Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Welcome to Barclays
Creating positive outcomes
for our stakeholders
Barclays PLC
Annual Report 2023 01
Our Purpose
Our Vision
Working together for a better financial future
The UK-centred leader in global finance
A comprehensive and pre-eminent UK consumer, corporate, wealth and private banking franchise
The leading non-US based investment bank
A strong, specialist US consumer bank
Our Values
Respect
Integrity
Service
Excellence
Stewardship
We harness the power
of diversity and inclusion in our
business, trust those we work
with, and value everyone’s
contribution
We operate with honesty,
courage, transparency
and fairness in all we do
We act with empathy
and humility, putting the
people and businesses
we serve at the centre of
what we do
We set high standards for
what we do, championing
innovation and using
our energy, expertise
and resources to make
a positive difference
We prize sustainability,
and are passionate about
leaving things better than
we found them
Customers and clients
Colleagues
Society
Investors
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
The Group at a glance
Working together for
a better financial future
Barclays PLC
Annual Report 2023 02
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.
Financial headlines
1
£6.6bn
Profit before tax
(PBT)
1
32.4p
Earnings per share
1
10.6%
Return on tangible equity
(EPS)
(RoTE)
Customers and clients
Colleagues
7.3m
personal customers who Barclays helped
to open a new savings account or grow
their deposits with us (2023)
of colleagues would recommend Barclays
as a great place to work (2023)
86%
Society
Investors
3.27m
people upskilled by Barclays (2023)
37%increase in announced 2023
capital distribution
versus 2022
Note:
1 Excluding the impact of Q423 structural cost actions.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
In this year’s report
Barclays PLC
Annual Report 2023 03
Parts 1, 2 and 3 of Barclays PLC 2023
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 sum due to
rounding.
Strategic report
The Barclays PLC Strategic report 2023
was approved by the Board of Directors
on 19 February 2024 and signed on its
behalf by the Chairman.
The Strategic report 2023 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 2023.
Inside Part 1
Strategic report
Welcome to Barclays
The Group at a glance
In this year's report
Chairman’s introduction
Chief Executive’s review
Our business model
Our strategy
Our business environment
Our plan and targets
Our new divisional structure
2023 divisional review
About Barclays
Barclays UK
Barclays International:
Corporate and Investment Bank
Barclays International:
Consumer, Cards and Payments
21
11Our strategy
Our stakeholders
Customers and clients
Colleagues
Society
Investors
Additional disclosure
Section 172(1) statement
Non-financial and sustainability
information statement
Task Force on Climate-related
financial disclosure statement of
compliance
ESG Ratings and Benchmarks
1
2
3
4
7
10
11
12
13
14
15
ESG-related reporting
and disclosures
16
17
19 Managing risk
Viability statement
Shareholder information
Important information
15
2023 divisional review
23
24
27
30
34
37
38
40
48
49
50
51
54
56
58
Inside Part 2
Climate and sustainability report
Risks and opportunities
Implementing our
climate strategy
Resilience of our strategy
Inside Part 3
59 Governance
66
72 Directors’ report
Board governance
Remuneration report
130 Other governance
Risk review
23Our stakeholders
Risk review contents
Risk management
Material existing
and emerging risks
Principal risk management
Risk performance
Supervision and regulation
Financial review
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
140
144
145
191
230
254
255
256
258
272
284
363
373
374
376
378
380
387
394
395
413
Notes to the financial statements 421
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Chairman’s introduction
Barclays PLC
Annual Report 2023 04
Working together
for a better
financial future
Our strong and stable franchise has enabled us to remain
resilient and continue to support our customers, clients
and communities through an unpredictable external
environment. We will continue to work together for a
better financial future for all our stakeholders.
“The UK has been Barclays'
home for over 300 years
and as such we play
an active part in its
economic success.”
Nigel Higgins
Chairman
Banks and the banking system should at all times
strive for a high degree of stability and reliability,
reflecting their resilience, continuity of service to
customers and clients, and the essential
mechanics they perform for national and global
economies. The premium for stability and
reliability, and the challenge of achieving both,
rise in difficult times. The essence of our
message to you this year is that Barclays is well
on the journey to a more sustainable, and
satisfactory performance, but has more to do
and a plan to do it.
That the global background is unpredictable is
obvious and volatility is now the backdrop to our
world, where we seek so many things with only
partial success – continuing economic growth,
predictable courses for inflation and interest
rates, settled patterns of global trade, stability
within and between nations.
2023 started with fairly uniform and downbeat
economic and equity market expectations. On
both counts, however, the intervening twelve
months surprised on the positive side, but not
without considerable stress being experienced
by households and businesses, triggered by
inflation and rising interest rates. It is testimony
to the resilience of the economic system that
this occurred but is sobering to note how wrong
so much of the predictive commentary could be.
As a global bank we must pay close heed to shifts
in the external environment and reverberations
for our stakeholders. Banks vary enormously, by
geography and by individual firm, in terms of how
they respond to changes in interest rates and the
interest rate curve. After years of negligible
interest rates, banks have to find the right
balance between higher rates for borrowers,
which improve profitability, and sometimes
conflicting consumer and political expectations;
this is not an easy balance to strike.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Chairman’s introduction (continued)
Facts and figures
1
32.4p
Earnings per share
2022:30.8p
8.0pDividend
2022: 7.25p
£3.0bn
Total capital return in relation to 2023
2022: £2.1bn
$67.8bn
Sustainable and transition
financing facilitated towards the target
of $1trn by 2030
In this environment, Barclays has maintained
strong liquidity and operated towards the top of
its target range for capital throughout 2023. With
a profitable business model we delivered a
1
,
Return on Tangible Equity for 2023 of 10.6%
enabling capital distributions of c. £3.0bn. These
capital returns mean that since 2019 we have
returned c.£9bn in dividends and buybacks to our
shareholders, representing a share count
reduction of 13%. Our management team has
brought stability to earnings, delivering
consistent underlying returns above 10% since
2021, whilst continuing to oversee significant
improvements in the operations of the bank as
part of our ambition to achieve a standard of
being consistently excellent in all that Barclays
does. This has been a very material endeavour
and Venkat gives more detail about our renewed
operational rigour in his letter.
However, both the Board and management team
are acutely aware that our returns should be
higher, and our valuation is far from where it
should be. Our focus since the global financial
crisis has been to rebuild and stabilise the bank. In
a world of constrained capital and human
resource, the bank has prioritised its operational
and financial resilience, including significant
investments in the technology stack. This has
included a considerable shrinkage of geographic
footprint and a focus on those businesses where
we believe we can be successful.
We have also reinforced the talent and
infrastructure of the Investment Bank, in Markets
and Banking in particular, given that these are
scale-dependent businesses and are central to
the diversified returns strategy we pursue. The
consumer businesses of Barclays have received
less consistent and focused investment.
The challenges of performance and valuation are
linked but distinct. In addressing the challenges
and regulatory requirements of the post-
financial crisis world Barclays has become overly
complex and cost-heavy. It is not always the case
that more resources and extra processes make a
financial institution safer or more resilient.
Complexity can lead to accountability or
responsibility being unclear at times, and to
unnecessary cost; being simpler is often safer,
and more cost efficient. In other words, how we
operate is as important as the shape of the
business model. There are a small number of
business lines which we plan to exit in 2024, but
these are not particularly material to the
performance challenge. The big task is to
execute Venkat's ambition to be consistently
excellent. The simplification of processes and
the streamlining of management layers in the
bank are fundamental to this. This process is well
underway and it lay behind the decision to take a
significant fourth quarter restructuring charge
last year.
The valuation challenge is obviously less directly
under our control. The Board’s view remains that
the diversified returns strategy which we pursue
is the right one. However, it brings business
complexities, and there is a scarcity of
comparable banks in Europe.
Barclays PLC
Annual Report 2023 05
Our commitment to the Investment Bank
remains strong, and its priority over the next few
years, having reached overall scale, is to become
more capital efficient and thus profitable, in part
through improved prioritisation around activities
and clients. The cost structure also requires
some work. Given this, we do not envisage
needing to add materially to the capital deployed
in the Investment Bank. At the same time we will
step up investment in the consumer businesses
of Barclays on both sides of the Atlantic.
As a result, we expect the allocation of capital
within the bank to shift, with Markets and Banking
coming to represent a rather lower proportion of
RWAs over coming years. We think that this
balance, as long as it is reinforced by continuing
returns at the appropriate level, should improve
investor sentiment towards this business.
Secondly, we continue the journey to make sure
that investors have more confidence in where
and how we make money. Our disclosures
around risk and profitability have improved
markedly over the last few years and we remain
committed to doing more. The new divisional
reporting arrangement will help here, including
being transparent about those areas of the
business where profitability improvement is most
needed.
In his letter to shareholders Venkat sets out in
more detail his vision for Barclays, including new
financial targets, and a clear plan to achieve
them.
Note:
1 Excluding the impact of Q423 structural cost actions.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Chairman’s introduction (continued)
This path to a simpler, better and more balanced
bank is not just based on the work around
Barclays’ shape, strategy and financial
performance. It is also intimately tied to our
expression of Purpose, which we have also
decided to streamline to emphasise the way in
which we need to operate. ‘Working together for
a better financial future’ expresses our drive to
deliver high quality products and services which
help to improve livelihoods for customers and
clients, helping them with the finance and advice
to innovate, invest and grow. And for our
communities, it is about using our scale and
capabilities to fulfil potential. It is also clear that a
greater focus on the consumer and on the UK as
a whole are crucial here.
During 2023, we continued to make progress to
meet our ambition of being a net zero bank by
2050. Capital is critical for a successful energy
transition and we are targeting our financing and
resources to energy companies committed to
decarbonise and investing to enable the
transition in the real economy. I am pleased to
report that in 2023 we financed $67.8bn of
Sustainable and Transition Financing,
contributing towards our target of $1trn by the
end of 2030.
In addition, earlier in February we published a
revised energy policy to progress our climate
strategy, with a commitment not to directly
finance energy companies' new oil and gas
projects, consistent with the IEA NZE scenario,
and setting clear expectations of transition
strategies and decarbonisation requirements for
our clients. This policy change is an important
lever for reducing our financed emissions as we
continue towards aligning our financing portfolio
to the goals of the Paris Agreement.
As you read this report you will also find powerful
testimonies as to how Barclays is supporting our
communities, including in our UK home market.
In 2023 we marked the ten year anniversary of
Barclays’ LifeSkills programme, which has helped
millions of people transform their futures
through its employability tools and learning
resources.
Our partnerships with sport are another
meaningful demonstration of how we can
support the development of vital skills and
confidence which are critical to the future
success of our communities. Building on our
comprehensive sponsorship of girls’ and
women’s football since 2019, in 2023 we debuted
as the Official Banking Partner of Wimbledon,
integrating it with our existing programmes to
support employability and skills, our focus on
sustainability, and connecting clients, customers
and communities.
The UK has been Barclays’ home for over
300 years and as such we play an active part in its
economic success. Against a backdrop of
constrained public finances, high inflation and
interest rates, we recognise the increasing
imperative for financial institutions to play a
prominent role in fostering sustainable economic
growth. We have continued to do just that
through 2023, from our growing network of
Barclays Eagle Labs supporting entrepreneurship,
to our close participation in public policy
consideration of how the UK’s capital markets
can be bolstered to unlock business growth.
The various threads of our performance I have
recounted are only made possible by the
steadfast dedication and hard work of
colleagues. On behalf of the Board I would like to
thank all of them for their ongoing commitment
to serve our stakeholders, and to deliver Barclays’
success.
I am also grateful to all of my Board colleagues for
their contributions this last year. We welcomed
Marc Moses to our Board in January 2023 and Sir
John Kingman to our Board and as Chair of
Barclays Bank UK PLC in June 2023. Both bring a
deep experience of financial services. Julia
Wilson, who joined the Board in 2021, took over
as Chair of the Audit Committee in April 2023
and you can read her letter to shareholders on
page 166. I would also like to reiterate my thanks
to Mike Ashley and Crawford Gillies who retired
from the Board during 2023, having supported
Barclays through a period of considerable change
during their tenure.
Barclays PLC
Annual Report 2023 06
I look forward to discussing Barclays’
performance in 2023 and plans for the year
ahead at our Annual General Meeting on
Thursday 9 May 2024 in Glasgow, which is the
home of our net zero campus and base for over
5,000 colleagues. The meeting will take place at
the Scottish Events Campus, Armadillo, Glasgow
and shareholders will be invited to participate in
person or online.
2024 will be notable as we renew our focus on
delivering high quality products and service to our
customers and clients, and on improving our
returns to investors.
Nigel Higgins
Chairman
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Chief Executive’s review
Barclays PLC
Annual Report 2023 07
Our ambition to
be the UK-centred
leader in global
finance
“By being Simpler,
Better and More
balanced, we can deliver
greater shareholder
value by 2026.”
C. S. Venkatakrishnan
Group Chief Executive
Over the last decade we have made good progress
building strong customer franchises in the UK and US,
alongside the leading markets and banking business
outside the US. We have also strengthened the bank
financially, and improved our returns. From these strong
foundations, we have a vision for the shape of a better
run, more strongly performing and higher returning
Barclays.
Introduction
Our progress and performance
During this year, as in the previous one, we have
seen increasing political and economic tensions
around the world. Resurging nationalism is
precipitating global decoupling, reversing the
ratcheting integration of preceding decades. The
effects are reflected in increasingly restrictive
trade policies, subsidies, mistrust even among
allies, and the resurgence of real conflict.
This riskier market, economic and political
environment has several important implications
for a global financial institution like Barclays.
Notwithstanding global fragmentation, investors
continue to need access to world markets. We
have to provide this while managing the relatively
higher risk of doing so. In the last decade,
Barclays has largely curtailed or entirely shut
retail operations in Africa, India and Europe.
Our footprint today, operating in London and
New York, and across major global financial
centres, positions us well for this increasingly
polarising world.
Perhaps most relevantly, our home in London,
remains one of the leading capital market centres.
We have built a strong position in the UK market,
the product of more than three centuries of
commitment, with c.20 million personal customers.
In the last two decades, we have also built a growing
customer franchise in the US, working in
partnership with prominent US brands like Gap Inc.
and American Airlines, through which we serve c.20
million credit card customers. In parallel, we have
established the leading international markets and
banking business headquartered outside the US.
Barclays Investment Bank has forged a global
reputation for sophisticated execution and risk
management, and is at a scale which competes
directly with US peers. In Global Markets we are Top
1
, while in
3 in Credit and Fixed Income Financing
Investment Banking we continue to maintain a 6th
2
position globally
. We led on a number of prominent
deals through 2023, including Arm’s IPO – the
largest to price since 2021.
Notes:
1 Coalition Greenwich Competitor Analytics, 1H23 Global Results.
Analysis based on the following banks: Barclays, BofA Securities,
BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman
Sachs, J.P. Morgan, Morgan Stanley, UBS. Analysis is based on
Barclays’ internal revenue numbers and business structure.
2 Dealogic for the period covering 1 January 2023 to
31 December 2023.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Chief Executive’s review (continued)
Barclays PLC
Annual Report 2023 08
Facts and figures
£25.4bn
Total income
2022: £25.0bn
£6.6bn
Profit before tax 1
2022: £7.0bn
10.6%
Return on tangible equity1
2022: 11.6%
13.8%CET1 capital
2022: 13.9%
As we have built our multinational footprint, we
have also strengthened Barclays financially, and
improved our returns. Over the last decade we
increased our capitalisation from 10% to nearly
14% CET1, against a backdrop of accelerating
digital transformation, an evolving regulatory
landscape including Basel III, and significant
economic and geopolitical disruption.
Since 2021, we have delivered consistent
underlying returns above 10%, through an
uncertain operating environment. This strength
and resiliency has enabled us to return c.£9bn in
dividends and buybacks to our shareholders
since 2019, and since 2021 we have distributed
33% of our market cap. With respect to 2023 we
have announced c. £3.0bn in dividends and
buybacks, an increase of 37% on 2022.
We continued to deliver well in 2023, despite the
mixed macroeconomic backdrop. Our income
was £25.4bn, our CIR was 63% - in line with our
target - and our RoTE was 10.6%, excluding the
structural cost charge taken in Q4 2023. We
generated a PBT of £6.6bn, and EPS of 32.4p.
Our Vision
I have considerable ambition for Barclays. Simply
put, I want us to be the UK-centred leader in
global finance. At our core we will have a
comprehensive and pre-eminent UK consumer,
corporate, wealth and private banking franchise,
complemented by a strong, specialist US
consumer bank. Alongside both will be the
leading non-US based Investment Bank.
I want Barclays to be renowned for excellent
operational performance, strong product
delivery, highly satisfied customers and clients,
and robust liquidity, capital and risk management.
The outcome of which is a strongly returning,
highly valued global bank, centred in the UK,
producing higher levels of total shareholder
returns.
Achieving our objective
We are building from the strong foundations I set
out earlier, but we know this is not reflected in our
shareholder experience. We have spent time
examining the path we are on, and the direction
we will take going forward, as we know we need to
do better. I believe Barclays is capable of
delivering further value for our shareholders.
We need to continue to improve our operational
and financial performance, and improve total
shareholder returns. To do so, over the next three
years we aim to make Barclays Simpler, Better
and More balanced.
We will manage the bank along five focused
business lines, each with ambition of scale and
high returns. This will reduce the complexity of
our reporting, and improve the accountability and
transparency of each individual businesses
performance.
Our UK ring-fenced consumer bank – Barclays UK
(BUK) – today delivers consistently high returns,
has entrenched scale, with full presence across
products and clients. We will aim to establish a
leadership position in the UK, ever-improving our
customer propositions and service. Our emphasis
is on regaining share within credit cards and
unsecured lending, and delivering greater
operational and cost efficiency. We aim to reduce
our CIR from 58% in 2023 to c.50% in 2026.
We will split out Consumer, Cards and Payments
(CCP) into three, separately reported businesses:
Barclays US Consumer Bank, Barclays UK
Corporate Bank and Barclays Private Bank &
Wealth Management.
Barclays US Consumer Bank (USCB), is a specialist
partnership credit card provider in the US, with a
market leading position in Travel and Airlines.
Notwithstanding the lower RoTE in 2023 which is
explained on page 21 of the Annual Report, we
aim to be a partner of choice for America’s leading
brands, particularly in Retail, achieving an ever-
more diversified portfolio of blue-chip clients.
We will continue to invest in a scalable digital
platform to increase operating efficiency, and
sophisticated capital management techniques to
enhance risk-adjusted returns.
We will also seek to build further on our strengths
in Barclays UK Corporate Bank, which has a long
and successful history of fostering enterprise in
the UK. We have relationships with 25% of UK
2
, and see more than two in five of the
corporates
UK’s credit and debit card transactions. We aim
to build on this strength, expanding our share in
lending, and modernising our systems to
improve self-service capabilities.
Barclays Private Bank and Wealth Management
represents a significant opportunity to
strengthen our retail and mass affluent franchise,
linked to our strong consumer franchise and
complementing our UK-centred Private Bank.
We will offer robust financial management tools,
priced fairly, managed transparently, constructed
simply and delivered efficiently, in order for our
clients to grow wealth responsibly at each stage
of their personal financial journeys.
Barclays Investment Bank today is the leading
non-US based international markets and
3
investment banking business
. It is at scale, with
deep client relationships and a global reputation
for sophistication in execution and risk
management.
Note:
1 Excluding the impact of Q423 structural cost actions and the Over-
issuance of Securities in the prior year.
2 Relationships from which we generate >£500 income per annum
from our existing product set from companies (not legal entities) with
annual income of >£6.5m across UK Corporate and Corporate within
the Investment Bank.
3 #6 Global Markets and Investment Banking. Global Markets rank
based on Barclays’ calculations using Peer reported financials. Top 10
Peers includes Barclays and; US Peers: Bank of America, Citi,
Goldman Sachs, JP. Morgan, Morgan Stanley. European Peers: BNP
Paribas, Credit Suisse, Deutsche Bank, UBS. Investment Banking rank
based on Dealogic as at 31 December 2023.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Chief Executive’s introduction (continued)
We aim to consolidate our position, broadening
and deepening client relationships, monetising our
investments in technology and capital, and driving
stronger returns. To support this journey, we have
moved the International Corporate Banking
business into Investment Banking.
Operating our bank, and each of our businesses,
extremely well is fundamental to improving and
de-risking our financial outcomes. We will
continue to drive operational and process
efficiency across the group, by streamlining our
workforce, simplifying decision making,
upgrading legacy system architecture, and
accelerating the pace of delivery. This will deliver
improved cost income ratios across every
business, even as we invest to drive better
returns and improve resilience.
I am also clear we must manage the bank in a
consistently excellent way, to avoid unexpected
and unnecessary losses from operational errors
and give continued confidence to our
stakeholders. We have implemented a group-
wide culture programme – Consistently Excellent
– establishing a very high operating standard for
the firm, and targeting best-in-class service
across the group. We are making progress
advancing this high standard across the bank as
numerous examples throughout this Report will
attest, but we have more to do as we aim to
make it the essence of Barclays.
Financially, we will increase the allocation of
capital to higher-returning businesses. Over the
next three years we will deliver a more evenly
balanced allocation of RWAs, with more capital
deployed to our highest returning consumer
businesses, which attract higher investor
multiples.
RWAs in Barclays UK, Barclays UK Corporate
Bank and Barclays Private Bank and Wealth
Management will increase by around 4% points
as a proportion of total RWAs.
By no means is this to diminish the importance of
our Investment Bank; rather, it is to place our
consumer and corporate businesses on a
similarly strong footing.
Over the medium-term this will rebalance
Barclays RWAs across our consumer and
wholesale businesses, to support more
consistent and higher returns.
By being Simpler, Better and More balanced, we
can deliver greater shareholder value by 2026.
Our new financial framework includes a target to
generate a Return on Tangible Equity of greater
than 12% by that time, and to return at least £10
billion to shareholders via a mix of dividends and
1
buybacks
.
Shaping Barclays for the future
The business, operational and financial goals
which we have outlined are an important part of
success, but they are not all of it. In the
increasingly multi-polar world we described at
the outset, we must choose what we want to be
and where.
This year signifies our strengthened
commitment to the UK. The UK economy
continues to prove relatively resilient to global
shifts and, as a UK headquartered bank, we are
deeply rooted in our domestic market. With a
renewed focus on businesses in which we can be
successful, and a re-emphasis on delivering
excellent customer service, we can build on our
valuable brand and capture even more
opportunity in our home market.
Note:
1 This multiyear plan is subject to supervisory and Board approval,
anticipated financial performance and our published CET1 range
of 13%-14%.
Conclusion
Our commitment to, and deep roots in, the UK
have shaped our vision. As part of this resolve, we
are purposefully engaged in initiatives to advance
UK prosperity, from levelling-up essential life
skills for 3.27 million people during 2023, to
supporting ambitious start-ups and scale-ups
across the UK.
At the heart of the activity and ambition which I
have detailed throughout this letter are our
colleagues. Our success is driven by their hard
work and dedication and to support our
customers, clients and communities. I am
pleased to note that Barclays is ranked as
Number 1 on LinkedIn’s 2023 UK Top Companies
list for the third year in a row, demonstrating that
we have built an organisation of mutual respect
and appreciation, and one in which our
colleagues have opportunities to thrive.
2024 will be a crucial year for Barclays. To change
the way we operate and achieve sustainable
success will take strenuous effort, relentless
focus and time. I am confident that our clear plan
will achieve these objectives, and take us to new
heights.
Thank you.
C. S. Venkatakrishnan
Group Chief Executive
Barclays PLC
Annual Report 2023 09
Our Priorities
Simpler
Simpler business
Simpler organisation
Simpler operations
Better
Better returns
Better investments
Better quality income
Better customer experience
and outcomes
More balanced
More balanced allocation
of RWAs
More balanced
geographical footprint
Read more about our
priorities on Page 13
+
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Our business model
Working together for
a better financial future
We deploy
our resources...
to serve the financial
needs of our diversified
customer base...
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.
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.
Lending
We lend to customers and clients to
support their needs.
Connecting
We connect companies seeking funding
with the financial markets.
Protecting
We ensure the assets of our clients and
customers are safe.
Investing and advising
We help our customers and clients invest
assets to drive growth.
Barclays PLC
Annual Report 2023 10
Our universal banking model enables us to create
synergies across the organisation and deliver long-
term value for our stakeholders.
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.
Applying Group-wide
technology–platforms to
deliver better products
and services.
Joining up different parts
of the Group so capabilities
in one can benefit another.
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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 11
Our strategy
Within this section we review
Barclays in the current
environment, provide an overview
of core strengths and capabilities
of the business, and set out our
vision and strategy to drive
improved performance.
Our business environment
Our plans and targets
Our new divisional structure
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Our business environment
Barclays PLC
Annual Report 2023 12
The world in which
we operate
Barclays is driven by a common Purpose: working
together for a better financial future. To do so, we
must be strong as an institution, prepared for the future,
and able to navigate different market conditions and
evolving trends.
We regularly review our operating environment
for emerging trends and adapt to address them.
In 2021, we called out three long-term trends
and continue to make good progress addressing
these, as you will find detailed throughout
the report:
The impact of technology on consumer
products and services
The role of capital markets as the principal
drivers of global growth
The transition of the global economy towards
a low-carbon economy
Context:
We actively navigate risk and uncertainty, and are vigilant to deliver for our customers, clients,
and shareholders in any environment.
Primary considerations
Geopolitical
• Elections in over
70 countries during 2024
• Conflict in Ukraine
and Middle East
• US-China relations
Further considerations
Climate:
• Energy transition
• More extreme climate cycles
Technology:
• Generative AI, and related impact from regulators
and cybersecurity
• FinTech adoption
Regulatory:
• Basel 3 endgame, and related regulated responses from
countries including effects of AIRB regulations in the US
Recently, we have adjusted our strategy and
operating model to reflect changes in the
environment we operate in, and evolving
demands from our customers, clients,
regulators and shareholders.
Macroeconomic
• Economic uncertainty:
higher inflation and interest
rates
• Higher systemic risk and
volatility
Delivering our
three-year plan
Our Purpose
Our Vision
Our Priorities
We want Barclays to be
renowned for an excellent
operational performance,
highly satisfied customers and
clients, strong liquidity, capital
and risk management, and
predictable, attractive
shareholder returns. Building
on our strong foundations, we
have a clear plan to achieve
these objectives and deliver
further value for shareholders
by 2026. Over the next three
years we will make Barclays
Simpler, Better and More
balanced.
Read more about our updated strategy at:
home.barclays/strategy
+
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Our plan and targets
Barclays PLC
Annual Report 2023 13
We have a clear plan to improve our operational and financial
performance, and improve total shareholder returns. To do so,
over the next three years we will make Barclays Simpler, Better
and More balanced.
