,423
14,174
75,796
16,341
47,405
249,765
300,775
11,917
67,341
14,517
76,369
18,156
36,916
204,326
229,204
11,953
67,522
18,578
82,286
20,559
37,882
216,834
219,643
11,362
1,444,439
1,314,244
1,282,632
1,074,569
1,069,504
4,373
13,284
(2,192)
52,827
68,292
968
69,260
4,536
12,259
1,770
50,487
69,052
989
70,041
4,637
11,172
4,461
45,527
65,797
1,085
66,882
4,594
10,871
4,760
44,204
64,429
1,231
65,660
4,311
9,632
5,153
43,460
62,556
1,223
63,779
1,513,699
1,384,285
1,349,514
1,140,229
1,133,283
347p
295p
339p
291p
315p
269p
309p
262p
309p
262p
Number of ordinary shares of Barclays PLC (in millions)
15,871
16,752
17,359
17,322
17,133
Year-end USD exchange rate
Year-end EUR exchange rate
1.20
1.13
1.35
1.19
1.37
1.11
1.32
1.18
1.28
1.12
Notes
a 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See impact of Over-issuance of Securities on page 356 and Restatement of financial
statements (Note 1a) on page 428 for further details.
b Debt securities in issue include covered bonds of £3.2bn (2021: £5.0bn).
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Balance sheet commentary
Total assets
Total assets increased £129bn to £1,514bn.
Cash and balances at central banks increased by £18bn to £256bn, predominantly driven by strong growth in customer deposits.
Financial assets at fair value through other comprehensive income increased £3bn to £65bn.
Loans and advances at amortised cost increased £37bn to £399bn, which reflected increased lending to customers across Barclays
International and Barclays UK, and increased investment in debt securities.
Derivative financial instrument assets increased £40bn to £302bn, driven by market volatility and increased activity. Cash collateral and
settlement balances increased by £20bn to £113bn.
Trading portfolio assets decreased £13bn to £134bn due to reduction in equity securities as clients repositioned their demand, partially
offset by increased trading activity in debt securities. Financial assets at fair value through the income statement increased £22bn to
£214bn driven by increased reverse repurchase activity.
Total liabilities
Total liabilities increased £130bn to £1,444bn.
Deposits at amortised cost increased £26bn to £546bn primarily due to an increase in short-term money market deposits and growth
in Barclays International deposits.
Derivative financial instrument liabilities increased £33bn to £290bn, driven by market volatility and increased activity. Cash collateral
and settlement balances increased by £18bn to £97bn.
Trading portfolio liabilities increased £19bn to £73bn due to increases in equity securities as clients repositioned their demand. Financial
liabilities designated at fair value increased £21bn to £272bn due to increased prime brokerage deposits and repurchase agreements.
Total shareholders’ equity
Total shareholders’ equity decreased £0.7bn to £69.3bn.
Other equity instruments increased £1.0bn to £13.3bn due to the issuance of three AT1 instruments (£1.25bn, $2.0bn and SGD450m),
offset by two redemptions (£1.0bn and $1.5bn). AT1 securities are perpetual subordinated contingent convertible securities
structured to qualify as AT1 instruments under prevailing capital rules applicable as at the relevant issue date.
Other reserves decreased by £4.0bn, mainly due to a reduction in the cash flow hedging reserve of £6.4bn to £7.2bn debit, as a result of
fair value movements on interest rate swaps held for hedging purposes due to an increase in major interest rate curves. This was
partially offset by an increase in the currency translation reserve of £2.0bn to £4.8bn, driven by the depreciation of GBP against USD.
Retained earnings increased £2.3bn to £52.8bn, mainly due to profits of £5.0bn, offset by share repurchases of £1.5bn and dividends of
£1.0bn.
Tangible net asset value per share increased to 295p (December 2021: 291p) with EPS of 30.8p and currency movements partially
offset by net negative reserve movements due to higher interest rates, primarily in the cash flow hedging reserve.
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Analysis of results by business
Barclays UK
Income statement information
Net interest income
Net fee, commission and other income
Total income
Operating costs
UK bank levy
Litigation and conduct
Total operating expenses
Other net income
Profit before impairment
Credit impairment (charges)/releases
Profit before tax
Attributable profit
Balance sheet information
Loans and advances to customers at amortised cost
Total assets
Customer deposits at amortised cost
Loan: deposit ratio
Risk weighted assets
Period end allocated tangible equity
Key facts
UK mortgage balances
Mortgage gross lending flow
Average LTV of mortgage portfolioa
Average LTV of new mortgage lendinga
Number of branches
Mobile banking active customers
30 day arrears rate - Barclaycard Consumer UK
Number of employees (full time equivalent)
Performance measures
Return on average allocated tangible equity
Average allocated tangible equity
Cost: income ratio
Loan loss rate (bps)
Net interest margin
2022
£m
5,893
1,366
7,259
2021
£m
5,202
1,334
6,536
2020
£m
5,234
1,113
6,347
(4,260)
(4,357)
(4,270)
(26)
(41)
(36)
(37)
(4,327)
(4,430)
—
2,932
(286)
2,646
1,877
—
2,106
365
2,471
1,756
(50)
(32)
(4,352)
18
2,013
(1,467)
546
325
£205.1bn
£313.2bn
£258.0bn
87%
£73.1bn
£10.1bn
£208.8bn
£321.2bn
£260.6bn
85%
£72.3bn
£10.0bn
£205.4bn
£289.1bn
£240.5bn
89%
£73.7bn
£9.7bn
£162.2bn
£30.3bn
£158.1bn
£33.9bn
£148.3bn
£22.8bn
50%
68%
481
10.5m
0.9%
6,200
18.7%
£10.0bn
60%
13
2.86%
51%
70%
666
9.7m
1.0%
7,100
17.6%
£10.0bn
68%
(16)
2.52%
51%
68%
859
9.2m
1.7%
21,300
3.2%
£10.1bn
69%
68
2.61%
Note
a Average loan to value (LTV) of mortgages is balance weighted and reflects both residential and buy-to-let (BTL) mortgage portfolios within the Home Loans portfolio.
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Analysis of results by business (continued)
Analysis of Barclays UK
Analysis of total income
Personal Banking
Barclaycard Consumer UK
Business Banking
Total income
Analysis of credit impairment (charges)/releases
Personal Banking
Barclaycard Consumer UK
Business Banking
Total credit impairment (charges)/releases
Analysis of loans and advances to customers at amortised cost
Personal Banking
Barclaycard Consumer UK
Business Banking
Total loans and advances to customers at amortised cost
Analysis of customer deposits at amortised cost
Personal Banking
Barclaycard Consumer UK
Business Banking
Total customer deposits at amortised cost
2022
£m
4,540
1,093
1,626
7,259
(167)
30
(149)
(286)
2021
£m
3,883
1,250
1,403
6,536
28
404
(67)
365
2020
£m
3,522
1,519
1,306
6,347
(380)
(881)
(206)
(1,467)
£169.7bn
£165.4bn
£157.3bn
£9.2bn
£26.2bn
£8.7bn
£34.7bn
£9.9bn
£38.2bn
£205.1bn
£208.8bn
£205.4bn
£195.6bn
£196.4bn
£179.7bn
—
£62.4bn
£258.0bn
—
£64.2bn
£260.6bn
£0.1bn
£60.7bn
£240.5bn
2022 compared to 2021
Profit before tax increased to £2,646m (2021: £2,471m), with benefits from the rising rate environment in the UK more than offsetting
the non-recurrence of a prior year credit impairment release .
Total income increased 11% to £7,259m. Net interest income increased 13% to £5,893m with a NIM of 2.86% (2021: 2.52%) primarily
driven by the rising interest rate environment in the UK. Net fee, commission and other income increased 2% to £1,366m.
Personal Banking income increased 17% to £4,540m, driven by rising interest rates, partially offset by mortgage margin compression.
Barclaycard Consumer UK income decreased 13% to £1,093m as higher customer spend volumes were more than offset by lower
interest earning lending (IEL) balances following repayments and ongoing prudent risk management.
Business Banking income increased 16% to £1,626m driven by rising interest rates alongside improved transaction based revenues,
partially offset by lower government scheme lending income as repayments continue.
Total operating expenses decreased 2% to £4,327m driven by efficiency savings more than offsetting the impact of inflation.
Credit impairment charges were £286m (2021: £365m net release). The charges reflect an updated macroeconomic scenario together
with a partial return to more normalised levels of customer behaviour. This is partially offset from the release of COVID-19 related
adjustments as performance stabilises at or below pre-pandemic levels. As at 31 December 2022, UK cards 30 and 90 day arrears
remain at 0.9% (Q421: 1.0%) and 0.2% (Q421: 0.2%) respectivelya. The UK cards business is supported by a total coverage ratio of 7.6%
(December 2021: 12.8%). The UK cards coverage reflects revised recovery expectations under the ongoing debt sale program and
continued resilience in the underlying book. PMAs are in place for the anticipated stress arising from the cost-of-living crisis.
Loans and advances to customers at amortised cost decreased 2% to £205.1bn as £4.1bn of mortgage growth was more than offset
by a £8.5bn decrease in Business Banking balances due to the repayment of government scheme lending and the yield curve impact
from rising interest rates on the Education, Social Housing and Local Authority portfolio carrying value.
Customer deposits at amortised cost remained broadly stable at £258.0bn (December 2021: £260.6bn), maintaining a strong loan:
deposit ratio of 87% (December 2021: 85%).
RWAs remained broadly stable at £73.1bn (December 2021: £72.3bn).
Note
a As at 31 December 2019, UK Cards 30 and 90 day arrears were 1.7% and 0.8% respectively.
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Analysis of results by business (continued)
Barclays International
Income statement information
Net interest income
Net trading income
Net fee, commission and other income
Total income
Operating costs
UK bank levy
Litigation and conduct
Total operating expenses
Other net income
Profit before impairment
Credit impairment (charges)/releases
Profit before tax
Attributable profit
Balance sheet information
Loans and advances to customers at amortised cost
Loans and advances to banks at amortised cost
Debt securities at amortised cost
Loans and advances at amortised cost
Trading portfolio assets
Derivative financial instrument assets
Financial assets at fair value through the income statement
Cash collateral and settlement balances
Other assets
Total assets
Deposits at amortised cost
Derivative financial instrument liabilities
Loan: deposit ratio
Risk weighted assets
Period end allocated tangible equity
Key facts
Number of employees (full time equivalent)
Performance measures
Return on average allocated tangible equity
Average allocated tangible equity
Cost: income ratio
Loan loss rate (bps)
Net interest margin
2022
£m
4,927
7,709
5,231
17,867
(10,361)
(133)
(1,503)
(11,997)
28
5,898
(933)
4,965
3,844
Restateda
2021
£m
3,263
5,693
6,709
15,665
(9,076)
(134)
(345)
(9,555)
40
6,150
288
6,438
4,647
2020
£m
3,282
6,920
5,719
15,921
(8,765)
(240)
(48)
(9,053)
28
6,896
(3,280)
3,616
2,220
£133.7bn
£106.4bn
£100.1bn
£8.7bn
£27.2bn
£169.6bn
£133.8bn
£301.7bn
£210.5bn
£107.7bn
£258.0bn
£8.4bn
£19.0bn
£133.8bn
£146.9bn
£261.5bn
£188.2bn
£88.1bn
£225.6bn
£8.0bn
£14.7bn
£122.7bn
£127.7bn
£301.8bn
£170.7bn
£97.5bn
£221.4bn
£1,181.3bn
£1,044.1bn
£1,041.8bn
£287.6bn
£288.9bn
59%
£254.8bn
£36.8bn
£258.8bn
£256.4bn
52%
£230.9bn
£33.2bn
£240.5bn
£300.4bn
51%
£222.3bn
£30.2bn
10,900
10,400
10,800
10.2%
£37.6bn
67%
54
5.02%
14.4%
£32.4bn
61%
(21)
4.01%
7.1%
£31.5bn
57%
257
3.64%
Note
a 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See impact of Over-issuance of Securities on page 356 and Restatement of financial
statements (Note 1a) on page 428 for further details.
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Analysis of results by business (continued)
Analysis of Barclays International
Corporate and Investment Bank
Income statement information
Net interest income
Net trading income
Net fee, commission and other income
Total income
Operating costs
UK bank levy
Litigation and conduct
Total operating expenses
Other net income
Profit before impairment
Credit impairment (charges)/releases
Profit before tax
Attributable profit
Balance sheet information
Loans and advances to customers at amortised cost
Loans and advances to banks at amortised cost
Debt securities at amortised cost
Loans and advances at amortised cost
Trading portfolio assets
Derivative financial instrument assets
Financial assets at fair value through the income statement
Cash collateral and settlement balances
Other assets
Total assets
Deposits at amortised cost
Derivative financial instrument liabilities
Risk weighted assets
Performance measures
Return on average allocated tangible equity
Average allocated tangible equity
Cost: income ratio
Loan loss rate (bps)
Analysis of total income
FICC
Equities
Global Markets
Advisory
Equity capital markets
Debt capital markets
Investment Banking fees
Corporate lending
Transaction banking
Corporate
Total income
2022
£m
1,949
7,733
3,686
13,368
(7,630)
(126)
(1,189)
(8,945)
2
4,425
(119)
4,306
3,364
£90.5bn
£8.1bn
£27.2bn
£125.8bn
£133.7bn
£301.6bn
£210.5bn
£106.9bn
£222.6bn
£1,101.1bn
£205.8bn
£288.9bn
£215.9bn
10.2%
£32.8bn
67%
9
5,695
3,149
8,844
768
166
1,281
2,215
(231)
2,540
2,309
Restateda
2021
£m
1,351
5,652
5,331
12,334
(6,818)
(128)
(237)
(7,183)
2
5,153
473
5,626
4,032
£73.4bn
£7.6bn
£19.0bn
£100.0bn
£146.7bn
£261.5bn
£188.1bn
£87.2bn
£195.8bn
£979.3bn
£189.4bn
£256.4bn
£200.7bn
14.3%
£28.3bn
58%
(47)
3,448
2,967
6,415
921
813
1,925
3,659
588
1,672
2,260
2020
£m
1,084
6,975
4,417
12,476
(6,689)
(226)
(4)
(6,919)
6
5,563
(1,559)
4,004
2,554
£70.3bn
£7.4bn
£14.7bn
£92.4bn
£127.5bn
£301.7bn
£170.4bn
£96.7bn
£194.9bn
£983.6bn
£175.2bn
£300.3bn
£192.2bn
9.5%
£27.0bn
55%
166
5,138
2,471
7,609
561
473
1,697
2,731
590
1,546
2,136
13,368
12,334
12,476
Note
a 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See impact of Over-issuance of Securities on page 356 and Restatement of financial
statements (Note 1a) on page 428 for further details.
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Analysis of results by business (continued)
Analysis of Barclays International continued
Consumer, Cards and Payments
Income statement information
Net interest income
Net fee, commission, trading and other income
Total income
Operating costs
UK bank levy
Litigation and conduct
Total operating expenses
Other net income
Profit before impairment
Credit impairment charges
Profit/(loss) before tax
Attributable profit/(loss)
Balance sheet information
Loans and advances to customers at amortised cost
Total assets
Deposits at amortised cost
Risk weighted assets
Key facts
US cards 30 day arrears rate
US cards customer FICO score distribution
<660
>660
Total number of payments clients
Value of payments processeda
Performance measures
Return on average allocated tangible equity
Average allocated tangible equity
Cost: income ratio
Loan loss rate (bps)
Analysis of total income
International Cards and Consumer Bank
Private Bank
Payments
Total income
Note
a
Includes £296bn (2021: £270bn; 2020: £268bn) of merchant acquiring payments.
2022
£m
2,979
1,520
4,499
(2,731)
(7)
(314)
(3,052)
26
1,473
(814)
659
480
2021
£m
1,912
1,419
3,331
(2,258)
(6)
(108)
(2,372)
38
997
(185)
812
615
2020
£m
2,198
1,247
3,445
(2,076)
(14)
(44)
(2,134)
22
1,333
(1,721)
(388)
(334)
£43.2bn
£80.2bn
£81.8bn
£38.9bn
£33.0bn
£64.8bn
£69.4bn
£30.2bn
£29.7bn
£58.2bn
£65.3bn
£30.1bn
2.2%
1.6%
2.5%
11%
89%
395k
10%
90%
380k
13%
87%
365k
£307bn
£277bn
£274bn
10.0%
£4.8bn
68%
175
2,913
1,014
572
4,499
15.0%
£4.1bn
71%
51
2,092
781
458
3,331
(7.5%)
£4.5bn
62%
517
2,433
707
305
3,445
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Analysis of results by business (continued)
2022 compared to 2021a
Profit before tax decreased 23% to £4,965m with a RoTE of 10.2% (2021: 14.4%), reflecting a RoTE of 10.2% (2021: 14.3%) in CIB and
10.0% (2021: 15.0%) in CC&P.
Excluding the impact of the Over-issuance of Securities, CIB RoTE was 12.0%.
Barclays International has a diverse income profile across businesses and geographies including a significant presence in the US. The
10% appreciation of average USD against GBP positively impacted income and profits and adversely impacted credit impairment
charges, total operating expenses and RWAs.
Total income increased to £17,867m (2021: £15,665m).
CIB income increased 8% to £13,368m.
Global Markets income increased 38% to £8,844m representing the best full year for both Global Markets and FICC on a comparable
basisb. FICC income increased 65% to £5,695m, mainly in macro, reflecting higher levels of activity as we supported our clients through
a period of market volatility. Equities income of £3,149m (2021: £2,967m) included £292m of income related to hedging arrangements
to manage the risks of the rescission offer in relation to the Over-issuance of Securities.
Investment Banking fees decreased 39% to £2,215m due to the reduced fee pool, particularly in Equity and Debt capital marketsc
.
Within Corporate, Transaction banking income increased 52% to £2,540m driven by improved margins and growth in deposits, and
higher fee income. Corporate lending income reflected fair value losses on leverage finance lending of c.£335m net of mark to market
gains on related hedges, of which c.£85m was recognised in Q422, and higher costs of hedging and credit protection.
CC&P income increased 35% to £4,499m.
International Cards and Consumer Bank income increased 39% to £2,913m reflecting higher cards balances, including the Gap portfolio
acquisition, partially offset by higher customer acquisition costs.
Private Bank income increased 30% to £1,014m, reflecting client balance growth and improved margins partially offset by the non-
recurrence of a property sale gain in the prior year.
Payments income increased 25% to £572m driven by turnover growth from the easing of lockdown restrictions.
Total operating expenses increased 26% to £11,997m. CIB total operating expenses increased 25% to £8,945m. Operating expenses
excluding litigation and conduct charges increased 12% to £7,756m driven by continued investment in talent and technology, and the
impact of inflation. Litigation and conduct charges were £1,189m (2021: £237m) including £966m from the Over-issuance of Securities
and £165m relating to the Devices Settlementsd. CC&P total operating expenses increased 29% to £3,052m. Operating expenses
excluding litigation and conduct charges increased 21% to £2,738m, including higher investment spend reflecting an increase in
marketing and partnership costs. Litigation and conduct charges were £314m (2021: £108m) mainly driven by customer remediation
costs relating to legacy loan portfolios.
Credit impairment charges were £933m (2021: £288m net release) driven by a deteriorating macroeconomic forecast. CIB credit
impairment charges of £119m (2021: £473m net release) were driven by a net increase in modelled impairment and single name
charges partially offset by the benefit of credit protection. CC&P credit impairment charges increased to £814m (2021: £185m), driven
by higher balances in US cards, including the day one impact of acquiring the Gap portfolio, macroeconomic deterioration and a gradual
increase in delinquencies, partially offset by the utilisation of economic uncertainty PMAs and the release of COVID-19 related
adjustments informed by refreshed macroeconomic scenarios. As at 31 December 2022, US cards 30 and 90 day arrears remain below
pre-pandemic levels at 2.2% (Q421: 1.6%) and 1.2% (Q421: 0.8%) respectivelye. The US cards business is supported by a total coverage
ratio of 8.1% (December 2021: 10.6%).
Loans and advances at amortised cost increased £35.8bn to £169.6bn due to increased lending to customers across CIB and CC&P,
inclusive of the Gap portfolio acquisition and appreciation of USD against GBP, and increased investment in debt securities.
Trading portfolio assets decreased £13.1bn to £133.8bn due to a reduction in equity securities as clients repositioned their demand,
partially offset by increased trading activity in debt securities.
Derivative assets and liabilities increased £40.2bn and £32.5bn respectively to £301.7bn and £288.9bn driven by market volatility and
increased activity.
Financial assets at fair value through the income statement increased £22.3bn to £210.5bn driven by increased reverse repurchase
activity.
Deposits at amortised cost increased £28.8bn to £287.6bn primarily due to growth in Corporate deposits and an increase in short-term
money market deposits.
RWAs increased to £254.8bn (December 2021: £230.9bn) mainly resulting from the impact of the appreciation of USD against GBP,
regulatory changes and higher CC&P balances including the Gap portfolio.
Notes
a 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See impact of Over-issuance of Securities on page 356 and Restatement of financial
statements (Note 1a) on page 428 for further details.
b Period covering 2014-2022. Pre 2014 data was not restated following re-segmentation in 2016.
c Data source: Dealogic for the period covering 1 January to 31 December 2022.
d Refers to the settlements with the SEC and CFTC in connection with their investigations of the use of unauthorised devices for business communications.
e As at 31 December 2019, US cards 30 and 90 days arrears were 2.7% and 1.4% respectively.
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Analysis of results by business (continued)
Head Office
Income statement information
Net interest income
Net fee, commission and other income
Total income
Operating costs
UK bank levy
Litigation and conduct
Total operating expenses
Other net (expenses)/income
Loss before impairment
Credit impairment charges
Loss before tax
Attributable loss
Balance sheet informationa
Total assets
Risk weighted assets
Period end allocated tangible equity
Key facts
Number of employees (full time equivalent)b,c
Performance measures
Average allocated tangible equity
2022
£m
(248)
78
(170)
(336)
(17)
(53)
(406)
(22)
(598)
(1)
(599)
(698)
Restated
2021
£m
(392)
131
(261)
(659)
—
(15)
(674)
220
(715)
—
(715)
(198)
2020
£m
(393)
(109)
(502)
(399)
(9)
(73)
(481)
(23)
(1,006)
(91)
(1,097)
(1,019)
£19.2bn
£8.6bn
£(0.2)bn
£19.0bn
£11.0bn
£5.5bn
£18.6bn
£10.2bn
£6.8bn
70,300
64,100
50,900
£0.7bn
£5.0bn
£6.7bn
Notes
a 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See impact of Over-issuance of Securities on page 356 and Restatement of financial
statements (Note 1a) on page 428 for further details.
b Head Office includes employees in Barclays Execution Services.
c Barclays Execution Services Employees are reported within the Head Office Segment. Barclays UK transformed its business in 2021 and consolidated all Customer Care employees, who directly serve
customers, into Barclays Execution Services to improve customer service and experience. Costs are recharged, while FTEs are reported within Head Office, as at 31 December 2021 10,700 FTEs were
impacted by the move from Barclays UK to Head Office. The 2020 comparative figures have not been restated.
2022 compared to 2021
Loss before tax was £599m (2021: £715m).
Total income was an expense of £170m (2021: £261m) primarily reflecting treasury items, funding costs on legacy capital instruments
and mark-to-market losses on legacy investments, partially offset by hedge accounting gains. Additionally, there was a £74m loss on
sale arising from disposals of Barclays’ equity stake in Absa, and a £72m interest expense that became payable to a US tax authority
upon the resolution of historical tax issues. This was partially offset by a gain of £86m from the sale and leaseback of UK data centres
and the receipt of £30m of dividends from Absa prior to disposal.
Total operating expenses reduced to £406m (2021: £674m) reflecting the non-recurrence of the £266m structural cost action charge
taken as part of the real estate review in June 2021.
Other net income was an expense of £22m (2021: £220m income) driven by a fair value loss on investments held by the Business
Growth Fund in which Barclays has an associate interest.
RWAs reduced to £8.6bn (December 2021: £11.0bn) reflecting the disposals of Barclays' equity stake in Absa in April 2022 and
September 2022.
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Non-IFRS performance measures
The Group’s management believes that the non-IFRS performance measures included in this document provide valuable information
to the readers of the financial statements as they enable the reader to identify a more consistent basis for comparing the businesses’
performance between financial periods, and provide more detail concerning the elements of performance which the managers of these
businesses are most directly able to influence or are relevant for an assessment of the Group.
They also reflect an important aspect of the way in which operating targets are defined and performance is monitored by management.
However, any non-IFRS performance measures in this document are not a substitute for IFRS measures and readers should consider
the IFRS measures as well.
Non-IFRS performance measures glossary
Measure
Loan: deposit ratio
Period end allocated tangible
equity
Definition
Loans and advances at amortised cost divided by deposits at amortised cost. The components of the
calculation have been included on page 348.
Allocated tangible equity is calculated as 13.5% (2021; 13.5% and 2020: 13.0%) of RWAs for each business,
adjusted for capital deductions, excluding goodwill and intangible assets, reflecting the assumptions the
Group uses for capital planning purposes. Head Office allocated tangible equity represents the difference
between the Group’s tangible shareholders’ equity and the amounts allocated to businesses.
Average tangible shareholders’
equity
Calculated as the average of the previous month’s period end tangible equity and the current month’s
period end tangible equity. The average tangible shareholders’ equity for the period is the average of the
monthly averages within that period.
Average allocated tangible
equity
Return on average tangible
shareholders’ equity
Return on average allocated
tangible equity
Operating expenses excluding
litigation and conduct
Operating costs
Cost: income ratio
Loan loss rate
Calculated as the average of the previous month’s period end allocated tangible equity and the current
month’s period end allocated tangible equity. The average allocated tangible equity for the period is the
average of the monthly averages within that period.
Statutory profit after tax attributable to ordinary equity holders of the parent, as a proportion of average
shareholders’ equity excluding non-controlling interests and other equity instruments adjusted for the
deduction of intangible assets and goodwill. The components of the calculation have been included on
pages 394.
Statutory profit after tax attributable to ordinary equity holders of the parent, as a proportion of average
allocated tangible equity. The components of the calculation have been included on page 395.
A measure of total operating expenses excluding litigation and conduct charges.
A measure of total operating expenses excluding litigation and conduct charges, UK bank levy and GMP.
Total operating expenses divided by total income.
Quoted in basis points and represents total impairment charges divided by gross loans and advances held
at amortised cost at the balance sheet date. The components of the calculation have been included on
page 304.
Net interest margin
Net interest income divided by the sum of average customer assets. The components of the calculation
have been included on page 393.
Tangible net asset value per
share
Calculated by dividing shareholders’ equity, excluding non-controlling interests and other equity
instruments, less goodwill and intangible assets, by the number of issued ordinary shares. The
components of the calculation have been included on page 396.
Performance measures
excluding the impact of the
Over-issuance of Securities
Profit before impairment
Calculated by excluding the impact of the Over-issuance of Securities from performance measures. The
components of the calculations have been included on page 395.
Calculated by excluding credit impairment charges or releases from profit before tax.
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Non-IFRS performance measures (continued)
Margins analysis
For the year ended 31 December
Barclays UK
Corporate and Investment Banka
Consumer, Cards and Payments
Barclays Internationala
Total Barclays UK and Barclays International
Otherb
Total Barclays Group
2022
2021
Net interest
income
Average customer
assets
Net interest
margin
Net interest
income
Average customer
assets
Net interest
margin
£m
5,893
1,796
2,979
4,775
£m
205,972
56,008
39,193
95,201
10,668
301,173
(96)
10,572
%
2.86
3.21
7.60
5.02
3.54
£m
5,202
1,238
1,911
3,149
8,351
(278)
8,073
£m
206,628
47,725
30,805
78,530
285,158
%
2.52
2.59
6.21
4.01
2.93
Notes
a Corporate and Investment Bank and Barclays International margins include IEL balances within the corporate and investment banking business.
b Other includes Head Office and non-lending related corporate and investment banking businesses not included in Barclays International margins.
The Group NIM increased 61bps to 3.54%. Barclays UK NIM increased 34bps to 2.86%, reflecting the impact of higher UK interest
rates. Barclays International NIM increased 101bps to 5.02%. CIB NIM increased 62bps to 3.21% and CC&P NIM increased 139bps to
7.60%, reflecting the impact of balance growth and higher interest rates.
The Group’s combined product and equity structural hedge notional as at 31 December 2022 was £263bn (December 2021: £228bn),
with an average duration of approximately 2.5 years (2021: close to 3 years). Group net interest income includes gross structural hedge
contributions of £2,196m (2021: £1,415m) and net structural hedge contributions of £(1,544)m (2021: £1,187m). Gross structural
hedge contributions represent the absolute interest income earned from the fixed receipts on the swaps in the structural hedge, while
the net structural hedge contributions represent the net interest earned on the difference between the structural hedge rate and
prevailing floating rates.
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Non-IFRS performance measures (continued)
Returns
Return on average tangible equity is calculated as profit for the period attributable to ordinary equity holders of the parent as a
proportion of average tangible equity for the period, excluding non-controlling and other equity interests for businesses. Allocated
tangible equity has been calculated as 13.5% (2021: 13.5%, 2020: 13.0%) of RWAs for each business, adjusted for capital deductions,
excluding goodwill and intangible assets, reflecting the assumptions the Group uses for capital planning purposes. Head Office average
allocated tangible equity represents the difference between the Group’s average tangible shareholders’ equity and the amounts
allocated to businesses.
For the year ended 31 December 2022
Barclays UK
Corporate and Investment Bank
Consumer, Cards and Payments
Barclays International
Head Office
Barclays Group
For the year ended 31 December 2021a
Barclays UK
Corporate and Investment Bank
Consumer, Cards and Payments
Barclays International
Head Office
Barclays Group
For the year ended 31 December 2020
Barclays UK
Corporate and Investment Bank
Consumer, Cards and Payments
Barclays International
Head Office
Barclays Group
Profit/(loss) attributable
to ordinary equity holders
of the parent
£m
1,877
3,364
480
3,844
(698)
5,023
1,756
4,032
615
4,647
(198)
6,205
325
2,554
(334)
2,220
(1,019)
1,526
Average
tangible
equity
£bn
10.0
32.8
4.8
37.6
0.7
48.3
10.0
28.3
4.1
32.4
5.0
47.3
10.1
27.0
4.5
31.5
6.7
48.3
Return on
average
tangible equity
%
18.7
10.2
10.0
10.2
n/m
10.4
17.6
14.3
15.0
14.4
n/m
13.1
3.2
9.5
(7.5)
7.1
n/m
3.2
Note
a 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See impact of Over-issuance of Securities on page 356 and Restatement of financial
statements (Note 1a) on page 428 for further details.
Performance measures
Return on average tangible shareholders' equity
Attributable profit/(loss)
£m
1,877
£m
3,364
£m
480
£m
3,844
£m
(698)
£m
5,023
Barclays UK
Corporate and
Investment Bank
Consumer, Cards
and Payments
Barclays
International
Head Office
Barclays Group
For the year ended 31 December 2022
Average shareholders' equity
Average goodwill and intangibles
Average tangible shareholders' equity
£13.6bn
(£3.6bn)
£10.0bn
£32.8bn
—
£32.8bn
£5.7bn
(£0.9bn)
£4.8bn
£38.5bn
(£0.9bn)
£37.6bn
£4.3bn
(£3.6bn)
£0.7bn
£56.4bn
(£8.1bn)
£48.3bn
Return on average tangible shareholders' equity
18.7%
10.2%
10.0%
10.2%
n/m
10.4%
Barclays Group average tangible shareholders’
equity based on a CET1 ratio of 13.5%
£47.7bn
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Non-IFRS performance measures (continued)
Return on average tangible shareholders' equity
Attributable profit/(loss)
Average shareholders' equity
Average goodwill and intangibles
Average tangible shareholders' equity
For the year ended 31 December 2021a
Barclays UK
£m
1,756
£13.6bn
(£3.6bn)
£10.0bn
Corporate and
Investment Bank
Consumer, Cards
and Payments
Barclays
International
Head Office
Barclays Group
£m
4,032
£28.3bn
—
£28.3bn
£m
615
£4.8bn
(£0.7bn)
£4.1bn
£m
4,647
£33.1bn
(£0.7bn)
£32.4bn
£m
(198)
£8.7bn
(£3.7bn)
£5.0bn
£m
6,205
£55.4bn
(£8.1bn)
£47.3bn
Return on average tangible shareholders' equity
17.6%
14.3%
15.0%
14.4%
n/m
13.1%
Barclays Group average tangible shareholders’
equity based on a CET1 ratio of 13.5%
£42.7bn
Note
a 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See impact of Over-issuance of Securities on page 356 and Restatement of financial
statements (Note 1a) on page 428 for further details.
Return on average tangible shareholders' equity
Attributable profit/(loss)
Average shareholders' equity
Average goodwill and intangibles
Average tangible shareholders' equity
For the year ended 31 December 2020
Barclays UK
Corporate and
Investment Bank
Consumer, Cards
and Payments
Barclays
International
Head Office
Barclays Group
£m
325
£13.7bn
(£3.6bn)
£10.1bn
£m
2,554
£27.0bn
—
£27.0bn
£m
(334)
£5.1bn
(£0.6bn)
£4.5bn
£m
2,220
£32.1bn
(£0.6bn)
£31.5bn
£m
(1,019)
£10.6bn
(£3.9bn)
£6.7bn
£m
1,526
£56.4bn
(£8.1bn)
£48.3bn
Return on average tangible shareholders' equity
3.2%
9.5%
(7.5%)
7.1%
n/m
3.2%
Barclays Group average tangible shareholders’
equity based on a CET1 ratio of 13.0%
Performance measures excluding the impact of the Over-issuance of Securities
Corporate and Investment Bank
Attributable profit excluding the impact of the Over-issuance of Securities
Attributable profit
Post-tax impact of the Over-issuance of Securities
Attributable profit excluding the impact of the Over-issuance of Securities
Return on average allocated tangible equity
Average allocated tangible equity
The impact of the Over-issuance of Securities
Average allocated tangible equity adjusted for the impact of the Over-issuance of Securities
Return on average allocated tangible equity
The impact of the Over-issuance of Securities
Return on average allocated tangible equity excluding the impact of the Over-issuance of
Securities
£45.1bn
For the year ended
31.12.22
£m
3,364
(552)
3,916
£32.8bn
£0.3bn
£32.5bn
10.2%
(1.8)%
12.0%
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Non-IFRS performance measures (continued)
Tangible net asset value per share
Total equity excluding non-controlling interests
Other equity instruments
Goodwill and intangibles
Tangible shareholders’ equity attributable to ordinary shareholders of the parent
2022
£m
68,292
(13,284)
(8,239)
46,769
2021a
£m
69,052
(12,259)
(8,061)
48,732
2020
£m
65,797
(11,172)
(7,948)
46,677
Shares in issue
15,871m
16,752m
17,359m
Tangible net asset value per share
295p
291p
269p
Note
a 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See impact of Over-issuance of Securities on page 356 and Restatement of financial
statements (Note 1a) on page 428 for further details.
Financial statements
Detailed analysis of our statutory accounts,
independently audited and providing in-depth
disclosure on the financial performance of the Group.
Barclays has adopted the British Bankers’ Association (BBA) Code for Financial Reporting
Disclosure as adopted by UK Finance in 2017 and has prepared the 2022 Annual Report in
compliance with the BBA Code. Barclays is committed to continuously reflect the objectives
of reporting set out in the BBA Code.
Consolidated financial statements
Independent Auditor’s Report
Consolidated income statement
Consolidated statement of comprehensive income
Consolidated balance sheet
Consolidated statement of changes in equity
Consolidated cash flow statement
Parent company accounts
Notes to the financial statements
Significant accounting policies
Financial performance and returns
Segmental reporting
Net interest income
Net fee and commission income
Net trading income
Net investment income
Operating expenses
Credit impairment charges
Tax
Earnings per share
Dividends on ordinary shares
Assets and liabilities held at fair value
Trading portfolio
Financial assets at fair value through
the income statement
Derivative financial instruments
Financial assets at fair value through
other comprehensive income
Financial liabilities designated at fair value
Fair value of financial instruments
Offsetting financial assets and financial liabilities
Page
Note
399
416
417
418
419
420
421
424
430
432
433
435
435
436
436
440
445
445
446
446
447
455
455
456
468
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
Assets at amortised cost
and other investments
Loans and advances and deposits at amortised cost
Property, plant and equipment
Leases
Goodwill and intangible assets
Accruals, provisions, contingent
liabilities and legal proceedings
Other liabilities
Provisions
Capital instruments,
equity and reserves
Contingent liabilities and commitments
Legal, competition and regulatory matters
Subordinated liabilities
Ordinary shares, share premium and other equity
Reserves
Non-controlling interests
Employee benefits
Staff costs
Scope of consolidation
Share-based payments
Pensions and post-retirement benefits
Principal subsidiaries
Structured entities
Investments in associates and joint ventures
Securitisations
Assets pledged, collateral received
and assets transferred
Other disclosure matters
Related party transactions and Directors’ remuneration
Auditor’s remuneration
Interest rate benchmark reform
Barclays PLC (the Parent company)
Related undertakings
Page
Note
469
469
471
473
477
477
478
479
485
488
489
490
491
492
494
500
502
506
507
509
511
513
513
517
519
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
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KPMG LLP’s independent auditor’s report
to the members of Barclays PLC
consistent with those discussed and
included in our reporting to the Board
Audit Committee (“BAC”).
We have fulfilled our ethical responsibilities
under, and we remain independent of the
Group in accordance with, UK ethical
requirements including the FRC Ethical
Standard as applied to listed public interest
entities.
2. Overview of our audit
Factors driving our view of risks
Following our FY21 audit and considering
developments affecting the Barclays PLC
Group since then, we have updated our
risk assessment.
The macro-economic environment
continues to drive our risk assessment as
the uncertainty which arose during the
COVID-19 pandemic has evolved into
increasing affordability pressures
associated with rising inflation and interest
rates.
The economic uncertainty and change has
brought both pressures and opportunities.
Fee income across the equity and debt
capital markets is down versus the prior
year but income in the markets business
has risen versus 2021 due to a higher
volume of trading activity linked to volatility
across various asset classes. In addition,
the increasing interest rate environment
and changes in portfolio mix have led to an
increase in the net interest margin.
As part of our risk assessment, we have
maintained our focus on future economic
assumptions used by the Group in its key
estimates both at the year end and, where
relevant, on a forward-looking basis.
Our risk assessment also considered
instances of non-compliance with laws and
regulations and enforcement actions
against the Group during the year and
specifically those that could reasonably be
expected to have a material effect on the
financial statements. We considered
management’s assessment of how these
occurred, their assessment of whether the
risk could be more pervasive, and actions
taken to remediate and prevent
recurrences or similar issues.
:
1. Our opinion is unmodified
In our opinion:
• the financial statements of Barclays PLC
give a true and fair view of the state of
the Group’s and of the Parent
Company’s affairs as at 31 December
2022, and of the Group’s profit for the
year then ended;
• the Group financial statements have
been properly prepared in accordance
with UK-adopted international
accounting standards;
• the Parent Company financial
statements have been properly
prepared in accordance with UK-
adopted international accounting
standards as applied in accordance with
the provisions of the Companies Act
2006;
• the financial statements have been
prepared in accordance with the
requirements of the Companies Act
2006.
What our opinion covers
We have audited the Group and Parent
Company financial statements of Barclays
PLC for the year ended 31 December
2022 (FY22) included in the Annual Report
and Accounts, which comprise:
Group (Barclays PLC and its subsidiaries)
• Consolidated income statement
• Consolidated statement of
comprehensive income
• Consolidated balance sheet
• Consolidated statement of changes in
equity
• Consolidated cash flow statement
• Notes 1 to 43 of the Consolidated
Financial Statements, including the
summary of significant accounting
policies
Parent Company (Barclays PLC)
• Statement of comprehensive income
• Balance sheet
• Statement of changes in equity
• Cash flow statement
• Note 42 to the Financial Statements,
including the summary of significant
accounting policies
Basis for opinion
We conducted our audit in accordance
with International Standards on Auditing
(UK) (“ISAs (UK)”) and applicable law. Our
responsibilities are described below. We
believe that the audit evidence we have
obtained is a sufficient and appropriate
basis for our opinion. Our audit opinion
and matters included in this report are
Key Audit Matters
Item
Impairment allowance on
loans and advances at
amortised cost
Valuation of financial
instruments held at fair value
UK Pension scheme valuation
User access management
Recoverability of Parent
Company’s investment
in subsidiaries
& 4.1
1 4.2
1 4.3
1 4.4
1 4.5
Similar risk to FY21
Increased risk since FY21
1
&
Our use of specialists and innovation
Using the work of specialists and specific
team members with expertise in a
specialised area of accounting or
auditing: We used our specialists and
specific team members with expertise in a
specialised area of accounting or auditing
to assist us in various aspects of our audit.
This includes, for example:
• Credit risk modellers for our testing of
the ECL models
• Economics specialists for our work
related to the macro-economic
variables and scenarios used in the
determination of the ECL provisions
• Valuation specialists for our
independent repricing of samples of
financial instruments
• Corporate finance valuation specialists
for our work over the methodology
underpinning and certain of the
assumptions used in the impairment
assessment of goodwill and intangibles
and the carrying value of subsidiaries
• Actuarial pensions specialists for our
work on the valuation of the defined
benefit obligation
• Tax specialists for our work over the tax
charge, effective tax rate and uncertain
tax positions.
Incorporating unpredictability into our
audit: A requirement of the auditing
standards is that we undertake procedures
which are deliberately unexpected and
could not have reasonably been predicted
by Barclays’ management. As an example,
we update our criteria for selecting journals
with a higher risk of management override
for testing each year so that the selection
criteria do not become predictable. This
year we added additional key words we
searched for in journal descriptions and
also introduced new search criteria for
journals posted and approved by the same
individuals.
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Innovation in the audit: Our audit is
committed to driving innovation and the
increased use of technology. In 2022 we
have continued to deploy a large number
of data and analytics tools across our audit.
We have also continued to innovate our
audit of the estimation of expected credit
losses through independently recalculating
a selection of model assumptions using
more recent data for certain portfolios.
This is used to develop a range for ECL
which we then compare to management’s
own point estimate.
Board Audit Committee (“BAC”)
interaction
During the year, the BAC met 14 times.
KPMG are invited to attend all BAC
meetings and are provided an opportunity
to meet with the BAC in private sessions
without the Executive Directors being
present. For each Key Audit Matter, we
have set out communications with the
BAC in section 4, including matters that
required particular judgement for each.
In addition, our audit team includes a
senior partner who has specific
responsibility for ensuring audit quality (our
“Audit Quality Partner”). The Board Audit
Committee met with the Audit Quality
Partner, without the audit team present, to
receive a report on his assessment of audit
quality.
The matters included in the BAC Chair’s
report on page 169 are materially
consistent with our observations of those
meetings.
Our independence
We have fulfilled our ethical responsibilities
and remain independent of the Group in
accordance with UK ethical requirements,
including the FRC Ethical Standard as
applied to listed public interest entities.
Apart from the matter noted below, we
have not performed any non-audit
services during the year ended
31 December 2022 or subsequently which
are prohibited by the FRC Ethical Standard.
During 2023, we identified that a KPMG
member firm had provided preparation of
local GAAP financial statement services
over the period 2019 to 2022 to entities
not in scope for the group audit. The
services involved administrative
preparation of the local statutory financial
statements and did not involve any
management decision-making or
bookkeeping. The work was undertaken
after the group audit opinion was signed by
KPMG LLP for each of the impacted
financial years and had no direct or indirect
effect on Barclays PLC’s consolidated
financial statements.
In our professional judgment, we confirm
that based on our assessment of the
breach, our integrity and objectivity as
auditor has not been compromised and we
believe that an objective, reasonable and
informed third party would conclude that
the provision of this service would not
impair our integrity or objectivity for any of
the impacted financial years. The audit
committee have concurred with this view.
We were first appointed as auditor by the
shareholders for the year ended
31 December 2017. The period of total
uninterrupted engagement is for the six
financial years ended 31 December 2022.
The Group lead engagement partner is
required to rotate after five years. This is
the first set of UK Financial Statements
that Stuart Crisp has signed.
The average tenure of key audit partners
who are responsible for component audits,
as set out in section 7 below, is three years,
with the shortest being their first year of
involvement and longest being five years.
Total audit fee
Other audit related fees
Other services
Date first appointed
Uninterrupted audit tenure
Next financial period which requires a tender
Tenure of Group lead engagement partner
Average tenure of key audit partners
£58m
£11m
£2m
31 March 2017
6 years
31 December 2027
1 year
3 years
Normalised profit before tax from
continuing operations £7,012m
(2021: normalised PBT:£6,071m)
n Profit before
tax from
continuing
operations
n Group
materiality
£7,012
£275
A £275m
Whole financial
statements materiality
(2021: £230m)
B £170m
Highest component materiality.
Range of materiality for
the five components
(£100m-£170m)
(2021: £75m-£170m)
£13m
Misstatements reported to the
Board Audit Committee
(2021: £11m)
C
In line with our audit methodology, our procedures on
individual account balances and disclosures were performed
to a lower threshold, performance materiality, so as to reduce
to an acceptable level the risk that individually immaterial
misstatements in individual account balances add up to a
material amount across the financial statements as a whole.
Performance materiality was set at 65% (2021: 74%) of
materiality for the financial statements as a whole, which
equates to £179m (2021: £170m) for the group and £169m
(2021: £169m) for the parent company. We applied this
percentage in our determination of performance materiality
based on the level of control deficiencies during the prior
period.
Materiality
(Item 6 below)
The scope of our work is influenced by our
view of materiality and our assessed risk of
material misstatement.
We have determined overall materiality for
the Barclays PLC Group to be £275m
(FY21: £230m).
A key judgement in determining materiality
(and performance materiality) is the
appropriate benchmark to select, based on
our perception of the needs of
shareholders. We considered which
benchmarks and key performance
indicators have the greatest bearing on
shareholder decisions.
We determined that profit before tax
remains the key benchmark for the
Barclays PLC Group. For FY21 we
normalised profit before tax downward by
£2.3bn to adjust for the fact that ECL
charges were considered abnormally low
as the economy recovered from the
COVID-19 pandemic. For FY22 we did not
normalise profit before tax. This is
reflective of the impact of COVID-19 on
ECL being less pronounced in the current
period. This change is a driver of the
increase in materiality in 2022. As such, for
FY22 we based our materiality on profit
before tax, of which it represents 3.9%
(FY21: 3.8% of normalised PBT).
We have determined overall materiality for
the Parent Company to be £260m (FY21:
£225m). Materiality for the Parent
Company financial statements was
determined with reference to a benchmark
of net assets of which it represents 0.5%
(FY21: 0.4%).
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Group scope
(Item 7 below)
We have performed top down risk
assessment and planning to determine
which of the Group’s components are likely
to include risks of material misstatement
to the Group financial statements, the
type of procedures to be performed at
these components and the extent of
involvement required from component
auditors around the world for the purpose
of our opinion on the consolidated financial
statements.
We have also considered the extent to
which the Group has established central
hubs in shared service centre structures in
India. The outputs from these hubs are
included in the financial information of the
reporting components and so the India
operations are not considered to be a
separate component.
We have performed certain audit
procedures centrally across the Group, set
out in more detail in Section 7. In addition,
we have performed Group level analysis on
the remaining components to determine
whether further risks of material
misstatement exist in those components.
We consider the scope of our audit, as
communicated to the Board Audit
Committee, to be an appropriate basis for
our audit opinion.
The components within the scope of our
work accounted for the following
percentages:
Coverage of Group financial statements
Group total income*
Group total assets*
Note
* Percentage of Group total income/assets over which we
performed full scope audit or audit of account balances
The impact of climate change on our audit
In planning our audit, we have considered
the potential impact of risks arising from
climate change on the Group’s business
and its financial statements. The Group
has set out its ambition under the Paris
Accord to be a net zero bank by 2050.
Further information is provided in the
Group’s Environment, Social and
Governance report which has been
incorporated into the 2022 Annual Report.
Climate change risks, opportunities and
the Group’s own commitments and
changing regulations could have a
significant impact on the Group’s business
and operations. There is the possibility that
climate change risks, both physical and
transitional, could affect financial
statement balances, through estimates
such as credit risk and market risk. There is
enhanced narrative in the Annual Report
on climate matters.
As part of our audit we performed a risk
assessment of the impact of climate
change risk and the commitments made
by the Group in respect of climate change
on the financial statements and our audit
approach. As a part of this we held
discussions with our own climate change
professionals to challenge our risk
assessment. In doing this we performed
the following:
• Understanding management’s
processes: we made enquiries to
understand management’s assessment
of the potential impact of climate
change risk on the Group’s Annual
Report and Accounts and the Group’s
preparedness for this. As a part of this
we made enquiries to understand
management’s risk assessment process
as it relates to possible effects of
climate change on the Annual Report
and Accounts including the way in which
the accounting policies of the Group
(including those relating to products
with specific climate features) are
updated to reflect climate change risks.
• Retail credit risk: we assessed how the
Group considers the impact of physical
risks on the valuation of mortgage
collateral. Specifically, we performed
data and analytic driven risk assessment
procedures to understand the potential
impact of flooding and subsidence on
the valuation of mortgage collateral and
made enquiries of management to
understand how this is considered within
their own collateral valuation process.
• Corporate credit risk: we assessed how
the Group considers the impact of
climate risk on corporate counterparties
through our individual loan assessments
where, for performing counterparties,
we assessed how climate change risk
impacts certain counterparties within
the commercial bank, including the
impact on their credit rating as
applicable. The focus of our procedures
was on certain counterparties who
operate in industries with greater
exposure to climate risk - the energy,
transportation, materials and buildings,
agriculture, food and forest product
sectors.
• Market risk: as part of our risk
assessment, we incorporated a
consideration of the climate change
impact on unobservable inputs used in
the valuation of certain financial
instruments in elevated risk sectors
including energy, metals and mining.
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• Annual report narrative: we made
enquiries of management to understand
the process by which climate related
narrative is developed including the
primary sources of data used and the
governance process in place over the
narrative. As a part of our risk
assessment, we read the climate related
information in the front half of the
Annual Report and considered
consistency with the financial
statements and our audit knowledge.
On the basis of the procedures performed
above, we concluded that, while climate
change posed a risk to the determination
of asset values in the current year, the risk
was not significant when we considered
the nature of the assets and the relevant
contractual terms. As a result, there was
no material impact from climate change on
our key audit matters.
3. Going concern, viability and
principal risks and uncertainties
The Directors have prepared the financial
statements on the going concern basis as
they do not intend to liquidate the Parent
Company or the Group or to cease their
operations, and they have concluded that
the Parent Company’s and the Group’s
financial position means that this is
realistic. They have also concluded that
there are no material uncertainties that
could have cast significant doubt over their
ability to continue as a going concern for at
least a year from the date of approval of
the financial statements (“the going
concern period”).
Going concern
We used our knowledge of the Group and
Parent Company, the financial services
industry, and the general economic
environment to identify the inherent risks
to the business model and analysed how
those risks might affect the Group’s and
Parent Company’s financial resources or
ability to continue operations over the
going concern period. The risks that
management considered most likely to
adversely affect the Group’s and Parent
Company’s available financial resources
over this period and which we challenged
were:
• the availability of funding and liquidity in
the event of a market wide stress
scenario; and
• the impact on regulatory capital
requirements in the event of an
economic slowdown.
We considered whether these risks could
plausibly affect the availability of financial
resources in the going concern period by
comparing severe, but plausible downside
scenarios that could arise from these risks
individually and collectively against the level
of available financial resources indicated by
the Group’s financial forecasts.
Our procedures also included an
assessment of whether the going concern
disclosure in note 1 to the financial
statements gives a complete and accurate
description of the Directors’ assessment
of going concern.
Accordingly, based on those procedures,
we found the directors’ use of the going
concern basis of preparation without any
material uncertainty for the Group and
Parent Company to be acceptable.
However, as we cannot predict all future
events or conditions and as subsequent
events may result in outcomes that are
inconsistent with judgements that were
reasonable at the time they were made,
the above conclusions are not a guarantee
that the Group or the Parent Company will
continue in operation.
Our conclusions
• We consider that the directors’ use of
the going concern basis of accounting in
the preparation of the Group’s and
Parent Company’s financial statements
is appropriate;
• We have not identified, and concur with
the directors’ assessment that there is
not, a material uncertainty related to
events or conditions that, individually or
collectively, may cast significant doubt
on the Group’s or Parent Company's
ability to continue as a going concern for
the going concern period;
• We have nothing material to add or draw
attention to in relation to the directors’
statement in Note 1 to the financial
statements on the use of the going
concern basis of accounting with no
material uncertainties that may cast
significant doubt over the Group and
Parent Company’s use of that basis for
the going concern period, and we found
the going concern disclosure in note 1
to be acceptable; and
• The related statement under the Listing
Rules set out on page 65 is materially
consistent with the financial statements
and our audit knowledge.
Disclosures of emerging and principal
risks and longer-term viability
Our responsibility
We are required to perform procedures to
identify whether there is a material
inconsistency between the directors’
disclosures in respect of emerging and
principal risks and the viability statement,
and the financial statements and our audit
knowledge.
Based on those procedures, we have
nothing further to add or draw attention to
in relation to:
• the directors’ confirmation within the
viability statement that they have
carried out a robust assessment of the
emerging and principal risks facing the
Group, including those that would
threaten its business model, future
performance, solvency and liquidity;
• the Principal Risks and Uncertainties
disclosures describing these risks and
how emerging risks are identified and
explaining how they are being managed
and mitigated; and
• the directors’ explanation in the viability
statement of how they have assessed
the prospects of the Group, over what
period they have done so and why they
considered that period to be
appropriate, and their statement as to
whether they have a reasonable
expectation that the Group will be able
to continue in operation and meet its
liabilities as they fall due over the period
of their assessment, including any
related disclosures drawing attention to
any necessary qualifications or
assumptions.
We are also required to review the Viability
Statement set out on page 58.
Our work is limited to assessing these
matters in the context of only the
knowledge acquired during our financial
statements audit. As we cannot predict all
future events or conditions and as
subsequent events may result in
outcomes that are inconsistent with
judgements that were reasonable at the
time they were made, the absence of
anything to report on these statements is
not a guarantee as to the Group’s and
Parent Company’s longer-term viability.
Our reporting
• We have nothing material to add or draw
attention to in relation to these
disclosures.
• We have concluded that these
disclosures are materially consistent
with the financial statements and our
audit knowledge.
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KPMG LLP’s independent auditor’s report
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4. Key audit matters
What we mean
Key Audit Matters are those matters that, in our professional judgement, were of most significance in the audit of the financial
statements and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us,
including those which had the greatest effect on:
• the overall audit strategy;
• the allocation of resources in the audit;
• and directing the efforts of the engagement team.
We include below the Key Audit Matters in decreasing order of audit significance together with our key audit procedures to address
those matters and our results from those procedures. These matters were addressed, and our results are based on procedures
undertaken for the purpose of our audit of the financial statements as a whole. We do not provide a separate opinion on these matters.
4.1 Impairment allowances on loans and advances at amortised cost, including off-balance sheet elements
Financial Statement Elements
Impairment allowances on loans and advances
at amortised cost, including off-balance sheet
elements
FY22
FY21
£6.2bn
£6.3bn
Our assessment of risk vs FY21
& Our assessment is that the risk has increased since FY21.
This is due to the increased macroeconomic uncertainty
seen during the year considering rising interest rates and
inflationary pressures.
Our results
FY22:
Acceptable
FY21:
Acceptable
Description of the Key Audit Matter
Subjective estimate
The estimation of expected credit losses
(“ECL”) on financial instruments, involves
significant judgement and estimates. The key
areas where we identified greater levels of
management judgement and therefore
increased levels of audit focus in the Group’s
estimation of ECLs are:
• Model estimations – Inherently judgemental
modelling and assumptions are used to
estimate ECL which involves determining
Probabilities of Default (“PD”), Loss Given
Default (“LGD”), and Exposures at Default
(“EAD”). ECLs may be inappropriate if certain
models or underlying assumptions do not
accurately predict defaults or recoveries
over time, become out of line with wider
industry experience, or fail to reflect the
credit risk of financial assets. As a result,
certain IFRS 9 models and model
assumptions are the key drivers of
complexity and uncertainty in the Group’s
calculation of the ECL estimate.
• Economic scenarios – IFRS 9 requires the
Group to measure ECLs on an unbiased
forward-looking basis reflecting a range of
future economic conditions. Significant
management judgement is applied in
determining the forward-looking economic
scenarios used as an input to calculate ECL,
the probability weightings associated with
the scenarios and the complexity of models
used to derive the probability weightings.
Our response to the risk
Our procedures to address the risk included:
Risk assessment: We performed granular and detailed risk assessment procedures over the entirety
of the loan and advances at amortised cost including off-balance sheet elements within the Group’s
financial statements. As part of these risk assessment procedures, we identified which portfolios are
associated with a risk of material misstatement including those arising from significant judgements
over the estimation of ECL either due to inputs, methods or assumptions.
Controls testing: We performed end to end process walkthroughs to identify the key systems,
applications and controls used in the ECL processes. We tested the relevant manual, general IT and
application controls over key systems used in the ECL process.
Key aspects of our controls testing involved evaluating the design and implementation and testing the
operating effectiveness of the key controls over the:
• completeness and accuracy of the key inputs into the IFRS 9 impairment models;
• application of the staging criteria;
• model validation, implementation and monitoring;
• authorisation and calculation of post model adjustments and management overlays;
• selection and implementation of economic variables and the controls over the economic scenario
selection and probabilities; and
• credit reviews that determine customer risk ratings used in the models for wholesale customers.
Our credit risk modelling expertise: We involved our own credit risk modellers who assisted in the
following:
• evaluating the Group’s impairment methodologies for compliance with IFRS 9;
•
inspecting model code for the calculation of certain components of the ECL model to assess its
consistency with the Group’s model methodology;
• evaluating for a selection of models which were changed or updated during the year as to whether
the changes (including the updated model code) were appropriate by assessing the updated model
methodology against the applicable accounting standard;
•
reperforming the calculation of certain adjustments to assess consistency with the qualitative
adjustment methodologies;
• assessing and reperforming, for a selection of models, the reasonableness of the model
predictions by comparing them against actual results and evaluating the resulting differences;
• evaluating the model output for a selection of models by inspecting the corresponding model
functionality and independently implementing the model by rebuilding the model code and
comparing our independent output with management’s output; and
•
independently recalculating a selection of model assumptions using more recent data for certain
portfolios. This is used to develop a range for ECL which is compared to management’s point
estimate
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Description of the Key Audit Matter
Our response to the risk
Our economics expertise: We involved our own economic specialists who assisted us in:
• assessing the reasonableness of the Group’s methodology and models for determining the
economic scenarios used and the probability weightings applied to them;
• assessing key economic variables which included comparing samples of economic variables to
external sources;
• assessing the overall reasonableness of the economic forecasts by comparing the Group’s
forecasts to our own modelled forecasts; and
• assessing the reasonableness of the Group’s qualitative adjustments by challenging key economic
assumptions applied in their calculation based on external sources.
Other test of details: Key aspects of our testing in addition to those set out above involved:
• sample testing over key inputs into the ECL calculations;
• selecting a sample of post model adjustments, considering the size and complexity of
management overlays, in order to assess the reasonableness of the adjustments by challenging
key assumptions, inspecting the calculation methodology and tracing a sample of the data used
back to source data; and
• selecting a sample of credit reviews in order to assess the reasonableness of customer risk ratings
by challenging key judgements and considering disconfirming or contradictory evidence.
Assessing transparency: We assessed whether the disclosures appropriately disclose and address
the uncertainty which exists when determining the ECL. In addition, we assessed whether the
disclosure of the key judgements and assumptions was sufficiently clear.
▪ Qualitative adjustments – Adjustments to
the model-driven ECL results are raised by
management to address known impairment
model limitations or emerging trends as well
as risks not captured by models. They
represent approximately 8.5% of the ECL.
These adjustments are inherently uncertain
and significant management judgement is
involved in estimating certain post model
adjustments (“PMA’s”) and management
overlays.
The effect of these matters is that, as part of
our risk assessment, we determined that the
impairment of loans and advances to
customers including off balance sheet
elements has a high degree of estimation
uncertainty, with a potential range of
reasonable outcomes greater than our
materiality for the financial statements as a
whole, and possibly many times that amount.
The credit risk sections of the financial
statements (pages 301-340) disclose the
sensitivities estimated by the Group.
Disclosure quality
The disclosures regarding the Group’s
application of IFRS 9 are key to explaining the
key judgements and material inputs to the IFRS
9 ECL results.
Communications with the Barclays PLC
Board Audit Committee
Our discussions with and reporting to the
Board Audit Committee included:
• The effectiveness of the control
environment operating over the
calculation of the ECL provisions;
• The determination and utilisation of
judgemental post model adjustments
recognised;
• Model monitoring results and
adjustments made;
• Management’s economic forecast and
associated scenario probability weights;
and
• The disclosures made to explain ECL,
including explaining the resulting
estimation uncertainty.
Areas of particular auditor judgement
We identified the following as the areas of
particular auditor judgement:
• The appropriateness of the model
estimations and adjustments recorded
to the model driven ECL calculations to
reflect the current economic
environment.
Our results
Based on the risk identified and our
procedures performed we considered the
impairment allowances on loans and
advances at amortised cost, including off-
balance sheet elements and the related
disclosures to be acceptable (2021 result:
acceptable).
Further information in the Annual Report
and Accounts: See the Board Audit
Committee Report on page 173 for details
on how the Board Audit Committee
considered impairment as an area of
focus, page 425 for the accounting policy
on accounting for the impairment of
financial assets under IFRS 9, pages
300-340 for the credit risk disclosures, and
page 436 for the financial disclosure note
8; Credit Impairment charges/(releases).
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4.2 Valuation of financial instruments held at fair value
Financial Statement Elements
FY22
FY21
Level 2 assets at fair value* (note 17)
Level 2 liabilities at fair value* (note 17)
Level 3 assets at fair value (note 17)
Level 3 liabilities at fair value (note 17)
£595bn
£572bn
£21bn
£7.5bn
£533bn
£521bn
£16bn
£6.5bn
Our assessment of risk vs FY21
1 Our assessment is that the risk is similar to FY21.
Our results
FY22:
Acceptable
FY21:
Acceptable
*The key audit matter identified relates to one derivatives portfolio within these balances, and xVA adjustments made to derivative valuations, both of which we considered to be harder-to-value.
Our response to the risk
Our procedures to address the risk included:
Risk assessment: We performed granular and detailed risk assessment procedures throughout the
audit period over the entirety of the balances within the Group’s financial statements (i.e. all of the fair
value financial instruments held by the Group). As part of these risk assessment procedures, we
identified which portfolios and the associated valuation inputs have a risk of material misstatement
including those arising from significant judgements over valuation either due to unobservable inputs
or complex models.
Control testing: We attended management’s valuation committee throughout the year and
observed discussion and challenge over valuation themes including items related to the valuation of
certain difficult-to-value financial instruments recorded at fair value.
We performed end to end process walkthroughs to identify the key systems, applications and controls
used in the valuations processes. We tested the design and operating effectiveness of key controls
relating specifically to these portfolios.
Key aspects of our controls testing involved evaluating the design and implementation and testing the
operating effectiveness of the key controls over:
•
independent price verification (IPV), performed by a control function, of key market pricing inputs,
including completeness of positions and valuation inputs subject to the IPV process;
• FVAs, including exit adjustments (to mark the portfolio to bid or offer prices), model shortcoming
reserves to address model limitations and XVAs;
•
•
the validation, completeness, implementation and usage of valuation models. This included
controls over assessment of model limitations and assumptions; and
the assessment of the observability of a product and their unobservable inputs.
Our valuations expertise: We involved our own valuations specialists in the following:
•
independently re-pricing a selection of fair value financial instruments and challenging
management on the valuations where they were outside our tolerance; and
• challenging the appropriateness of significant models and methodologies used in calculating fair
values, risk exposures and in calculating FVAs, including comparison to industry practice.
Seeking contradictory evidence: For a selection of collateral disputes identified through
management’s control we challenged management’s valuation where significant fair value differences
were observable with the market participant on the other side of the trade. We also utilised collateral
dispute data to identify fair value financial instruments with significant fair value differences against
market counter parties and selected these to independently reprice.
Inspection of movements: We inspected trading revenue arising on level 3 positions to assess
whether material gains or losses generated were in line with the accounting standards.
Historical comparison: We performed a retrospective review by inspecting significant gains and
losses on a selection of new fair value financial instruments, position exits, novations and
restructurings throughout the audit period and evaluated whether these data points indicated
elements of fair value not incorporated in the current valuation methodologies. We also inspected
movements in unobservable inputs throughout the period to challenge whether any gain or loss
generated was appropriate.
Assessing transparency: For the Level 3 portfolios, we assessed the adequacy of the Group’s
financial statements disclosures in the context of the relevant accounting standards.
Description of the Key Audit Matter
Subjective valuation
The fair value of the Group’s financial
instruments is determined through the
application of valuation techniques which can
involve the exercise of significant judgement
by the Group in relation to the choice of the
valuation models, pricing inputs and post-
model pricing adjustments, including fair value
adjustments (FVAs) and credit and funding
adjustments (together referred to as XVAs).
Where significant pricing inputs are
unobservable, management has limited
reliable, relevant market data available in
determining the fair value and hence
estimation uncertainty can be high. These
financial instruments are classified as Level 3,
with management having controls in place
over the boundary between Level 2 and 3
positions. Our significant audit risk is therefore
primarily over significant Level 3 portfolios.
In addition, there may also be valuation
complexity associated with Level 2 portfolios,
specifically where valuation modelling
techniques result in significant limitations or
where there is greater uncertainty around the
choice of an appropriate pricing methodology,
and consequently more than one valuation
methodology could be used for that product
across the market.
We identified two areas of such complexity.
The first a derivatives portfolio that we
considered to be harder to value Level 2 due to
an element of modelling complexity
associated with the product, and the second
the XVA adjustments made to uncollateralised
and partially collateralised derivative
valuations.
The effect of these matters is that, as part of
our risk assessment, we determined that the
subjective estimates in fair value
measurement of certain portfolios, and
harder-to-value Level 2 portfolios have a high
degree of estimation uncertainty, with a
potential range of reasonable outcomes
greater than our materiality for the financial
statements as a whole, and possibly many
times that amount. The financial statements
(note 17) disclose the sensitivity estimated by
the Group.
Disclosure quality
For the Level 3 portfolios, the disclosures are
key to explaining the valuation techniques, key
judgements, assumptions and material inputs.
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Communications with the Barclays PLC
Board Audit Committee
Our discussions with and reporting to the
Board Audit Committee included:
• Our approach to the audit of the fair
value of Level 3 and harder-to-value
Level 2 financial instrument assets and
liabilities. This included details of our risk
assessment, controls and substantive
procedures.
• Our conclusions on the appropriateness
of the Group’s fair value methodology,
models, pricing inputs, and fair value
adjustments.
Areas of particular auditor judgement
We identified the following as the areas of
particular auditor judgement:
• The appropriateness of the valuation of
harder to value Level 2 and Level 3
financial instruments, and particularly
the selection of market data inputs and
valuation models.
Our results
Based on the risk identified and our
procedures performed we consider the fair
value of Level 3 and harder-to-value Level
2 financial instrument assets and liabilities
recognised and the related disclosures to
be acceptable (2021 result: acceptable).
Further information in the Annual Report
and Accounts: See the Board Audit
Committee Report on page 173 for details
on how the Board Audit Committee
considered Valuations as an area of focus,
page 425 for the accounting policy on
financial assets and liabilities, and page 456
for the financial disclosure note 17; Fair
value of financial instruments.
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4.3 Valuation of the defined benefit pension obligation in respect of the UK Retirement Fund (‘UKRF’)
Financial Statement Elements
Defined benefit obligation related to UKRF
(note 33)
FY22
FY21
£20.0bn
£30.9bn
Our assessment of risk vs FY21
1 Our assessment is that the risk is similar to FY21.
Our results
FY22:
Acceptable
FY21:
Acceptable
Description of the Key Audit Matter
Subjective valuation
The valuation of the defined benefit obligation
in respect of the UKRF is dependent on key
actuarial assumptions, including the discount
rates, retail price index (‘RPI’) and mortality
assumptions. Small changes to these
assumptions may still have a significant impact
on the measurement of the defined benefit
pension obligation.
As part of our risk assessment, we determined
that the defined benefit pension obligation has
a high degree of estimation uncertainty, with a
potential range of reasonable outcomes
greater than our materiality for the financial
statements, and possibly many times that
amount.
At 31 December 2022, the Group reported a
gross defined benefit pension obligation of
£20.0bn relating to UKRF.
Disclosure quality
The disclosures regarding the Group’s
application of IAS 19 (including risks,
assumptions and sources of estimation
uncertainty) are key to explaining the key
judgements applied in the IAS 19 Defined
Benefit Obligation calculation.
Communications with the Barclays PLC
Board Audit Committee
Our discussions with and reporting to the
Board Audit Committee included:
• Our definition of the Key Audit Matter
relating to the valuation of the defined
benefit pension obligation including the
rationale for not including the valuation
of pension assets in the key audit
matter.
• We also discussed our audit response to
the key audit matter which included the
use of specialists to challenge key
aspects of management’s actuarial
valuation.
Our response to the risk
Our procedures to address the risk included:
Control testing: We performed end to end process walkthroughs to identify the key systems,
applications and controls used in the defined benefit obligation process. We tested the design and
operating effectiveness of key controls relating to the process. These included:
• controls over management’s review of IAS19 assumptions including the discount rate, RPI and
mortality assumptions;
•
reconciliation controls of the IAS19 disclosures to underlying data.
Evaluation of management’s expert: We evaluated the objectivity and competence of
management’s actuarial expert involved in the valuation of the defined benefit pension obligation.
Our actuarial expertise: we involved our own actuarial professionals in the following:
• evaluating the judgements made and the appropriateness of methodologies used by management
and management’s actuarial expert in determining the key actuarial assumptions;
• comparing the assumptions used by Barclays PLC to our independently compiled expected ranges
based on market observable indices and our market experience;
• evaluating the output from the triennial funding valuation as at 30 September 2022 and the impact
on demographic assumptions and future funding requirements.
Assessing transparency: We assessed the adequacy of the Group’s financial statements disclosures
in the context of the relevant accounting standards.
Further information in the Annual Report
and Accounts: See page 496 for the
accounting policy on defined benefit
schemes, and page 494 for the financial
disclosure note 33; Pensions and post-
retirement benefits.
Areas of particular auditor judgement
We identified the following as areas of
particular auditor judgement:
• Subjective and complex auditor
judgement was required in evaluating
the key actuarial assumptions used by
the Group (including the discount rate,
retail price index and mortality
assumptions).
Our results
Based on the risk identified and our
procedures performed we consider the
valuation of the defined benefit pension
obligation in respect of UKRF and the
related disclosures to be acceptable (2021
result: acceptable).
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4.4 User access management
Financial Statement Elements
User access management has a potential impact
throughout the financial statements.
Our assessment of risk vs FY21
1 Our assessment is the risk is similar to FY21
Our results
FY22 and FY21:
Our testing did not identify
unauthorised user activities in
the systems relevant to financial
reporting which would have
required us to significantly
expand the extent of our
planned detailed testing.
Description of the Key Audit Matter
Control Performance
Operations across several countries support a wide
range of products and services resulting in a large and
complex IT infrastructure relevant to the financial
reporting processes and related internal controls.
Our response to the risk
Our procedures to address the risk included:
Control testing: We tested the design, implementation and operating effectiveness of
automated controls that support material balances in the financial statements. We also
tested the design and operating effectiveness of the relevant preventative and detective
general IT controls over user access management including:
User access management controls are an integral part
of the IT environment to ensure both system access
and changes made to systems and data are authorised
and appropriate. Our audit approach relies on the
effectiveness of IT access management controls. Our
audit procedures identified deficiencies in certain IT
access controls for systems relevant to financial
reporting. More specifically, control deficiencies
continue to be identified around monitoring of activities
performed by privileged users on infrastructure
components. Management has ongoing programmes
to remediate the deficiencies. Since these deficiencies
were open during the year, we performed additional
procedures to respond to the risk of unauthorised
changes to automated controls over financial reporting,
such as an assessment of compensating controls
implemented by management.
• authorising access rights for new joiners
•
•
timely removal of user access rights
logging and monitoring of user activities
• privileged user access management and monitoring
• developer access to transaction and balance information
• segregation of duties; and
•
re-certification of user access rights.
We performed procedures to assess whether additional detective compensating controls
operate at the same level of precision to support our assessed risk of unauthorised activities
and we tested management’s detective compensating controls.
Communications with the Barclays PLC
Board Audit Committee
Our discussions with and reporting to the
Board Audit Committee included:
• Our response to the Key Audit Matter.
Areas of particular auditor judgement
We identified the following as the areas of
particular auditor judgement:
• The Key Audit Matter relates to
determining whether user access
management controls were designed
and implemented and operated
effectively. Limited auditor judgement
was required relative to the other Key
Audit Matters which have been
identified.
Our results
Based on the risk identified and our
procedures performed, we did not identify
unauthorised user activities in the systems
relevant to financial reporting which would
have required us to significantly expand
the extent of our planned detailed testing.
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4.5 Recoverability of parent company’s investment in subsidiaries
Financial Statement Elements
Investment in subsidiaries (Parent company
accounts and note 42)
FY22
FY21
£64.5bn
£62.5bn
Our assessment of risk vs FY21
1 Our assessment is the risk is similar to FY21
Impairment/ (Reversal of Impairment) of
investment in BBUK PLC (note 42)
£0bn
(£2.6bn)
Our results
FY22:
Acceptable
FY21:
Acceptable
Description of the Key Audit Matter
Subjective assessment
The Parent Company’s investment in subsidiaries may be
misstated if the carrying value of the investment in the
balance sheet is not supported by the future cash flows of
the underlying business (the value in use (“VIU”)).
The calculation of VIU is dependent on certain key
assumptions around the future cash flows which have been
forecasted using the Group’s Medium-Term Plan (‘MTP’),
the discount rates and the terminal growth rates. These
assumptions, which are judgemental, are derived from a
combination of management estimates, market data and
other information obtained from external sources.
These assumptions continued to be impacted by the
economic uncertainty in the wider economic environment.
This has contributed to the complexity and subjectivity in
the impairment assessment process, in addition to the
complexities of the valuation of a Bank.
Due to the materiality of the investment in subsidiaries in
the context of the Parent Company financial statements,
this is the area that had the greatest impact on the overall
Parent Company audit.
Our work focused on the Parent Company’s investment in
Barclays Bank UK PLC given the material size of the cost of
investment, the impairment loss recognised in 2020 and
reversal of impairment in 2021, as well as Barclays Bank PLC
due to the material size of the cost of investment.
Our response to the risk
Our procedures to address the risk included:
Control testing: We performed end to end process walkthroughs to identify the key
systems, applications and controls used in the process. We tested the design and
operating effectiveness of the key controls relating to the process. These included
controls over the identification of indicators of impairment or reversal of impairment and
review of the key assumptions in determining the value in use.
Test of details: We compared the carrying amount of each subsidiary to its draft balance
sheet to identify whether their net assets, being an approximation of their minimum
recoverable amount, were in excess of their carrying amount we assessed for potential
indicators that investments in subsidiaries might be impaired.
Benchmarking assumptions: For the two largest subsidiaries (BB PLC and BBUK PLC)
we compared key assumptions including those underlying certain estimated future cash
flows, the discount rate and the terminal growth rate to externally derived data including
analyst broker reports, peer bank data and projected economic growth.
Our valuations expertise: We involved our own valuations specialists to assist us in the
following:
• evaluating the appropriateness of the discount rate used by independently developing
discount rate ranges using external data sources and peer bank data; and
• assessing whether the methodology over management’s calculation of the VIU is
compliant with the requirements of the accounting standard.
Our business understanding: We used our business understanding to evaluate the
reasonableness of certain key assumptions and considerations made when developing
the Group’s MTP estimated future cash flows.
Historical comparison: We performed a retrospective review by comparing the MTP
from previous years to actual results to assess the Group’s ability to accurately prepare
cash flow forecasts at the individual subsidiary level.
Communications with the Barclays
Board Audit Committee
Our discussions with and reporting to the
Board Audit Committee included:
• Our audit response to the Key Audit
Matter which included the use of
specialists to challenge key aspects of
management’s impairment assessment
and the range of reasonably possible
alternatives for significant assumptions.
Areas of particular auditor judgement
We identified the following as the areas of
particular judgement:
• We identified the reasonableness of the
assumptions underlying the estimated
future cash flows and appropriateness
of the discount rate, which was used in
the impairment assessment, as the
areas of particular judgement.
Our results
Based on our procedures performed, we
consider the Parent Company’s
investment in subsidiaries balance to be
acceptable (2021 result: acceptable).
Further information in the Annual Report
and Accounts: See page 517 for the
accounting policy on the recoverability of
the investment in subsidiaries and page
517 for the financial disclosure note 42;
Parent Company.
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journals posted and approved by the same
individuals.
Link to key audit matters
Further details of the testing we perform
over the identified fraud risks for ECL and
fair value of financial instruments are
included in the respective key audit
matters sections 4.1 and 4.2 of this report,
as the procedures relating to those
estimates also address the risk of fraud.
Laws and regulations - identifying and
responding to risks of material
misstatement due to non-compliance
with laws and regulations
Risk assessment
We identified areas of laws and regulations
that could reasonably be expected to have
a material effect on the financial
statements. For this risk assessment,
matters considered include the following:
• our general commercial and sector
experience;
• inquiries with the directors and other
management (as required by auditing
standards);
• inspection of the Group’s key regulatory
and legal correspondence;
• inspection of the policies and
procedures regarding compliance with
laws and regulations;
• relevant discussions with the Group’s
external legal counsel;
• relevant discussions with the Group’s
key regulatory supervisors including the
Prudential Regulation Authority,
Financial Conduct Authority, Federal
Reserve Board, Federal Deposit
Insurance Corporation and the Joint
Supervisory Team; and
• the Group’s own assessment of the
risks of non-compliance with laws and
regulations, and the internal controls
established to mitigate these. This
assessment was considered and
approved by the Board Audit
Committee.
5. Our ability to detect
irregularities, and our response
Fraud - identifying and responding to
risks of material misstatement due to
fraud
Fraud risk assessment
To identify risks of material misstatement
due to fraud (“fraud risks”) we assessed
events or conditions that could indicate an
incentive or pressure to commit fraud or
provide an opportunity to commit fraud. In
this risk assessment we considered the
following:
• Our meetings throughout the year with
the Group Head of Risk, Group Head of
Compliance and Group Head of Legal
and inspection of Barclays’ internal
ethics and compliance reporting
summaries, including those concerning
investigations and regulatory
correspondence;
• Enquiries of operational managers,
internal audit, and the Board Audit
Committee and inspection of policy
documentation as to the Group’s high-
level policies and procedures relating to
• detecting and responding to the risks
of fraud as well as whether they have
knowledge of any actual, suspected or
alleged fraud; and
• the internal controls established to
mitigate risks related to fraud,
including the appropriateness and
impact of changes made to these
controls to facilitate remote/hybrid
working;
• The Group’s remuneration policies and
key drivers for remuneration and bonus
levels;
• Discussions among the engagement
team regarding how and where fraud
might occur in the financial statements
and any potential indicators of fraud.
The engagement team includes audit
partners and staff who have extensive
experience of working with banks, and
this experience was relevant to the
discussion about where fraud risks may
arise. The discussions also involved our
forensic specialists to assist us in
identifying fraud risks based on
discussions of the circumstances of the
Group and Company, including
consideration of fraudulent schemes
that had arisen in similar sectors and
industries. The forensic specialists
participated in the initial fraud risk
assessment discussions and were
consulted as required where further
guidance was deemed necessary.
Fraud risk communication
We communicated identified fraud risks
throughout the audit team and we
remained alert to any indications of fraud
throughout the audit. This included
communication from the Group to
component audit teams of relevant fraud
risks identified at the Group level.
Fraud risks and our procedures to
address them
We identified five fraud risks which were
communicated to component audit
teams. The nature of these fraud risks is
substantially unchanged from the prior
year. The fraud risks we identified are set
out below:
1. IFRS 9 ECL: Judgemental qualitative
adjustments made to the ECL provision
2. Valuations - risk relating to
unobservable pricing inputs used to
price level 3 fair value instruments
3. Revenue recognition: Cut-off of the
recognition of revenue from investment
banking advisory fees
4. Existence and accuracy of unconfirmed
over-the-counter bilateral derivatives
5. The risk of management override of
controls, common with all audits under
ISAs (UK).
As required by auditing standards and
taking into account our overall knowledge
of the control environment, we performed
procedures to address the above risks, the
risk that Group and component
management may be in a position to make
inappropriate accounting entries and the
risk of bias in accounting estimates and
judgements.
Our audit procedures included evaluating
the design and implementation and
operating effectiveness of relevant
internal controls, assessing significant
accounting estimates for bias, as well as
substantive procedures to address the
fraud risks.
These procedures also included identifying
journal entries to test based on risk criteria
and comparing the identified entries to
supporting documentation.
Incorporating unpredictability into our
audit: A requirement of the auditing
standards is that we undertake procedures
which are deliberately unexpected and
could not have reasonably been predicted
by Barclays’ management. As an example,
we update our criteria for selecting journals
with a higher risk of management override
for testing each year so that the selection
criteria do not become predictable. This
year we added additional key words we
searched for in journal descriptions and
also introduced new search criteria for
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KPMG LLP’s independent auditor’s report
to the members of Barclays PLC (continued)
Our risk assessment also considered
instances of non-compliance with laws and
regulations and enforcement actions
against the Group during the year and
specifically those that could reasonably be
expected to have a material effect on the
financial statements. We considered
management’s assessment of how these
occurred, their assessment of whether the
risk could be more pervasive, and actions
taken to remediate and prevent
recurrences or similar issues.
As the Group operates in a highly regulated
environment, our assessment of risks of
material misstatement also considered the
control environment, including the Group’s
higher-level procedures for complying with
regulatory requirements. Our assessment
included inspection of key frameworks,
policies and standards in place,
understanding and evaluating the role of
the compliance function in establishing
these and monitoring compliance and
testing of related controls around
whistleblowing and complaints.
Risk communication
Our identified laws and regulations risks
was communicated throughout our team
and we remained alert to any indications of
non-compliance throughout the audit.
This included communication from the
Group to component audit teams of
relevant laws and regulations identified at
Group level.
Direct laws context and link to audit
The potential effect of these laws and
regulations on the financial statements
varies considerably.
Firstly, the Group is subject to laws and
regulations that directly impact the
financial statements including:
• financial reporting legislation (including
related companies’ legislation);
• distributable profits legislation; and
• taxation legislation (direct and indirect).
We assessed the extent of compliance
with these laws and regulations as part of
our procedures on the related financial
statement items.
statements, as disclosed by management
in note 26, and which resulted in a
restatement of the 2021 comparatives.
Our audit approach in respect of the over-
issuance included the following
procedures and we reported the results of
these to the Board Audit Committee
• Performance of risk assessment
procedures which included inspecting
correspondence with regulators and
making enquires of Barclays internal and
external counsel.
• Testing the design and operating
effectiveness of the controls covering
the calculation and utilisation of the
recission right provision and the
identification of debt-issuance
programme issuance limits and the
monitoring of the utilisation against
these.
• Performing substantive procedures
over the determination and utilisation of
the recission right provision.
Context of the ability of the audit to
detect fraud or breaches of law or
regulation
Owing to the inherent limitations of an
audit, there is an unavoidable risk that we
may not have detected some material
misstatements in the financial statements,
even though we have properly planned and
performed our audit in accordance with
auditing standards. For example, the
further removed non-compliance with
laws and regulations is from the events and
transactions reflected in the financial
statements, the less likely the inherently
limited procedures required by auditing
standards would identify it.
In addition, as with any audit, there
remained a higher risk of non-detection of
fraud, as these may involve collusion,
forgery, intentional omissions,
misrepresentations, or the override of
internal controls. Our audit procedures are
designed to detect material misstatement.
We are not responsible for preventing
non-compliance or fraud and cannot be
expected to detect non-compliance with
all laws and regulations.
Most significant indirect law/
regulation areas
Secondly, the Group is subject to many
other laws and regulations where the
consequences of non-compliance could
have a material effect on amounts or
disclosures in the financial statements, for
instance through the imposition of fines,
remediation payments or litigation, or the
loss of the Group’s permission to operate
in countries where the non-adherence to
laws could prevent trading in such
countries.
We identified the following areas as those
most likely to have such an effect:
• Specific aspects of regulatory capital
and liquidity
• Other banking laws and regulations,
including securities issuance law
• Customer conduct rules
• Money laundering
• Sanctions list and financial crime
• Market abuse regulations
• Certain aspects of company legislation
recognising the financial and regulated
nature of the Group’s activities.
Auditing standards limit the required audit
procedures to identify non-compliance
with these laws and regulations to enquiry
of the directors and other management
and inspection of regulatory and legal
correspondence, if any. If a breach of
operational regulations is not disclosed to
us or evident from relevant
correspondence, an audit will not detect
that breach.
Audit response
In relation to the legal, competition and
regulatory matters disclosed in note 26 we
performed audit procedures which
included making enquiries of Barclays
internal counsel and inspection of minutes
of meetings and of regulatory
correspondence. For a subset of these
matters which we deemed to be more
significant we also made enquiries of
external counsel and obtained legal
confirmations from Barclays’ external
counsel.
In respect of regulatory matters relating to
conduct risk as disclosed in note 41 our
procedures included inspection of
regulatory correspondence, independent
enquiry of the Group’s main regulators and
performing audit procedures to respond to
risks of material misstatement identified in
recognised conduct provisions.
We also specifically considered the sale of
securities in excess of the amount of
securities registered with the SEC under
Barclays Bank PLC’s shelf registration
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KPMG LLP’s independent auditor’s report
to the members of Barclays PLC (continued)
6. Our determination of
materiality
The scope of our audit was influenced by
our application of materiality. We set
quantitative thresholds and overlay
qualitative considerations to help us
determine the scope of our audit and the
nature, timing and extent of our
procedures, and in evaluating the effect of
misstatements, both individually and in the
aggregate, on the financial statements as a
whole.
Materiality for the financial statements
as a whole
2022: £275m 2021: £230m
What we mean
A quantitative reference for the purpose of
planning and performing our audit
Basis for determining materiality and
judgements applied
We have determined overall materiality for
the Barclays PLC Group to be £275m
(FY21: £230m).
A key judgement in determining materiality
(and performance materiality) is the
appropriate benchmark to select, based on
our perception of the needs of
shareholders. We considered which
benchmarks and key performance
indicators have the greatest bearing on
shareholder decisions.
We determined that profit before tax
remains the key benchmark for the
Barclays PLC Group. For FY21 we
normalised profit before tax downward by
£2.3bn to adjust for the fact that ECL
charges were considered abnormally low
as the economy recovered from the
COVID-19 pandemic. For FY22 we did not
normalise profit before tax. This is
reflective of the impact of COVID-19 on
ECL being less pronounced in the current
period. We determined that no
adjustments to profit before tax were
required for FY22. This change is a driver of
the increase in materiality in 2022.
The overall materiality for the Group of
£275m (2021: £230m) compares as
follows to the other main financial
statement elements amounts in the table
below.
Group Materiality as % of caption
Audit misstatement posting threshold
2022: £13m 2021: £11m
What we mean
This is the amount below which identified
misstatements are considered to be
clearly trivial from a quantitative point of
view. We may become aware of
differences below this threshold which
could alter the nature, timing and scope of
our audit procedures, for example if we
identify smaller differences which are
indicators of fraud.
This is also the amount above which all
differences identified are communicated
to Barclays PLC’s Board Audit Committee.
Basis for determining the audit
misstatement reporting threshold and
judgements applied
The audit misstatement posting threshold
has been set at a level of 5% (2021:5%) of
materiality for Barclays PLC’s Group
financial statements. We consider this
appropriate based on the number and
nature of adjusted and unadjusted audit
differences (certain of which were
judgemental) identified during previous
audits.
We also report to the Audit Committee
any other identified misstatements that
warrant reporting on qualitative grounds.
Our materiality of £275m (2021: £230m)
was determined by applying a percentage
to Profit Before Tax. When using a profit-
related measure to determine overall
materiality, KPMG’s approach is to apply a
percentage between 3% and 5% to the
pre-tax measure. In setting overall
materiality, we applied a rate of 3.9%
(2021: 3.8%) which is lower than the top
end of the allowable percentage range.
Materiality for the Parent Company
financial statements was set at £260m
(2021: £225m), determined with reference
to a benchmark of Parent Company net
assets (of which it represents 0.5% (2021:
0.4%)).
Performance materiality
2022: £179m 2021: £170m
What we mean
Our procedures on individual account
balances and disclosures were performed
to a lower threshold, performance
materiality, so as to reduce, to an
acceptable level, the risk that individually
immaterial misstatements in individual
account balances add up to a material
amount across the financial statements as
a whole.
Basis for determining performance
materiality and judgements applied
We have considered performance
materiality at a level of 65% (2021: 74%) of
materiality for Barclays PLC Group’s
financial statements as a whole to be
appropriate. We applied this percentage in
our determination of performance
materiality based on the level of control
deficiencies during the prior period.
The Group performance materiality was
set at £179m (2021: £170m) and £169m
(2021: £169m) for the parent company.
Total Revenue
Total Assets
Net Assets
2022
2021
2022
2021
2022
2021
£24,956m £21,940m £1,513,699m £1,384,285m £69,260m £70,041m
0.33%
0.40%
1.05%
0.02%
1.10%
0.02%
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KPMG LLP’s independent auditor’s report
to the members of Barclays PLC (continued)
7. The scope of our audit
Group scope
What we mean
How the Group audit team determined the
procedures to be performed across the
Group
We have subjected four (2021: three) of
the Group’s five components to full scope
audits for Group purposes. Our approach
to scoping the four components was as
follows: for two components, Barclays
Bank UK PLC and Barclays Execution
Services Limited Solus, we directly
instructed the component audit teams to
conduct and report to us on full scope
audits; the third full scope component,
Barclays PLC Solus was subject to a full
scope audit by us (2021: audit of account
balance), and the fourth component,
Barclays Bank PLC Group, was subject to a
full scope audit by us and for which we
specified seven (2021: seven) components
within that group.
We have subjected one (2021: two) of the
Group’s components, Barclays PLC
Subsidiaries, to audits of certain account
balances carried out by us, this component
represents less than 1% of total Barclays
PLC Group assets.
Within the Barclays Bank PLC Group we
specified the components as follows;
Barclays Bank Solus to be subject to a full
scope audit carried out by us; Barclays
Bank Delaware and Barclays Capital Inc to
be subject to a full scope audit as
instructed by us; and Barclays Bank Ireland
PLC and Barclays Capital Securities
Limited to be subject to an audit of certain
account balances as instructed by us. We
have subjected Barclays Bank Subsidiaries
and Barclays Bank Intermediate Holding
Companies (‘IHC’) Subsidiaries to an audit
of certain account balances carried out by
us, these components represent less than
2% of total Barclays Bank PLC Group
assets.
The components within the scope of our
work accounted for the percentages
illustrated in section 2 – Group scope.
The materiality levels applied to the audits
of the components of Barclays PLC are as
follows:
Barclays PLC has centralised certain
Group-wide processes a shared service
centre in India, the outputs of which are
included in the financial information of the
reporting components it services and
therefore it is not a separate reporting
component. This service centre is subject
to specified audit procedures,
predominantly the testing of transaction
processing, reconciliations and review
controls. Additional procedures are
performed at certain reporting
components to address the audit risks not
covered by the work performed by the
shared service centre.
The Group audit team has also performed
audit procedures on the following areas on
behalf of the components:
• Testing of IT systems and automated
business controls; and
• Operating expenses and Group
recharges.
The Group team communicated the
results of these procedures to the
component teams.
In addition, we have performed Group level
analysis on the remaining components to
determine whether further risks of material
misstatement exist in those components.
We were able to rely upon the Group's
internal control over financial reporting in
all areas of our audit, and where our
controls testing supported this approach,
which enabled us to reduce the scope of
our substantive audit work.
Group audit team oversight
What we mean
The extent of the Group audit team’s
involvement in component audits.
A hybrid communication and oversight
strategy was implemented between the
Group audit team and the components
during the year as opposed to virtual
oversight during the COVID 19 pandemic.
This included:
• A virtual global planning conference led
by the Group audit team to discuss key
audit risks and obtain input from
component teams and other
participating locations;
Scope
Full scope audit
Audit of account balance
Number of components
Range of materiality applied
4
1
£100m - £170m
£100m
• The components in scope for Group
reporting purposes were either visited
by the Group audit team to assess the
audit risk and strategy, or such review
occurred remotely to assess the audit
risk and strategy. Conference meetings
and calls were also held with these
component auditors throughout the
conduct of the audit. At these visits and
meetings, we reviewed the
components’ key working papers, the
findings reported to the Group team
were discussed in more detail, and any
further work required by the Group team
was then performed by the component
auditors;
• Instructions issued by the Group audit
team to component auditors setting out
the significant areas to be covered,
including the relevant key audit matters
identified above and the information to
be reported back to the Group audit
team. For example, minimum criteria for
high-risk journals were set by the Group
team and applied consistently across
the audit;
• Review and approval by the Group audit
team of the component materiality for
all components;
• Risk assessment and challenge sessions
with each component audit team were
held in the planning, interim and final
phases of the audit, led by the Group
engagement partner and audit quality
partner;
• Fortnightly video conferences with the
partners and directors of the Group and
component audit teams along with
regular ad-hoc contact in person and via
video calls and email exchanges to
challenge the component audit
approach and findings;
• Stuart Crisp, the Group Lead
Engagement Partner (and Senior
Statutory Auditor), attended each Board
Audit Committee for Barclays Bank PLC
and at least one Board Audit Committee
for each of Barclays Bank UK, the IHC
covering Barclays Capital Inc. and
Barclays Bank Delaware, and Barclays
Bank Europe;
• Review of key working papers within
component audit files (both in person
and using remote technology
capabilities) to understand and
challenge the audit approach and audit
findings of each component.
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KPMG LLP’s independent auditor’s report
to the members of Barclays PLC (continued)
Other matters on which we are required
to report by exception
Our responsibility
Under the Companies Act 2006, we are
required to report to you if, in our opinion:
• adequate accounting records have not
been kept by the Parent Company, or
returns adequate for our audit have not
been received from branches not visited
by us; or
• the Parent Company financial
statements and the part of the
Directors’ Remuneration Report to be
audited are not in agreement with the
accounting records and returns; or
• certain disclosures of directors’
remuneration specified by law are not
made; or
• we have not received all the information
and explanations we require for our
audit.
Our reporting
We have nothing to report in this respect.
8. Other information in the
annual report
The directors are responsible for the other
information presented in the Annual
Report together with the financial
statements. Our opinion on the financial
statements does not cover the other
information and, accordingly, we do not
express an audit opinion or, except as
explicitly stated below, any form of
assurance conclusion thereon.
All other information
Our responsibility
Our responsibility is to read the other
information and, in doing so, consider
whether, based on our financial
statements audit work, the information
therein is materially misstated or
inconsistent with the financial statements
or our audit knowledge.
Our reporting
Based solely on that work we have not
identified material misstatements or
inconsistencies in the other information.
Strategic report and Directors’ report
Our responsibility and reporting
Based solely on our work on the other
information described above we report to
you as follows:
• we have not identified material
misstatements in the strategic report
and the Directors’ Report;
• in our opinion the information given in
those reports for the financial year is
consistent with the financial statements;
and
Corporate governance disclosures
Our responsibility
We are required to perform procedures to
identify whether there is a material
inconsistency between the financial
statements and our audit knowledge, and:
• the directors’ statement that they
consider that the annual report and
financial statements taken as a whole is
fair, balanced and understandable, and
provides the information necessary for
shareholders to assess the Group’s
position and performance, business
model and strategy;
• the section of the annual report
describing the work of the Board Audit
Committee, including the significant
issues that the Board Audit Committee
considered in relation to the financial
statements, and how these issues were
addressed; and
• the section of the annual report that
describes the review of the
effectiveness of the Group’s risk
management and internal control
systems.
Our reporting
Based on those procedures, we have
concluded that each of these disclosures
is materially consistent with the financial
statements and our audit knowledge.
We are also required to review the part of
Corporate Governance Statement relating
to the Group’s compliance with the
provisions of the UK Corporate
Governance Code specified by the Listing
Rules for our review.
• in our opinion those reports have been
We have nothing to report in this respect.
prepared in accordance with the
Companies Act 2006.
Directors’ remuneration report
Our responsibility
We are required to form an opinion as to
whether the part of the Directors’
Remuneration Report to be audited has
been properly prepared in accordance with
the Companies Act 2006.
Our reporting
In our opinion the part of the Directors’
Remuneration Report to be audited has
been properly prepared in accordance with
the Companies Act 2006.
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KPMG LLP’s independent auditor’s report
to the members of Barclays PLC (continued)
10. The purpose of our audit
work and to whom we owe our
responsibilities
This report is made solely to the
Company’s members, as a body, in
accordance with Chapter 3 of Part 16 of
the Companies Act 2006 and the terms of
our engagement by the Company. Our
audit work has been undertaken so that we
might state to the Company’s members
those matters we are required to state to
them in an auditor’s report and the further
matters we are required to state to them in
accordance with the terms agreed with the
Company, and for no other purpose. To
the fullest extent permitted by law, we do
not accept or assume responsibility to
anyone other than the Company and the
Company’s members, as a body, for our
audit work, for this report, or for the
opinions we have formed.
Stuart Crisp
(Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory
Auditor
Chartered Accountants
15 Canada Square
London
E14 5GL
14 February 2023
9. Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement
set out on page 152, the Directors are
responsible for: the preparation of the
financial statements including being
satisfied that they give a true and fair view;
such internal control as they determine is
necessary to enable the preparation of
financial statements that are free from
material misstatement, whether due to
fraud or error; assessing the Group and
Parent Company’s ability to continue as a
going concern, disclosing, as applicable,
matters related to going concern; and
using the going concern basis of
accounting unless they either intend to
liquidate the Group or the parent Company
or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable
assurance about whether the financial
statements as a whole are free from
material misstatement, whether due to
fraud or error, and to issue our opinion in
an auditor’s report. Reasonable assurance
is a high level of assurance but does not
guarantee that an audit conducted in
accordance with ISAs (UK) will always
detect a material misstatement when it
exists. Misstatements can arise from fraud
or error and are considered material if,
individually or in aggregate, they could
reasonably be expected to influence the
economic decisions of users taken on the
basis of the financial statements.
A fuller description of our responsibilities is
provided on the FRC’s website at
www.frc.org.uk/auditorsresponsibilities.
The Company is required to include these
financial statements in an annual financial
report prepared using the single electronic
reporting format specified in the TD ESEF
Regulation. The auditor’s report provides
no assurance over whether the financial
report has been prepared in accordance
with that format.
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Annual Report 2022 416
Consolidated financial statements
Consolidated income statement
For the year ended 31 December
Interest and similar income
Interest and similar expense
Net interest income
Fee and commission income
Fee and commission expense
Net fee and commission income
Net trading income
Net investment income
Other income
Total income
Staff costs
Infrastructure costs
Administration and general expenses
Litigation and conduct
Operating expenses
Share of post-tax results of associates and joint ventures
Profit on disposal of subsidiaries, associates and joint ventures
Profit before impairment
Credit impairment (charges)/releases
Profit before tax
Taxation
Profit after tax
Attributable to:
Equity holders of the parent
Other equity instrument holders
Total equity holders of the parent
Non-controlling interests
Profit after tax
Earnings per share
Basic earnings per ordinary share
Diluted earnings per share
Notes
3
3
4
4
5
6
31
7
7
7
7
8
9
30
10
10
2022
£m
19,096
(8,524)
10,572
9,637
(3,038)
6,599
8,049
(434)
170
24,956
(9,252)
(3,435)
(2,446)
(1,597)
(16,730)
6
—
8,232
(1,220)
7,012
(1,039)
5,973
5,023
905
5,928
45
5,973
p
30.8
29.8
Restateda
2021
£m
11,240
(3,167)
8,073
9,880
(2,206)
7,674
5,794
311
88
21,940
(8,511)
(3,614)
(2,137)
(397)
(14,659)
260
—
7,541
653
8,194
(1,138)
7,056
6,205
804
7,009
47
7,056
p
36.5
35.6
2020
£m
11,892
(3,770)
8,122
8,641
(2,070)
6,571
7,029
13
31
21,766
(8,097)
(3,323)
(2,313)
(153)
(13,886)
6
17
7,903
(4,838)
3,065
(604)
2,461
1,526
857
2,383
78
2,461
p
8.8
8.6
Note
a 2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Restatement of financial statements (Note 1a) on page 428 for further details.
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Consolidated financial statements (continued)
Consolidated statement of comprehensive income
For the year ended 31 December
Profit after tax
Other comprehensive income/(loss) that may be recycled to profit or loss:
Currency translation reserve
Currency translation differencesb
Fair value through other comprehensive income reserve movements relating to debt securities
Net (losses)/gains from changes in fair value
Net losses/(gains) transferred to net profit on disposal
Net losses/(gains) relating to (releases of) impairment
Net gains/(losses) due to fair value hedging
Tax
Cash flow hedging reserve
Net (losses)/gains from changes in fair value
Net losses/(gains) transferred to net profit
Tax
Other
Other comprehensive (loss)/income that may be recycled to profit or loss
Other comprehensive income/(loss) not recycled to profit or loss:
Retirement benefit remeasurements
Fair value through other comprehensive income reserve movements relating to equity instruments
Own credit
Tax
Other comprehensive income/(loss) not recycled to profit or loss
2022
£m
5,973
Restateda
2021
£m
7,056
2020
£m
2,461
2,032
(131)
(473)
(7,516)
111
9
5,452
523
(9,052)
339
2,331
—
(5,771)
(754)
228
2,092
(156)
1,410
(1,668)
(305)
(8)
1,354
198
(2,280)
(1,173)
1,025
—
(2,988)
1,298
141
(106)
(563)
770
2,902
(295)
2
(2,000)
(155)
1,299
(510)
(216)
5
559
(80)
(262)
(810)
198
(954)
Other comprehensive loss for the year
(4,361)
(2,218)
(395)
Total comprehensive income for the year
1,612
4,838
2,066
Attributable to:
Equity holders of the parent
Non-controlling interests
Total comprehensive income for the year
1,567
45
1,612
4,791
47
4,838
1,988
78
2,066
Notes
a 2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Restatement of financial statements (Note 1a) on page 428 for further details.
b
Includes £1m gain (2021: £26m loss; 2020: £17m gain ) on recycling of currency translation differences to net profit.
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Consolidated financial statements (continued)
Consolidated balance sheet
As at 31 December
Assets
Cash and balances at central banks
Cash collateral and settlement balances
Loans and advances at amortised cost
Reverse repurchase agreements and other similar secured lending
Trading portfolio assets
Financial assets at fair value through the income statement
Derivative financial instruments
Financial assets at fair value through other comprehensive income
Investments in associates and joint ventures
Goodwill and intangible assets
Property, plant and equipment
Current tax assets
Deferred tax assets
Retirement benefit assets
Other assets
Total assets
Liabilities
Deposits at amortised cost
Cash collateral and settlement balances
Repurchase agreements and other similar secured borrowing
Debt securities in issue
Subordinated liabilities
Trading portfolio liabilities
Financial liabilities designated at fair value
Derivative financial instruments
Current tax liabilities
Deferred tax liabilities
Retirement benefit liabilities
Other liabilities
Provisions
Total liabilities
Equity
Called up share capital and share premium
Other equity instruments
Other reserves
Retained earnings
Total equity excluding non-controlling interests
Non-controlling interests
Total equity
Total liabilities and equity
Notes
2022
£m
19
12
13
14
15
36
22
20
9
33
19
27
12
16
14
9
33
23
24
28
28
29
30
256,351
112,597
398,779
776
133,813
213,568
302,380
65,062
922
8,239
3,616
385
6,991
4,743
5,477
1,513,699
545,782
96,927
27,052
112,881
11,423
72,924
271,637
289,620
580
16
264
13,789
1,544
1,444,439
4,373
13,284
(2,192)
52,827
68,292
968
69,260
1,513,699
Restateda
2021
£m
238,574
92,542
361,451
3,227
147,035
191,972
262,572
61,753
999
8,061
3,555
261
4,619
3,879
3,785
1,384,285
519,433
79,371
28,352
98,867
12,759
54,169
250,960
256,883
689
37
311
10,505
1,908
1,314,244
4,536
12,259
1,770
50,487
69,052
989
70,041
1,384,285
Note
a 2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Restatement of financial statements (Note 1a) on page 428 for further details.
The Board of Directors approved the financial statements on pages 416 to 522 on 14 February 2023.
Nigel Higgins
Group Chairman
C.S. Venkatakrishnan
Group Chief Executive
Anna Cross
Group Finance Director
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Consolidated financial statements (continued)
Consolidated statement of changes in equity
Restatedc
Restatedc
Restatedc
Total equity
excluding non-
controlling
interests
Non-controlling
interests
Total equity
Balance as at 1 January 2022
Profit after tax
Currency translation movements
Fair value through other comprehensive
income reserve
Cash flow hedges
Retirement benefit remeasurements
Own credit reserve
Total comprehensive income for the year
Employee share schemes and hedging
thereof
Issue and redemption of other equity
instruments
Other equity instruments coupons paid
Disposal of Absa holding
Increase in treasury shares
Vesting of shares under employee share
schemes
Dividends paid
Repurchase of shares
Own credit realisation
Other reserve movements
Called up share
capital and share
premiuma
£m
4,536
—
—
—
—
—
—
—
70
—
—
—
—
—
—
(233)
—
—
Other equity
instrumentsa Other reservesb
£m
12,259
905
—
—
—
—
—
£m
1,770
—
2,032
(1,193)
(6,382)
—
1,463
Retained
earnings
£m
50,487
5,023
—
—
—
(281)
—
905
(4,080)
4,742
£m
69,052
5,928
2,032
(1,193)
(6,382)
(281)
1,463
1,567
—
1,032
(905)
—
—
—
—
—
—
(7)
—
—
—
(84)
(248)
253
—
233
(36)
—
476
546
28
—
84
—
(485)
(1,028)
(1,508)
36
(5)
1,060
(905)
—
(248)
(232)
(1,028)
(1,508)
—
(12)
Balance as at 31 December 2022
4,373
13,284
(2,192)
52,827
68,292
Balance as at 1 January 2021
4,637
11,172
Profit after tax
Currency translation movements
Fair value through other comprehensive
income reserve
Cash flow hedges
Retirement benefit remeasurements
Own credit reserve
Total comprehensive income for the year
Employee share schemes and hedging
thereof
Issue and exchange of other equity
instruments
Other equity instruments coupons paid
Increase in treasury shares
Vesting of shares under employee share
schemes
Dividends paid
Repurchase of shares
Other reserve movements
Balance as at 31 December 2021
—
—
—
—
—
—
—
60
—
—
—
—
—
(161)
—
4,536
804
—
—
—
—
—
4,461
—
(131)
(288)
(2,428)
—
(14)
45,527
6,205
—
—
—
643
—
65,797
7,009
(131)
(288)
(2,428)
643
(14)
804
(2,861)
6,848
4,791
—
1,078
(804)
—
—
—
—
9
—
—
—
(240)
241
—
161
8
235
295
6
—
—
(410)
(512)
1,084
(804)
(240)
(169)
(512)
(1,200)
(1,200)
(7)
10
£m
989
45
—
—
—
—
—
45
—
(20)
—
—
—
—
(45)
—
—
(1)
968
1,085
47
—
—
—
—
—
47
—
£m
70,041
5,973
2,032
(1,193)
(6,382)
(281)
1,463
1,612
546
1,040
(905)
—
(248)
(232)
(1,073)
(1,508)
—
(13)
69,260
66,882
7,056
(131)
(288)
(2,428)
643
(14)
4,838
295
(75)
1,009
—
—
—
(44)
—
(24)
(804)
(240)
(169)
(556)
(1,200)
(14)
Notes
a For further details refer to Note 28.
b For further details refer to Note 29.
c 2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Restatement of financial statements (Note 1a) on page 428 for further details.
12,259
1,770
50,487
69,052
989
70,041
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Consolidated financial statements (continued)
Consolidated cash flow statement
For the year ended 31 December
Reconciliation of profit before tax to net cash flows from operating activities:
Profit before tax
Adjustment for non-cash items:
Credit impairment (releases)/charges
Depreciation, amortisation and impairment of property, plant, equipment and intangibles
Other provisions, including pensions
Net loss on disposal of investments and property, plant and equipment
Other non-cash movements including exchange rate movements
Changes in operating assets and liabilities
Net (increase)/decrease in cash collateral and settlement balances
Net increase in loans and advances at amortised cost
Net decrease/(increase) in reverse repurchase agreements and other similar secured lending
Net increase in deposits at amortised cost
Net increase/(decrease) in debt securities in issue
Net (decrease)/increase in repurchase agreements and other similar secured borrowing
Net increase in derivative financial instruments
Net decrease/(increase) in trading portfolio assets
Net increase in trading portfolio liabilities
Net (increase)/decrease in financial assets and liabilities at fair value through the income statement
Net (increase)/decrease in other assets
Net increase/(decrease) in other liabilities
Corporate income tax paid
Net cash from operating activities
Purchase of debt securities at amortised cost
Proceeds from redemption or sale of debt securities at amortised cost
Purchase of financial assets at fair value through other comprehensive income
Proceeds from sale or redemption of financial assets at fair value through other comprehensive income
Purchase of property, plant and equipment and intangibles
Disposal of subsidiaries and associates, net of cash disposed
Other cash flows associated with investing activities
Net cash from investing activities
Dividends paid and other coupon payments on equity instruments
Issuance of subordinated liabilities
Redemption of subordinated liabilities
Issue of shares and other equity instruments
Repurchase of shares and other equity instruments
Issuance of debt securitiesa
Redemption of debt securitiesa
Net purchase of treasury shares
Net cash from financing activities
Effect of exchange rates on cash and cash equivalents
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Cash and cash equivalents comprise:
Cash and balances at central banks
Loans and advances to banks with original maturity less than three months
Cash collateral balances with central banks with original maturity less than three months
Treasury and other eligible bills with original maturity less than three months
Cash and cash equivalents at end of year
Restatedb
2021
£m
2022
£m
2020
£m
Notes
7,012
8,194
3,065
1,220
1,786
1,724
54
(13,298)
(653)
2,076
468
39
3,093
4,838
1,734
1,365
47
(2,977)
(881)
(24,949)
2,451
26,349
9,210
(1,300)
(7,071)
13,222
18,755
(919)
(3,497)
1,051
(688)
30,231
(27,731)
14,277
(69,380)
62,821
(1,746)
—
86
(21,673)
(1,978)
1,477
(2,679)
3,205
(3,655)
11,139
(6,335)
(478)
696
10,330
19,584
259,206
278,790
4,101
(10,728)
5,804
38,397
18,131
14,178
(4,018)
(19,085)
6,764
(15,626)
(2,133)
1,252
(1,335)
48,919
(12,500)
3,757
(75,673)
89,342
(1,720)
1,057
7
4,270
(1,360)
1,890
(4,807)
1,118
(1,275)
8,415
(3,475)
(399)
107
(4,232)
49,064
210,142
259,206
4,321
(4,365)
(5,652)
65,249
(6,309)
(343)
(1,845)
(13,755)
10,489
3,374
452
(1,500)
(683)
57,505
(14,671)
8,480
(91,744)
80,895
(1,324)
—
(12)
(18,376)
(936)
1,438
(3,258)
1,165
(1,056)
5,736
—
(357)
2,732
1,668
43,529
166,613
210,142
27
27
256,351
6,431
15,150
858
278,790
238,574
6,488
13,532
612
259,206
191,127
5,955
12,204
856
210,142
Notes
a
Issuance of debt securities and Redemption of debt securities included in financing activities relate to instruments that qualify as eligible liabilities and satisfy regulatory requirements for MREL
instruments which came into effect during 2019. Refer to Note 1, paragraph 4(vi), for further details.
b 2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Restatement of financial statements (Note 1a) on page 428 for further details.
Interest received was £40,975m (2021: £17,194m; 2020: £18,748m) and interest paid was £28,709m (2021: £8,063m; 2020: £9,577m). These amounts include interest paid and received arising from
trading activities. Dividends received were £31m (2021: £20m; 2020: £37m). The Group is required to maintain balances with central banks and other regulatory authorities. These amounted to £3,457m
(2021: £4,750m; 2020: £3,392m) and are included within the Cash and cash equivalents. For the purposes of the cash flow statement, cash comprises cash on hand and demand deposits and cash
equivalents comprise highly liquid investments that are convertible into cash with an insignificant risk of changes in value with original maturities of three months or less. Repurchase and reverse
repurchase agreements are not considered to be part of cash equivalents.
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Parent company accounts
Statement of comprehensive income
For the year ended 31 December
Dividends received from subsidiary
Net interest (expense)
Other (expense)/ income
Impairment reversal/(charge) of investment in subsidiary
Operating expenses
Profit/(loss) before tax
Taxation
Profit/(loss) after tax
Other comprehensive income
Total comprehensive income/(loss)
Profit/(loss) after tax attributable to:
Ordinary equity holders
Other equity instrument holders
Profit/(loss) after tax
Total comprehensive income/(loss) attributable to:
Ordinary equity holders
Other equity instrument holders
Total comprehensive income/(loss)
Notes
42
42
42
2022
£m
2,797
(163)
(654)
—
(257)
1,723
440
2,163
—
2,163
1,258
905
2,163
1,258
905
2,163
2021
£m
1,356
(161)
659
2,573
(160)
4,267
76
4,343
—
4,343
3,539
804
4,343
3,539
804
4,343
2020
£m
763
(175)
1,192
(2,573)
(241)
(1,034)
16
(1,018)
—
(1,018)
(1,875)
857
(1,018)
(1,875)
857
(1,018)
For the year ended 31 December 2022, profit after tax was £2,163m (2021: £4,343m) and total comprehensive income was £2,163m
(2021:£4,343m). The Company has 61 members of staff (2021: 65).