Working together for a better financial future
The UK-centred leader in global finance
Simpler
Simpler business
• Five focused businesses
Simpler organisation
• Reduce organisational complexity
• Simplify decision making
Simpler operations
• Continue to upgrade legacy technology
• Further uplift operational controls
Better
Better returns
More balanced
More balanced allocation of RWA
• Improve performance across all our businesses
Better investments
• Investments in cost efficiency, and revenue and growth
protection
Better quality income
• Capital allocation to our highest returning businesses
• Barclays Investment Bank c.50% of Group RWA
by 2026
More balanced geographical footprint
• Focus growth in our home market
• Diverse sources of income to support growth
• Leverage our UK brand
• Grow proportion of income from stable revenue streams
Better customer experience and outcomes
• Improve platform resilience and expanded offerings
• Deliver best-in-class customer and client experience
2026
targets
2024
targets
Note:
Return on tangible equity
>12%
Total payout 2024-2026
at least £10bn¹
Investment Bank RWAs
c.50% of Group
Supporting
targets
Income
c.£30bn
Cost:income ratio
High 50s%
Return on tangible equity
>10%
(c.10.5% excluding inorganic activity)
Group net interest income
excluding Barclays Investment Bank and Head Office
c.£10.7bn
Supporting
targets
Barclays UK net interest income
c. £6.1bn2
Cost:income ratio
c.63%
Loan Loss Rate (LLR)
50-60bps through
the cycle
Loan Loss Rate (LLR)
50-60bps through
the cycle
Continue to target a 13-14% CET1 ratio range
1 This multiyear plan is subject to supervisory and Board approval, anticipated financial performance and our published CET1 range of 13%-14%.
2 This excludes the impact of Tesco Bank acquisition, which is expected to generate annualised NII of c.£400m in the first year post completion.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 14
Our strategy (continued)
Reporting the business
through five divisions
From Q1 2024, our reporting will reflect five new clear
divisions. This will reduce the complexity of our reporting,
and improve the accountability and transparency
of performance.
Barclays UK
• Long-established scale player with trusted brand
• Strong franchise deposit base (c.20m personal banking
customers and c.1m business banking customers)
• Well-performing lending book (c.5m credit card accounts)
• Long-term RoTE track record
Aims
• Establish a leadership position in the UK
• Focus on improving customer service propositions
• Deliver greater operational and cost efficiency
Barclays UK
Corporate Bank
• Deep and enduring franchise delivered across the UK through
Aims
>50 offices
Award-winning expertise with an 18-year average client
relationship and a >10% growth in clients vs 2021
Strong and resilient deposit base
•
•
• Expand our share in lending
• Modernise systems
• Deliver more functionality to clients
Barclays Private
Bank & Wealth
Management
• One of the largest bank-led Private Bank and Wealth
Management businesses in the UK, now able to support clients
across the full wealth continuum
International business aligned to our Investment Bank presence,
focused on Ultra High Net Worth and High Net Worth clients
•
Aims
• Strengthen our highly competitive UK wealth offering
• Become the leading UK-centred Private Bank
Barclays
Investment Bank
• At scale, focused Global Markets and Investment
Banking franchises
1
• Leading non-US Investment Bank
• Diversified, stable income with deep relationships with our
largest clients
• Strong risk and capital discipline
Aims
• Consolidate globally competitive Markets and Investment Banking businesses
• Reallocate RWAs towards higher returning businesses and opportunities
• Monetise investments in technology and capital
• Broaden and deepen client relationships
Barclays US
Consumer Bank
Notes:
• 20+ years of expertise in US cards with deep partnership
Aims
card experience
2
2
• #9 US card issuer
| #6 in US partner market
• 20 client partners | c.20m customers
• Prime book with average FICO >750
• Synergies with Barclays Investment Bank
• Be a partner of choice for America’s leading brands, particularly in Retail
•
• Continue investment in a scalable digital platform
Increase operating efficiency and enhance risk-adjusted return
2023 RWA allocation
Barclays UK 21%
Barclays UK Corporate Bank 6%
Barclays Private Bank & Wealth
Management 2%
Barclays US Consumer Bank 7%
Head Office 6%
Barclays Investment Bank 58%
Targeting a more balanced
allocation in 2026
Non-Investment Bank businesses
1 #6 Global Markets and Investment Banking. Global Markets rank based on Barclays’ calculations using Peer reported financials. Top 10 Peers includes Barclays, Bank of America, Citi, Goldman Sachs, JP. Morgan,
Morgan Stanley, BNP Paribas, Credit Suisse, Deutsche Bank, and UBS. Investment Banking rank based on Dealogic as at 31 December 2023.
2 Based on End Net Receivables. Source: Gate One, as at Q323.
Barclays Investment Bank c.50%
2023£343bn2026
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 15
2023 divisional review
Our reporting for 2023 divisional
review on the following pages is
based on our reporting divisions in
place during, and as at the end of
2023, and therefore exclude
changes to our operating structure
as detailed in our 2023 Results
Announcement.
Barclays UK
Barclays International –
Corporate and Investment Bank
Barclays International –
Consumer, Cards and Payments
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
About Barclays
A strong and stable
universal bank
Barclays PLC
Annual Report 2023 16
During 2023, Barclays operated as two
operating businesses, Barclays UK and Barclays
International, supported by our service
company, Barclays Execution Services.
The following pages narrate the performance of
these divisions during the year.
As part of the 2023 Results Announcement,
Barclays announced a revised operating
structure to deliver value to stakeholders.
The summary view of the new structure can
be seen on page 14, and further detail of the
2023 Results Announcement, including revised
divisional financials can be found at:
home.barclays/investorrelations
Barclays UK
Barclays International
£2.9bnPBT
£73.5bn
RWAs
19.2%RoTE
£4.6bnPBT
£259.1bn
RWAs
8.2%RoTE
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 retail and business banking
+
Read more:
page 17
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.
Corporate and Investment Bank
+
Read more:
page 19
Consumer, Cards and Payments
+
Read more:
page 21
Barclays Execution Services
Barclays Execution Services (BX) is the Group-wide service company providing technology,
operations and functional services to businesses across the Group.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 17
Barclays UK
Barclays UK
Barclays UK consists of our UK personal banking, UK business
banking and Barclaycard Consumer UK businesses.
Business description
Focus areas
• Offering banking services that meet the
needs of today’s and tomorrow’s
customers and clients, making money work
for them.
• Pursuing digital innovation and helping
colleagues focus on value-adding customer
interactions.
• Making our customers’ communities better
tomorrow than they are today, and seeking
out opportunities for an inclusive and
sustainable future.
• 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.
• 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
£7.6bn
Income
2022: £7.3bn
£4.4bn
Operating expenses
2022: £4.3bn
£2.9bn
Profit before tax
2022: £2.6bn
19.2%
Return on tangible equity
2022:18.7%
Year in review
Barclays UK has been customer-focused and
community-based for 333 years. In 2023 we focused
on strengthening our customer and client
propositions and improving our execution. Our strong
franchise and valuable brand are reflected in our
financial performance, with Barclays UK delivering a
RoTE of 19.2%. Notwithstanding these results, and
our progress over the course of 2023 to refine and
enhance our customer service, we know we have
more to do.
During 2023, cost of living pressures and the rising
interest rate environment continued to impact our
customers in the UK. In response we enhanced the
tools and information available to customers via our
Money Management Hub – helping them better
understand their spending and the steps they can take
to improve their financial wellbeing. We also launched
our Money 1:1 service, offering customers a
personalised financial coaching session with a specially
trained Barclays Money Mentor.
To boost customers’ long-term financial resilience we
provided options to switch to interest-only mortgages
for six months and extensions of their mortgage term
where appropriate. Additionally, we helped over
103,000 new customers get on or move up the
housing ladder during 2023 – including 33,000 first-
time buyers. We also proactively contacted 1.2 million
customers to let them know they could earn more
interest by moving to a different savings product. For
our business clients, we ran more than 900 Business
Health Pledge masterclasses during 2023.
As part of our customer-centricity we remained
focused on improving our customer experience,
combining the best of digital with the human touch.
The transformation of our physical service model
means we are able to provide in-person support in our
communities, while serving our customers more
sustainably. In 2023 we expanded Barclays Local by
more than 159 new sites and now have
351 sites in total – in addition to 306 branches and 16
mobile service points (vans). We are also participating
in innovative new Shared Banking Hubs.
Improving existing propositions and adding
innovative new ones are important ways we
continue to drive growth in Barclays UK. To this end,
in 2023 we completed the acquisition of Kensington
Mortgage Company – an award-winning mortgage
1
lender
known for its strong support of specialist
customer groups and the intermediary market.
Our Savings strategy is to help customers develop
smart savings habits while supporting those already
saving to make their money work harder. We offer
personal customers interest rates of up to 5%, with
our flexible products designed to help customers
achieve their goals. For example, customers can
segregate money from current accounts to develop
savings habits, while Barclays Blue customers are
rewarded with a higher rate in the months they have
no withdrawals.
In parallel, we continue to make good progress to
ensure digital banking with Barclays is smooth,
easy and rewarding – including by improving the
navigation and functionality of our app. As a
consequence, active app customers increased
5% year on year in 2023. Across all our channels,
over 80% of our customer transactions are now
digitally enabled – up from 76% in 2022. While we
will continue to help customers recognise and
embrace the ease and convenience of our digital
capabilities, our focus moving forward will shift to
improving the depth and quality of engagement
from customers already actively using them.
To further strengthen our customer propositions we
also launched Visa Cashback Rewards, giving Barclays
Blue customers cash back on their everyday spending.
Our progress to improve the customer
experience in 2023 is reflected in Barclays UK’s
improved Net Promoter Score, which increased
by six points versus 2022. We recognise there is
still more to do to improve our customer
propositions and execution, and we will remain
focused on doing so.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 18
Barclays UK (continued)
Our focus on making communities better
tomorrow than they are today is reflected in our
growing network of Barclays Eagle Labs. Our
37 business incubators across the UK – which
include nine new locations added in 2023 – are
part of our ambition to be a bank where
entrepreneurs start, scale and achieve their
growth ambitions. In 2023 Eagle Labs supported
over 4,500 businesses, while Barclays UK more
broadly supported over 47,000 new start-up or
scale-up customers – including Climate Tech
start-ups working on innovative technology to
deliver a more sustainable future. We were also
entrusted by the UK Government with a £12m
Digital Growth Grant to further support the
growth of UK tech start-ups and scale-ups over
the next two years. The Grant will help deliver
20 national programmes and more than
8,000 business interventions, including our
Sustainability Bridge programme, to enable
ambitious entrepreneurs.
Another key way we support customers is through
our focus on sustainability. This year we expanded
and improved sustainability-related propositions for
customers, including a new Green Barclayloan for
Business that offers no arrangement fees for lending
above £25,000 on a range of green assets –
supporting our business customers in their transition
to net zero. We also expanded our existing Asset
2
Finance proposition via our partner Propel
, offering
business customers fixed rates on a wider range of
green assets, including new fully electric vehicles and
solar photovoltaic panels. Additionally, we extended
our Greener Home Reward scheme, which offers a
cash reward of up to £2,000 for eligible residential
mortgage customers who install eligible energy-
3
efficiency-related measures in their homes.
Note:
1 In 2023 Kensington Mortgage Company won 'Best Specialist Mortgage
Lender' at both the What Mortgage and Your Mortgage Awards. It was also
named 'Best Intermediary Lender' at the Personal Finance Awards and
'Best Online Mortgage Provider' at the Moneyfacts Awards.
2 Further detail can be found at barclays.co.uk/business-banking/borrow/
asset-finance/
3 Further detail can be found at barclays.co.uk/mortgages/greener-home-
reward/
Shared Banking Hubs
To reflect the shift in demand away from
traditional bank branches – and the need to
improve efficiency for those who still require
in-person services – Barclays has
participated in the creation of innovative new
Shared Banking Hubs.
These are physical spaces, similar to a
traditional bank branch but shared between
customers of any high street bank. The Hubs
consist of a counter service operated by Post
Office colleagues, where customers can
withdraw and deposit cash, make bill
payments and carry out regular banking
transactions, in addition to private spaces for
financial conversations.
Over 100 Hubs have been announced by
Cash Access UK in locations across the UK,
helping Barclays UK provide our services in a
better and more efficient way while serving
our communities.
Kensington Mortgages
In March 2023 Barclays bolstered its support for the UK
mortgage market by purchasing Kensington Mortgages, the
UK’s leading residential specialist mortgage lender. Kensington
Mortgages brings over 25 years’ experience of providing
innovative and flexible mortgage products, serving fast-
growing customer groups including the newly self-employed,
contract workers, borrowers with multiple sources of income,
and those with a weaker credit history. This acquisition
broadens our existing mortgage product range and further
enhances our product capabilities.
“We are
creating more
opportunities
for our
customers to
connect with us
outside of the
traditional
branch, putting
us at the heart
of local
communities."
Melanie Tweddle,
Everyday Customer Care
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Corporate and Investment Bank
Barclays International:
Corporate and Investment Bank
The Corporate and Investment Bank helps money managers,
financial institutions, governments, supranational organisations
and corporate clients manage their funding, investing, financing,
and strategic and risk management needs.
Focus areas
Business description
• Leveraging the Power of One Barclays¹ to
deliver world-class service for clients.
• Capitalising on our top-tier Global Markets
franchise, focusing on areas of excellence
across our diversified business model.
• Capturing opportunities in our global,
scaled Investment Bank franchise.
Note:
1. The Power of One Barclays is about colleagues uniting
across businesses to put our clients' needs first. By working as
a cohesive unit - collaborating, sharing expertise and
information - we can deliver the best outcomes for our clients.
Measuring where we are
• Global Markets offers clients a full range of
liquidity, risk management and financing
solutions, as well as ideas and content
tailored to their investing and risk
management needs - coupled with
execution capabilities - across the
spectrum of financial 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.
£12.6bn
Income
2022: £13.4bn
£8.5bn
Operating expenses
2022: £8.9bn
£4.1bn
Profit before tax
2022: £4.3bn
8.4%
Return on tangible equity
2022:10.2%
Year in review
In 2023 we experienced a challenging market and
wallet environment, characterised by inflation,
macroeconomic uncertainty and heightened
geopolitical tensions. These conditions contributed
to subdued primary market activity, as reflected in
the 16% year-on- year decline in the global
1
.
investment banking wallet
Against this backdrop, the Corporate and
Investment Bank (CIB) delivered a 8.4% RoTE (2022:
10.2%). Our resilient CIB performance reflects the
benefits of our income diversification, the strength
of our client relationships, and close collaboration
across Investment Banking, Corporate Banking and
Global Markets.
In Investment Banking, we continued to deliver for
our clients through rigorous focus, consistent
execution and a strong solutions mindset. We
2
ranked sixth globally in 2023
, and in the UK we
topped the investment banking league table - in
3
fees earned - for the first time in six years
.
Additionally, we continue to excel in areas of
traditional strength, such as Debt Capital Markets
2
where we rank fifth globally
, and we are successfully
expanding in priority areas such as Equity Capital
Markets, where our share grew by 70bps.
Among the year's highlights, Barclays was proud
to serve as Joint Global Coordinator and Billing &
Delivery Agent on Arm’s IPO. Please see the
facing case study for further information.
In Global Markets, we continue to be a leading
provider of liquidity to institutional clients around
the world, helping them find opportunities and
manage risk. Our clients recognised Barclays for
our level of service amid continued market volatility
as we were named Interest Rate Derivatives House
of the Year by Risk magazine, as well as Credit
Derivatives and Equity House of the Year by IFR.
Note
1 Dealogic Banking wallet as at December 31st 2023 for the period covering
2022 to 2023.
2 Dealogic for the period covering 1 January 2023 to 31 December 2023.
3 Data from Dealogic, UK Investment Bank revenue by bank, full year 2023.
Barclays PLC
Annual Report 2023 19
Arm IPO
In 2023 Barclays helped British
semiconductor design company Arm
become a publicly listed company through an
Initial Public Offering (IPO) on the Nasdaq
stock exchange. Barclays acted as Joint
Global Coordinator and Billing & Delivery
Agent on the IPO. The US $5.2bn offering is
the largest IPO to price in 2023.
This transaction demonstrates the power of
our Investment Banking and Global Markets
businesses working together to deliver
outstanding outcomes for our clients. This
resulted from focused and consistent client
coverage from across the entirety of our
franchise - from ECM to Global Markets - and
with teams from across Asia, the UK, and
the US.
It also reflects the value in building multi-year
relationships with top clients. Barclays has
had a relationship with Softbank for 18 years,
over which we have executed numerous
transactions.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Corporate and Investment Bank (continued)
The CIB continues to play a fundamental role in
Barclays’ commitment to invest in the transition
to a low-carbon economy. This includes delivery
towards the Group target to facilitate $1tn of
Sustainable and Transition Financing by the end
of 2030, providing green, sustainable and
transition products and services that will support
our clients and the global economy to accelerate
the transition to net zero.
In addition, we continue to invest thoughtfully in
our talent to meet client demands and deliver the
best service. In early 2024 we announced the
formation of a new Energy Transition Group to
support our ambition to be a leading adviser and
financier to clients as they transition to a low-
carbon future.
In Corporate Banking, revenues grew off the back
of elevated deposits income which continued to
benefit from a strong net interest margin, and
increased deposit balances from clients. We
continued to make progress expanding our
international capabilities, building out our
Corporate Banking businesses in the US and
Europe, alongside strengthening our digital
capabilities globally to provide our clients with
seamless access to our transaction banking
product set.
We continued to grow share of wallet with our
Global Markets top 100 clients. Income from our
top 100 clients is up 5% year on year, despite
lower client activity in markets across the
industry. Additionally, client market share data for
the first half of 2023 indicates our Global Markets
business now ranks fifth globally (up from sixth)
1
.
with institutional clients
Our focus remains on delivering sustainable
through-the-cycle returns and we have the
breadth of capabilities across Fixed Income and
Equities, combined with a top tier Financing
business, to deliver on this. We continued to
make progress against some of our key strategic
initiatives, which offset compressed financing
spreads and a weaker environment for
intermediation. In parallel, we continued to grow
our financing capabilities to deliver more stable,
higher returning income.
Over the past five years our ranking in Prime
Services has moved up from 7 rank to joint
5 rank, complementing our existing strength in
Fixed Income Financing where we ranked joint
2
.
1 for 2023
Our Research team provides industry-leading
analysis and investment advice for our
institutional clients. For the second year in a row,
Barclays ranked Top 3 for Fixed Income
3
Research
in Institutional Investor Research 2023
rankings - and Top 5 in European Equity
3
Research
for the first time - underscoring the
value clients and investors place on our
differentiated content.
“Our clients have
bold visions for
the future.
Through a deep
understanding of
their needs, and by
utilising our full
capabilities across
the CIB, we have
helped them
achieve their
goals at pace.”
Dan Grabos,
Co-Head, Americas M&A
Note:
1 Based on Barclays analysis using internal and external sources.
2 Coalition Greenwich Competitor Analytics, 1H23 Global Results.
Analysis based on the following banks: Barclays, BoA, BNP, CITI,
CS, DB, GS, JPM, MS and UBS. Analysis is based on Barclays'
internal revenue numbers and business structure.
3 institutionalinvestor.com/section/research
Barclays PLC
Annual Report 2023 20
Nextracker’s IPO and first Follow-on Offering
Nextracker, a leading provider of intelligent, integrated solar
tracker and software solutions for utility-scale and distributed
generation projects, partnered with Barclays’ investment
banking teams to successfully raise $734m through its IPO in
February 2023 and $662m through its first Follow-on Offering
in July 2023. As Joint Lead Book-Running Manager on the IPO
and first Follow-on Offering, Barclays’ Equity Capital Markets
and what is now known as the Energy Transition Group worked
closely with Nextracker’s management, advising on the
structure, marketing and execution of both deals. The deals
highlight the strength of Barclays’ Equity Capital Markets and
Energy Transition Group franchises and further Barclays’
leadership in the renewable energy industry.
See here for further information: cib.barclays/investment-banking/
financing-the-future-of-solar-energy-with-nextrackers-ipo.html
+
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Consumer, Cards and Payments
Barclays International:
Consumer, Cards and Payments
f
The Consumer, Cards and Payments division of Barclays
International comprises our International Cards and
Consumer Bank, Private Bank and Wealth Management,
Barclaycard Payments and Consumer Bank Europe
businesses.
Focus areas
Business description
• Developing new financial products and
capabilities to reflect growing trends, to
drive growth in our strategic home and
international markets.
• Creating an enhanced digital customer
experience to build a more efficient
business.
• Broadening relationships with existing
• Our US Consumer Bank offers co-branded
and private-label credit cards, online retail
deposits products, personal loans and
instalment payments.
• Private Bank and Wealth Management
provides UK and International clients with
access to the full spectrum of wealth and
private banking services.
partners, pursuing new partnerships, and
building capabilities to offer new financing
solutions across all markets.
• Barclaycard Payments provides a unified
experience for making and receiving
payments in-store and online.
• Consumer Bank Europe offers own-
branded and co-branded credit cards,
online loans, electronic Point of Sale (ePOS)
financing and deposits.
Measuring where we are
£5.3bn
Income
2022: £4.5bn
£3.3bn
Operating expenses
2022: £3.1bn
£0.5bn
Profit before tax
2022: £0.7bn
6.7%
Return on tangible equity
2022: 10.0%
Year in review
Consumer, Cards and Payments (CC&P)
delivered a RoTE of 6.7% (2022: 10.0%). Our
performance was driven by the impact of higher
impairment charges, partially offset by
deepening client relationships and market share
in growth businesses, alongside continued digital
innovation to enhance propositions and services.
The strength of our client relationships is
reflected in the performance of our US
Consumer Bank (USCB), where income is up 24%
year on year – driven by our leading position as
1
.
the card of choice in the travel & airlines sector
Building on the success of our partnership with
Gap Inc., we announced a new partnership with
Breeze Airways to issue its first consumer credit
card programme. In addition, USCB launched a
new partnership with Microsoft and Mastercard
to issue Xbox’s first co-branded credit card in the
US. USCB’s retail deposits have grown 14% year
on year, reflecting excellent competitive
positioning, brand strength, and the broadening
of our partner base.
Continued investment in and focus on,
enhancing digital propositions played an
important role across our specialist businesses.
In USCB, mobile app enhancements – including
enabling facial biometrics ID as part of app
authentication – helped boost the Android app
star rating to 4.7 out of 5 in 2023, up from 4 in
2022.
Barclays PLC
Annual Report 2023 21
As further testament of improvements to our
digital platform, our USCB Digital tNPS – a newly
tracked metric for USCB measuring customer
experience at the digital journey level – increased
from 59.8 in 2022 to a full year average of 61.3 in
2023.
In parallel, we have remained focused on
enhancing our product capabilities. In the first
half of 2023 we launched the new JetBlue
programme, a complete redesign to align with
the airlines' new loyalty programme.
Subsequently, we were recognised by J.D.
1
Power
for the JetBlue Plus Card, issued by
Barclays, which ranked the highest among co-
branded airline credit cards - demonstrating the
value it offers customers.
The successful integration of Private Bank and
Wealth Management in 2023 is helping build our
advantage in reach and specialist capability.
Combined income for 2023 is £1.2bn, alongside
Client Assets and Liabilities of £74.1bn and
invested assets of £108.8bn. Alongside the
integration there has been an ongoing focus on
enhancing the client experience, reflected in the
launch of the Wealth Hub to 1.2 million Premier
customers in Barclays UK, and providing UK
Private Bank clients with an enhanced service
experience.
Similarly, in Barclaycard Payments we saw a 29%
year-on-year increase in digital logins and a
corresponding 10% reduction in customers
using our call centres, supporting our increased
efficiency. This momentum reflects the
introduction of new digital features – including
the launch of Smartpay Anywhere and Smartpay
Fuse, enabling small business customers to take
online payments as part of a seamless
experience.
Note:
1 ir.jetblue.com/news/news-details/2023/JetBlue-Plus-Card-
Issued-by-Barclays-Earns-J.D.-Power-Award-For-Ranking-
Number-One-Among-Airline-Co-Branded-Credit-Cards/
default.aspx
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Consumer, Cards and Payments (continued)
Xbox
Barclays US Consumer Bank further diversified its
credit card portfolio with the launch of the Xbox
Mastercard, Microsoft’s first co-branded card in the US.
Using research and insights, the credit card product was
custom-built to provide the Xbox community with an
immersive digital experience across the entire
customer journey – from applying through the Xbox
console and web, to earning and redeeming their card
rewards, and personalising their card with their
gamertag on one of five iconic Xbox-inspired designs.
Created with customer- and client-centricity in mind,
the card aims to heighten enjoyment for Xbox players
while deepening their loyalty and enhancing
engagement with one of the world’s most recognised
brands. It is currently available for Xbox Insiders in 50 US
states through Microsoft digital channels including
xbox.com.
We continued to build our client portfolio, signing
new business deals in 2023 with prominent
brands including department store Fenwick and
plumbing and heating specialist Wolseley.
Barclaycard Payments and Barclays Corporate
Banking were chosen by Fenwick to provide a
range of banking and payment services to
support the growth and digitisation of the
business – testament to the breadth of our
business services, collaboration, and digital
capabilities.
Consumer Bank Europe delivered a strong
performance, growing its deposit book 206%
year on year, driven by our continued focus on
enhancing the customer experience. We
launched the in-app call facility to significantly
improve the efficiency and speed of customer
service. We also continued to be a leading
provider of consumer finance through our credit
cards and personal loans business.
Private Bank and Wealth integration
On 1 May 2023 Barclays completed the
transfer of its UK Wealth Management &
Investments business to sit alongside the
Private Bank. The transition of 300,000 clients
and 1,000 colleagues has created one of the
largest bank-owned Private Bank and Wealth
Management businesses in the UK.
The combined business, Barclays Private Bank
and Wealth Management, provides UK clients
with access to the full spectrum of wealth and
private banking services while opening up
access to the broader key markets and wealth
corridors where Barclays provides Private
Banking in Europe, the Middle East, Asia and
Africa.
The integration will enable us to grow our client
relationships in the UK and further develop our
reputation as a trusted choice for Private Bank
clients in selected international markets.
Barclays PLC
Annual Report 2023 22
”We have
continued our
focus on
customers'
and clients’
experience,
listening to
their feedback
to prioritise
enhancements
in our digital
servicing
channels.”
Mike Robinson,
Head of Customer, USCB
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 23
Our stakeholders
In this section we cover how
we listen and respond to our
stakeholders, and create
sustainable value for all
those we serve.
Customers and clients
Colleagues
Society
Investors
The KPIs featured throughout this section
are used to monitor our performance and
progress – they are also linked directly to
Executive Director remuneration. Further
detail can be found in the Remuneration
report on page 191
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 24
Customers and clients
Customers and clients
We aim to build trust and loyalty by offering innovative
products and services with an excellent customer and
client experience. We seek to understand our customers’
and clients’ expectations and aspirations, and develop
products and services to support them – especially
during difficult economic conditions.
Where to find out more:
+
Please visit our ESG resources hub for further
information: home.barclays/sustainability/esg-resource-
hub/reporting and disclosures/
Engaging with customers
and clients
Barclays is committed to serving our customers'
and clients' best interests. To do so we regularly
engage them, building our understanding of their
evolving needs and enabling us to adapt our
products and services accordingly. We engage in
a wide variety of ways, including running regular
surveys, analysing customer complaints, direct
interaction and drawing on data from millions of
individual transactions.
Our engagement is most significant with respect
to our large retail presence in the UK, where we
offer a wide range of products and services to
approximately 20 million customers through
Barclays UK.
Barclays UK runs on average eight panels per
month for Personal, Premier and Business
customers and clients to share their views on our
products and services, and on their own financial
health. These panels provide regular insights to
bring us closer to our customers, and to inform
our design principles and the transformation of
our customer journeys.
As described in the Barclays UK section of this
report on page 17, inflation has been a dominant
theme for customers during 2023 and we have
adapted and enhanced our products and services
to better serve them in response. One example is
1
our Barclays Money Worries Hub
, which was
launched to bring together the resources and
advice our customers told us they needed in
challenging economic times. This is in addition to
our specific mortgages and personal savings
initiatives also detailed on page 244.
More broadly, Barclays UK collected over
1.4 million pieces of customer feedback in 2023.
Customers told us they wanted their experiences
with Barclays to feel more personal, as well as
showing continued demand for increased
convenience and functionality of the Barclays app.
In response we have introduced new design
principles to ensure every new or updated
customer experience feels personalised, and
have continued to develop the capabilities of our
app. Our work to ensure a seamless digital
experience for customers is one of the reasons
we have more active digital users than any other
2
.
UK bank
While we continue to make progress addressing
the volume of Barclays UK customer complaints,
we recognise there is still more work to do to
improve the overall customer experience and
address and remove the root causes of customer
complaints. This focus is at the core of our new
vision and strategy as we work towards improving
our propositions and execution in our consumer
businesses, in order to deliver best-in-class
service and ensure we have highly-satisfied retail
customers.
Customer and client feedback in Barclays US
Consumer Bank has recently highlighted positive
experiences with our specialists and customer
agents, while areas for suggested improvement
include making it even easier for customers and
clients to interact with us. We are using this
feedback to help prioritise improvements, for
example simplifying the digital customer journey
and reducing the need to contact our call centres
as detailed on page 242.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Customers and clients (continued)
Barclays PLC
Annual Report 2023 25
Consumer Duty
The new Consumer Duty marks the beginning of a step-change in UK consumer regulation,
requiring firms to act to deliver good outcomes for retail customers – a principle underpinning
Barclays’ ambition of being a consistently excellent organisation delivering best-in-class service
for customers and clients.
We have undertaken significant work to implement the Duty across the Group, and continue to
embed this throughout the organisation. We continue to use and enhance data and insights to
ensure our strategy, products and services for retail customers deliver the intended outcomes,
with a focus on meeting the needs of people with vulnerable characteristics.
For example, drawing on data and insights from our Rainy Day Saver product, we contacted over
1.2 million customers to advise them that alternative products may offer a better interest rate for
balances over £5,000.
In the Corporate and Investment Bank, reflecting
on engagement with and feedback from our
clients, we continued to build the expertise,
knowledge and capabilities they are looking for.
We strengthened partnerships across business
lines to deliver a more integrated set of solutions
and services to global clients, and growing client
mindshare.
Supporting customers and clients
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 people living with disabilities, complex
needs or experiencing difficult life events.
During the course of 2023 we delivered a number
of key measures to support the financial
resilience of our customers against a challenging
economic backdrop, including reaching out via
SMS to 1.4 million customers to offer a free
conversation about cost of living-related
financial worries. In addition, we seek to support
vulnerable customers and provide responsible
and inclusive banking in an extensive range of
ways.
Note:
1 barclays.co.uk/money-management/
2 The #1 for digital users score is from Curinos - eBenchmarkers
Analyser and internal analysis. and is from their April 2023 report .
* In Barclays UK, the Performance Framework through its design
and approach encapsulates the Consumer Duty and looks to
mitigate the risk of inappropriate practices. It provides guidance
on Performance Management to promote the right culture to
deliver good customer outcomes, supports colleague
development and drives sustainable commercial performance.
Fraud and scams
A key way we support the financial resilience
of vulnerable customers is through our focus
on fraud and scams. While overall rates of
fraud and scams continue to rise across the
sector, Barclays has one of the lowest scam
rates and highest reimbursement rates in the
industry, due to our investment in robust
security systems and commitment to
educating customers¹.
Our fraud detection systems can determine
in less than a second if a payment is likely to
be a fraudster rather than a customer, and
we continue to invest in security features
that protect against fraud and scams –
including ‘App ID’, which allows customers to
verify they are speaking to a Barclays
colleague. We are also part of the ‘Do not
originate’ scheme, a partnership with the
telecommunications industry, UK Finance
and Ofcom to prevent customer phone
numbers from being spoofed.
Fraud can only be stopped through cross-
sector collaboration. Barclays is a founding
member of Stop Scams UK, a group made up
of banks, telecoms and tech firms.
Note:
1 PSR report, October 2023, .psr.org.uk/information-for-
consumers/app-fraud-performance-data/
+
You can found out more about Barclays’ policy views
here: home.barclays/news/press-releases/2023/08/eight-
in-ten-brits-feel-unsafe-on-social-media-due-to-
scammers/
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 26
Consumer, cards and payments
US customer digital engagement*
Corporate and Investment Bank
revenue ranks and market shares
Customers and clients (continued)
Customers and clients – our KPIs
Barclays UK
Net Promoter Score
(NPS)
2023
2022
2021
Barclays UK
complaints excluding PPI
(% movement year on year)
(%)
2023
2022
2021
About this KPI and why we use it
Net Promoter Score (NPS) is used to
measure the strength of customer
relationships. We track NPS to identify both
our strengths and where there is room for
improvement, informing how we develop our
services and products in the future.
About this KPI and why we use it
About this KPI and why we use it
The FCA publishes complaints information
every six months – 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 changes to
our products and services.
Digital engagement assesses our digital value
proposition and user experience. We
measure usage over a 90-day period as a
percentage of total active customers,
reflecting the general health of the digital
experience and allowing us to uncover any
issues we may need to address.
2023
2022
2021
(%, #)
2023
2022
2021
#6
#6
#6
#6
#6
#6
n Global Markets revenue ranking and share
n Dealogic Investment Banking global fee ranking and share
demonstrating our performance vs peers.
About this KPI and why we use it
Revenue ranks and market shares are a good
indicator to monitor success and identify
opportunities. 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
1
clearly and transparently.
defined peer group
How we performed
How we performed
How we performed
How we performed
NPS for Barclays UK has improved through
2023 to +17. Personal Customers with Blue
or Premier accounts feel more positive about
their experience, although a decline in
Business Banking NPS means rebuilding and
deepening relationships with clients is high on
our forward agenda. Barclaycard NPS has
also increased through 2023.
We are striving for highly satisfied customers
and recognise that better service is a key
lever. However, complaint volumes increased
during 2023, driven by specific issues
encountered by customers and rising levels
of fraud and scams experienced across
industry. A rigorous plan is in place to address
these issues and to reduce the reasons for
customers to complain, including a focus on
improving our propositions and execution to
deliver best-in-class service.
Overall, our customer digital engagement
improved year-on-year by 190bps, excluding
Gap Inc. customers who display lower digital
activity. The improvement reflects the
introduction of new and enhanced digital
engagement features and technology
advancements.
In 2023 we maintained our rank of sixth
across the Investment Bank in both Global
Markets and Investment Banking, despite
challenging market conditions and
suppressed dealmaking.
See page 191 for details on Executive Director
remuneration linked to these KPIs
+
Note:
* Excluding Gap Inc. customers.
Note:
1 Global Markets rank based on Barclays' calculations using
Peer reported financials. Top 10 peer group includes
Barclays and US peers: BoA, BNP, CITI, CS, DB, GS, JPM,
MS and UBS. Where any of the peer group has not
published results by the time we report, we use the
consensus estimate for their quarterly performance.
17111129918-17-1776.074.171.86.53.17.33.12.76.96.43.63.66.4 Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 27
Colleagues
Colleagues
Our colleagues are connected by a shared Purpose, Values
and Mindset, and commitment to delivering to a consistently
excellent standard. We strive to make Barclays a great place
to work, empower colleagues to attain sustainable high
performance and deliver strong results for stakeholders
Where to find out more:
+
For more information on our commitment to building a diverse,
equitable and inclusive workplace, see: home.barclays/who-we-
are/our-strategy/diversity-and-inclusion/
For additional colleague KPIs please visit our ESG resource hub:
home.barclays/sustainability/esg-resource-hub/reporting and
disclosures/
Engaging with colleagues
Barclays has a diverse talent pool of around
90,000 colleagues across the world. We engage
in regular dialogue with our colleagues to
understand what is working well and where there
are opportunities to improve. This includes
townhalls, skip-level meetings, site visits, leader-
led engagement and surveys. We maintain an
engagement approach in line with the UK's
Financial Reporting Council (FRC) governance
recommendations.
Our regular all-colleague Your View surveys give
individuals the opportunity to share their views
on how they find working at Barclays. This year’s
survey generally shows improvement to our
scores: Engagement increased +2ppt to 86%,
alongside our highest scores to date for
Wellbeing (88%) and Inclusion (83%). In addition,
our broader Continuous Listening Strategy
includes pulse surveys deployed throughout the
employee lifecycle, capturing insights that help
us improve the colleague experience.
Maintaining a strong and effective partnership
1
, national works councils and the
with Unite
Barclays Group European Forum helps us gather
feedback. We continue to consult with colleague
representatives on major change programmes
impacting our people, to minimise compulsory
job losses and focus on reskilling and
redeployment.
Achieving a consistently excellent
standard
As our CEO discusses in his letter, Barclays
continues to focus on delivering to a higher
operating standard via our Group-wide cultural
change programme, Consistently Excellent. This
programme challenges colleagues to address
five key areas – Precision, Service, Focus,
Efficiency and Diversity of thought – to establish
a new operating standard.
This higher standard is becoming part of our
culture and we are working hard to equip
everyone with the right skills to achieve this, while
rewarding progress. We have incorporated it into
our existing Values and Mindset behaviours and
as part of an enhanced set of leadership
behaviours. We also began updating our key
processes for attracting, retaining and
developing talent, planning for succession, and
recognising and rewarding performance.
To help create a common understanding across
the Group, we led Consistently Excellent
workshops throughout 2023 for our senior
leaders. In 2024, all colleagues will be invited to
attend these workshops.
Progress in embedding this new operating
standard with colleagues is reflected in the
results from our Autumn 2023 Your View survey.
89% of colleagues felt their peers “have a good
understanding of what it means to be a
consistently excellent organisation”. Further,
62% (+2ppt) of colleagues said it was “simple and
straightforward to get things done at Barclays”, a
concept in line with one of our key Consistently
Excellent focus areas, although this result shows
there is still more to be done in making Barclays
more efficient.
Investing in our talent
Our talent ambition underpins Barclays’
approach to talent attraction, retention and
development. We relaunched our ambition in
2023 to focus on the skills and capabilities we
require for the future, and set the benchmark for
what it means to lead at Barclays through our
refreshed leadership framework. Together, these
set clear behavioural expectations for our
leaders, and enable our leaders to create the
right culture for colleagues to deliver to a
consistently excellent standard.
Using this framework we aim to empower
Barclays leaders to create an environment of
psychological safety and inclusion, and to foster
a culture of learning and curiosity where
colleagues can thrive – supporting all colleagues
across Barclays to grow and progress their
careers.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 28
Colleagues (continued)
To empower our colleagues to attain sustainable
high performance, we continued to deliver our
flagship leadership development programmes:
the Enterprise Leaders’ Summit, our Strategic
Leaders Programme, and our award-winning
Aspire programme.
With our Diversity, Equity and Inclusion (DEI)
agenda in mind, we continue to attract
candidates who possess the capabilities, critical
skills and experience required to provide
exceptional service to our customers and clients.
In 2023, our graduate intake was over 36%
female, while our undergraduate Discovery
Diversity Programme focused on showcasing
successful career paths for underrepresented
minorities. These hiring programmes have
helped drive applications from a diverse pool of
candidates. To further promote social mobility,
we will continue our extensive apprentice hiring
programme through engagement with
educational institutions.
Delivering on our Diversity, Equity
and Inclusion plans and ambitions
At the end of 2023, 5.1% of UK and 21% of US
colleagues were from underrepresented
ethnicities, surpassing our ambitions two years
early. We are now resetting this ambition to
achieve a further 12.5% and 5% respective
increase in the UK and the US by the end of 2025.
To hold ourselves accountable at a senior level
we have set a new ambition to increase the
number of Managing Directors from
underrepresented ethnicities by 50% – to 84 in
the UK and US combined by the end of 2025. At
the end of 2023 this was 55.
We are also progressing towards our ambition of
33% representation of women in senior
leadership roles (Managing Directors and
Directors) by the end of 2025. At the end of 2023
Δ
.
this was 30%
Maintaining our focus on wellbeing
In our Autumn 2023 Your View survey the
Wellbeing Index score rose to 88% favourable
(+2ppt year on year), demonstrating our
maintained focus on wellbeing.
We remain committed to supporting colleague
wellbeing using data-driven insights and
engagement through leader-led initiatives such
as the 'Healthy to Talk' campaign on World
Mental Health Day. This is supplemented by
dedicated people leader workshops exploring
practical ways to continue to embed wellbeing
into ways of working.
There are now over 47,500 colleagues registered
on our Be Well wellbeing portal – the highest
number since its launch – while our mental health
awareness eLearning has been completed by
84% of colleagues and 90% of people leaders.
Introducing structured hybrid working
Following our continuous test and learn
approach, Barclays has adapted its ways of
working to introduce structured hybrid working –
supporting colleagues to connect in-person and
plan their work to make the most of both their
time in the office and remotely.
Building connections is a vital part of our culture.
In our Autumn 2023 Your View survey, 76% of
colleagues told us that their team’s hybrid
approach enables them to deliver the best
outcomes for our colleagues, clients and
customers. We continue to monitor colleague
perceptions and may evolve our hybrid working
approach further as we gather insights and
learnings.
Our people policies
2
Our people policies
help us 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 are regularly reviewed and
updated to ensure alignment with our broader
people strategy.
A great place to work
We were delighted to receive a number of awards in 2023 in recognition of our efforts, including:
• Times Graduate Employer of Choice Award – Finance category
• LinkedIn Top UK Employer – for the third consecutive year
• Times Top 100 Graduate Employers – Top 10
We are committed to paying our colleagues fairly
and appropriately relative to their role, skills,
experience and performance. This means our
remuneration policies reward performance in line
with our Purpose, Values and Mindset, and our
consistently excellent standard. We also
encourage our colleagues to benefit from
Barclays’ performance by enrolling in our
employee share ownership plans.
Companies Act Diversity Disclosure
3
On a Companies Act 2006 414C basis
as at
31 December 2023, Barclays employs 98,662
colleagues across the world (54,032 male, 44,219
female, and 411 undisclosed), including 423 senior
managers (318 male, 105 female), and 13 Board of
Directors at Barclays PLC (8 male, 5 female).
+
Read more about our commitment to fair pay in the
Remuneration report, from page 191, and in our Fair Pay Report.
Notes:
1 The collective bargaining coverage of Unite in the UK represents
80% (2022: 82%) of our UK workforce and 40% (2022: 43%) of
our global workforce.
2 Our policies 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.
3 Headcount basis, including colleagues on long-term leave.
Undisclosed refers to colleagues who do not record their gender in
our systems. '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 a narrower scope than 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.
Δ 2023 data re-produced from the Barclays PLC Annual Report
where selected ESG metrics marked with the symbol △ were
subject to KPMG Independent Limited Assurance under ISAE
(UK) 3000 and ISAE 3410. Refer to the ESG Resource Hub for
further details.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 29
Colleagues (continued)
Colleagues – our KPIs
Colleague
engagement
(%)
2023
2022
2021
Females at Managing
Director and Director level
(%)
33% by end 2025
“I would recommend Barclays
to people I know as a great place
to work” (%)
“I believe that my team and I do a
good job of role modelling the
Values every day” (%)
2023
2022
2021
2023
2022
2021
2023
2022
2021
About this KPI and why we use it
About this KPI and why we use it
Colleague engagement is derived from the
responses to three questions in our all-
colleague Your View survey that measure
colleague advocacy, motivation and sense of
personal accomplishment. It enables us to
monitor how engaged our workforce is and
closely relates to key organisational and
colleague outcomes such as productivity,
wellbeing and retention.
This metric is used to monitor our progress
against our gender ambition of 33% females
at Managing Director and Director level by
the end of 2025.
How we performed
How we performed
Colleague engagement improved +2ppt to
86% and we saw improvements across all
three of the questions that make up the
engagement score.
We saw a marginal improvement since 2022.
While we are making gradual long-term
progress to achieve our ambition of 33% by
the end of 2025, we still have more to do.
About this KPI and why we use it
This is one of the three questions making up
our colleague engagement score, specifically
measuring advocacy of Barclays as an
employer. In addition to being used as part of
our engagement score, this question can
also be used as an 'Employee Net Promoter
Score' and is regularly tracked in our monthly
pulse survey.
How we performed
Colleague advocacy improved slightly year on
year and is +13ppt above our pre-pandemic
score of 73% in 2019 – and +5ppt above our
external benchmark.
About this KPI and why we use it
This question within our Your View survey
measures colleagues’ perception of how well
the Barclays Values are role-modelled by
colleagues. The Values are our moral
compass; the fundamentals of who we are
and what we believe is right.
How we performed
In 2023 we saw a +2ppt improvement year on
year, which brings us in line with the previous
high of 94% in 2020.
See page 191 for details on Executive Director
remuneration linked to these KPIs
+
Note
Δ 2023 data subject to independent Limited Assurance under ISAE (UK) 3000 and ISAE 3410. Current limited assurance scope and opinions can be found within the ESG Resource Hub: home.barclays/sustainability/esg-resource-hub/reporting and disclosures/
86848230△2928868582949292 Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 30
Society
Society
Our success is judged not only by our commercial
performance but also by our contribution to society and
the way we work together for a better financial future for
all our stakeholders. Our focus on society falls broadly into
three categories: Climate, Communities and Suppliers.
Where to find out more:
+ About the people and businesses Barclays supports through its community programmes: home.barclays/community
About the Bank’s skills and employability programmes at home.barclays/lifeskills
Barclays’ climate and ESG-related data, targets and progress
can be found in the Barclays Climate and Sustainability report
from page 59. and within the ESG (non-financial) Data Centre
within our ESG Resource hub: home.barclays/sustainability/esg-
resource-hub/reporting-and-disclosures/
Our policies are a lever for reducing our financed
emissions. In 2024, we updated our Climate
1
:
Change Statement, to include
• No project finance, or other direct finance to
energy companies, for upstream oil and gas
expansion projects or related infrastructure.
• Restrictions for new energy company clients
engaged in expansion from January 2025.
• Restrictions on non-diversified energy
companies engaged in long lead expansion.
• Additional restrictions on unconventional oil
and gas, including Amazon and extra heavy oil.
• Requirements for energy companies to have
2030 methane reduction targets, a
commitment to end all routine / non-essential
venting and flaring by 2030 and near-term net
zero aligned Scope 1 and 2 targets from
January 2026.
• Expectations for energy companies to
produce relevant information in relation to
their transition plans or decarbonisation
strategies by January 2025.
Climate
Barclays is committed to achieving its ambition
to be a net zero bank by 2050. We are focused on
reducing our financed emissions through our
policies, targets and financing. This includes
working with our clients as they decarbonise and
supporting their efforts to transition the real
economy in a manner that is just, orderly and
provides energy security.
We have now set 2030 reduction targets for
eight of the highest-emitting sectors in our
portfolio: Energy, Power, Cement, Steel,
Automotive manufacturing, Aviation, Agriculture
and Commercial Real Estate; and assessed the
baseline and convergence point for our UK
Housing portfolio. This meets our commitment
under the Net Zero Banking Alliance (NZBA) to
set targets for material high-emitting sectors in
our portfolio.
Note:
1 For details on the scope and application of the updated positions
please refer to the Climate Change Statement found: home.barclays/
sustainability/esg-resource-hub/statements-and-policy-positions/
Moray West offshore wind farm
In 2023 Barclays provided approximately
£100 million in loans and CPI, IRS & FX
hedging to support Moray West offshore
wind farm, developed by Ocean Winds.
Once constructed, the project is expected
to provide a secure, reliable source of
energy to supply the equivalent of 50% of
Scotland’s domestic electricity – the same
as the power needs of up to 1.33 million
homes.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 31
Society (continued)
We understand that capital is critical for a
successful energy transition and are focusing our
financing to those clients actively engaged in the
energy transition.
The scale of our business gives us the
opportunity to help finance the energy transition
– to use our global reach, products, expertise and
position in the global economy to work with our
clients, including those in the energy sector, as
they transition to a low-carbon business model.
+
Please see the full Climate Change Statement at:
home.barclays/sustainability/esg-resource-hub/
statements-and-policy-positions/
In 2024, we also published the Barclays Transition
Finance Framework, outlining the criteria for
transactions to be included towards Barclays’
target to facilitate $1trn of Sustainable and
Transition Finance between 2023 and 2030.
In 2023, we financed $67.8bn of Sustainable and
Transition Finance, demonstrating good
momentum towards our target of $1trn by the
end of 2030.
+
Please see page 70 of the Climate and Sustainability report
for further detail on our Transition Finance Framework.
In addition, Barclays’ Sustainable Impact Capital
portfolio has a mandate to invest up to £500m of
the Bank’s own capital in sustainability-focused
start-ups by 2027, helping accelerate the
transition towards a low-carbon economy. To
date, 21 investments have been made, deploying
over £138m since 2020. Following investment,
companies are offered access to the Bank’s
wider ecosystem of support – including space at
Rise, Barclays’ FinTech hubs, where cutting-edge
start-ups and scale-ups can connect, create and
scale their businesses.
Communities
Barclays is committed to building a stronger,
more inclusive economy that is better for
everyone. We are supporting local communities
where we operate by enabling people to develop
the skills and confidence they need to succeed,
and helping businesses to grow and create jobs.
We regularly engage with our community
partners to help shape our strategy and deepen
our understanding of evolving societal issues. We
request formal quantitative and qualitative
information from our charity partners on a
quarterly basis and regularly seek feedback from
the CEOs we support through our Unreasonable
Impact programme - a partnership between
Barclays and Unreasonable Group, detailed
further on the following page.
Feedback and data from our community
partners, charity partners and the businesses we
support helps inform and evolve our
programmes to ensure they best meet their
needs.
Skills and employability
We believe everyone deserves the financial
independence, security and opportunity that
comes with a job – and a vibrant, skilled workforce
ensures local communities and businesses can
thrive. In 2023 our programmes reached more
than 3.27 million people around the world,
unlocking the skills and employment
opportunities people need to progress.
Barclays' LifeSkills programme has been
delivering a positive impact in UK communities
for a decade, helping millions of people develop
the vital employability and financial skills they
need to succeed at work, thrive in the digital age
and better manage their money. Through the
next chapter of our LifeSkills programme,
Barclays has committed to upskilling 8.7 million
people and placing 250,000 people into work by
the end of 2027.
In addition, Barclays’ Military and Veterans
Outreach programme provides support to service
personnel, veterans and their families to develop
the skills they need to transition to civilian life, build
careers beyond the military and grow their own
businesses. Our Digital Eagles programme, which
upskilled more than 622,000 people in 2023, is
enabling people to become more confident with
technology and stay safe online.
LifeSkills in the UK
Barclays is proud of the positive impact LifeSkills has made over the past
10 years.
With social inequalities continuing to rise, there is more to do to support
underserved communities – which is why we are putting socio-economic
inclusion at the heart of the LifeSkills programme to give more help to
people who would otherwise be left behind.
The focus of new investment is for people in the UK’s most underserved
communities and underrepresented groups. We are working in
partnership with respected charities, the education sector, the business
community and Barclays' colleagues to support families, young people
and young adults to thrive – now and in the future.
Find out more here:
home.barclays/lifeskills
+
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 32
Society (continued)
We also recognise the power of sport to engage
and strengthen communities. The Barclays
Community Football Fund has helped more than
2,900 community sports groups make football
more accessible to underrepresented groups,
reaching more than 400,000 young people.
In 2023, as Official Banking Partner of The
Championships, Wimbledon, Barclays made the
largest ever partner donation to the Wimbledon
1
Foundation
and connected Barclays LifeSkills to
the UK Set for Success programme and the
Barclays Net Work programme in the US.
Using sport, and through mentoring sessions
with inspirational athletes, both initiatives provide
young people from underserved communities
the opportunity to develop valuable life skills.
The UK Set for Success programme aims to
support 3,900 people in 30 regions across the UK
over the next four years.
Sustainable growth
Businesses are the engines of growth and
innovation in communities around the world,
pioneering solutions to support the transition to
a more sustainable, inclusive and just future.
Barclays is well-positioned with the capabilities,
resources and networks to support the growth of
these businesses at each stage of the lifecycle -
from idea to IPO - with a dynamic package of
innovative programming, workspaces and
investment. In 2023, more than 5,600 businesses
were supported through our programmes³.
Through our Unreasonable Impact programme, we
support high-growth entrepreneurs around the
world with the network, resources and mentorship
to address global issues and scale their businesses.
In 2023, Barclays committed to support an
additional 200 ventures through the programme by
the end of 2027. More than 300 ventures have been
supported so far, collectively raising over $11bn in
financing and employing more than 25,000 people.
Through Eagle Labs, we are also helping
entrepreneurs in UK communities who are just
starting out – giving them access to mentors, office
space and a collaborative community.
Charitable giving and investment
in our communities
Barclays supports employees to make a positive
difference to the causes that matter most
to them. In 2023, we supported more than
4,800 colleagues around the world to fundraise and
donate to their chosen charities - with a total of
Female Founder Accelerator
In 2023, through Barclays’ Eagle Labs, we launched our first
Female Founder Accelerator, in partnership with AccelerateHER
— supporting 40 female-led technology businesses to address
the gender imbalance in the entrepreneur community.
In 2024, the Female Founder Accelerator is funded by the UK
Government and will support a further 100 businesses. During the
nine-week programme, founders work with experts from across
the entrepreneurial landscape in a series of masterclasses, with
the focus on developing their business propositions further.
+
For further information please see here: labs.uk.barclays/
what-we-offer/our-programmes/
female-founder-accelerator/
£7.6m, including matching, given to more than
1,700 charities. We also supported
10,360 colleagues to donate £2m in total, with
matching, via our UK Payroll Giving programme.
Barclays supports communities directly by investing
money and skills in partnerships with respected
non-governmental organisations, charities and
social enterprises. Our investment amounted to
£49.3m in 2023 including charitable giving,
management costs and monetised work hours of
Barclays' colleagues.
Suppliers
As a global institution, we have responsibility for a
large supply chain. We engage directly with our
Suppliers - our Third Party Service Providers
(TPSPs) - to promote Diversity, Equity and Inclusion
and we are committed to trying to identify and
seeking to address the modern slavery risks in our
supply chain.
We work closely with our TPSPs and set out our
expectations in our Third Party Service Provider
Code of Conduct (TPSP CoC). The TPSP CoC
encourages our TPSPs to adopt our approach to
doing business and details our expectations for
matters including environmental management,
human rights, diversity and inclusion and also for
living the Barclays Values.
+
home.barclays/who-we-are/our-suppliers/our-requirements-
of-external-suppliers/
Please see here for further information:
We aim to pay our TPSPs within clearly defined
terms and achieved 93% on-time payment to
our suppliers at the end of 2023 (93% at the end
of 2022), exceeding our public commitment of
85%². Barclays is also proud to be a signatory of
the Prompt Payment Code in the UK.