Balance sheet
As at 31 December
Assets
Investment in subsidiaries
Loans and advances to subsidiaries
Financial assets at fair value through the income statement
Derivative financial instruments
Other assets
Total assets
Liabilities
Deposits at amortised cost
Debt securities in issue
Subordinated liabilities
Financial liabilities designated at fair value
Derivative financial instruments
Other liabilities
Total liabilities
Equity
Called up share capital
Share premium account
Other equity instruments
Other reserves
Retained earnings
Total equity
Total liabilities and equity
Notes
42
42
42
42
42
42
42
28
28
28
2022
£m
64,544
23,628
28,930
31
402
117,535
544
24,086
11,230
22,971
906
131
59,868
3,968
405
13,250
788
39,256
57,667
117,535
2021
£m
62,528
22,072
25,091
4
68
109,763
488
25,658
9,301
16,319
43
117
51,926
4,188
348
12,241
555
40,505
57,837
109,763
The financial statements on pages 421 to 423 and the accompanying note on pages 517 to 518 were approved by the Board of
Directors on 14 February 2023 and signed on its behalf by:
Nigel Higgins
Group Chairman
C.S.Venkatakrishnan
Group Chief Executive
Anna Cross
Group Finance Director
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Parent company accounts (continued)
Statement of changes in equity
Balance as at 1 January 2022
Profit/(loss) after tax and other comprehensive
income
Issue of shares under employee share schemes
Issue and exchange of other equity instruments
Vesting of shares under employee share schemes
Dividends paid
Other equity instruments coupons paid
Repurchase of shares
Balance as at 31 December 2022
Balance as at 1 January 2021
Profit/(loss) after tax and other comprehensive
income
Issue of shares under employee share schemes
Issue and exchange of other equity instruments
Vesting of shares under employee share schemes
Dividends paid
Other equity instruments coupons paid
Repurchase of shares
Other movements
Balance as at 31 December 2021
Notes
11
11
Called up share
capital and share
premium
£m
4,536
—
70
—
—
—
—
(233)
4,373
4,637
—
60
—
—
—
—
(161)
—
4,536
Other equity
instruments
£m
12,241
905
—
1,009
—
—
(905)
—
13,250
11,169
804
—
1,072
—
—
(804)
—
—
12,241
Other reserves
Retained earnings
Total equity
£m
555
—
—
—
—
—
—
233
788
394
—
—
—
—
—
—
161
—
555
£m
40,505
1,258
34
17
(22)
(1,028)
—
(1,508)
39,256
38,672
3,539
29
—
(18)
(512)
—
(1,200)
(5)
40,505
£m
57,837
2,163
104
1,026
(22)
(1,028)
(905)
(1,508)
57,667
54,872
4,343
89
1,072
(18)
(512)
(804)
(1,200)
(5)
57,837
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Parent company accounts (continued)
Cash flow statement
For the year ended 31 December
Reconciliation of profit before tax to net cash flows from operating activities:
Profit/(loss) before tax
Adjustment for non-cash items:
Impairment (reversal)/charge of investment in subsidiary
Other non-cash items
Changes in operating assets and liabilities
Net cash generated from operating activities
Net increase in loans and advances to subsidiaries of the parenta
Capital contribution to and investment in subsidiary
Net cash used in investing activities
Issue of shares and other equity instruments
Redemption of other equity instruments
Net increase in debt securities in issueb
Proceeds of borrowings and issuance of subordinated debt
Repurchase of shares
Dividends paid
Coupons paid on other equity instruments
Net cash generated from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Net cash generated from operating activities includes:
Dividends received
Net interest (paid)/received
Notes
a
b
Includes financial assets at fair value through the income statement.
Includes financial liabilities designated at fair value.
2022
£m
2021
£m
2020
£m
1,723
4,267
(1,034)
—
868
1,037
3,628
(5,087)
(1,769)
(6,856)
3,180
(2,097)
4,813
1,000
(1,508)
(1,028)
(905)
3,455
227
249
476
(2,573)
383
17
2,094
(6,118)
(1,083)
(7,201)
1,114
—
4,939
1,579
(1,200)
(512)
(804)
5,116
9
240
249
2,573
528
—
2,067
(4,732)
(393)
(5,125)
1,175
(898)
3,720
158
—
—
(857)
3,298
240
—
240
2,797
(163)
1,356
(161)
763
(175)
The Parent company’s principal activity is to hold the investment in its wholly-owned subsidiaries, Barclays Bank PLC, Barclays Bank UK
PLC, Barclays Execution Services Limited and Barclays Principal Investments Limited. Dividends received are treated as operating
income.
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Notes to the financial statements
For the year ended 31 December 2022
This section describes the Group’s significant policies and critical accounting estimates that relate to the financial statements and
notes as a whole. If an accounting policy or a critical accounting estimate relates to a particular note, the accounting policy and/or
critical accounting estimate is contained with the relevant note.
1 Significant accounting policies
1. Reporting entity
Barclays PLC is a public company limited by shares registered in England under company number 48839, having its registered office at 1
Churchill Place, London, E14 5HP.
These financial statements are prepared for Barclays PLC and its subsidiaries (the Group) under Section 399 of the Companies Act
2006. The Group is a major global financial services provider engaged in retail banking, credit cards, wholesale banking, investment
banking, wealth management and investment management services. In addition, separate financial statements have been presented
for the holding company.
2. Compliance with International Financial Reporting Standards
The consolidated financial statements of the Group, and the separate financial statements of Barclays PLC, have been prepared in
accordance with UK-adopted international accounting standards.
The consolidated financial statements of the Group, and the separate financial statements of Barclays PLC, have also been prepared in
accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB),
including interpretations issued by the IFRS Interpretations Committee, as there are no applicable differences from IFRS as issued by
the IASB for the periods presented.
The principal accounting policies applied in the preparation of the consolidated and separate financial statements are set out below, and
in the relevant notes to the financial statements. These policies have been consistently applied.
3. Basis of preparation
The consolidated and separate financial statements have been prepared under the historical cost convention modified to include the
fair valuation of investment property, and particular financial instruments, to the extent required or permitted under IFRS as set out in
the relevant accounting policies. These financial statements are stated in millions of Pounds Sterling (£m), the functional currency of
Barclays PLC.
The financial statements have been prepared for Barclays PLC and its subsidiaries (the Group) under Section 399 of the Companies Act
2006 as applicable to companies using IFRS. The financial statements are prepared on a going concern basis, as the Board is satisfied
that the Group and the parent company have the resources to continue in business for a period of at least 12 months from approval of
the financial statements.
In making this assessment, the Board has considered a wide range of information relating to present and future conditions and includes
a review of a working capital report (WCR). The WCR is used by the Board to assess the future performance of the Group and that it has
the resources in place that are required to meet its ongoing regulatory requirements. The assessment is based upon business plans
which contain future projections of profitability taken from the Group’s medium-term plan as well as projections of regulatory capital
requirements and business funding needs. The WCR also includes an assessment of the impact of internally generated stress testing
scenarios on the liquidity and capital requirement forecasts. The stress tests used were based upon an assessment of reasonably
possible downside economic scenarios that the Group could experience. Further details are set out in the Viability statement on
page 58.
The WCR showed that the Group had sufficient capital and liquidity in place to support its future business requirements and remained
above its regulatory minimum requirements in the stress scenarios. Accordingly, the Directors concluded that there was a reasonable
expectation that the Group and parent company has adequate resources to continue as a going concern for a period of at least 12
months from the date of approval of the financial statements.
4. Accounting policies
The Group prepares financial statements in accordance with IFRS. The Group’s significant accounting policies relating to specific
financial statement items, together with a description of the accounting estimates and judgements that were critical to preparing those
items, are set out under the relevant notes. Accounting policies that affect the financial statements as a whole are set out below.
(i) Consolidation
The Group applies IFRS 10 Consolidated financial statements.
The consolidated financial statements combine the financial statements of Barclays PLC and all its subsidiaries. Subsidiaries are entities
over which Barclays PLC has control. The Group has control over another entity when the Group has all of the following:
1) power over the relevant activities of the investee, for example through voting or other rights
2) exposure to, or rights to, variable returns from its involvement with the investee, and
3) the ability to affect those returns through its power over the investee.
The assessment of control is based on the consideration of all facts and circumstances. The Group reassesses whether it controls an
investee if facts and circumstances indicate that there are changes to one or more of the three elements of control.
Intra-group transactions and balances are eliminated on consolidation. Consistent accounting policies are used throughout the Group
for the purposes of the consolidation.
Changes in ownership interests in subsidiaries are accounted for as equity transactions if they occur after control has already been
obtained and they do not result in loss of control.
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Notes to the financial statements (continued)
For the year ended 31 December 2022
As the consolidated financial statements include partnerships where the Group member is a partner, advantage has been taken of the
exemption under Regulation 7 of the Partnership (Accounts) Regulations 2008 with regard to preparing and filing of individual
partnership financial statements.
Details of the principal subsidiaries are given in Note 34.
(ii) Foreign currency translation
The Group applies IAS 21 The Effects of Changes in Foreign Exchange Rates. Transactions in foreign currencies are translated into
Sterling at the rate ruling on the date of the transaction. Foreign currency monetary balances are translated into Sterling at the period
end exchange rates. Exchange gains and losses on such balances are taken to the income statement. Non-monetary foreign currency
balances in relation to items measured in terms of historical cost are carried at historical transaction date exchange rates. Non-
monetary foreign currency balances in relation to items measured at fair value are translated using the exchange rate at the date when
the fair value was measured.
The Group’s foreign operations (including subsidiaries, joint ventures, associates and branches) based mainly outside the UK may have
different functional currencies. The functional currency of an operation is the currency of the main economy to which it is exposed.
Prior to consolidation (or equity accounting) the assets and liabilities of non-Sterling operations are translated at the period end
exchange rate and items of income, expense and other comprehensive income are translated into Sterling at the rate on the date of
the transactions. Exchange differences arising on the translation of foreign operations are included in currency translation reserves
within equity. These are transferred to the income statement when the Group disposes of the entire interest in a foreign operation,
when partial disposal results in the loss of control of an interest in a subsidiary, when an investment previously accounted for using the
equity method is accounted for as a financial asset, or on the disposal of a foreign operation within a branch.
(iii) Financial assets and liabilities
The Group applies IFRS 9 Financial Instruments to the recognition, classification and measurement, and derecognition of financial
assets and financial liabilities and the impairment of financial assets. The Group applies the requirements of IAS 39 Financial
Instruments: Recognition and Measurement for hedge accounting purposes.
Recognition
The Group recognises financial assets and liabilities when it becomes a party to the terms of the contract. Trade date or settlement
date accounting is applied depending on the classification of the financial asset.
Classification and measurement
Financial assets are classified on the basis of two criteria:
i) the business model within which financial assets are managed, and
ii) their contractual cash flow characteristics (whether the cash flows represent ‘solely payments of principal and interest’ (SPPI)).
The Group assesses the business model criteria at a portfolio level. Information that is considered in determining the applicable
business model includes (i) policies and objectives for the relevant portfolio, (ii) how the performance and risks of the portfolio are
managed, evaluated and reported to management, and (iii) the frequency, volume and timing of sales in prior periods, sales expectation
for future periods, and the reasons for such sales.
The contractual cash flow characteristics of financial assets are assessed with reference to whether the cash flows represent SPPI. In
assessing whether contractual cash flows are SPPI compliant, interest is defined as consideration primarily for the time value of money
and the credit risk of the principal outstanding. The time value of money is defined as the element of interest that provides
consideration only for the passage of time and not consideration for other risks or costs associated with holding the financial asset.
Terms that could change the contractual cash flows so that it would not meet the condition for SPPI are considered, including: (i)
contingent and leverage features, (ii) non-recourse arrangements and (iii) features that could modify the time value of money.
Financial assets are measured at amortised cost if they are held within a business model whose objective is to hold financial assets in
order to collect contractual cash flows, and their contractual cash flows represent SPPI.
Financial assets are measured at fair value through other comprehensive income if they are held within a business model whose
objective is achieved by both collecting contractual cash flows and selling financial assets, and their contractual cash flows represent
SPPI.
Other financial assets are measured at fair value through profit and loss. There is an option to make an irrevocable election on initial
recognition for non-traded equity investments to be measured at fair value through other comprehensive income, in which case
dividends are recognised in profit or loss, but gains or losses are not reclassified to profit or loss upon derecognition, and the
impairment requirements of IFRS 9 do not apply.
The accounting policy for each type of financial asset or liability is included within the relevant note for the item. The Group’s policies for
determining the fair values of the assets and liabilities are set out in Note 17.
Derecognition
The Group derecognises a financial asset, or a portion of a financial asset, from its balance sheet where (i) the contractual rights to cash
flows from the asset have expired, or (ii) the contractual rights to cash flows from the asset have been transferred (usually by sale) and
with them either (a) substantially all the risks and rewards of the asset have been transferred, or (b) where neither substantially all the
risks and reward have been transferred or retained, where control over the asset has been lost.
Financial liabilities are derecognised when the liability has been settled, has expired or has been extinguished. An exchange of an existing
financial liability for a new liability with the same lender on substantially different terms – generally a difference of 10% or more in the
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Notes to the financial statements (continued)
For the year ended 31 December 2022
present value of the cash flows or a substantive qualitative amendment – is accounted for as an extinguishment of the original financial
liability and the recognition of a new financial liability.
Transactions in which the Group transfers assets and liabilities, portions of them, or financial risks associated with them can be complex
and it may not be obvious whether substantially all of the risks and rewards have been transferred. It is often necessary to perform a
quantitative analysis. Such an analysis compares the Group’s exposure to variability in asset cash flows before the transfer with its
retained exposure after the transfer.
A cash flow analysis of this nature may require judgement. In particular, it is necessary to estimate the asset’s expected future cash
flows as well as potential variability around this expectation. The method of estimating expected future cash flows depends on the
nature of the asset, with market and market-implied data used to the greatest extent possible. The potential variability around this
expectation is typically determined by stressing underlying parameters to create reasonable alternative upside and downside scenarios.
Probabilities are then assigned to each scenario. Stressed parameters may include default rates, loss severity, or prepayment rates.
Accounting for reverse repurchase and repurchase agreements including other similar lending and borrowing
Reverse repurchase agreements (and stock borrowing or similar transactions) are a form of secured lending whereby the Group
provides a loan or cash collateral in exchange for the transfer of collateral, generally in the form of marketable securities subject to an
agreement to transfer the securities back at a fixed price in the future. Repurchase agreements are where the Group obtains such loans
or cash collateral, in exchange for the transfer of collateral.
The Group purchases (a reverse repurchase agreement) or borrows securities subject to a commitment to resell or return them. The
securities are not included in the balance sheet as the Group does not acquire the risks and rewards of ownership. Consideration paid
(or cash collateral provided) is accounted for as a loan asset at amortised cost, unless it is designated or mandatorily at fair value
through profit and loss.
The Group may also sell (a repurchase agreement) or lend securities subject to a commitment to repurchase or redeem them. The
securities are retained on the balance sheet as the Group retains substantially all the risks and rewards of ownership. Consideration
received (or cash collateral provided) is accounted for as a financial liability at amortised cost, unless it is designated at fair value through
profit and loss.
(iv) Issued debt and equity instruments
The Group applies IAS 32, Financial Instruments: Presentation, to determine whether funding is either a financial liability (debt) or equity.
Issued financial instruments or their components are classified as liabilities if the contractual arrangement results in the Group having an
obligation to either deliver cash or another financial asset, or a variable number of equity shares, to the holder of the instrument. If this is
not the case, the instrument is generally an equity instrument and the proceeds included in equity, net of transaction costs. Dividends
and other returns to equity holders are recognised when paid or declared by the members at the Annual General Meeting and treated
as a deduction from equity.
Where issued financial instruments contain both liability and equity components, these are accounted for separately. The fair value of
the debt is estimated first and the balance of the proceeds is included within equity.
(v) Changes in the basis for determining contractual cash flows resulting from interest rate benchmark reform
A change in the basis of determining the contractual cash flows of a financial instrument that is required by interest rate benchmark
reform is accounted for by updating the effective interest rate, without the recognition of an immediate gain or loss. This practical
expedient is only applied where (1) the change to the contractual cash flows is necessary as a direct consequence of the reform and (2)
the new basis for determining the contractual cash flows is economically equivalent to the previous basis. For changes made in addition
to those required by the interest rate benchmark reform, the practical expedient is applied first, after which the normal IFRS 9
requirements for modifications of financial instruments is applied.
Refer to Note 14 for further details regarding hedge accounting policies in respect of interest rate benchmark reform.
Refer to Note 41 for further disclosure related to interest rate benchmark reform.
(vi) Cash flow statement
Cash comprises cash on hand and balances at central banks. Cash equivalents comprise loans and advances to banks, cash collateral
balances with central banks related to payment schemes and treasury and other eligible bills, all with original maturities of three months
or less. Repurchase and reverse repurchase agreements are not considered to be part of cash equivalents.
Investments in debt securities at amortised cost, presented within loans and advances on the balance sheet, are deemed to be
investing activities for the purposes of the cash flow statement, except those instruments considered to be cash equivalents.
Debt securities issued and redeemed are considered to be operating activities, except qualifying eligible liabilities that satisfy regulatory
requirements for MREL instruments (or have previously satisfied these requirements since 2019 when they came into effect), which are
considered to be financing activities.
5. New and amended standards and interpretations
The accounting policies adopted have been consistently applied.
Future accounting developments
The following accounting standards have been issued by the IASB but are not yet effective:
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Notes to the financial statements (continued)
For the year ended 31 December 2022
IFRS 17 – Insurance contracts
In May 2017, the IASB issued IFRS 17 Insurance Contracts, a comprehensive new accounting standard for insurance contracts covering
recognition and measurement, presentation and disclosure. IFRS 17 will replace IFRS 4 Insurance Contracts that was issued in 2005. In
June 2020, the IASB published amendments to IFRS 17, to include scope exclusion for certain credit card contracts and similar
contracts that provide insurance coverage, the optional scope exclusion for loan contracts that transfer significant insurance risk, and
the clarification that only financial guarantees issued are in scope of IFRS 9.
IFRS 17 applies to all types of insurance contracts (i.e. life, non-life, direct insurance and reinsurance), regardless of the type of entities
that issue them, as well as to certain guarantees and financial instruments with discretionary participation features. A few scope
exceptions will apply.
IFRS 17 is effective for accounting periods beginning on or after 1 January 2023. The Group does not expect the impact of IFRS 17 to
be material.
Classification of Liabilities as Current or Non-current (Amendments to IAS 1)
In January 2020 the IASB issued amendments to IAS 1 to clarify the presentation of liabilities in the balance sheet, with an effective date
of 1 January 2024.
The amendments clarify that a liability should be classified as non-current only if the entity has the right to defer settlement of the
liability for at least 12 months after the reporting period, and that (i) the right to defer settlement must exist at the end of the reporting
period and (ii) management’s intentions or expectations about whether it will exercise its right to defer settlement does not affect the
classification. Further clarifications include how lending conditions affect classification and classification of liabilities the entity will or
may settle by issuing its own equity instruments.
In October 2022, the IASB also issued further amendments to IAS 1 to improve the information an entity provides when its right to
defer settlement of a liability for at least twelve months is subject to compliance with covenants, and to respond to stakeholders’
concerns about the classification of such a liability as current or non-current.
Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2
In February 2021 the IASB issued amendments to IAS 1 that require entities to disclose their material accounting policies rather than
their significant accounting policies. The amendments to IFRS Practice Statement 2 provide guidance on the concept of materiality and
its application to accounting policy information.
Under the amendments, accounting policy information is material if, when considered together with other information included in an
entity’s financial statements, it can reasonably be expected to influence decisions that the primary users of general purpose financial
statements make on the basis of those financial statements.
The amendments are effective for annual periods beginning on or after 1 January 2023, and will be applied from that date.
Definition of Accounting Estimate - Amendments to IAS 8
In February 2021 the IASB issued amendments to IAS 8 that replace the definition of a change in accounting estimates with a definition
of accounting estimates.
Under the new definition, accounting estimates are clarified as monetary amounts in financial statements that are subject to
measurement uncertainty. Where an entity's accounting policy requires an item to be measured at monetary amounts that cannot be
observed directly, it should develop an accounting estimate to achieve this objective.
The amendments are effective for annual periods beginning on or after 1 January 2023, and will be applied from that date.
6. 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 the 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 are highlighted under the relevant note. Critical
accounting estimates and judgements are disclosed in:
▪ Credit impairment charges on page 436
▪ Tax on page 441
▪ Fair value of financial instruments on page 456
▪ Goodwill and intangible assets on page 475
▪ Pensions and post-retirement benefit obligations on page 496
▪ Provisions including conduct and legal, competition and regulatory matters on page 477.
7. Other disclosures
To improve transparency and ease of reference, by concentrating related information in one place, certain disclosures required under
IFRS have been included within the Risk review section as follows:
▪ Credit risk on pages 289 to 291 and 300 to 340
▪ Market risk on page 291 and 341 to 342
▪ Treasury and Capital risk – liquidity on page 292 and 344 to 354
▪ Treasury and Capital risk – capital on page 292 and 355 to 362.
These disclosures are covered by the Audit opinion (included on pages 399 to 415) where referenced as audited.
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Notes to the financial statements (continued)
For the year ended 31 December 2022
1a Restatement of financial statements
The comparatives in these consolidated financial statements for the year ended 31 December 2022 (the financial statements) have
been restated to reflect both a provision and contingent liability disclosure in respect of the impact of an over-issuance of securities
(the Over-issuance of Securities) in excess of the maximum aggregate offering price registered under Barclays Bank PLC’s shelf
registration statement on Form F-3, as declared effective by the SEC in August 2019 (2019 F-3) and Barclays Bank PLC’s prior shelf
registration statement (Predecessor Shelf). The comparatives have been restated so as to align them to those reported in the restated
2021 financial statements included in the Company’s amended Annual Report on Form 20-F for the year ended 31 December 2021.
Due to an SEC settlement order in 2017, at the time the 2019 F-3 was filed and the Predecessor Shelf was amended, Barclays Bank PLC
had ceased to be a “well-known seasoned issuer” (or WKSI) and had become an “ineligible issuer”, as defined in Rule 405 under the
Securities Act of 1933, as amended (Securities Act), thus being required to register upfront a fixed amount of securities with the SEC.
In March 2022, Barclays Bank PLC became aware that it had issued securities in the US materially in excess of the amount it had
registered with the SEC under the 2019 F-3. Subsequently, Barclays Bank PLC became aware that securities had also been issued in
excess of the amount it had registered with the SEC under the Predecessor Shelf. The securities that were over-issued included
structured notes and exchange traded notes (ETNs). Certain offers and sales of these securities were not made in compliance with the
Securities Act, giving rise to rights of rescission for certain purchasers of the securities. Under Section 12(a)(1) of the Securities Act,
certain purchasers of unregistered securities have a right to recover, upon the tender of such security, the consideration paid for such
security with interest, less the amount of any income received, or damages if the purchaser sold the securities at a loss (the Rescission
Price). As a result, Barclays Bank PLC made a rescission offer to eligible purchasers of the relevant affected securities at the Rescission
Price (the Rescission Offer).
A portion of the costs associated with the rights of rescission of certain investors was attributable to Barclays PLC’s financial
statements for the year ended 31 December 2021. Accordingly, the comparatives in these financial statements have been restated.
The restatement impacts the consolidated income statement, the consolidated statement of comprehensive income, the
consolidated balance sheet, the consolidated statement of changes in equity, and the consolidated cash flow statement for the year
ended 31 December 2021. There was no material impact on Barclays PLC’s previously reported financial statements for the year ended
31 December 2020.
The impact of the restatement is as follows:
• Litigation and conduct charges in the income statement for the year ended 31 December 2021 were underreported by £220m,
increasing total operating expenses from a reported £14,439m to £14,659m.
• Provisions on the consolidated balance sheet have increased from a reported £1,688m to £1,908m.
• The taxation charge in the income statement has reduced by £50m from a reported £1,188m to £1,138m with a corresponding
decrease in current tax liabilities on the balance sheet from £739m to £689m.
• The overall impact of the restatement has been to reduce reported profit after tax from £7,226m to £7,056m.
• The consolidated financial statements have been restated for the increased provision of £220m and lower tax charge of £50m.
• The contractual maturity profile of financial liabilities designated at fair value has been restated to reflect the impact of the Over-
issuance of Securities.
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Notes to the financial statements (continued)
For the year ended 31 December 2022
The table below reflects each of the consolidated financial statement line items that were affected by the restatement:
For the year ended 31 December 2021
Impact on the consolidated income statement
Litigation and conduct
Operating expenses
Profit before tax
Taxation
Profit after tax
Impact on the consolidated statement of comprehensive income
Profit after tax
Total comprehensive income for the year
Impact on the consolidated balance sheet
Liabilities
Current tax liabilities
Provisions
Total liabilities
Equity
Retained earnings
Total equity
Impact on the consolidated cash flow statement
Profit before tax
Adjustments for non-cash items:
Other provisions, including pensions
As reported
Restatement
As restated
£m
(177)
(14,439)
8,414
(1,188)
7,226
7,226
5,008
(739)
(1,688)
(1,314,074)
50,657
70,211
8,414
248
£m
(220)
(220)
(220)
50
(170)
(170)
(170)
50
(220)
(170)
(170)
(170)
(220)
220
£m
(397)
(14,659)
8,194
(1,138)
7,056
7,056
4,838
(689)
(1,908)
(1,314,244)
50,487
70,041
8,194
468
The financial impact of the restatement has been reflected in Notes 2, 7, 9, 10 and 24. Further, Note 26 (Legal, competition and
regulatory matters) has also been amended to reflect the Over-issuance of Securities.
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Notes to the financial statements (continued)
For the year ended 31 December 2022
Financial performance and returns
The notes included in this section focus on the results and performance of the Group. Information on the income generated,
expenditure incurred, segmental performance, tax, earnings per share and dividends are included here. For further detail on
performance, see income statement commentary within Financial Review (unaudited).
2 Segmental reporting
Presentation of segmental reporting
The Group’s segmental reporting is in accordance with IFRS 8 Operating Segments. Operating segments are reported in a manner
consistent with the internal reporting provided to the Executive Committee, which is responsible for allocating resources and assessing
performance of the operating segments, and has been identified as the chief operating decision maker. All transactions between
business segments are conducted on an arm’s-length basis, with intra-segment revenue and costs being eliminated in Head Office.
Income and expenses directly associated with each segment are included in determining business segment performance.
The Group is a British universal bank diversified by business, geography and income type, serving consumer and wholesale customers
and clients globally and for segmental reporting purposes it defines its two operating divisions as Barclays UK and Barclays International.
▪ Barclays UK consists of our UK Personal Banking, UK Business Banking and Barclaycard Consumer UK businesses. These businesses
are carried on by our UK ring-fenced bank (Barclays Bank UK PLC) and certain other entities within the Group.
▪ Barclays International consists of our Corporate and Investment Bank and Consumer, Cards and Payments businesses. These
businesses are carried on by our non ring-fenced bank (Barclays Bank PLC) and its subsidiaries, and certain other entities within the
Group.
The below table also includes Head Office which comprises head office and legacy businesses, as well as the FTEs employed by Barclays
Execution Services.
Analysis of results by business
For the year ended 31 December 2022
Total income
Operating costs
UK bank levy
Litigation and conduct
Total operating expenses
Other net income/(expenses)a
Profit/(loss) before impairment
Credit impairment charges
Profit/(loss) before tax
Total assets (£bn)
Number of employees (full time equivalent)
Average number of employees (full time equivalent)
Barclays UK
Barclays
International
Head Office
Group results
£m
£m
£m
£m
7,259
(4,260)
(26)
(41)
(4,327)
—
2,932
(286)
2,646
313.2
6,200
17,867
(10,361)
(133)
(1,503)
(11,997)
28
5,898
(933)
4,965
1,181.3
10,900
(170)
(336)
(17)
(53)
(406)
(22)
(598)
(1)
(599)
19.2
70,300
24,956
(14,957)
(176)
(1,597)
(16,730)
6
8,232
(1,220)
7,012
1,513.7
87,400
83,900
Note
a Other net income/(expenses) represents the share of post-tax results of associates and joint ventures, profit on disposal of subsidiaries, associates and joint ventures, and gains on acquisitions.
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Notes to the financial statements (continued)
For the year ended 31 December 2022
For the year ended 31 December 2021
Total income
Operating costs
UK bank levy
Litigation and conduct
Total operating expenses
Other net incomeb
Profit/(loss) before impairment
Credit impairment releases
Profit/(loss) before tax
Total assets (£bn)
Number of employees (full time equivalent)c
Average number of employees (full time equivalent)
Barclays UK
Restateda
Barclays
International
Restateda
Head Office
Group results
£m
£m
£m
£m
6,536
(4,357)
(36)
(37)
(4,430)
—
2,106
365
2,471
321.2
7,100
15,665
(9,076)
(134)
(345)
(9,555)
40
6,150
288
6,438
1,044.1
10,400
(261)
(659)
—
(15)
(674)
220
(715)
—
(715)
19.0
64,100
21,940
(14,092)
(170)
(397)
(14,659)
260
7,541
653
8,194
1,384.3
81,600
82,900
Notes
a 2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Restatement of financial statements (Note 1a) on page 428 for further details.
b Other net income represents the share of post-tax results of associates and joint ventures, profit on disposal of subsidiaries, associates and joint ventures, and gains on acquisitions.
c Barclays Execution Services Employees are reported within the Head Office Segment. Barclays UK transformed its business in 2021 and consolidated all Customer Care employees, who directly serve
customers, into Barclays Execution Services to improve customer service and experience. Costs are recharged, while FTEs are reported within Head Office, as at 31 December 2021 10,700 FTEs were
impacted by the move from Barclays UK to Head Office. The 2020 comparative figures have not been restated.
For the year ended 31 December 2020
Total income
Operating costs
UK bank levy
Litigation and conduct
Total operating expenses
Other net income/(expenses)b
Profit/(loss) before impairment
Credit impairment charges
Profit/(loss) before tax
Total assets (£bn)
Number of employees (full time equivalent)
Average number of employees (full time equivalent)
Barclays UKa
Barclays
Internationala
£m
£m
6,347
(4,270)
(50)
(32)
(4,352)
18
2,013
(1,467)
546
289.1
21,300
15,921
(8,765)
(240)
(48)
(9,053)
28
6,896
(3,280)
3,616
1,041.8
10,800
Head
Office
£m
(502)
(399)
(9)
(73)
(481)
(23)
(1,006)
(91)
(1,097)
18.6
50,900
Group results
£m
21,766
(13,434)
(299)
(153)
(13,886)
23
7,903
(4,838)
3,065
1,349.5
83,000
81,800
Notes
a On 1 April 2020, assets of £2.2bn relating to the Barclays Partner Finance business were moved from Barclays International to Barclays UK, with net operating income of £19m and loss before tax of
£5m subsequently recognised in Barclays UK for the rest of 2020.
b Other net income/(expenses) represents the share of post-tax results of associates and joint ventures, profit (or loss) on disposal of subsidiaries, associates and joint ventures, and gains on
acquisitions.
Income by geographic regiona
For the year ended 31 December
United Kingdom
Europe
Americas
Africa and Middle East
Asia
Total
.Income from individual countries which represent more than 5% of total incomea
For the year ended 31 December
United Kingdom
United States
Note
a The geographical analysis is based on the location of the office where the transactions are recorded.
2022
£m
14,908
2,321
6,353
63
1,311
24,956
2022
£m
14,908
6,176
2021
£m
11,256
2,372
7,199
45
1,068
21,940
2021
£m
11,256
7,048
2020
£m
11,211
2,059
7,425
36
1,035
21,766
2020
£m
11,211
7,318
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Notes to the financial statements (continued)
For the year ended 31 December 2022
3 Net interest income
Accounting for interest income and expenses
Interest income on loans and advances at amortised cost and financial assets at fair value through other comprehensive income, and
interest expense on financial liabilities held at amortised cost, are calculated using the effective interest method which allocates
interest, and direct and incremental fees and costs, over the expected lives of the assets and liabilities.
The effective interest method requires the Group to estimate future cash flows, in some cases based on its experience of customers’
behaviour, considering all contractual terms of the financial instrument, as well as the expected lives of the assets and liabilities.
The Group incurs certain costs to originate credit card balances with the most significant being co-brand partner fees. To the extent
these costs are attributed to customers that continuously carry an outstanding balance (revolvers) and incremental to the origination
of credit card balances, they are capitalised and subsequently included within the calculation of the effective interest rate. They are
amortised to interest income over the period of expected repayment of the originated balance. Costs attributed to customers that
settle their outstanding balances each period (transactors) are deferred on the balance sheet as a cost of obtaining a contract and
amortised to fee and commission expense over the life of the customer relationship (refer to Note 4). There are no other individual
estimates involved in the calculation of effective interest rates that are material to the results or financial position.
Cash and balances at central banks
Loans and advances at amortised cost
Fair value through other comprehensive income
Negative interest on liabilities
Other
Interest and similar income
Deposits at amortised cost
Debt securities in issue
Subordinated liabilities
Negative interest on assets
Other
Interest and similar expense
Net interest income
2022
£m
2,916
13,376
1,963
208
633
19,096
(3,573)
(3,240)
(530)
(208)
(973)
(8,524)
10,572
2021
£m
184
2020
£m
275
9,540
10,180
550
248
718
11,240
(561)
(1,340)
(507)
(374)
(385)
(3,167)
8,073
776
68
593
11,892
(1,030)
(1,360)
(670)
(344)
(366)
(3,770)
8,122
Interest and similar income presented above represents interest revenue calculated using the effective interest method. Costs to
originate credit card balances of £786m (2021: £652m; 2020: £698m) have been amortised to interest and similar income during the
year. Interest and similar income includes £59m (2021: £37m; 2020: £40m) accrued on impaired loans. Other interest expense includes
£56m (2021: £64m; 2020:£70m) relating to IFRS 16 lease interest expenses.
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Notes to the financial statements (continued)
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4 Net fee and commission income
Accounting for net fee and commission income
The Group applies IFRS 15 Revenue from Contracts with Customers. IFRS 15 establishes a five-step model governing revenue
recognition. The five-step model requires the Group to (i) identify the contract with the customer, (ii) identify each of the performance
obligations included in the contract, (iii) determine the amount of consideration in the contract, (iv) allocate the consideration to each of
the identified performance obligations and (v) recognise revenue as each performance obligation is satisfied.
The Group recognises fee and commission income charged for services provided by the Group as and when performance obligations
are satisfied, for example, on completion of the underlying transaction. Where the contractual arrangements also result in the Group
recognising financial instruments in scope of IFRS 9, such financial instruments are initially recognised at fair value in accordance with
IFRS 9 before applying the provisions of IFRS 15.
Fee and commission income is disaggregated below by fee types that reflect the nature of the services offered across the Group and
operating segments, in accordance with IFRS 15. The below table includes a total for fees in scope of IFRS 15. Refer to Note 2 for more
detailed information about operating segments.
Fee type
Transactional
Advisory
Brokerage and execution
Underwriting and syndication
Other
Total revenue from contracts with customers
Other non-contract fee income
Fee and commission income
Fee and commission expense
Net fee and commission income
Fee type
Transactional
Advisory
Brokerage and execution
Underwriting and syndication
Other
Total revenue from contracts with customers
Other non-contract fee income
Fee and commission income
Fee and commission expense
Net fee and commission income
Fee type
Transactional
Advisory
Brokerage and execution
Underwriting and syndication
Other
Total revenue from contracts with customers
Other non-contract fee income
Fee and commission income
Fee and commission expense
Net fee and commission income
Barclays UK
2022
Barclays
International
Head Office
£m
£m
1,084
161
256
—
59
1,560
—
1,560
(319)
1,241
3,256
964
1,521
2,037
153
7,931
143
8,074
(2,713)
5,361
£m
—
—
—
—
3
3
—
3
(6)
(3)
Barclays UK
2021
Barclays
International
Head Office
£m
£m
871
172
228
—
74
1,345
—
1,345
(218)
1,127
2,572
1,096
1,135
3,425
182
8,410
121
8,531
(1,983)
6,548
£m
—
1
—
—
3
4
—
4
(5)
(1)
2020
Barclays
International
Head Office
Barclays UK
£m
£m
810
159
212
—
71
1,252
—
1,252
(308)
944
2,353
693
1,173
2,867
173
7,259
119
7,378
(1,754)
5,624
£m
—
2
—
—
9
11
—
11
(8)
3
Total
£m
4,340
1,125
1,777
2,037
215
9,494
143
9,637
(3,038)
6,599
Total
£m
3,443
1,269
1,363
3,425
259
9,759
121
9,880
(2,206)
7,674
Total
£m
3,163
854
1,385
2,867
253
8,522
119
8,641
(2,070)
6,571
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Notes to the financial statements (continued)
For the year ended 31 December 2022
Fee types
Transactional
Transactional fees are service charges on deposit accounts, cash management services fees and transactional processing fees. These
include interchange and merchant fee income generated from credit and bank card usage. Transaction and processing fees are
recognised at the point in time the transaction occurs or service is performed. Interchange and merchant fees are recognised upon
settlement of the card transaction payment.
The Group incurs certain card-related costs including those related to cardholder reward programmes and payments to co-brand
partners. Cardholder reward programme costs related to customers that settle their outstanding balance each period (transactors) are
expensed when incurred and presented in fee and commission expense, while costs related to customers that continuously carry an
outstanding balance (revolvers) are included in the effective interest rate of the receivable (refer to Note 3). Payments to partners for
new cardholder account originations related to transactor accounts are deferred as costs to obtain a contract under IFRS 15, while
costs related to revolver accounts are included in the effective interest rate of the receivable (refer to Note 3). Those costs deferred
under IFRS 15 are capitalised and amortised over the estimated life of the customer relationship. Payments to co-brand partners based
on revenue sharing to the extent the revenue share relates to "revolvers" are included in the effective interest rate of the receivable and
to the extent revenue share relates to “transactors” it must be presented in fee and commission expense. Payments based on
profitability are presented in fee and commission expense.
Advisory
Advisory fees are generated from wealth management services and investment banking advisory services related to mergers,
acquisitions and financial restructurings. Wealth management advisory fees are earned over the period the services are provided and
are generally recognised quarterly when the market value of client assets is determined. Investment banking advisory fees are
recognised at the point in time when the services related to the transaction have been completed under the terms of the engagement.
Investment banking advisory costs are recognised as incurred in fee and commission expense if direct and incremental to the advisory
services or are otherwise recognised in operating expenses.
Brokerage and execution
Brokerage and execution fees are earned for executing client transactions with various exchanges and over-the-counter markets and
assisting clients in clearing transactions and facilitating foreign exchange transactions for spot/forward contracts. Brokerage and
execution fees are recognised at the point in time the associated service has been completed which is generally the trade date of the
transaction.
Underwriting and syndication
Underwriting and syndication fees are earned for the distribution of client equity or debt securities and the arrangement and
administration of a loan syndication. This includes commitment fees to provide loan financing. Underwriting fees are generally
recognised on trade date if there is no remaining contingency, such as the transaction being conditional on the closing of an acquisition
or another transaction. Underwriting costs are deferred and recognised in fee and commission expense when the associated
underwriting fees are recorded. Syndication fees are earned for arranging and administering a loan syndication; however, the associated
fee may be subject to variability until the loan has been syndicated to other syndicate members or until other contingencies have been
resolved and therefore the fee revenue is deferred until the uncertainty is resolved.
Included in the underwriting and syndication fees are loan commitment fees, when the drawdown is not probable, which are not
presented as part of the carrying value of the loan in accordance with IFRS 9. Such commitment fees are recognised over time through
to the contractual maturity of the commitment.
Contract assets and contract liabilities
The Group had no material contract assets or contract liabilities as at 31 December 2022 (2021: £nil; 2020: £nil).
Impairment of fee receivables and contract assets
During 2022, there have been no material impairments recognised in relation to fees receivable and contract assets (2021: £nil; 2020:
£nil). Fees in relation to transactional business can be added to outstanding customer balances. These amounts may be subsequently
impaired as part of the overall loans and advances balance.
Remaining performance obligations
The Group applies the practical expedient of IFRS 15 and does not disclose information about remaining performance obligations that
have original expected durations of one year or less or because the Group has a right to consideration that corresponds directly with
the value of the service provided to the client or customer.
Costs incurred in obtaining or fulfilling a contract
The Group expects that incremental costs of obtaining a contract such as success fee and commission fees paid are recoverable and
therefore capitalise such contract costs. Capitalised contract costs net of amortisation as at 31 December 2022 are £198m (2021:
£154m; 2020: £141m).
Capitalised contract costs are amortised over the customer relationship period depending on the transfer of services to which the
asset pertains. In 2022, the amount of amortisation was £47m (2021: £36m; 2020: £36m) and there was no impairment loss recognised
in connection with the capitalised contract costs (2021: £nil; 2020: £nil).
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Notes to the financial statements (continued)
For the year ended 31 December 2022
5 Net trading income
Accounting for net trading income
In accordance with IFRS 9, trading positions are held at fair value, and the resulting gains and losses are included in net trading income,
together with interest and dividends arising from long and short positions and funding costs relating to trading activities.
Income arises from both the sale and purchase of trading positions, margins which are achieved through market-making and customer
business and from changes in fair value caused by movements in interest and exchange rates, equity prices and other market variables.
Gains or losses on non-trading financial instruments designated or mandatorily at fair value with changes in fair value recognised in the
income statement are included in net trading income where the business model is to manage assets and liabilities on a fair value basis
which includes use of derivatives or where an instrument is designated at fair value to eliminate an accounting mismatch and the related
instrument's gain and losses are reported in net trading income.
Net gains on financial instruments held for trading
Net gains on financial instruments designated at fair value
Net gains on financial instruments mandatorily at fair value
Net trading income
2022
£m
6,021
508
1,520
8,049
2021
£m
3,992
692
1,110
5,794
6 Net investment income
Accounting for net investment income/(expense)
Dividends are recognised when the right to receive the dividend has been established. Other accounting policies relating to net
investment income are set out in Note 13 and Note 15.
Net (losses)/gains from financial instruments mandatorily at fair value
Net (losses)/gains from disposal of debt instruments at fair value through other comprehensive
income
Net (losses)/gains from disposal of financial assets and liabilities measured at amortised cost
Dividend income
Net losses on other investmentsa
Net investment (expense)/income
2022
£m
(51)
(111)
(18)
31
(285)
(434)
2021
£m
73
305
114
20
(201)
311
Note
a
Included within the 2022 balance are losses of £74m on sale arising from disposal of Barclays’ equity stake in Absa Group Limited (Absa) in April 2022 and September 2022.
2020
£m
5,342
700
987
7,029
2020
£m
(50)
295
(61)
37
(208)
13
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Notes to the financial statements (continued)
For the year ended 31 December 2022
7 Operating expenses
Infrastructure costs
Property and equipment
Depreciation and amortisation
Impairment of property, equipment and intangible assetsb
Total infrastructure costs
Administration and general expenses
Consultancy, legal and professional fees
Marketing and advertising
UK bank levy
Other administration and general expenses
Total administration and general expenses
Staff costs
Litigation and conduct
Operating expenses
2022
£m
1,649
1,723
63
3,435
669
500
176
1,101
2,446
9,252
1,597
16,730
Restateda
2021
£m
1,538
1,673
403
3,614
610
399
170
958
2,137
8,511
397
14,659
2020
£m
1,590
1,539
194
3,323
567
330
299
1,117
2,313
8,097
153
13,886
Notes
a 2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Restatement of financial statements (Note 1a) on page 428 for further details.
b
In 2021, Impairment of property, equipment and intangible assets included £266m relating to structural cost actions taken as part of the real estate review.
For further details on staff costs including accounting policies, refer to Note 31.
8 Credit impairment charges/(releases)
Accounting for the impairment of financial assets
Impairment
In accordance with IFRS 9, the Group is required to recognise expected credit losses (ECLs) based on unbiased forward-looking
information for all financial assets at amortised cost, lease receivables, debt financial assets at fair value through other comprehensive
income, loan commitments and financial guarantee contracts.
At the reporting date, an allowance (or provision for loan commitments and financial guarantees) is required for the 12 month (Stage 1)
ECLs. If the credit risk has significantly increased since initial recognition (Stage 2), or if the financial instrument is credit impaired (Stage
3), an allowance (or provision) should be recognised for the lifetime ECLs.
The measurement of ECL is calculated using three main components: (i) probability of default (PD) (ii) loss given default (LGD) and (iii)
the exposure at default (EAD).
The 12 month and lifetime ECLs are calculated by multiplying the respective PD, LGD and the EAD. The 12 month and lifetime PDs
represent the PD occurring over the next 12 months and the remaining maturity of the instrument respectively. The EAD represents
the expected balance at default, taking into account the repayment of principal and interest from the balance sheet date to the default
event together with any expected drawdowns of committed facilities. The LGD represents expected losses on the EAD given the event
of default, taking into account, among other attributes, the mitigating effect of collateral value at the time it is expected to be realised
and the time value of money.
Expected credit loss measurement is based on the ability of borrowers to make payments as they fall due. The Group also considers
sector-specific risks and whether additional adjustments are required in the measurement of ECL. Credit risk may be impacted by
climate considerations for certain sectors, such as oil and gas.
Determining a significant increase in credit risk since initial recognition:
The Group assesses when a significant increase in credit risk has occurred based on quantitative and qualitative assessments. The
credit risk of an exposure is considered to have significantly increased when:
i) Quantitative test
The annualised lifetime PD has increased by more than an agreed threshold relative to the equivalent at origination.
PD deterioration thresholds are defined as percentage increases, and are set at an origination score band and segment level to ensure
the test appropriately captures significant increases in credit risk at all risk levels. Generally, thresholds are inversely correlated to the
origination PD, i.e. as the origination PD increases, the threshold value reduces.
The assessment of the point at which a PD increase is deemed ‘significant’, is based upon analysis of the portfolio’s risk profile against a
common set of principles and performance metrics (consistent across both retail and wholesale businesses), incorporating expert
credit judgement where appropriate. Application of quantitative PD floors does not represent the use of the low credit risk exemption
as exposures can separately move into Stage 2 via the qualitative route described below.
Wholesale assets apply a 100% increase in PD and 0.2% PD floor to determine a significant increase in credit risk.
Retail assets apply bespoke relative increase and absolute PD thresholds based on product type and origination PD. Thresholds are
subject to maximums defined by Group policy and typically apply minimum relative thresholds of 50-100% and a maximum relative
threshold of 400%.
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Notes to the financial statements (continued)
For the year ended 31 December 2022
For existing/historical exposures where origination point scores or data are no longer available or do not represent a comparable
estimate of lifetime PD, a proxy origination score is defined, based upon:
• back-population of the approved lifetime PD score either to origination date or, where this is not feasible, as far back as possible
(subject to a data start point no later than 1 January 2015); or
• use of available historical account performance data and other customer information, to derive a comparable ‘proxy’ estimation of
origination PD.
ii) Qualitative test
This is relevant for accounts that meet the portfolio’s ‘high risk’ criteria and are subject to closer credit monitoring.
High risk customers may not be in arrears but either through an event or an observed behaviour exhibit credit distress. The definition
and assessment of high risk includes as wide a range of information as reasonably available, such as industry and Group-wide customer
level data, including but not limited to bureau scores and high consumer indebtedness index, wherever possible or relevant.
Whilst the high risk populations applied for IFRS 9 impairment purposes are aligned with risk management processes, they are also
regularly reviewed and validated to ensure that they capture any incremental segments where there is evidence of credit deterioration.
iii) Backstop criteria
This is relevant for accounts that are more than 30 calendar days past due. The 30 days past due criteria is a backstop rather than a
primary driver of moving exposures into Stage 2.
The criteria for determining a significant increase in credit risk for assets with bullet repayments follows the same principle as all other
assets, i.e. quantitative, qualitative and backstop tests are all applied.
Exposures will move back to Stage 1 once they no longer meet the criteria for a significant increase in credit risk. This means that, at a
minimum all payments must be up-to-date, the PD deterioration test is no longer met, the account is no longer classified as high risk,
and the customer has evidenced an ability to maintain future payments.
Exposures are only removed from Stage 3 and reassigned to Stage 2 once the original default trigger event no longer applies.
Exposures being removed from Stage 3 must no longer qualify as credit impaired, and:
a) the obligor will also have demonstrated consistently good payment behaviour over a 12-month period, by making all consecutive
contractual payments due and, for forborne exposures, the relevant EBA defined probationary period has also been successfully
completed or;
b) (for non-forborne exposures) the performance conditions are defined and approved within an appropriately sanctioned restructure
plan, including 12 months’ payment history have been met.
Management overlays and other exceptions to model outputs are applied only if consistent with the objective of identifying significant
increases in credit risk.
Forward-looking information
The measurement of ECL involves complexity and judgement, including estimation of PD, LGD, a range of unbiased future economic
scenarios, estimation of expected lives (where contractual life is not appropriate), and estimation of EAD and assessing significant
increases in credit risk.
Credit losses are the expected cash shortfalls from what is contractually due over the expected life of the financial instrument,
discounted at the original effective interest rate (EIR). ECLs are the unbiased probability-weighted credit losses determined by
evaluating a range of possible outcomes and considering future economic conditions.
The Group uses a five-scenario model to calculate ECL. An external consensus forecast is assembled from key sources, including HM
Treasury (short and medium-term forecasts) and Bloomberg (based on median of economic forecasts), which forms the Baseline
scenario. In addition, two adverse scenarios (Downside 1 and Downside 2) and two favourable scenarios (Upside 1 and Upside 2) are
derived, with associated probability weightings. The adverse scenarios are calibrated to a broadly similar severity to the Group's internal
stress tests and stress scenarios provided by regulators whilst also considering IFRS 9 specific sensitivities and non-linearity. The
favourable scenarios are designed to reflect plausible upside risks to the Baseline scenario which are broadly consistent with the
economic narrative approved by the Senior Scenario Review Committee. All scenarios are regenerated at a minimum semi-annually.
The scenarios include key economic variables (including GDP, unemployment, House Price Index (HPI) and base rates in both the UK
and US markets) and expanded variables using statistical models based on historical correlations. The upside and downside shocks are
designed to evolve over a five-year stress horizon, with all five scenarios converging to a steady state after approximately seven years.
The methodology for estimating probability weights for each of the scenarios involves a comparison of the distribution of key historical
UK and US macroeconomic variables against the forecast paths of the five scenarios. The methodology works such that the baseline
(reflecting current consensus outlook) has the highest weight and the weights of adverse and favourable scenarios depend on the
deviation from the baseline; the further from the baseline, the smaller the weight. A single set of five scenarios is used across all
portfolios and all five weights are normalised to equate to 100%. The same scenarios used in the estimation of expected credit losses
are also used to inform Barclays' internal planning. The impacts across the portfolios are different because of the sensitivities of each of
the portfolios to specific macroeconomic variables, for example, mortgages are highly sensitive to house prices, and credit cards and
unsecured consumer loans are highly sensitive to unemployment.
Definition of default, credit impaired assets, write-offs, and interest income recognition
The definition of default for the purpose of determining ECLs, and for internal credit risk management purposes, has been aligned to
the Regulatory Capital CRR Article 178 definition of default, to maintain a consistent approach with IFRS 9 and associated regulatory
guidance. The Regulatory Capital CRR Article 178 definition of default considers indicators that the debtor is unlikely to pay, includes
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Notes to the financial statements (continued)
For the year ended 31 December 2022
exposures in forbearance and is no later than when the exposure is more than 90 days past due. When exposures are identified as credit
impaired at the time when they are purchased or originated interest income is calculated on the carrying value net of the impairment
allowance.
An asset is considered credit impaired when one or more events occur that have a detrimental impact on the estimated future cash
flows of the financial asset. This comprises assets defined as defaulted and other individually assessed exposures where imminent
default or actual loss is identified.
Uncollectable loans are written off against the related allowance for loan impairment on completion of the Group’s internal processes
and when all reasonably expected recoverable amounts have been collected. Subsequent recoveries of amounts previously written off
are credited to the income statement. The timing and extent of write-offs may involve some element of subjective judgement.
Nevertheless, a write-off will often be prompted by a specific event, such as the inception of insolvency proceedings or other formal
recovery action, which makes it possible to establish that some or the entire advance is beyond realistic prospect of recovery.
Accounting for purchased financial guarantee contracts
The Group may enter into a financial guarantee contract which requires the issuer of such contract to reimburse the Group for a loss it
incurs because a specified debtor fails to make payment when due in accordance with the terms of a debt instrument. For these
separate financial guarantee contracts, the Group recognises a reimbursement asset aligned with the recognition of the underlying
ECLs, if it is considered virtually certain that a reimbursement would be received if the specified debtor fails to make payment when due
in accordance with the terms of the debt instrument.
Loan modifications and renegotiations that are not credit-impaired
When modification of a loan agreement occurs as a result of commercial restructuring activity rather than due to the credit risk of the
borrower, an assessment must be performed to determine whether the terms of the new agreement are substantially different from
the terms of the existing agreement. This assessment considers both the change in cash flows arising from the modified terms as well
as the change in overall instrument risk profile. In respect of payment holidays granted to borrowers which are not due to forbearance, if
the revised cash flows on a present value basis (based on the original EIR) are not substantially different from the original cash flows, the
loan is not considered to be substantially modified.
Where terms are substantially different, the existing loan will be derecognised and a new loan will be recognised at fair value, with any
difference in valuation recognised immediately within the income statement, subject to observability criteria.
Where terms are not substantially different, the loan carrying value will be adjusted to reflect the present value of modified cash flows
discounted at the original EIR, with any resulting gain or loss recognised immediately within the income statement as a modification gain
or loss.
Note 1 sets out details for changes in the basis of determining the contractual cash flows of a financial instrument that are required by
interest rate benchmark reform.
Expected life
Lifetime ECLs must be measured over the expected life. This is restricted to the maximum contractual life and takes into account
expected prepayment, extension, call and similar options. The exceptions are certain revolving financial instruments, such as credit
cards and bank overdrafts, that include both a drawn and an undrawn component where the entity’s contractual ability to demand
repayment and cancel the undrawn commitment does not limit the entity’s exposure to credit losses to the contractual notice period.
For revolving facilities, expected life is analytically derived to reflect the behavioural life of the asset, i.e. the full period over which the
business expects to be exposed to credit risk. Behavioural life is typically based upon historical analysis of the average time to default,
closure or withdrawal of facility. Where data is insufficient or analysis inconclusive, an additional ‘maturity factor’ may be incorporated to
reflect the full estimated life of the exposures, based upon experienced judgement and/or peer analysis. Potential future modifications
of contracts are not taken into account when determining the expected life or EAD until they occur.
Discounting
ECLs are discounted at the EIR at initial recognition or an approximation thereof and consistent with income recognition. For loan
commitments the EIR is the rate that is expected to apply when the loan is drawn down and a financial asset is recognised. Issued
financial guarantee contracts are discounted at the risk free rate. Lease receivables are discounted at the rate implicit in the lease. For
variable/floating rate financial assets, the spot rate at the reporting date is used and projections of changes in the variable rate over the
expected life are not made to estimate future interest cash flows or for discounting.
Modelling techniques
The regulatory Basel Committee of Banking Supervisors (BCBS) ECL calculations are leveraged for IFRS 9 modelling but adjusted for
key differences which include:
▪ BCBS requires 12 month through the economic cycle losses whereas IFRS 9 requires 12 months or lifetime point in time losses based
on conditions at the reporting date and multiple forecasts of the future economic conditions over the expected lives;
▪
IFRS 9 models do not include certain conservative BCBS model floors and downturn assessments and require discounting to the
reporting date at the original EIR rather than using the cost of capital to the date of default;
▪ Management adjustments are made to modelled output to account for situations where known or expected risk factors and
information have not been considered in the modelling process, for example forecast economic scenarios for uncertain political
events; and
▪ ECL is measured at the individual financial instrument level, however a collective approach where financial instruments with similar
risk characteristics are grouped together, with apportionment to individual financial instruments, is used where effects can only be
seen at a collective level, for example for forward-looking information.
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Notes to the financial statements (continued)
For the year ended 31 December 2022
For the IFRS 9 impairment assessment, the Group’s risk models are used to determine the PD, LGD and EAD. For Stage 2 and 3, the
Group applies lifetime PDs but uses 12 month PDs for Stage 1. The ECL drivers of PD, EAD and LGD are modelled at an account level
which considers vintage, among other credit factors. Also, the assessment of significant increase in credit risk is based on the initial
lifetime PD curve, which accounts for the different credit risk underwritten over time.
Forbearance
A financial asset is subject to forbearance when it is modified due to the credit distress of the borrower. A modification made to the
terms of an asset due to forbearance will typically be assessed as a non-substantial modification that does not result in derecognition of
the original loan, except in circumstances where debt is exchanged for equity.
Both performing and non-performing forbearance assets are classified as Stage 3 except where it is established that the concession
granted has not resulted in diminished financial obligation and that no other regulatory definition of default criteria have been triggered,
in which case the asset is classified as Stage 2. The minimum probationary period for non-performing forbearance is 12 months and for
performing forbearance, 24 months. Hence, a minimum of 36 months is required for non-performing forbearance to move out of a
forborne state.
No financial instrument in forbearance can transfer back to Stage 1 until all of the Stage 2 thresholds are no longer met and can only
move out of Stage 3 when no longer credit impaired.
Critical accounting estimates and judgements
IFRS 9 impairment involves several important areas of judgement, including estimating forward-looking modelled parameters (PD, LGD
and EAD), developing a range of unbiased future economic scenarios, estimating expected lives and assessing significant increases in
credit risk, based on the Group’s experience of managing credit risk. The determination of expected life is most material for Barclays'
credit card portfolios which is obtained via behavioural life analysis to materially capture the risk of these facilities.
Within the retail and small businesses portfolios, which comprise large numbers of small homogenous assets with similar risk characteristics
where credit scoring techniques are generally used, the impairment allowance is calculated using forward-looking modelled parameters which
are typically run at account level. There are many models in use, each tailored to a product, line of business or customer category. Judgement
and knowledge is needed in selecting the statistical methods to use when the models are developed or revised. Management adjustments to
impairment models, which contain an element of subjectivity, are applied in order to factor in certain conditions or changes in policy that are not
fully incorporated into the impairment models, or to reflect additional facts and circumstances at the period end. Management adjustments are
reviewed and incorporated into future model development where appropriate. The impairment charge reflected in the income statement for
retail portfolios is £976m (2021: £289m release; 2020: £3,116m charge) of the total impairment charge on loans and advances and off-balance
sheet loan commitments and financial guarantee contracts.
For individually significant assets in Stage 3, impairment allowances are calculated on an individual basis and all relevant considerations that have
a bearing on the expected future cash flows across a range of economic scenarios are taken into account. These considerations can be
particularly subjective and can include the business prospects for the customer, the realisable value of collateral, the Group’s position relative to
other claimants, the reliability of customer information and the likely cost and duration of the work-out process. The level of the impairment
allowance is the difference between the value of the discounted expected future cash flows (discounted at the loan’s original effective interest
rate), and its carrying amount. Furthermore, judgements change with time as new information becomes available or as work-out strategies
evolve, resulting in frequent revisions to the impairment allowance as individual decisions are taken. Changes in these estimates would result in a
change in the allowances and have a direct impact on the impairment charge. The impairment charge reflected in the financial statements in
relation to wholesale portfolios is £207m (2021: £346m release; 2020: £1,569m charge) of the total impairment charge on loans and advances
and off-balance sheet loan commitments and financial guarantee contracts.
Further information on impairment allowances, impairment charges, management adjustments to models for impairment, measurement
uncertainty, sensitivity analysis and related credit information is set out within the Credit risk performance section.
Temporary adjustments to calculated IFRS9 impairment allowances may be applied in limited circumstances to account for situations where
known or expected risk factors or information have not been considered in the ECL assessment or modelling process. For further information
please see page 315 in the Credit risk performance section.
Information about the potential impact of the physical and transition risks of climate change on borrowers is considered, taking into account
reasonable and supportable information to make accounting judgements and estimates. Climate change is inherently of a long-term nature,
with significant levels of uncertainty, and consequently requires judgement in determining the possible impact in the next financial year, if any.
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Notes to the financial statements (continued)
For the year ended 31 December 2022
2022
Recoveries
and
reimburse-
mentsa
Impairment
Charges/
(Releases)
£m
£m
2021
Recoveries
and
reimburse-
ments
Impairment
Charges/
(Releases)
£m
£m
Total
£m
2020
Recoveries
and
reimburse-
ments
Impairment
Charges/
(Releases)
£m
£m
Total
£m
Total
£m
1,428
(263)
1,165
(361)
240
(121)
4,308
(399)
3,909
18
1,446
—
18
(263)
1,183
(514)
(875)
—
240
(514)
(635)
776
5,084
—
776
(399)
4,685
28
—
28
(4)
—
(4)
9
—
9
—
(8)
(6)
—
—
—
(8)
(6)
149
2
2
—
—
—
2
2
149
Loans and advances at amortised
cost
Off-balance sheet loan
commitments and financial
guarantee contracts
Total
Cash collateral and settlement
balances
Financial instruments at fair value
through other comprehensive
income
Other financial assets measured
at cost
Credit impairment charges/
(releases)
1,483
(263)
1,220
(893)
240
(653)
5,237
(399)
4,838
Note
a Recoveries and reimbursements includes a net increase in amounts recoverable from financial guarantee contracts held with third parties of £199m (2021: £(306)m) and cash recoveries of previously
written off amounts of £64m (2021: £66m).
Write-offs that can be subjected to enforcement activity
The contractual amount outstanding on financial assets that were written off during the year and that can still be subjected to
enforcement activity is £949m (2021: £1,190m). This is lower than the write-offs presented in the movement in gross exposures and
impairment allowance table due to assets sold during the year post write-offs and post write-off recoveries.
Modification of financial assets
Financial assets of £2,412m (2021: £3,446m), with a loss allowance measured at an amount equal to lifetime ECL, were subject to non-
substantial modification during the year, with a resulting loss of £4m (2021: £11m). The gross carrying amount of financial assets
subject to non-substantial modification for which the loss allowance has changed to a 12 month ECL during the year amounts to
£1,077m (2021: £419m).
9 Tax
Accounting for income taxes
The Group applies IAS 12 Income Taxes in accounting for taxes on income. Income tax payable on taxable profits (current tax) is
recognised as an expense in the periods in which the profits arise. Withholding taxes are also treated as income taxes. Income tax
recoverable on tax allowable losses is recognised as a current tax asset only to the extent that it is regarded as recoverable by offsetting
against taxable profits arising in the current or prior periods. Current tax is measured using tax rates and tax laws that have been
enacted or substantively enacted at the balance sheet date.
Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised. Deferred tax liabilities are
recognised for all taxable temporary differences except for the initial recognition of goodwill. Deferred tax is not recognised where the
temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at
the time of the transaction, affects neither the accounting profit nor taxable profit or loss. Deferred tax is determined using tax rates
and legislation enacted or substantively enacted by the balance sheet date which are expected to apply when the deferred tax asset is
realised or the deferred tax liability is settled. Deferred tax assets and liabilities are only offset when there is both a legal right to set-off
and an intention to settle on a net basis.
The Group considers an uncertain tax position to exist when it considers that ultimately, in the future, the amount of profit subject to
tax may be greater than the amount initially reflected in the Group’s tax returns. The Group accounts for provisions in respect of
uncertain tax positions in two different ways.
A current tax provision is recognised when it is considered probable that the outcome of a review by a tax authority of an uncertain tax
position will alter the amount of cash tax due to, or from, a tax authority in the future. From recognition, the current tax provision is then
measured at the amount the Group ultimately expects to pay the tax authority to resolve the position. The accrual of interest and
penalty amounts in respect of uncertain income tax positions is recognised as an expense within profit before tax.
Deferred tax provisions are adjustments made to the carrying value of deferred tax assets in respect of uncertain tax positions. A
deferred tax provision is recognised when it is considered probable that the outcome of a review by a tax authority of an uncertain tax
position will result in a reduction in the carrying value of the deferred tax asset. From recognition of a provision, measurement of the
underlying deferred tax asset is adjusted to take into account the expected impact of resolving the uncertain tax position on the loss or
temporary difference giving rise to the deferred tax asset.
The approach taken to measurement takes account of whether the uncertain tax position is a discrete position that will be reviewed by
the tax authority in isolation from any other position, or one of a number of issues which are expected to be reviewed together
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Notes to the financial statements (continued)
For the year ended 31 December 2022
concurrently and resolved simultaneously with a tax authority. The Group’s measurement of provisions is based upon its best estimate
of the additional profit that will become subject to tax. For a discrete position, consideration is given only to the merits of that position.
Where a number of issues are expected to be reviewed and resolved together, the Group will take into account not only the merits of its
position in respect of each particular issue but also the overall level of provision relative to the aggregate of the uncertain tax positions
across all the issues that are expected to be resolved at the same time. In addition, in assessing provision levels, it is assumed that tax
authorities will review uncertain tax positions and that all facts will be fully and transparently disclosed.
Critical accounting estimates and judgements
There are two key areas of judgement that impact the reported tax position. Firstly, the level of provisioning for uncertain tax positions;
and secondly, the recognition and measurement of deferred tax assets.
The Group does not consider there to be a significant risk of a material adjustment to the carrying amount of current and deferred tax
balances, including provisions for uncertain tax positions in the next financial year. The provisions for uncertain tax positions cover a
diverse range of issues and reflect advice from external counsel where relevant. It should be noted that only a proportion of the total
uncertain tax positions will be under audit at any point in time, and could therefore be subject to challenge by a tax authority over the
next year.
Deferred tax assets have been recognised based on business profit forecasts. Details on the recognition of deferred tax assets are
provided in this note.
Current tax charge/(credit)
Current year
Adjustments in respect of prior years
Deferred tax charge/(credit)
Current year
Adjustments in respect of prior years
2022
£m
1,045
(444)
601
235
203
438
Restateda
2021
£m
1,417
317
1,734
(352)
(244)
(596)
Tax charge
1,039
1,138
Note
a 2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Restatement of financial statements (Note 1a) on page 428 for further details.
2020
£m
1,255
31
1,286
(830)
148
(682)
604
In 2022 the adjustments in respect of prior years are principally a result of various steps taken in the US and UK tax groups that have
affected the timing of the tax deductibility of expenditure related to fixed assets. Across the Barclays Bank PLC’s US Branch Tax Group
and US Intermediate Holding Company Tax Group ('IHC Tax Group'), elections have been made in 2022 to advance tax deductions in
relation to fixed assets that would otherwise have arisen in later periods. Those elections resulted in a current tax credit in respect of
prior years of £556m and a deferred tax charge in respect of prior years of a similar amount. In the UK Tax Group various tax claims and
elections will have the effect of deferring the timing of deductions related to plant and machinery and this has resulted in a current tax
charge in respect of prior years of £167m and a deferred tax credit in respect of prior years of 213m.
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For the year ended 31 December 2022
The table below shows the reconciliation between the actual tax charge and the tax charge that would result from applying the standard
UK corporation tax rate to the Group’s profit before tax.
Profit before tax
Tax charge based on the standard UK corporation tax rate of 19% (2021:
19%; 2020: 19% )
Impact of profits/losses earned in territories with different statutory rates
to the UK (weighted average tax rate is 21.4% (2021: 22.4%; 2020: 25.1% ))
Recurring items:
Non-creditable taxes including withholding taxes
Banking surchargeb and other items
Non-deductible expenses
Impact of UK bank levy being non-deductible
Impact of Barclays Bank PLC's overseas branches being taxed both locally
and in the UK
Tax adjustments in respect of share-based payments
Non-taxable gains and income
Changes in recognition of deferred tax and effect of unrecognised tax
losses
Tax relief on payments made under AT1 instruments
Adjustments in respect of prior years
Tax relief on holdings of inflation-linked government bonds
Non-recurring items:
Remeasurement of UK deferred tax assets due to tax rate changes
Non-deductible provisions for investigations and litigation
Non-deductible provisions for UK customer redress
Total tax charge
Restateda
Restateda
2022
£m
7,012
2022
%
2021
£m
8,194
2021
%
2020
£m
3,065
2020
%
1,332
19.0%
1,557
19.0%
582
19.0%
167
2.4%
277
3.4%
188
6.1%
126
101
51
33
17
13
1.8%
1.4%
0.7%
0.5%
0.2%
0.2%
134
83
80
32
25
(5)
(135)
(1.9%)
(198)
(146)
(172)
(241)
(556)
(2.1%)
(2.4%)
(3.4%)
(7.9%)
(140)
(149)
73
(169)
1.6%
1.0%
1.0%
0.4%
0.3%
(0.1%)
(2.4%)
(1.7%)
(1.8%)
0.9%
(2.1%)
109
6
48
57
25
26
3.5%
0.2%
1.6%
1.9%
0.8%
0.8%
(185)
(6.0%)
(123)
(165)
179
(23)
(4.0%)
(5.4%)
5.8%
(0.8%)
(3.8%)
0.2%
(0.2%)
346
93
10
4.9%
1.3%
0.1%
(462)
(5.6%)
(118)
—
—
—
—
5
(7)
1,039
14.8%
1,138
13.9%
604
19.7%
Notes
a 2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Restatement of financial statements (Note 1a) on page 428 for further details.
b Banking surcharge includes the impact of the 8% UK banking surcharge rate on profits/losses and tax adjustments relating to UK banking entities.
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For the year ended 31 December 2022
Factors driving the effective tax rate
The effective tax rate of 14.8% is lower than the UK corporation tax rate of 19% primarily due to tax relief on holdings of inflation-linked
government bonds, beneficial prior year adjustments, tax relief on payments made under AT1 instruments and the utilisation of
unrecognised tax losses in the period. These factors, which have each decreased the effective tax rate, are partially offset by
adjustments for the remeasurement of UK deferred tax assets as a result of the enactment during 2022 of a reduction in the banking
surcharge rate to 3% from 1 April 2023 and profits earned outside the UK being taxed at local statutory tax rates that are higher than
the UK tax rate.
The Group’s future tax charge will be sensitive to the geographic mix of profits earned, the tax rates in force and changes to the tax
rules in the jurisdictions that the Group operates in.
In its Autumn Statement held in November 2022, the UK Government confirmed that, as currently enacted, the banking surcharge rate
will be reduced from 8% to 3% from 1 April 2023. UK deferred tax assets as at 31 December 2022 are measured at this rate, having
been remeasured when the 3% rate was substantively enacted in 2022. The statutory tax rate applicable to banks' UK profits will
therefore be 28% (comprising a rate of 25% for corporation tax and of 3% for banking surcharge) from 1 April 2023.
The OECD and G20 Inclusive Framework on Base Erosion and Profit Shifting announced plans to introduce a global minimum tax rate of
15% and the OECD issued model rules in 2021. During 2022 further OECD guidance has been released and draft legislation to
implement the global minimum tax regime has been published by the UK Government. The UK Government has stated that it intends to
enact legislation in 2023 to apply for accounting periods beginning on or after 31 December 2023. The Group has reviewed the
published OECD model rules and further guidance along with the draft UK legislation and has been assessing the expected impact
ahead of the implementation of the new regime. The Group will review further guidance as well as new legislation expected to be
released by governments implementing this new tax regime and continue to assess the potential impact.
In the USA, the Inflation Reduction Act was enacted in August 2022. The Act does not include changes to the US corporate income tax
rate or to US international tax provisions included in the previously proposed Build Back Better Act but does introduce a corporate
alternative minimum tax on adjusted financial statements income, effective from 1 January 2023. Further regulations and guidance are
expected to be published in 2023, however the Group’s preliminary view is that the alternative minimum tax is not expected to
materially increase the Group’s effective tax rate. The Group will review future guidance when it is published and continue to monitor
other legislative developments and assess the potential impact.
Tax in the consolidated statement of comprehensive income
The tax relating to each component of other comprehensive income can be found in the consolidated statement of comprehensive
income . The total amount recognised in relation to the remeasurement of UK deferred tax through other comprehensive income was
a £28m charge (2021: £111m).
Tax included directly in equity
Tax included directly in equity comprises a £1m credit (2021: £58m) relating to share-based payments and deductible costs on issuing
other equity instruments.
Deferred tax assets and liabilities
The deferred tax amounts on the balance sheet were as follows:
UK Tax Group
IHC Tax Group
Barclays Bank PLC's US Branch Tax Group
Other (outside the UK and US tax groups)
Deferred tax asset
Deferred tax liability
Net deferred tax
2022
£m
4,925
1,094
482
490
6,991
(16)
6,975
2021
£m
2,183
1,004
1,002
430
4,619
(37)
4,582
US deferred tax assets in the IHC and US Branch Tax Groups
The deferred tax asset in the IHC Tax Group of £1,094m (2021: £1,004m) includes £21m (2021: £1m) relating to tax losses, with the
balance relating to temporary differences. The deferred tax asset in Barclays Bank PLC’s US Branch Tax Group of £482m (2021:
£1,002m) relates entirely to temporary differences.
In relation to the IHC Tax Group, these temporary differences include £434m (2021: £301m) arising from New York State and City prior
net operating loss conversion which can be carried forward and will expire in 2034. Business profit forecasts indicate these amounts will
be fully recovered before expiry.
UK Tax Group deferred tax asset
The deferred tax asset in the UK Tax Group of £4,925m (2021: £2,183m) includes £1,535m (2021: £1,098m) relating to tax losses, with
the balance relating to temporary differences. There is no time limit on utilisation of UK tax losses and business profit forecasts indicate
that these losses will be fully recovered.
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For the year ended 31 December 2022
Other deferred tax assets (outside the UK and US tax groups)
The deferred tax asset of £490m (2021: £430m) in other entities within the Group includes £90m (2021: £121m) relating to tax losses.
These deferred tax assets relate to a number of different territories and their recognition is based on profit forecasts or local country
law which indicate that it is probable that those deferred tax assets will be fully recovered.
Of the deferred tax asset of £490m (2021: £430m), an amount of £33m (2021: £9m) relates to entities which have suffered a loss in
either the current or prior year and for which the utilisation of the deferred tax is dependent on future taxable profits. This has been
taken into account in reaching the above conclusion that these deferred tax assets will be fully recovered in the future.
The table below shows movements on deferred tax assets and liabilities during the year. The amounts are different from those
disclosed on the balance sheet and in the preceding table as they are presented before offsetting asset and liability balances where
there is a legal right to set-off and an intention to settle on a net basis.
Fixed asset
timing
differences
Fair value
through other
comprehensive
income
Cash flow
hedges
Retirement
benefit
obligations
Loan
impairment
allowance
Own credit
Share-based
payments and
deferred
compensation
£m
1,647
(42)
1,605
(458)
—
72
1,219
1,296
(77)
£m
155
—
155
(6)
523
3
675
675
—
£m
521
—
521
—
2,354
—
2,875
2,875
£m
40
(1,674)
(1,634)
£m
693
—
693
(3)
(11)
£m
426
—
426
—
£m
414
—
414
14
357
5
(1,275)
40
—
(1,315)
—
20
702
702
—
(616)
(17)
—
(190)
—
(190)
22
433
433
—
Other
temporary
differences
Tax losses
carried
forward
£m
£m
Total
£m
1,248
1,220
6,364
(66)
1,182
(400)
—
108
890
1,280
(390)
—
(1,782)
1,220
426
—
—
1,646
1,646
4,582
(438)
2,601
230
6,975
8,947
—
(1,972)
1,219
675
2,875
(1,275)
702
(190)
433
890
1,646
6,975
1,465
(41)
1,424
184
—
(3)
1,605
1,647
(42)
1,605
—
(38)
(38)
(6)
198
1
155
155
—
155
—
(566)
(566)
—
43
(826)
(783)
5
1,088
(855)
666
—
666
39
—
329
—
329
—
98
(1)
(1)
(12)
(1)
521
521
—
521
(1,634)
40
(1,674)
(1,634)
693
693
—
693
426
426
—
426
363
—
363
12
36
3
414
414
—
414
1,378
(79)
1,299
(123)
(1)
7
735
—
735
485
—
—
1,182
1,248
1,220
1,220
4,979
(1,550)
3,429
596
564
(7)
4,582
6,364
(66)
—
(1,782)
1,182
1,220
4,582
Assets
Liabilities
As at 1 January 2022
Income statement
Other comprehensive
income and reserves
Other movements
Assets
Liabilities
As at 31 December
2022
Assets
Liabilities
As at 1 January 2021
Income statement
Other comprehensive
income and reserves
Other movements
Assets
Liabilities
As at 31 December
2021
Other movements include the impact of changes in foreign exchange rates as well as deferred tax amounts relating to acquisitions and
disposals.
The amount of deferred tax assets expected to be recovered after more than 12 months is £8,155m (2021: £5,886m). The amount of
deferred tax liability expected to be settled after more than 12 months is £1,864m (2021: £1,778m). These amounts are before
offsetting asset and liability balances where there is a legal right to set-off and an intention to settle on a net basis.
Unrecognised deferred tax
Tax losses and temporary differences
Deferred tax assets have not been recognised in respect of gross deductible temporary differences of £111m (2021: £110m), unused
tax credits of £323m (2021: £283m), and gross tax losses of £22,537m (2021: £22,835m). The tax losses include capital losses of
£3,935m (2021: £3,981m). Of these tax losses, £149m (2021: £63m) expire within five years, £401m (2021: £370m) expire within six to
ten years, £10,393m (2021: £10,529m) expire within 11 to 20 years and £11,594m (2021: £11,873m) can be carried forward indefinitely.
Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profits and gains
will be available against which they can be utilised.
Group investments in subsidiaries, branches and associates
Deferred tax is not recognised in respect of the value of the Group's investments in subsidiaries, branches and associates where the
Group is able to control the timing of the reversal of the temporary differences and it is probable that such differences will not reverse in
the foreseeable future. The aggregate amount of these temporary differences for which deferred tax liabilities have not been
recognised was £852m (2021: £858m).
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For the year ended 31 December 2022
10 Earnings per share
Profit attributable to ordinary equity holders of the parent
Basic weighted average number of shares in issue
Number of potential ordinary shares
Diluted weighted average number of shares
2022
£m
5,023
2022
million
16,333
534
16,867
Restateda
2021
£m
6,205
2021
million
16,985
435
17,420
Earnings per ordinary share
Basic earnings per share
Diluted earnings per share
2022
p
30.8
Restateda
2021
p
36.5
2020
p
8.8
2022
p
29.8
Restateda
2021
p
35.6
2020
£m
1,526
2020
million
17,300
368
17,668
2020
p
8.6
Note
a 2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Restatement of financial statements (Note 1a) on page 428 for further details.
The calculation of basic earnings per share is based on the profit attributable to equity holders of the parent and the basic weighted
average number of shares excluding treasury shares held in employee benefit trusts or held for trading. When calculating the diluted
earnings per share, the weighted average number of shares in issue is adjusted for the effects of all expected dilutive potential ordinary
shares held in respect of Barclays PLC, totalling 534m (2021: 435m) shares. The total number of share options outstanding, under
schemes considered to be potentially dilutive, was 789m (2021: 688m). These options have strike prices ranging from £0.84 to £1.66.
Of the total number of employee share options and share awards at 31 December 2022, 27m (2021: 5m) were anti-dilutive.
The 652m decrease (2021: 315m decrease) in the basic weighted average number of shares is primarily due to the impact of the share
buy-back programmes completed in the year.
11 Dividends on ordinary shares
The Directors have approved a total dividend in respect of 2022 of 7.25p per ordinary share of 25p each. The full year dividend for 2022
of 5.00p per ordinary share will be paid on 31 March 2023 to shareholders on the Share Register on 24 February 2023. On 31 December
2022, there were 15,871m ordinary shares in issue. The financial statements for the year ended 31 December 2022 do not reflect this
dividend, which will be accounted for in shareholders’ equity as an appropriation of retained profits in the year ending 31 December
2023.
The Directors have confirmed their intention to initiate a share buyback of up to £500m after the balance sheet date. The proposed
share buyback is expected to commence in the first quarter of 2023. The financial statements for the year ended 31 December 2022
do not reflect the impact of the proposed share buyback, which will be accounted for as and when shares are repurchased by the
Company.
The 2022 financial statements include the 2022 interim dividend of £364m (2021: £339m); a full year dividend declared in relation to
2021 of £664m (2020: £173m) and two share buyback programmes totalling £1,500m (2021: £1,200m). Dividends and share buybacks
are funded out of distributable reserves.
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Notes to the financial statements (continued)
Assets and liabilities held at fair value
Assets and liabilities held at fair value
The notes included in this section focus on assets and liabilities the Group holds and recognises at fair value. Fair value refers to the
price that would be received to sell an asset or the price that would be paid to transfer a liability in an orderly transaction between market
participants at the measurement date, which may be an observable market price or, where there is no quoted price for the instrument,
may be an estimate based on available market data. Detail regarding the Group’s approach to managing market risk can be found in the
Market risk management section.
12 Trading portfolio
Accounting for trading portfolio assets and liabilities
In accordance with IFRS 9, all assets and liabilities held for trading purposes are held at fair value with gains and losses in the changes in
fair value taken to the income statement in net trading income (Note 5).
Debt securities and other eligible bills
Equity securities
Traded loans
Commodities
Trading portfolio assets
Trading portfolio liabilities
2022
£m
55,475
65,031
13,198
109
2021
£m
50,864
83,113
12,525
533
2022
£m
(39,531)
(33,393)
—
—
2021
£m
(34,957)
(19,212)
—
—
Trading portfolio assets/(liabilities)
133,813
147,035
(72,924)
(54,169)
13 Financial assets at fair value through the income statement
Accounting for financial assets mandatorily at fair value
Financial assets that are held for trading are recognised at fair value through profit or loss. In addition, financial assets are held at fair
value through profit or loss if they do not contain contractual terms that give rise on specified dates to cash flows that are SPPI, or if the
financial asset is not held in a business model that is either (i) a business model to collect the contractual cash flows or (ii) a business
model that is achieved by both collecting contractual cash flows and selling.
Accounting for financial assets designated at fair value
Financial assets, other than those held for trading, are classified in this category if they are so irrevocably designated at inception and
the use of the designation removes or significantly reduces an accounting mismatch.
Subsequent changes in fair value for these instruments are recognised in the income statement in net investment income, except if
reporting it in trading income reduces an accounting mismatch.
The details on how the fair value amounts are derived for financial assets at fair value are described in Note 17.
Loans and advances
Debt securities
Equity securities
Reverse repurchase agreements and other
similar secured lending
Other financial assets
Financial assets at fair value through the
income statement
Designated at fair value
Mandatorily at fair value
Total
2022
£m
3,658
205
—
—
1
2021
£m
5,579
319
—
—
—
2022
£m
35,771
3,044
6,091
2021
£m
33,088
1,986
5,875
2022
£m
39,429
3,249
6,091
2021
£m
38,667
2,305
5,875
164,681
145,014
164,681
145,014
117
111
118
111
3,864
5,898
209,704
186,074
213,568
191,972
Credit risk of financial assets designated at fair value and related credit derivatives
The following table shows the maximum exposure to credit risk, the changes in fair value attributable to changes in credit risk, and the
cumulative changes in fair value since initial recognition for loans and advances. The table does not include debt securities and reverse
repurchase agreements and other similar secured lending designated at fair value as they have minimal exposure to credit risk. Reverse
repurchase agreements are collateralised and debt securities are primarily relating to high quality sovereigns.
Loans and advances designated at fair value,
attributable to credit risk
Value mitigated by related credit derivatives
Maximum exposure as at 31 December
Changes in fair value during the year
ended
Cumulative changes in fair value from
inception
2022
£m
3,658
855
2021
£m
5,579
1,617
2022
£m
10
2021
£m
5
(1)
(3)
2022
£m
(9)
(1)
2021
£m
(19)
(3)
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Notes to the financial statements (continued)
Assets and liabilities held at fair value
14 Derivative financial instruments
Accounting for derivatives
Derivative instruments are contracts whose value is derived from one or more underlying financial instruments or indices defined in the
contract. They include swaps, forward-rate agreements, futures, options and combinations of these instruments and primarily affect
the Group’s net interest income, net trading income and derivative assets and liabilities. Notional amounts of the contracts are not
recorded on the balance sheet. Derivatives are used to hedge interest rate, credit risk, inflation risk, exchange rate, commodity equity
exposures, and exposures to certain indices such as house price indices and retail price indices related to non-trading positions.
All derivative instruments are held at fair value through profit or loss, except for derivatives that are in a designated cash flow or net
investment hedge accounting relationship. Derivatives are classified as assets when their fair value is positive or as liabilities when their
fair value is negative. This includes terms included in a contract or financial liability (the host), which, had it been a standalone contract,
would have met the definition of a derivative. If these are separated from the host, i.e. when the economic characteristics of the
embedded derivative are not closely related with those of the host contract and the combined instrument is not measured at fair value
through profit or loss, then they are accounted for in the same way as derivatives. For financial assets, the requirements are whether
the financial assets contain contractual terms that give rise on specified dates to cash flows that are SPPI, and consequently the
requirements for accounting for embedded derivatives are not applicable to financial assets.
Hedge accounting
The Group applies the requirements of IAS 39 Financial Instruments: Recognition and Measurement for hedge accounting purposes.
The Group applies hedge accounting to represent the economic effects of its interest rate, currency and contractually-linked inflation
risk management strategies. Where derivatives are held for risk management purposes, and when transactions meet the required
criteria for documentation and hedge effectiveness, the Group applies fair value hedge accounting, cash flow hedge accounting, or
hedging of a net investment in a foreign operation, as appropriate to the risks being hedged.
The Group applies the ‘Amendments to IFRS 9, IAS 39 and IFRS 7 Interest Rate Benchmark Reform’ issued in September 2019 (the
Phase 1 amendments). The amendments provide temporary relief from applying specific hedge accounting requirements to hedging
relationships directly affected by IBOR (‘Interbank Offered Rates’) reform. The reliefs have the effect that IBOR reform should not
generally cause hedge accounting to terminate. However, any hedge ineffectiveness continues to be recorded in the income
statement. Furthermore, the amendments set out triggers for when the reliefs will end, which include the uncertainty arising from
interest rate benchmark reform no longer being present.
In summary, the reliefs provided by the Phase 1 amendments are:
▪ When considering the ‘highly probable’ requirement, the Group has assumed that the IBOR interest rates upon which our hedged
items are based do not change as a result of IBOR Reform.
▪
In assessing whether the hedge is expected to be highly effective on a forward-looking basis the Group has assumed that the IBOR
interest rates upon which the cash flows of the hedged items and the interest rate swaps that hedge them are based are not altered
by IBOR reform.
▪ The Group will not discontinue hedge accounting during the period of IBOR-related uncertainty solely because the retrospective
effectiveness falls outside the required 80–125% range.
▪ The Group has not recycled the cash flow hedge reserve relating to the period after the reforms are expected to take effect.
▪ The Group has assessed whether the hedged IBOR risk component is a separately identifiable risk only when it first designates a
hedged item in a fair value hedge and not on an ongoing basis.
The Group also applies the ‘Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform – Phase 2’
issued in August 2020. The Phase 2 amendments provide relief when changes are made to hedge relationships as a result of the
interest rate benchmark reform.
In summary, the reliefs provided by the Phase 2 amendments are:
▪ Under a temporary exception, the Group has considered that changes to the hedge designation and hedge documentation due to
the interest rate benchmark reform would not constitute the discontinuation of the hedge relationship nor the designation of a new
hedging relationship.
▪
In respect of the retrospective hedge effectiveness assessment, the Group may elect, on a hedge-by-hedge basis, to reset the
cumulative fair value changes to zero when the exception to the retrospective assessment ends (Phase 1 relief). Any hedge
ineffectiveness will continue to be measured and recognised in full in profit or loss.
▪ The Group has deemed the amounts accumulated in the cash flow hedge reserve to be based on the alternative benchmark rate (on
which the hedge future cash flows are determined) when there is a change in basis for determining the contractual cash flows.
▪ For hedges of groups of items (such as those forming part of a macro cash flow hedging strategy), the amendments provide relief for
items within a designated group of items that are amended for changes directly required by the reform.
▪
In respect of whether a risk component of a hedged item is separately identifiable, the amendments provide temporary relief to
entities to meet this requirement when an alternative risk free rate (RFR) financial instrument is designated as a risk component.
These amendments allow the Group upon designation of the hedge to assume that the separately identifiable requirement is met if
the Group reasonably expects the RFR risk will become separately identifiable within the next 24 months. The Group applies this relief
to each RFR on a rate-by-rate basis and starts when the Group first designates the RFR as a non-contractually specified risk
component.
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Notes to the financial statements (continued)
Assets and liabilities held at fair value
Fair value hedge accounting
Changes in fair value of derivatives that qualify and are designated as fair value hedges are recorded in the income statement, together
with changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. The fair value changes adjust the
carrying value of the hedged asset or liability held at amortised cost.
If hedge relationships no longer meet the criteria for hedge accounting, hedge accounting is discontinued. For fair value hedges of
interest rate risk, the fair value adjustment to the hedged item is amortised to the income statement over the period to maturity of the
previously designated hedge relationship using the effective interest method. If the hedged item is sold or repaid, the unamortised fair
value adjustment is recognised immediately in the income statement. For items classified as fair value through other comprehensive
income, the hedge accounting adjustment is included in other comprehensive income.
Cash flow hedge accounting
For qualifying cash flow hedges, the fair value gain or loss associated with the effective portion of the cash flow hedge is recognised
initially in other comprehensive income, and then recycled to the income statement in the periods when the hedged item will affect
profit or loss. Any ineffective portion of the gain or loss on the hedging instrument is recognised in the income statement immediately.
When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain
or loss existing in equity at that time remains in equity and is recognised when the hedged item is ultimately recognised in the income
statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was recognised in equity is
immediately transferred to the income statement.
Hedges of net investments
The Group’s net investments in foreign operations, including monetary items accounted for as part of the net investment, are hedged
for foreign currency risks using both derivatives and foreign currency borrowings. Hedges of net investments are accounted for
similarly to cash flow hedges; the effective portion of the gain or loss on the hedging instrument is being recognised directly in other
comprehensive income and the ineffective portion being recognised immediately in the income statement. The cumulative gain or loss
recognised in other comprehensive income is recognised in the income statement on the disposal or partial disposal of the foreign
operation, or other reductions in the Group’s investment in the operation.
Total derivatives
Total derivative assets/(liabilities) held for trading
Total derivative assets/(liabilities) held for risk
management
2022
2021
Notional contract
amount
£m
Fair value
Assets
£m
Liabilities
£m
Notional
contract
amount
£m
Fair value
Assets
£m
Liabilities
£m
52,689,773
301,647
(288,573)
47,812,774
261,678
(255,747)
285,505
733
(1,047)
219,551
894
(1,136)
Derivative assets/(liabilities)
52,975,278
302,380
(289,620)
48,032,325
262,572
(256,883)
Further information on netting arrangements of derivative financial instruments can be found within Note 18.
The fair values and notional amounts of derivative instruments held for trading and held for risk management are set out in the following
table:
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Notes to the financial statements (continued)
Assets and liabilities held at fair value
Derivatives held for trading and held for risk management
Derivatives held for trading
Foreign exchange derivatives
OTC derivatives
Derivatives cleared by central counterparty
Exchange traded derivatives
Foreign exchange derivatives
Interest rate derivatives
OTC derivatives
Derivatives cleared by central counterparty
Exchange traded derivatives
Interest rate derivatives
Credit derivatives
OTC derivatives
Derivatives cleared by central counterparty
Credit derivatives
Equity and stock index derivatives
OTC derivatives
Exchange traded derivatives
Equity and stock index derivatives
Commodity derivatives
OTC derivatives
Exchange traded derivatives
Commodity derivatives
Derivative assets/(liabilities) held for trading
Total OTC derivatives
2022
2021
Notional
contract
amount
£m
Fair value
Assets
£m
Liabilities
£m
Notional
contract
amount
£m
Fair value
Assets
£m
Liabilities
£m
5,775,206
108,833
(103,439)
5,705,108
75,959
(74,226)
113,455
19,426
440
15
(473)
(6)
99,664
20,084
171
10
(208)
(3)
5,908,087
109,288
(103,918)
5,824,856
76,140
(74,437)
14,924,915
21,927,570
5,654,126
129,920
(116,752)
14,216,846
123,819
(113,051)
2,319
2,257
(2,371)
19,398,748
(2,167)
5,200,838
1,122
905
(845)
(907)
42,506,611
134,496
(121,290)
38,816,432
125,846
(114,803)
619,843
1,107,377
1,727,220
410,276
1,924,613
2,334,889
4,411
208,555
212,966
52,689,773
21,734,651
4,262
1,161
5,423
12,679
35,986
48,665
14
3,761
3,775
301,647
255,708
3,920
42,019
(4,731)
(1,321)
606,504
665,600
(6,052)
1,272,104
(16,724)
278,683
(36,774)
1,469,078
(53,498)
1,747,761
(51)
(3,764)
(3,815)
4,670
146,951
151,621
(288,573)
47,812,774
(241,697)
20,811,811
(4,165)
20,164,012
(42,711)
6,836,951
4,007
1,675
5,682
18,822
32,901
51,723
56
2,231
2,287
261,678
222,663
2,968
36,047
(4,752)
(1,809)
(6,561)
(24,468)
(33,174)
(57,642)
(107)
(2,197)
(2,304)
(255,747)
(216,604)
(2,862)
(36,281)
Total derivatives cleared by central counterparty
23,148,402
Total exchange traded derivatives
7,806,720
Derivative assets/(liabilities) held for trading
52,689,773
301,647
(288,573)
47,812,774
261,678
(255,747)
Derivatives held for risk management
Derivatives designated as cash flow hedges
OTC foreign exchange derivatives
OTC interest rate derivatives
Interest rate derivatives cleared by central
counterparty
Derivatives designated as cash flow hedges
Derivatives designated as fair value hedges
OTC interest rate derivatives
Interest rate derivatives cleared by central
counterparty
Derivatives designated as fair value hedges
Derivatives designated as hedges of net
investments
OTC foreign exchange derivatives
Derivatives designated as hedges of net
investments
Derivative assets/(liabilities) held for risk
management
Total OTC derivatives
Total derivatives cleared by central counterparty
Derivative assets/(liabilities) held for risk
management
11,946
266
143,271
155,483
7,814
118,246
126,060
3,962
3,962
285,505
23,988
261,517
285,505
549
—
—
549
83
—
83
101
101
733
733
—
733
(211)
(1)
—
(212)
7,592
788
105,933
114,313
(815)
8,480
—
94,335
(815)
102,815
(20)
2,423
(20)
2,423
(1,047)
(1,047)
—
219,551
19,283
200,268
(1,047)
219,551
798
0
—
798
59
—
59
37
37
894
894
—
894
—
(3)
—
(3)
(1,118)
(11)
(1,129)
(4)
(4)
(1,136)
(1,125)
(11)
(1,136)
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Notes to the financial statements (continued)
Assets and liabilities held at fair value
Hedge accounting
Hedge accounting is applied predominantly for the following risks:
▪
Interest rate risk – arises due to a mismatch between fixed interest rates and floating interest rates. Interest rate risk also includes
exposure to inflation risk for certain types of investments.
▪ Currency risk – arises due to assets or liabilities being denominated in different currencies than the functional currency of the relevant
entity. At a consolidated level, currency risk also arises when the functional currency of subsidiaries are different from the parent.
▪ Contractually linked inflation risk – arises from financial instruments within contractually specified inflation risk. The Group does not
hedge inflation risk that arises from other activities.
In order to hedge these risks, the Group uses the following hedging instruments:
Interest rate derivatives to swap interest rate exposures into either fixed or variable rates.
▪
▪ Currency derivatives to swap foreign currency exposures into the entity’s functional currency, and net investment exposure to local
currency.
▪
Inflation derivatives to swap inflation exposure into either fixed or variable interest rates.
In some cases, certain items which are economically hedged may be ineligible hedged items for the purposes of IAS 39, such as core
deposits and equity. In these instances, a proxy hedging solution can be utilised whereby portfolios of floating rate assets are
designated as eligible hedged items in cash flow hedges.
In some hedging relationships, the Group designates risk components of hedged items as follows:
▪ Benchmark interest rate risk as a component of interest rate risk, such as the LIBOR or Risk Free Rate (RFR) component.
▪
▪ Spot exchange rate risk for foreign currency financial assets or financial liabilities.
▪ Components of cash flows of hedged items, for example certain interest payments for part of the life of an instrument.
Inflation risk as a contractually specified component of a debt instrument.
Using the benchmark interest rate risk results in other risks, such as credit risk and liquidity risk, being excluded from the hedge
accounting relationship. Following market-wide interest rate benchmark reform, sensitivity to risk-free rates is considered to be the
predominant interest rate risk and therefore the hedged items (which often reference risk-free or similar 'overnight' rates) change in fair
value on a proportionate basis with reference to this risk.
In respect of many of the Group’s hedge accounting relationships, the hedged item and hedging instrument change frequently due to
the dynamic nature of the risk management and hedge accounting strategy. The Group applies hedge accounting to dynamic
scenarios, predominantly in relation to interest rate risk, with a combination of hedged items in order for its financial statements to
reflect as closely as possible the economic risk management undertaken. In some cases, if the hedge accounting objective changes,
the relevant hedge accounting relationship is de-designated and is replaced with a different hedge accounting relationship.
Changes in the GBP value of net investments due to foreign currency movements are captured in the currency translation reserve,
resulting in a movement in CET1 capital. The Group mitigates this by matching the CET1 capital movements to the revaluation of the
foreign currency RWA exposures. Net investment hedges are designated where necessary to reduce the exposure to movement in a
particular exchange rate to within limits mandated by Risk. As far as possible, existing external currency liabilities are designated as the
hedging instruments.
The hedging instruments share the same risk exposures as the hedged items. Hedge effectiveness is determined with reference to
quantitative tests, predominantly regression testing, but to the extent hedging instruments are exposed to different risks than the
hedged items, this could result in hedge ineffectiveness or hedge accounting failures.
Sources of ineffectiveness include the following:
▪ Mismatches between the contractual terms of the hedged item and hedging instrument, including basis differences.
▪ Changes in credit risk of the hedging instruments.
▪
If a hedging relationship becomes over-hedged, for example in hedges of net investments if the net asset value designated at the
start of the period falls below the amount of the hedging instrument.
▪ Cash flow hedges using external swaps with non-zero fair values.
▪ The effects of the reforms to IBOR because these might take effect at a different time and have a different impact on hedged items
and hedging instruments.
The Group's risk exposure continues, in part, to be affected by interest rate benchmark reform. In most cases, hedged items and
hedging instruments are expected to transition to relevant risk-free rates at the end of their current cash flow period. USD LIBOR,
Canadian Dollar Offerred Rate (CDOR) and Singapore Swap Offered Rate (SOR) linked hedge accounting relationships are still exposed
to uncertainty regarding the precise timing and effects of benchmark reform. USD LIBOR and SOR benchmarks will cease to be
published after 30 June 2023, CDOR - after 28 June 2024, but certain hedged items and hedging instruments continue to contractually
reference these benchmarks beyond the cessation date.
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Notes to the financial statements (continued)
Assets and liabilities held at fair value
The following table summarises the significant hedge accounting exposures impacted by the IBOR reform (see Note 41 for further
updates) as at 31 December 2022:
Current benchmark rate
Expected convergence to RFR
USD LIBOR
Secured Overnight Financing Rate (SOFR)
Singapore Swap Offered Rate (SOR)
Singapore Overnight Rate Average (SORA)
Canadian Dollar Offered Rate (CDOR) Overnight Repo Rate Average (CORRA)
Total IBOR Notionals
Nominal amount of hedged items
directly impacted by IBOR reform
Nominal amount of hedging
instruments directly impacted by
IBOR reform
£m
26,448
124
1,306
27,878
£m
35,678
124
1,335
37,137
The hedged items and hedging instruments are expected to be transitioned to SOFR and SORA by 30 June 2023 and CORRA by 28
June 2024.
Hedged items in fair value hedges
Accumulated fair value adjustment
included in carrying amount
Hedged item statement of financial position classification and
risk category
Carrying amount
£m
Total
£m
Of which:
Accumulated fair
value adjustment
on items no longer
in a hedge
relationship
Change in fair
value used as a
basis to determine
ineffectiveness
Hedge
ineffectiveness
recognised in the
income
statementsa
£m
£m
£m
2022
Assets
Loans and advances at amortised cost
- Interest rate risk
- Inflation risk
Debt securities classified at amortised cost
- Interest rate risk
- Inflation risk
Financial assets at fair value through other comprehensive
income
- Interest rate risk
- Inflation risk
Total assets
Liabilities
Debt securities in issue
- Interest rate risk
Total liabilities
Total hedged items
2021
Assets
Loans and advances at amortised cost
- Interest rate risk
- Inflation risk
Debt securities classified at amortised cost
- Interest rate risk
- Inflation risk
Financial assets at fair value through other comprehensive
income
- Interest rate risk
- Inflation risk
Total assets
Liabilities
Debt securities in issue
- Interest rate risk
Total liabilities
Total hedged items
Note
a Hedge ineffectiveness is recognised in net interest income.
(3,474)
(1,268)
243
—
(4,405)
(111)
(133)
(1,693)
(11)
(1)
4,906
445
159
4,858
33,583
8,514
52,465
(19)
(1,304)
(3,758)
(261)
(8,573)
(232)
14
(4,799)
(804)
(1,498)
(11,945)
(51,893)
(51,893)
4,825
4,825
527
527
5,946
5,946
572
(3,748)
(971)
(5,999)
8,512
556
1,378
4,087
31,485
9,066
55,084
(48,251)
(48,251)
6,833
671
354
(39)
400
(258)
470
1,598
(1,084)
(1,084)
514
(642)
(1,643)
—
—
—
9
(75)
(16)
32
(32)
(642)
(1,436)
161
(3,000)
86
86
1,606
1,606
(556)
(1,394)
44
2
(20)
(16)
168
(9)
169
13
13
182
33
0
(18)
(1)
39
13
66
(48)
(48)
18
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Notes to the financial statements (continued)
Assets and liabilities held at fair value
For items classified as fair value through other comprehensive income, the hedge accounting adjustment is not included in the carrying
amount, but rather adjusts other comprehensive income.
The following table shows the fair value hedging instruments which are carried on the Group’s balance sheet:
Derivative assets
Carrying value
Derivative
liabilities
Loan liabilities
Nominal amount
Change in fair
value used as a
basis to determine
ineffectiveness
Nominal amount
directly impacted
by IBOR reform
£m
£m
£m
Hedge type
Risk category
As at 31 December 2022
Fair value
Interest rate risk
Inflation risk
Total
As at 31 December 2021
Fair value
Interest rate risk
Inflation risk
Total
£m
—
83
83
54
5
59
£m
—
(815)
(815)
(11)
(1,118)
(1,129)
£m
—
—
—
—
—
—
109,761
16,299
126,060
92,447
10,368
102,815
3,596
2,585
6,181
1,554
(142)
1,412
The following table profiles the expected notional values of current hedging instruments in future years:
As at 31 December
Fair value hedges of:
2022
£m
2023
£m
2024
£m
2025
£m
2026
£m
2027
£m
Interest rate risk (outstanding notional amount)
109,761
104,565
Inflation risk (outstanding notional amount)
16,299
15,828
90,291
12,688
74,338
11,459
60,285
43,683
39,302
8,295
7,826
6,779
25,676
2,493
28,169
15,577
1,624
17,201
2028 and
later
£m
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Notes to the financial statements (continued)
Assets and liabilities held at fair value
There are 1,796 (2021: 1,782) interest rate risk fair value hedges with an average fixed rate of 1.97% (2021: 1.88%) across the
relationships and 94 (2021: 96) inflation risk fair value hedges with an average rate of 0.54% (2021: 0.51%) across the relationships.
Hedged items in cash flow hedges and hedges of net investments in foreign operations
Description of hedge
relationship and hedged risk
2022
Cash flow hedge of:
Interest rate risk
Loans and advances at
amortised cost
Foreign exchange risk
Loans and advances at
amortised cost
Debt securities classified at
amortised cost
Inflation risk
Debt securities classified at
amortised cost
Total cash flow hedge
Hedge of net investment in
foreign operations
USD foreign operations
EUR foreign operations
Other foreign operations
Total foreign operations
2021
Cash flow hedge of:
Interest rate risk
Loans and advances at
amortised cost
Foreign exchange risk
Loans and advances at
amortised cost
Debt securities classified at
amortised cost
Inflation risk
Debt securities classified at
amortised cost
Total cash flow hedge
Hedge of net investment in
foreign operations
USD foreign operations
EUR foreign operations
Other foreign operations
Total foreign operations
Change in value of
hedged item used
as the basis for
recognising
ineffectiveness
Balance in cash
flow hedging
reserve for
continuing hedges
Balance in currency
translation reserve
for continuing
hedges
Balances remaining
in cash flow
hedging reserve
for which hedge
accounting is no
longer applied
Balances remaining
in currency
translation reserve
for which hedge
accounting is no
longer applied
Hedging gains or
losses recognised
in other
comprehensive
income
Hedge
ineffectiveness
recognised in the
income statementa
£m
£m
£m
£m
£m
£m
£m
8,448
6,457
3
483
362
9,296
1,240
265
34
1,539
(13)
601
142
7,187
—
—
—
—
2,465
1,536
(88)
(16)
(356)
123
252
2,273
204
1,847
—
—
—
—
—
1,886
141
242
2,269
—
—
—
—
—
138
(117)
(3)
18
—
—
—
—
943
100
44
1,087
2,858
—
—
16
2,874
—
—
—
—
(492)
—
—
(12)
(504)
—
—
—
—
—
—
—
—
—
—
—
23
23
—
—
—
—
—
8,448
(83)
3
483
98
9,032
1,240
265
34
1,539
2
—
33
(48)
—
—
—
—
2,465
(347)
(88)
(356)
1
1
252
2,273
(22)
(367)
—
—
186
186
138
(117)
(3)
18
—
—
—
—
Note
a Hedge ineffectiveness is recognised in net interest income.
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Notes to the financial statements (continued)
Assets and liabilities held at fair value
The following table shows the cash flow and net investment hedging instruments which are carried on the Group’s balance sheet:
Hedge type
Risk category
As at 31 December 2022
Cash flow
Interest rate risk
Foreign exchange risk
Inflation risk
Total
Net investment
Foreign exchange risk
As at 31 December 2021
Cash flow
Interest rate risk
Foreign exchange risk
Inflation risk
Total
Net investment
Foreign exchange risk
Carrying value
Derivative
liabilities
£m
(1)
(211)
—
(212)
(20)
—
—
(3)
(3)
(4)
Loan liabilities
Nominal amount
Change in fair
value used as a
basis to determine
ineffectiveness
Nominal amount
directly impacted
by IBOR reform
£m
—
—
—
—
(12,824)
—
—
—
—
(11,212)
£m
£m
£m
140,901
11,946
2,636
155,483
16,786
(8,531)
8,968
(484)
(329)
(9,344)
(1,539)
—
—
8,968
102,629
(2,812)
8,397
7,592
4,092
114,313
13,635
446
(274)
(2,640)
(239)
—
—
8,397
—
Derivative assets
£m
—
549
—
549
101
—
798
—
798
37
There are 58 (2021: 36) foreign exchange risk cash flow hedges with an average foreign exchange rate of 148.00 JPY:1 GBP (2021:
137.85 JPY:1 GBP) across the relationships.
The effect on the income statement and other comprehensive income of recycling amounts in respect of cash flow hedges and net
investment hedges of foreign operations is set out in the following table:
2022
2021
Amount recycled
from other
comprehensive
income due to
hedged item
affecting income
statement
Amount recycled
from other
comprehensive
income due to sale
of investment, or
cash flows no
longer expected to
occur
Amount recycled
from other
comprehensive
income due to
hedged item
affecting income
statement
Amount recycled
from other
comprehensive
income due to sale
of investment, or
cash flows no
longer expected to
occur
Description of hedge relationship and hedged risk
£m
£m
£m
Cash flow hedge of interest rate risk
Recycled to net interest income
Cash flow hedge of foreign exchange risk
Recycled to other income
Hedge of net investment in foreign operations
Recycled to other income
(320)
(13)
(6)
—
—
(58)
541
630
—
£m
2
—
(26)
A detailed reconciliation of the movements of the cash flow hedging reserve and the currency translation reserve is as follows:
Balance on 1 January
Currency translation movements
Hedging gains/(losses) for the year
Amounts reclassified in relation to cash flows affecting profit or loss
Tax
Balance on 31 December
2022
2021
Cash flow hedging
reserve
Currency
translation reserve
Cash flow hedging
reserve
Currency
translation reserve
£m
(853)
(20)
£m
2,740
3,513
(9,032)
(1,539)
339
2,331
58
—
(7,235)
4,772
£m
1,575
(7)
(2,273)
(1,173)
1,025
(853)
£m
2,871
(139)
(18)
26
—
2,740
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Notes to the financial statements (continued)
Assets and liabilities held at fair value
15 Financial assets at fair value through other comprehensive income
Accounting for financial assets at fair value through other comprehensive income (FVOCI)
Financial assets that are debt instruments held in a business model that is achieved by both collecting contractual cash flows and selling
and that contain contractual terms that give rise on specified dates to cash flows that are SPPI are measured at FVOCI. They are
subsequently remeasured at fair value and changes therein (except for those relating to impairment, interest income and foreign
currency exchange gains and losses) are recognised in other comprehensive income until the assets are sold. Interest (calculated using
the effective interest method) is recognised in the income statement in net interest income (Note 3). Upon disposal, the cumulative
gain or loss recognised in other comprehensive income is included in net investment income (Note 6).
In determining whether the business model is achieved by both collecting contractual cash flows and selling financial assets, it is
determined that both collecting contractual cash flows and selling financial assets are integral to achieving the objective of the business
model. The Group will consider past sales and expectations about future sales to establish if the business model is achieved.
For equity securities that are not held for trading, the Group may make an irrevocable election on initial recognition to present
subsequent changes in the fair value of the instrument in other comprehensive income (except for dividend income which is recognised
in profit or loss). Gains or losses on the derecognition of these equity securities are not transferred to profit or loss. These assets are
also not subject to the impairment requirements and therefore no amounts are recycled to the income statement. Where the Group
has not made the irrevocable election to present subsequent changes in the fair value of the instrument in other comprehensive
income, equity securities are measured at fair value through profit or loss.
Debt securities and other eligible bills
Equity securitiesa
Loans and advances
Financial assets at fair value through other comprehensive income
2022
£m
2021
£m
64,832
60,798
8
222
902
53
65,062
61,753
Note
a 2021 includes Barclays’ equity stake in Absa Group Limited (Absa) which was sold in April 2022 and September 2022. The fair value of the stake sold in April 2022 was £557m and in September 2022
was £566m. The cumulative gains on disposal of £48m and £36m respectively were recognised within Retained earnings.
16 Financial liabilities designated at fair value
Accounting for liabilities designated at fair value through profit and loss
In accordance with IFRS 9, financial liabilities may be designated at fair value, with gains and losses taken to the income statement within
net trading income (Note 5) and net investment income (Note 6). Movements in own credit are reported through other comprehensive
income, unless the effects of changes in the liability's credit risk would create or enlarge an accounting mismatch in P&L. In these
scenarios, all gains and losses on that liability (including the effects of changes in the credit risk of the liability) are presented in P&L. On
derecognition of the financial liability no amount relating to own credit risk is recycled to the income statement. The Group has the
ability to make the fair value designation when holding the instruments at fair value reduces an accounting mismatch (caused by an
offsetting liability or asset being held at fair value), or is managed by the Group on the basis of its fair value, or includes terms that have
substantive derivative characteristics (Note 14).
The details on how the fair value amounts are arrived at for financial liabilities designated at fair value are described in Note 17.
Debt securities
Deposits
2022
2021
Fair value
£m
57,846
41,037
Contractual
amount due
on maturity
£m
73,757
42,455
Fair value
£m
53,647
29,246
Contractual
amount due
on maturity
£m
61,946
29,673
Repurchase agreements and other similar secured borrowing
172,746
173,511
168,060
168,129
Other financial liabilities
Financial liabilities designated at fair value
8
8
7
7
271,637
289,731
250,960
259,755
The cumulative own credit net gain recognised is £674m (2021: £960m loss).
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Notes to the financial statements (continued)
Assets and liabilities held at fair value
17 Fair value of financial instruments
Accounting for financial assets and liabilities – fair values
Financial instruments that are held for trading are recognised at fair value through profit or loss. In addition, financial assets are held at
fair value through profit or loss if they do not contain contractual terms that give rise on specified dates to cash flows that are SPPI, or if
the financial asset is not held in a business model that is either (i) a business model to collect the contractual cash flows or (ii) a business
model that is achieved by both collecting contractual cash flows and selling. Subsequent changes in fair value for these instruments are
recognised in the income statement in net investment income, except if reporting it in trading income reduces an accounting
mismatch.
All financial instruments are initially recognised at fair value on the date of initial recognition (including transaction costs, other than
financial instruments held at fair value through profit or loss) and depending on the subsequent classification of the financial asset or
liability, may continue to be held at fair value either through profit or loss or other comprehensive income. The fair value of a financial
instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date.
Wherever possible, fair value is determined by reference to a quoted market price for that instrument. For many of the Group’s financial
assets and liabilities, especially derivatives, quoted prices are not available and valuation models are used to estimate fair value. The
models calculate the expected cash flows under the terms of each specific contract and then discount these values back to a present
value. These models use as their basis independently sourced market inputs including, for example, interest rate yield curves, equities
and commodities prices, option volatilities and currency rates.
For financial liabilities measured at fair value, the carrying amount reflects the effect on fair value of changes in own credit spreads
derived from observable market data such as in primary issuance and redemption activity for structured notes.
On initial recognition, it is presumed that the transaction price is the fair value unless there is observable information available in an
active market to the contrary. The best evidence of an instrument’s fair value on initial recognition is typically the transaction price.
However, if fair value can be evidenced by comparison with other observable current market transactions in the same instrument, or is
based on a valuation technique whose inputs include only data from observable markets, then the instrument should be recognised at
the fair value derived from such observable market data.
For valuations that have made use of unobservable inputs, the difference between the model valuation and the initial transaction price
(Day one profit) is recognised in profit or loss either: on a straight-line basis over the term of the transaction; or over the period until all
model inputs will become observable where appropriate; or released in full when previously unobservable inputs become observable.
Various factors influence the availability of observable inputs and these may vary from product to product and change over time.
Factors include the depth of activity in the relevant market, the type of product, whether the product is new and not widely traded in the
marketplace, the maturity of market modelling and the nature of the transaction (bespoke or generic). To the extent that valuation is
based on models or inputs that are not observable in the market, the determination of fair value can be more subjective, dependent on
the significance of the unobservable input to the overall valuation. Unobservable inputs are determined based on the best information
available, for example by reference to similar assets, similar maturities or other analytical techniques.
The sensitivity of valuations used in the financial statements to possible changes in significant unobservable inputs is shown on page
465.
Critical accounting estimates and judgements
The valuation of financial instruments often involves a significant degree of judgement and complexity, in particular where valuation
models make use of unobservable inputs (‘Level 3’ assets and liabilities). This note provides information on these instruments, including
the related unrealised gains and losses recognised in the period, a description of significant valuation techniques and unobservable
inputs, and a sensitivity analysis.
Climate-related risks are assumed to be included in the fair values of assets and liabilities traded in active markets.
Valuation
IFRS 13 Fair value measurement requires an entity to classify its assets and liabilities according to a hierarchy that reflects the
observability of significant market inputs. The three levels of the fair value hierarchy are defined below with judgement applied in
determining the boundary between Level 2 and 3 classification.
Quoted market prices – Level 1
Assets and liabilities are classified as Level 1 if their value is observable in an active market. Such instruments are valued by reference to
unadjusted quoted prices for identical assets or liabilities in active markets where the quoted price is readily available, and the price
represents actual and regularly occurring market transactions. An active market is one in which transactions occur with sufficient
volume and frequency to provide pricing information on an ongoing basis.
Valuation technique using observable inputs – Level 2
Assets and liabilities classified as Level 2 have been valued using models whose inputs are observable either directly or indirectly.
Valuations based on observable inputs include assets and liabilities such as swaps and forwards which are valued using market standard
pricing techniques, and options that are commonly traded in markets where all the inputs to the market standard pricing models are
observable.