Note:
1 wimbledon.com/en_GB/news/articles/2022-11-22/
barclays_announced_as_official_banking_partner_of_the_cham
pionships_wimbledon_from_2023.html
2 We measure prompt payment globally by calculating the percentage
of TPSP spend paid within 45 days following invoice date. This
measurement applies against all invoices by value over a three month
average period.
3 5,633 businesses were supported.
Wimbledon
In 2023 Barclays launched a multi-year
partnership with the All England Lawn Tennis
Club as the Official Banking Partner of
Wimbledon. In our first year, to accompany
our partnership, we delivered an international
campaign bringing in our customers, clients,
colleagues and communities.
• Customers benefited from perks and
elevated Premier giveaways.
• We showcased two of our Unreasonable
Impact businesses. 80 Acres Farms, a
company also supported by Barclays
Sustainable Impact Capital, built a one-of-
a-kind vertical strawberry farm on site, while
CLUBZERØ supported us with returnable
packaging. Over 6,000 Wimbledon
attendees interacted with these two
businesses over the course of The
Championships, providing unique
exposure.
• Additionally, we delivered for our
communities with the Wimbledon
Foundation by leveraging Barclays LifeSkills
to expand the UK Set for Success
programme, and launched the Barclays Net
Work employability programme in the US'.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 33
Society (continued)
Society - our KPIs
Operational GHG
emissions (market-based)
(tonnes CO2e)
Social, environmental and
sustainability-linked
financing facilitated ($bn)
Skills and employability:
Number of people
upskilled (millions)
Sustainable growth:
Number of businesses
supported (thousands)
2023
2022
2021
About this KPI and why we use it
Barclays is working to achieve net
zero operations, consistent with a
1.5°C aligned pathway, and
counterbalance any residual
emissions.
This metric measures total gross
Scope 1 and 2 (market-based)
emissions generated from
Barclays’ branches, offices and
data centres, including all indirect
emissions from electricity
consumption.
How we performed
We continued to source 100%Δ
renewable electricity for our global
real estate portfolio and continued
to meet our 90% Scope 1 and 2
market-based emissions
reduction target – reducing these
Δ
.
emissions by 93%
See page 191 for details on Executive
Director remuneration linked to these KPIs
+
Note
2023
2022
2023
2023
About this KPI and why we use it
In 2022, we set a target of $1trn
Sustainable and Transition
Financing between 2023 and 2030
– encompassing green, social,
transition and sustainability-linked
financing, having met our previous
target to facilitate £150bn of
social, environmental and
sustainability linked financing by
2025.
Please see page 101 for
further detail on our target.
+
How we performed
In the first full year of our new
$1trn target by 2030, we have
Δ
facilitated $67.8bn
,
demonstrating good momentum.
About this KPI and why we use it
Barclays is delivering skills and
employment opportunities for
people in the communities where
we operate. The total number of
people supported to unlock skills
and employment opportunities
includes those upskilled through
our LifeSkills, Digital Eagles and
Military and Veterans Outreach
programmes.
About this KPI and why we use it
Barclays is championing innovation
and sustainable growth through
programmes that unlock the world
of finance, enabling businesses
and economies to grow. The total
number of businesses supported
in our communities includes those
engaged through Barclays’ Eagle
Labs, Rise, Sustainable Impact
Capital and Unreasonable Impact.
How we performed
How we performed
This KPI is new for 2023. In 2023,
our impact measurement and
reporting evolved to demonstrate
Barclays’ holistic impact in
communities. See the ‘Society'
section on pages 31-32 for more
information.
This KPI is new for 2023. In 2023,
our impact measurement and
reporting evolved to demonstrate
Barclays’ holistic impact in
communities, through Barclays
LifeSkills, Digital Eagles and Military
and Veterans Outreach. In
previous years, Barclays reported
the number of people upskilled
solely through LifeSkills, which for
Δ
2023 is 2.6m
(2022: 2.7m). From
2023, new investment through
LifeSkills is focused on targeted
support for people in underserved
communities, resulting in a smaller
number of people reached overall
through our programme.
Our current estimate of
our financed emissions
based on our disclosed
BlueTrackTM methodology
Portfolio
Energy
Power
Cement
Metals (Steel)
Automotive
manufacturing
UK Housing
UK Commercial
real estate
Agriculture
Aviation
December 2023
42.5Δ MtCO2e
(absolute emissions)
241Δ KgCO2e/MWh
(physical intensity)
0.573Δ tCO2e/t
(physical intensity)
1.635Δ tCO2e/t
(physical intensity)
175.2Δ gCO2e/km
(physical intensity)
2
32.1Δ kgCO2e/m
(physical intensity)
2
30.0Δ kgCO2e m
(physical intensity)
2.4Δ MtCO2e
(absolute emissions)
882Δ gCO2e/RTK
(physical intensity)
Cumulative
performance
vs. baseline
-44 %
-26 %
-8 %
-16 %
0 %
N/A
N/A
N/A
N/A
Date baseline set:
n December 2020 n December 2021
n December 2022 n December 2023
About this KPI and why we use it
We continue to assess the financed
emissions across our portfolio and measure
the baseline emissions we finance across
sectors. Our assessment will inform our
plan for target setting in the coming years
and support our better understanding of
the extent to which our financing aligns with
a 'well below 2°C' pathway.
How we performed
TM
During 2023 we added further sectors to our
BlueTrack
methodology, progressing
towards our NZBA commitment to set
science-based targets for all material high-
emitting sectors (as defined by the NZBA) in
our portfolio by April 2024.
Our detailed analysis of our sectors and
performance is contained within the Climate
& Sustainability section from page 80.
Δ 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. Current limited assurance scope and opinions can be found within the ESG Resource Hub: home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/
16,89522,14134,68867.8△65.33.275.63
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 34
Investors
Investors
Our investor stakeholder group encompasses investors,
rating agencies and other market participants with an
interest in the financial performance of the Group.
Where to find out more:
Further details can be found at:
home.barclays/investor-relations/
+
Engaging with investors
Through the year we maintained active
engagement with our stakeholders across a
number of themes, including capital strategy and
allocation, divisional performance and the impact
of the changing macroeconomic environment.
This bilateral engagement has helped inform our
Investor Update and our plans to deliver further
value to our shareholders and stakeholders. The
combination of our 2023 Results
Announcement, Resegmentation document,
and the Investor Update in February 2024
provide further detail on our three-year plan to
deliver higher returns, our capital allocation
priorities and revised financial targets, as well as
the updated divisional structure we will report
upon from Q1 2024.
We also engaged extensively regarding our
climate strategy, methodology, and the actions
we have taken to build a sustainable bank.
Alongside this, our engagement also covered
how we have utilised the Board and senior
management to engage with other corporates
on governance and the control environment.
Shareholder feedback on ESG demonstrated a
focus on the development of our climate
strategy and policies. In February 2024, we
updated our Climate Change Statement,
including our policies, targets and financing to
reduce financed emissions.
Our 2024 AGM will be hosted in Glasgow to
continue our wider engagement with
shareholders.
Performance during the year
Barclays delivered a Group statutory RoTE of
9.0% (2022: 10.4%) with profit before tax of
£6.6bn (2022: £7.0bn), which included £0.9bn of
structural costs actions in Q423. The prior year
included the impact of the Over-issuance of
Securities.
The following performance highlights exclude
the impact of the Q423 structural cost actions
and the impact of the Over-issuance of
1
.
Securities in the prior year
Group RoTE of 10.6% (2022: 11.6%) with profit
before tax of £7.5bn (2022: £7.7bn)
Group income of £25.4bn, up 3% year-on-year:
Barclays UK income increased 5% to £7.6bn,
driven by net interest income growth from higher
rates, including higher structural hedge income.
Corporate and Investment Bank (CIB) income
decreased 4% to £12.6bn, driven by lower client
activity in both Global Markets and Investment
Banking, partially offset by a strong performance
in Corporate driven by Transaction Banking.
Consumer Cards and Payments (CC&P) income
increased 18% to £5.3bn reflecting higher
balances in US cards and favourability from
higher rates and client balance growth in Private
Bank.
Group total operating expenses were £16.0bn,
up 2% year-on-year. Cost: income ratio of
63%as the Group delivered positive cost: income
jaws of 1%.
Credit impairment charges were £1.9bn (2022:
£1.2bn) with an LLR of 46bps (2022: 30bps).
CET1 ratio of 13.8% (2022: 13.9%), with risk
weighted assets (RWAs) of £342.7bn (December
2022: £336.5bn) and tangible net asset value per
share of 331p (December 2022: 295p).
Capital distributions: Total capital distributions of
£3.0bn announced in relation to 2023, up c.37%
on 2022, reflecting a total dividend of 8.0p and
total share buybacks of £1.75bn for 2023. This
includes our intention to initiate a further share
buyback of up to £1.0bn.
Note:
1 Page 391 includes a reconciliation of financial results excluding
the impact of Q423 structural costs actions and the Over-
issuance of Securities in 2022.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Investors (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
2023
£m
12,709
12,669
25,378
(16,714)
(180)
(37)
(16,931)
(9)
8,438
(1,881)
6,557
(1,234)
5,323
(64)
(985)
4,274
27.7p
26.9p
9.0%
67%
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%
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 2023 35
2023
£m
2022
£m
224,634
108,889
399,496
2,594
174,605
206,651
256,836
71,836
31,946
1,477,487
538,789
94,084
41,601
96,825
10,494
58,669
297,539
250,044
17,578
1,405,623
4,288
13,259
(77)
53,734
71,204
660
71,864
1,477,487
382p
331p
15,155
1.28
1.15
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
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 36
Investors (continued)
Investors – our KPIs
Common Equity Tier 1 (CET1) ratio1
(%)
Group return on tangible equity
(RoTE)1
(%)
Total operating expenses1, 2
(£bn)
Cost: income ratio1
(%)
Target range 13-14%
Target greater than 10%
Below 60%
2023
2022
2021
2023
2022
2021
2023
2022
2021
2023
2022
2021
About this KPI and why we use it
About this KPI and why we use it
About this KPI and why we use it
About this KPI and why we use it
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
whilst 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.
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.
How we performed
How we performed
The CET1 ratio decreased to 13.8%
(December 2022: 13.9%), within our target
range, as RWAs increased by £6.2bn to
£342.7bn partially offset by an increase in
CET1 capital of £0.4bn to £47.3bn.
Statutory RoTE was 9.0% (2022: 10.4%)
including £0.9bn of structural cost actions in
Q423.
Excluding Q423 structural cost actions, RoTE
3
.
was 10.6%
See page 191 for details on Executive Director
remuneration linked to these KPIs
+
Notes
We view total operating expenses as a key
strategic area for banks. Those that actively
manage costs and control them effectively
will gain a strong competitive advantage.
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.
How we performed
Group operating expenses increased to
£16.9bn (2022: £16.7bn) reflecting £0.9bn of
structural cost actions in Q423, business
growth and investments in resilience and
controls, partially offset by lower litigation
and conduct charges.
The prior year included £1.0bn of litigation
and conduct charges related to the Over-
issuance of Securities.
How we performed
The Group cost: income ratio was 67%
(2022: 67%). Excluding Q423 structural cost
2
actions, Group cost: income ratio was 63%
as the Group delivered positive jaws of 1%.
1 KPIs reflect the targets and ambitions followed during 2023. On 20 February 2024, the 2023 Results Announcement set out refreshed targets and ambitions which future progress will be measured against. Please see page 13 for further detail, or home.barclays/strategy
2 Litigation and conduct in 2023: £37m, 2022: £1,597m, which includes £966m related to the Over-issuance of Securities and 2021: £397m.
3 Page 391 includes a reconciliation of financial results excluding the impact of Q423 structural costs actions and the Over-issuance of Securities in 2022.
13.813.915.19.010.413.12.79.916.916.714.7676767
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 37
Additional disclosure
In this section we disclose
information as required by
Companies Act 2006 and various
other information to help navigate
the Annual Report 2023.
Section 172 statement
Non-financial and sustainability
information Statement
TCFD compliance
ESG ratings and reporting
Managing risk
Viability statement
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Section 172(1) statement
Barclays PLC
Annual Report 2023 38
How the Board has
regard to the views
of our stakeholders
You can read more about our key
stakeholder groups and how we listen
and respond to them, striving to create
sustainable value for all those we serve in
Our Stakeholders from page 23. You can also
read about the key activities of the Board and
decisions taken during the year, along with
details of the Board’s engagement with
colleagues in Key Board Activities in 2023
in the Board Governance report.
Overview
Throughout the year, the Board and individual
Directors engage directly and indirectly with
stakeholders to ensure they have a deep
understanding of the impact of the Group’s
operations on key stakeholders, as well as their
interests and views. This includes meeting with
customers and clients, colleagues, investors,
proxy advisers, key regulators, NGOs and other
stakeholders.
This engagement, both directly and through
reporting by executive management, to whom the
day-to-day operations of the business are
delegated, seeks to ensure the Board understands
the key issues to enable the Directors to comply
with their legal duty under Section 172(1).
You can find out more about how the Directors
have had regard to the matters set out in Section
172(1) when discharging their duties, and the
effect of those considerations in reaching certain
decisions below.
Embedding a standard of consistent
excellence across Barclays
As reported in our 2022 Annual Report, towards
the end of 2022, Barclays established a group-
wide cultural change programme led by our
Group Chief Executive, to set a standard of
consistent excellence, recognising that both our
stakeholders and management want Barclays
to perform at a consistently very high level, each
and every day. This programme challenges
colleagues to address five key areas – service,
precision, focus, simplicity and diversity of
thought – to establish a new operating standard.
This programme is supported by our existing
Purpose, Values and Mindset. The Board
recognises that this cultural change programme
is key to driving better outcomes for Barclays'
stakeholders, including for our investors,
customers, clients and colleagues. As such,
oversight of this programme has been a key area
of focus for the Board in 2023.
In 2023, the Board received updates on the
progress of this programme at each Board
meeting, including the key levers necessary
to achieve the required outcomes.
Board members have discussed with
management the importance of ‘tone from
the top’, recognising the need for senior
leadership accountability and support in order
to drive a broader cultural shift across the
wider colleague base.
In accordance with the Companies Act 2006 (the Act),
this statement sets out how the Directors have had
regard to the matters set out in Section 172(1) of the
Act when performing their duty to promote the success
of the Company under Section 172.
What a consistently excellent standard means to Barclays
We are holding ourselves to a high standard across:
Service:
Precision:
Focus:
Simplicity:
world-class
service
for clients
and customers,
every time
in our operations,
our risk
management
and our controls
on businesses
and projects
where we
can excel
simplicity
and efficiency,
seeking out every
opportunity
to automate
Diversity
of thought:
championing
new thinking,
and challenging
the status quo
The Board recognises that in order to drive
change across the organisation it is key that
colleagues understand and believe in the aims
of the programme and recognise their personal
accountability for delivering the right outcomes,
including their role in challenging processes and
controls that can be improved or simplified.
To support this, a high profile internal campaign
led by the Group Executive Committee has been
launched which recognises and celebrates the
successes of colleagues in driving simplification,
and risk and control improvements across the
organisation, providing real examples which bring
the aim of the programme to life. Throughout
2023, a programme of events has been held for
management level colleagues, the aim of which is
to ensure senior colleagues understand the
importance of the programme objectives and
that they are supported in developing the skills
they need to implement and embed the change
in the organisation.
This included Consistently Excellent workshops for
our senior leaders, to help create a common
understanding across the Group. In 2024, all
colleagues will be invited to attend these workshops.
As part of that programme, our Group Chief
Executive interviewed Brian Gilvary, our Senior
Independent Director, about his experiences during
his executive career of dealing with operational
challenges and cultural change programmes.
A key part of achieving the aims of this cultural
change programme is driving operational
excellence. The Board Audit Committee has
oversight of the execution and sustainable
embedding of the Group’s key remediation
programmes, and received regular briefings
throughout the year on the progress of these
programmes, including deep dives into
specific projects.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Section 172(1) statement (continued)
The Board recognises that a cultural and
behavioural change programme of this nature is
both complex and multi-year and, as such, the
embedding and sustainability of this programme
will continue to be an area of focus for the Board
throughout 2024 and beyond.
A key area to achieving success in this area is
the related work to identify lessons learned
from these remediation programmes, and
to embed those learnings into standard
business practices.
The Board has discussed with management
the need to ensure that desired outcomes are
measured and tracked, with regular insight being
provided to the Board and management relating
to improvements in customer experience,
operational excellence, risk management,
colleague behaviour and financial delivery.
“To be a consistently excellent organisation,
we must be ambitious and focused...
with each of us taking personal accountability”
C. S. Venkatakrishnan
Group Chief Executive
Our Group Chief Executive, C.S.
Venkatakrishnan, together with Group
Executive Committee members, Sasha
Wiggins and Vim Maru, discussing what it
means to deliver to a consistently
excellent standard with colleagues in
Wilmington, USA.
Barclays PLC
Annual Report 2023 39
A Consumer Duty lens has been applied in the
development of the Barclays Group-wide change
programme, Consistently Excellent, with the
spirit of the Consumer Duty reflected in the
‘world-class service for clients and customers’. In
May 2023, the Chairman, together with Mary
Francis (as BBPLC Consumer Duty Champion)
and the BBUKPLC Consumer Duty Champion,
visited our contact centre in Wavertree,
Liverpool, to experience Consumer Duty in
action, meeting with customer-facing colleagues
and learning about how Barclays is addressing
vulnerable customer needs.
In late 2023, the Board received a further
progress report on the continuing work to
operationalise and embed the Consumer Duty
across the Group, the roll-out of new Consumer
Duty management information and ongoing
planning for the second implementation date of
31 July 2024 for closed products.
One continuing area of Board focus is the Group
oversight of work to develop robust data and
monitoring capabilities to assess customer
outcomes and identify potential or actual risks,
and for reporting at business, Executive and
Board level.
Given the Group-wide significance of the
Consumer Duty, throughout 2023, there has
been extensive engagement by the Boards of
BPLC, BBPLC and BBUKPLC on this subject.
The Board will continue its oversight of BBPLC
and BBUKPLC's embedding and implementation
of the Consumer Duty in 2024, noting that, from
July 2024, each of the BBPLC and BBUKPLC
Boards is required to review and approve its first
assessment as to whether each business is
delivering good outcomes for its retail customers
which are consistent with the Consumer Duty.
Implementing and embedding
the new FCA Consumer Duty
In July 2023, the Financial Conduct
Authority's (FCA) Consumer Duty came
into force. The Consumer Duty is a new
outcomes-based regulation, designed
to ensure relevant financial services firms
deliver good outcomes for retail customers
consistent with the three cross-cutting
rules to (i) act in good faith, (ii) avoid
causing foreseeable harm, and (iii) enable
and support retail customers, and the four
retail customers outcomes relating to:
(i) products and services, (ii) price and value,
(iii) consumer understanding, and (iv)
consumer support.
The implementation of, and ongoing compliance
with, the Consumer Duty is the responsibility
of the operating entities within the Group,
primarily BBPLC and BBUKPLC. However,
given the significance of the Consumer Duty,
the Board also provides relevant oversight of
the Consumer Duty across the Group. In this
respect, in February 2023, the Board approved
changes to its Matters Reserved in order to
reflect its responsibility for this oversight.
Throughout the first half of 2023, the Board
retained oversight of Barclays' planning for the
first Consumer Duty implementation deadline of
31 July 2023 for in-scope products and services.
In addition to receiving its regular updates on the
status of the Group’s implementation plans, the
Board received a final update on the Group's
overall compliance readiness shortly before the
July implementation deadline. This update
included information on work conducted to
ensure all relevant Group frameworks align with
the Consumer Duty rules and guidance and
ongoing work to embed the Consumer Duty,
including the roll-out of mandatory Consumer
Duty training for colleagues.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Non-financial and sustainability information statement
Barclays PLC
Annual Report 2023 40
Non-financial and
sustainability information
statement
The non-financial and sustainability reporting
requirements (including the new climate-related
financial disclosures) contained in Sections
414CA and 414CB of the Companies Act 2006
have been addressed through a combination of
summary text and cross referencing to other
sections of the Annual Report. We have used
cross-referencing as appropriate to deliver clear,
concise and transparent reporting.
In addition to the information referred to in the
table below, further information about the impact
of our activities can be found in the following
sections of the Annual Report:
Part 1 of this statement addresses the non-
financial information requirements set out in
section 414CB(1) and (2).
Part 2 of this statement addresses the new
climate-related financial disclosure requirements
set out in section 414CB(A1) and (2A).
Part 1
Relevant information relating to business model,
principal risks and non-financial key performance
indicators can be found in the following sections
of the Annual Report:
Business model
Principal risks
Section
Managing risk
Principal Risk management
Risk performance
Pages
10, 60-65
51-53
272-283*
284-362*
Key performance indicators
Impact
Environmental matters
73 - 79, 80 - 100, 124 - 125, 236 - 237
26, 29, 33, 36, 75, 88, 103
Company employees
Social matters
Respect for human rights
Anti corruption and
bribery matters
27 - 29, 246, 250
24 - 26, 30 - 33, 236 - 237, 238 - 239,
239 - 241, 242 - 244
238 - 239, 239 - 241
249
Note:
* in Part 3 of the Report
In relation to the requirements relating to
policies, we have a range of statements and
policy positions designed to support key
outcomes for all of our stakeholders, some of
which can be found here: home.barclays/
sustainability/esg-resource-hub/
These policies and statements are in place with
the aim of ensuring strengthened risk
management and consistent governance. In
order to maintain these policies and statements,
the relevant documents are reviewed
periodically.
Performance against our strategic key
performance indicators for our stakeholder
groups, as shown from page 23, is one indicator
of the effectiveness and outcome of policies
and guidance.
We have included summary information in
relation to these statements and policies in the
table below, providing cross references to
additional content contained in the Annual
Report where appropriate:
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 41
Non-financial and sustainability information statement (continued)
Environmental-related statements and policies
Environmental-related statements and policies (continued)
Statement or policy position
Description
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
and their buffer zones. Our statement outlines our restrictions and
client due diligence approach that aims to preserve and safeguard
these sites.
Climate Risk Policy The Climate Risk Policy outlines the requirements and policy
objectives for assessing and managing the impact on Financial and
Operational Risks arising from the physical and transition risks
associated with climate change. This incorporates identification,
measurement, management and reporting for Financial and
Operational Risks. Risks associated with Climate Change are being
managed in accordance with the requirements set out in this policy.
Information to help
understand our Group and
its impact, policies, due
diligence and outcomes
See our:
•
•
•
‘Managing impacts in
lending and financing’
section in Part 3 of the
Annual Report (page
236 onwards).
‘Restrictive policies’
section in Part 2 of the
Annual Report (page
100),
‘Our approach to
nature and
biodiversity’ section in
Part 2 of the Annual
Report (page 124).
• See our Climate risk
section from page
272 in Risk Review in
Part 3 of the Annual
Report.
Statement or policy
position
Description
Climate Change
statement
The Barclays Climate Change Statement sets out our approach based on a
consideration of all risk and market factors to certain energy and power
sectors with higher carbon-related exposures or emissions from
extraction or consumption, or those which may have an impact on certain
sensitive environments or on communities, namely thermal coal mining,
coal-fired power generation, mountain top coal removal, upstream oil and
gas and unconventional oil and gas including oil sands, Arctic oil and gas,
Amazon oil and gas, hydraulic fracturing ('fracking'), ultra-deep water and
extra heavy oil. 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 conduct due diligence on a case-by-case basis on clients
in sensitive energy sectors that fall outside the restrictions set out in our
statement.
Forestry and
Agricultural
Commodities
statement
We recognise that forestry and agricultural commodities sectors are
responsible for producing a range of agricultural commodities such as
timber, pulp & paper, palm oil, beef and soy that are often associated with
environmental and social impacts, including climate change, deforestation,
biodiversity loss and human rights issues. Our Forestry and Agricultural
Commodities Statement outlines our restrictions and due diligence
approach for clients involved in these activities,
Information to help
understand our Group and
its impact, policies, due
diligence and outcomes
See our:
•
•
‘Managing impacts in
lending and financing’
section in Part 3 of the
Annual Report (page
236 onwards).
‘Restrictive policies’
section in Part 2 of the
Annual Report (page
100),
• Our approach to
nature and
biodiversity section in
Part 2 of the Annual
Report (page 124).
• Our strategy, selected
targets and progress:
2) Reducing our
financed emissions –
Restrictive policies
section in Part 2 of the
Annual Report (page
63).
See our:
•
•
•
‘Managing impacts in
lending and financing’
section in Part 3 of the
Annual Report (page
236 onwards).
‘Restrictive policies’
section in Part 2 of the
Annual Report (page
100).
‘Our approach to
nature and
biodiversity’ section in
Part 2 of the Annual
Report (page 124).
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 42
Non-financial and sustainability information statement (continued)
Human rights-related statements
Colleagues and suppliers
Statement or policy position
Description
Human rights
Modern slavery
Defence and
Security sector
Barclays' human rights statement expresses our commitment to
respecting human rights as defined in the International Bill of Human
Rights and the International Labour Organisation’s Declaration on
Fundamental Principles and Rights at Work. Our approach to
respecting human rights is guided by the UN Guiding Principles on
Business and Human Rights and the OECD Guidelines for
Multinational Enterprises on Responsible Business Conduct. The
statement provides an overview of the evolving framework of policies
and processes that seek to embed these commitments across our
business.
Barclays publishes a Modern Slavery Statement made according to
the requirements of section 54 of the UK Modern Slavery Act 2015
and section 14 of the Australian Modern Slavery Act 2018 (Cth). We
recognise that the nature of our business and global footprint means
we may be exposed to modern slavery risks across our operations,
supply chain, and customer and client relationships. We are
committed to trying to identify and seeking to address human rights
risks, such as modern slavery, across our value chain. In this
Statement we report the progress made over the course of the year
and outline our plans for the year ahead.
Barclays' Statement on the Defence and Security Sector outlines our
approach to defence-related transactions and relationships. We
recognise that various types of defence equipment are considered
necessary for achieving internationally accepted goals, such as
legitimate national defence and security purposes as set forth in the
Charter of the United Nations, or peacekeeping missions. At the
same time, we also recognise that the Defence and Security Sector
involves equipment and activities that have the potential to lead to
significant impacts on individuals, communities and the broader
geopolitical landscape. Barclays conducts enhanced due diligence as
appropriate on clients in scope of the Defence and Security
Statement.
Information to help
understand our Group and
its impact, policies, due
diligence and outcomes
See our:
•
‘Managing impacts in
lending and financing’
section in Part 3 of the
Annual Report (page
236 onwards).
• Other Governance
within the
Governance report in
Part 3 of the Annual
Report (Page 230).
See our:
•
‘Managing impacts in
lending and financing’
section in Part 3 of the
Annual Report (page
236 onwards).
• Other Governance
within the
Governance report in
Part 3 of the Annual
Report (Page 230).
See our:
•
•
‘Managing impacts in
lending and financing’
section in Part 3 of the
Annual Report (page
236 onwards).
‘Restrictive policies’
section in Part 2 of the
Annual Report (page
100).