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Notes to the financial statements (continued)
Assets and liabilities held at fair value
Valuation technique using significant unobservable inputs – Level 3
Assets and liabilities are classified as Level 3 if their valuation incorporates significant inputs that are not based on observable market
data (unobservable inputs). A valuation input is considered observable if it can be directly observed from transactions in an active
market, or if there is compelling external evidence demonstrating an executable exit price. Unobservable input levels are generally
determined via reference to observable inputs, historical observations or using other analytical techniques.
The following table shows the Group’s assets and liabilities that are held at fair value disaggregated by valuation technique (fair value
hierarchy) and balance sheet classification:
Assets and liabilities held at fair value
As at 31 December
Trading portfolio assets
Financial assets at fair value through the income
statement
2022
2021
Valuation technique using
Valuation technique using
Level 1
Level 2
Level 3
£m
£m
£m
Total
£m
Level 1
Level 2
Level 3
£m
£m
£m
Total
£m
62,478
64,855
6,480
133,813
80,926
63,828
2,281
147,035
5,720
198,723
9,125
213,568
5,093
177,167
9,712
191,972
Derivative financial assets
10,054
287,152
5,174
302,380
6,150
252,412
4,010
262,572
Financial assets at fair value through other
comprehensive income
Investment property
Total assets
20,704
44,347
—
—
11
5
65,062
22,009
39,706
5
—
—
38
7
61,753
7
98,956
595,077
20,795
714,828
114,178
533,113
16,048
663,339
Trading portfolio liabilities
(44,128)
(28,740)
(56)
(72,924)
(27,529)
(26,613)
(27)
(54,169)
Financial liabilities designated at fair value
(133) (270,454)
(1,050) (271,637)
(174)
(250,376)
(410)
(250,960)
Derivative financial liabilities
(10,823) (272,434)
(6,363) (289,620)
(6,571)
(244,253)
(6,059)
(256,883)
Total liabilities
(55,084) (571,628)
(7,469) (634,181)
(34,274)
(521,242)
(6,496)
(562,012)
The following table shows the Group’s Level 3 assets and liabilities that are held at fair value disaggregated by product type:
Level 3 assets and liabilities held at fair value by product type
Interest rate derivatives
Foreign exchange derivatives
Credit derivatives
Equity derivatives
Corporate debt
Reverse repurchase and repurchase agreements
Non-asset backed loans
Private equity investments
Othera
Total
2022
2021
Assets
£m
2,362
1,513
290
1,009
1,677
37
9,949
1,291
2,667
20,795
Liabilities
£m
(2,858)
(1,474)
(603)
(1,428)
(49)
(434)
—
(8)
(615)
(7,469)
Assets
£m
1,091
376
323
2,220
1,205
13
6,405
1,095
3,320
16,048
Liabilities
£m
(1,351)
(374)
(709)
(3,625)
(21)
(172)
—
(6)
(238)
(6,496)
Note
a Other includes commercial real estate loans, asset backed loans, funds and fund-linked products, issued debt, Government and Government sponsored debt, asset backed securities, equity cash
products and investment property.
Valuation techniques and sensitivity analysis
Sensitivity analysis is performed on products with significant unobservable inputs (Level 3) to generate a range of reasonably possible
alternative valuations. The sensitivity methodologies applied take account of the nature of the valuation techniques used, as well as the
availability and reliability of observable proxy and historical data and the impact of using alternative models.
Sensitivities are dynamically calculated on a monthly basis. The calculation is based on range or spread data of a reliable reference
source or a scenario based on relevant market analysis alongside the impact of using alternative models. Sensitivities are calculated
without reflecting the impact of any diversification in the portfolio.
The valuation techniques used, observability and sensitivity analysis for material products within Level 3, are described below.
Interest rate derivatives
Description: Derivatives linked to interest rates or inflation indices. The category includes futures, interest rate and inflation swaps,
swaptions, caps, floors, inflation options, balance guaranteed swaps and other exotic interest rate derivatives.
Valuation: Interest rate and inflation derivatives are generally valued using curves of forward rates constructed from market data to
project and discount the expected future cash flows of trades. Instruments with optionality are valued using volatilities implied from
market inputs, and use industry standard or bespoke models depending on the product type.
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Assets and liabilities held at fair value
Observability: In general, inputs are considered observable up to liquid maturities which are determined separately for each input and
underlying. Unobservable inputs are generally set by referencing liquid market instruments and applying extrapolation techniques or
inferred via another reasonable method.
Foreign exchange derivatives
Description: Derivatives linked to the foreign exchange (FX) market. The category includes FX forward contracts, FX swaps and FX
options. The majority are traded as over the counter (OTC) derivatives.
Valuation: FX derivatives are valued using industry standard and bespoke models depending on the product type. Valuation inputs
include FX rates, interest rates, FX volatilities, interest rate volatilities, FX interest rate correlations and others as appropriate.
Observability: FX correlations, forwards and volatilities are generally observable up to liquid maturities which are determined separately
for each input and underlying.
Unobservable inputs are set by referencing liquid market instruments and applying extrapolation techniques, or inferred via another
reasonable method.
Credit derivatives
Description: Derivatives linked to the credit spread of a referenced entity, index or basket of referenced entities or a pool of referenced
assets (e.g. a securitised product). The category includes single name and index credit default swaps (CDS) and total return swaps
(TRS).
Valuation: CDS are valued on industry standard models using curves of credit spreads as the principal input. Credit spreads are observed
directly from broker data, third party vendors or priced to proxies.
Observability: CDS contracts referencing entities that are actively traded are generally considered observable. Other valuation inputs
are considered observable if products with significant sensitivity to the inputs are actively traded in a liquid market. Unobservable
valuation inputs are generally determined with reference to recent transactions or inferred from observable trades of the same issuer
or similar entities.
Equity derivatives
Description: Exchange traded or OTC derivatives linked to equity indices and single names. The category includes vanilla and exotic
equity products.
Valuation: Equity derivatives are valued using industry standard models. Valuation inputs include stock prices, dividends, volatilities,
interest rates, equity repurchase curves and, for multi-asset products, correlations.
Observability: In general, valuation inputs are observable up to liquid maturities which are determined separately for each input and
underlying. Unobservable inputs are set by referencing liquid market instruments and applying extrapolation techniques, or inferred via
another reasonable method.
Corporate debt
Description: Primarily corporate bonds.
Valuation: Corporate bonds are valued using observable market prices sourced from broker quotes, inter-dealer prices or other reliable
pricing sources.
Observability: Prices for actively traded bonds are considered observable. Unobservable bonds prices are generally determined by
reference to bond yields or CDS spreads for actively traded instruments issued by or referencing the same (or a similar) issuer.
Reverse repurchase and repurchase agreements
Description: Includes securities purchased under resale agreements, securities sold under repurchase agreements, and other similar
secured lending agreements. The agreements are primarily short-term in nature.
Valuation: Repurchase and reverse repurchase agreements are generally valued by discounting the expected future cash flows using
industry standard models that incorporate market interest rates and repurchase rates, based on the specific details of the transaction.
Observability: Inputs are deemed observable up to liquid maturities or for consensus pricing with low pricing-range and are determined
based on the specific features of the transaction. Unobservable inputs are generally set by referencing liquid market instruments and
applying extrapolation techniques, or inferred via another reasonable method.
Non-asset backed loans
Description: Largely made up of fixed rate loans.
Valuation: Fixed rate loans are valued using models that discount expected future cash flows based on interest rates and loan spreads.
Observability: Within this loan population, the loan spread is generally unobservable. Unobservable loan spreads are determined by
incorporating funding costs, the level of comparable assets such as gilts, issuer credit quality and other factors.
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Notes to the financial statements (continued)
Assets and liabilities held at fair value
Private equity investments
Description: Includes investments in equity holdings in operating companies not quoted on a public exchange.
Valuation: Private equity investments are valued in accordance with the ‘International Private Equity and Venture Capital Valuation
Guidelines’ which require the use of a number of individual pricing benchmarks such as the prices of recent transactions in the same or
similar entities, discounted cash flow analysis and comparison with the earnings or revenue multiples of listed companies. While the
valuation of unquoted equity instruments is subjective by nature, the relevant methodologies are commonly applied by other market
participants and have been consistently applied over time.
Observability: Inputs are considered observable if there is active trading in a liquid market of products with significant sensitivity to the
inputs. Unobservable inputs include earnings or revenue estimates, multiples of comparative companies, marketability discounts and
discount rates.
Other
Description: Other includes commercial real estate loans, asset backed loans, funds and fund-linked products, issued debt, government
sponsored debt, asset backed securities, equity cash products and investment property.
Assets and liabilities reclassified between Level 1 and Level 2
During the period, there were no material transfers between Level 1 and Level 2 (2021: there were no material transfers between Level
1 and Level 2).
Level 3 movement analysis
The following table summarises the movements in the Level 3 balances during the period. The table shows gains and losses and
includes amounts for all financial assets and liabilities that are held at fair value transferred to and from Level 3 during the period.
Transfers have been reflected as if they had taken place at the beginning of the year.
Asset and liability transfers between Level 2 and Level 3 are primarily due to i) an increase or decrease in observable market activity
related to an input or ii) a change in the significance of the unobservable input, with assets and liabilities classified as Level 3 if an
unobservable input is deemed significant.
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Notes to the financial statements (continued)
Assets and liabilities held at fair value
Analysis of movements in Level 3 assets and liabilities
Purchases
Sales
Issues Settlements
Total gains and (losses)
in the period
recognised in the
income statement
Trading
incomeb
Other
income
Total gains
or (losses)
recognised
in OCI
Transfers
In
£m
87
10
275
372
49
56
17
As at 31
December
2022
£m
597
4,837
1,046
6,480
Out
£m
(34)
(22)
(275)
(331)
(84)
—
(18)
5,112
1,284
2,729
122
(102)
9,125
—
—
—
—
7
4
11
5
Corporate debt
As at 1
January
2022
£m
389
£m
394
£m
(182)
Non asset backed loans
758
7,009
(2,635)
Other
1,134
665
(412)
Trading portfolio assets
2,281
8,068
(3,229)
Non asset backed loans
5,647
2,739
(1,019)
Private equity investments
1,095
192
(64)
Other
2,970
6,482
(6,540)
Financial assets at fair value
through the income statement
9,712
9,413
(7,623)
£m
(18)
(19)
£m
(39)
(264)
(298)
(43)
(335)
(346)
£m
—
—
—
—
(1,487)
(733)
—
(24)
(189)
95
4
(66)
3
(1,700)
(634)
(63)
£m
—
—
—
—
—
—
—
—
£m
—
—
—
—
—
—
—
—
—
—
Private equity investments
Other
Assets at fair value through
other comprehensive income
Investment properties
—
38
38
7
—
—
—
—
—
—
—
(32)
—
—
—
—
1
(2)
6
—
—
—
(32)
—
—
(1)
6
(1)
—
—
(1)
—
—
—
—
Trading portfolio liabilities
(27)
(23)
8
—
9
—
—
(27)
4
(56)
Financial liabilities designated at
fair value
(410)
(286)
—
(98)
82
70
Interest rate derivatives
Foreign exchange derivatives
Credit derivatives
Equity derivatives
Net derivative financial
instrumentsa
(260)
(216)
2
(386)
—
(4)
(1,405)
(213)
—
—
(2)
—
(2,049)
(433)
(2)
—
—
—
—
—
54
(467)
(6)
57
333
27
23
306
438
(111)
—
—
—
—
—
—
—
(448)
40
(1,050)
—
—
—
—
—
431
—
11
(38)
(496)
16
(12)
39
(313)
(419)
(11)
571
431
537
(1,189)
Total
9,552
16,739
(10,847)
(98)
(1,547) (1,012)
(64)
(1)
456
148
13,326
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Notes to the financial statements (continued)
Assets and liabilities held at fair value
Analysis of movements in Level 3 assets and liabilities
Purchases
Sales
Issues Settlements
Total gains and (losses)
in the period
recognised in the
income statement
Trading
incomeb
Other
income
Total gains
or (losses)
recognised
in OCI
Corporate debt
As at 1
January
2021
£m
151
£m
310
£m
(123)
Non-asset backed loans
709
1,580
(1,409)
Other
1,003
371
(425)
Trading portfolio assets
1,863
2,261
(1,957)
Non-asset backed loans
5,580
1,380
(306)
Private equity investments
874
166
(24)
Other
2,052
11,256
(10,230)
Financial assets at fair value
through the income statement
8,506
12,802
(10,560)
Non-asset backed loans
Other
Financial assets at fair value
through other comprehensive
income
Investment property
106
47
153
10
—
—
—
—
£m
—
—
—
—
—
—
—
—
—
—
Trading portfolio liabilities
(28)
(5)
23
—
£m
(12)
(85)
(57)
(154)
£m
38
(1)
(49)
(12)
£m
—
—
—
—
(748)
(181)
(174)
(9)
(185)
—
2
163
27
(942)
(179)
16
£m
—
—
—
—
—
—
—
—
Transfers
In
£m
41
45
442
528
113
35
49
As at 31
December
2021
£m
389
758
1,134
2,281
5,647
1,095
2,970
Out
£m
(16)
(81)
(151)
(248)
(17)
(110)
(1)
197
(128)
9,712
—
—
—
(7)
—
—
—
—
—
(2)
—
—
(106)
—
—
38
—
—
(7)
—
—
(2)
—
(106)
38
(2)
—
—
—
—
(1)
(6)
—
—
—
—
—
(12)
1
7
—
(27)
—
Financial liabilities designated at
fair value
(355)
(4)
—
(101)
66
21
(1)
—
(68)
32
(410)
Interest rate derivatives
Foreign exchange derivatives
Credit derivatives
Equity derivatives
Net derivative financial
instrumentsa
(2)
1
20
—
(155)
(239)
—
—
9
(1,614)
90
(1)
(1,770)
(129)
8
—
—
—
—
—
105
40
(45)
(15)
(255)
(2)
34
(4)
85
(227)
Total
8,379
14,925
(12,488)
(101)
(952)
(403)
—
—
—
—
—
14
—
—
—
—
—
90
10
10
(218)
(260)
(47)
—
2
(386)
(3)
142
(1,405)
107
(123)
(2,049)
(2)
752
(572)
9,552
Notes
a The derivative financial instruments are represented on a net basis. On a gross basis, derivative financial assets are £5,174m (2021: £4,010m) and derivative financial liabilities are £6,363m (2021:
£6,059m).
b Trading income represents gains and (losses) on level 3 financial instruments which in the majority are offset by losses and gains on financial instruments disclosed in level 2.
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Notes to the financial statements (continued)
Assets and liabilities held at fair value
Unrealised gains and losses on Level 3 financial assets and liabilities
The following table discloses the unrealised gains and losses recognised in the year arising on Level 3 financial assets and liabilities held
at year end.
Unrealised gains and (losses) recognised during the period on Level 3 assets and liabilities held at year end
2022
2021
As at 31 December
Trading portfolio assets
Financial assets at fair value through the income statement
Fair value through other comprehensive income
Investment property
Trading portfolio liabilities
Financial liabilities designated at fair value
Net derivative financial instruments
Total
Income statement
Trading
incomea
Other
income
Other
compre-
hensive
income
£m
(290)
(551)
—
—
8
55
(80)
£m
—
(66)
—
(1)
—
—
—
(858)
(67)
£m
—
—
1
—
—
—
—
1
Income statement
Trading
incomea
Other
income
Other
compre-
hensive
income
Total
£m
£m
(290)
(67)
£m
—
(617)
(176)
154
1
(1)
8
55
—
—
(5)
16
(80)
(196)
—
—
—
(1)
—
(924)
(428)
153
Total
£m
(67)
(22)
—
—
(5)
15
(196)
(275)
£m
—
—
—
—
—
—
—
—
Note
a Trading income represents gains and (losses) on level 3 financial instruments which in the majority are offset by losses and gains on financial instruments disclosed in level 2.
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Notes to the financial statements (continued)
Assets and liabilities held at fair value
Significant unobservable inputs
The following table discloses the valuation techniques and significant unobservable inputs for material products recognised at fair value
and classified as Level 3 along with the range of values used for those significant unobservable inputs:
Valuation technique(s)a
Significant unobservable inputs
Min
Max
Min
Max
Unitsb
2022 Range
2021 Range
Derivative financial
instrumentsc
Interest rate derivatives
Discounted cash flows
Inflation forwards
Credit spread
Yield
Correlation model
Inflation forwards
Option model
Inflation volatility
Interest rate volatility
Option volatility
FX - IR correlation
IR - IR correlation
Credit derivatives
Discounted cash flows
Credit spread
Comparable pricing
Price
Equity derivatives
Option model
Equity volatility
Equity - equity
correlation
Foreign exchange derivatives Option model
Option volatility
Discounted cash flow
Discounted margin
Discounted Cash Flows
Yield
Non-derivative financial
instruments
Non-asset backed loans
Discounted cash flows
Loan spread
Comparable pricing
Credit spread
Yield
Price
Private equity investments
EBITDA multiple
EBITDA multiple
Earnings multiple
Earnings multiple
Discounted cash flow
Credit spread
Discount margin
Corporate debt
Comparable pricing
Price
Commercial Real Estate
loans
Reverse repurchase and
repurchase agreements
Discounted cash flows
Loan spread
Discounted cash flows
Credit spread
Discounted cash flows
Repo spread
Issued debt
Discounted cash flows
Credit spread
Option model
Equity volatility
Interest rate volatility
3
17
(3)
(20)
49
36
57
(20)
12
3
79
3
40
(205)
0
(3)
50
200
5
0
11
4
496
8
0
229
267
321
73
3
42
5
2,159
56
(13)
315
430
60
78
99
2,943
92
140
100
634
100
4
801
300
34
101
15
23
559
10
232
834
426
502
548
111
261
0
9
—
(20)
31
5
—
(20)
(100)
2
—
2
10
(129)
0
—
31
200
3
0
16
5
3
1,848
—
(13)
130
600
—
78
99
2,925
—
108
100
93
100
—
1,552
300
10
145
20
28
725
1,916
8
0
229
68
—
—
—
—
10
284
854
543
—
—
—
—
%
bps
%
%
bps vol
bps vol
£m
%
%
bps
points
%
%
bps
points
%
bps
bps
%
points
Multiple
Multiple
bps
%
points
bps
bps
bps
bps
%
bps vol
Notes
a A range has not been provided for Net Asset Value as there would be a wide range reflecting the diverse nature of the positions.
b The units used to disclose ranges for significant unobservable inputs are percentages, points and basis points. Points are a percentage of par; for example, 100 points equals 100% of par. A basis point
equals 1/100th of 1%; for example, 150 basis points equals 1.5%.
c Certain derivative instruments are classified as Level 3 due to a significant unobservable credit spread input into the calculation of the Credit Valuation Adjustment for the instruments. The range of
significant unobservable credit spreads is between 17-2159bps (2021: 32-1,848bps).
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Notes to the financial statements (continued)
Assets and liabilities held at fair value
The following section describes the significant unobservable inputs identified in the table above, and the sensitivity of fair value
measurement of the instruments categorised as Level 3 assets or liabilities to increases in significant unobservable inputs. Where
sensitivities are described, the inverse relationship will also generally apply.
Where reliable interrelationships can be identified between significant unobservable inputs used in fair value measurement, a
description of those interrelationships is included below.
Forwards
A price or rate that is applicable to a financial transaction that will take place in the future.
In general, a significant increase in a forward in isolation will result in a fair value increase for the contracted receiver of the underlying
(currency, bond, commodity, etc.), but the sensitivity is dependent on the specific terms of the instrument.
Credit spread
Credit spreads typically represent the difference in yield between an instrument and a benchmark security or reference rate. Credit
spreads reflect the additional yield that a market participant demands for taking on exposure to the credit risk of an instrument and
form part of the yield used in a discounted cash flow calculation.
In general, a significant increase in credit spread in isolation will result in a movement in a fair value decrease for a cash asset.
For a derivative instrument, a significant increase in credit spread in isolation can result in a fair value increase or decrease depending on
the specific terms of the instrument.
Volatility
Volatility is a measure of the variability or uncertainty in return for a given derivative underlying. It is an estimate of how much a particular
underlying instrument input or index will change in value over time. In general, volatilities are implied from observed option prices. For
unobservable options the implied volatility may reflect additional assumptions about the nature of the underlying risk, and the strike/
maturity profile of a specific contract.
In general a significant increase in volatility in isolation will result in a fair value increase for the holder of a simple option, but the
sensitivity is dependent on the specific terms of the instrument.
There may be interrelationships between unobservable volatilities and other unobservable inputs (e.g. when equity prices fall, implied
equity volatilities generally rise) but these are generally specific to individual markets and may vary over time.
Correlation
Correlation is a measure of the relationship between the movements of two variables. Correlation can be a significant input into
valuation of derivative contracts with more than one underlying instrument. Credit correlation generally refers to the correlation
between default processes for the separate names that make up the reference pool of a CDO structure.
A significant increase in correlation in isolation can result in a fair value increase or decrease depending on the specific terms of the
instrument.
Comparable price
Comparable instrument prices are used in valuation by calculating an implied yield (or spread over a liquid benchmark) from the price of a
comparable observable instrument, then adjusting that yield (or spread) to account for relevant differences such as maturity or credit
quality. Alternatively, a price-to-price basis can be assumed between the comparable and unobservable instruments in order to
establish a value.
Non-asset backed loans includes a portfolio of loans extended to clients within the Group’s leveraged finance business. Leveraged
finance loans are originated where Barclays provide financing commitments to clients to facilitate strategic transactions such as
leverage buyouts and acquisitions. The sensitivity of the portfolio to unobservable inputs is judgmental reflecting their illiquid nature and
the significance of unobservable price inputs to the valuation.
In general, a significant increase in comparable price in isolation will result in an increase in the price of the unobservable instrument. For
derivatives, a change in the comparable price in isolation can result in a fair value increase or decrease depending on the specific terms
of the instrument.
Loan spread
Loan spreads typically represent the difference in yield between an instrument and a benchmark security or reference rate. Loan
spreads typically reflect credit quality, the level of comparable assets such as gilts and other factors, and form part of the yield used in a
discounted cash flow calculation.
Non-asset backed loans contains a portfolio primarily consisting of long-dated fixed rate loans extended to counterparties in the UK
Education, Social Housing and Local Authority sectors (ESHLA). The loans are categorised as Level 3 in the fair value hierarchy due to
their illiquid nature and the significance of unobservable loan spreads to the valuation. Valuation uncertainty arises from the long-dated
nature of the portfolio, the lack of secondary market in the loans and the lack of observable loan spreads. The majority of ESHLA loans
are to borrowers in heavily regulated sectors that are considered extremely low credit risk, and have a history of near zero defaults since
inception. While the overall loan spread range is from 50bps to 589bps (2021: 31bps to 1,552bps), the vast majority of spreads are
concentrated towards the bottom end of this range, with 88% of the loan notional being valued with spreads less than 200bps
consistently for both years.
In general, a significant increase in loan spreads in isolation will result in a fair value decrease for a loan.
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Notes to the financial statements (continued)
Assets and liabilities held at fair value
EBITDA multiple
EBITDA multiple is the ratio of the valuation of the investment to the earnings before interest, taxes, depreciation and amortisation.
In general, a significant increase in the multiple will result in a fair value increase for an investment.
Earnings multiple
Earnings or Revenue multiple is the ratio of the valuation of the investment to the earnings or revenue. In general, a significant increase
in the multiple will result in a fair value increase for an investment.
Sensitivity analysis of valuations using unobservable inputs
Interest rate derivatives
Foreign exchange derivatives
Credit derivatives
Equity derivatives
Corporate debt
Non-asset backed loans
Private equity investments
Othera
Total
2022
2021
Favourable changes
Unfavourable changes
Favourable changes
Unfavourable changes
Income
statement
Equity
Income
statement
Equity
Income
statement
Equity
Income
statement
Equity
£m
119
16
79
161
45
316
268
71
1,075
£m
—
—
—
—
—
—
1
—
1
£m
(155)
(22)
(71)
(168)
(27)
(521)
(281)
(82)
(1,327)
£m
—
—
—
—
—
—
(1)
—
(1)
£m
51
20
111
187
38
165
246
62
880
£m
—
—
—
—
—
—
—
—
—
£m
(79)
(28)
(103)
(195)
(28)
(256)
(236)
(80)
(1,005)
£m
—
—
—
—
—
—
—
—
—
Note
a Other includes asset backed loans, equity cash products and funds and fund-linked products
The effect of stressing unobservable inputs to a range of reasonably possible alternatives, alongside considering the impact of using
alternative models, would be to increase fair values by up to £1,076m (2021: £880m) or to decrease fair values by up to £1,328m (2021:
£1,005m) with substantially all the potential effect impacting profit and loss rather than reserves.
Fair value adjustments
Key balance sheet valuation adjustments are quantified below:
Exit price adjustments derived from market bid-offer spreads
Uncollateralised derivative funding
Derivative credit valuation adjustments
Derivative debit valuation adjustments
2022
£m
(577)
(11)
(319)
208
2021
£m
(506)
(127)
(212)
91
Exit price adjustments derived from market bid-offer spreads
The Group uses mid-market pricing where it is a market maker and has the ability to transact at, or better than, mid price (which is the
case for certain equity, bond and vanilla derivative markets). For other financial assets and liabilities, bid-offer adjustments are recorded
to reflect the exit level for the expected close out strategy. The methodology for determining the bid-offer adjustment for a derivative
portfolio involves calculating the net risk exposure by offsetting long and short positions by strike and term in accordance with the risk
management and hedging strategy.
Bid-offer levels are generally derived from market quotes such as broker data. Less liquid instruments may not have a directly
observable bid-offer level. In such instances, an exit price adjustment may be derived from an observable bid-offer level for a
comparable liquid instrument, or determined by calibrating to derivative prices, or by scenario or historical analysis.
Exit price adjustments derived from market bid-offer spreads have increased by £71m to £(577)m.
Discounting approaches for derivative instruments
Collateralised
In line with market practice, the methodology for discounting collateralised derivatives takes into account the nature and currency of
the collateral that can be posted within the relevant credit support annex (CSA). The CSA aware discounting approach recognises the
‘cheapest to deliver’ option that reflects the ability of the party posting collateral to change the currency of the collateral.
Uncollateralised
A fair value adjustment of £(11)m is applied to account for the impact of incorporating the cost of funding into the valuation of
uncollateralised and partially collateralised derivative portfolios and collateralised derivatives where the terms of the agreement do not
allow the rehypothecation of collateral received. This adjustment is referred to as the Uncollateralised derivative funding.
Uncollateralised derivative funding has decreased by £116m to £(11)m as a result of underlying moves in the exposure profile of the
derivative portfolio in scope.
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Notes to the financial statements (continued)
Assets and liabilities held at fair value
Derivative credit and debit valuation adjustments
Derivative credit valuation adjustments and Derivative debit valuation adjustments are incorporated into derivative valuations to reflect
the impact on fair value of counterparty credit risk and Barclays’ own credit quality respectively. These adjustments are calculated for
uncollateralised and partially collateralised derivatives across all asset classes. Derivative credit valuation adjustments and Derivative
debit valuation adjustments are calculated using estimates of exposure at default, probability of default and recovery rates, at a
counterparty level. Counterparties include (but are not limited to) corporates, sovereigns and sovereign agencies and supranationals.
Exposure at default is generally estimated through the simulation of underlying risk factors through approximating with a more vanilla
structure, or by using current or scenario-based mark to market as an estimate of future exposure.
Probability of default and recovery rate information is generally sourced from the CDS markets. Where this information is not available,
or considered unreliable, alternative approaches are taken based on mapping internal counterparty ratings onto historical or market-
based default and recovery information.
Derivative credit valuation adjustments increased by £107m to £(319)m as a result of widening input counterparty credit spreads.
Derivative debit valuation adjustments increased by £117m to £208m as a result of widening input own credit spreads.
Correlation between counterparty credit and underlying derivative risk factors, termed ‘wrong-way,’ or ‘right-way’ risk, is not
systematically incorporated into the derivative credit valuation adjustments calculation but is adjusted where the underlying exposure is
directly related to the counterparty.
Barclays continues to monitor market practices and activity to ensure the approach to uncollateralised derivative valuation remains
appropriate.
Portfolio exemptions
The Group uses the portfolio exemption in IFRS 13 Fair Value Measurement to measure the fair value of groups of financial assets and
liabilities. Instruments are measured using the price that would be received to sell a net long position (i.e. an asset) for a particular risk
exposure or to transfer a net short position (i.e. a liability) for a particular risk exposure in an orderly transaction between market
participants at the balance sheet date under current market conditions. Accordingly, the Group measures the fair value of the group of
financial assets and liabilities consistently with how market participants would price the net risk exposure at the measurement date.
Unrecognised gains as a result of the use of valuation models using unobservable inputs
The amount that has yet to be recognised in income that relates to the difference between the transaction price (the fair value at initial
recognition) and the amount that would have arisen had valuation models using unobservable inputs been used on initial recognition,
less amounts subsequently recognised, is £126m (2021: £133m) for financial instruments measured at fair value and £216m (2021:
£230m) for financial instruments carried at amortised cost. There are additions and FX gains of £59m (2021: £59m), and amortisation
and releases of £66m (2021: £42m) for financial instruments measured at fair value and additions of £0m (2021: £0m) and amortisation
and releases of £14m (2021: £17m) for financial instruments measured at amortised cost.
Third-party credit enhancements
Structured and brokered certificates of deposit issued by Barclays are insured up to $250,000 per depositor by the Federal Deposit
Insurance Corporation (FDIC) in the US. The FDIC is funded by premiums that Barclays and other banks pay for deposit insurance
coverage. The carrying value of these issued certificates of deposit that are designated under the IFRS 9 fair value option includes this
third party credit enhancement. The on-balance sheet value of these brokered certificates of deposit amounted to £5,197m (2021:
£790m).
Comparison of carrying amounts and fair values for assets and liabilities not held at fair value
The following table summarises the fair value of financial assets and liabilities measured at amortised cost on the Group’s balance
sheet:
As at 31 December
Financial assets
Loans and advances at amortised cost
Reverse repurchase agreements and
other similar secured lending
Financial liabilities
Deposits at amortised cost
Repurchase agreements and other
similar secured borrowing
Debt securities in issue
Subordinated liabilities
2022
2021
Carrying
amount
Fair value
Level 1
Level 2
Level 3
Carrying
amount
Fair value
Level 1
Level 2
Level 3
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
398,779
391,661
15,117
113,153
263,391
361,451
362,424
17,381
83,191
261,852
776
776
—
776
—
3,227
3,227
—
3,227
—
(545,782) (545,738) (426,016) (116,157)
(3,565) (519,433) (519,436) (434,431) (83,501)
(1,504)
(27,052) (27,054)
—
(27,054)
—
(28,352) (28,358)
—
(28,358)
—
(112,881) (113,276)
—
(110,151)
(3,125) (98,867) (100,657)
—
(98,364)
(2,293)
(11,423) (11,474)
—
(11,254)
(220) (12,759) (13,334)
—
(13,267)
(67)
The fair value is an estimate of the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. As a wide range of valuation techniques are available, it may not be appropriate
to directly compare this fair value information to independent market sources or other financial institutions. Different valuation
methodologies and assumptions can have a significant impact on fair values which are based on unobservable inputs.
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Notes to the financial statements (continued)
Assets and liabilities held at fair value
Financial assets
The carrying value of financial assets held at amortised cost is determined in accordance with the relevant accounting policy in Note 19.
Loans and advances at amortised cost
The fair value of loans and advances, for the purpose of this disclosure, is derived from discounting expected cash flows in a way that
reflects the current market price for lending to issuers of similar credit quality. Where market data or credit information on the
underlying borrowers is unavailable, a number of proxy/extrapolation techniques are employed to determine the appropriate discount
rates. For 2022, the fair value is lower than carrying value mainly on fixed rate products driven by rising interest rates. The majority will be
part of a wider portfolio which includes fair valued instruments that are not presented in this table.
Reverse repurchase agreements and other similar secured borrowing
The fair value of reverse repurchase agreements approximates carrying amount as these balances are generally short dated and fully
collateralised.
Financial liabilities
The carrying value of financial liabilities held at amortised cost is determined in accordance with the accounting policy in Note 1.
Deposits at amortised cost
In many cases, the fair value disclosed approximates carrying value because the instruments are short term in nature or have interest
rates that reprice frequently, such as customer accounts and other deposits and short-term debt securities.
The fair value for deposits with longer-term maturities, mainly time deposits, are estimated using discounted cash flows applying either
market rates or current rates for deposits of similar remaining maturities. Consequently, the fair value discount is minimal.
Repurchase agreements and other similar secured borrowing
The fair value of repurchase agreements approximates carrying amounts as these balances are generally short dated.
Debt securities in issue
Fair values of other debt securities in issue are based on quoted prices where available, or where the instruments are short dated,
carrying amount approximates fair value.
Subordinated liabilities
Fair values for dated and undated convertible and non-convertible loan capital are based on quoted market rates for the issuer
concerned or issuers with similar terms and conditions.
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Notes to the financial statements (continued)
Assets and liabilities held at fair value
18 Offsetting financial assets and financial liabilities
In accordance with IAS 32 Financial Instruments: Presentation, the Group reports financial assets and financial liabilities on a net basis on
the balance sheet only if there is a legally enforceable right to set-off the recognised amounts and there is intention to settle on a net
basis, or to realise the asset and settle the liability simultaneously. The following table shows the impact of netting arrangements on:
▪ all financial assets and liabilities that are reported net on the balance sheet
▪ all derivative financial instruments and reverse repurchase and repurchase agreements and other similar secured lending and
borrowing agreements that are subject to enforceable master netting arrangements or similar agreements, but do not qualify for
balance sheet netting.
The ‘Net amounts’ presented are not intended to represent the Group’s actual exposure to credit risk, as a variety of credit mitigation
strategies are employed in addition to netting and collateral arrangements.
Amounts subject to enforceable netting arrangements
Effects of offsetting on-balance sheet
Related amounts not offset
Gross amounts
Amounts
offseta
Net amounts
reported on
the balance
sheet
Financial
instruments
Financial
collateralb
Net amount
Amounts not
subject to
enforceable
netting
arrangementsc
Balance sheet
totald
£m
£m
£m
£m
£m
£m
£m
£m
As at 31 December 2022
Derivative financial assets
Reverse repurchase agreements and
other similar secured lendinge
Total assets
374,253
(76,429)
297,824
(238,337)
(45,981)
13,506
4,556
302,380
558,977
(396,323)
162,654
—
(162,024)
630
933,230
(472,752)
460,478
(238,337)
(208,005)
14,136
2,803
7,359
165,457
467,837
Derivative financial liabilities
(360,630)
76,530
(284,100)
238,337
26,639
(19,124)
(5,520)
(289,620)
Repurchase agreements and other
similar secured borrowinge
Total liabilities
As at 31 December 2021
Derivative financial assets
Reverse repurchase agreements and
other similar secured lendinge
Total assets
(571,774)
396,323
(175,451)
—
(932,404)
472,853
(459,551)
238,337
175,451
202,090
—
(24,347)
(199,798)
(19,124)
(29,867)
(489,418)
279,568
(24,137)
255,431
(202,519)
(40,485)
12,427
7,141
262,572
514,360
(370,003)
144,357
—
(143,854)
503
793,928
(394,140)
399,788
(202,519)
(184,339)
12,930
3,884
11,025
148,241
410,813
Derivative financial liabilities
(274,356)
23,606
(250,750)
202,519
34,321
(13,910)
(6,133)
(256,883)
Repurchase agreements and other
similar secured borrowinge
Total liabilities
(535,653)
370,003
(165,650)
—
(810,009)
393,609
(416,400)
202,519
165,650
199,971
—
(30,762)
(196,412)
(13,910)
(36,895)
(453,295)
Notes
a Amounts offset for derivative financial assets additionally includes cash collateral netted of £15,199m (2021: £3,815m). Amounts offset for derivative financial liabilities additionally includes cash
collateral netted of £15,098m (2021: £4,346m). Settlements assets and liabilities have been offset amounting to £24,250m (2021: £22,837m).
b Financial collateral of £45,981m (2021: £40,485m) was received in respect of derivative assets, including £34,547m (2021: £34,598m) of cash collateral and £11,434m (2021: £5,887m) of non-cash
collateral. Financial collateral of £26,639m (2021: £34,321m) was placed in respect of derivative liabilities, including £25,222m (2021: £32,031m) of cash collateral and £1,417m (2021: £2,290m) of non-
cash collateral. The collateral amounts are limited to net balance sheet exposure so as to not include overcollateralisation.
c This column includes contractual rights of set-off that are subject to uncertainty under the laws of the relevant jurisdiction.
d The balance sheet total is the sum of ‘Net amounts reported on the balance sheet’ that are subject to enforceable netting arrangements and ‘Amounts not subject to enforceable netting
arrangements’.
e Reverse repurchase agreements and other similar secured lending of £165,457m (2021: £148,241m) is split by fair value £164,681m (2021: £145,014m) and amortised cost £776m (2021: £3,227m).
Repurchase agreements and other similar secured borrowing of £199,798m (2021: £196,412m) is split by fair value £172,746m (2021: £168,060m) and amortised cost £27,052m (2021: £28,352m).
Derivative assets and liabilities
The ‘Financial instruments’ column identifies financial assets and liabilities that are subject to set-off under netting agreements, such as
the ISDA Master Agreement or derivative exchange or clearing counterparty agreements, whereby all outstanding transactions with
the same counterparty can be offset and close-out netting applied across all outstanding transactions covered by the agreements if an
event of default or other predetermined events occur.
Financial collateral refers to cash and non-cash collateral obtained, typically daily or weekly, to cover the net exposure between
counterparties by enabling the collateral to be realised in an event of default or if other predetermined events occur.
Repurchase and reverse repurchase agreements and other similar secured lending and borrowing
The ‘Financial instruments’ column identifies financial assets and liabilities that are subject to set-off under netting agreements, such as
Global Master Repurchase Agreements and Global Master Securities Lending Agreements, whereby all outstanding transactions with
the same counterparty can be offset and close-out netting applied across all outstanding transactions covered by the agreements if an
event of default or other predetermined events occur.
Financial collateral typically comprises highly liquid securities which are legally transferred and can be liquidated in the event of
counterparty default.
These offsetting and collateral arrangements and other credit risk mitigation strategies used by the Group are further explained in the
Credit risk management section.
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Notes to the financial statements (continued)
Assets at amortised cost and other investments
Assets at amortised cost and other investments
The notes included in this section focus on the Group’s loans and advances and deposits at amortised cost, leases, property, plant and
equipment and goodwill and intangible assets. Details regarding the Group’s liquidity and capital position can be found in the Treasury
and Capital risk section.
19 Loans and advances and deposits at amortised cost
Accounting for loans and advances and deposits held at amortised cost
Loans and advances to customers and banks, customer accounts, debt securities and most financial liabilities, are held at amortised
cost. That is, the initial fair value (which is normally the amount advanced or borrowed) is adjusted for repayments and the amortisation
of coupon, fees and expenses to represent the effective interest rate of the asset or liability. Balances deferred on-balance sheet as
effective interest rate adjustments are amortised to interest income over the life of the financial instrument to which they relate.
Financial assets that are held in a business model to collect the contractual cash flows and that contain contractual terms that give rise
on specified dates to cash flows that are SPPI, are measured at amortised cost. The carrying value of these financial assets at initial
recognition includes any directly attributable transaction costs. Refer to Note 1 for details on ‘solely payments of principal and interest’.
In determining whether the business model is a ‘hold to collect’ model, the objective of the business model must be to hold the financial
asset to collect contractual cash flows rather than holding the financial asset for trading or short-term profit taking purposes. While the
objective of the business model must be to hold the financial asset to collect contractual cash flows this does not mean the Group is
required to hold the financial assets until maturity. When determining if the business model objective is to collect contractual cash flows
the Group will consider past sales and expectations about future sales.
Loans and advances and deposits at amortised cost
As at 31 December
Loans and advances at amortised cost to banks
Loans and advances at amortised cost to customers
Debt securities at amortised cost
Total loans and advances at amortised cost
Deposits at amortised cost from banks
Deposits at amortised cost from customers
Total deposits at amortised cost
2022
£m
10,015
343,277
45,487
398,779
19,979
525,803
545,782
2021
£m
9,698
319,922
31,831
361,451
17,819
501,614
519,433
20 Property, plant and equipment
Accounting for property, plant and equipment
The Group applies IAS 16 Property Plant and Equipment and IAS 40 Investment Properties.
Property, plant and equipment is stated at cost, which includes direct and incremental acquisition costs less accumulated depreciation
and provisions for impairment, if required. Subsequent costs are capitalised if these result in enhancement of the asset.
Depreciation is provided on the depreciable amount of items of property, plant and equipment on a straight-line basis over their
estimated useful economic lives. Depreciation rates, methods and the residual values underlying the calculation of depreciation of
items of property, plant and equipment are kept under review to take account of any change in circumstances. The Group uses the
following annual rates in calculating depreciation:
Annual rates in calculating depreciation
Freehold land
Freehold buildings and long-leasehold property (more than 50 years to run)
Depreciation rate
Not depreciated
2-3.3%
Leasehold property over the remaining life of the lease (less than 50 years to run)
Over the remaining life of the lease
Costs of adaptation of freehold and leasehold property
Equipment installed in freehold and leasehold property
Computers and similar equipment
Fixtures and fittings and other equipment
6-10%
6-10%
17-33%
9-20%
Costs of adaptation and installed equipment are depreciated over the shorter of the life of the lease or the depreciation rates noted in
the table above.
Investment property
The Group initially recognises investment property at cost, and subsequently at fair value at each balance sheet date, reflecting market
conditions at the reporting date. Gains and losses on remeasurement are included in the income statement.
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Notes to the financial statements (continued)
Assets at amortised cost and other investments
Cost
As at 1 January 2022
Additions
Disposalsb
Exchange and other movements
As at 31 December 2022
Accumulated depreciation and impairment
As at 1 January 2022
Depreciation charge
Impairment
Disposalsb
Exchange and other movements
As at 31 December 2022
Net book value
Cost
As at 1 January 2021
Additions
Disposals
Exchange and other movements
As at 31 December 2021
Accumulated depreciation and impairment
As at 1 January 2021
Depreciation charge
Impairment
Disposals
Exchange and other movements
As at 31 December 2021
Net book value
£m
7
—
(1)
(1)
5
—
—
—
—
—
—
5
10
—
(2)
(1)
7
—
—
—
—
—
—
7
Investment
property
Property
Equipment
Right of use
assetsa
£m
£m
£m
4,131
273
3,210
313
(923)
(641)
104
3,585
136
3,018
1,920
37
(68)
61
1,950
(872)
(206)
(22)
65
(21)
(2,586)
(227)
—
630
(61)
(2,244)
(1,056)
774
894
3,091
189
(74)
4
3,210
(2,421)
(222)
—
66
(9)
(2,586)
624
1,934
32
(114)
68
1,920
(567)
(204)
(170)
60
9
(872)
1,048
(2,255)
(181)
(23)
882
(65)
(1,642)
1,943
4,002
274
(160)
15
4,131
(2,013)
(249)
(106)
136
(23)
(2,255)
1,876
Total
£m
9,268
623
(1,633)
300
8,558
(5,713)
(614)
(45)
1,577
(147)
(4,942)
3,616
9,037
495
(350)
86
9,268
(5,001)
(675)
(276)
262
(23)
(5,713)
3,555
Notes
a Right of use (ROU) asset balances relate to property leases under IFRS 16. Refer to Note 21 for further details.
b Disposals primarily pertain to fully depreciated assets which are not in use.
Property rentals of £10m (2021: £16m) have been included in other income.
The fair value of investment property is determined by reference to current market prices for similar properties, adjusted as necessary
for condition and location, or by reference to recent transactions updated to reflect current economic conditions. Discounted cash
flow techniques may be employed to calculate fair value where there have been no recent transactions, using current external market
inputs such as market rents and interest rates. Valuations are carried out by management with the support of appropriately qualified
independent valuers.
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Notes to the financial statements (continued)
Assets at amortised cost and other investments
21 Leases
Accounting for leases
IFRS 16 applies to all leases with the exception of licences of intellectual property, rights held by licensing agreements within the scope
of IAS 38 Intangible Assets, service concession arrangements, leases of biological assets within the scope of IAS 41 Agriculture and
leases of minerals, oil, natural gas and similar non-regenerative resources. IFRS 16 includes an accounting policy choice for a lessee to elect
not to apply IFRS 16 to remaining assets within the scope of IAS 38 Intangible Assets which the Group has decided to apply.
When the Group is the lessee, it is required to recognise both:
▪ A lease liability, measured at the present value of remaining cash flows on the lease, and
▪ A right of use (ROU) asset, measured at the amount of the initial measurement of the lease liability, plus any lease payments made
prior to commencement date, initial direct costs, and estimated costs of restoring the underlying asset to the condition required by
the lease, less any lease incentives received.
Subsequently the lease liability will increase for the accrual of interest, resulting in a constant rate of return throughout the life of the
lease, and reduce when payments are made. The right of use asset will amortise to the income statement over the life of the lease. The
lease liability is remeasured when there is a change in one of the following:
▪ Future lease payments arising from a change in an index or rate;
▪ The Group’s estimate of the amount expected to be payable under a residual value guarantee; or
▪ The Group’s assessment of whether it will exercise a purchase, extension or termination option.
When the lease liability is remeasured, a corresponding adjustment is made to the carrying amount of the ROU asset, or is recorded in
the income statement if the carrying amount of the ROU asset has been reduced to nil.
On the balance sheet, the ROU assets are included within property, plant and equipment and the lease liabilities are included within
other liabilities.
The Group applies the recognition exemption in IFRS 16 for leases with a term not exceeding 12 months. For these leases the lease
payments are recognised as an expense on a straight line basis over the lease term unless another systematic basis is more
appropriate.
When the Group is the lessor, the lease must be classified as either a finance lease or an operating lease. A finance lease is a lease which
confers substantially all the risks and rewards of the leased assets on the lessee. An operating lease is a lease where substantially all of
the risks and rewards of the leased asset remain with the lessor.
When the lease is deemed a finance lease, the leased asset is not held on the balance sheet; instead a finance lease receivable is
recognised representing the minimum lease payments receivable under the terms of the lease, discounted at the rate of interest
implicit in the lease.
When the lease is deemed an operating lease, the lease income is recognised on a straight-line basis over the period of the lease unless
another systematic basis is more appropriate. The Group holds the leased assets on balance sheet within property, plant and
equipment.
As a Lessor
Finance lease receivables are included within loans and advances at amortised cost.
The following table sets out a maturity analysis of lease receivables, showing the lease payments to be received after the reporting
date.
2022
2021
Gross
investment in
finance lease
receivables
Future finance
income
Present value
of minimum
lease
payments
receivable
Unguaranteed
residual
values
Gross
investment in
finance lease
receivables
Future finance
income
Present value
of minimum
lease
payments
receivable
Unguaranteed
residual
values
£m
14
9
2
1
1
1
£m
(1)
(1)
—
—
—
—
£m
13
8
2
1
1
1
28
(2)
26
£m
—
—
—
—
—
—
—
£m
29
19
6
2
1
1
58
£m
(3)
(2)
—
—
—
—
£m
26
17
6
2
1
1
(5)
53
£m
—
—
—
—
—
—
—
Not more than one year
One to two years
Two to three years
Three to four years
Four to five years
Over five years
Total
Barclays Asset Finance provided leasing and other asset finance facilities across a broad range of asset types to business and individual
customers.There is no impairment allowance for finance lease receivables in current and previous year.
The Group does not have any material operating leases as a lessor.
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Notes to the financial statements (continued)
Assets at amortised cost and other investments
Finance lease income
Finance lease income is included within interest income. The following table shows amounts recognised in the income statement
during the year.
Finance income from net investment in lease
Profit on sales
2022
£m
2
—
2021
£m
21
1
As a Lessee
The Group leases various offices, branches and other premises under non-cancellable lease arrangements to meet its operational
business requirements. In some instances, Barclays will sublease property to third parties when it is no longer needed to meet business
requirements. Currently, Barclays does not have any material subleasing arrangements.
ROU asset balances relate to property leases only. Refer to Note 20 for the carrying amount of ROU assets.
The total expenses recognised during the year for short term leases were £1m (2021: £3m). The portfolio of short term leases to which
Barclays is exposed at the end of the year is not dissimilar to the expenses recognised in the year.
Lease liabilities
As at 1 January
Interest expense
New leases
Disposals
Cash payments
Exchange and other movements
As at 31 December (see Note 23)
2022
£m
1,317
56
42
(13)
(239)
53
1,216
The below table sets out a maturity analysis of undiscounted lease liabilities, showing the lease payments after the reporting date.
Undiscounted lease liabilities maturity analysis
Not more than one year
One to two years
Two to three years
Three to four years
Four to five years
Five to ten years
Greater than ten years
2022
£m
229
216
193
160
140
457
105
2021
£m
1,444
64
43
(54)
(258)
78
1,317
2021
£m
230
215
197
182
149
503
163
Total undiscounted lease liabilities as at 31 December
1,500
1,639
In addition to the cash flows identified above, Barclays is exposed to:
▪ Variable lease payments: This variability will typically arise from either inflation index instruments or market-based pricing
adjustments. Currently, Barclays has 401 (2021: 609) leases out of the total 896 (2021: 1,111) leases which have variable lease
payment terms based on market-based pricing adjustments. Of the gross cash flows identified above, £1,087m (2021: £1,196m) is
attributable to leases with some degree of variability predominately linked to market-based pricing adjustments.
▪ Extension and termination options: The table above represents Barclays' best estimate of future cash outflows for leases, including
assumptions regarding the exercising of contractual extension and termination options. The above gross cash flows have been
reduced by £516m (2021: £434m) for leases where Barclays is highly expected to exercise an early termination option. However,
there is no significant impact where Barclays is expected to exercise an extension option.
In 2022, the Group recorded a one-off gain of £88m from sale and leaseback (2021: £33m).
The Group does not have any restrictions or covenants imposed by the lessor on its property leases which restrict its businesses.
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Notes to the financial statements (continued)
Assets at amortised cost and other investments
22 Goodwill and intangible assets
Accounting for goodwill and intangible assets
Goodwill
The carrying value of goodwill is determined in accordance with IFRS 3 Business Combinations and IAS 36 Impairment of Assets.
Goodwill arising on the acquisition of subsidiaries represents the excess of the fair value of the purchase consideration over the fair
value of the Group’s share of the assets acquired and the liabilities and contingent liabilities assumed on the date of the acquisition.
Goodwill is reviewed annually for impairment, or more frequently when there are indications that impairment may have occurred. The
test involves comparing the carrying value of a cash generating unit (CGU) including goodwill with the present value of the pre-tax cash
flows, discounted at a rate of interest that reflects the inherent risks, of the CGU to which the goodwill relates, or the CGU's fair value if
this is higher.
Intangible assets
Intangible assets other than goodwill are accounted for in accordance with IAS 38 Intangible Assets.
Intangible assets are initially recognised when they are separable or arise from contractual or other legal rights, the cost can be
measured reliably and, in the case of intangible assets not acquired in a business combination, where it is probable that future economic
benefits attributable to the assets will flow from their use.
For internally generated intangible assets, only costs incurred during the development phase are capitalised. Expenditure in the
research phase is expensed when it is incurred.
Intangible assets are stated at cost (which is, in the case of assets acquired in a business combination, the acquisition date fair value)
less accumulated amortisation and impairment, if any, and are amortised over their useful lives in a manner that reflects the pattern to
which they contribute to future cash flows, generally using the amortisation periods set out below:
Annual rates in calculating amortisation
Goodwill
Internally generated softwarea
Other software
Customer lists
Licences and other
Amortisation period
Not amortised
12 months to 6 years
12 months to 6 years
12 months to 25 years
12 months to 25 years
Note
a Exceptions to the above rate relate to useful lives of certain core banking platforms that are assessed individually and, if appropriate, amortised over longer periods ranging from 10 to 15 years.
Intangible assets are reviewed for impairment when there are indications that impairment may have occurred. Intangible assets not yet
available for use are reviewed annually for impairment.
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Notes to the financial statements (continued)
Assets at amortised cost and other investments
2022
Cost
As at 1 January 2022
Additions
Disposalsa
Exchange and other movements
As at 31 December 2022
Accumulated amortisation and impairment
As at 1 January 2022
Disposalsa
Amortisation charge
Impairment charge
Exchange and other movements
As at 31 December 2022
Net book value
2021
Cost
As at 1 January 2021
Additions
Disposalsa
Exchange and other movements
As at 31 December 2021
Accumulated amortisation and impairment
As at 1 January 2021
Disposalsa
Amortisation charge
Impairment charge
Exchange and other movements
As at 31 December 2021
Net book value
Note
a Disposals pertain to fully amortised assets which are not in use.
Total
£m
14,863
1,160
(861)
460
15,622
(6,802)
861
(1,109)
(18)
(315)
(7,383)
8,239
14,511
1,255
(917)
14
14,863
908
19
(39)
96
984
(429)
39
(69)
—
(44)
(503)
481
490
407
(3)
14
908
Goodwill
£m
4,718
—
—
19
4,737
Internally
generated
software
£m
7,180
1,047
(774)
174
7,627
Intangible assets
Other
software
£m
Customer
lists
£m
Licences
and other
£m
626
18
(36)
12
620
1,431
76
(12)
159
1,654
(825)
(3,884)
(364)
(1,300)
12
(44)
—
(143)
(1,475)
179
1,419
—
(5)
17
1,431
—
—
—
—
(825)
3,912
4,716
—
—
2
4,718
774
(946)
(18)
(121)
(4,195)
3,432
7,247
842
(894)
(15)
7,180
(825)
(3,779)
—
—
—
—
(825)
3,893
894
(867)
(127)
(5)
(3,884)
3,296
36
(50)
—
(7)
(385)
235
639
6
(15)
(4)
626
(328)
15
(51)
—
—
(364)
262
(1,252)
(379)
(6,563)
5
(36)
—
(17)
(1,300)
131
3
(44)
—
(9)
(429)
479
917
(998)
(127)
(31)
(6,802)
8,061
Goodwill
Goodwill and Intangible assets are allocated to business operations according to business segments as follows:
Barclays UK
Barclays International
Head Office
Total
2022
Goodwill
Intangibles
£m
3,560
310
42
3,912
£m
1,263
3,062
2
4,327
Total
£m
4,823
3,372
44
8,239
2021
Goodwill
Intangibles
£m
3,560
291
42
3,893
£m
1,233
2,930
5
4,168
Total
£m
4,793
3,221
47
8,061
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Notes to the financial statements (continued)
Assets at amortised cost and other investments
Critical accounting estimates and judgements
Goodwill
Testing goodwill for impairment involves a significant amount of judgement. Goodwill is allocated to CGUs for the purpose of
impairment testing. The review of goodwill for impairment involves calculating a value in use (VIU) valuation which is compared to the
carrying value of a CGU associated with the goodwill to determine whether any impairment has occurred. This includes the
identification of independent CGUs across the organisation and the allocation of goodwill to those CGUs.
The calculation of a value in use contains a high degree of uncertainty in estimating the future cash flows and the rates used to discount
them. Key judgements include determining the carrying value of the CGU, the cash flows and discount rates used in the calculation.
▪ The cash flow forecasts used by management involve judgement and are based upon a view of the future prospects of the business
and market conditions at the point in time the assessment is prepared. The estimation of cash flows is sensitive to the periods for
which detailed forecasts are available and to assumptions regarding long-term sustainable cash flows.
▪ The discount rates applied to the future cash flows also involve judgement as they can have a significant impact on the valuation.
The discount rates used are compared to market participants to ensure that they are appropriate and based on an estimated cost of
equity for each CGU.
▪ The choice of a terminal growth rate used to determine the present value of the future cash flows of the CGUs is also a judgement
that can impact the outcome of the assessment. The terminal growth rate and discount rates used may vary due to external market
rates and economic conditions that are beyond management’s control, including the potential effect of climate change.
Further details of some of the key judgements are set out below.
2022 impairment review
The 2022 impairment review was performed during Q4 2022. In comparison to the prior year, there is an expectation of an increasing
interest rate environment which would impact favourably on the Barclays UK CGUs. A detailed assessment has been performed, with
the approach and results of this analysis set out below.
Determining the carrying value of CGUs
The carrying value for each CGU is the sum of the tangible equity, goodwill and intangible asset balances associated with that CGU.
The Group manages the assets and liabilities of its CGUs with reference to the tangible equity of the respective businesses. That
tangible equity is derived from the level of risk weighted assets (RWAs) and capital required to be deployed in the CGU and therefore
reflects its relative risk, as well as the level of capital that management consider a market participant would be required to hold and
retain to support business growth.
The goodwill held across the Group has been allocated to the CGU where it originated, based upon historical records. The intangible
asset balances are allocated to the CGUs based upon their expected usage of these assets.
Cash flows
The five-year cash flows used in the calculation are based on the formally agreed medium-term plans approved by the Board. These are
prepared using macroeconomic assumptions which management consider reasonable and supportable, and reflect business agreed
initiatives for the forecast period. The macroeconomic assumptions underpinning the medium term plan were determined in August
2022 and management has considered whether there are subsequent significant changes in those assumptions which would adversely
impact the results of the impairment review.
As required by IAS 36, all estimates of future cash flows exclude cash inflows or outflows that are expected to arise from restructuring
initiatives where a constructive obligation to carry out the plan does not yet exist.
In line with prior year treatment, the Education, Social Housing and Local Authority (ESHLA) portfolio has been excluded from the
Business Banking CGU cash flows. This is a legacy loan portfolio which was previously within the Non-Core bank and was not part of the
business to which the goodwill relates. As such, the cash flows relating to this portfolio have been excluded from the Business Banking
VIU calculation.