Statement or policy position
Description
Code of Conduct
Board Diversity and
Inclusion Policy
Third-party code of
conduct
Statement of
Commitment to
Health & Safety
Information to help
understand our Group and
its impact, policies, due
diligence and outcomes
• See The Barclays Way
section from page
245 in Other
Governance within
the Governance
report in Part 3 of the
Annual Report.
The Barclays Way is our code of conduct which outlines the Purpose,
Values and Mindset that 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 with the aim of creating the best possible working
environment for our colleagues.
The Board Diversity and Inclusion Policy is designed to ensure that all
Board appointments and succession plans are based on merit and
objective criteria, recognising the benefits of diversity, in all its forms,
and that due regard is given to diversity and inclusion characteristics
when considering Board Committee appointments. The Policy sets
out measurable objectives for achieving diversity on the Board,
including the Board's current target to ensure that, by 2025, the
proportion of women on the Board is at least 40 per cent.
• See our section on
diversity within the
report of the Board
Nominations
Committee on page
158 of Part 3 of the
Annual Report.
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.
Barclays health, safety and wellbeing statement of commitment sets
out the Bank’s commitment to protecting the safety and wellbeing of
our employees, customers, suppliers, and any individuals using our
premises, by providing and maintaining a safe working environment
that protects both physical and mental wellbeing. The effective
implementation of the statement of commitment has resulted in the
continual improvement of health and safety related performance and
proactive hazard management, as well as increasing the number of
sites where Barclay’s occupational health and safety management
system is independently certified to ISO45001.
• See “Supporting our
Supply Chain” within
ESG Governance on
page 238.
• See our health and
safety section from
page 250 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
Non-financial and sustainability information statement (continued)
Governance and Financial Crime statements
Governance and Financial Crime statements
Statement or policy position
Description
Information to help understand
our Group and its impact,
policies, due diligence and
outcomes
Financial Crime
Statement
We have adopted a holistic approach to financial crime risk
management and have one group-wide Financial Crime Policy. It
is designed to ensure that Barclays has adequate systems,
procedures, and controls in place to manage the risk of being
used to facilitate financial crime and to manage the legal,
regulatory, and reputational risks associated with financial crime.
• See the Financial Crime
section from page 249 in
Other Governance within
the Governance report in
Part 3 of the Annual
Report.
Statement or policy position
Resilience
Description
Barclays maintains a robust resilience framework focusing on the
end-to-end resilience of the business services we provide to
customers and clients, aiming to ensure that all service
components can deliver during business disruptions, crises,
adverse events and other types of threats.
Barclays PLC
Annual Report 2023 43
Information to help understand
our Group and its impact,
policies, due diligence and
outcomes
• See the managing data
privacy, security and
resilience section from
page 251 in Other
Governance within the
Governance report in Part
3 of the Annual Report.
Tax
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 which is designed to ensure we file our
returns on time and pay the correct amount of tax in a
responsible and transparent manner.
• See the tax section from
page 247 in Other
Governance within the
Governance report.
• Barclays PLC Country
Snapshot report at
home.barclays/
annualreport
The Financial Crime Policy is supported by group-wide Standards
that focus on four key risks anti-bribery & corruption (ABC); anti-
money laundering & counter-terrorist financing (AML); anti-tax
evasion facilitation (ATEF) and sanctions, including proliferation
financing, and is:
• Designed to ensure that all employees and Barclays
businesses globally comply with UK, extra-territorial and
locally applicable legal and regulatory obligations,
• Designed to create an integrated and consistent framework
upon which Barclays manages financial crime risk,
• Supported by the Barclays Board of Directors,
• Approved by the Group Chief Compliance Officer (member of
the Group Executive Committee), and
• Regularly reviewed to ensure it remains up to date.
Barclays aims to ensure that the privacy and security of personal
information is respected and protected. Our privacy notices,
available on our websites, describe 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 carefully evaluates non-profit organisations prior to
partnering with them to ensure they align with its values. Barclays
will not make any donation that is, or could be perceived to be, an
incentive to win or retain business or one that delivers a business
advantage. We will not make any donation that is contrary to
Barclays Financial Crime Policy (Anti-Bribery & Anti-Corruption
Policy, Sanctions), or any other Barclays Compliance policies and
standards. Barclays is unfortunately unable to provide funding to
many of the requests that we receive and does not accept
unsolicited donation requests.
• See the managing data
privacy, security and
resilience section from
page 251 in Other
Governance within the
Governance report in Part
3 of the Annual Report.
• See our donation
guidelines at:
home.barclays/content/
dam/home-barclays/
documents/citizenship/
our-reporting-and-policy-
positions/Barclays-
donation-guidelines.pdf
Data protection
Donations
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 44
Non-financial and sustainability information statement (continued)
Part 2
Relevant information in relation to the climate-related financial disclosures is set out below, using cross-
referencing to other sections of the Annual Report where appropriate.
Given the similarities in these disclosure requirements with the TCFD recommended disclosures, and in
order to avoid unnecessary duplication and deliver concise reporting, we have chosen to present the
climate-related financial disclosures alongside information relating to the related TCFD recommended
disclosures.
Climate-related financial disclosures index
CA 2006 requirement
Detail
Section
414CB(2A)(a)
A description of the company’s
governance arrangements in
relation to assessing and managing
climate-related risks and
opportunities
TCFD Section
Governance
Recommendation
Summary
a) We describe the Board's oversight of
climate-related risks and opportunities
The Board is responsible for the overall leadership of Barclays PLC, including setting the
Group's climate strategy. The Board and, as appropriate, its Committees are
responsible for the oversight of climate-related risks and opportunities in the Group.
Each Board Committee has its own Committee Terms of Reference clearly setting out
its remit and decision-making powers, including those relating to climate matters.
Page references within
Parts 2 and 3 of the
Annual Report
154, 180 - 182
232
b) We describe management's role in
assessing and managing climate-related
risks and opportunities
Oversight and management of Barclays' climate strategy is increasingly embedded in
business-as-usual management structures, including a number of executive
committees.
121 - 123, 233 -
235
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.
In 2023, the Group Sustainability Committee was established as a dedicated forum to
identify and discuss climate-related matters across the Group with a specific mandate
to review and propose updates to the Group Climate strategy prior to approval by
Group ExCo.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 45
Non-financial and sustainability information statement (continued)
Climate-related financial disclosures index
TCFD Section
Strategy
CA 2006 requirement
Detail
Section
414CB(2A)(d)
A description of:
(i) the principal climate-related risks
and opportunities arising in
connection with the company’s
operations, and
(ii) the time periods by reference to
which those risks and
opportunities are assessed
Section
414CB(2A)(e)
A description of the actual and
potential impacts of the principal
climate-related risks and
opportunities on the company’s
business model and strategy
Recommendation
Summary
a) We describe the climate-related risks
and opportunities the organisation has
identified over the short, medium and long
term
Climate risk is defined as the impact on Financial (Credit, Market, Treasury & Capital)
and Operational Risks arising from climate change through physical risks and risks
associated with transitioning to a lower carbon economy. Barclays faces exposure to
climate-related risks, either directly through its operations and infrastructure or
indirectly through its financing and investment activities. Time horizons are considered
based on Barclays' planning cycles.
Page references within
Parts 2 and 3 of the
Annual Report
67 – 71, 272, 284 –
290
Barclays has enhanced its focus on sustainable finance over the last two years. At the
end of 2022, we announced a new target to facilitate $1trn of Sustainable and
Transition Finance. This followed a review of the financing requirements arising from
the global transition to a low-carbon economy if the world is to avoid the worst effects
of climate change and the potential addressable market for Barclays. During 2023 we
built on this work to develop a Group-wide sustainable finance strategy to
operationalise our ambition.
b) We describe the impact of climate-
related risks and opportunities on the
organisation's businesses, strategy and
financial planning
Barclays’ 2023 financial planning process included a review of our strategy, its
implementation and tracking our progress on climate related targets, as well as,
capturing a view of climate-related risks and opportunities, which aligns with how we
manage other risks.
72 – 129
Section
414CB(2A)(f)
An analysis of the resilience of the
company’s business model and
strategy, taking into consideration
different climate-related scenarios
c) We describe the resilience of the
organisation's strategy, taking into
consideration different climate-related
o
C or lower scenario
scenarios, including a 2
Our planning process also considered current climate policies to ensure they are
included in the base scenario.
The planning process included an assessment of our financed emissions reduction
targets for some of our highest emitting sectors.
We also considered impairment over the horizon of the financial plan. At this point in
time, there are no material amendments required to the financial plan.
Our Sustainable and Transition Financing target of $1tn is a key driver of our finance
planning process with pathway to achieve this as well as risks and opportunities
reviewed and agreed with business heads.
Barclays has performed two group wide climate stress tests during 2023, over and
above existing macroeconomic internal stress tests, to assess Barclays’ financial
resiliency to climate risks.
131 - 136
The two scenarios include both physical and transition risks, including assessment of a
tipping point (H1) as well as the knock on macroeconomic impacts (H2).
Results from the exercises have been integrated into Barclays internal capital adequacy
assessment process to ensure Barclays remains sufficiently capitalised to both climate
and macroeconomic stresses.
The outputs are considered within Climate Risk Management and Financial Planning
processes, such as assessment of climate impacts to ECL.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 46
Non-financial and sustainability information statement (continued)
Climate-related financial disclosures index
CA 2006 requirement
Detail
Section
414CB(2A)(b)
A description of how the company
identifies, assesses, and manages
climate-related risks and
opportunities
TCFD Section
Risk
management
Section
414CB(2A)(c)
A description of how processes for
identifying, assessing, and
managing climate-related risks are
integrated into the company’s
overall risk management process
Recommendation
Summary
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
The impact of climate risk drivers are observed in Barclays' portfolio through its
traditional risk categories such as credit risk, market risk, treasury and capital risk ,
operational risk and reputational risk. Barclays continues to develop and enhance
processes for identifying, assessing and managing climate-related risks and drive
integration of climate risk into its business activities and operations.
Climate Risk is a Principal Risk under Barclays' Enterprise Risk Management Framework.
A Climate Risk Framework, Climate Risk Policy and relevant governance structures
have been developed to foster a systematic and consistent approach for managing
climate risk across the firm. Barclays has also established a climate risk appetite at the
Group-level.
Page references within
Parts 2 and 3 of the
Annual Report
67 – 69, 272 – 276
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 47
Non-financial and sustainability information statement (continued)
Climate-related financial disclosures index
CA 2006 requirement
Detail
Section
414CB(2A)(h)
A description of the key
performance indicators (KPIs) used
to assess progress against targets
used to manage climate-related
risks and realise climate-related
opportunities and of the
calculations on which those KPIs
are based
TCFD Section
Metrics &
Targets
Recommendation
Summary
a) Our metrics used to assess climate-
related risks and opportunities in line with
our strategy and risk management
processes
In line with our three-part climate strategy, we have set financed emissions 2030
reduction targets across eight high emitting sectors in our portfolio (with the addition
this year of targets for the Aviation, Agriculture and UK Commercial Real Estate
sectors).
Page references within
Parts 2 and 3 of the
Annual Report
67 – 71
N/A
N/A
b) Our Scope 1, Scope 2 and Scope 3
operational greenhouse gas (GHG)
emissions and the related risks
Section
414CB(2A)(g)
A description of the targets used by
the company to manage climate-
related risks and to realise climate-
related opportunities and of
performance against those targets
c) Our targets used to manage climate-
related risks and opportunities and
performance against targets
We have also expanded the scope of our UK Housing convergence point this year, as
detailed on page 98. Each of our 2030 target ranges is developed with reference to a
1.5°C-aligned scenario, such as the IEA Net Zero by 2050 scenario. We have reported
our progress against each of these targets as at December 2023, as detailed on page
86.
We have additionally calculated the financed emissions for the full in-scope balance
sheet as at December 2022. This has enabled us to calculate the coverage of our
reduction targets across our portfolio (including integration of 1.5 degree aligned
scenarios, with ranges for certain sectors) and to assess the extent to which the
business is aligned to a well-below 2 degrees pathway. Our calculations indicate that we
have set reduction targets for 55% of our overall Scope1,2 financed emissions.
We also note our progress against our sustainable and transition financing between
2023 and the end of 2030, our green financing between 2018-2030, and our balance
sheet investment by the end of 2027.
We measure our Scope 1, Scope 2 and Scope 3 emissions and report these against
our net zero operations strategy, as set out on pages 73-79.
75, 88
On our financed emissions, we have:
i. Estimated the full in-scope balance sheet financed emissions as at December 2022
using a methodology developed based on the PCAF Standard as set out on pages
80-83; and
ii. Calculated financed emissions and physical intensities for specific activities as at
December 2023 where we have set 2030 targets which include the integration of
1.5°C 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, as set
out on page 89
Alignment of our client portfolios to the goals and timelines of the Paris Agreement
underpinned by Barclays' BlueTrack™ Methodology. Progress reported against the
following sector targets: Energy, Power, Cement, Steel, Automotive Manufacturing and
UK Housing (where we have set a convergence point). Targets have also been set in
2023 for the first time against the following sectors: UK Commercial Real Estate,
Agriculture, and Aviation.
Progress against our target to facilitate $1 trillion of Sustainable and Transition Finance
between 2023 and the end of 2030.
75, 88, 103
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Task Force on Climate-related financial disclosure statement of compliance
Barclays PLC
Annual Report 2023 48
Task Force on Climate-
related financial disclosure
statement of compliance
We have considered our obligations 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.
Given the similarities between the TCFD
Recommended Disclosures and the new climate-
related financial disclosures (required further to
sections 414CA and 414CB of the Companies Act
2006), and in order to avoid unnecessary duplication
and deliver concise reporting, we have chosen to
present information relating to the TCFD
recommended disclosures alongside the relevant
Companies Act 2006 requirements.
For further information on where these
disclosures can be found please refer to pages
44 to 47 of this report.
Looking ahead: TCFD sector specific
requirements for asset managers
We continue our work to implement the TCFD
sector specific guidance for asset managers
(which represents a small part of our overall
business) in accordance with the FCA Enhanced
Climate-Related Disclosure Requirements for
Asset Managers. We will report on this work
during 2024, recognising the industry-wide
challenge with data availability and accuracy to
meet these requirements.
+
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/
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
ESG Ratings and Benchmarks
ESG ratings performance
We remain committed to enhancing our disclosures and
to engaging with industry-led initiatives intended to
support an effective and trusted ESG ratings market.
In 2023, Barclays continued engaging with key
ESG ratings agencies to provide clear and
consistent disclosures to our stakeholders.
Five of the ratings we track were unchanged, two
declined, and three improved.
The ESG ratings market is moving towards a
more regulated environment in the EU. Here in
the UK, an industry-led working group launched a
Code of Conduct for ESG ratings and data
product providers. Barclays supports the Code's
principles of transparency, good governance,
management of conflicts of interest, and robust
controls.
+ Please also refer to page 144 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 230 in Part 3
of the Annual Report.
Barclays PLC
Annual Report 2023 49
Select ESG ratings and benchmarks
MSCI ESG Rating
ISS QualityScore Environment
Scale (best to worst):
AAA to CCC
Barclays’ rating was stable
AA2022: AA
2021: AA
12022: 1
2021: 1
Scale (best to worst):
1 to 10
Barclays’ rating was stable
Sustainalytics ESG Risk Rating
ISS QualityScore Social
23.82022: 23.8
2021: 25.1
S&P Global CSA
59(90th
percentile)
Scale (best to worst):
0-100
Barclays’ rating was stable
Scale (best to worst):
100 to 0
Barclays’ rating and relative
performance declined
Scale (best to worst):
1 to 10
Barclays’ rating was stable
12022: 1
2021: 1
ISS QualityScore Governance
Scale (best to worst):
1 to 10
Barclays' rating improved
42022: 9
2021: 7
percentile)
th
2022: 75
(95
2021: 78
(92
nd
percentile)
CDP Climate Change
ISS ESG Corporate Score
Scale (best to worst):
A to D-
Barclays' rating declined
B2022: A-
2021: B
Scale (best to worst):
A+ to D
Barclays’ rating improved
C2022: C-
2021: C-
FTSE Russell ESG Rating
Moody’s ESG Solutions
Scale (best to worst):
5 to 0
Barclays’ rating was stable and relative
performance improved slightly
4.7(99th
percentile)
622022: 55
2021: 55
Scale (best to worst):
100 to 0 with advanced (>60)
Barclays’ rating improved
percentile)
th
2022: 4.7
(98
2021: 4.2
(92
nd
percentile)
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
ESG-related reporting and disclosures
ESG-related reporting
and disclosures
Barclays continues to support efforts for
enhanced ESG reporting and advocates for
consistency in approaches to disclosures, ratings
and benchmarks, including the work of the
International Sustainability Standards Board
(ISSB). We participate in a range of regional and
global industry efforts to promote increased
harmonisation in approaches to data,
taxonomies and 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/
+
Our ESG-related disclosures:
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.
+
home.barclays/sustainability/esg-resource-hub/reporting-
and-disclosures/
The Barclays PLC PRB Report 2023 can be found at:
TCFD-related reporting and
disclosures
Our climate-related financial disclosures are
included within this Annual Report. The majority
of the content can be found in Part 2 within the
Climate and Sustainability report in addition to
Part 3 within the Governance report and Risk
review sections of the report.
+ For further details on where to access our TCFD-related
disclosures, please see our Climate-related Financial
Disclosures Summary and Index on page 44.
Barclays PLC
Annual Report 2023 50
Our approach to ESG reporting is informed by
recognised external standards and frameworks. As
these frameworks evolve, we will continue to assess and
amend our approach to ESG disclosures appropriately.
ESG Additional Reporting Disclosures
KPMG LLP Limited Assurance
Barclays provides additional disclosures within
the ESG Resource Hub, including reporting with
reference to the material topics from the
Sustainability Accounting Standards Board
(SASB) and the Global Reporting Initiative (GRI).
ESG Data Centre
Within the ESG Resource Hub, our ESG Data
Centre continues to provide a central repository
of climate, sustainability, and ESG-related data
that is published within the Barclays PLC Annual
Report in addition to additional data points and
granularity.
+
The ESG Data Centre can be accessed online within our
ESG Resource Hub at: home.barclays/sustainability/esg-
resource-hub/reporting-and-disclosures/
Barclays appointed KPMG LLP to perform limited
independent assurance over selected ESG
content, 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.
+
home.barclays/sustainability/esg-resource-hub/reporting-
and-disclosures/
Further details on Limited Assurance can be found at:
Annual Report
• Taskforce for Climate-related
Financial Disclosures (TCFD)
Recommendations
• ESG-related disclosures
ESG-related
reporting
ESG data
resources
Other ESG
resources
Statements
and policy positions
Indices
• Principles for Responsible Banking
• ESG Data Centre
• ESG Investor Presentations
• ESG Resource Hub - Statements
• Global Reporting Index (GRI)
(PRB) Report
• 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
• Barclays' Transition
Finance Framework
and policy positions
• Sustainability Accounting Standards
Board (SASB)
• BlueTrack
Whitepaper
TM
• Corporate Transition Forecast Model
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Managing risk
Barclays PLC
Annual Report 2023 51
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.
Risk appetite
Three lines of defence
Monitoring the risk profile
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.
In 2023, the Conduct Risk Principal Risk was
renamed "Compliance Risk" and now
incorporates Conduct Risk as well as risks from a
failure to comply with laws, rules and regulations
applicable to the firm.
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
2023, the Group’s performance remained within
its risk appetite limits.
“The ERMF governs the way in which Barclays
identifies and manages its risks.”
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 proactively identifying,
communicating and providing legal advice on
applicable laws, rules and regulations. 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
compliance risks, as well as with respect to the
legal risks to which the Group is exposed.
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.
During 2023, Barclays ran a stress test to assess
its capital adequacy and resilience under a severe
but plausible macroeconomic scenario. This
stress test targeted risks such as inflation,
financial stress and a shock on demand; with
terminal low rates set to test the Group's
vulnerabilities through Net Interest Income (NII)
margin compression. The stress test outcome
for macroeconomic tests assesses our full
financial performance over the horizon of the
scenario in terms of profitability, capital, liquidity
and leverage to ensure the Group remains viable.
+
For further details of the stress test,
please refer to page 55.
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
+
management and risk performance, please see our full Risk
review on pages 254 to 372 of 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 2023 52
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.
Credit Risk teams identify, evaluate, sanction, limit and monitor various forms of credit exposure, individually and
in aggregate. The First Line delivers business plans and products within risk appetite and all limits set by the
Second Line, by maintaining detailed financial forecasts, applying controls and managing risks to which they are
exposed.
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.
Market Risk teams use a range of complementary approaches to identify and evaluate traded market risk
exposures. These risks are measured, limited and monitored by market risk specialists. The First Line conduct
trading activities within the risk appetite and all mandate & scale limits set by the Second Line.
Treasury and Capital risk is identified and managed by specialists in capital, liquidity and asset and liability
management teams. A range of risk management approaches are used such as limits plan monitoring and stress
testing.
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
1
arising as a result of second order impacts on portfolios of these two drivers.
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. The First Line delivers business plans and manages exposures within the climate risk appetite and
limits set by the Second Line. Climate risk controls are embedded across the financial and operational principal
risk types through the Barclays Group's frameworks, policies and standards.
Note:
1 Definition of climate risk amended as part of the update climate risk policy in 2023. See page 67 for further detail.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 53
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
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
The potential for adverse consequences from decisions based on incorrect or misused
model outputs and reports.
Compliance risk
The risk of poor outcomes for, or harm to, customers, clients and markets, arising from the
delivery of the Group’s products and services (also known as 'Conduct risk') and the risk to
Barclays, its clients, customers or markets from a failure to comply with the laws, rules and
regulations applicable to the Group (also known as Laws, Rules and Regulations Risk, 'LRR
Risk').
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.
Operational risks are managed in accordance with the Operational Risk Framework, owned and overseen by the
Second Line, and the standards within the Barclays Control Framework. The primary responsibility for the
management of operational risk rests within the business and functional units where the risk arises. Management
complete Risk and Control Self-Assessments to assess operational risks and the effectiveness of the controls
within processes. Identified risks, events and issues are escalated to senior management and the Board to
ensure timely notification and to agree the appropriate response.
The range of controls owned by First Line include: timely model identification, robust model development,
testing, documentation, annual assessment, and ongoing performance monitoring. The range of controls owned
by Second Line include: independent model validation, oversight over on-going model performance, and
execution of overall model risk governance covering oversight and reporting and escalation to appropriate
forums and committees.
The First Line are accountable for the overall assessment and management of compliance risks in their business
or function and are responsible for implementing the requirements outlined in the Compliance Risk Management
Framework (CRMF).
Compliance must oversee adherence to the CRMF and the management of compliance risk, and provide
independent Second Line of Defence oversight to all Barclays businesses, providing advice and challenge where
appropriate.
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 applicable laws, rules and regulations or contractual requirements or to assert or
defend its intellectual property rights.
Legal risk is managed by the identification and management of legal risks by the legal function and the escalation
of legal risk as necessary. The Group’s businesses and functions have responsibility for engagement of the Legal
function in situations that have the potential for legal risk,
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Viability statement
Consideration
of the long-term viability
of Barclays
Barclays PLC
Annual Report 2023 54
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 2024. 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 51 to 53)
▪ 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 Stress Test (ILST), regulatory
Liquidity Coverage Ratios (LCR) and Net
Stable Funding Ratios (NSFR)
▪ 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 25 to the financial statements on pages
470 to 474.
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
258 to 271 .
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.
Barclays PLC
Annual Report 2023 55
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
Viability statement (continued)
These particular risks include:
▪
the potential impact of increased recession
risk heightened by the turbulent geopolitical
outlook and volatile market conditions
▪
▪
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 penalties, damages or 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 the Group continues
to evaluate and take steps to appropriately adapt
its 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 H2 2023, targets risks such as
inflation, financial stress and a shock on demand;
with terminal low rates set to test Barclays’
vulnerabilities through NII margin compression:
• severe UK recession (GDP low point -4.5%)
brought by falling household real incomes, job
losses leading to 8.3% unemployment rate,
declining economic confidence and tight
financial conditions. Other major economies
experience very similar shocks
• high interest rates (peak 8.5% UK, 8.5% US)
lead to additional stress in banking and non-
banking sectors. As financial conditions
tighten, central banks rapidly reverse policy
and low interest rates persist (1% UK, 1.5%
US) to stimulate the economy and avoid an
even worse outcome
• inflation, after a short-term spike (UK 10.4%,
US 8.1%), begins to reduce towards the end of
2025 gradually falling to 2% in the outer year
forecast horizon. The short-term affordability
pressures on customers ease as interest rates
and inflation falls
• residential house prices in the UK decline 33%
while in the US commercial real estate prices
fall 45%, reflecting the contagion effects from
the financial markets.
The stress test outcome for macroeconomic
tests assesses our full financial performance
over the horizon of the scenario in terms of
profitability, capital, liquidity and leverage to
ensure we remain viable.
In addition to a macroeconomic internal stress
test, a climate internal stress test was run this
year and presented to the Board Risk Committee
for approval. See page 176. The exercise
confirmed the Bank is financially resilient to
climate risks. Refer to the 'scenario analysis'
section in page 131 for the key learnings from
the climate internal stress test.
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 the ILST 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
information
Shareholder information
Annual General Meeting (AGM)
Location
SEC (Scottish Event Campus) Armadillo,
Exhibition Way, Glasgow G3 8YW
And electronically on an online platform
Date
Thursday, 9 May 2024
Time
11.00am
The arrangements for the Company’s 2024 AGM
and details of the resolutions to be proposed,
together with explanatory notes and how to
attend the meeting, will be set out in the Notice
of AGM to be published on the Company’s
website (home.barclays/agm).
Key dates
1 March
2024
Full year dividend record date
3 April
2024
Full year dividend payment date
25 April
2024
Q1 2024 Results Announcement
9 May
2024
Annual General Meeting at
11.00am
Barclays PLC
Annual Report 2023 56
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 on
the next page.
Dividends
The Barclays PLC 2023 full year dividend for the
year ended 31 December 2023 will be 5.30p per
share, making the 2023 total dividend 8.00p per
share.
Dividend Reinvestment 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.
Share price Information on the Barclays share
price and other share price tools are available at:
home.barclays/investorrelations
+ Further details regarding the DRIP can be found at
home.barclays/dividends
and shareview.co.uk/info/drip
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
information
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,
£75,452.72 was donated in 2023, taking the total
donated since 2017 to over £336,200.
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 two
easy steps:
Step 1 Go to portfolio.shareview.co.uk
Step 2
Register for electronic
communications by following the
instructions on screen
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 2023, 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 £32,000 to our
shareholders, in addition to the approximately
£5.0m returned since 2015.
Useful contact details
Registrar
Holders of ordinary shares
The Barclays share register is maintained by
Equiniti. If you have any questions about your
Barclays shares, please contact Equiniti:
By phone:
+ 44 (0)371 384 2055
(UK & International telephone number)
+44 (0)371 384 2255
(for the hearing impaired in the UK
and international)
Note: Lines open 8.30am to 5.30pm (UK time)
Monday to Friday, excluding public holidays.
Visit online:
shareview.co.uk
By post:
Aspect House
Spencer Road, Lancing, West Sussex
BN99 6DA
To find out more, contact Equiniti or visit:
home.barclays/dividends
Alternative formats
Shareholder documents can be provided in
large print, audio CD or Braille free of charge
by calling Equiniti.
+44 (0)371 384 2055
(UK and International telephone number)
Barclays PLC
Annual Report 2023 57
Holders of 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 your Barclays
ADRs, please contact Shareowner Services:
By email:
StockTransfer@equiniti.com
Visit online:
adr.com
By phone:
+1 800 990 1135 (toll free in the US and Canada)
+1 651 453 2128 (outside the US and Canada)
By post:
Shareowner Services,
PO Box 64504, St Paul, MN 55164-0504, USA
Delivery of ADR certificates and overnight mail:
By post:
Shareowner Services,
1110 Centre Point Curve, Suite 101, Mendota
Heights, MN 55120-4100, USA
Qualifying US and Canadian resident ADR
holders should contact Shareowner Services
for further details regarding the DRIP.
Shareholder Relations
If you have any questions for Barclays about
your shareholding, please contact:
By email:
privateshareholderrelations@barclays.com
By post:
Shareholder Relations
Barclays PLC, 1 Churchill Place, London,
E14 5HP
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
information
Barclays PLC
Annual Report 2023 58
Important Information
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,
business strategy, income levels, costs, assets
and liabilities, impairment charges, provisions,
capital leverage and other regulatory ratios,
capital distributions (including policy on dividends
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),
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, regulations, governmental and
regulatory policies, expectations and actions,
voluntary codes of practices and the
interpretation thereof, changes in International
Financial Reporting Standards 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 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, pandemics
and similar events beyond the Group’s control;
the impact of competition in the banking and
financial services industry; capital, liquidity,
leverage and other regulatory rules and
requirements 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;
reforms to benchmark interest rates and indices;
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 conflicts in Ukraine and the Middle East on
European and global macroeconomic conditions,
political stability and financial markets; political
elections; developments in the UK’s relationship
with the European Union (EU); the risk of
cyberattacks, information or security breaches,
technology failures or other operational
disruptions and any subsequent impacts 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. In setting
its targets and outlook for the period 2024-2026,
Barclays has made certain assumptions about
the macro-economic environment, including,
without limitation, inflation, interest and
unemployment rates, the different markets and
competitive conditions in which Barclays
operates, and its ability to grow certain
businesses and achieve costs savings and other
structural actions. 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 beginning on page 258 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.
Climate and Sustainability report
The Climate and Sustainability report forms Part 2 of the Barclays PLC 2023 Annual Report.
Parts 1, 2 and 3 together comprise Barclays PLC's annual accounts and report for the purposes
of Section 423 of the Companies Act 2006.
TCFD Strategy Recommendation A
TCFD Strategy Recommendation B
TCFD Strategy Recommendation C
Describe the climate-related risks and
opportunities the organisation has identified
over the short, medium, and long term.
Describe the impact of climate-related risks and
opportunities on the organisation’s businesses,
strategy, and financial planning.
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
66
67
70
Implementing our Climate Strategy
Achieving net zero operations
Operational footprint dashboard
All other narrative
Reducing our financed emissions
BlueTrack
dashboard
TM
All other narrative
Financing the transition
Sustainable finance dashboard
All other narrative
Working with our clients
Embedding climate and sustainability into our
business
Just transition and nature and biodiversity
Engaging with industry
Barclays' approach to public policy
Resilience of our strategy
Scenario analysis
Barclays’ resilience to climate scenarios
Climate stress tests
2023 Enhancements and beyond
Challenges and limitations
Macro-dependencies and objectives
Important information/disclaimers
130
131
132
132
134
135
136
137
72
73
75
76
80
88
89
101
103
104
107
121
124
126
129
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays’ climate strategy
A strategy for a better
financial future
Barclays’ climate strategy
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 operational
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
Barclays PLC
Annual Report 2023 60
Our climate strategy is driven by consideration of relevant
risks and opportunities and in alignment with our Purpose:
working together for a better financial future for our
customers, clients and communities.
We have a clear shareholder endorsed climate
strategy to achieve our ambition of being a net zero
bank by 2050, by achieving net zero operations,
reducing our financed emissions and financing the
transition.
We are committed to achieving net zero operations
and have continued to make progress, achieving a
Δ
51%
reduction of Scope 1 and 2 location-based
greenhouse gas emissions milestone ahead of
Δ
schedule. We continued to source 100%
renewable electricity for our global real estate
portfolio and met our 90% Scope 1 and 2 market-
based emissions reduction target – reducing these
Δ
.
emissions by 93%
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 emissions reduction targets
for eight of the highest-emitting sectors in our
portfolio: Energy, Power, Cement, Steel,
Automotive manufacturing, Aviation, Agriculture
and Commercial Real Estate; and have assessed
the baseline and convergence point for our UK
Housing portfolio. This meets our commitment
under the NZBA to set targets for material high-
emitting sectors in our portfolio.
Our 2030 target-setting includes the integration of
o
1.5
C aligned scenarios, such as the IEA Net Zero
2050 scenario, in our financed emission targets,
and includes ranges for certain sectors to reflect
dependencies outside our control that will
determine how quickly our financed emissions can
be reduced in these sectors.
This year, we have further extended the scope of
our calculations to cover the full in-scope balance
sheet financed emissions, largely aligned to the
PCAF Standard. We used our 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™.
Capital is critical for a successful energy transition
and we are focusing our financing to those clients
actively engaged in the energy transition.
The scale of our business gives us the opportunity
to help finance the energy transition – to use our
global reach, products, expertise and position in the
global economy to work with our clients, including
those in the Energy sector, as they transition to a
low-carbon business model.
To reduce reliance on fossil fuels the world needs to
accelerate and scale the supply and capacity of
renewables and climate tech solutions that will help
to decarbonise high-emitting activities. The Climate
Policy Initiative estimates that this requires at least
1
$4.3trillion of climate finance a year by 2030
.
Notes:
Δ 2023 data subject to independent limited assurance under ISAE
(UK)3000 and ISAE 3410. Current limited assurance scope and
opinion can be found within the ESG Resource Hub:
home.barclays/sustainability/esg-resource-hub/reporting-and-
disclosures/
1 Climate Policy Initiative - Global Landscape of Climate Finance:
A Decade in Data climatepolicyinitiative.org/wp-content/
uploads/2022/10/Global-Landscape-of-Climate-Finance-A-
Decade-of-Data.pdf
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays’ climate strategy (continued)
Barclays is committed to help finance the energy
transition, In 2022 we set a target to facilitate $1trn
of Sustainable and Transition Financing between
2023 and the end of 2030.
Δ
of
During 2023, we facilitated $67.8bn
sustainable and transition financing. $67.4bn was
Δ
sustainable financing and $0.4bn
was transition
financing that qualified against our new
Transition Finance Framework.
We are also focused on investing and scaling the
climate tech – hydrogen, carbon capture,
batteries, amongst others – needed by society
and our clients to transition, generate economic
growth and create a new wave of green jobs. To
support this, we have a mandate to invest up to
£500m of Barclays’ own capital by the end of
2027 and we have invested £138m into 21
innovative companies to date.
An important lever for reducing our financed
emissions is our policy. In February 2024, we
updated our Climate Change Statement with
new restrictions on financing upstream oil and
gas, including unconventional oil and gas and
additional Enhanced Due Diligence (EDD)
requirements for biomass.
Fossil fuels are still required for many essential
activities – including electricity generation,
transport and heating. In the International Energy
Agency NZE scenario, new long lead time
upstream oil and gas projects are not required on
a 1.5°C-aligned pathway. For current and future
(declining) global demand to be satisfied,
investment is needed to support existing assets,
2
while clean energy is scaled
. Barclays
understands the critical importance of energy
being secure, reliable and affordable for our
customers and clients.
Barclays will continue to support an energy
sector in transition, focusing on the diversified
energy companies investing in low carbon and
with greater scrutiny on those engaged in
developing new oil and gas projects.
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 to a low carbon economy.
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.
The energy companies unable or unwilling to
reduce their emissions or play a role in the energy
transition may find it increasingly difficult to
access financing from Barclays.
We are committed to continuing the work we
began in 2020. Our climate strategy will continue
to evolve and adapt in light of the rapidly
changing environment and the need to support
governments and clients, in our efforts to meet
our ambition of being a net zero bank by 2050.
Notes:
Δ 2023 data subject to independent limited assurance under ISAE
(UK) 3000 and ISAE 3410. Current limited assurance scope and
opinion can be found within the ESG Resource Hub:
home.barclays/sustainability/esg-resource-hub/reporting-and-
disclosures/
2 International Energy Agency - Net Zero Roadmap, 2023 Update
iea.blob.core.windows.net/
assets/9a698da4-4002-4e53-8ef3-631d8971bf84/
NetZeroRoadmap_AGlobalPathwaytoKeepthe1.5CGoalinReach
-2023Update.pdf
+ Please see the Barclays Climate and Sustainability report
from page 60 for further details on Barclays' ambition to be
a net zero bank.
Barclays' climate, sustainability, and ESG-related data,
targets and progress can be found within the ESG Data
Centre within our ESG Resource Hub.
Further details on our BlueTrackTM methodology can be
found within our Financed Emissions Methodology
paper (published in 2024) accessible at: home.barclays/
sustainability/esg-resource-hub/reporting-and-
disclosures/
Barclays PLC
Annual Report 2023 61
Collaborating with the Transition Plan Taskforce
The Transition Plan Taskforce (TPT) was launched by HM Treasury in March 2022 with a mandate
to bring together leaders from industry, academia, and regulators to develop good practice for
transition plan disclosures for the finance sector and the real economy. Barclays participated in a
number of working groups for the TPT, including inputting into the Banks Sector Guidance – which
adds further depth and detail for preparers of transition plans operating in the banking sector.
Barclays contributed to the development of the additional guidance, sharing its views on particular
nuances of transition planning for banks – including the incorporation of nature and just transition
elements. The guidance was published for consultation in October 2023, with Barclays
participating in the launch event.
Further details can be found at:
+
transitiontaskforce.net/wp-content/uploads/2023/11/TPT-Banks-Sector-
Guidance.pdf
Our approach to TPT disclosures
Over 2023, Barclays participated in a number of working groups of the Transition Plan Taskforce
(TPT), supporting the development of its framework for transition plan disclosures. We are
developing our approach to the TPT’s recommendations, taking into account relevant guidance
as it develops, and elements of the TPT’s Disclosure Framework (including the Implementation
Guidance and draft Banks Sector Guidance) are addressed in our climate related disclosures
included in this Annual Report. During 2024, we will look to further develop elements of our climate
disclosures including transition planning. This will be reflected in future disclosures, as we work
towards publishing our own transition plan.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays’ climate strategy (continued)
Barclays PLC
Annual Report 2023 62
Our strategy, selected targets
and progress
The table below sets out selected targets and policies we
have previously announced, progress against them,
as well as new announcements as of the publication of
this Annual Report.
Strategic pillar
Previously Announced Target/Policy
Progress
New Announcement
By end 2025
Energy
1Achieving
net zero
operations
• 100% renewable electricity sourcing for our global real
100%
Δ
sourced
estate portfolio by end of 2025
2023 performance
We are working towards the following milestones
N/A
N/A
Reduction of GHG
emissions
• 90% reduction in Scope 1 and 2 GHG emissions
(market-based, against a 2018 baseline)
Δ
reduction
-93%
By the end of 2030
Cumulative change
By the end of 2030
2Reducing
our financed
emissions
Portfolio reduction
targets/
convergence point
1
Energy
1
Power
1
Cement
1
Steel
Automotive
1
manufacturing
1
UK Housing
• 40% reduction in absolute CO2e emissions against
Δ
MtCO2e (Scopes 1, 2 & 3)
a 2020 baseline of 75.4
• 50-69% reduction in CO2e emissions intensity against
Δ
kgCO2e/MWh (Scope 1)
a 2020 baseline of 326
• 20-26% reduction in CO2e emission intensity against
Δ
tCO2e/t (Scopes 1 & 2)
a 2021 baseline of 0.626
• 20-40% reduction in CO2e emissions intensity against
Δ
tCO2e/t (Scopes 1 & 2)
a 2021 baseline of 1.945
-44%
-26%
-8%
-16%
• 40-64 % reduction in CO2e emissions intensity against
Δ
gCO2e/km (Scopes 1, 2 & 3)
a 2022 baseline of 174.8
0%
N/A
N/A
N/A
N/A
N/A
• Convergence point: 40% reduction in CO2e emissions
Δ
2
intensity against a 2022 baseline of 32.0
kgCO2e/m
(Scopes 1 & 2) for formerly UK Residential Real Estate
UK Commercial Real
estate
UK Agriculture -
Livestock & Dairy
Aviation
N/A
N/A
N/A
+1%
N/A
N/A
N/A
• Convergence point: 40% reduction in CO2e emissions intensity against a 2023 baseline
Δ
2
of 32.1
(Scopes 1 & 2) for expanded scope covering social housing and
kgCO2e/m
business banking real estate
Δ
2
kgCO2e/m
• 51% reduction in CO2e emissions intensity against a 2023 baseline of 30.0
(Scopes 1 & 2)
Δ
MtCO2e
• 21% reduction in absolute CO2e emissions against a 2023 baseline of 2.4
(Scopes 1, 2 & 3)
Δ
gCO2e/
• 11-16 % reduction in CO2e emissions intensity against a 2023 baseline of 882
RTK (Scopes 1 & 3)
Notes:
Δ 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. Current 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 Reported values marked with Δ have been re-baselined in the current year.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays’ climate strategy (continued)
Barclays PLC
Annual Report 2023 63
Strategic pillar
Previously Announced Policy New Announcements1
Project level restrictions
Entity level restrictions
Upstream Oil & Gas N/A
2Reducing
our financed
emissions
2
Restrictive policies
From 9 February 2024:
• We will not provide project finance for expansion projects
or for infrastructure projects primarily to be used for
such expansion projects.
• We will not provide other direct financing to Energy
Groups for expansion projects or infrastructure projects
primarily to be used for such expansion projects.
From 9 February 2024:
• We will not provide financing to new clients that are Energy Groups where more than
10% of their total planned oil & gas capital expenditure is in expansion.
By 1 January 2025:
• We expect all Energy Groups to be producing relevant information in relation to
their transition plans or decarbonisation strategies.
From 1 January 2025:
• Any new financing or renewal of existing financing for Non-diversified Groups where
more than 10% of their total planned oil & gas capital expenditure is in long-lead
expansion would be by exception.
From 1 January 2026:
• We will only provide financing to Energy Groups if they are able to demonstrate that
they are committed to reducing their own emissions by having:
– net zero-aligned near-term Scope 1 and 2 emissions reduction targets (absolute
or intensity-based); and
– targets to reduce methane emissions by 2030, aligned with OGCI, OGMP2.0 or
similar industry guidance; and
– a commitment to end all routine / non-essential venting and flaring by 2030.
Unconventional Oil
& Gas
• Existing project and entity level
restrictions on unconventional oil &
gas (including Arctic Circle oil & gas,
Hydraulic Fracturing and Oil Sands)
remain in place.
From 9 February 2024:
• We will not provide direct financing to Energy Groups for
any oil & gas projects in the Amazon Biome, or any oil &
gas projects involving Ultra-Deep Water and/or Extra
Heavy Oil, or infrastructure projects primarily to be used
for such oil & gas projects.
From 30 June 2024:
• We will not provide financing to Energy Groups whose aggregate share of
production in Oil Sands, Extra Heavy Oil, Hydraulic Fracturing in the UK/EU, and Arctic
Circle oil & gas exceeds 20% of their total oil & gas production.
• We will not provide financing to Clients engaged in exploration, appraisal,
development, and production of oil & gas in the Amazon Biome.
Thermal Coal
Mining
• Existing project and entity level
restrictions on thermal coal mining
remain in place.
Thermal Coal
Power
• Existing project and entity level
restrictions on thermal coal-fired
power remain in place.
From 9 February 2024:
• No project finance for greenfield development or
material expansion of thermal coal mines anywhere in the
world, including captives. (Note: this was an update to an
existing restriction to include captives)
• No project finance for development of infrastructure
projects primarily to be used for thermal coal mines
anywhere in the world.
From 9 February 2024:
• No project finance to enable construction or material
expansion of thermal coal-fired power plants anywhere
in the world, including captives. (Note: this was an
update to an existing restriction to include captives)
Notes:
1 For details on the exact scope and application of these restrictions please refer to the Climate Change Statement found at: home.barclays/sustainability/esg-resource-hub/statements-and-policy-positions/
2 Words in italics are defined in the Climate Change Statement found at: home.barclays/sustainability/esg-resource-hub/statements-and-policy-positions/
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays’ climate strategy (continued)
Barclays PLC
Annual Report 2023 64
Strategic pillar
Previously Announced Target/Policy
Previously Announced Target
3Financing
the transition
Sustainable financing
• Facilitate $1trn of Sustainable and Transition Financing
between 2023 and end of 2030
• Facilitate £100bn of green financing between 2018 and
2030
Progress
2023 performance
Δ
• $67.8bn
Δ
Δ
)
(Cumulative performance: £113.7bn
• £25.9bn
Sustainable Impact
Capital
•
Increase mandate to invest up to £500m of Barclays'
capital in global climate tech start-ups by the end of 2027
• £49.49m (£138.4m invested by the end of 2023)
Δ 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. Current limited assurance scope and opinions can be found within the ESG Resource Hub: home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays’ climate strategy (continued)
Climate Action Roadmap
Barclays PLC
Annual Report 2023 65
Barclays has been taking action on climate change for a number of years. The below roadmap highlights key targets, actions and policies relating to achieving net zero operations, reducing our financed
emissions and financing the transition. These are key milestones on the way to achieving our ambition to be a net zero bank by 2050.
• Announced 2025 £150bn
social and environmental
financing target and 2030
£100bn green financing
target
• One of the first UK banks
to launch a 'Green
Home Mortgage'
• Announced targets to reduce
operational emissions by
80% and procure 90%
4
renewable energy by 2025
• Announced ambition
to be a net zero bank by 2050
• Launched BlueTrack™
with 2025 Energy and
6
Power targets
• Launched £175m
8
Sustainable Impact Capital
initiative
• Announced 2030 Energy,
Power, Cement and
6
Steel targets
• Announced $1tn Sustainable
and Transition Financing
8
target and increased SIC
mandate to invest up to
£500m
• Announced new operational
emissions and electricity
4
sourcing targets
• Elevated Climate risk to
a Principal Risk
• Held a ‘Say on Climate’
advisory vote
• Updated Climate Change
Statement with new
financing restrictions for
3
upstream oil and gas
• Announced 2030 targets for
Agriculture, Commercial
Real Estate, and Aviation,
and updated scope for
7
UK Housing
convergence
6
and EPC ambition
point
• Estimated full in-scope
balance sheet financed
emissions using
methodology developed
11
10
using PCAF
Standard
• Minimum requirements for
Scope 1 and 2 targets,
methane abatement and
venting/flaring for Energy
3
Groups will come into effect
• All financing
to thermal coal
mining or coal-fired power
generation clients will be
3
phased out
Pre-
2018
2018
2019
2020
2021
2022
2023
2024
2025
2026
2030
2035
2050
• Joined Paris Pledge
for Action in 2015
• Signed statement of
1
support of the FSB’s
2
in 2017
TCFD
5
pilot
• Joined PACTA
• Published Climate Change
3
setting
Statement
out restrictions for
sensitive sectors
Notes:
• Founding member of
9
the NZBA
• Exceeded target to
facilitate £150bn of social,
environmental and
sustainability-linked
financing by 2025
• Exceeded 2025 operational
emissions and energy
4
targets
• Announced 2030 Autos target,
convergence point for UK
7
and ambition for
Housing
50% of mortgages to have
6
EPC C or better by 2030
• Expanded our net zero
operations approach and
announced new operational
4
milestones
• Exceeded target to
facilitate £100bn of green
financing by 2030
• Financing restrictions came
into effect for certain
thermal coal mining, coal
3
power and oil sands clients
• NZ ambition
• Tightened financing
restrictions for coal-fired
power generation clients will
3
come into effect
• Transition plan expectations
for Energy Groups will come
3
into effect
• Financing
to thermal coal
mining or coal-fired power
generation clients in the EU
and OECD will be phased
3
out
• Financing to clients with >10%
revenue from thermal coal
mining or coal-fired power
generation in the RoW will be
3
restricted
1 Financial Stability Board | 2 Taskforce on Climate-related Financial Disclosures | 3 See our Climate Change Statement updated in February 2024 for further details including on scope and definition | 4 See section on Net Zero Operations | 5 Paris Agreement Capital Transition
Assessment | 6 See section Reducing our financed emissions | 7 Originally called Residential Real Estate, updated in 2024 | 8 Sustainable Impact Capital | 9 Net-Zero Banking Alliance | 10 Partnership for Carbon Accounting Financials | 11 PCAF Standard - PCAF (2022). The
Global GHG Accounting and Reporting Standard Part A: Financed Emissions. Second Edition.
Risk and opportunities
TCFD Strategy Recommendation A:
TCFD Strategy Recommendation B:
TCFD Strategy Recommendation C:
Describe the climate-related risks and
opportunities the organisation has identified over
the short, medium, and long term.
Describe the impact of climate-related risks and
opportunities on the organisation’s businesses,
strategy, and financial planning.
Risks and opportunities
Risks
Opportunities
66
67
70
Implementing our climate strategy
Achieving net zero operations
Operational footprint dashboard
All other narrative
Reducing our financed emissions
BlueTrack
dashboard
TM
All other narrative
Financing the transition
Sustainable finance dashboard
All other narrative
Working with our clients
Embedding climate and sustainability into our
business
Just transition and nature and biodiversity
Engaging with industry
Barclays' approach to public policy
Describe the resilience of the organisation’s
strategy, taking into consideration different
climate-related scenarios, including a 2°C or
lower scenario.
Resilience of our strategy
Scenario analysis
Barclays’ resilience to climate scenarios
Climate stress tests
2023 Enhancements and beyond
Challenges and limitations
Macro-dependencies and objectives
Important information/disclaimers
130
131
132
133
134
135
136
137
72
73
75
76
80
88
89
101
103
104
107
121
124
126
129
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 67
Risk and opportunities
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 risks. Climate risk is a
Principal Risk within the Barclays Enterprise
Risk Management Framework.
Barclays faces exposure to climate-related risks
either directly through its operations and
infrastructure or indirectly through its financing
and investment activities. The two main
categories of climate-related risks are physical
risks and transition risks.
Physical risks
Physical risks result from a changing climate and
can be event-driven (acute risks), including
increased frequency and/or severity of extreme
weather events such as cyclone, hurricanes and
flooding. Physical risks can also be driven by
longer-term shifts in climate patterns (chronic
risks) from sustained higher temperatures,
leading to rising sea levels, rising mean
temperatures and more severe weather events.
Transition risks
Transition risks result from the transition to a
lower-carbon economy. This is likely to involve
significant, rapid policy, regulatory and legal
changes, as well as the evolution of technology
and markets to adapt to a changing climate and
associated impacts.
Time horizons
The impact of physical and transition risks can be
significant and widespread, affecting Barclays'
portfolio and financial performance over short-,
medium- and long-terms horizons.
In the short term, physical risks arising from
extreme weather events and climate-related
disasters pose a direct threat to Barclays'
physical assets and infrastructure. This can
potentially result in immediate losses, increased
costs for repair and higher insurance premiums.
Similarly, acute events may also potentially
damage the physical facilities of Barclays' clients
or cause business disruptions, which may
adversely impact the value of clients' assets,
reduce their profitability and subsequently lead
to potential increase in credit risk for Barclays.
Additionally, operations in regions prone to high
physical risks may also experience higher
insurance premiums or limited insurance
coverage.
Transition risks are expected to occur in all
timeframes, but more broadly over the medium
term. The cost of transitioning to cleaner
technologies and sustainable business practices
may strain the financial resources of businesses,
affecting profitability and long-term viability.
Financial institutions like Barclays could also face
significant increases in costs and resources
allocated to adhere to new policies, laws and
regulations aimed at transitioning to a lower-
carbon economy. This in turn may lead to higher
conduct and operational risks to Barclays. At an
individual level, there may be challenges related
to employment opportunities as businesses
transition away from carbon-intensive practices.
This in turn may impact the creditworthiness of
Barclays' clients and their ability to repay loans.
Transition risks aimed at mitigating climate
change can also impact the profitability and value
of assets in Barclays' portfolio, particularly those
linked to carbon-intensive industries. Companies
perceived as slow to adapt or unresponsive to
environmental concerns may face reputational
damage or legal actions leading to decreased
customer trust and investor support.
With escalating concerns and heightened global
awareness of climate risks, it is likely that litigation
linked to these risks will increase. Additionally,
Barclays may face greater scrutiny of the type of
business it conducts – including in the form of
adverse media coverage and an increase in
climate-related litigation cases. This in turn may
adversely impact customer demand for Barclays'
products, returns on business activities, value of
assets and trading positions, resulting in higher
impairment charges.
Looking to the longer term, the cumulative
effects of global temperature rise are likely to
become increasingly pronounced – influencing
ecosystems, sea levels and societal structures.
Climate change can also trigger tipping points
through feedback loops that amplify its effects.
Certain tipping points are already underway,
manifesting in observable changes across the
globe. Different tipping elements, such as the
melting of ice sheets or changes in ocean
circulation, have varying time horizons. As the
science develops, we are observing that some
tipping points may run on a shorter timeline than
initially expected. Accordingly, the uncertainty of
exact timeframes in which such tipping points are
expected to materialise adds a layer of
complexity – making it challenging to precisely
predict when impacts will materialise.
When considering the timescales of climate-
related risks, Barclays has categorised short,
medium and long term as follows:
• Short term (S): 0-1 year
• Medium term (M): 1-5 years
• Long term (L): 5-30 years.
The short-term timescale coincides with the
short-term plan for annual budgets and granular
financial plans. The medium term coincides with
the five-year financial, capital and funding plans.
Climate change as a driver of risk
The feedback effects of climate risk drivers
through macro and micro transmission channels
are observed in Barclays' portfolio through
traditional risk categories such as credit risk,
market risk, treasury and capital risk, operational
risk and reputational risk. The approach to
identifying, measuring and managing climate-
related risks is consistent with other key risks,
however there remains significant uncertainty
around when these risks will materialise.
Climate risk is integrated into the broader
Enterprise Risk Management Framework,
aligning with other Principal Risks and ensuring a
holistic approach to risk identification,
assessment and management. Barclays' Climate
Risk Framework facilitates a structured
integration of climate risk considerations into the
Bank's operations. It undergoes regular reviews
and updates – including changes to risk
taxonomy, definitions and methodology – to align
with changing regulatory expectations and
external developments. Following the annual
review of the Climate Risk Framework in 2023,
Barclays no longer considers that a separate
category is needed to capture second-order
impacts of physical and transition risk, as these
impacts are already being captured and managed
within the existing assessments and framework.
Therefore, connected risks no longer features as
a separate category.
The potential impacts of physical and transition
risk drivers will vary across Barclays' portfolios
depending on composition, industry, geographic
location, business operations and other
contextual factors.