Discount rates
IAS 36 requires that the discount rate used in a value in use calculation reflects the pre-tax rate an investor would require if they were to
choose an investment that would generate similar cash flows to those that the entity expects to generate from the asset. In
determining the discount rate, management have in previous years identified the cost of equity associated with market participants
that closely resemble the Group's CGUs and adjusted them for tax to arrive at the pre-tax equivalent rate. This method assumed a
static rate of tax that was applicable to the pre-tax cash flows of the CGU. The cost of equity without adjusting for the tax rate has been
used as the discount rate in the 2022 impairment assessment and applied to the post tax cash flows of the CGU. This post-tax method
incorporates the impact of changing tax rates on the cash flows and is expected to produce the same VIU result as the pre-tax method
adjusted for varying tax rates. Using the resultant VIU the equivalent pre-tax discount rate has been calculated. The range of equivalent
pre-tax discount rates applicable across the CGUs range from 14.1% to 16.5% (2021: 12.5% to 15.1%).
Terminal growth rate
The terminal growth rate is used to estimate the effect of projecting cash flows to the end of an asset’s useful economic life. It is
management’s judgement that the cash flows associated with the CGUs will grow in line with the major economies in which the Group
operates. Inflation rates are used as an approximation of future growth rates and form the basis of the terminal growth rates applied.
The terminal growth rate used is 2.0% (2021: 2.0%).
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Notes to the financial statements (continued)
Assets at amortised cost and other investments
Outcome of goodwill and intangibles review
The Personal Banking and Business Banking CGUs carry the majority of the Group’s goodwill balance, predominantly as a consequence
of the Woolwich acquisition. The goodwill within Personal Banking was £2,752m (2021: £2,752m), of which £2,501m (2021: £2,501m)
was attributable to Woolwich, and within Business Banking was £629m (2021: £629m), fully attributable to Woolwich. The recoverable
amount for both Personal Banking and Business Banking have increased in comparison to the 2021 impairment review, reflective of
improvements in the interest rate and macroeconomic outlook.
The largest portion of the Group’s intangible assets sit within the Cards and Payments CGU, part of Barclays International with an
allocation of £1,531m (2021: £1,351m).
Based on management’s plans and assumptions the value in use exceeds the carrying value of the CGUs and no impairment has been
indicated.
The outcome of the impairment review for Personal Banking, Business Banking and Cards and Payments are set out below:
Cash generating unit
Tangible equity
Goodwill
Intangibles
Carrying value
Value in use
Value in use
exceeding carrying
value
Value in use
exceeding carrying
value 2021
Personal Banking
Business Banking
Cards and Payments
Total
£m
5,091
1,549
3,780
10,420
£m
2,752
629
229
3,610
£m
928
216
1,531
2,675
£m
8,771
2,394
5,540
16,705
£m
13,438
9,017
7,138
29,593
£m
4,667
6,623
1,598
12,888
£m
1,489
3,623
1,025
6,137
Sensitivity of key judgements
The CGUs are sensitive to possible adverse changes in the key assumptions that support the recoverable amount:
Cash flows: The medium-term plans used to determine the cash flows used in the VIU calculation rely on macroeconomic forecasts,
including interest rates, GDP and unemployment, and forecast levels of market and client activity. Interest rate assumptions impact
planned cash flows from both customer income and structural hedge contributions and therefore cash flow expectations are highly
sensitive to movements in the yield curve. The cash flows also contain assumptions with regard to the prudential and financial conduct
regulatory environment which may be subject to change. Given the current level of economic uncertainty, a 10% reduction in cash
flows has been provided to show the sensitivity of the outcome to a change in these key assumptions.
Discount rate: The discount rate should reflect the market risk-free rate adjusted for the inherent risks of the business it is applied to.
Management have identified discount rates for comparable businesses and consider these to be a reasonable estimate of a suitable
market rate for the profile of the business unit being tested. The risk that these discount rates may not be appropriate is quantified
below and shows the impact of a 100 bps change in the discount rate.
Terminal growth rate: The terminal growth rate is used to estimate the cash flows into perpetuity based on the expected longevity of
the CGUs' businesses. The terminal growth rate is sensitive to uncertainties in the macroeconomic environment. The risk that using
inflation data may not be appropriate for its determination is quantified below and shows the impact of 100 bps change in the terminal
growth rate.
Allocated capital rate: Tangible equity is allocated based on the level of risk weighted assets (RWAs) and capital required to be
deployed in the CGU which is dependent on the relative risk of businesses. The capital ratio used in determining the level of tangible
equity allocated to the CGU and its capital cash flows could move over time. The impact of a 50bps increase in capital ratio is quantified
below.
The sensitivity of the value in use to key judgements in the calculations is set out below:
Reduction in headroom
Change required to reduce headroom to zero
Cash generating unit
Carrying
value
Value in
use
Value in
use
exceeding
carrying
value
Discount
rate
Terminal
growth
rate
100 bps
increase
in the
discount
rate
100 bps
decrease
in terminal
growth
rate
50 bps
increase to
allocated
capital rate
10%
reduction in
forecasted
cash flows
Discount
rate
Terminal
growth
rate
Allocated
capital
rate
£m
£m
£m
Personal Banking
8,771
13,438
4,667
Cards and Payments
5,540
7,138
1,598
Total
14,311
20,576
6,265
%
16.5
15.9
%
2.0
2.0
£m
£m
£m
£m
(944)
(596)
(279)
(1,493)
(724)
(515)
(287)
(1,005)
%
6.9
2.5
%
(14.8)
(3.7)
%
8.4
2.8
Cash
flows
%
(31.3)
(15.9)
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Notes to the financial statements (continued)
Accruals, provisions, contingent liabilities and legal proceedings
Accruals, provisions, contingent liabilities and legal proceedings
The notes included in this section focus on the Group’s accruals, provisions and contingent liabilities. Provisions are recognised for
present obligations arising as consequences of past events where it is probable that a transfer of economic benefit will be necessary to
settle the obligation, and it can be reliably estimated. Contingent liabilities reflect potential liabilities that are not recognised on the
balance sheet.
23 Other liabilities
Accruals and deferred income
Other creditors
Items in the course of collection due to other banks
Lease liabilities (refer to Note 21)
Liabilities included in disposal groups classified as held for sale
Other liabilities
2022
£m
4,618
7,870
85
1,216
—
2021
£m
4,173
4,793
202
1,317
20
13,789
10,505
24 Provisions
Accounting for provisions
The Group applies IAS 37 Provisions, Contingent Liabilities and Contingent Assets in accounting for non-financial liabilities.
Provisions are recognised for present obligations arising as consequences of past events where it is more likely than not that a transfer
of economic benefit will be necessary to settle the obligation, which can be reliably estimated. Provision is made for the anticipated cost
of restructuring, including redundancy costs, when an obligation exists; for example, when the Group has a detailed formal plan for
restructuring a business and has raised valid expectations in those affected by the restructuring by announcing its main features or
starting to implement the plan.
Critical accounting estimates and judgements
The financial reporting of provisions involves a significant degree of judgement and is complex. Identifying whether a present obligation
exists and estimating the probability, timing, nature and quantum of the outflows that may arise from past events requires judgements
to be made based on the specific facts and circumstances relating to individual events and often requires specialist professional advice.
When matters are at an early stage, accounting judgements and estimates can be difficult because of the high degree of uncertainty
involved. Management continues to monitor matters as they develop to re-evaluate on an ongoing basis whether provisions should be
recognised, however there can remain a wide range of possible outcomes and uncertainties, particularly in relation to legal, competition
and regulatory matters, and as a result it is often not practicable to make meaningful estimates even when matters are at a more
advanced stage.
The complexity of such matters often requires the input of specialist professional advice in making assessments to produce estimates.
Customer redress and legal, competition and regulatory matters are areas where a higher degree of professional judgement is required.
The amount that is recognised as a provision can also be very sensitive to the assumptions made in calculating it. This gives rise to a
large range of potential outcomes which require judgement in determining an appropriate provision level. See Note 26 for more detail of
legal, competition and regulatory matters.
As at 1 January 2022
Additions
Amounts utilised
Unused amounts reversed
Exchange and other movements
As at 31 December 2022
Restatedb
Restatedb
Onerous
contracts
Redundancy
and
restructuring
£m
5
—
(2)
(3)
—
—
£m
326
77
(186)
(88)
7
136
Undrawn
contractually
committed
facilities and
guaranteesa
£m
542
145
—
Customer
redress
£m
530
1,184
(1,393)
(128)
(94)
24
583
151
378
Legal,
competition
and
regulatory
matters
Sundry
provisions
£m
226
462
(557)
(15)
43
159
£m
279
120
(60)
(64)
13
288
Total
£m
1,908
1,988
(2,198)
(392)
238
1,544
Notes
a Undrawn contractually committed facilities and guarantees provisions are accounted for under IFRS 9.
b 2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Restatement of financial statements (Note 1a) on page 428 for further details.
Provisions expected to be recovered or settled within no more than 12 months after 31 December 2022 were £1,348m (2021:
£1,754m).
Onerous contracts
Onerous contract provisions comprise an estimate of unavoidable costs involved with fulfilling the terms and conditions of contracts
net of any expected benefits to be received.
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Notes to the financial statements (continued)
Accruals, provisions, contingent liabilities and legal proceedings
Redundancy and restructuring
These provisions comprise the estimated cost of restructuring, including redundancy costs where an obligation exists. Additions made
during the year relate to formal restructuring plans and have either been utilised, or reversed where total costs are now expected to be
lower than the original provision amount.
Undrawn contractually committed facilities and guarantees
Impairment allowance under IFRS 9 considers both the drawn and the undrawn counterparty exposure. For retail portfolios, the total
impairment allowance is allocated to the drawn exposure to the extent that the allowance does not exceed the exposure as ECL is not
reported separately. Any excess is reported on the liability side of the balance sheet as a provision. For wholesale portfolios, the
impairment allowance on the undrawn exposure is reported on the liability side of the balance sheet as a provision. For further
information, refer to the Credit risk section for loan commitments and financial guarantees on page 308.
Customer redress
Customer redress provisions comprise the estimated cost of making redress payments to customers, clients and counterparties for
losses or damages associated with inappropriate judgement in the execution of the Group’s business activities.
Legal, competition and regulatory matters
The Group is engaged in various legal proceedings, both in the UK and a number of other overseas jurisdictions, including the US. For
further information in relation to legal proceedings and discussion of the associated uncertainties, refer to Note 26.
Sundry provisions
This category includes provisions that do not fit into any of the other categories, such as fraud losses and dilapidation provisions.
25 Contingent liabilities and commitments
Accounting for contingent liabilities
Contingent liabilities are possible obligations whose existence will be confirmed only by uncertain future events and present obligations
where the transfer of economic resources is uncertain or cannot be reliably measured. Contingent liabilities are not recognised on the
balance sheet but are disclosed unless the likelihood of an outflow of economic resources is remote.
The following table summarises the nominal principal amount of contingent liabilities and commitments which are not recorded on-
balance sheet:
Guarantees and letters of credit pledged as collateral security
Performance guarantees, acceptances and endorsements
Total contingent liabilities and financial guarantees
Of which: Financial guarantees carried at fair value
Documentary credits and other short-term trade related transactions
Standby facilities, credit lines and other commitments
Total commitments
Of which: Loan commitments carried at fair value
2022
£m
17,760
6,445
24,205
1,423
1,748
393,760
395,508
13,471
2021
£m
15,549
5,797
21,346
231
1,584
344,127
345,711
18,571
Provisions for expected credit losses held against contingent liabilities and commitments equal £583m (2021: £542m) and are reported
in Note 24. Further details on contingent liabilities relating to legal and competition and regulatory matters can be found in Note 26.
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Notes to the financial statements (continued)
Accruals, provisions, contingent liabilities and legal proceedings
26 Legal, competition and regulatory matters
The Group faces legal, competition and regulatory challenges, many of which are beyond our control. The extent of the impact of these
matters cannot always be predicted but may materially impact our operations, financial results, condition and prospects. Matters arising
from a set of similar circumstances can give rise to either a contingent liability or a provision, or both, depending on the relevant facts
and circumstances.
The recognition of provisions in relation to such matters involves critical accounting estimates and judgments in accordance with the
relevant accounting policies applicable to Note 24, Provisions. We have not disclosed an estimate of the potential financial impact or
effect on the Group of contingent liabilities where it is not currently practicable to do so. Various matters detailed in this note seek
damages of an unspecified amount. While certain matters specify the damages claimed, such claimed amounts do not necessarily
reflect the Group’s potential financial exposure in respect of those matters.
Matters are ordered under headings corresponding to the financial statements in which they are disclosed.
1. Barclays PLC and Barclays Bank PLC
Investigations into certain advisory services agreements
FCA proceedings
In 2008, Barclays Bank PLC and Qatar Holdings LLC entered into two advisory service agreements (the Agreements). The Financial
Conduct Authority (FCA) conducted an investigation into whether the Agreements may have related to Barclays PLC’s capital raisings
in June and November 2008 (the Capital Raisings) and therefore should have been disclosed in the announcements or public
documents relating to the Capital Raisings. In 2013, the FCA issued warning notices (the Warning Notices) finding that Barclays PLC and
Barclays Bank PLC acted recklessly and in breach of certain disclosure-related listing rules, and that Barclays PLC was also in breach of
Listing Principle 3. The financial penalty provided in the Warning Notices was £50m. Barclays PLC and Barclays Bank PLC contested the
findings. In September 2022, the FCA’s Regulatory Decisions Committee (RDC) issued Decision Notices finding that Barclays PLC and
Barclays Bank PLC breached certain disclosure-related listing rules. The RDC also found that in relation to the disclosures made in the
Capital Raising of November 2008, Barclays PLC and Barclays Bank PLC acted recklessly, and that Barclays PLC breached Listing
Principle 3. The RDC upheld the combined penalty of £50m on Barclays PLC and Barclays Bank PLC, the same penalty as in the Warning
Notices. Barclays PLC and Barclays Bank PLC have referred the RDC’s findings to the Upper Tribunal for reconsideration.
Investigations into LIBOR and other benchmarks and related civil actions
Regulators and law enforcement agencies, including certain competition authorities, from a number of governments have conducted
investigations relating to Barclays Bank PLC’s involvement in allegedly manipulating certain financial benchmarks, such as LIBOR.
Various individuals and corporates in a range of jurisdictions have threatened or brought civil actions against the Group and other banks
in relation to the alleged manipulation of LIBOR and/or other benchmarks.
USD LIBOR civil actions
The majority of the USD LIBOR cases, which have been filed in various US jurisdictions, have been consolidated for pre-trial purposes in
the US District Court in the Southern District of New York (SDNY). The complaints are substantially similar and allege, among other
things, that Barclays PLC, Barclays Bank PLC, Barclays Capital Inc. (BCI) and other financial institutions individually and collectively
violated provisions of the US Sherman Antitrust Act (Antitrust Act), the US Commodity Exchange Act (CEA), the US Racketeer
Influenced and Corrupt Organizations Act (RICO), the US Securities Exchange Act of 1934 and various state laws by manipulating USD
LIBOR rates.
Putative class actions and individual actions seek unspecified damages with the exception of one lawsuit, in which the plaintiffs are
seeking no less than $100m in actual damages and additional punitive damages against all defendants, including Barclays Bank PLC.
Some of the lawsuits also seek trebling of damages under the Antitrust Act and RICO. Barclays Bank PLC has previously settled certain
claims. In 2022, Barclays Bank PLC also settled one further matter. The financial impact of the settlement is not material to the Group’s
operating results, cash flows or financial position.
Sterling LIBOR civil actions
In 2016, two putative class actions filed in the SDNY against Barclays Bank PLC, BCI and other Sterling LIBOR panel banks alleging,
among other things, that the defendants manipulated the Sterling LIBOR rate in violation of the Antitrust Act, CEA and RICO, were
consolidated. The defendants’ motion to dismiss the claims was granted in 2018. The plaintiffs have appealed the dismissal.
Japanese Yen LIBOR civil actions
In 2012, a putative class action was filed in the SDNY against Barclays Bank PLC and other Japanese Yen LIBOR panel banks by a lead
plaintiff involved in exchange-traded derivatives and members of the Japanese Bankers Association’s Euroyen Tokyo Interbank
Offered Rate (Euroyen TIBOR) panel. The complaint alleges, among other things, manipulation of the Euroyen TIBOR and Yen LIBOR
rates and breaches of the CEA and the Antitrust Act. In 2014, the court dismissed the plaintiff’s antitrust claims, and in 2020, the court
dismissed the plaintiff’s remaining CEA claims.
In 2015, a second putative class action, making similar allegations to the above class action, was filed in the SDNY against Barclays PLC,
Barclays Bank PLC and BCI. Barclays and the plaintiffs have reached a settlement of $17.75m for both actions. A final court approval
hearing has been scheduled for March 2023.
SIBOR/SOR civil action
In 2016, a putative class action was filed in the SDNY against Barclays PLC, Barclays Bank PLC, BCI and other defendants, alleging
manipulation of the Singapore Interbank Offered Rate (SIBOR) and Singapore Swap Offer Rate (SOR). The plaintiffs and remaining
defendants (which includes Barclays Bank PLC) reached a joint settlement to resolve this matter for $91m, which received final court
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Notes to the financial statements (continued)
Accruals, provisions, contingent liabilities and legal proceedings
approval in November 2022. This matter is now concluded. The financial impact of Barclays’ share of the joint settlement is not material
to the Group’s operating results, cash flows or financial position.
ICE LIBOR civil actions
In 2019, several putative class actions were filed in the SDNY against a panel of banks, including Barclays PLC, Barclays Bank PLC, BCI,
other financial institution defendants and Intercontinental Exchange Inc. and certain of its affiliates (ICE), asserting antitrust claims that
the defendants manipulated USD LIBOR through the defendants’ submissions to ICE. These actions have been consolidated. The
defendants’ motion to dismiss was granted in 2020 and the plaintiffs appealed. In February 2022, the dismissal was affirmed on appeal.
The plaintiffs did not seek US Supreme Court review. This matter is now concluded.
In August 2020, an ICE LIBOR-related action was filed by a group of individual plaintiffs in the US District Court for the Northern District
of California on behalf of individual borrowers and consumers of loans and credit cards with variable interest rates linked to USD ICE
LIBOR. The plaintiffs’ motion seeking, among other things, preliminary and permanent injunctions to enjoin the defendants from
continuing to set LIBOR or enforce any financial instrument that relies in whole or in part on USD LIBOR was denied. The defendants’
motion to dismiss the case was granted in September 2022. The plaintiffs have filed an amended complaint, which the defendants have
moved to dismiss.
Non-US benchmarks civil actions
There remains one claim, issued in 2017, against Barclays Bank PLC and other banks in the UK in connection with alleged manipulation
of LIBOR. Proceedings have also been brought in a number of other jurisdictions in Europe, Argentina and Israel relating to alleged
manipulation of LIBOR and EURIBOR. Additional proceedings in other jurisdictions may be brought in the future.
Credit Default Swap civil action
A putative antitrust class action is pending in New Mexico federal court against Barclays Bank PLC, BCI and various other financial
institutions. The plaintiffs, the New Mexico State Investment Council and certain New Mexico pension funds, allege that the defendants
conspired to manipulate the benchmark price used to value Credit Default Swap (CDS) contracts at settlement (i.e. the CDS final
auction price). The plaintiffs allege violations of US antitrust laws and the CEA, and unjust enrichment under state law. The defendants
have moved to dismiss the case.
Foreign Exchange investigations and related civil actions
The Group has been the subject of investigations in various jurisdictions in relation to certain sales and trading practices in the Foreign
Exchange market. Settlements were reached in various jurisdictions in connection with these investigations, including the EU and US.
The financial impact of any remaining ongoing investigations is not expected to be material to the Group’s operating results, cash flows
or financial position. Various individuals and corporates in a range of jurisdictions have threatened or brought civil actions against the
Group and other banks in relation to alleged manipulation of Foreign Exchange markets.
US FX opt out civil action
In 2018, Barclays Bank PLC and BCI settled a consolidated action filed in the SDNY, alleging manipulation of Foreign Exchange markets
(Consolidated FX Action), for a total amount of $384m. Also in 2018, a group of plaintiffs, who opted out of the Consolidated FX Action,
filed a complaint in the SDNY against Barclays PLC, Barclays Bank PLC, BCI and other defendants. Some of the plaintiffs’ claims were
dismissed in 2020. Barclays PLC, Barclays Bank PLC, and BCI have reached a settlement in principle of all claims against them in the
matter. The financial impact of this settlement is not material to the Group’s operating results, cash flows or financial position.
US retail basis civil action
In 2015, a putative class action was filed against several international banks, including Barclays PLC and BCI, on behalf of a proposed
class of individuals who exchanged currencies on a retail basis at bank branches (Retail Basis Claims). The SDNY has ruled that the Retail
Basis Claims are not covered by the settlement agreement in the Consolidated FX Action. The Court subsequently dismissed all Retail
Basis Claims against the Group and all other defendants. The plaintiffs have filed an amended complaint.
Non-US FX civil actions
Legal proceedings have been brought or are threatened against Barclays PLC, Barclays Bank PLC, BCI and Barclays Execution Services
Limited (BX) in connection with alleged manipulation of Foreign Exchange in the UK, a number of other jurisdictions in Europe, Israel,
Brazil and Australia. Additional proceedings may be brought in the future.
The above-mentioned proceedings include two purported class actions filed against Barclays PLC, Barclays Bank PLC, BX, BCI and
other financial institutions in the UK Competition Appeal Tribunal (CAT) in 2019. The CAT refused to certify these claims in the first
quarter of 2022 although the claimants have obtained permission to appeal and judicially review the CAT’s decisions. Also in 2019, a
separate claim was filed in the UK in the High Court of Justice (High Court), and subsequently transferred to the CAT, by various banks
and asset management firms against Barclays Bank PLC and other financial institutions alleging breaches of European and UK
competition laws related to FX trading. This claim has been settled as part of the settlement in principle referred to under the US FX opt
out civil action above.
Metals-related civil actions
A number of US civil complaints, each on behalf of a proposed class of plaintiffs, have been consolidated and transferred to the SDNY.
The complaints allege that Barclays Bank PLC and other members of The London Gold Market Fixing Ltd. manipulated the prices of
gold and gold derivative contracts in violation of the Antitrust Act and other federal laws. The parties reached a joint settlement to
resolve this matter for $50m. The settlement received final court approval in August 2022. This matter is now concluded. The financial
impact of Barclays’ share of the joint settlement is not material to the Group’s operating results, cash flows or financial position. A
separate US civil complaint by a proposed class of plaintiffs against a number of banks, including Barclays Bank PLC, BCI and BX, alleging
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manipulation of the price of silver in violation of the CEA, the Antitrust Act and state antitrust and consumer protection laws, has been
dismissed as against the Barclays entities. The plaintiffs have the option to seek the court’s permission to appeal.
Civil actions have also been filed in Canadian courts against Barclays PLC, Barclays Bank PLC, Barclays Capital Canada Inc. and BCI on
behalf of proposed classes of plaintiffs alleging manipulation of gold and silver prices.
US residential mortgage related civil actions
There are two pending US Residential Mortgage-Backed Securities (RMBS) related civil actions arising from unresolved repurchase
requests submitted by Trustees for certain RMBS, alleging breaches of various loan-level representations and warranties (R&Ws) made
by Barclays Bank PLC and/or a subsidiary acquired in 2007. In one action, the Barclays defendants’ motion for summary judgment was
granted in June 2022 and the plaintiffs’ R&W breach claim was dismissed. The plaintiffs are appealing the decision. The other
repurchase action is pending.
Barclays Bank PLC reached settlements to resolve two other repurchase actions, which have received final court approval. Payment of
the settlement amounts was completed in July 2022. These matters are now concluded. The financial impact of the settlements is not
material to the Group’s operating results, cash flows or financial position.
In 2020, a civil litigation claim was filed in the New Mexico First Judicial District Court by the State of New Mexico against six banks,
including BCI, on behalf of two New Mexico state pension funds and the New Mexico State Investment Council relating to legacy RMBS
purchases. As to BCI, the complaint alleges that the funds purchased approximately $22m in RMBS underwritten by BCI. The parties
have reached a joint settlement to resolve this matter for $32.5m. The settlement was paid in April 2022. The financial impact of BCI’s
share of the joint settlement is not material to the Group’s operating results, cash flows or financial position.
Government and agency securities civil actions
Treasury auction securities civil actions
Consolidated putative class action complaints filed in US federal court against Barclays Bank PLC, BCI and other financial institutions
under the Antitrust Act and state common law allege that the defendants (i) conspired to manipulate the US Treasury securities market
and/or (ii) conspired to prevent the creation of certain platforms by boycotting or threatening to boycott such trading platforms. The
court dismissed the consolidated action in March 2021. The plaintiffs filed an amended complaint. The defendants’ motion to dismiss
the amended complaint was granted in March 2022. The plaintiffs are appealing this decision.
In addition, certain plaintiffs have filed a related, direct action against BCI and certain other financial institutions, alleging that defendants
conspired to fix and manipulate the US Treasury securities market in violation of the Antitrust Act, the CEA and state common law.
Supranational, Sovereign and Agency bonds civil actions
Civil antitrust actions have been filed in the SDNY and Federal Court of Canada in Toronto against Barclays Bank PLC, BCI, BX, Barclays
Capital Securities Limited and, with respect to the civil action filed in Canada only, Barclays Capital Canada, Inc. and other financial
institutions alleging that the defendants conspired to fix prices and restrain competition in the market for US dollar-denominated
Supranational, Sovereign and Agency bonds.
In one of the actions filed in the SDNY, the court granted the defendants’ motion to dismiss the plaintiffs’ complaint. The dismissal was
affirmed on appeal; however, the district court subsequently informed the parties of a potential conflict. The matter was assigned to a
new district court judge and the plaintiffs moved to vacate the dismissal order, which was denied. The plaintiffs’ time to appeal has
expired and this matter is now concluded. The plaintiffs have voluntarily dismissed the other SDNY action. In the Federal Court of
Canada action, the parties have reached a settlement in principle, which will require court approval. The financial impact of the
settlement is not expected to be material to the Group’s operating results, cash flows or financial position.
Variable Rate Demand Obligations civil actions
Civil actions have been filed against Barclays Bank PLC and BCI and other financial institutions alleging the defendants conspired or
colluded to artificially inflate interest rates set for Variable Rate Demand Obligations (VRDOs). VRDOs are municipal bonds with interest
rates that reset on a periodic basis, most commonly weekly. Two actions in state court have been filed by private plaintiffs on behalf of
the states of Illinois and California. Three putative class action complaints have been consolidated in the SDNY. In the consolidated
SDNY class action, certain of the plaintiffs' claims were dismissed in November 2020 and June 2022. In the California action, the
plaintiffs’ claims were dismissed in June 2021. The plaintiffs have appealed the dismissal. In the Illinois action, trial has been scheduled
for August 2023.
Odd-lot corporate bonds antitrust class action
In 2020, BCI, together with other financial institutions, were named as defendants in a putative class action. The complaint alleges a
conspiracy to boycott developing electronic trading platforms for odd-lots and price fixing. The plaintiffs demand unspecified money
damages. The defendants’ motion to dismiss was granted in 2021 and the plaintiffs have appealed the dismissal.
Interest rate swap and credit default swap US civil actions
Barclays PLC, Barclays Bank PLC and BCI, together with other financial institutions that act as market makers for interest rate swaps
(IRS), are named as defendants in several antitrust class actions which were consolidated in the SDNY in 2016. The complaints allege
the defendants conspired to prevent the development of exchanges for IRS and demand unspecified money damages.
In 2018, trueEX LLC filed an antitrust class action in the SDNY against a number of financial institutions including Barclays PLC, Barclays
Bank PLC and BCI based on similar allegations with respect to trueEX LLC’s development of an IRS platform. In 2017, Tera Group Inc.
filed a separate civil antitrust action in the SDNY claiming that certain conduct alleged in the IRS cases also caused the plaintiff to suffer
harm with respect to the Credit Default Swaps market. In 2018 and 2019, respectively, the court dismissed certain claims in both cases
for unjust enrichment and tortious interference but denied motions to dismiss the federal and state antitrust claims, which remain
pending.
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BDC Finance L.L.C.
In 2008, BDC Finance L.L.C. (BDC) filed a complaint in the Supreme Court of the State of New York (NY Supreme Court), demanding
damages of $298m, alleging that Barclays Bank PLC had breached a contract in connection with a portfolio of total return swaps
governed by an ISDA Master Agreement (the Master Agreement). Following a trial, the court ruled in 2018 that Barclays Bank PLC was
not a defaulting party, which was affirmed on appeal. In April 2021, the trial court entered judgement in favour of Barclays Bank PLC for
$3.3m and as yet to be determined legal fees and costs. BDC appealed. In January 2022, the appellate court reversed the trial court’s
summary judgment decision in favour of Barclays Bank PLC and remanded the case to the lower court for further proceedings. The
parties have filed cross-motions on the scope of trial. The trial has been adjourned pending a decision on the motions and any
subsequent appeal.
In 2011, BDC’s investment advisor, BDCM Fund Adviser, LLC and its parent company, Black Diamond Capital Holdings, LLC, also sued
Barclays Bank PLC and BCI in Connecticut State Court for unspecified damages allegedly resulting from Barclays Bank PLC’s conduct
relating to the Master Agreement, asserting claims for violation of the Connecticut Unfair Trade Practices Act and tortious interference
with business and prospective business relations. This case is currently stayed.
Civil actions in respect of the US Anti-Terrorism Act
There are a number of civil actions, on behalf of more than 4,000 plaintiffs, filed in US federal courts in the US District Court in the
Eastern District of New York (EDNY) and SDNY against Barclays Bank PLC and a number of other banks. The complaints generally allege
that Barclays Bank PLC and those banks engaged in a conspiracy to facilitate US dollar-denominated transactions for the Iranian
Government and various Iranian banks, which in turn funded acts of terrorism that injured or killed the plaintiffs or the plaintiffs’ family
members. The plaintiffs seek to recover damages for pain, suffering and mental anguish under the provisions of the US Anti-Terrorism
Act, which allow for the trebling of any proven damages.
The court granted the defendants’ motions to dismiss three out of the six actions in the EDNY. The plaintiffs appealed in one action and
the dismissal was affirmed in January 2023. The remaining EDNY actions are stayed. Out of the two actions in the SDNY, the court
granted the defendants’ motion to dismiss the first action. That action is stayed, and the second SDNY action is stayed pending any
appeal on the dismissal of the first.
Shareholder derivative action
In November 2020, a purported Barclays shareholder filed a putative derivative action in New York state court against BCI and a number
of current and former members of the Board of Directors of Barclays PLC and senior executives or employees of the Group. The
shareholder filed the claim on behalf of nominal defendant Barclays PLC, alleging that the individual defendants harmed the company
through breaches of their duties, including under the Companies Act 2006. The plaintiff seeks damages on behalf of Barclays PLC for
the losses that Barclays PLC allegedly suffered as a result of these alleged breaches. An amended complaint was filed in April 2021,
which BCI and certain other defendants moved to dismiss. The motion to dismiss was granted in April 2022. The plaintiff is appealing the
decision.
Derivative transactions civil action
In 2021, Vestia, a Dutch housing association, brought a claim against Barclays Bank PLC in the UK in the High Court in relation to a series
of derivative transactions entered into with Barclays Bank PLC between 2008 and 2011, seeking damages of £329m. Barclays Bank PLC
is defending the claim and has made a counterclaim.
Timeshare loans, skilled person review, and associated matters
In August 2020, the FCA granted an application by Clydesdale Financial Services Limited (CFS), which trades as Barclays Partner Finance
and houses Barclays’ point-of-sale finance business, for a validation order with respect to certain loans to customers brokered between
April 2014 and April 2016 by Azure Services Limited (ASL), a timeshare operator, which did not, at the point of sale, hold the necessary
broker licence. As a condition to the validation order, the FCA required CFS to undertake a skilled person review of the assessment of
affordability processes for the loans brokered by ASL (ASL Loans) as well as CFS’ policies and procedures for assessing affordability and
oversight of brokers more generally, and dictated a remediation methodology in the event that ASL Loans did not pass the affordability
test. The skilled person made a number of observations, some of which were adverse, about both current and historic affordability
practices as well as current oversight practices. CFS is not required to conduct a full back book review but, following a review of certain
cohorts of loans to determine historic affordability and/or broker oversight practices that may have caused customer harm, where
harm is identified, CFS’ intention is to remediate. To date, CFS has identified a number of areas for remediation, but the scoping
exercise is ongoing and remediation will only begin once the scoping exercise is complete. As at 31 December 2022, CFS booked a
provision in respect of the expected remediation for these matters of £10.4m.
Separately, and notwithstanding this, CFS decided in March 2022 to extend the proactive remediation of ASL Loans beyond those
brokered between April 2014 and April 2016 to include the full portfolio of ASL Loans brokered between 2006 and 2018. In the first
quarter of 2022, an additional customer remediation provision was recognised in relation to the remediation of the ASL Loans
originated outside the April 2014 to April 2016 period. As at 31 December 2022, the provision recognised in relation to this matter by
CFS is £183m. Remediation of the full portfolio of ASL Loans started in October 2022 and is expected to be completed in 2023.
In addition, CFS completed a review of all other legacy timeshare retailers during 2022. No concerns were identified in relation to the
majority of those retailers, but where concerns were identified, CFS’ intention is to remediate. As at 31 December 2022, the provision
recognised in relation to this matter by CFS is £96m.
Over-issuance of Securities in the US
Barclays Bank PLC maintains a US shelf registration statement with the US Securities and Exchange Commission (SEC) in order to issue
securities to US investors. In May 2017, Barclays Bank PLC lost its status as a “well-known seasoned issuer” (or WKSI) as a result of an
SEC settlement order involving BCI. Due to its loss of WKSI status, Barclays Bank PLC was required to register a specified amount of
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securities to be issued under certain US shelf registration statements filed with the SEC. In March 2022, executive management
became aware that Barclays Bank PLC had issued securities materially in excess of the set amount under its 2019 US shelf registration
statement and subsequently became aware that securities had also been issued in excess of the set amount under the predecessor US
shelf registration statement. The securities that were over-issued included structured notes and exchange traded notes (ETNs).
Securities issued in excess of the amount registered were considered to be “unregistered securities” for the purposes of US securities
laws, with certain purchasers of those securities having a right to recover, upon the tender of such security to Barclays Bank PLC, the
consideration paid for such security with interest, less the amount of any income received, or to recover damages from Barclays Bank
PLC if the purchaser sold the security at a loss (the Rescission Price). Barclays Bank PLC commenced its rescission offer on 1 August
2022, by which Barclays Bank PLC offered to repurchase the relevant affected securities for the Rescission Price (the Rescission Offer).
The Rescission Offer expired on 12 September 2022.
In September 2022, the SEC announced the resolution of its investigation of Barclays PLC and Barclays Bank PLC relating to the over-
issuance of securities by Barclays Bank PLC under certain of its US shelf registration statements. Pursuant to the terms of the
resolution, Barclays PLC and Barclays Bank PLC paid in the fourth quarter of 2022 a combined penalty of $200m (£165ma), without
admitting or denying the SEC’s findings. The SEC found that the independent Rescission Offer made by Barclays Bank PLC to holders of
the relevant over-issued securities satisfied its requirements for disgorgement and related prejudgment interest.
The Group is engaged with, and responding to inquiries and requests for information from, various other regulators who may seek to
impose fines, penalties and/or other sanctions as a result of this matter. Furthermore, Barclays Bank PLC and/or its affiliates may incur
costs and liabilities in relation to private civil claims which have been filed and may face other potential private civil claims, class actions
or other enforcement actions in relation to this matter. By way of example, in September 2022, a purported class action claim was filed
in the US District Court in Manhattan seeking to hold Barclays PLC and former and current executives responsible for declines in the
prices of its American depositary receipts, which the plaintiffs claim occurred as a result of alleged misstatements and omissions in its
public disclosures; and in February 2023, a claim was brought in a New York federal court by holders of a series of ETNs alleging that
Barclays' failure to disclose that these ETNs were unregistered securities misled investors and that, as a result, Barclays is liable for the
holders' alleged losses following the suspension of further sales and issuances of such series of ETNs.
Following completion of the rescission offer on 12 September 2022, Barclays utilised a provision of £1,008m in settlement of valid
structured note claims and paid a monetary penalty of $200m (£165m1) to the SEC. A contingent liability exists in relation to civil claims
or any further enforcement actions taken against Barclays Bank PLC and/or its affiliates, but Barclays Bank PLC is unable to assess the
likelihood of liabilities that may arise out of such claims or actions.
Any liabilities, claims or actions in connection with the over-issuance of securities under Barclays Bank PLC’s US shelf registration
statements could have an adverse effect on the Group’s business, financial condition, results of operations and reputation as a
frequent issuer in the securities markets.
Exchange rate USD/GBP 1.22 as at 30 June 2022.
Note
a
Investigation into the use of unapproved communications platforms
In September 2022, the SEC and the Commodity Futures Trading Commission (CFTC) announced settlements with a number of
financial institutions, including Barclays Bank PLC and BCI, of financial industry-wide investigations regarding compliance with record-
keeping obligations in connection with business-related communications sent over unapproved electronic messaging platforms. The
SEC and the CFTC found that Barclays Bank PLC and BCI failed to comply with their respective record-keeping rules, where such
communications were sent or received by employees over electronic messaging platforms that had not been approved by the bank for
business use by employees. As part of the settlement, in the third quarter of 2022, Barclays Bank PLC and BCI paid a combined $125m
civil monetary penalty to the SEC and a $75m civil monetary penalty to the CFTC. There are also non-financial components to the
settlements, including the retention of an independent compliance consultant and certain ongoing undertakings. This matter is now
concluded.
2. Barclays PLC, Barclays Bank PLC and Barclays Bank UK PLC
HM Revenue & Customs (HMRC) assessments concerning UK Value Added Tax
In 2018, HMRC issued notices that have the effect of removing certain overseas subsidiaries that have operations in the UK from
Barclays’ UK VAT group, in which group supplies between members are generally free from VAT. The notices have retrospective effect
and correspond to assessments of £181m (inclusive of interest), of which Barclays would expect to attribute an amount of
approximately £128m to Barclays Bank UK PLC and £53m to Barclays Bank PLC. HMRC’s decision has been appealed to the First Tier
Tribunal (Tax Chamber).
Local authority civil actions concerning LIBOR
Following settlement by Barclays Bank PLC of various governmental investigations concerning certain benchmark interest rate
submissions referred to above in ‘Investigations into LIBOR and other benchmarks and related civil actions’, in the UK, certain local
authorities brought claims in 2018 against Barclays Bank PLC and Barclays Bank UK PLC asserting that they entered into loans between
2006 and 2008 in reliance on misrepresentations made by Barclays Bank PLC in respect of its conduct in relation to LIBOR. Barclays
Bank PLC and Barclays Bank UK PLC were successful in their applications to strike out the claims. The claims have been settled on
terms such that the parties have agreed not to pursue these claims further and to bear their own costs. The financial impact of the
settlements is not material to the Group's operating results, cash flows or financial position.
FCA investigation into transaction monitoring
The FCA has been investigating Barclays’ compliance with UK money laundering regulations and the FCA’s rules and Principles for
Businesses in an investigation which is focussed on aspects of Barclays’ transaction monitoring in relation to certain business lines now
in Barclays Bank UK PLC. Barclays has been co-operating with the investigation and responding to information requests.
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3. Barclays PLC
Alternative trading systems
In 2020, a claim was brought against Barclays PLC in the UK in the High Court by various shareholders regarding Barclays PLC’s share
price based on the allegations contained within a complaint by the New York State Attorney General (NYAG) in 2014. Such claim was
settled in 2016, as previously disclosed. The more recent claim seeks unquantified damages and Barclays is defending the claim. The
NYAG complaint was filed against Barclays PLC and BCI in the NY Supreme Court alleging, among other things, that Barclays PLC and
BCI engaged in fraud and deceptive practices in connection with LX, BCI’s SEC-registered alternative trading system.
General
The Group is engaged in various other legal, competition and regulatory matters in the UK, the US and a number of other overseas
jurisdictions. It is subject to legal proceedings brought by and against the Group which arise in the ordinary course of business from time
to time, including (but not limited to) disputes in relation to contracts, securities, debt collection, consumer credit, fraud, trusts, client
assets, competition, data management and protection, intellectual property, money laundering, financial crime, employment,
environmental and other statutory and common law issues.
The Group is also subject to enquiries and examinations, requests for information, audits, investigations and legal and other
proceedings by regulators, governmental and other public bodies in connection with (but not limited to) consumer protection
measures, compliance with legislation and regulation, wholesale trading activity and other areas of banking and business activities in
which the Group is or has been engaged. The Group is cooperating with the relevant authorities and keeping all relevant agencies
briefed as appropriate in relation to these matters and others described in this note on an ongoing basis.
At the present time, Barclays PLC does not expect the ultimate resolution of any of these other matters to have a material adverse
effect on the Group’s financial position. However, in light of the uncertainties involved in such matters and the matters specifically
described in this note, there can be no assurance that the outcome of a particular matter or matters (including formerly active matters
or those matters arising after the date of this note) will not be material to Barclays PLC’s results, operations or cash flows for a particular
period, depending on, among other things, the amount of the loss resulting from the matter(s) and the amount of profit otherwise
reported for the reporting period.
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Capital instruments, equity and reserves
Capital instruments, equity and reserves
The notes included in this section focus on the Group’s loan capital and shareholders’ equity including issued share capital, retained
earnings, other equity balances and interests of minority shareholders in our subsidiary entities (non-controlling interests). For more
information on capital management and how the Group maintains sufficient capital to meet our regulatory requirements refer to the
Capital risk management section.
27 Subordinated liabilities
Accounting for subordinated liabilities
Subordinated liabilities are measured at amortised cost using the effective interest method under IFRS 9.
As at 1 January
Issuances
Redemptions
Other
As at 31 December
2022
£m
12,759
1,477
(2,679)
(134)
11,423
2021
£m
16,341
1,890
(4,807)
(665)
12,759
Issuances of £1,477m comprise £1,000m GBP 8.407% Fixed Rate Resetting Subordinated Callable Notes, issued externally by Barclays
PLC and £317m USD Floating Rate Notes, £89m ZAR Floating Rate Notes,£42m EUR Floating Rate Notes and £29m JPY Floating Rate
Notes issued externally by Barclays subsidiaries.
Redemptions of £2,679m comprise £2,349m notes issued externally by Barclays Bank PLC, £175m USD Floating Rate Notes, £88m
USD Fixed Rate Notes issued externally by Barclays subsidiaries and £67m GBP Undated Subordinated Loan Notes (secured) issued
externally by a Barclays securitisation special purpose vehicle (SPV). £2,349m notes issued externally by Barclays Bank PLC comprise
£1,275m USD 7.625% Fixed Rate Contingent Capital Notes, £838m EUR 6.625% Fixed Rate Subordinated Notes, £147m USD 6.86%
Callable Perpetual Core Tier One Notes, £42m EUR Subordinated Floating Rate Notes, £35m GBP 5.3304% Step-up Callable Perpetual
Reserve Capital Instruments and £12m GBP 6% Callable Perpetual Core Tier One Notes.
Other movements predominantly comprise foreign exchange movements and fair value hedge adjustments.
Subordinated liabilities include accrued interest and comprise undated and dated subordinated liabilities as follows:
Undated subordinated liabilities
Dated subordinated liabilities
Total subordinated liabilities
None of the Group’s subordinated liabilities are secured.
Undated subordinated liabilitiesa
Barclays Bank PLC issued
Tier One Notes (TONs)
6% Callable Perpetual Core Tier One Notes b
6.86% Callable Perpetual Core Tier One Notes (USD 179m) b
Reserve Capital Instruments (RCIs)
5.3304% Step-up Callable Perpetual Reserve Capital Instruments b
Undated Notes
Junior Undated Floating Rate Notes (USD 38m)
Barclays securitisation SPV issued
Undated Subordinated Loan Notes (secured)
Initial call date
2032
2032
2036
Any interest payment date
Undated Subordinated Loan Notes (secured) (GBP 67m)
At any time
Total undated subordinated liabilities
2022
£m
28
11,395
11,423
2021
£m
355
12,404
12,759
2022
£m
—
—
—
28
—
28
2021
£m
15
194
51
28
67
355
Notes
a
b The GBP 6% Callable Perpetual Core Tier One Notes, USD 6.86% Callable Perpetual Core Tier One Notes and GBP 5.3304% Step-up Callable Perpetual Reserve Capital Instruments were redeemed
Instrument values are disclosed to the nearest million.
by exercising a regulatory call option in 2022.
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Capital instruments, equity and reserves
Undated subordinated liabilities
The undated subordinated liabilities that are issued by Barclays Bank PLC and its subsidiaries are for the development and expansion of
the businesses and to strengthen the capital bases. The principal terms of such undated subordinated liabilities are described below:
Junior Undated Floating Rate Notes
The Junior Undated Floating Rate Notes rank behind the claims against Barclays Bank PLC of depositors and other unsecured
unsubordinated creditors and holders of dated subordinated liabilities. The Junior Undated Floating Rate Notes are floating rate notes
where rates are fixed periodically in advance based on the related market rate. The Junior Undated Floating Rate Notes are repayable at
the option of Barclays Bank PLC, in whole, on any interest payment date. In addition, the Junior Undated Floating Rate Notes are
repayable, at the option of Barclays Bank PLC in whole for certain tax reasons, on an interest payment date. There are no events of
default except non-payment of principal or mandatory interest. Any repayments require the prior consent of the PRA. The Junior
Undated Floating Rate Notes are non-convertible.
Dated subordinated liabilities
Barclays PLC issued
2% Fixed Rate Subordinated Callable Notes (EUR 1,500m)
4.375% Fixed Rate Subordinated Notes (USD 1,250m)
3.75% Fixed Rate Resetting Subordinated Callable Notes (GBP 500m)
3.75% Fixed Rate Resetting Subordinated Callable Notes (SGD 200m)
5.20% Fixed Rate Subordinated Notes (USD 2,050m)
1.125% Fixed Rate Resetting Subordinated Callable Notes (EUR 1,000m)
4.836% Fixed Rate Subordinated Callable Notes (USD 2,000m)
8.407% Fixed Rate Resetting Subordinated Callable Notes (GBP 1,000m)
5.088% Fixed-to-Floating Rate Subordinated Callable Notes (USD 1,500m)
3.564% Fixed Rate Resetting Subordinated Callable Notes (USD 1,000m)
3.811% Fixed Rate Resetting Subordinated Callable Notes (USD 1,000m)
Barclays Bank PLC issued
Subordinated Floating Rate Notes (EUR 50m)
6.625% Fixed Rate Subordinated Notes (EUR 1,000m)
7.625% Contingent Capital Notes (USD 3,000m)
Subordinated Floating Rate Notes (EUR 50m)
5.75% Fixed Rate Subordinated Notes
5.4% Reverse Dual Currency Subordinated Loan (JPY 15,000m)
6.33% Subordinated Notes
Subordinated Floating Rate Notes (EUR 68m)
External issuances by other subsidiaries
Total dated subordinated liabilities
Initial call date
Maturity date
2023
2025
2025
2026
2027
2027
2029
2030
2041
2028
2024
2030
2030
2026
2031
2028
2032
2030
2035
2042
2022
2022
2022
2023
2026
2027
2032
2040
2032
2022
£m
1,345
1,013
445
120
1,588
795
1,554
1,013
1,117
664
646
—
—
—
44
280
93
46
60
572
2021
£m
1,283
974
483
113
1,564
833
1,564
—
1,162
696
782
42
889
1,133
42
322
97
59
57
309
11,395
12,404
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Capital instruments, equity and reserves
Dated subordinated liabilities
Dated subordinated liabilities are issued by Barclays PLC, Barclays Bank PLC and its subsidiaries for the development and expansion of
their businesses and to strengthen their respective capital bases. The principal terms of the dated subordinated liabilities are described
below:
Subordination
Dated subordinated liabilities issued by Barclays PLC ranks behind the claims against Barclays PLC of unsecured unsubordinated
creditors but before the claims of the holders of its equity.
All dated subordinated liabilities externally issued by Barclays Bank PLC rank behind the claims against Barclays Bank PLC of depositors
and other unsecured unsubordinated creditors but before the claims of the undated subordinated liabilities and the holders of its equity.
The dated subordinated liabilities externally issued by other subsidiaries are similarly subordinated as the external subordinated liabilities
issued by Barclays Bank PLC.
Interest
Interest on the Floating Rate Notes is fixed periodically in advance, based on the related market rates.
Interest on Fixed Rate Notes is set by reference to market rates at the time of issuance and fixed until maturity.
Interest on the 4.836% Fixed Rate Subordinated Callable Notes, 2% Fixed Rate Subordinated Callable Notes, 3.75% SGD Fixed Rate
Resetting Subordinated Callable Notes, 3.75% GBP Fixed Rate Resetting Subordinated Callable Notes, 3.811% Fixed Rate Resetting
Subordinated Callable notes, 1.125% Fixed Rate Resetting Subordinated Callable Notes, 3.564% Fixed Rate Resetting Subordinated
Callable Notes, and the 8.407% Fixed Rate Resetting Subordinated Callable Notes are fixed until the call date. After the respective call
dates, in the event that they are not redeemed, the interest rates will be reset and fixed until maturity based on a market rate. Interest
on the 5.088% Fixed-to-Floating Rate Subordinated Callable Notes is fixed until the call date. After the call date, in the event that they
are not redeemed, the interest rate will reset periodically in advance based on market rates.
Repayment
Those subordinated liabilities with a call date are repayable at the option of the issuer on such call date in accordance with the
conditions governing the respective debt obligations, some in whole or in part, and some only in whole. The remaining dated
subordinated liabilities outstanding at 31 December 2022 are redeemable only on maturity, subject in particular cases to provisions
allowing an early redemption in the event of certain changes in tax law, or to certain changes in legislation or regulations.
Any repayments prior to maturity require, in the case of Barclays PLC and Barclays Bank PLC, the prior consent of the PRA, or in the
case of the overseas issues, the approval of the local regulator for that jurisdiction and of the PRA in certain circumstances.
There are no committed facilities in existence at the balance sheet date which permit the refinancing of debt beyond the date of
maturity.
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Notes to the financial statements (continued)
Capital instruments, equity and reserves
28 Ordinary shares, share premium, and other equity
Called up share capital, allotted and fully paid
As at 1 January 2022
Issued to staff under share incentive plans
AT1 securities issuance
AT1 securities redemption
Repurchase of shares
Other movements
As at 31 December 2022
As at 1 January 2021
Issued to staff under share incentive plans
AT1 securities issuance
AT1 securities redemption
Repurchase of shares
Other movements
As at 31 December 2021
Number of shares
Ordinary share
capital
Ordinary share
premium
Total share capital
and share premium
Other
equity instruments
m
16,752
50
—
—
(931)
—
15,871
17,359
37
—
—
(644)
—
16,752
£m
4,188
13
—
—
(233)
—
3,968
4,340
9
—
—
(161)
—
4,188
£m
348
57
—
—
—
—
405
297
51
—
—
—
—
348
£m
4,536
70
—
—
(233)
—
4,373
4,637
60
—
—
(161)
—
4,536
£m
12,259
—
3,158
(2,126)
—
(7)
13,284
11,172
—
1,078
—
—
9
12,259
Called up share capital
Called up share capital comprises 15,871m (2021: 16,752m) ordinary shares of 25p each.
Share repurchase
At the 2022 AGM on 4 May 2022, Barclays PLC was authorised to repurchase up to an aggregate of 1,676m of its ordinary shares of
25p. The authorisation is effective until the AGM in 2023 or the close of business on 30 June 2023, whichever is the earlier. During 2022,
931m shares were repurchased with a total nominal value of £233m (2021: 644m shares with a nominal value of £161m).
Other equity instruments
Other equity instruments of £13,284m (2021: £12,259m) include AT1 securities issued by Barclays PLC. The AT1 securities are
perpetual securities with no fixed maturity and are structured to qualify as AT1 instruments under prevailing capital rules applicable as at
the relevant issue date.
In 2022, there were three issuances of AT1 instruments, in the form of Fixed Rate Resetting Perpetual Subordinated Contingent
Convertible Securities, for £3,158m (2021: one issuance for £1,078m) which includes issuance costs of £9m (2021: £4m). There were
two redemptions in 2022 totalling £2,126m (2021: no redemptions).
AT1 equity instruments
AT1 equity instruments - Barclays PLC
7.875% Perpetual Subordinated Contingent Convertible Securities
7.875% Perpetual Subordinated Contingent Convertible Securities (USD 1,500m)
7.25% Perpetual Subordinated Contingent Convertible Securitiesa
7.75% Perpetual Subordinated Contingent Convertible Securities (USD 2,500m)a
5.875% Perpetual Subordinated Contingent Convertible Securities
8% Perpetual Subordinated Contingent Convertible Securities (USD 2,000m)
7.125% Perpetual Subordinated Contingent Convertible Securitiesa
6.375% Perpetual Subordinated Contingent Convertible Securities
6.125% Perpetual Subordinated Contingent Convertible Securities (USD 1,500m)a
4.375% Perpetual Subordinated Contingent Convertible Securities (USD 1,500m)
8.300% Perpetual Subordinated Contingent Convertible Securities (SGD 450m)
8.875% Perpetual Subordinated Contingent Convertible Securities
8.000% Perpetual Subordinated Contingent Convertible Securities (USD 2,000m)a
Total AT1 equity instruments
Note
a Reported net of securities held by the Group.
Initial call date
2022
2022
2023
2023
2024
2024
2025
2025
2025
2028
2027
2027
2029
2022
£m
—
—
1,243
1,925
1,244
1,509
993
996
1,142
1,078
264
1,247
1,643
2021
£m
995
1,131
1,245
1,924
1,244
1,509
996
996
1,141
1,078
—
—
—
13,284
12,259
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Notes to the financial statements (continued)
Capital instruments, equity and reserves
The principal terms of the AT1 securities are described below:
▪ AT1 securities rank behind the claims against Barclays PLC of i) unsubordinated creditors; ii) claims which are expressed to be
subordinated to the claims of unsubordinated creditors of Barclays PLC but not further or otherwise; or iii) claims which are, or are
expressed to be, junior to the claims of other creditors of Barclays PLC, whether subordinated or unsubordinated, other than claims
which rank, or are expressed to rank, pari passu with, or junior to, the claims of holders of the AT1 securities.
▪ AT1 securities are undated and are redeemable, at the option of Barclays PLC, in whole on (i) the initial reset date, or on any fifth
anniversary after the initial reset date or (ii) any day falling in a named period ending on the initial reset date, or on any fifth anniversary
after the initial reset date. In addition, the AT1 securities are redeemable, at the option of Barclays PLC, in whole in the event of
certain changes in the tax or regulatory treatment of the securities. Any redemptions require the prior consent of the PRA.
▪
Interest on the AT1 securities will be due and payable only at the sole discretion of Barclays PLC, and Barclays PLC has sole and
absolute discretion at all times and for any reason to cancel (in whole or in part) any interest payment that would otherwise be payable
on any interest payment date.
.
29 Reserves
Currency translation reserve
The currency translation reserve represents the cumulative gains and losses on the retranslation of the Group’s net investment in
foreign operations, net of the effects of hedging.
Fair value through other comprehensive income reserve
The fair value through other comprehensive income reserve represents the changes in the fair value of financial instruments accounted
for at fair value through other comprehensive income investments since initial recognition.
Cash flow hedging reserve
The cash flow hedging reserve represents the cumulative gains and losses on effective cash flow hedging instruments that will be
recycled to profit or loss when the hedged transactions affect profit or loss.
Own credit reserve
The own credit reserve reflects the cumulative own credit gains and losses on financial liabilities at fair value. Amounts in the own credit
reserve are not recycled to profit or loss in future periods.
Other reserves and treasury shares
Other reserves relate to redeemed ordinary and preference shares issued by the Group.
Treasury shares relate to Barclays PLC shares held in relation to the Group’s various share schemes. These schemes are described in
Note 32. Treasury shares are deducted from shareholders’ equity within other reserves. A transfer is made to retained earnings in line
with the vesting of treasury shares held for the purposes of share-based payments.
Currency translation reserve
Fair value through other comprehensive income reserve
Cash flow hedging reserve
Own credit reserve
Other reserves and treasury shares
Total
2022
£m
4,772
(1,560)
(7,235)
467
1,364
(2,192)
2021
£m
2,740
(283)
(853)
(960)
1,126
1,770
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Notes to the financial statements (continued)
Capital instruments, equity and reserves
30 Non-controlling interests
Barclays Bank PLC issued:
– Preference shares
– Upper Tier 2 instruments
Other non-controlling interests
Total
Profit attributable to non-controlling
interest
Equity attributable to non-controlling
interest
Dividends paid to non-controlling
interest
2022
£m
31
14
—
45
2021
£m
27
17
3
47
2022
£m
529
438
1
968
2021
£m
529
458
2
989
2022
£m
31
14
—
45
2021
£m
27
17
—
44
In 2022, there were no issuances (2021: none) and one redemption of £20m (2021: £75m) relating to the Undated Floating Rate
Primary Capital Notes Series 3.
Barclays Bank PLC and protective rights of non-controlling interests
Barclays PLC holds 100% of the voting rights of Barclays Bank PLC. As at 31 December 2022, Barclays Bank PLC has in issue preference
shares and Upper Tier 2 instruments. These are non-controlling interests to the Group.
A fixed coupon rate is attached to all Upper Tier 2 instruments until the initial call date, with the exception of the 9% Bonds, which are
fixed for the life of the issue and the Series 1 and Series 2 Undated Notes, which are floating rate at rates fixed periodically in advance
based on market rates.
After the initial call date, in the event they are not redeemed, coupon payments in relation to the 6.125% Undated Notes are fixed
periodically in advance for five-year periods based on market rates. Coupon payments for all other Upper Tier 2 instruments are at rates
fixed periodically in advance based on market rates.
The payment of preference share dividends and Upper Tier 2 coupons are typically at the discretion of Barclays Bank PLC, except for
coupon payments that become compulsory where Barclays PLC has declared or paid a dividend on ordinary shares, or in certain cases,
any class of preference shares, in the preceding six-month period. Coupons not paid become payable in each case if such a dividend is
subsequently paid or in certain other circumstances. No dividend or coupon payments may be made unless Barclays Bank PLC satisfies
a specified solvency test. Under the terms of these instruments, Barclays PLC may not pay dividends on ordinary shares until a dividend
or coupon is next paid on these instruments or the instruments are redeemed or purchased by Barclays Bank PLC. There are no
restrictions on Barclays Bank PLC’s ability to remit capital to the Parent as a result of these issued instruments.
Preference share redemptions are typically at the discretion of Barclays Bank PLC. Upper Tier 2 instruments are repayable, at the
option of Barclays Bank PLC generally in whole at the initial call date and on any subsequent coupon payment date or, in the case of the
6.125% Undated Notes on any fifth anniversary after the initial call date. In addition, each issue of Upper Tier 2 instruments is repayable,
at the option of Barclays Bank PLC, in whole for certain tax reasons, either at any time, or on an interest payment date. There are no
events of default except non-payment of principal or mandatory interest. Any repayments or redemptions require the prior consent of
the PRA, and in respect of the preference shares, any such redemption will be subject to the Companies Act 2006 and the Articles of
Barclays Bank PLC.
Instrument
Preference Shares:
US Dollar Preference Shares
Euro Preference Shares
Total Barclays Bank PLC Preference Shares
Upper Tier 2 Instruments:
Undated Floating Rate Primary Capital Notes Series 1
Undated Floating Rate Primary Capital Notes Series 2
5.03% Undated Reverse Dual Currency Subordinated Loan (JPY8bn)
5.0% Reverse Dual Currency Undated Subordinated Loan (JPY12bn)
Undated Floating Rate Primary Capital Notes Series 3 (£145m)
9% Permanent Interest Bearing Capital Bonds (£100m)
6.125% Undated Subordinated Notes (£550m)
Total Upper Tier 2 Instruments
2022
£m
318
211
529
93
179
39
53
—
40
34
438
2021
£m
318
211
529
93
179
39
53
20
40
34
458
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Notes to the financial statements (continued)
Employee benefits
Employee benefits
The notes included in this section focus on the costs and commitments associated with employing our staff.
31 Staff costs
Accounting for staff costs
The Group applies IAS 19 Employee benefits in its accounting for most of the components of staff costs.
Short-term employee benefits – salaries, accrued performance costs and social security are recognised over the period in which the
employees provide the services to which the payments relate.
Performance costs – recognised to the extent that the Group has a present obligation to its employees that can be measured reliably
and are recognised over the period of service that employees are required to work to qualify for the payments.
Deferred cash and share awards are made to employees to incentivise performance over the period employees provide services. To
receive payment under an award, employees must provide service over the vesting period. The period over which the expense for
deferred cash and share awards is recognised is based upon the period employees consider their services contribute to the awards. For
past awards, the Group considers that it is appropriate to recognise the awards over the period from the date of grant to the date that
the awards vest. In relation to awards granted from 2017, the Group, taking into account the changing employee understanding
surrounding those awards, considered it appropriate for expense to be recognised over the vesting period including the financial year
prior to the grant date.
The accounting policies for share-based payments, and pensions and other post-retirement benefits are included in Note 32 and Note
33 respectively.
Incentive awards granted:
Current year bonus
Deferred bonus
Total incentive awards granted
Reconciliation of incentive awards granted to income statement charge:
Less: deferred bonuses granted but not charged in current year
Add: current year charges for deferred bonuses from previous years
Other differences between incentive awards granted and income statement charge
Income statement charge for performance costs
Other income statement charges:
Salaries
Social security costs
Post-retirement benefitsa
Other compensation costs
Total compensation costsb
Other resourcing costs:
Outsourcing
Redundancy and restructuring
Temporary staff costs
Other
Total other resourcing costs
Total staff costs
2022
£m
1,241
549
1,790
(388)
399
35
1,836
2021
£m
1,278
667
1,945
(457)
280
(23)
1,745
2020
£m
1,090
490
1,580
(335)
293
(34)
1,504
4,732
4,290
4,322
714
563
504
619
539
431
613
519
479
8,349
7,624
7,437
607
(7)
113
190
903
357
296
109
125
887
342
102
102
114
660
9,252
8,511
8,097
Notes
a Post-retirement benefits charge includes £313m (2021: £289m; 2020: £279m) in respect of defined contribution schemes and £250m (2021: £250m; 2020: £240m) in respect of defined benefit
schemes.
b £604m (2021: £484m; 2020: £451m) of Group compensation was capitalised as internally generated software and excluded from the Staff cost disclosed above .
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Notes to the financial statements (continued)
Employee benefits
32 Share-based payments
Accounting for share-based payments
The Group applies IFRS 2 Share-based Payments in accounting for employee remuneration in the form of shares.
Employee incentives include awards in the form of shares and share options, as well as offering employees the opportunity to purchase
shares on favourable terms. The cost of the employee services received in respect of the shares or share options granted is recognised
in the income statement over the period that employees provide services. The overall cost of the award is calculated using the number
of shares and options expected to vest and the fair value of the shares or options at the date of grant.
The number of shares and options expected to vest takes into account the likelihood that performance and service conditions included
in the terms of the awards will be met. Failure to meet the non-vesting condition is treated as a cancellation, resulting in an acceleration
of recognition of the cost of the employee services.
The fair value of shares is the market price ruling on the grant date, in some cases adjusted to reflect restrictions on transferability. The
fair value of options granted is determined using the Black Scholes model to estimate the numbers of shares likely to vest. The model
takes into account the exercise price of the option, the current share price, the risk-free interest rate, the expected volatility of the
share price over the life of the option and other relevant factors. Market conditions that must be met in order for the award to vest are
also reflected in the fair value of the award, as are any other non-vesting conditions – such as continuing to make payments into a
share-based savings scheme.
The charge for the year arising from share-based payment schemes was as follows:
Deferred Share Value Plan and Share Value Plan
Others
Total equity settled
Cash settled
Total share-based payments
The terms of the main current plans are as follows:
Charge for the year
2022
£m
295
214
509
4
513
2021
£m
256
216
472
5
477
2020
£m
245
184
429
2
431
Share Value Plan (SVP)
The SVP was introduced in Barclays PLC Group in March 2010. SVP awards have been granted to participants in the form of a
conditional right to receive Barclays PLC shares or provisional allocations of Barclays PLC shares which vest or are considered for
release over a period of three, four, five or seven years. Participants do not pay to receive an award or to receive a release of shares. For
awards granted before December 2017, the grantor may also make a dividend equivalent payment to participants on release of a SVP
award. SVP awards are also made to eligible employees for recruitment purposes. All awards are subject to potential forfeiture in certain
leaver scenarios.
Deferred Share Value Plan (DSVP)
The DSVP was introduced in February 2017. The terms of the DSVP are materially the same as the terms of the SVP as described
above, save that Executive Directors are not eligible to participate in the DSVP and the DSVP operates over market purchase shares
only.
Other schemes
In addition to the SVP and DSVP, the Barclays PLC Group operates a number of other schemes settled in Barclays PLC Shares including
Sharesave (both UK and Ireland), Sharepurchase (both UK and overseas), and the Barclays PLC Group Long Term Incentive Plan. A
delivery of upfront shares to ‘Material Risk Takers’ can be made as a Share Incentive Award (Holding Period) under the SVP.
Share option and award plans
The weighted average fair value per award granted, weighted average share price at the date of exercise/release of shares during the
year, weighted average contractual remaining life and number of options and awards outstanding (including those exercisable) at the
balance sheet date were as follows:
2022
2021
Weighted
average fair
value per
award
granted in
year
Weighted
average
share price at
exercise/
release
during year
Weighted
average
remaining
contractual
life
Number of
options/
awards
outstanding
Weighted
average fair
value per
award
granted in
year
Weighted
average
share price at
exercise/
release
during year
Weighted
average
remaining
contractual
life
Number of
options/
awards
outstanding
£
1.43
£
in years
(000s)
1.61
1 501,454
£
1.62
£
in years
(000s)
1.76
1 413,859
0.38-1.64 1.59-1.66
0-3 316,534
0.64-1.8
1.75-1.92
0-3 335,976
DSVP and SVPa,b
Othersa
Notes
a Options/award granted over Barclays PLC shares.
b Weighted average exercise price is not applicable for SVP and DSVP awards as these are not share option schemes.
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Notes to the financial statements (continued)
Employee benefits
SVP and DSVP are nil cost awards on which the performance conditions are substantially completed at the date of grant. Consequently,
the fair value of these awards is based on the market value at that date.
Sharesave has a contractual life of 3 years and 5 years,the expected volatility is 31.10% for 3 years and 30.56% for 5 years. The risk free
interest rates used for valuations are 4.28% and 4.05% for 3 years and 5 years respectively. The pure dividend yield rates used for
valuations are 4.01% and 3.93% for 3 years and 5 years respectively. The repo rates used for valuations are (0.47)% and (0.63)% for
3 years and 5 years respectively. The inputs into the model such as risk free interest rate, expected volatility, pure dividend yield rates
and repo rates are derived from the market data.
Movements in options and awards
The movement in the number of options and awards for the major schemes and the weighted average exercise price of options was:
Outstanding at beginning of year/acquisition date
Granted in the year
Exercised/released in the year
Less: forfeited in the year
Less: expired in the year
Outstanding at end of year
Of which exercisable:
DSVP and SVPa,b
Number (000s)
Othersa,c
Number (000s)
Weighted average ex. price (£)
2022
413,859
291,876
2021
416,941
187,667
2022
335,976
146,203
2021
356,033
120,385
(178,634)
(160,460)
(133,682)
(107,688)
(25,647)
(30,289)
(28,789)
(24,489)
—
—
(3,174)
(8,265)
501,454
413,859
—
—
316,534
34,247
335,976
28,609
2022
0.95
1.33
1.15
1.01
1.23
0.97
1.19
2021
0.96
1.43
1.38
0.95
1.67
0.95
1.23
Notes
a Options/award granted over Barclays PLC shares.
b Weighted average exercise price is not applicable for SVP and DSVP awards as these are not share option schemes.
c The number of awards within Others at the end of the year principally relates to Sharesave (number of awards exercisable at end of year was 13,954,749). The weighted average exercise price relates
to Sharesave.
Awards and options granted under the Group’s share plans may be satisfied using new issue shares, treasury shares and market
purchase shares. Awards granted under the DSVP may be satisfied using market purchase shares only.
There were no significant modifications to the share-based payments arrangements in 2022 and 2021.
As at 31 December 2022, the total liability arising from cash-settled share-based payments transactions was £5m (2021: £5m).
Holdings of Barclays PLC shares and hedges
Various employee benefit trusts established by the Group hold shares in Barclays PLC to meet obligations under the Barclays share-
based payment schemes. The total number of Barclays shares held in these employee benefit trusts at 31 December 2022 was 14m
(2021: 12.9m). Dividend rights have been waived on all these shares. The total market value of the shares held in trust based on the year
end share price of £1.59 (2021: £1.87) was £22m (2021: £24m). For accounting of treasury shares, see Note 29.
The Group has entered into physically settled forward contracts to hedge the settlement of certain share-based payment schemes.
The fixed forward price to be paid under these contracts is £469m and has been recorded in retained earnings.
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Notes to the financial statements (continued)
Employee benefits
33 Pensions and post-retirement benefits
Accounting for pensions and post-retirement benefits
The Group operates a number of pension schemes and post-employment benefit schemes.
Defined contribution schemes – the Group recognises contributions due in respect of the accounting period in the income statement.
Any contributions unpaid at the balance sheet date are included as a liability.
Defined benefit schemes – the Group recognises its obligations to members of each scheme at the period end, less the fair value of the
scheme assets after applying the asset ceiling test.
Each scheme’s obligations are calculated using the projected unit credit method. Scheme assets are stated at fair value as at the period
end.
Changes in pension scheme liabilities or assets (remeasurements) that do not arise from regular pension cost, net interest on net
defined benefit liabilities or assets, past service costs, settlements or contributions to the scheme, are recognised in other
comprehensive income. Remeasurements comprise experience adjustments (differences between previous actuarial assumptions
and what has actually occurred), the effects of changes in actuarial assumptions, return on scheme assets (excluding amounts included
in the interest on the assets) and any changes in the effect of the asset ceiling restriction (excluding amounts included in the interest on
the restriction).
Post-employment benefit schemes – the cost of providing healthcare benefits to retired employees is accrued as a liability in the financial
statements over the period that the employees provide services to the Group, using a methodology similar to that for defined benefit
pension schemes.
Pension schemes
UK Retirement Fund (UKRF)
The UKRF is the Group’s main scheme, representing 96% (2021: 97%) of the Group’s total retirement benefit obligations. Barclays Bank
PLC is the principal employer of the UKRF. The UKRF was closed to new entrants on 1 October 2012, and comprises 10 sections, the
two most significant of which are:
▪ Afterwork, which comprises a contributory cash balance defined benefit element, and a voluntary defined contribution element. The
cash balance element is accrued each year and revalued until Normal Retirement Age in line with the increase in Retail Price Index
(RPI) (up to a maximum of 5% p.a.). The main risks that Barclays runs in relation to Afterwork are limited although additional
contributions are required if pre-retirement investment returns are not sufficient to provide for the benefits.
▪ The 1964 Pension Scheme. Most employees recruited before July 1997 built up benefits in this non-contributory defined benefit
scheme in respect of service up to 31 March 2010. Pensions were calculated by reference to service and pensionable salary. From
1 April 2010, members became eligible to accrue future service benefits in either Afterwork or the Pension Investment Plan, a historic
defined contribution section which is now closed to future contributions. The risks that Barclays runs in relation to the 1964 section
are typical of final salary pension schemes, principally that investment returns fall short of expectations, that inflation exceeds
expectations, and that retirees live longer than expected.
Barclays Pension Savings Plan (BPSP)
The BPSP is a defined contribution scheme providing benefits for all new UK hires from 1 October 2012. BPSP is not subject to the
same investment return, inflation or life expectancy risks for Barclays that defined benefit schemes are. Members’ benefits reflect
contributions paid and the level of investment returns achieved.
Other
Apart from the UKRF and the BPSP, Barclays operates a number of smaller pension and long-term employee benefits and post-
retirement healthcare plans globally, the largest of which are the US defined benefit and defined contribution schemes. Many of the
schemes are funded, with assets backing the obligations held in separate legal vehicles such as trusts. Others are operated on an
unfunded basis. The benefits provided, the approach to funding, and the legal basis of the schemes, reflect local environments.
Governance
The UKRF operates under trust law and is managed and administered on behalf of the members in accordance with the terms of the
Trust Deed and Rules and all relevant legislation. The Corporate Trustee is Barclays Pension Funds Trustees Limited, a private limited
company and a wholly owned subsidiary of Barclays Bank PLC. The Trustee is the legal owner of the assets of the UKRF which are held
separately from the assets of the Group.
The Trustee Board comprises six Management Directors selected by Barclays, of whom three are independent Directors with no
relationship with Barclays (and who are not members of the UKRF), plus three Member Nominated Directors selected from eligible
active members of the UKRF, deferred and pensioner members who apply for the role.
The BPSP is a Group Personal Pension arrangement which operates as a collection of personal pension plans. Each personal pension
plan is a direct contract between the employee and the BPSP provider (Legal & General Assurance Society Limited), and is regulated by
the FCA.
Similar principles of pension governance apply to the Group’s other pension schemes, depending on local legislation.
Amounts recognised
The following tables include amounts recognised in the income statement and an analysis of benefit obligations and scheme assets for
all Group defined benefit schemes. The net position is reconciled to the assets and liabilities recognised on the balance sheet. The
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Notes to the financial statements (continued)
Employee benefits
tables include funded and unfunded post-retirement benefits. The income statement charge with respect to Defined contribution
schemes is disclosed as part of footnotes to Note 31 Staff costs.
Income statement (credit)/charge
Current service cost
Net finance (income)/cost
Past service cost
Other movements
Total
Balance sheet reconciliation
Benefit obligation at beginning of the year
Current service cost
Interest costs on scheme liabilities
Past service cost
Remeasurement (loss)/gain – financial
Remeasurement (loss)/gain – demographic
Remeasurement (loss)/gain – experience
Employee contributions
Benefits paid
Exchange and other movements
Benefit obligation at end of the year
Fair value of scheme assets at beginning of the year
Interest income on scheme assets
Employer contribution
2022
£m
227
(122)
20
3
128
2021
£m
247
(26)
—
3
224
2020
£m
243
(40)
(4)
1
200
2022
2021
Of which relates to
UKRF
£m
Total
£m
Of which relates to
UKRF
£m
Total
£m
(31,899)
(30,859)
(33,190)
(32,108)
(227)
(724)
(20)
(197)
(707)
(20)
10,995
10,734
268
(521)
(4)
1,339
(88)
270
(510)
—
1,299
—
(247)
(422)
—
848
53
(249)
(4)
1,309
3
(20,881)
(19,990)
(31,899)
35,467
846
1,808
34,678
829
1,785
(225)
(405)
—
820
50
(259)
—
1,268
—
(30,859)
33,915
434
955
642
—
(1,268)
—
34,678
3,819
3,819
—
3,819
34,713
448
971
653
4
(1,309)
(13)
35,467
3,568
3,879
(311)
3,568
Remeasurement – return on scheme assets (less)/greater than discount rate
(11,510)
(11,313)
Employee contributions
Benefits paid
Exchange and other movements
Fair value of scheme assets at end of the year
Net surplus
Retirement benefit assets
Retirement benefit liabilities
Net retirement benefit assets
4
—
(1,339)
(1,299)
84
25,360
4,479
4,743
(264)
4,479
—
24,680
4,690
4,690
—
4,690
Included within the benefit obligation is £690m (2021: £821m) relating to overseas pensions and £201m (2021: £219m) relating to other
post-employment benefits.
As at 31 December 2022, the UKRF’s scheme assets were in surplus versus IAS 19 obligations by £4,690m (2021: £3,819m). The
increase in the UKRF surplus during the year was driven by £294m of deficit reduction contributions and the unwind of the Senior Notes
(see later in note), partially offset by higher than expected inflation experienced during the year. The UKRF assets and benefit obligation
have reduced by c£10bn and c£11bn respectively over the year, primarily due to higher gilt and bond yields. This is as expected from the
investment strategy which aims to invest in assets that move in value in line with changes in liability values.
The weighted average duration of the benefit payments reflected in the defined benefit obligation for the UKRF is 13 years (2021: 16
years) . The decrease in duration is primarily due to the increase in discount rate, driven by higher corporate bond yields. The UKRF
expected benefits are projected to be paid out for in excess of 50 years, although 30% of the total benefits are expected to be paid in
the next 10 years; 30% in years 11 to 20 and 25% in years 21 to 30. The remainder of the benefits are expected to be paid beyond 30
years.
Of the £1,299m (2021: £1,268m) UKRF benefits paid out, £390m (2021: £419m) related to transfers out of the fund.
Where a scheme’s assets exceed its obligation, an asset is recognised to the extent that it does not exceed the present value of future
contribution holidays or refunds of contributions (the asset ceiling). In the case of the UKRF the asset ceiling is not applied as, in certain
specified circumstances such as wind-up, the Group expects to be able to recover any surplus. Similarly, a liability in respect of future
minimum funding requirements is not recognised. The Trustee does not have a substantive right to augment benefits, nor do they have
the right to wind up the plan except in the dissolution of the Group or termination of contributions by the Group. The application of the
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Notes to the financial statements (continued)
Employee benefits
asset ceiling to other plans and recognition of additional liabilities in respect of future minimum funding requirements are considered on
an individual plan basis.
Critical accounting estimates and judgements
Actuarial valuation of the scheme's obligation is dependent upon a series of assumptions. Below is a summary of the main financial and
demographic assumptions adopted for the UKRF.
Key UKRF financial assumptions
Discount rate
Inflation rate (RPI)
2022
% p.a.
4.80
3.21
2021
% p.a.
1.84
3.56
The UKRF discount rate assumption for 2022 was based on a standard WTW RATE Link model. The RPI inflation assumption for 2022
was set by reference to the Bank of England’s implied inflation curve. The inflation assumption incorporates a deduction of 20 basis
points as an allowance for an inflation risk premium. The methodology used to derive the discount rate and inflation assumptions is
consistent with that used at the prior year end.
The UKRF’s post-retirement mortality assumptions are based on an updated best estimate assumption derived from an analysis in
2022 of the UKRF’s own post-retirement mortality experience and taking account of recent evidence from published mortality surveys.
An allowance has been made for future mortality improvements based on the 2021 core projection model published by the Continuous
Mortality Investigation Bureau subject to a long-term trend of 1.25% per annum in future improvements (2021: 1.5% per annum). An
additional allowance has been made within the mortality assumptions to reflect the uncertain impact of COVID-19 in the long term.
The table below shows how the assumed life expectancy at 60, for members of the UKRF, has varied over the past three years:
Assumed life expectancy
Life expectancy at 60 for current pensioners (years)
– Males
– Females
Life expectancy at 60 for future pensioners currently aged 40 (years)
– Males
– Females
2022
2021
2020
26.8
29.5
28.3
31.0
27.3
29.6
29.1
31.4
27.2
29.4
29.0
31.2
The UKRF entered into a longevity reinsurance contract in 2022 covering £7bn of the pensioner liabilities. This is in addition to a £5bn
transaction executed in 2020. In total, over three-quarters of the longevity risk for current pensioners has been reinsured, and the
transactions will provide income to the UKRF in the event that pensions are paid out for longer than expected. The contracts form part
of the UKRF’s investment portfolio. At 31 December 2022, the contracts are valued at £(123)m (2021: nil). The negative value placed on
the longevity reinsurance contracts at 31 December 2022 reflects the estimated impact of changes in the reinsurance market,
demographic assumptions and risk premia since the 2020 transaction was entered into by the UKRF. The 2022 transaction is valued at
nil as it is assessed to have been transacted recently at fair value.
Sensitivity analysis on actuarial assumptions
The sensitivity analysis has been calculated by valuing the UKRF liabilities using the amended assumptions shown in the table below and
keeping the remaining assumptions the same as disclosed in the table above, except in the case of the inflation sensitivity where other
assumptions that depend on assumed inflation have also been amended correspondingly. The difference between the recalculated
liability figure and that stated in the balance sheet reconciliation table above is the figure shown. The selection of these movements to
illustrate the sensitivity of the defined benefit obligation to key assumptions should not be interpreted as Barclays expressing any
specific view of the probability of such movements happening.
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Notes to the financial statements (continued)
Employee benefits
Change in key assumptions
Discount rate
0.5% p.a. increase
0.25% p.a. increase
0.25% p.a. decrease
0.5% p.a. decrease
Assumed RPI
0.5% p.a. increase
0.25% p.a. increase
0.25% p.a. decrease
0.5% p.a. decrease
Life expectancy at 60
One year increase
One year decrease
2022
2021
(Decrease)/
Increase in UKRF
defined benefit
obligation
(Decrease)/
Increase in UKRF
defined benefit
obligation
£bn
£bn
(1.1)
(0.6)
0.6
1.2
0.8
0.4
(0.4)
(0.8)
0.6
(0.5)
(2.3)
(1.2)
1.3
2.6
1.6
0.8
(0.8)
(1.6)
1.2
(1.2)
Assets
A long-term investment strategy has been set for the UKRF, with its asset allocation comprising a mixture of equities, bonds, property
and other appropriate assets. This recognises that different asset classes are likely to produce different long-term returns and some
asset classes may be more volatile than others. The long-term investment strategy ensures, among other aims, that investments are
adequately diversified.
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Notes to the financial statements (continued)
Employee benefits
The value of the assets of the schemes and their percentage in relation to total scheme assets were as follows:
Analysis of scheme assets
As at 31 December 2022
Equities
Private equities
Bonds - fixed government
Bonds - index-linked government
Bonds - corporate and other
Property
Infrastructure
Hedge funds
Derivatives
Longevity reinsurance contracts
Cash and liquid assetsb
Mixed investment funds
Other
Total
Of which relates to UKRF
% of total fair
value of
scheme
assets
%
Quoted
£m
Unquoteda
£m
Value
£m
% of total fair
value of
scheme
assets
%
Quoted
£m
Unquoteda
£m
Value
£m
113
—
1,353
9,847
5,884
13
793
11
—
2,734
—
—
1,551
1,310
790
1,362
113
2,734
1,353
9,847
7,435
1,323
1,583
1,373
0.5
10.8
5.3
38.9
29.3
5.2
6.2
5.4
—
—
1,098
9,829
5,690
—
793
—
—
2,734
—
—
1,551
1,310
790
1,362
—
2,734
1,098
9,829
7,241
1,310
1,583
1,362
(20)
(1,837)
(1,857)
—
(123)
(123)
(7.3)
(0.5)
(20)
(1,837)
(1,857)
—
(123)
(123)
(1,776)
3,286
1,510
6.0
(1,789)
3,286
1,497
11
7
—
51
11
58
—
0.2
—
—
—
6
—
6
—
11.1
4.4
39.9
29.3
5.3
6.4
5.5
(7.5)
(0.5)
6.1
—
—
Fair value of scheme assets
16,236
9,124
25,360
100.0
15,601
9,079
24,680
100.0
As at 31 December 2021
Equities
Private equities
Bonds - fixed government
Bonds - index-linked government
Bonds - corporate and other
Property
Infrastructure
Hedge funds
Derivatives
Longevity reinsurance contract
Cash and liquid assetsb
Mixed investment funds
Other
Fair value of scheme assetsc
294
—
2,384
15,375
7,451
14
—
—
1
—
—
3,113
161
—
1,498
1,490
1,815
1,365
10
—
(1,865)
2,275
9
20
—
57
294
3,113
2,545
15,375
8,949
1,504
1,815
1,365
11
—
410
9
77
0.8
8.8
7.2
43.5
25.2
4.2
5.1
3.8
—
—
1.2
—
0.2
167
—
2,080
15,352
7,214
—
—
—
1
—
—
3,113
161
—
1,498
1,490
1,815
1,365
10
—
(1,878)
2,275
—
—
—
15
167
3,113
2,241
15,352
8,712
1,490
1,815
1,365
11
—
397
—
15
0.5
9.0
6.5
44.4
25.1
4.3
5.2
3.9
—
—
1.1
—
—
23,683
11,784
35,467
100.0
22,936
11,742
34,678
100.0
Notes
a Valuation of unquoted assets is provided by the underlying managers or qualified independent valuers. Valuations of complex instruments are based on UKRF custodian valuations. The valuation for
some of the unquoted assets, in particular Private equities, is based on valuations as at 30 September 2022 adjusted by cash flows, these being the latest available valuations as at the point of
publication. All valuations are determined in accordance with relevant industry guidance.
b Cash and liquid assets for the UKRF consists of £521m (2021: £488m) Cash, £80m (2021: £93m) Receivables/payables, £3,286m (2021:£2,275m) Pooled cash funds and £(2,390)m (2021: £(2,459)m)
Repurchase agreements.
c The asset allocation for 2021 has been re-presented to reflect the re-interpretation of the asset classifications as well as a reclassification of £1.2bn between unquoted/quoted bonds, in a manner that
management believes better represents the underlying nature of the assets.
Included within the fair value of UKRF scheme assets was nil (2021: nil) relating to shares in Barclays PLC and nil (2021: nil) relating to
bonds issued by Barclays PLC. The UKRF also invests in pooled investment vehicles which may hold shares or debt issued by Barclays
PLC.
There has been no significant change in the UKRF investment strategy over the year, however, given the movement in the gilt and bond
yields over the year, the relative weights of assets classes have changed. No additional support from the Group was required in
response to the market volatility experienced over the year.
The UKRF assets as at 31 December 2021 do not include the Senior Notes referred to in the section below on Triennial Valuation, as
these were non-transferable instruments and not recognised under IAS 19. The Senior Notes were redeemed in December 2022, and
the redemption proceeds are now included in Cash and Liquid Assets as at 31 December 2022.
Approximately 34% of the UKRF assets are invested in liability-driven investment strategies; primarily UK gilts as well as interest rate
and inflation swaps. These swaps are used to better match the assets to its liabilities. The swaps are used to reduce the scheme’s
inflation and duration risks against its liabilities.
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Notes to the financial statements (continued)
Employee benefits
The UKRF employs derivative instruments, where appropriate, to match assets more closely to liabilities, or to achieve a desired
exposure or return. The value of assets shown reflects the assets held by the UKRF, with any derivative holdings reflected on a fair value
basis. The UKRF uses repurchase agreements and reverse repurchase agreements to achieve the Trustee’s liability hedging objective.
Investment managers are allowed to undertake repo transactions on the UKRF’s existing gilt holdings to raise cash with which to buy
additional gilts for efficient portfolio management; and reverse repo transactions to receive gilts and be paid a fee for providing cash.
For information on the UKRF Trustee’s approach to Responsible Investment and Climate Risk, in the context of managing the UKRF,
please refer to the UKRF Trustee website at https://epa.towerswatson.com/accounts/barclays/public/barclays-bank-responsible-
investment-policy/.
Triennial valuation
The latest triennial actuarial valuation of the UKRF showed a funding surplus of £2.0bn at 30 September 2022 (2021 update: £0.6bn
surplus). The improvement was mainly due to £294m of deficit reduction contributions, changes to views on life expectancy and
inflationary returns on assets relative to liabilities being better than expected.
The main differences between the funding and accounting assumptions are a different approach to setting the discount rate and a
more conservative longevity assumption for funding.
As the UKRF has a funding surplus, the 2023 deficit reduction contribution (£286m), agreed as part of the 2019 triennial actuarial
valuation, is no longer required, and a new recovery plan was not required.
As part of the 2022 triennial valuation, the Trustee and Barclays Bank PLC agreed an annual adequacy test on a basis more prudent than
the IAS 19 or funding bases. Should the UKRF be sufficiently funded on this basis, the regular employer contributions to the UKRF to
fund future Afterwork accrual will not be required in the following calendar year. The test will be reviewed at the 2025 triennial valuation.
The next funding valuation of the UKRF is due to be completed in 2026 with an effective date of 30 September 2025.
Subscription for Fixed rate notes
During 2019 and 2020 the UKRF subscribed for non-transferable listed senior fixed rate notes for £1,250m, backed by UK gilts (the
Senior Notes). These investments were partially financed by £1,000m deficit reduction contributions. The Senior Notes were issued by
two entities consolidated in the Barclays Bank Group under IFRS 10: Heron Issuer Limited (Heron) for £500m and Heron Issuer Number
2 Limited (Heron 2) for £750m. The Senior Notes entitled the UKRF to semi-annual coupon payments for five years, and full repayment
in cash in three tranches: £250m in 2023, £750m in 2024 and £250m at final maturity in 2025. Heron and Heron 2 acquired a total of
£1,500m of gilts from Barclays Bank PLC for cash to support payments on the Senior Notes. Barclays Bank PLC subscribed for the
junior notes issued by Heron and Heron 2 for £250m. The regulatory capital impact, which otherwise would have occurred in 2019 and
2020 from the regular deficit reduction contributions, would have been deferred until 2023, 2024 and 2025 upon maturity of the Senior
Notes.
As part of the planned early unwind of these transactions disclosed in Barclays PLC’s Q1 2022 Results Announcement, Barclays Bank
PLC purchased the Senior Notes at fair value from the UKRF for cash in December 2022. The UKRF’s investment in the Senior Notes
did not qualify as a plan asset under IAS 19; so the purchase of the Senior Notes for cash increased IAS 19 plan assets by £1,250m and
thereby accelerated the regulatory capital impact of the deficit reduction contributions to 2022 from 2023, 2024 and 2025. Barclays
Bank PLC subsequently reacquired the gilts held by Heron and Heron 2 in exchange for the redemption of all the fixed rate notes. The
gilts were disposed of by Barclays Bank PLC prior to year end.
Other support measures agreed which remain in place
Collateral – Barclays Bank PLC has entered into an agreement with the UKRF Trustee to provide collateral to cover at least 100% of any
funding deficit with an overall cap of £9bn, to provide security for the UKRF funding deficit as it increases or decreases over time. The
collateral pool is currently zero, reflecting the surplus funding position. The arrangement provides the UKRF Trustee with dedicated
access to the pool of assets in the event of Barclays Bank PLC not paying a deficit reduction contribution to the UKRF or in the event of
Barclays Bank PLC’s insolvency.
Participation – As permitted under the Financial Services and Markets Act 2000 (Banking Reform) (Pensions) Regulations 2016, Barclays
Bank UK PLC is a participating employer in the UKRF and will remain so during a transitional phase until September 2025 as set out in a
deed of participation. Barclays Bank UK PLC will make contributions for the future service of its employees who are currently Afterwork
members and, in the event of Barclays Bank PLC’s insolvency during this period provision has been made to require Barclays Bank UK
PLC to become the principal employer of the UKRF. Barclays Bank PLC’s Section 75 debt would be triggered by the insolvency (the debt
would be calculated after allowing for the payment to the UKRF of the collateral above).
Defined benefit contributions paid with respect to the UKRF were as follows:
Contributions paid
2022
2021
2020
£m
1,785
955
748
There were nil (2021: nil) Section 75 contributions included within the Group’s contributions paid as no participating employers left the
UKRF in 2022.
The Group’s expected contribution to the UKRF in respect of defined benefits in 2023 is £38m (2022: £546m). In addition, the expected
contributions to UK defined contribution schemes in 2023 is £32m (2022: £33m) to the UKRF and £243m (2022: £221m) to the BPSP.
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Notes to the financial statements (continued)
Scope of consolidation
Scope of consolidation
The notes included in this section present information on the Group’s investments in subsidiaries, joint ventures and associates and its
interests in structured entities. Detail is also given on securitisation transactions the Group has entered into and arrangements that are
held off-balance sheet.
34 Principal subsidiaries
The Group applies IFRS 10 Consolidated Financial Statements. The consolidated financial statements combine the financial statements
of the Group and all its subsidiaries. Subsidiaries are entities over which the Group has control. Under IFRS 10, this is when the Group is
exposed or has rights to variable returns from its involvement in the entity and has the ability to affect those returns through its power
over the entity.
The Group reassesses whether it controls an entity if facts and circumstances indicate that there have been changes to its power, its
rights to variable returns or its ability to use its power to affect the amount of its returns.
Intra-group transactions and balances are eliminated on consolidation and consistent accounting policies are used throughout the
Group for the purposes of the consolidation. Changes in ownership interests in subsidiaries are accounted for as equity transactions if
they occur after control has been obtained and they do not result in loss of control.
The significant judgements used in applying this policy are set out below.
Accounting for investment in subsidiaries
In the individual financial statements of Barclays PLC, investments in subsidiaries are stated at cost less impairment.
Principal subsidiaries for the Group are set out below. This includes those subsidiaries that are most significant in the context of the
Group’s business, results or financial position.
Company name
Barclays Bank PLC
Barclays Bank UK PLC
Principal place of business or
incorporation
United Kingdom
United Kingdom
Nature of business
Banking, holding company
Banking, holding company
Barclays Bank Ireland PLC
Ireland
Banking
Barclays Execution Services
Limited
Barclays Capital Inc.
Barclays Capital Securities
Limited
Barclays Securities Japan
Limited
Barclays US LLC
Barclays Bank Delaware
United Kingdom
United States
Service company
Securities dealing
United Kingdom
Securities dealing
Japan
United States
United States
Securities dealing
Holding company
Credit card issuer
Non-controlling
interests -
proportion of
ownership
interests
Non-controlling
interests -
proportion of
voting interests
Percentage of
voting rights held
%
100
100
100
100
100
100
100
100
100
%
2
—
—
—
—
—
—
—
—
%
—
—
—
—
—
—
—
—
—
The country of registration or incorporation is also the principal area of operation of each of the above subsidiaries.
Ownership interests are in some cases different to voting interests due to the existence of non-voting equity interests, such as
preference shares. Refer to Note 30 for more information.
Determining whether the Group has control of an entity is generally straightforward based on ownership of the majority of the voting
capital. However, in certain instances, this determination will involve judgement, particularly in the case of structured entities where
voting rights are often not the determining factor in decisions over the relevant activities. This judgement will involve assessing the
purpose and design of the entity. It will also often be necessary to consider whether the Group, or another involved party with power
over the relevant activities, is acting as a principal in its own right or as an agent on behalf of others.
There is also often considerable judgement involved in the ongoing assessment of control over structured entities. In this regard, where
market conditions have deteriorated such that the other investors’ exposures to the structure’s variable returns have been
substantively eliminated, the Group may conclude that the managers of the structured entity are acting as its agent and therefore will
consolidate the structured entity.
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Notes to the financial statements (continued)
Scope of consolidation
An interest in equity voting rights exceeding 50% would typically indicate that the Group has control of an entity. However, the entity set
out below is excluded from consolidation because the Group does not have exposure to its variable returns.
Company name
Palomino Limited
Country of registration or incorporation
Cayman Islands
Percentage of
voting rights held
Equity
shareholders'
funds
Retained profit for
the year
%
100
£m
—
£m
—
This entity is managed by an external counterparty and consequently is not controlled by the Group. Interests relating to this entity are
included in Note 35.
Significant restrictions
As is typical for a group of its size and international scope, there are restrictions on the ability of Barclays PLC to obtain distributions of
capital, access the assets or repay the liabilities of members of its Group due to the statutory, regulatory and contractual requirements
of its subsidiaries and due to the protective rights of non-controlling interests. These are considered below.
Regulatory requirements
Barclays’ principal subsidiary companies have assets and liabilities before intercompany eliminations of £1,962bn (2021: £1,833bn) and
£1,869bn (2021: £1,737bn) respectively. Certain of these assets and liabilities are subject to prudential regulation and regulatory capital
requirements in the countries in which they are regulated. These require entities to maintain minimum capital levels which cannot be
returned to the parent company, Barclays PLC, on a going concern basis.
In order to meet capital requirements, subsidiaries may issue certain equity-accounted and debt-accounted financial instruments and
non-equity instruments such as Tier 1 and Tier 2 capital instruments and other forms of subordinated liabilities. Refer to Note 27 and
Note 28 for particulars of these instruments. These instruments may be subject to cancellation clauses or preference share
restrictions that would limit the ability of the entity to repatriate the capital on a timely basis.
Liquidity requirements
Regulated subsidiaries of the Group are required to meet applicable PRA or local regulatory requirements pertaining to liquidity. Some
of the regulated subsidiaries include Barclays Bank PLC and Barclays Capital Securities Limited (which are regulated on a combined
basis under a Domestic Liquidity Sub-Group (DoLSub) arrangement), Barclays Bank UK PLC, Barclays Bank Ireland PLC, Barclays Capital
Inc. and Barclays Bank Delaware. Refer to the Liquidity risk section for further details of liquidity requirements, including those of the
Group’s significant subsidiaries.
Statutory requirements
The Group’s subsidiaries are subject to statutory requirements not to make distributions of capital and unrealised profits and generally
to maintain solvency. These requirements restrict the ability of subsidiaries to make remittances of dividends to Barclays PLC, the
ultimate parent, except in the event of a legal capital reduction or liquidation. In most cases, the regulatory restrictions referred to
above exceed the statutory restrictions.
Asset encumbrance
The Group uses its financial assets to raise finance in the form of securitisations and through the liquidity schemes of central banks, as
well as to provide security to the UK Retirement Fund. Once encumbered, the assets are not available for transfer around the Group.
The assets typically affected are disclosed in Note 38.
Other restrictions
The Group is required to maintain balances with central banks and other regulatory authorities, and these amounted to £3,457m (2021:
£4,750m).
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35 Structured entities
A structured entity is an entity in which voting or similar rights are not the dominant factor in deciding who controls the entity. Voting
rights may relate to administrative tasks only, with the relevant activities of the entity being directed by means of contractual
arrangements. Structured entities are generally created to achieve a narrow and well-defined objective with restrictions around their
ongoing activities.
Depending on the Group’s power over the activities of the entity and its exposure to and ability to influence its own returns, it may
consolidate the entity. In other cases, it may sponsor or have exposure to such an entity but not consolidate it.
Consolidated structured entities
The Group has contractual arrangements which may require it to provide financial support to the following types of consolidated
structured entities:
• Securitisation vehicles: The Group uses securitisation as a source of financing and a means of risk transfer. Where entities are
controlled by the Group, they are consolidated. Refer to Note 37 for further detail.
▪ Commercial Paper (CP) conduits: These entities issue CP and use the proceeds to lend to clients as part of the Group's multi-seller
conduit programme. The Group has provided £20.8bn (2021: £17.2bn) in contractual liquidity facilities to the CP conduits that the
Group consolidates. These amounts represent the maximum the conduits can lend externally. The amounts of CP conduit lending
(drawn and undrawn) to unconsolidated structured entities can be seen in Other interests in unconsolidated structured entities
under multi-seller conduit programme in the Nature of interest table.
▪ Employee benefit trusts: The Group provides capital contributions to employee benefit trusts to enable them to meet obligations to
employees in relation to share-based remuneration arrangements.
▪ Tender Option Bond (TOB) trusts: During 2022, the Group provided undrawn liquidity facilities of £3.8bn (2021: £3.3bn) to
consolidated TOB trusts. These trusts invest in fixed income instruments issued by state, local or other municipalities in the United
States, funded by long-term senior floating-rate notes and junior residual securities.
Unconsolidated structured entities
The term ‘unconsolidated structured entities’ refers to structured entities not controlled by Barclays, and are established either by
Barclays or a third party. An interest in a structured entity is any form of contractual or non-contractual involvement which creates
variability in returns arising from the performance of the entity for the Group. Such interests include holdings of debt or equity
securities, derivatives that transfer financial risks from the entity to the Group, lending, loan commitments, financial guarantees and
investment management agreements.
The Group enters into transactions with unconsolidated structured entities in the normal course of business to facilitate customer
transactions, to provide risk management services and for specific investment opportunities. This is predominantly within the CIB
business. Structured entities may take the form of funds, trusts, securitisation vehicles, and private investment companies. The largest
transactions for Barclays include loans and derivatives with hedge fund structures and special purpose entities, multi-seller conduit
lending, holding notes issued by securitisation vehicles, and facilitating customer requirements through funds.
The nature and extent of the Group’s interests in structured entities is summarised below:
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Summary of interests in unconsolidated structured entities
As at 31 December 2022
Assets
Trading portfolio assets
Financial assets at fair value through the income statement
Derivative financial instruments
Financial assets at fair value through other comprehensive
income
Loans and advances at amortised cost
Reverse repurchase agreements and other similar secured
lending
Other assets
Total assets
Liabilities
As at 31 December 2021
Assets
Trading portfolio assets
Financial assets at fair value through the income statement
Derivative financial instruments
Financial assets at fair value through other comprehensive
income
Loans and advances at amortised cost
Reverse repurchase agreements and other similar secured
lending
Other assets
Total assets
Liabilities
Secured financing
interests Traded derivatives
Other interests
Short-term traded
£m
£m
—
75,166
—
—
—
117
—
8,632
—
—
—
—
—
—
£m
—
—
4,555
—
—
—
—
£m
—
2,459
—
423
44,292
—
69
Total
£m
8,632
77,625
4,555
423
44,292
117
69
75,283
8,632
4,555
47,243
135,713
—
61,816
—
—
—
104
—
7,170
—
—
—
—
—
—
—
—
5,160
—
—
—
—
—
3,490
—
91
28,227
—
17
61,920
7,170
5,160
31,825
106,075
—
8,460
7,170
65,306
5,160
91
28,227
104
17
Derivative financial instruments
—
—
8,460
—
Derivative financial instruments
—
—
9,543
—
9,543
Secured financing arrangements, short-term traded interests and traded derivatives are typically managed under Market risk
management policies described in the Market risk management section which includes an indication of the change of risk measures
compared to last year. For this reason, the total assets of these entities are not considered meaningful for the purposes of
understanding the related risks and so have not been presented. Other interests include conduits and lending where the interest is
driven by normal customer demand. As at 31 December 2022, there were 6,267 (2021: 5,891) structured entities that Barclays entered
into transactions with.
Secured financing
The Group routinely enters into reverse repurchase contracts, margin lending, stock borrowing and similar arrangements on normal
commercial terms where the counterparty to the arrangement is a structured entity. Due to the nature of these arrangements,
especially the transfer of collateral and ongoing margining, the Group is able to manage its variable exposure to the performance of the
structured entity counterparty. The counterparties included in secured financing mainly include hedge fund limited structures,
investment companies and special purpose entities.
Short-term traded interests
As part of its market making activities, the Group buys and sells interests in structured vehicles, which are predominantly debt securities
issued by asset securitisation vehicles. Such interests are typically held individually or as part of a larger portfolio for no more than 90
days. In such cases, the Group typically has no other involvement with the structured entity other than the securities it holds as part of
trading activities and its maximum exposure to loss is restricted to the carrying value of the asset.
Traded derivatives
The Group enters into a variety of derivative contracts with structured entities which reference market risk variables such as interest
rates, equities, foreign exchange rates and credit indices among other things. The main derivative types which are considered interests
in structured entities include equity options, index-based and entity-specific credit default swaps, and total return swaps. Interest rate
swaps and foreign exchange derivatives that are not complex and which expose the Group to insignificant credit risk by being senior in
the payment waterfall of a securitisation and derivatives that are determined to introduce risk or variability to a structured entity are not
considered to be an interest in an entity and have been excluded from the disclosures.
A description of the types of derivatives and the risk management practices are detailed in Note 14. The risk of loss may be mitigated
through ongoing margining requirements as well as a right to cash flows from the structured entity which are senior in the payment
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waterfall. Such margining requirements are consistent with market practice for many derivative arrangements and in line with the
Group’s normal credit policies.
Derivative transactions require the counterparty to provide cash or other collateral under margining agreements to mitigate
counterparty credit risk. The Group is mainly exposed to settlement risk on these derivatives which is mitigated through daily margining.
Total notional contract amounts were £244,780m (2021: £217,055m).
Except for credit default swaps where the maximum exposure to loss is the swap notional amount, it is not possible to estimate the
maximum exposure to loss in respect of derivative positions as the fair value of derivatives is subject to changes in market rates of
interest, exchange rates and credit indices which by their nature are uncertain. In addition, the Group’s losses would be subject to
mitigating action under its traded market risk and credit risk policies that require the counterparty to provide collateral in cash or other
assets in most cases.
Other interests in unconsolidated structured entities
The Group’s interests in structured entities not held for the purposes of short-term trading activities are set out below, summarised by
the nature of the interest and limited to significant categories, based on maximum exposure to loss.
Nature of interest
As at 31 December 2022
Financial assets at fair value through the income statement
Financial assets at fair value through other comprehensive
income
Loans and advances at amortised cost
Other assets
Total on-balance sheet exposures
Total off-balance sheet notional amounts
Maximum exposure to loss
Total assets of the entity
As at 31 December 2021
Financial assets at fair value through the income statement
Financial assets at fair value through other comprehensive
income
Loans and advances at amortised cost
Other assets
Total on-balance sheet exposures
Total off-balance sheet notional amounts
Maximum exposure to loss
Total assets of the entity
Multi-seller
conduit
programme
£m
—
—
8,681
32
8,713
10,552
19,265
66,504
—
—
5,184
8
5,192
11,015
16,207
65,441
Lending
£m
59
220
22,069
33
22,381
10,926
33,307
160,002
70
53
14,538
4
14,665
9,426
24,091
166,238
Of which: Barclays
owned, not
consolidated
entitiesa
£m
Total
£m
Other
£m
2,400
2,459
2,284
203
13,542
4
16,149
—
16,149
88,779
423
44,292
69
47,243
21,478
68,721
315,285
—
—
—
2,284
—
2,284
8,690
3,420
3,490
3,335
38
8,505
5
11,968
—
11,968
52,873
91
28,227
17
31,825
20,441
52,266
284,552
—
—
—
3,335
—
3,335
11,513
Note
a Comprises of Barclays owned, not consolidated structured entities per IFRS 10 Consolidated Financial Statements, and Barclays sponsored entities, Refer to Note 34 Principal subsidiaries for more
details on consolidation.
Maximum exposure to loss
Unless specified otherwise below, the Group’s maximum exposure to loss is the total of its on-balance sheet positions and its off-
balance sheet arrangements, being loan commitments and financial guarantees. Exposure to loss is mitigated through collateral,
financial guarantees, the availability of netting and credit protection held.
Multi-seller conduit programme
Barclays' multi-seller conduit programme engages in providing financing to various clients and holds whole or partial interests in pools of
receivables or similar obligations. These instruments are protected from loss through over-collateralisation, seller guarantees, or other
credit enhancements provided to the conduit entities. The Group’s off-balance sheet exposure included in the table above represents
liquidity facilities that are provided to the conduit for the benefit of the holders of the commercial paper issued by the conduit and will
only be drawn where the conduit is unable to access the commercial paper market. If these liquidity facilities are drawn, the Group is
protected from loss through over-collateralisation, seller guarantees, or other credit enhancements provided to the conduit.
Lending
The portfolio includes lending provided by the Group to unconsolidated structured entities in the normal course of its lending business
to earn income in the form of interest and lending fees and includes loans to structured entities that are generally collateralised by
property, equipment or other assets. All loans are subject to the Group’s credit sanctioning process. Collateral arrangements are
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specific to the circumstances of each loan with additional guarantees and collateral sought from the sponsor of the structured entity
for certain arrangements. During the period the Group incurred an impairment of £32m (2021: £28m) against such facilities.
Other
This includes fair value loans with structured entities where the market risk is materially hedged with corresponding derivative contracts,
interests in debt securities issued by securitisation vehicles and drawn and undrawn loan facilities to these entities. In addition, other
includes investment funds with interests restricted to management fees based on performance of the fund and trusts held on behalf of
beneficiaries with interests restricted to unpaid fees.
Assets transferred to sponsored unconsolidated structured entities
Barclays is considered to sponsor another entity if: it had a key role in establishing that entity, it transferred assets to the entity, the
Barclays name appears in the name of the entity or it provides guarantees on the entity’s performance. As at 31 December 2022,
assets transferred to sponsored unconsolidated structured entities were £1,665m (2021: £1,662m).
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Scope of consolidation
36 Investments in associates and joint ventures
Accounting for associates and joint ventures
The Group applies IAS 28 Investments in Associates and IFRS 11 Joint Arrangements. Associates are entities in which the Group has
significant influence, but not control, over the operating and financial policies. Generally the Group holds more than 20% but less than
50% of their voting shares. Joint ventures are arrangements where the Group has joint control and rights to the net assets of the entity.
The Group’s investments in associates and joint ventures are initially recorded at cost and increased (or decreased) each year by the
Group’s share of the post acquisition profit/(loss). The Group ceases to recognise its share of the losses of equity accounted
associates when its share of the net assets and amounts due from the entity have been written off in full, unless it has a contractual or
constructive obligation to make good its share of the losses. In some cases, investments in these entities may be held at fair value
through profit or loss, for example, those held by private equity businesses.
The equity accounted associates include the Group's investment in the Business Growth Fund £669m (2021: £699m) which has
increased due to a fair value gain in its investments by £(21)m (2021: £220m).
Equity accounted
Held at fair value through profit or loss
Total
2022
Associates
Joint ventures
£m
695
—
695
£m
227
435
662
Total
£m
922
435
1,357
2021
Associates
Joint ventures
£m
722
—
722
£m
277
444
721
Total
£m
999
444
1,443
Summarised financial information for the Group’s equity accounted associates and joint ventures is set out below. The amounts shown
are the Group’s share of the net income of the investees for the year ended 31 December 2021, with the exception of certain
undertakings for which the amounts are based on accounts made up to dates not earlier than three months before the balance sheet
date.
Profit/(loss) from continuing operations
Other comprehensive income/(loss)
Total comprehensive income/(loss) from continuing operations
Associates
Joint ventures
2022
£m
(21)
—
(21)
2021
£m
219
1
220
2022
2021
£m
26
1
27
£m
35
5
40
Unrecognised shares of the losses of individually immaterial associates and joint ventures were £nil (2021: £nil).
The Group has provided £nil (2021: £nil) to its joint ventures and associates. The Barclays drawn commitments to finance or otherwise
provide resources to its joint ventures and associates are £474m (2021: £482m) The Barclays share of the associates and joint
ventures unutilised credit facilities commitments amounted to £1,796m (2021: £1,760m).
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Notes to the financial statements (continued)
Scope of consolidation
37 Securitisations
Accounting for securitisations
The Group uses securitisations as a source of finance and a means of risk transfer. Such transactions generally result in the transfer of
contractual cash flows from portfolios of financial assets to holders of issued debt securities.
Securitisations may, depending on the individual arrangement, result in continued recognition of the securitised assets and the
recognition of the debt securities issued in the transaction; lead to partial continued recognition of the assets to the extent of the
Group’s continuing involvement in those assets or lead to derecognition of the assets and the separate recognition, as assets or
liabilities, of any rights and obligations created or retained in the transfer. Full derecognition only occurs when the Group transfers both
its contractual right to receive cash flows from the financial assets, or retains the contractual rights to receive the cash flows, but
assumes a contractual obligation to pay the cash flows to another party without material delay or reinvestment, and also transfers
substantially all the risks and rewards of ownership, including credit risk, prepayment risk and interest rate risk.
In the course of its normal banking activities, the Group makes transfers of financial assets, either where legal rights to the cash flows
from the asset are passed to the counterparty or beneficially, where the Group retains the rights to the cash flows but assumes a
responsibility to transfer them to the counterparty. Depending on the nature of the transaction, this may result in derecognition of the
assets in their entirety, partial derecognition or no derecognition of the assets subject to the transfer.
A summary of the main transactions, and the assets and liabilities and the financial risks arising from these transactions, is set out below:
Transfers of financial assets that do not result in derecognition
Securitisations
The Group was party to securitisation transactions involving its credit card balances and other personal lending. In these transactions,
the assets, interests in the assets, or beneficial interests in the cash flows arising from the assets, are transferred to a special purpose
entity, which then issues interest bearing debt securities to third party investors.
Securitisations may, depending on the individual arrangement, result in continued recognition of the securitised assets and the
recognition of the debt securities issued in the transaction. Partial continued recognition of the assets to the extent of the Group’s
continuing involvement in those assets can also occur or derecognition of the assets and the separate recognition, as assets or
liabilities, of any rights and obligations created or retained in the transfer.
The following table shows the carrying amount of securitised assets that have not resulted in full derecognition, together with the
associated liabilities, for each category of asset on the balance sheet:
Loans and advances at amortised cost
Credit cards, unsecured and other retail lending
Mortgage Loans
Financial assets at FVTPL
Mortgage Loans
Total
2022
2021
Assets
Liabilities
Assets
Liabilities
Carrying
amount
Fair value
Carrying
amount
Fair value
Carrying
amount
Fair value
Carrying
amount
Fair value
£m
£m
£m
£m
£m
£m
£m
£m
5,324
496
330
6,150
5,761
(1,537)
(1,460)
1,262
1,382
(1,225)
(1,219)
439
(20)
(20)
330
0
0
0
41
0
41
0
0
0
0
6,530
(1,557)
(1,480)
1,303
1,423
(1,225)
(1,219)
Balances included within loans and advances at amortised cost represent securitisations where substantially all the risks and rewards of
the asset have been retained by the Group and balances included within Financial assets at FVTPL represent securitisations where the
risks and rewards are neither substantially transferred nor retained.
The relationship between the transferred assets and the associated liabilities is that holders of notes may only look to cash flows from
the securitised assets for payments of principal and interest due to them under the terms of their notes, although the contractual
terms of their notes may be different to the maturity and interest of the transferred assets.
If Barclays transfers a financial asset but does not transfer or retain substantially all the risk and rewards of the asset and retains control
over it, the transferred assets is recognised to the extent of Barclays’ continuing involvement. In 2022, financial assets of £828m (2021:
£249m) were transferred in this manner and the carrying value of the asset representing continued involvement is included in the table
above.
For transfers of assets in relation to repurchase agreements, refer to Note 38.
Continuing involvement in financial assets that have been derecognised
In some cases, the Group may have transferred a financial asset in its entirety but may have continuing involvement in it. This arises in
asset securitisations where loans and asset backed securities were derecognised as a result of the Group’s involvement with asset
backed securities, residential mortgage backed securities and commercial mortgage backed securities. Continuing involvement largely
arises from providing financing into these structures in the form of retained notes, which do not bear first losses.
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The table below shows the potential financial implications of such continuing involvement:
Type of transfer
2022
Asset backed securities
Residential mortgage backed securities
Commercial mortgage backed securities
Total
2021
Asset backed securities
Residential mortgage backed securities
Commercial mortgage backed securities
Total
Continuing involvementa
Gain from continuing involvement
Carrying amount
Fair value
Maximum
exposure to loss
For the year ended
Cumulative to 31
December
£m
£m
£m
8
913
412
8
907
357
8
913
412
1,333
1,272
1,333
25
574
311
910
25
574
307
906
25
574
311
910
£m
1
18
5
24
1
3
5
9
£m
3
22
16
41
2
4
11
17
Note
a Assets which represent the Group’s continuing involvement in derecognised assets are recorded in Loans and advances at amortised cost and Debt securities at FVTPL.
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38 Assets pledged, collateral received and assets transferred
Assets are pledged or transferred as collateral to secure liabilities under repurchase agreements, securitisations and stock lending
agreements or as security deposits relating to derivatives. Assets transferred are non-cash assets transferred to a third party that do
not qualify for derecognition from the Group balance sheet, for example because Barclays retains substantially all the exposure to those
assets under an agreement to repurchase them in the future for a fixed price.
Assets pledged or transferred as collateral include all assets categorised as encumbered in the disclosure on pages 180 to 182 of the
Barclays PLC Pillar 3 Report 2022 (unaudited), other than those held in commercial paper conduits. In these transactions, the Group will
be required to step in to provide financing itself under a liquidity facility if the vehicle cannot access the commercial paper market.