The tables below set out the example drivers,
example potential impacts and expected time
horizons of various physical and transition risks.
Further details on how Barclays manages climate risk can be
+
found on pages 272 to 276.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Risk and opportunities (continued)
Barclays PLC
Annual Report 2023 68
TCFD Strategy Recommendation (a)
Transition risks
Example drivers
Example potential impacts
Expected time horizons
Physical risks
Example drivers
Policy and legal
Reputation
Technology
Market
• Carbon tax impacting sectors and clients
•
• Enhanced GHG reporting obligations
• Government and non-governmental
organisations taking litigation actions
Increased stakeholder concern or
negative stakeholder feedback
• Shifts in consumer preferences
• Stigmatisation of sectors
• Disruptive substitute technologies being
• Changes in supply and demand of raw
favoured because of lower carbon
footprint
• Development of emissions capture and
recycling facilities
•
Investments in new technologies
materials
• Uncertainty in market signals
• Changing market sentiment
•
Increased operating costs for compliance
or due to fines from regulators or
damages from litigation
• Write-offs and early retirement of assets
due to policy changes
• Changes in asset valuations
•
Increased costs and reduced demand for
products and services
• Write-offs and early retirement of assets
• Research and development expenditure
• Decreased production capacity due to
poor employee attraction and retention
in new technologies
• Costs for adoption of new practices and
• Reduction in capital availability
processes
•
•
Increased costs and reduced demand for
products and services
Increased production costs due to changing
input prices and output requirements
• Decreased revenue and repricing of assets
S, M, L
Acute
Chronic
• Damage to fixed assets and infrastructure (e.g. property, power supplies) by wildfires
• Change in weather and precipitation patterns resulting in reduced agricultural yields and
• Adverse impact on agriculture and production of soft commodities due to drought
• Transport difficulties and damage to infrastructure due to severe storm and flooding
land no longer suitable for farming
• Potential population migration due to uninhabitable land
Example potential impacts
•
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 horizons
S, M, L
M, L
Barclays PLC
Annual Report 2023 69
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Risk and opportunities (continued)
TCFD Strategy Recommendation (a)
i
Building our understanding of nature-related risk
i
Nature-related risks arise from an organisation's
dependencies and impacts on nature. These risks
can be physical risks and transition risks, which in
1
.
turn can present financial risks
As such, this year we have undertaken further work
to develop our understanding of nature-related
risks and how these relate to different industry
sectors. Building on last year's heatmap analysis, we
have updated our approach using publicly available
data and explored a wider set of impacts and
dependencies. This work has been designed to help
build our understanding of the material nature-
related impacts, dependencies, risks and
opportunities within priority industry sectors, and
indicate where we might focus further analysis, as
we continue to build our nature related assessment
and decision-making capabilities.
Through this work, we have developed an updated
heatmap by mapping industry classification codes
and the associated qualitative nature-related
2
impact and dependency ratings from ENCORE
3
and SBTN
to Barclays' internal sector
classifications. The mapping was undertaken for
sectors with material impacts and dependencies as
identified by TNFD in its Guidance for Financial
4
.
Institutions
We then undertook an exploratory exercise which
highlighted in which of these industry sectors
particular nature-related impacts and
dependencies are most likely to occur.
This work created a heatmap with ratings
representing an average global view of the
potential impacts and dependencies that may
be associated with the direct operations of
companies in these sectors.
The preliminary heatmap analysis highlighted
that, for most of the priority industry sectors,
there are a number of potential impacts and
dependencies rated as high or very high,
including impacts related to land-use change,
water use and pollution, as well as
dependencies on ecosystem services such as
ground and surface water, climate regulation
and flood-storm protection. These insights will
be used to help inform our future analysis,
taking into account that this represents one
data source, and specific nature related risks
within the same sector might vary substantially
from company or project and an aggregated
heatmap is not necessarily representative of
the actual impacts and dependencies of
Barclays’ client base.
Our proposed next steps include building on
the TNFD LEAP pilot undertaken in 2022/2023
to conduct further sector-level analysis, taking
into account the results of the heatmap,
Barclays’ exposure and client base and
emerging thinking on impact and risk data and
methodologies.
Notes:
1 Source: tnfd.global/wp-content/uploads/2023/08/Recommendations_of_the_Taskforce_on_Nature-
related_Financial_Disclosures_September_2023.pdf?v=1695118661
2 ENCORE stands for Exploring Natural Capital Opportunities, Risks, and Exposure and is a tool developed by Global Economy, UNEP-FI, and UNEP-
WCMC.
3 SBTN stands for Science Based Targets Network and builds on the momentum of the Science Based Targets initiative helping companies set
science-based targets for nature.
4 Source: tnfd.global/wp-content/uploads/2023/08/Guidance_for_Financial_Institutions_v1.pdf
Nature-related data, models and methodologies are a nascent area and therefore evolving and reliant on externally sourced data mapped to
internal sector identifiers, with various limitations. We will continue to review the applied data, models, and methodologies, as such the results
of similar assessments are likely to change in the future.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 70
Risk and opportunities (continued)
TCFD Strategy Recommendation (a)
Climate-related opportunities
identified over the short, medium
and long term
Barclays has enhanced its focus on sustainable
and transition finance over the last two years.
At the end of 2022, we announced a new target
to facilitate $1trn of Sustainable and Transition
Finance. This followed a review of the financing
requirements arising from the global transition
to a low-carbon economy if the world is to
avoid the worst effects of climate change and
the potential addressable market for Barclays.
During 2023 we built on this work to develop a
Group-wide sustainable finance strategy to
operationalise our ambition.
The market opportunity
We recognise the opportunities arising from the
global transition to a low-carbon economy –
which will involve scaling up zero or near-zero
emitting technologies and businesses and
supporting emissions reductions in high-emitting
and hard-to-abate sectors if the world is to avoid
the worst effects of climate change.
In 2022, we completed a review of the market
and identified three medium-term thematic
areas of potential opportunity for Barclays, as
outlined below. Although markets may have
evolved during 2023 we believe these still
represent growth opportunities for Barclays.
Energy Transition Finance
The analysis indicated that, based on current
policy, technology and market developments,
Energy Transition Finance – including renewables
and nascent or early-stage climate technologies
that are needed to scale to support the transition
to net zero – 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 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. The analysis also indicated significant
longer-term opportunities in financing the
scaling of capabilities in nascent technologies
such as carbon capture utilisation and storage
(CCUS) and hydrogen solutions.
Sustainable finance instruments
Sustainable finance instruments represent an
estimated $3.5trn-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.
The analysis indicated that all ESG instruments
are expected to grow to 2030 with ESG debt
excluding green bonds and loans represents an
estimated 10-year $400-650bn cumulative
financing opportunity for Barclays based on our
global market share in sustainable finance
instruments.
Retail and business banking
Barclays UK recognises the environmental and
societal benefits – and the commercial
opportunities – that can be delivered through
financing the UK economy's transition to net
zero. Embracing the challenge of capturing
opportunities from the transition to a low-carbon
economy aligns with Barclays’ Purpose and
positions us to capitalise on the growing market
for sustainable finance.
Our 2022 market review indicated that, 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.
According to our 2022 market review, Green
Home Mortgages represent the largest individual
market for Barclays UK by 2030. We are actively
exploring ways to unlock the decarbonisation of
homes at scale by developing secured and
unsecured lending for energy-efficiency-related
technologies. We are also exploring strategic
partnerships to provide customers and
businesses with financing and guidance to make
more sustainable choices. However, there are
significant dependencies for this opportunity to
be realised – namely customer demand, supply
chain maturity and policy intervention.
Assessing the market opportunity
To determine the addressable global market
for sustainable finance to 2030, Barclays'
2022 market review 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 the
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.
$1trn Sustainable and Transition
Financing Target
Following analysis of the market opportunity 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 101 and further details on how Barclays'
products and services are harnessing these opportunities
from page 107.
We recognise that we must 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.
During 2023 we developed a Transition Finance
Framework, which we announced in early 2024.
The Transition Finance Framework sets out the
criteria for the inclusion of transition financing in
our $1trn target. The inclusion of transition
financing reflects our recognition of the
importance of lending and facilitating funding and
investing in technologies and activities that
support GHG emission reduction (directly or
indirectly) in high-emitting and hard-to-abate
sectors.
+ Further details of Barclays' Transition Finance Framework
can be found on page 104.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Risk and opportunities (continued)
TCFD Strategy Recommendation (a)
Group sustainable finance strategy
Following the appointments of the CIB Head of
Sustainable Finance in November 2022 and the
Barclays UK Head of Social Purpose and
Sustainable Finance in January 2023, a significant
piece of work was undertaken to develop a Group
sustainable finance strategy, which was presented
to and discussed with the Board in July 2023.
This work built on the findings of the 2022 market
opportunity analysis and considered Barclays '
competitive strengths to identify strategic
opportunities in sustainable and transition finance
where we believe Barclays can differentiate itself
and best support our clients and the global
economy to accelerate the transition to net zero.
The strategy aligns with the climate and
environmental themes that were identified when
we announced our $1trn Sustainable and
Transition Financing target in December 2022 and
therefore underpins our plan to deliver
that ambition.
In the development of the strategy, we identified
three sustainability themes which are important in
the journey towards a net zero and sustainable
future, where we see significant commercial
opportunity and where we believe we can focus
and differentiate:
The graphic below provides a summary of the
themes and pillars. At the intersection of each
theme and pillar we are developing tailored
products and services for our clients and
customers to help them deliver on their
transition and sustainability objectives.
For example, with our focus on climate
technologies, we are supporting the development
of start-ups in targeted technologies and nature
from idea to IPO. We are also advising sustainable
and Agtech companies on areas such as raising
finance and M&A.
1 Decarbonising industry
2 Contributing to a nature-positive food system
3 Supporting consumers on the path to net zero
We also identified three pillars of competitive
advantage for Barclays across those
sustainability themes, through which we believe
we can deliver for our clients by working
collectively across our different businesses:
1 Our strength in the UK
2 Our focus on being a leading partner to climate
technologies
3 The strength of our business across
sustainable credit markets
Our strategy to deliver on our sustainable finance ambition
Three pillars where we can deliver for clients and stakeholders:
Support UK net zero
Leading climate tech partner
Sustainable credit markets
• Facilitate the flow of capital to consumers
and businesses
• Facilitate the flow of capital to new and existing
technologies critical to the net zero transition
• Leverage strength in credit markets to facilitate
clients’ transition plans
• Deliver on our social purpose agenda by
• Develop expertise and infrastructure financing
• Play a leading role in the creation of carbon and
supporting the just transition
solutions for the deployment of new technologies
biodiversity markets
• Support climate tech companies across the lifecycle,
• Unlock additional sources of capital, including
from startup to IPO
through securitisation, savings and investments
Three sustainability themes where we can focus and differentiate:
Decarbonising
industry
Support SMEs and corporates across major
industries to decarbonise, deploy new
technology and manage their transitions
Contributing to a nature-
positive food system
Drive the evolution to sustainable
agriculture and foods, and facilitate
regenerative land use
Supporting consumers on the path
to net zero
Provide financing to facilitate consumer
products to live and act sustainably, and
support consumer-oriented climate tech
and financing models
Barclays PLC
Annual Report 2023 71
Through our sustainable finance strategy and our
$1trn Sustainable and Transition Financing target,
we have set out an ambition and approach that will
support our clients and customers in their
transition. Delivery of the strategy will require a
multi-year investment in our people and
capabilities, which we are now accelerating the
execution of.
Identifying nature-related
opportunities
Nature-related financing presents future
opportunities for the financial sector given
the capital requirements to address and
reverse nature loss: the biodiversity
financing gap is estimated to be $700bn per
year1. As we execute our sustainable
finance strategy, we aim to identify
opportunities to play a role in supporting
the financing of nature.
See section Financing nature on page 105 for details of
our approach.
+
Note:
1 cbd.int/doc/c/e6d3/cd1d/daf663719a03902a9b116c34/
cop-15-l-25-en.pdf
Implementing our climate strategy
TCFD Strategy Recommendation A:
TCFD Strategy Recommendation B:
TCFD Strategy Recommendation C:
Describe the climate-related risks and
opportunities the organisation has identified over
the short, medium, and long term.
Describe the impact of climate-related risks and
opportunities on the organisation’s businesses,
strategy, and financial planning.
Risks and opportunities
Risks
Opportunities
66
67
70
Implementing our climate strategy
Achieving net zero operations
Operational footprint dashboard
All other narrative
Reducing our financed emissions
BlueTrack
dashboard
TM
All other narrative
Financing the transition
Sustainable finance dashboard
All other narrative
Working with our clients
Embedding climate and sustainability into our
business
Just transition and nature and biodiversity
Engaging with industry
Barclays' approach to public policy
Describe the resilience of the organisation’s
strategy, taking into consideration different
climate-related scenarios, including a 2°C or
lower scenario.
Resilience of our strategy
Scenario analysis
Barclays’ resilience to climate scenarios
Climate stress tests
2023 Enhancements and beyond
Challenges and limitations
Macro-dependencies and objectives
Important information/disclaimers
130
131
132
132
134
135
136
137
72
73
75
76
80
88
89
101
103
104
107
121
124
126
129
Barclays PLC
Annual Report 2023 73
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b) | Strategic Pillar 1
Achieving net zero operations
Although financed emissions account for
the greatest proportion of our climate
impact, we have also continued addressing
our operational emissions – an important
factor in meeting our ambition to be a net
zero bank by 2050.
Defining net zero operations
We define net zero operations as the state in
which we will achieve a GHG reduction of our
Scope 1, Scope 2 and Scope 3 operational
o
1
emissions
C-aligned
consistent with a 1.5
pathway and counterbalance any residual
emissions.
We continue to review and develop our approach
to net zero operations as standards to
understand and define net zero evolve rapidly.
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 electricity
sourcing and replacing fossil-fuel-powered
infrastructure with low-emission alternatives
• Reduce Scope 3 operational emissions by
engaging with our key stakeholders, including
2
suppliers
and colleagues, to track, manage
and reduce their GHG emissions – while
embedding net zero principles across our
policies and contractual requirements.
Progress to date
3
In 2023 we achieved our milestone
of 50%
reduction of our Scope 1 and 2 location-based
GHG emissions ahead of 2030 – reducing these
Δ
emissions by 51%
. We continued to source
4
Δ
100%
for our global real
renewable electricity
5
estate portfolio
and continued to meet our 90%
Scope 1 and 2 market-based emissions
6
– reducing these emissions by
reduction target
Δ
.
93%
Key contributors to our progress include global
7
real estate portfolio right-sizing
and energy
efficiency programmes, as well as company
vehicles electrification, and our continued focus
on renewable electricity sourcing.
For our Scope 3 operational emissions, our focus
remained on engaging with our key stakeholders
and making data enhancements, particularly by
acquiring primary supplier data and evolving our
accounting methodology in line with industry
standards and best practice. We also continued
to pursue the integration of ESG considerations
and expectations into processes throughout the
procurement lifecycle.
We expect that our progress against our net zero
operations targets and milestones is likely to be
variable and non-linear. Our net zero operations
strategy is dependent on broader industry,
technological and regulatory changes that are
outside Barclays’ control and may affect our
ability to achieve our targets and milestones.
Further, as the accounting standards and data
underlying our net zero operations strategy
continue to evolve and be refined, this could
impact our metrics, targets and milestones.
Progress against our targets and milestones may
also be impacted by management decisions
based on key drivers unrelated to climate, for
example prudent risk management practices.
Our intent is to enhance data collection and
accuracy to help identify key contributors to our
impact, determine opportunities for
improvement, and support the integration of
sustainability into our business operations.
Notes:
Δ 2023 data subject to independent limited assurance under ISAE
(UK) 3000 and ISAE 3410. Current limited assurance scope and
opinion can be found within the ESG Resource Hub:
home.barclays/sustainability/esg-resource-hub/reporting-and-
disclosures/
1 We define our Scope 3 operational emissions to include supply
chain, waste, business travel and leased assets.
2 In this Achieving net zero operations section, when referring to
suppliers and supply chain, we are referring to Third-Party
Service Suppliers (TPSPs).
3 In this Achieving net zero operations section, a reference to a
"milestone” denotes an indicator we are working towards and
report against.
4 We maintained 100% renewable electricity sourcing for our
global real estate portfolio through instruments including green
tariffs (55%) and energy attribute certificates (EACs)(45%).
5 Global real estate portfolio includes offices, branches, campuses
and data centres.
6 In this Achieving net zero operations section, a reference to a
“target” denotes an indicator linked to our executive
remuneration.
7 By right-sizing, we are optimising our space and associated
resources for our operational needs.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b) | Strategic Pillar 1
Our net zero operations approach
Barclays PLC
Annual Report 2023 74
By the end of Scope 1 and 2
2022 performance
2023 performance Scope 3
2022 performance
2023 performance
100% renewable electricity sourcing for our global real
estate portfolio
100%
2025
90% reduction in our Scope 1 and 2 GHG emissions
(market-based against a 2018 baseline)
91%
100% electric vehicles (EV) transition for UK company
cars
55%
100% EV or ultra-low emissions vehicles (ULEV) for all
company cars
24%
50% reduction in our Scope 1 and 2 GHG emissions
(location-based against a 2018 baseline)
43%
Δ
100%
Δ
93%
88%
42%
Δ
51%
2
We intend to work towards the milestone
of 115 kWh/
2
m
/year average energy use intensity across our
corporate offices
2
of 10 MW
We intend to work towards the milestone
on-site renewable electricity capacity installed across
our portfolio
260 kWh/m
1
2
/year
0.30MW
3
2
/year
228 kWh/m
(-27% against 2018
baseline)
0.40MW (<1% total
electricity use)
2030
2035
2050
2
of 70% of
We intend to work towards the milestone
9
, having science-
our suppliers, by addressable spend
4
in place
based GHG emissions reduction targets
5
47%
5
57%
2
of 90% of
We intend to work towards the milestone
9
, having science-
our suppliers, by addressable spend
4
in place
based GHG emissions reduction targets
5
47%
2
We intend to work towards the milestone
of 50% GHG
supply chain emissions reduction (against a 2018
6
)
baseline
6
17%
2
We intend to work towards the milestone
of 90%
diversion of waste from landfill, incineration and the
7
environment across key campuses
8
49%
2
We intend to work towards the milestone
of 90% GHG
supply chain emissions reduction (against a 2018
6
)
baseline
6
17%
5
57%
6
28%
53%
6
28%
Notes:
1 We have updated internal and external data which has resulted in minor updates to FY2022 EUI performance (a change from 265kWh/m2/year to 260 kWh/m2/year).
2 In this Achieving net zero operations section, a reference to a "milestone” denotes an indicator we are working towards and report against.
3 We have updated internal data which has resulted in minor updates to FY2022 on-site renewable electricity capacity (from 0.26MW to 0.30MW).
4 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. The 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.
5 Indicative number provided to illustrate the number of suppliers by total addressable spend that have committed to or have science-based targets in place. In our 2022 Annual Report we reported 47% progress based on a review of our top 500 suppliers by addressable spend. Our
current progress is reported here based on a review of our top 2,000 suppliers by addressable spend.
6 Based on our indicative supply chain emissions inventory. DEFRA conversion factors – which Barclays uses to calculate spend data into supply chain emissions – were revised in 2023. These have been retrospectively applied to Barclays' 2018 baseline and 2022 disclosure, resulting
in an increased 2018 baseline and recalculated 2022 metrics. In FY 2022 we reported 8% reduction in our supply chain GHG emissions and due to the changes in the DEFRA conversion factors and updated internal data, we recalculated the 2022 figure to be 17%. As our suppliers
continue to develop the quality of emissions data for the goods and services we purchase, our reliance on spend data to calculate our emissions will reduce and the volume of primary data will increase.
7 Campuses include 1 Churchill Place, Radbroke, Northampton, Glasgow, Pune, Whippany, 745 7th Avenue, Dryrock.
8 Reported waste diversion performance for FY2022 has been recalculated from 65% to 49%, to account for an update in external data.
9 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, and property rent.
Please see ESG Data Centre for all recalculations and ESG Reporting Framework for our operational emissions accounting approach.
Δ 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. Current limited assurance scope and opinions can be found within the ESG Resource Hub: home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
Operational footprint dashboard
2023 Operational GHG emissions by Scope (market-based)
Scope 3 categories
Barclays PLC
Annual Report 2023 75
market-based
1 Category 1, 2 & 4 supply chain emissions
3 Category 3 fuel and energy-related activities
5 Category 5 waste generated in operations
6 Category 6 business travel
7 Category 8 upstream leased assets
8 Category 13 downstream leased assets
84.9%
2.1%
0.1%
6.1%
4.2%
0.1%
Total GHG emissions by Scope
(location-based) '000 tonnes CO2e
Total GHG emissions by Scope
(market-based) '000 tonnes CO2e
Total energy use
(MWh)
2023
2022
2021
2020
2019
2018
15.3△
20.2
23.2
22.7
27.3
29.0
n Scope 1 n Scope 2 (location-based)
n Scope 3
Notes
Δ
735.8
815.8
824.6
220.3
300.0
1019.5
Total
2023
2022
2021
2020
2019
2018
15.3△
20.2
23.2
22.7
43.5 53.7
27.3
73.8
108.3
29.0
n Scope 1 n Scope 2 (market-based)
n Scope 3
2023
2022
2021
2020
2019
2018
Δ
650.2
718.0
716.8
119.8
209.4
1115.1
Total
1 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 2023 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.
2 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. We have adopted the operational control approach on reporting boundaries.
3 We continuously review and update our performance data based on updated GHG emission factor, improvements in data quality and updates to estimates previously applied. For 2023, we have applied the latest emissions factors as of 31 December
2023. All location- and market-based figures are gross and do not include netted figures from carbon credits.
4 Upstream and downstream leased assets include our third-party co-located data centres and a property we lease out to tenants. Upstream leased assets also include properties with landlord managed energy from central systems which are outside
of our operational control.
5 We selected 2018 as the baseline year for our supply chain emissions, to align with the baseline year used for other categories, and have since reported supply chain emissions for 2021, 2022, and 2023.
6 Reported emissions for Scope 2 location and market-based have been recalculated back to the 2018 baseline, due to updated internal and external data. The associated emissions have also been re-classified from Scope 2 electricity to Scope 3
Category 8 (Upstream Leased Assets) as these emissions are currently outside of our operational control. In 2022 we reported Scope 2 location-based emissions of 103,422 tCO2e; the recalculated figure is 99,782 tCO2e. In 2022 we reported Scope
2 market-based emissions of 1,883 tCO2e; the recalculated figure is 1,963 tCO2e. In 2022 we reported energy use of 467,939 MWh; the recalculated figure is 463,973 MWh.
7 We have recalculated FY 2022 Scope 3 Category 5 GHG emissions from 10,700 tCO2e to 352 tCO2e as DEFRA Material Use emission factors were incorrectly applied to waste production which resulted in an overstatement of emissions.
Our operational footprint data follows a reporting period of 1 October 2022 to 30 September 2023.
Δ 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. Current limited assurance scope and opinions can be found within the ESG Resource Hub: home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/.
ESG Data Centre
See our ESG Data Centre for further
details of our operational GHG
emissions since 2018, including our
Scope 1, 2 location- and market-
based and Scope 3 operational
emissions data. For more
information on our operational
emissions accounting approach
please see the 2023 ESG Reporting
Framework.
87.2Δ99.8119.2144.0164.4182.1633.3695.8682.153.7108.3880.31.6Δ2.011.5205.7633.3695.8682.1880.3375,087Δ463,973553,250597,720652,809663,93597.4%0.2%2.4%Scope 3Scope 2Scope 135681 Scope 3 categories Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b) | Strategic Pillar 1
Reducing our Scope 1 and 2 emissions
In 2023, to reduce our Scope 1 and 2 emissions,
we maintained focus on improving energy
efficiency and replacing fossil-fuel-powered
infrastructure with lower-emission alternatives.
Energy efficiency measures reduce our overall
energy demand and reliance on the grid to power
our operations. Concurrently, by replacing fossil-
fuel-powered infrastructure, for example, by
electrifying our buildings and company vehicles,
we will aim to eliminate a significant part of our
Scope 1 emissions and prepare our
infrastructure to consume electricity from
renewable sources.
Increasing energy efficiency
To continually improve operational energy
efficiency, in 2023 we maintained global demand
1
our
reduction programmes and right-sized
global real estate portfolio – resulting in 44%
energy consumption reduction against a 2018
baseline. These efforts also contributed to
2
progress against our global corporate offices,
energy use intensity (EUI) milestone by reducing
our EUI by 27% against a 2018 baseline.
Our global energy optimisation programme
contributed to our EUI reduction by adjusting
corporate offices' settings and systems during
periods of low or no occupancy to reduce our
demand for energy while keeping our buildings
3
running. In 2023
the programme contributed to
approximately 9.1 GWh in energy savings at our
UK corporate offices – equivalent to the annual
electricity consumption of approximately 2,600
UK households. Programme projects included
4
Glasgow campus baseload
reductions, where
we reduced overnight usage of building
equipment such as our lighting, heating and
cooling systems, and power reductions for our
building equipment at 1 Churchill Place in
London, planned over bank holidays. Moving
forward, we plan to implement the energy
optimisation programme at additional
corporate offices.
Electrification and replacing fossil-fuel-
powered infrastructure
Replacing fossil fuels
with renewable energy
In 2023 we continued electrifying our real estate
portfolio by replacing end-of-life natural gas
heating and cooling equipment with electric-
powered alternatives and prioritising
electrification in campus developments
wherever possible, For example, at our Glasgow
campus we replaced natural gas boilers with an
air source heat pump – leading to an 84%
reduction in Scope 1 GHG emissions compared
to 2022 at that campus. As part of the campus
redevelopments at 1 Churchill Place, we are
electrifying our kitchen cooking stoves. We will
continue to incorporate electrification and fossil-
fuel-powered infrastructure replacement into
future real estate decisions.
As part of our commitment to Climate Group's
EV100 initiative, we have also made progress in
transitioning our corporate vehicle fleet to
electric vehicles (EVs) or ultra-low emissions
vehicles (ULEVs). By the end of 2023 88% of our
UK fleet was converted to EVs and 42% of our
global fleet was converted to EVs or ULEVs.
All UK colleagues provided with a company car
for their role have also been offered funded
home-charging equipment to ease the transition
to a fully electrified fleet.
In addition, we are replacing existing mobile
banking vans with electric vans, providing a less
carbon-intensive method of serving our Barclays
UK customers and communities compared to
the previous diesel-fuelled vehicles.
Δ
In 2023 we maintained 100%
renewable
electricity sourcing for our global real estate
portfolio
through instruments including green
6
5
tariffs
(55%) and energy attribute certificates
(EACs)(45%), continuing to meet our 2025 target
ahead of schedule.
We also maintained our long-term focus on
planning additional on-site renewable energy
installations and exploring tools like Power
Purchase Agreements (PPAs) that bring
additional renewable energy to the grid.