Where non-cash assets are pledged or transferred as collateral for cash received, the asset continues to be recognised in full, and a
related liability is also recognised on the balance sheet. Where non-cash assets are pledged or transferred as collateral in an exchange
for non-cash assets, the transferred asset continues to be recognised in full, and there is no associated liability as the non-cash
collateral received is not recognised on the balance sheet. The Group is unable to use, sell or pledge the transferred assets for the
duration of the transaction and remains exposed to interest rate risk and credit risk on these pledged assets. Unless stated, the
counterparty's recourse is not limited to the transferred assets.
The following table summarises the nature and carrying amount of the assets pledged as security against these liabilities:
Cash collateral and settlements
Loans and advances at amortised cost
Trading portfolio assets
Financial assets at fair value through the income statement
Financial assets at fair value through other comprehensive income
Assets pledged
2022
£m
78,996
64,772
63,969
8,220
18,210
2021
£m
66,138
65,216
71,518
5,595
13,748
234,167
222,215
The following table summarises the transferred financial assets and the associated liabilities. The transferred assets represent the
gross carrying value of the assets pledged and the associated liabilities represent the IFRS balance sheet value of the related liability
recorded on the balance sheet:
At 31 December 2022
Derivatives
Repurchase agreements
Securities lending arrangements
Other
At 31 December 2021
Derivatives
Repurchase agreements
Securities lending arrangements
Other
Transferred assets
Associated
liabilities
£m
£m
79,474
74,291
67,554
12,848
(79,474)
(46,617)
—
(11,055)
234,167
(137,146)
66,744
71,820
69,316
14,335
222,215
(66,744)
(49,543)
—
(12,121)
(128,408)
For repurchase agreements the difference between transferred assets and the associated liabilities is predominantly due to IFRS
netting. Included within Other are agreements where a counterparty's recourse is limited to the transferred assets. The relationship
between the gross transferred assets and the associated liabilities is that holders of notes may only look to cash flows from the
securitised assets for payments of principal and interest due to them under the terms of their notes.
Carrying value
Associated
Transferred assets
liabilities Transferred assets
Fair value
Associated
liabilities
Net position
£m
£m
£m
£m
£m
2022
Recourse to transferred assets only
6,150
(1,557)
6,530
(1,480)
5,050
2021
Recourse to transferred assets only
1,303
(1,225)
1,423
(1,219)
204
The Group has an additional £5.3bn (2021: £5.8bn) of loans and advances within its asset backed funding programmes that can readily
be used to raise additional secured funding and are available to support future issuances.
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Collateral held as security for assets
Under certain transactions, including reverse repurchase agreements and stock borrowing transactions, the Group is allowed to resell
or re-pledge the collateral held. The fair value at the balance sheet date of collateral accepted and re-pledged or transferred to others
was as follows:
Fair value of securities accepted as collateral
Of which fair value of securities re-pledged/transferred to others
2022
£m
988,340
892,026
2021
£m
928,999
814,448
Additional disclosure has been included in collateral and other credit enhancements in the Risk review section. Assets pledged as
collateral include all assets categorised as encumbered in the disclosure on pages 180 to 182 of the Barclays PLC Pillar 3 Report 2022
(unaudited).
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Notes to the financial statements (continued)
Other disclosure matters
Other disclosure matters
The notes included in this section focus on related party transactions, Auditor's remuneration and Directors’ remuneration. Related
parties include any subsidiaries, associates, joint ventures and Key Management Personnel.
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:
For the year ended and as at 31 December 2022
Total income
Credit impairment charges
Operating expenses
Total assets
Total liabilities
For the year ended and as at 31 December 2021
Total income
Credit impairment charges
Operating expenses
Total assets
Total liabilities
Associates
Joint ventures
Pension funds
£m
(2)
—
(15)
—
408
—
—
(20)
—
177
£m
91
—
—
1,336
—
50
—
—
1,278
—
£m
5
—
(1)
3
166
5
—
(1)
3
81
Total liabilities includes derivatives transacted on behalf of the pension funds of £110m (2021: £18m).
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
As at 1 January
Loans issued during the yeara
Loan repayments during the yearb
As at 31 December
Notes
a
b
Includes loans issued to existing Key Management Personnel and new or existing loans issued to newly appointed Key Management Personnel.
Includes loan repayments by existing Key Management Personnel and loans to former Key Management Personnel.
2022
£m
7.8
1.4
(1.7)
7.5
2021
£m
9.2
0.4
(1.8)
7.8
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No allowances for impairment were recognised in respect of loans to Key Management Personnel (or any connected person).
Deposits outstanding
As at 1 January
Deposits received during the yeara
Deposits repaid during the yearb
As at 31 December
2022
£m
9.1
47.9
(41.8)
15.2
2021
£m
10.4
37.6
(38.9)
9.1
Notes
a
b
Includes deposits received from existing Key Management Personnel and new or existing deposits received from newly appointed Key Management Personnel.
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 2022 were £0.5m (2021: £0.6m).
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 salaries, short term benefits and pensions contributions
received during the year and awards made as part of the latest remuneration decisions in relation to the year. 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 costs for deferred awards. Figures are
provided for the period that individuals met the definition of Key Management Personnel.
Salaries and other short-term benefits
Pension costs
Other long-term benefits
Share-based payments
Employer social security charges on emoluments
Costs recognised for accounting purposes
Employer social security charges on emoluments
Other long-term benefits – difference between awards granted and costs recognised
Share-based payments – difference between awards granted and costs recognised
Total remuneration awarded
2022
£m
32.4
—
7.8
9.8
6.7
56.7
(6.7)
—
6.5
56.5
2021
£m
37.8
—
8.5
12.2
7.2
65.7
(7.2)
3.1
6.9
68.5
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:
Aggregate emolumentsa
Amounts paid under LTIPsb
2022
£m
9.3
0.4
9.7
2021
£m
8.2
1.2
9.4
Notes
a The aggregate emoluments include amounts paid for the 2022 year. In addition, deferred share awards for 2022 with a total value at grant of £2.3m (2021: £1.4m) will be made to C.S. Venkatakrishnan,
Anna Cross and Tushar Morzaria which will only vest subject to meeting certain conditions.
b The figure above for "Amounts paid under LTIPs" in 2022 relates to LTIP awards that were released to Tushar Morzaria in 2022. Dividend shares released are excluded. The LTIP figure in the single total
figure table for Executive Directors' 2022 remuneration in the Directors' Remuneration report relates to the award that is scheduled to be released in 2023 in respect of the 2020-2022 LTIP cycle.
There were no pension contributions paid to defined contribution schemes on behalf of Directors (2021: £nil). There were no notional
pension contributions to defined contribution schemes.
As at 31 December 2022, there were no Directors accruing benefits under a defined benefit scheme (2021: 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 23 persons) at
31 December 2022 amounted to 15,944,986 (2021: 17,876,352) ordinary shares of 25p each (0.11% of the ordinary share capital
outstanding).
As at 31 December 2022, Executive Directors and Officers of Barclays PLC (involving 11 persons) held options to purchase a total of
62,268 (2021: 62,268) Barclays PLC ordinary shares of 25p each at a weighted average price of 93p under Sharesave.
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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 2022 to
persons who served as Directors during the year was £0.2m (2021: £0.2m). The total value of guarantees entered into on behalf of
Directors during 2022 was £nil (2021: £nil).
40 Auditor’s remuneration
Auditor’s remuneration is included within consultancy, legal and professional fees in administration and general expenses and
comprises:
Audit of the Barclays Group's annual accounts
Other services:
Audit of the Company's subsidiariesa
Other audit related feesb
Other services
Total Auditor's remuneration
2022
£m
10
48
11
2
71
2021
£m
9
41
10
2
62
2020
£m
9
38
10
2
59
Notes
a Comprises the fees for the statutory audit of subsidiaries both inside and outside the UK and fees for work performed by associates of KPMG in respect of the consolidated financial statements of the
Company.
b Comprises services in relation to statutory and regulatory filings. These include audit services for the review of the interim financial information under the Listing Rules of the UK listing authority.
Audit scope changes are finalised following the completion of the audit and recognised when agreed. The 2022 audit fee includes £2m
(2021: £3m) relating to the previous year’s audit.
41 Interest rate benchmark reform
Following the financial crisis, the reform and replacement of benchmark interest rates such as LIBOR has been a priority for global
regulators. As a result, the UK’s Financial Conduct Authority (FCA) and other global regulators instructed market participants to prepare
for the cessation of most LIBOR rates after the end of 2021, and to adopt “Risk-Free Rates” (RFRs).
Pursuant to FCA announcements during 2021, panel bank submissions for all GBP, JPY, EUR and CHF LIBOR tenors ceased after 31
December 2021. For USD, certain actively used tenors will continue to be provided until end June 2023 in their current form, however in
line with the US banking regulators’ joint statement, Barclays ceased issuing or entering into new contracts that use USD LIBOR as a
reference rate from 31 December 2021, other than in relation to those allowable use cases set out under the FCA's prohibition notice
(ref 21A). These include, amongst others, market making in support of client activity; or transactions that reduce or hedge Barclays' or
any client of Barclays' USD LIBOR exposure on contracts entered into before 1 January 2022.
The Group’s exposure to rates subject to benchmark interest rate reform has been predominantly to GBP, USD, JPY and CHF LIBOR
and Euro Overnight Index Average (EONIA) in addition to GBP LIBOR ICE Swap Rate, JPY LIBOR Tokyo Swap Rate and USD LIBOR ICE
Swap Rate, with the vast majority concentrated in derivatives within the Investment Bank. Some additional exposure exists on floating
rate loans and advances, repurchase and securities lending agreements and debt securities held and issued within the Corporate and
Investment Bank. Following transition activity in late 2021 and early 2022, almost all GBP LIBOR, GBP LIBOR ICE Swap Rate, JPY LIBOR
and JPY LIBOR Tokyo Swap Rate and CHF LIBOR and EONIA positions (“2021 scope”) have transitioned onto RFRs and while there are a
number of benchmarks yet to cease, the Group’s risk exposure is now mainly to USD LIBOR and the USD LIBOR ICE Swap Rate.
There are key differences between IBORs and RFRs. IBORs are ‘term rates’, which means that they are published for a borrowing period
(for example three months) and they are ‘forward-looking’, because they are published at the beginning of a borrowing period, based
upon an estimated inter-bank borrowing cost for the period. RFRs are based upon overnight rates from actual transactions and are
therefore published after the end of the overnight borrowing period. Furthermore, IBORs include term and credit risk premiums.
Therefore, to transition existing contracts and agreements to RFRs, adjustments for term and credit differences may need to be
applied to RFR-linked rates. The methodologies for these adjustments have been determined through in-depth consultations by
industry working groups, on behalf of the respective global regulators and related market participants.
How the Group is managing the transition to alternative benchmark rates
Barclays has established a Group-wide LIBOR Transition Programme. The Transition Programme spans all business lines and has
cross-functional governance which includes Legal, Compliance, Conduct Risk, Risk and Finance. The Transition Programme aims to
drive strategic execution and identify, manage and resolve key risks and issues as they arise. Barclays continues to provide quarterly
updates on progress and exposures to the PRA/FCA and other regulators as required.
The Transition Programme follows a risk-based approach, using recognised ‘change delivery’ control standards. Accountable
Executives are in place within key working groups and workstreams, with overall Board oversight delegated to the Board Risk
Committee.
Approaches to USD LIBOR and USD LIBOR ICE Swap Rate exposure transition vary by product and nature of counterparty. The Group
has engaged with counterparties to transition or include robust fallback provisions where not already agreed in contracts with
maturities after June 2023, when USD LIBOR and the USD LIBOR ICE Swap Rate will either cease to be published or cease to be
published, in its current form. Any fallback provision will provide the relevant replacement rate, in the case of the ISDA 2020 IBOR
Fallbacks Protocol this is the RFR plus a credit adjustment spread. For bilateral derivative exposure, adherence to the relevant ISDA
Fallback Protocols have provided Barclays with an efficient mechanism to amend outstanding trades to incorporate fallbacks. Beyond
the ISDA 2020 IBOR Fallbacks Protocol and the ISDA 2021 Fallbacks Protocol, another option has been to bilaterally amend terms with
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counterparties. Derivative contracts facing central clearing counterparties (CCP) will follow a market-wide, standardised approach to
reform through a series of CCP-led conversions, similar to those used for GBP, JPY and CHF LIBOR and EONIA.
GBP and JPY LIBOR ceased to be published in their original form from the end of 2021 and synthetic versions of GBP and JPY LIBOR
have been made available for a limited period of time. This was to help mitigate the risk of widespread disruption to legacy LIBOR
contracts which had not transitioned by end 2021, when the GBP and JPY panel bank submissions ended. The FCA has reiterated that
any synthetic LIBOR tenors are only a bridge to give time to transition to appropriate alternative RFRs and not a permanent solution.
Barclays continues to monitor, assess and limit the reliance on synthetic LIBOR.
On 29th September 2022 the FCA announced that the 1- and 6- month synthetic GBP LIBOR tenors would cease immediately after
31st March 2023 and confirmed that the synthetic JPY LIBOR tenors would cease permanently at end 2022.
On 23rd November 2022 the FCA announced that the 3-month synthetic GBP LIBOR tenor will cease at end March 2024 and that the
overnight and 12-month USD LIBOR tenors will cease at end June 2023. The FCA also proposed that the 1-, 3- and 6-month USD
LIBOR tenors should be published under a synthetic methodology for a temporary period until end September 2024. A final decision
from the FCA is expected by early in the second quarter of 2023.
US Federal legislation (the Adjustable Interest Rate (LIBOR) Act) has been enacted which provides a solution for contracts governed
under US law which reference USD LIBOR but do not have adequate fallbacks. The effect of this legislation on in scope agreements will
be to deem all references to USD LIBOR to the replacement Secured Overnight Financing Rate (SOFR) with the additional benefit of
statutory contract continuity and safe harbour protection. This contrasts with the legislation implemented in the UK which provides for
statutory contract continuity with safe harbour protection only for the administrator and could expose market participants to additional
litigation risk.
Progress made during 2022
During 2022, Barclays delivered technology and business process changes required to ensure operational readiness in preparation for
transitions to RFRs for those benchmark rates ceasing June 2023, this included new RFR product capabilities and alternatives to LIBOR
across loans, bonds, repurchase and securities lending transactions and derivatives. Barclays continued to monitor and address its
unremediated exposure to 2021 scope; noting that this exposure, excluding secondary traded loans and bonds, was reduced to £2bn
gross notional as at 31 December 2022, which accounts for less than 0.2% of baseline exposure for 2021 scope. Of this, £1.2bn relates
to undrawn lending facilities with £1.1bn of this made up of syndicated loans where transition is led by a third-party agent. The
remaining £0.8bn is predominantly made up of bilateral derivatives without appropriate fallbacks. Work is ongoing with clients and
agents, as appropriate, to address the outstanding unremediated exposures.
Barclays is now focused on transition of legacy positions related to USD LIBOR and USD LIBOR ICE Swap Rate (and other in-scope
IBORs) and remains on track to meet the associated industry deadlines. In the first half of 2022, Barclays successfully transitioned all
uncommitted lending exposures.
Risks to which the Group is exposed as a result of the transition
Global regulators and central banks in the UK, US, EU and APAC have been driving international efforts to reform key benchmark
interest rates and indices, such as LIBOR, which are used to determine the amounts payable under a wide range of transactions and
make them more reliable and robust. These benchmark reforms have resulted in significant changes to the methodology and operation
of certain benchmarks and indices, the adoption of RFRs, the discontinuation of certain reference rates (including LIBOR), and the
introduction of implementing legislation and regulations. Notwithstanding these developments, given the unpredictable consequences
of benchmark reform, any of these developments could have an adverse impact on market participants, including the Group, in respect
of any financial instruments linked to, or referencing, any of these benchmark interest rates.
Uncertainty associated with such potential changes include:
• the availability and/or suitability of alternative RFRs,
• the participation of customers and third-party market participants in the transition process
• challenges with respect to required documentation changes; and
• impact of legislation to deal with ‘certain legacy’ contracts that cannot convert into RFRs or add RFR fallbacks before cessation of the
benchmark they reference.
This uncertainty may adversely affect a broad range of transactions (including any securities, loans, repurchase and securities lending
transactions and derivatives which use LIBOR or any other affected benchmark 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 present 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 (such as LIBOR) to new alternative RFRs,
the Group faces conduct risks. These may lead to customer complaints, regulatory sanctions or reputational impact if the Group is
considered to be (among other things): (i) 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 a
consistent approach to remediation for customers in similar circumstances, (v) unduly delaying the communication and migration
activities in relation to client exposure, leaving them insufficient time to prepare, or (vi) colluding or inappropriately sharing
information with competitors.
▪ Litigation risk: members of the Group may face legal proceedings, regulatory investigations and/or other actions or proceedings
regarding (among other things): (i) the conduct risks identified above, (ii) the interpretation and enforceability of provisions in LIBOR-
based contracts, and (iii) the Group’s preparation and readiness for the replacement of LIBOR with alternative RFRs.
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▪ Financial risk: the valuation of certain of the Group’s financial assets and liabilities may change. Moreover, transitioning to alternative
RFRs 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 certain alternative
RFRs (such as SONIA and the 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 cash flows.
▪ Pricing risk: changes to existing reference rates and indices, discontinuation of any reference rate or indices and transition to
alternative RFRs 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 RFRs 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.
▪ Accounting risk: an inability to apply hedge accounting in accordance with IAS 39 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, prospects,
and reputation. While a number of the above risks in relation to transition of legacy 2021 scope onto RFRs have been substantially
mitigated, they remain relevant in relation to USD LIBOR transitions.
The Group does not expect material changes to its risk management approach and strategy as a result of interest rate benchmark
reform.
The following tables summarise USD LIBOR and USD LIBOR ICE Swap Rate non-derivatives exposures due to mature post 30 June
2023, when USD LIBOR and the USD LIBOR ICE Swap Rate will either cease to be published or cease to be published, in its current form:
USD LIBOR
As at 31 December
Non-derivative financial assets
Loans and advances at amortised cost
Reverse repurchase agreements and other similar secured lending
Financial assets at fair value through the income statement
Financial assets at fair value through other comprehensive income
Non-derivative financial assets
Non-derivative financial liabilities
Debt securities in issue
Subordinated liabilities
Financial liabilities designated at fair value
Non-derivative financial liabilities
Equity
Other equity instruments
Standby facilities, credit lines and other commitmentsa
2022
£m
8,659
—
4,282
—
2021
£m
15,812
186
8,538
—
12,941
24,536
(9,062)
(1,132)
(1,740)
(11,934)
(6,137)
(1,088)
(212)
(7,437)
(1,786)
68,118
(3,374)
42,767
Note
a For year ended 2021, multi currency loan facilities are reported in the currency which needs to be remediated first, which were mainly non-USD. As the non-USD rates transitioned, this has
resulted in a corresponding increase in USD LIBOR exposure for year ended 2022 as USD LIBOR exposure is yet to transition.
Balances reported at amortised cost are disclosed at their gross carrying value and do not include any expected credit losses that may
be held against them.
The following tables summarise USD LIBOR and USD LIBOR ICE Swap Rate derivative exposures due to mature post 30 June 2023:
USD LIBOR
Derivative notional contract amount
OTC interest rate derivatives
OTC interest rate derivatives - cleared by central counterparty
Exchange traded interest rate derivatives
OTC foreign exchange derivatives
OTC equity and stock index derivatives
Derivative notional contract amount
Derivatives are reported using the notional contract amount
2022
£m
2021
£m
2,594,268
2,137,245
337,535
84
1,261
2,283,236
2,228,399
466,339
461,680
9,949
5,070,393
5,449,603
As at 31 December 2022 the Group also had £9bn (2021: £9bn) of Barclays issued debt retained by the group, impacted by the interest
rate benchmark reform, in USD LIBOR.
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Fallback clauses
The USD LIBOR and USD LIBOR ICE Swap Rate as at 31 December 2022 exposure has been broken up into those with robust fallbacks
and those without. Fallbacks here are defined as any mechanism involving a ‘switch’ or ‘hardwire’ or a contractual agreement to
automatically transition to an agreed rate. One of the most commonly used market solutions to incorporate fallback provisions into
certain legacy non-cleared derivative agreements are the ISDA Fallbacks Protocols, namely the ISDA 2020 IBOR Fallbacks Protocol and
the ISDA 2021 Fallbacks Protocol published in October 2020. Market participants who have adhered to the relevant ISDA Fallbacks
Protocol agree, between adhering parties, that their legacy non-cleared contracts will be amended to include the relevant fallback
provisions.
The following table presents a breakdown of USD LIBOR and USD LIBOR ICE Swap Rate non-derivative exposures with robust fallbacks
in place and those without as at 31 December 2022:
USD LIBOR
As at 31 December 2022
Non-derivative financial assets
Loans and advances at amortised cost
Financial assets at fair value through the income statement
Non-derivative financial assets
Non-derivative financial liabilities
Debt securities in issue
Subordinated liabilities
Financial liabilities designated at fair value
Non-derivative financial liabilities
Equity
Other equity instruments
Standby facilities, credit lines and other commitments
With robust
fallback clause
Without robust
fallback clause
£m
7,770
4,282
12,052
(9,062)
(1,132)
(1,740)
(11,934)
(1,786)
64,632
£m
889
—
889
—
—
—
—
—
3,486
The following table presents a breakdown of USD LIBOR and USD LIBOR ICE Swap Rate derivative exposures with robust fallbacks in
place and those without as at 31 December 2022:
USD LIBOR
As at 31 December 2022
Derivative notional contract amount
OTC interest rate derivatives
OTC interest rate derivatives - cleared by central counterparty
Exchange traded interest rate derivatives
OTC foreign exchange derivatives
OTC equity and stock index derivatives
Derivative notional contract amount
With robust
fallback clause
Without robust
fallback clause
£m
£m
2,538,218
2,137,245
337,535
84
770
5,013,852
56,050
—
—
—
491
56,541
The majority of USD LIBOR and USD LIBOR ICE Swap Rate exposures are already covered by fallbacks as a result of the 2020 ISDA IBOR
Fallbacks Protocol and the June 2022 Benchmark Module of the ISDA 2021 Fallbacks Protocol which relevant Barclays entities have
adhered to.
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42 Barclays PLC (the Parent company)
Total income
Dividends received from subsidiaries
Dividends received from subsidiaries of £2,797m (2021: £1,356m, 2020: £763m) relates to dividends received from Barclays Execution
Services Limited £1,080m, Barclays Bank UK PLC £1,010m, Barclays Principal Investments Limited £507m and Barclays Bank PLC
£200m.
The dividends received in 2020 from its banking subsidiaries were paid up to Barclays PLC prior to the announcement made by the PRA
on 31 March 2020 that capital be preserved for use in serving Barclays customers and clients through the extraordinary challenges
presented by the COVID-19 pandemic. As part of a response to this announcement, Barclays PLC took steps to provide additional
capital to its banking subsidiaries.
Other expenses
Other expenses of £654m (2021: £659m income, 2020: £1,192m income) includes fair value and foreign exchange losses of £1,673m
(2021: £250m, 2020: £248m) on positions with subsidiaries partially offset by £905m (2021: £804m, 2020: £857m) of income received
from gross coupon payments on Barclays Bank PLC and Barclays Bank UK PLC-issued AT1 securities.
Total assets and liabilities
Investment in subsidiaries
The investment in subsidiaries of £64,544m (2021: £62,528m) predominantly relates to investments in the ordinary shares of Barclays
Bank PLC of £36,340m (2021: £35,590m) and their AT1 securities of £10,760m (2021: £9,493m), as well as investments in the ordinary
shares of Barclays Bank UK PLC of £14,245m (2021: 14,245m) and their AT1 securities of £2,570m (2021: £2,570m). The increase of
£2,016m during the year was driven by a capital injection of £750m and an increase in the AT1 holdings and associated fair value which
totalled £998m.
Impairment in subsidiaries
At the end of each reporting period an impairment review is undertaken in respect of investment in the ordinary shares of subsidiaries.
Where impairment may be indicated a test of the carrying value against the recoverable value is performed; impairment being indicated
where the investment exceeds the recoverable amount. The recoverable amount is calculated as a value in use (VIU) which is derived
from the present value of future cash flows expected to be received from the investment. The VIU calculations use forecast
attributable profit based on financial budgets approved by management, covering a five year period as an approximation of future cash
flows discounted using a pre-tax discount rate appropriate to the subsidiary being tested. A terminal growth rate has then been applied
to the cash flows thereafter which is based upon expectations of future inflation rates. The 2022 review identified the value in use
calculated was higher than the carrying value for all subsidiaries.
Due to the improved market conditions and interest rate environment for the Group’s UK banking business in December 2021
compared to December 2020, the review further identified that the accumulated impairment for the investment in Barclays Bank UK
PLC of £2,573m no longer existed. The VIU of Barclays Bank UK PLC was found to be significantly higher than both the carrying amount
of the investment and the gross cost of the investment and hence all accumulated impairment was reversed in December 2021. For
Barclays Bank UK PLC, a discount rate of 14.5% was applied to the cash flow forecast in December 2021 (2020: 13.8%). In determining
the discount rate, management identified a cost of equity associated with market participants that closely resemble the subsidiary and
adjusted for tax to arrive at the pre-tax equivalent rate. A terminal growth rate of 2.0% was used to calculate a terminal value for the
investment based on inflation rates to approximate future long term growth in December 2021 (2020:2.0%).
Loans and advances in subsidiaries
During the year loans and advances to subsidiaries increased by £1,556m to £23,628m (2021: £22,072m). The increase was largely
driven by £4,487m new intra-group loans to Barclays PLC subsidiaries and foreign exchange impact of £1,663m due to the depreciation
of GBP largely against USD. This was partially offset by the maturity of intra-group loans to Barclays PLC subsidiaries of £4,765m.
Subordinated liabilities and debt securities in issue
During the year, Barclays PLC issued £1,000m of Fixed Rate Resetting Subordinated Callable Notes, which are included within the
subordinated liabilities balance of £11,230m (2021: £9,301m). Debt securities in issue of £24,086m (2021: £25,658m) have reduced
during the year primarily due to net maturities of £2,969m senior issuances partially offset by foreign exchange impact of £1,404m due
to the depreciation of GBP largely against USD.
Management of internal investments
Barclays PLC retains the discretion to manage the nature of its internal investments in subsidiaries according to their regulatory and
business needs. Barclays PLC may invest capital and funding into Barclays Bank PLC, Barclays Bank UK PLC and other Group
subsidiaries such as Barclays Execution Services Limited and the US Intermediate Holding Company (IHC).
Financial assets and liabilities designated at fair value
Financial liabilities designated at fair value of £22,971m (2021: £16,319m) primarily included new issuances during the year of USD
7,250m, EUR 2,250m Fixed Rate Resetting Senior Callable Notes and USD 400m Zero Coupon Callable Notes. The proceeds raised
through these transactions were used to invest in subsidiaries of Barclays PLC and are included within the financial assets designated at
fair value through the income statement balance of £28,930m (2021: £25,091m). The effect of changes in the liabilities’ fair value,
including those due to credit risk, is expected to offset the changes in the fair value of the related financial asset in the income
statement The difference between the financial liabilities’ carrying amount and the contractual amount on maturity is £2,100m (2021:
£271m).
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Notes to the financial statements (continued)
Other disclosure matters
Derivative financial instruments
During the year derivative financial liabilities increased by £863m to £906m (2021: £43m). The increase in the year is primarily driven by
the rising rate environment.
Total equity
Called up share capital and share premium
Called up share capital and share premium of Barclays PLC is £4,373m (2021: £4,536m). The decrease in the year is primarily due to
931m shares repurchased with a total nominal value of £233m. This decrease was offset by shares issued under employee share
schemes.
Other equity instruments
Other equity instruments of £13,250m (2021: £12,241m) comprises AT1 securities issued by Barclays PLC. The AT1 securities are
perpetual securities with no fixed maturity and are structured to qualify as AT1 instruments under prevailing capital rules applicable as at
the relevant issue date. During the year there were three issuances with principal amounts totalling £1,250m, $2,000m, SGD450m and
redemptions with principal amounts totalling £1,000m and $1,500m. For further details, please refer to Note 28.
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Notes to the financial statements (continued)
Other disclosure matters
43 Related undertakings
The Group’s corporate structure consists
of a number of related undertakings,
comprising subsidiary undertakings, joint
ventures, associated undertakings and
significant holdings. A full list of these
related undertakings is set out below,
together with the country of incorporation,
registered office (or principal place of
business) and the identity and percentage
of each share class held by the Group. The
information is provided as at 31 December
2022.
The entities are grouped by the countries
in which they are incorporated. The profits
earned by the activities of these entities
are in some cases taxed in countries other
than the country of incorporation, for
example where the entity carries on
business through a branch in a territory
outside of its country of incorporation .
Barclays’ PLC Country Snapshot provides
details of where the Group carries on its
business, where its profits are subject to
tax and the taxes it pays in each country it
operates in.
Wholly owned subsidiaries
Unless otherwise stated the undertakings
below are wholly owned and included in the
consolidation and the share capital held by
the Group comprises ordinary and/or
common shares, which are held by
subsidiaries of Barclays PLC. Unless
otherwise stated, the Group holds 100%
of the nominal value of each share class.
Notes
A
B
C
D
E
F
G
H
I
J
K
L
M
N
O
P
Q
Directly held by Barclays PLC
Partnership Interest
Membership Interest
Guarantor
Preference Shares
A Preference Shares
B Preference Shares
Ordinary/Common Shares in addition to
other shares
A Ordinary Shares
B Ordinary Shares
C Ordinary Shares
F Ordinary Shares
First Preference Shares, Second Preference
shares
Registered Address not in country of
incorporation
Core Shares, Insurance (Classified) Shares
Class B, C, D (100%), E, F, G, H, I (94.36%), J
(95.32%) and K (100%)
Notes
R
S
T
U
V
W
X
Y
Z
AA
BB
CC
Class A, B, C, D & E Shares
Class A and Class B Shares
PEF Carry Shares
Not Consolidated (see Note 35 IFRS12
Structured entities)
USD Linked Ordinary Shares
Redeemable Class B Shares
Capital Contribution Shares
Class A Redeemable Preference Shares
Class B Redeemable Preference Shares
First Class Common Shares, Second Class
Common Shares
Tracker 1 GBP, USD, Euro Shares;
Tracker 2 USD Shares, Tracker 3 USD Shares
Non-Voting Redeemable Preference Shares
Wholly owned subsidiaries
United Kingdom
1 Churchill Place, London, E14 5HP
Aequor Investments Limited
Ardencroft Investments Limited
B D & B Investments Limited
B.P.B. (Holdings) Limited
Barclay Leasing Limited
Barclays Aldersgate Investments Limited
Barclays Asset Management Limited
Barclays Bank PLC
Barclays Bank UK PLC
Barclays Capital Asia Holdings Limited
Barclays Capital Finance Limited
Barclays Capital Nominees (No.2) Limited
Barclays Capital Nominees (No.3) Limited
Barclays Capital Nominees Limited
Barclays Capital Securities Client Nominee Limited
Barclays Capital Securities Limited
Barclays CCP Funding LLP
Barclays Converted Investments (No.2) Limited
Barclays Direct Investing Nominees Limited
Barclays Directors Limited
Barclays Equity Holdings Limited
Barclays Execution Services Limited
A
Barclays Executive Schemes Trustees Limited
Barclays Financial Planning Nominee Company
Limited
Barclays Funds Investments Limited
Barclays Global Shareplans Nominee Limited
Barclays Group Holdings Limited
Barclays Industrial Development Limited
Barclays Industrial Investments Limited
Barclays Insurance Services Company Limited
Barclays International Holdings Limited
Barclays Investment Management Limited
Barclays Investment Solutions Limited
Barclays Leasing (No.9) Limited
Barclays Long Island Limited
Barclays Nominees (George Yard) Limited
A
A
E, H
B
Z
N
Barclays Principal Investments Limited
A, I, J
Barclays Private Bank
Barclays SAMS Limited
Barclays Security Trustee Limited
Wholly owned subsidiaries
Note
Barclays Services (Japan) Limited
Barclays Shea Limited
Barclays Singapore Global Shareplans Nominee
Limited
Barclays Term Funding Limited Liability Partnership
B
Barclays UK Investments Limited
Barclays Unquoted Investments Limited
Barclays Unquoted Property Investments Limited
Barclays Wealth Nominees Limited
Barclayshare Nominees Limited
Barcosec Limited
Barsec Nominees Limited
BB Client Nominees Limited
BMI (No.9) Limited
BNRI ENG 2014 Limited Partnership
Note
BNRI ENG GP LLP
BNRI England 2010 Limited Partnership
BNRI England 2011 Limited Partnership
BNRI England 2012 Limited Partnership
Carnegie Holdings Limited
Chapelcrest Investments Limited
Clydesdale Financial Services Limited
Cornwall Home Loans Limited
CPIA England 2009 Limited Partnership
CPIA England No.2 Limited Partnership
DMW Realty Limited
Dorset Home Loans Limited
Durlacher Nominees Limited
Eagle Financial and Leasing Services (UK)
Limited
Finpart Nominees Limited
FIRSTPLUS Financial Group Limited
Foltus Investments Limited
B
B
B
B
B
H,I, J
B
B
Global Dynasty Natural Resource Private
B
Equity Limited Partnership
Globe Nominees Limited
Hawkins Funding Limited
Heraldglen Limited
Isle of Wight Home Loans Limited
J.V. Estates Limited
Kirsche Investments Limited
Long Island Assets Limited
Maloney Investments Limited
Menlo Investments Limited
Mercantile Credit Company Limited
Mercantile Leasing Company (No.132) Limited
MK Opportunities LP
Naxos Investments Limited
North Colonnade Investments Limited
Northwharf Investments Limited
Northwharf Nominees Limited
Radbroke Mortgages UK Limited
B
H,T
Real Estate Participation Management Limited
Real Estate Participation Services Limited
Relative Value Investments UK Limited Liability
Partnership
B
Relative Value Trading Limited
Roder Investments No. 1 Limited
Roder Investments No. 2 Limited
RVT CLO Investments LLP
Solution Personal Finance Limited
Surety Trust Limited
H, BB
H, BB
B
Non-Redeemable Ordinary Shares
Barclays OCIO Services Limited
Barclays Pension Funds Trustees Limited
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Other disclosure matters
Wholly owned subsidiaries
Note
Wholly owned subsidiaries
Note
Wholly owned subsidiaries
Note
Cayman Islands
PO Box 309, Ugland House, George Town, Grand
Cayman, KY1-1104
Alymere Investments Limited
F, G, H
5th to 12th Floor (Part), Building G2, Gera
Commerzone SEZ, Survey No.65, Kharadi, Pune,
411014
Barclays Global Service Centre Private Limited
Nirlon Knowledge Park, Level 9, Block B-6, Off
Western Express Highway, Goregaon (East),
Mumbai, 400063
Barclays Investments & Loans (India) Private Limited
E, H
Ireland
One Molesworth Street, Dublin 2, D02RF29
Barclaycard International Payments Limited
H, Y, Z
Barclays Bank Ireland Public Limited Company
Sustainable Impact Capital Limited
Swan Lane Investments Limited
US Real Estate Holdings No.1 Limited
US Real Estate Holdings No.2 Limited
US Real Estate Holdings No.3 Limited
US Real Estate Holdings No.4 Limited
US Real Estate Holdings No.5 Limited
US Real Estate Holdings No.6 Limited
Wedd Jefferson (Nominees) Limited
Westferry Investments Limited
Woolwich Homes Limited
Woolwich Qualifying Employee Share Ownership
Trustee Limited
Zeban Nominees Limited
Barclays Capital Japan Securities Holdings
Limited (In liquidation)
Barclays Marlist Limited (In liquidation)
Cobalt Investments Limited (In liquidation)
Leonis Investments LLP
B
1-4, Clyde Place Lane, Glasgow, G5 8DP
R.C. Greig Nominees Limited
50 Lothian Road, Festival Square, Edinburgh,
EH3 9WJ
BNRI PIA Scot GP Limited
BNRI Scots GP, LLP
Pecan Aggregator LP
Logic House, Waterfront Business Park, Park, Fleet
Road, Fleet, GU51 3SB
The Logic Group Enterprises Limited
The Logic Group Holdings Limited
9, allée Scheffer, L-2520, Luxembourg
Barclays Claudas Investments Partnership
Barclays Pelleas Investments Limited Partnership
Barclays Blossom Finance Limited Partnership
1 Churchill Place, London, E14 5HP
Alynore Investments Limited Partnership
B
B, U
I
B, N
B, N
B,N
B,N
Argentina
855 Leandro N.Alem Avenue, 8th Floor, Buenos
Aires
Compañía Sudamerica S.A.
Marval, O’Farrell & Mairal, Av. Leandro N.
Alem 882, Buenos Aires, C1001AAQ
Compañia Regional del Sur S.A.
Brazil
Av. Brigadeiro Faria Lima, No.4.440, 12th Floor,
Bairro Itaim Bibi, Sao Paulo, CEP, 04538-132
Barclays Brasil Assessoria Financeira Ltda
BNC Brazil Consultoria Empresarial Ltda
Canada
333 Bay Street, Suite 4910, Toronto ON M5H
2R2
Barclays Capital Canada Inc.
Stikeman Elliot LLP, 199 Bay Street, 5300
Commerce Court West, Toronto ON M5L 1B9
Barclays Corporation Limited
1 Churchill Place, London, E14 5HP
CPIA Canada Holdings
B, N
Analytical Trade UK Limited
Barclays Capital (Cayman) Limited
Barclays Securities Financing Limited
Barclays US Holdings Limited
Braven Investments No.1 Limited
Calthorpe Investments Limited
Capton Investments Limited
Claudas Investments Limited
Claudas Investments Two Limited
CPIA Investments No.2 Limited
Gallen Investments Limited
Hurley Investments No.1 Limited
JV Assets Limited (In liquidation)
Mintaka Investments No. 4 Limited
OGP Leasing Limited (In liquidation)
Palomino Limited
Pelleas Investments Limited
Pippin Island Investments Limited
Razzoli Investments Limited
RVH Limited
Wessex Investments Limited
F, G ,H
E, I
K
U
E, H
E, H
Walkers Corporate Limited, Cayman Corporate
Centre, 27 Hospital Road, George Town, KY1- 9008
Long Island Holding B Limited
Germany
TaunusTurm, Taunustor 1, 60310, Frankfurt
Barclays Capital Effekten GmbH (In liquidation)
Stuttgarter Straße 55-57, 73033 Göppingen
Holding Stuttgarter Straße GmbH
(In liquidation)
Guernsey
P.O. Box 33, Dorey Court, Admiral Park, St.
Peter Port, GY1 4AT
Barclays Insurance Guernsey PCC Limited
O
Hong Kong
42nd floor Citibank Tower, Citibank Plaza,
3 Garden Road
Barclays Bank (Hong Kong Nominees) Limited
(In liquidation)
Barclays Capital Asia Nominees Limited
(In liquidation)
Level 41,Cheung Kong Center, 2 Queen's Road,
Central
Barclays Capital Asia Limited
India
208 Ceejay House, Shivsagar Estate, Dr A Beasant
Road, Worli, Mumbai, 400 018
Barclays Securities (India) Private Limited
Barclays Wealth Trustees (India) Private Limited
Barclays Europe Client Nominees Designated Activity
Company
Barclays Europe Firm Nominees Designated Activity
Company
Barclays Europe Nominees Designated Activity
Company
25-28 North Wall Quay, Dublin1, D01H104
U
U
U
Erimon Home Loans Ireland Limited
70 Sir John Rogerson’s Quay, Dublin 2
Barclays Finance Ireland Limited
Isle of Man
PO Box 9, Victoria Street, Douglas, IM99 1AJ
Barclays Nominees (Manx) Limited
Barclays Private Clients International Limited
I, J
2nd Floor, St Georges Court, Upper Church Street,
Douglas, IM1 1EE
Barclays Holdings (Isle of Man) Limited (In Liquidation)
Japan
10-1, Roppongi 6-chome, Minato-ku, Tokyo
Barclays Funds and Advisory Japan Limited
Barclays Securities Japan Limited
F, H
Barclays Wealth Services Limited
Jersey
Gaspé House, 66-72 Esplanade, St. Helier, JE1 1GH
Barclays Services Jersey Limited
5 Espalanade, St Helier, JE2 3QA
Barclays Wealth Management Jersey Limited
BIFML PTC Limited (In liquidation)
13 Library Place, St Helier, JE4 8NE
Barclays Nominees (Jersey) Limited
Barclaytrust Channel Islands Limited
Esplanade, St Helier, JE1 1EE
MK Opportunities GP Ltd
Luxembourg
9, allée Scheffer, L-2520
Barclays Alzin Investments S.à r.l.
Barclays Bedivere Investments S.à r.l.
Barclays Bordang Investments S.à r.l.
Barclays BR Investments S.à r.l.
Barclays Cantal Investments S.à r.l.
Barclays Capital Luxembourg S.à r.l.
Barclays Capital Trading Luxembourg S.à r.l.
Barclays Claudas Investments S.à r.l.
Barclays Equity Index Investments S.à r.l.
U
U
A
R
S
S
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Wholly owned subsidiaries
Note
Wholly owned subsidiaries
Note
Taiwan (Province of China)
19F-1, No. 7, Xinyi Road, Sec. 5, Taipei,A322,
Taiwan
Barclays Securities Taiwan Limited
United States
Corporation Service Company, 251 Little Falls
Drive, Wilmington, DE 19808
Analytical Trade Holdings LLC
Analytical Trade Investments LLC
Barclays Bank Delaware
Barclays Capital Derivatives Funding LLC
Barclays Capital Energy Inc.
Barclays Capital Equities Trading GP
W
C
B
Barclays Capital Holdings Inc.
F, G, H
C
C
C
C
C
C
C
B
C
I
C
C
C
CC
W
Barclays Capital Real Estate Finance Inc.
Barclays Capital Real Estate Holdings Inc.
Barclays Capital Real Estate Inc.
Barclays Commercial Mortgage Securities LLC
Barclays Dryrock Funding LLC
Barclays Financial LLC
Barclays Group US Inc.
Barclays Oversight Management Inc.
Barclays Receivables LLC
Barclays Services Corporation
Barclays Services LLC
Barclays US CCP Funding LLC
Barclays US Investments Inc.
Barclays US LLC
BCAP LLC
Curve Investments GP
Gracechurch Services Corporation
Lagalla Investments LLC
Long Island Holding A LLC
Marbury Holdings LLC
Preferred Liquidity, LLC
Procella Investments No.2 LLC
Procella Investments No.3 LLC
Relative Value Holdings, LLC
Surrey Funding Corporation
Sussex Purchasing Corporation
Sutton Funding LLC
US Secured Investments LLC
Verain Investments LLC
Wilmington Riverfront LLC
Aon Insurance Managers, 76 Paul Street Suite, 500,
Burlington VT 05401
Barclays Insurance U.S. Inc.
Corporation Service Company, 80 State Street,
Albany, NY, 12207-2543
Barclays Equity Holdings Inc.
Corporation Service Company, 100 Pearl Street,
17th Floor, MC-CSC1, Hartford, CT 06103
Barclays Capital Inc.
Other Related Undertakings
Unless otherwise stated, the undertakings
below are included in the consolidation and
the share capital held by the Group
comprises ordinary and/or common
shares, which are held by subsidiaries of
Barclays PLC. The percentage of the
nominal value of each share class held by
the Group is provided below.
Other Related Undertakings
%
Note
United Kingdom
1 Churchill Place, London, E14 5HP
Barclaycard Funding PLC
PSA Credit Company Limited
(In liquidation)
Barclays Covered Bonds Limited
Liability Partnership
St Helen’s, 1 Undershaft, London,
EC3P 3DQ
100.00
100.00
100.00
100.00
50.00
I
J
I
K
B
Igloo Regeneration (General Partner)
Limited
100.00
K, U
3-5 London Road, Rainham, Kent,
ME8 7RG
Trade Ideas Limited
20.00
U
50 Lothian Road, Festival Square,
Edinburgh, EH3 9WJ
Equistone Founder Partner II L.P.
Equistone Founder Partner III L.P.
20.00
35.00
B, U
B, U
Enigma, Wavendon Business Park
Milton Keynes, MK178LX
Intelligent Processing Solutions Limited
19.50
U
c/o BDP LLP, Two Snow Hill,
Queensway, Birmingham, B4 6GA
GW City Ventures Limited (In liquidation)
100.00
J,U
GN Tower Limited (In liquidation)
100.00
U
Haberfield Old Moor Road, Wennington,
Lancaster, LA2 8PD
Full House Holdings Limited
67.42
U
13-15 York Buildings, London,
WC2N 6JU
BGF Group PLC
24.62
U
Unit 9 Westbrook Court, Sharrowvale
Road, Sheffield, United Kingdom,
S11 8YZ
Palms Row Healthcare Holdings Limited
99.99
U, CC
5th Floor, 44 Great Marlborough Street,
London, W1F 7JL
AVFI TIDE I LP
37.60
B, U
41 Luke Street, London, EC2A 4DP
Fintech for International Development
Limited
26.37
100.00
I
J
U
1 America Square, Crosswall, London,
EC3N 2SG
BMC (UK) Ltd
44.90
E, I, U
3rd Floor, 25 Soho Square, London,
W1D 3QR
Glenwood Ave, Suite 550, Raleigh, NC, 27608
Female Innovators Lab LP
73.17
B, U
Barclays US GPF Inc.
Equifirst Corporation (In liquidation)
Aurora House, 120 Bothwell Street,
Glasgow, G2 7JT
Buchanan Wharf (Glasgow) Management
Limited
78.00
E
Barclays International Luxembourg Dollar
Holdings S.à r.l.
Barclays Lamorak Investments S.à r.l.
Barclays Leto Investments S.à r.l.
Barclays Luxembourg EUR Holdings S.à r.l
Barclays Luxembourg Finance S.à r.l.
Barclays Luxembourg GBP Holdings S.à r.l.
Barclays Luxembourg Global Funding S.à r.l.
Barclays Luxembourg Holdings S.à r.l.
Barclays Luxembourg Holdings SSC
68-70 Boulevard de la Petrusse, L-2320
Adler Toy Holding Sarl
10 rue du Cha'teau d'Eau, Leudelange, L-3364
BPM Management GP SARL
E, Q
U
Q
T
H, V
B
Mauritius
C/O Rogers Capital Corporate Services Limited,
3rd Floor, Rogers House, No.5 President John
Kennedy Street, Port Louis
Barclays Capital Mauritius Limited (In liquidation)
Barclays Capital Securities Mauritius Limited
Fifth Floor, Ebene Esplanade, 24 Cybercity, Ebene
Barclays Mauritius Overseas Holdings Limited
Mexico
Paseo de la Reforma 505, 41 Floor, Torre Mayor,
Col. Cuauhtemoc, CP 06500
Barclays Bank Mexico, S.A.
Barclays Capital Casa de Bolsa, S.A. de C.V.
Grupo Financiero Barclays Mexico, S.A. de C.V.
Servicios Barclays, S.A. de C.V.
J, L
J, L
J, L
Monaco
31 Avenue de la Costa, Monte Carlo BP 339
Barclays Private Asset Management (Monaco) S.A.M
Saudi Arabia
3rd Floor Al Dahna Center, 114 Al-Ahsa Street, PO
Box 1454, Riyadh 11431
Barclays Saudi Arabia (In liquidation)
Singapore
10 Marina Boulevard, #25-01 Marina Bay Financial
Centre, Tower 2, 018983
Barclays Capital Futures (Singapore) Private Limited
(In liquidation)
Barclays Capital Holdings (Singapore) Private Limited
(In liquidation)
Barclays Merchant Bank (Singapore) Ltd.
Spain
Calle Jose, Abascal 51, 28003, Madrid
Barclays Tenedora De Inmuebles SL.
BVP Galvani Global, S.A.U.
Switzerland
Chemin de Grange Canal 18-20, PO Box 3941, 1211,
Geneva
Barclays Bank (Suisse) SA
Barclays Switzerland Services SA
BPB Holdings SA
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Joint Ventures
The related undertaking below is dealt with
as a Joint Venture in accordance with s.
18, Schedule 4, The Large and Medium-
sized Companies and Groups (Accounts
and Reports) Regulations 2008 and is
proportionally consolidated. The
proportion of the capital of the related
undertaking held by the Group is stated
below.
Joint Venture
%
Note
United Kingdom
All Saints Triangle, Caledonian Road,
London, N1 9UT
Vaultex UK Limited
50.00
Joint management factors
The Board of Directors of the above Joint
Venture comprises two Barclays
representative Directors, two JV partner
Directors and three non-JV partner
Directors. The Board of Directors are
responsible for setting the Company
strategy and budgets.
The last financial year of the above JV
ended on 6 October 2022.
Other Related Undertakings
%
Note
Aviation House, 125 Kingsway,
London, WC2B 6NH
Huntress Group Limited
25.00
I, U
Belgium
Postbus 751, Neiuwegein, Utrecht,
3430 AT
Subsidiaries by virtue of control
The related undertakings below are
subsidiary undertakings in accordance
with s.1162 Companies Act 2006 by virtue
of the fact that the Group can exercise
dominant influence or control over them.
Subsidiaries by virtue of dominant
influence or control
%
Note
Euphony Benelux NV (In liquidation)
20.00
U
United Kingdom
Cayman Islands
PO Box 309, Ugland House, Grand
Cayman KY1-1104
Cupric Canyon Capital GP Limited
Cupric Canyon Capital LP
Southern Peaks Mining LP
SPM GP Limited
1 Churchill Place, London, E14 5HP
Oak Pension Asset Management Limited
Water Street Investments Limited
0.00
0.00
U
U
50.00
42.2
54.4
U
I, U
B, U
90.00
U
Cayman Islands
PO Box 309GT, Ugland House, South
Church Street, Grand Cayman, KY1-1104
Hornbeam Limited
0.00
U
Guernsey
P.O. Box 33, Dorey Court, Admiral Park, St.
Peter Port, GY1 4AT
Barclays UKRF No.1 IC Limited
Barclays UKRF ICC Limited
Barclays UKRF No.2 IC Ltd
0.00
0.00
0.00
U
U
U
Korea, Republic of
18th Floor, Daishin Finance Centre, 343,
Samil-daero, Jung-go, Seoul
Woori BC Pegasus Securitization
Specialty Co. Ltd
70.00
AA
Luxembourg
9, allee Scheffer, L-2520
BNRI Limehouse No.1 S.à r.l.
Preferred Funding S.à r.l.
96.30
P
100.00 W
Preferred Investments S.à r.l.
100.00
H, W
Malta
RS2 Buildings, Fort Road, Mosta MST
1859
RS2 Software PLC
18.25
U
Netherlands
Alexanderstraat 18, The Hague, 2514
JM, Zuid-Holland
Tulip Oil Holding BV
34.90
23.20
I
K
U
Sweden
c/o ForeningsSparbanken AB 105 34
Stockholm
EnterCard Group AB
100
I
United States
Corporation Services Company, 251
Little Falls, Drive Wilmington, DE 19808
DG Solar Lessee, LLC
75.00
C, U
Corporation Trust Company,
Corporation Trust Centre, 1209 Orange
Street, Wilmington DE 19801
DG Solar Lessee II, LLC
VS BC Solar Lessee I LLC
75.00
50
C, U
C, U
1415 Louisiana Street, Suite 1600, TX
77002-0000
Sabine Oil & Gas Holdings, Inc.
22.12
U
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Notes to the financial statements (continued)
Other disclosure matters
Notes
The terms Barclays or Group refer to Barclays PLC together with
its subsidiaries. Unless otherwise stated, the income statement
analysis compares the year ended 31 December 2022 to the
corresponding twelve months of 2021 and balance sheet
analysis as at 31 December 2022 with comparatives relating to
31 December 2021.The historical financial information used for
the purposes of such analysis has been restated..The
abbreviations ‘£m’ and ‘£bn’ represent millions and thousands of
millions of Pounds Sterling respectively; the abbreviations ‘$m’
and ‘$bn’ represent millions and thousands of millions of US
Dollars respectively; and the abbreviations ‘€m’ and ‘€bn’
represent millions and thousands of millions of Euros
respectively.
There are a number of key judgement areas, for example
impairment calculations, which are based on models and which
are subject to ongoing adjustment and modifications. Reported
numbers reflect best estimates and judgements at the given
point in time.
Relevant terms that are used in this document but are not
defined under applicable regulatory guidance or International
Financial Reporting Standards (IFRS) are explained in the results
glossary that can be accessed at home.barclays/ investor-
relations/reports-and-events/latest-financial-results.
The information in this document, which was approved by the
Board of Directors on 14 February 2023, does not comprise
statutory accounts within the meaning of Section 434 of the
Companies Act 2006. Statutory accounts for the year ended 31
December 2022, which contain an unmodified audit report
under Section 495 of the Companies Act 2006 (which does not
make any statements under Section 498 of the Companies Act
2006), will be delivered to the Registrar of Companies in
accordance with Section 441 of the Companies Act 2006.
These results will be filed on a Form 20-F with the US Securities
and Exchange Commission (SEC) as soon as practicable
following their publication. Once filed with the SEC, a copy of the
Form 20-F will be available from the Barclays Investor Relations
website at home.barclays/annualreport and from the SEC’s
website at www.sec.gov.
Barclays is a frequent issuer in the debt capital markets and
regularly meets with investors via formal road-shows and other
ad hoc meetings. Consistent with its usual practice, Barclays
expects that from time to time over the coming quarter it will
meet with investors globally to discuss these results and other
matters relating to the Group.
Non-IFRS performance measures
Barclays’ management believes that the non-IFRS performance
measures included in this document provide valuable
information to the readers of the financial statements as they
enable the reader to identify a more consistent basis for
comparing the businesses’ performance between financial
periods and provide more detail concerning the elements of
performance which the managers of these businesses are most
directly able to influence or are relevant for an assessment of
the Group. They also reflect an important aspect of the way in
which operating targets are defined and performance is
monitored by Barclays’ management. However, any non-IFRS
performance measures in this document are not a substitute for
IFRS measures and readers should consider the IFRS measures
as well. Refer to pages 392 to 396 for further information and
calculations of non-IFRS performance measures included
throughout this document, and the most directly comparable
IFRS measures.
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. 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 directors, officers and employees of the Group
(including during management presentations) 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 levels,
costs, assets and liabilities, impairment charges, provisions,
capital, leverage and other regulatory ratios, capital distributions
(including dividend policy and share buybacks), return on tangible
equity, projected levels of growth in banking and financial
markets, industry trends, any commitments and targets
(including environmental, social and governance (ESG)
commitments and targets), business strategy, plans and
objectives for future operations and other statements that are
not historical or current facts. By their nature, forward-looking
statements involve risk and uncertainty because they relate to
future events and circumstances. Forward-looking statements
speak only as at the date on which they are made. Forward-
looking statements may be affected by a number of factors,
including, without limitation: changes in legislation, regulation
and the interpretation thereof, changes in IFRS and other
accounting standards, including practices with regard to the
interpretation and application thereof and emerging and
developing ESG reporting standards; the outcome of current
and future legal proceedings and regulatory investigations; the
policies and actions of governmental and regulatory authorities;
the Group’s ability along with governments and other
stakeholders to measure, manage and mitigate the impacts of
climate change effectively; environmental, social and
geopolitical risks and incidents and similar events beyond the
Group’s control; the impact of competition; capital, leverage and
other regulatory rules applicable to past, current and future
periods; UK, US, Eurozone and global macroeconomic and
business conditions, including inflation; volatility in credit and
capital markets; market related risks such as changes in interest
rates and foreign exchange rates; higher or lower asset
valuations; changes in credit ratings of any entity within the
Group or any securities issued by it; changes in counterparty risk;
changes in consumer behaviour; the direct and indirect
consequences of the conflict in Ukraine on European and global
macroeconomic conditions, political stability and financial
markets; direct and indirect impacts of the coronavirus
(COVID-19) pandemic; instability as a result of the UK’s exit from
the European Union (EU), the effects of the EU-UK Trade and
Cooperation Agreement and any disruption that may
subsequently result in the UK and globally; the risk of cyber-
attacks, information or security breaches or technology failures
on the Group’s reputation, business or operations; the Group’s
ability to access funding; and the success of acquisitions,
disposals and other strategic transactions. A number of these
factors are beyond the Group’s control. As a result, the Group’s
actual financial position, results, financial and non-financial
metrics or performance measures or its ability to meet
commitments and targets 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 the description of material existing and emerging risks on
pages 269 to 281 of this Annual Report.
Subject to Barclays PLC’s 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.
This document is printed on Revive 100 Offset, made from
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are both credited with ISO 14001 Environmental Management
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associated with its manufacture have been measured and offset
using the World Land Trust’s Carbon Balanced scheme.
Our 2022 suite of Reports
Barclays PLC Annual Report 2022
A detailed review of Barclays’ 2022
performance with disclosures that provide
useful insight and go beyond reporting
requirements. The 2022 report integrates
our ESG (Environmental, Social and
Governance), and DEI (Diversity, Equity and
Inclusion) reporting, and incorporates our
Task Force on Climate-related Financial
Disclosures (TCFD) recommendations in
this, the sixth year of disclosure.
Barclays PLC Pillar 3 Report 2022
A summary of our risk profile, its interaction
with the Group’s risk appetite, and risk
management.
Barclays PLC Fair Pay Report 2022
An overview of our approach to pay, including
the principles and policies of our Fair Pay
agenda.
Barclays PLC Country Snapshot 2022
An overview of our global tax contribution
as well as our approach to tax, including
our UK tax strategy, together with our
country-by-country data.
© Barclays PLC 2023
Registered office: 1 Churchill Place, London E14 5HP
Registered in England. Registered No: 48839