We continued developing strategies for on-site
renewable energy installations such as solar
panels, and have coordinated with stakeholders
like local utilities and planning boards with the
intent of installing these types of projects in
coming years. Sites with existing solar panel
installations, including Glasgow, Pune,
Northampton and Cambridge Eagle Lab, have
0.40 MW of renewable electricity capacity.
7
Beginning in 2024, up to 80%
of Barclays' annual
UK electricity needs will be sourced through a
PPA supporting Creag Riabhach, an onshore
wind farm project in Scotland.
Scope 1 and 2 emissions data accounting
We continue to work on improving our data
quality and accounting methodologies to make
meaningful comparisons of emissions data over
time and to make informed strategic decisions.
Given the evolving nature of climate data and
methodologies, past-period figures may change
to reflect updates. To manage the impact of
these changes we have detailed our operational
climate data accounting approach in the ESG
Reporting Framework on our ESG Resource Hub.
Barclays PLC
Annual Report 2023 76
Embedding sustainability into operational
practices
Across our operations we are introducing new
standards and guidelines to help enable the
integration of sustainability into decision
making.
For example, in 2023 we introduced the
Sustainability Design and Construction
Checklist and Green Leasing Toolkit, which
are guidelines that help integrate sustainability
criteria into real estate processes in alignment
with Barclays' net zero operations strategy.
Both guidelines help teams identify gaps in
existing real estate processes for leasing
transactions and in design and construction
projects. They serve as a record of inclusion
and applicability of sustainability criteria for a
given project, allowing teams to flag
inconsistencies between project design and
sustainability expectations.
Notes:
1 By right-sizing we are optimising our space and associated
resources for our operational needs.
2 Corporate offices include offices and campuses.
3 Data represents reduction from 1 October 2022 to
30 September 2023.
4 Baseload is the minimum load experienced by a building energy
system over a given period of time, that must be supplied at all
times.
5 Green tariffs are programmes in regulated electricity markets
offered by utilities, allowing large commercial and industrial
customers to buy bundled renewable electricity from a specific
project through a special utility tariff rate.
6 Energy attribute certificates 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 and UK,Renewable
Energy Certificates (RECs) in North America and International
RECs (I-RECs) in a growing number of countries in Asia, Africa,
the Middle East and Latin America.
7 Figure has been estimated using 2022 UK real estate property
portfolio electricity consumption as a reference.
Δ 2023 data subject to independent limited assurance under ISAE (UK)
3000 and ISAE 3410. Current limited assurance scope and opinions
can be found within the ESG Resource Hub: home.barclays/
sustainability/esg-resource-hub/reporting-and-disclosures/.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b) | Strategic Pillar 1
Addressing our Scope 3 operational
emissions
Supply chain
To support our net zero operations strategy, in
2023 we continued to implement our supply
chain net zero pathway.
As part of our pathway we are working towards a
50% reduction in our supply chain GHG
emissions by end of 2030 and a long-term
milestone of 90% emissions reduction by the
end of 2050 (both against a 2018 baseline). In
developing our supply chain net zero emissions
pathway, we used the Science Based Targets
initiative (SBTi) Corporate Net Zero Standard and
Target Setting Tool, consistent with a 1.5ºC-
aligned pathway.
Engagement and integration
Engagement with our suppliers is a key vehicle for
change. Our strategy is to engage proactively and
constructively across our supplier organisations to
increase climate transparency and accountability,
and promote emissions reduction. In 2023 we
invited 489 of our suppliers to disclose climate-
related information such as governance, risk
strategy, targets and performance, emissions
methodology and data related to climate change,
through CDP. We achieved a 75% participation
rate, representing approximately 75% of Barclays'
2023 supply chain emissions.
In 2022 we updated our standard supplier contract
terms with requirements relating to climate
change, including an obligation for our suppliers to
have an emissions reduction programme in place
by 2025, supported by a public reduction target
and a commitment to achieve net zero GHG
emissions no later than 2050. In 2023 we
continued to embed the discussion and
negotiation of these terms into new contracts and
renewals. This is one of the steps we are taking to
work towards our milestone of 90% of our
suppliers, by addressable spend, to have science-
based GHG emissions reduction targets in place
by end of 2030. The terms also include a
requirement for our suppliers to periodically
disclose their direct and indirect GHG emissions
using a recognised standard, such as the GHG
Protocol Corporate Accounting and Reporting
Standard.
We have also continued to work internally with
our Sourcing colleagues to embed the
consideration of GHG emissions into some of
our key tenders for Supplier and Product
selection. We are starting to embed the
consideration of GHG emissions at the point of
demand through seeking less-GHG-emission-
intensive ways of meeting our needs. For
example, the procurement process for capital
projects now integrates sustainability into
building design principles through embedding a
Sustainability Design and Construction Checklist
(see page 76 for more information).
Barclays PLC
Annual Report 2023 77
Lastly, to support our engagement with
suppliers, in 2023 we conducted an intelligence
gathering exercise across our top 2,000 suppliers
1
(based on spend
) to seek understanding of their
position on environmental and social matters.
Data enhancement
Our strategy to achieve our milestones is
underpinned by obtaining more accurate
emissions data from our suppliers, to inform our
approach to reducing emissions. Ultimately, we
are reliant on our suppliers to provide accurate
product-level primary data, in addition to
reducing GHG emissions associated with the
goods and services we purchase from them, to
achieve emissions reductions across their own
organisations. To measure progress towards our
emissions reduction milestones and inform our
supplier intervention strategy, reliable primary
GHG emissions data will need to be collected and
tracked over time across our supplier
organisations. In 2022 primary data accounted
for approximately 15% of our supply chain
emissions inventory, increasing to 27% in 2023.
We understand that our success depends on
that of our suppliers, and that progress may be
variable and non-linear. Geographic
considerations, resource capacities, data
availability, legal requirements, market conditions
and the varying transition pathways individual
companies take, given the technologies available,
may all affect the speed at which they can reduce
emissions.
Supply chain baseline
DEFRA conversion factors – which Barclays
uses to calculate spend data into supply chain
emissions – were revised in 2023. These have
been retrospectively applied to Barclays' 2018
baseline and 2022 supply chain emissions,
resulting in an increased 2018 baseline and
revised 2022 figures. Our 2022 performance
2
against supply chain milestone
increased
from 8% to 17% due to the change in the
DEFRA conversion factors and updated
internal data. As our suppliers continue to
develop the quality of emissions data for the
goods and services we purchase, our reliance
on spend data to calculate our emissions will
reduce and the volume of primary data will
increase.
Notes
1 In this section, when referring to 'spend', this is addressable
spend, 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, and property rent.
2 Milestones referred to include: 'By end of 2030 we intend to work
towards the milestone of 50% GHG supply chain emissions
reduction (against a 2018 baseline).' and 'By end of 2050 we
intend to work towards the milestone of 90% GHG supply chain
emissions reduction (against a 2018 baseline)'.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
Barclays PLC
Annual Report 2023 78
Leased assets and waste
While our leased assets and waste emissions are
lower than other operational emissions, we are
pursuing opportunities to reduce them.
For example, in 2023 we introduced a Green
Leasing Toolkit to support engagements with
landlords by encouraging the inclusion of our
sustainability criteria throughout the leasing real
estate lifecycle. The toolkit includes guidance
and preferred contractual language for lease
preferences.
We are also embedding circular economy
principles within our operations. Further details
are provided on page 79.
TCFD Strategy Recommendation (b) | Strategic Pillar 1
Business travel
In 2023 we continued engaging with our
stakeholders and colleagues to provide
information and tools to encourage more
sustainable travel choices. For example, we
updated our booking and reporting platforms to
highlight low-carbon modes of transport for our
colleagues, including EV rentals where available.
We provided colleagues with additional guidelines
illustrating how they can reduce their travel
emissions – identifying, for example, where they
could combine multiple trips or switch from air to
rail travel. We also continued to engage with our
preferred airline partners to explore their plans to
use sustainable aviation fuel (SAF).
Our 2023 total colleague business travel
emissions reduced by 43% against a 2018
baseline – noting these emissions doubled
compared to 2022 due to a return to business
travel post-COVID. We will continue to engage
with our stakeholders and provide colleagues
with the tools and resources to align with our net
zero ambition. Our intent is to improve the
accuracy of our business travel data to better
inform emission reduction strategies.
Carbon credits
Supporting our colleagues
We are currently reviewing our approach to the
use of voluntary carbon market credits for
operational emissions.
Our goal is to provide colleagues with the tools and
support needed to help reduce their individual
environmental footprints.
We remain supportive of initiatives to enhance
the integrity of the voluntary carbon market
across both the supply and demand side.
In 2023, for example:
• We continued to expand our range of green
benefits for colleagues, including our UK EV salary
sacrifice and UK and Ireland Bike4Work schemes.
In 2023 over 900 colleagues ordered EVs through
salary sacrifice and over 650 made use of
Bike4Work
• Officially launched in 2022, our Barclays Go Green
sustainability gamification programme helps
colleagues take and track actions that reduce
their personal environmental footprint. In 2023,
colleagues participated in over 20,000 activities –
such as switching off laptop equipment, opting
for lower-carbon travel methods and replacing
single-use items like cups with reusable
alternatives
• Our 14 global employee-led environment
networks created and participated in activities
aligned with Barclays’ climate and sustainability
strategy.
+ Further information about how Barclays engages with
colleagues can be found on page 122.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b) | Strategic Pillar 1
Nature and biodiversity
in our operations
Nature and biodiversity are intrinsically
connected to our efforts to mitigate and adapt
to climate change, maintain healthy communities
and support productive, sustainable economies.
At the end of 2023 we started to identify and
assess nature-related impacts and
dependencies for our real estate operations
informed by the Taskforce on Nature-related
Financial Disclosures (TNFD) LEAP (Locate,
Evaluate, Assess, Prepare) approach. This
evaluation includes assessing our real estate
operations' water, pollution, biodiversity and
resource use impacts and dependencies. We will
continue the assessment in 2024 to evaluate
nature considerations in our operations moving
forward.
The assessment will support our focus on
improving resource use and the ability to protect
natural environments through circular design
principles – including designing-out waste and
pollution across our operations, recycling, and
regenerating natural ecosystems.
Circular economy principles and zero waste
We are working to embed circular economy
principles across our operations by seeking to
eliminate waste at the source through resource
use reductions and by improving recycling rates.
landfill, incineration and the
1
Across our key campuses
we have an ambition
to achieve and maintain TRUE (Total Resource
Use and Efficiency) zero waste certified projects
by end of 2035 with a milestone to divert 90% of
waste from
environment by end of 2035 – and in 2023
achieved a 53% diversion rate of all waste, a 4%
2
increase from the previous year
. Even though
more colleagues have returned to work in our
office locations, causing the total tonnage of
waste to increase since 2022, the waste
diversion rate from landfill and incineration has
improved.
This result illustrates that, while more waste has
been created, we are diverting more of it through
increased waste segregation and reduced waste
stream contamination – as well as through the
introduction of more reusable items in our
campuses.
For example, at our Glasgow and Pune campuses,
we have increased waste segregation streams –
making it easier for colleagues to put the correct
waste in the correct bin. The increased waste
segregation streams resulted in an average
contamination rate of 14% between Pune and
Glasgow, compared to our average of 45% at key
campuses where these solutions have not yet
been implemented. The overall reduction in
contamination rates supports our recycling rates
– and, ultimately, our waste diversion milestone.
In addition, we are working to divert food waste
from landfill and incineration through projects
including the installation of on-site composters
at our Glasgow and Pune campuses and the
creation of commercial food waste collection
points at various office locations.
In 2023 we also launched our reusable food and
beverage dishware programmes across four key
campuses with the aim to reduce single-use
items and therefore waste.
Pollution management
Barclays has controls in place to address
pollution risks across our property portfolio
globally where we operate generators and store
diesel. The pollution risk controls are engineered
to identify possible pollution sources and
pathways for an uncontrolled release to cause
environmental harm, assess mitigation measures
and identify improvements and actions that can
be taken to further enhance our pollution
prevention and mitigation measures.
In 2023, 41% of our global real estate portfolio
remains certified to ISO 14001, the international
standard for designing and implementing an
Environmental Management System (EMS).
Barclays PLC
Annual Report 2023 79
Unreasonable Impact company Re:Dish powering
sustainable solutions for Barclays
After receiving support from Barclays through the Unreasonable Impact programme, Re:Dish has
brought its reusable dishware programme full circle to Barclays’ New York City, Wilmington and
Whippany campuses.
As part of our ambition to become a net zero bank by 2050, Barclays is working to achieve and
maintain TRUE (Total Resource Use and Efficiency) zero-waste-certified projects across key
campuses by 2035.
Re:Dish supports our goal by helping us remove hundreds of thousands of single-use items a year
from our waste stream. Re:Dish delivers food and beverage containers to Barclays, collects used
containers and cups to clean and sanitise, and returns them for reuse. Instead of requiring more
materials and resources for new containers and specialised cleaning equipment, Barclays taps into
an existing network of fit-for-purpose dishware and washing services that can efficiently
accommodate fluctuating demand.
In addition, Re:Dish and Barclays partnered to build colleagues’ understanding of circularity – an
important contributing factor to the success of these programmes. Re:Dish containers have a QR
code colleagues can scan to see exactly how many times that specific unit has been reused and the
resulting estimated environmental impact.
To learn more about Unreasonable Impact partnerships, see page 110.
Note
1 Key campuses include 1 Churchill Place, Radbroke, Northampton,
Glasgow, Pune, Whippany, 745 7th Avenue, Dryrock.
2 Reported waste diversion performance for FY2022 has been
recalculated from 65% to 49%, to account for an update in
external data.
Further details on Barclays’ approach to biodiversity can be
found on page 124 .
+
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
Barclays PLC
Annual Report 2023 80
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 we finance – not just for
lending but for capital markets activities, too.
We work closely with our clients to ensure that
over time the activities we finance are aligned to
the goals and timelines of the Paris Agreement.
Consistent with our Purpose, and taking into
account considerations of all relevant business
factors, we continue to set emissions reduction
targets for our portfolios where possible, aligned
with the ambitions of the Net-Zero Banking
Alliance (NZBA), of which we are a founding
member. We also continue to set and follow clear
restrictions on financing certain activities.
+
Further details on our restrictive policies can be found on
page 100.
The core building block for developing the transition
framework for Barclays to be a net zero bank is our
ability to estimate the full in-scope balance sheet
financed emissions.
1 In 2020, we developed our BlueTrack
TM
methodology to measure and track our progress
against our financed emissions, setting targets
for Energy upstream and Power generation
initially.
2 As of 2022, we had reported the baseline
TM
financed emissions for five sectors covered
under BlueTrack
targets as well as UK Residential Real Estate
where we set a convergence point.
where we have set reduction
3 In 2023, we have further extended the scope of
our calculations to cover the full in-scope balance
sheet financed emissions based on methodology
which has been developed using the PCAF
Identification of in-scope exposure to calculate financed emissions
(as at December 2022)
Category
Total Barclays balance sheet
Exclusions:
Cash and bank balances,
Cash collateral and settlement balances,
Derivative financial instruments,
Goodwill and intangible assets,
Current tax assets, Deferred tax assets, Other assets,
Trading portfolio assets (including drawn loans),
Retail lending (personal lending, retail cards) and
Property, plant and equipment
Retirement benefit assets
Total Barclays exposure in scope for computing
financed emissions
Inclusions:
Total in-scope undrawn commitments and
contingent liabilities
Capital markets financing (33% of Barclays share)
Total Barclays' activities considered
for financed emissions calculations
Value
(as at Dec 2022)
in £m
1,513,699
(-)1,076,980
(-)3,616
(-)4,743
428,360
(+)246,030
(+)104,734
779,124
Comments
Exposures excluded
by the PCAF Standard.
Emissions covered under
Barclays Scope 1 and Scope 2.
Emissions on Barclays Bank UK
Retirement Fund reported
separately as part of
Task Force on Climate-related
Financial Disclosures Report 2022.
We have gone beyond the scope of
PCAF’s definition of asset classes to
additionally cover undrawn
commitments and contingent liabilities.
We have excluded exposures for which
PCAF is yet to establish a methodology
(personal lending, retail cards and
Trading balances) from our total undrawn
commitments and contingent liabilities.
Equity holdings, bond issuances, equity
issuances, syndicated loans.
TM
to set reduction targets for three
Standard and have expanded the scope of
BlueTrack
new sectors - Agriculture, Aviation and UK
Commercial Real estate. Additionally, we have
expanded the scope of our UK Residential Real
1
convergence point.
Estate
Hence, we are pivoting our approach to disclosing
our financed emissions across two sections:
1 Estimating the full in-scope balance sheet
financed emissions using a methodology which
2
has been developed using the PCAF Standard
.
The data reported in this section of the Annual
Report (up to page 83) is as at December 2022.
Hence, these numbers follow a lag of one year
when compared to other climate-related
disclosures based on December 2023 in this
report, due to the lead time required to fully
analyse our entire in-scope exposures.
2 Continuing to use the BlueTrack™ methodology
to assess financed emissions for material sectors
and set 2030 targets integrating 1.5°C scenarios.
This data is being reported as at December 2023.
Note
1 For further details please see page 98.
2 PCAF Standard - PCAF (2022). The Global GHG Accounting and
Reporting Standard Part A: Financed Emissions. Second Edition.
Estimating the full in-scope balance sheet
financed emissions
Scope
We have identified the scope of coverage using a
methodology which has been developed using
the PCAF standard.
We have included undrawn commitments,
contingent liabilities, and capital
markets financing.
We have calculated financed emissions for c.
£779bn of Barclays' activity as at December 2022
(of which £428bn are on-balance-sheet
exposures) which is set out in further detail in the
following table.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
Barclays PLC
Annual Report 2023 81
TCFD Strategy Recommendation (b) | Strategic Pillar 2
Basis of preparation
Our approach for calculating financed emissions
is based on a methodology which has been
developed using the PCAF Standard with the
following key exceptions:
1 We have gone beyond the scope of PCAF’s
definition of asset classes to additionally cover
undrawn commitments, contingent liabilities
and capital markets financing activities. For
instance, in the case of a loan we consider the
committed amount (both drawn and undrawn),
as opposed to just outstanding amounts
(which is the approach preferred by PCAF) for
calculating financed emissions.
2 We have also consistently used the book value
of equity and debt for all clients to calculate the
attribution factor, while PCAF recommends
using the Enterprise Value Including Cash
(EVIC) for listed entities.
3 PCAF recommends calculating emissions at a
client level. For certain sectors, clients could
have presence in activities across multiple
parts of the value chain and in such cases
reported emissions may not be consistent and
reliable to estimate financed emissions. To
overcome this challenge we calculate
emissions at an activity level, using a range of
options aligned to the PCAF Standard's
guidance to calculate client emissions.
For certain activities – including fossil fuel
exploration and production, electric power
generation and automotive manufacturing – we
employ asset-level production data to estimate
client emissions. For activities such as cement
and steel production, we use client-reported
emissions. Where we do not have sufficient data
on reported emissions or physical activities – for
example in relation to mortgages where we do
not have EPC data available – we use fall-backs
based on emission factors.
For an immaterial part of our balance sheet
(c. 1%), where the appropriate sector fall-backs
could not be reliably obtained, we have used the
overall portfolio average economic emissions
intensity to estimate emissions.
+ Our Financed Emissions Methodology paper (published in
2024) provides more details of our methodology and can be
found within the ESG Resource Hub: home.barclays/
sustainability/esg-resource-hub/reporting-and-disclosures/
Emissions coverage
Results
We have computed our overall financed
emissions based on Scope 1 and Scope 2 of our
clients’ emissions as at December 2022. Hence,
these numbers follow a lag of one year when
compared to other disclosures based on
December 2023 in this report. The lag of one
year is due to the lead time required to fully
analyse our entire in-scope exposures.
We have excluded our clients’ Scope 3 emissions
from these calculations except for activities
where we have set a target on Scope 3 emissions
– which includes Energy Upstream, Automotive
manufacturing LDVs, Aviation and UK
Agriculture. - Livestock and Dairy Farming. This is
due to challenges in sourcing reliable and
consistent data, not just on reported Scope 3
emissions but also the fall-back emission factors
for downstream emission estimations. As we
refine our approach and data sourcing strategy,
we will assess the suitability of including Scope 3
emissions in our financed emissions disclosures.
Aligned to the guidance issued by the NZBA, our
metrics and targets for all sectors capture
emissions on a CO2e basis. For activities where
we have set targets, we have assessed which
GHGs are relevant and material for the
respective sector.
Barclays has assessed the extent to which the
o
business is aligned to a well-below 2
C pathway
by calculating an estimate of our financed
emissions for the full in-scope balance sheet as
at December 2022, which has enabled us to
calculate the coverage of our financed emissions
reduction targets across our portfolio (including
integration of 1.5°C aligned scenarios and ranges
for certain sectors to reflect dependencies
outside our control that will determine how
quickly our financed emissions can be reduced in
these sectors).
Our estimation of our overall financed emissions
indicates a total annual Scope 1,2 emissions of
c.80MtCO2e for FY2022. Among these, we have
set 2030 financed emissions targets covering
our clients’ Scope 1,2 emissions (including
integration of 1.5°C aligned scenarios and ranges
for certain sectors and including UK Housing for
which we have set a convergence point) for 55%
of our full in-scope balance sheet financed
emissions. Beyond this we have also set 2030
targets integrating a 1.5°C aligned scenario
covering Scope 3 emissions for Energy
Upstream, Automotive manufacturing LDVs,
Aviation and UK Agriculture – Livestock and Dairy
Farming.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b) | Strategic Pillar 2
Financed emissions for activities with 2030 targets integrating 1.5°C scenarios (as at December 2022)
Barclays PLC
Annual Report 2023 82
Activities
On-balance-sheet lending
Activities with 2030 targets integrating 1.5°C scenarios as at December 2022
Automotive manufacturing (LDV)
Cement manufacturing
Steel manufacturing
Fossil Fuel Extraction and Production
Power generation
0.0
0.2
0.3
0.8
2.2
1
UK Housing (convergence point)
Activities with 2030 targets integrating 1.5°C scenario after December 2022
1.6
UK Livestock and Dairy Farming
Aviation
2
Commercial Real Estate
Total
Notes:
1.6
0.5
0.0
7.4
Scope 1,2 emissions (MtCO2e)
Undrawn commitments and
contingent liabilities
Capital markets financing
On-balance-sheet lending
Scope 3 emissions (MtCO2e)
Undrawn commitments
and contingent liabilities
Capital markets financing
0.1
0.3
0.9
3.9
16.7
0.0
0.3
1.7
0.0
24.0
0.1
0.1
0.4
0.4
11.4
0.0
—
0.4
0.0
12.8
0.6
—
—
7.6
—
—
0.3
0.1
—
8.6
4.7
—
—
33.1
—
—
0.1
1.0
—
38.8
1.6
—
—
5.8
—
—
—
0.3
—
7.7
1 UK Housing is based on a convergence point and includes Social Housing and Business banking real estate which was added to the scope in 2023.
2 We have calculated Commercial Real Estate and Social Housing/Business Banking real estate emissions using “Business loans and unlisted Equity” PCAF asset-class methodology, The scope of coverage for Commercial Real Estate is based on the set of counterparties considered in the
2023 BlueTrack
portfolio and may not fully align with our exposure to this activity in 2022.
TM
Financed emissions for other activities not covered by targets integrating 1.5°C scenarios
(as at December 2022)
Activities
Mining and Quarrying
Energy and Water
Agriculture, Food and Forest Products
Manufacturing
Mortgages
Materials and Building
Transport
Other activities
Total
Government and central bank
1
Government and central bank (Excluding LULUCF)
Emissions covered under targets integrating 1.5°C
scenarios (excluding Government and central bank)
Note:
1 Emissions excluding land-use, land-use change and forestry.
On-balance-sheet lending
Scope 1,2 emissions (MtCO2e)
Undrawn commitments and
contingent liabilities
Capital markets financing
0.9
0.6
1.4
1.9
0.2
0.3
0.7
3.9
9.9
15.4
17.5
2.3
2.8
0.2
7.4
—
0.2
2.0
5.6
20.4
—
—
55%
0.2
0.9
0.0
1.4
—
0.0
0.9
2.5
5.9
—
—
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
Barclays PLC
Annual Report 2023 83
TCFD Strategy Recommendation (b) | Strategic Pillar 2
Data sourcing and data quality
We acknowledge the extent of data quality
challenges inherent in the calculations of
financed emissions for the full in-scope set of
activities. The PCAF Standard provides guidance
to measure data quality (DQ) through a hierarchy
ranging from DQ1 (best) to DQ5 (worst) specific
to each asset class. Our estimation of the data
quality is also largely aligned to the PCAF
Standard's guidance.
Our current data quality is dispersed across
DQ1-2 (reported emissions) data, DQ3 (deriving
emissions from physical activity data) and DQ4-5
(deriving emissions from revenue or asset-based
emission factors). For activities where we have
set targets, DQ is mostly concentrated across
DQ1-2 and DQ3. We have identified a
concentration of lower DQ scores for the
category of activities where we are yet to set
targets - including banks, financial institutions
and sovereigns. This indicates that we need to
consider the current estimate of financed
emissions for these activities as highly
preliminary and indicative only, and which can
change materially as we improve data quality.
Climate data, models and methodologies are
evolving – and are not yet at the same standard
as more traditional financial metrics. Our
financed emissions calculations rely on externally
sourced data 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, as well
as 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. As a result 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.
Data quality distribution of Barclays' financed emissions calculation (as at December 2022)
Category
2
Activities with 2030 targets integrating 1.5°C scenario as at December 2022
UK Housing (Convergence Point)
Activities with 2030 targets integrating 1.5°C scenario after December 2022
Activities not covered by targets integrating 1.5°C scenarios (including Sovereigns)
Total
Notes:
Scope 1,2 emissions1
DQ1-2
DQ3
DQ4-5
Reported emissions
(verified/unverified)
Use of physical-activity-
based emissions factors
Use of economic-activity-
based emissions factors
18 %
—
22 %
25 %
19 %
74 %
63 %
—
—
17 %
7 %
37 %
78 %
75 %
64 %
1 For sectors where we calculate Scope 3 emissions – Aviation, UK Livestock and Dairy Farming, Fossil Fuel Extraction and Production, and Automotive manufacturing (LDV) – our data quality distribution is 85% in
DQ3 and 15% in DQ4-5.
2 Totals may not be equal to 100% due to rounding.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b) | Strategic Pillar 2
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 involves updating the historical
starting point for a period and recalculating the
historical performance.
• A re-baseline involves keeping the historical
performance constant and recalculating the
current period baseline to ensure consistency
when reviewing performance. The indicative
historical baseline will also be disclosed.
Barclays PLC
Annual Report 2023 84
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.
In line with our reporting approach for past period
metrics, we have re-baselined internal and
external data, which has resulted in minor
updates (less than 1%) to Energy, Cement and
Automotive Manufacturing metrics and a c.2%
impact to the Power metrics. The most material
change has been the treatment of multi-client
shared facilities, which has led to an additional
c.4% impact in the baseline (2022) metrics for
Automotive Manufacturing.
Our approach to reporting financed emissions data
Scenario
Error identified in our internal finance data or
methodology
Changes to our methodology and/or data sources to
calculate financed emissions (for example, including
additional GHGs)
Restatement
Re-baseline
Updates to external counterparty data driven by timing
lags when data is reported (for example, counterparty
valuations or emissions estimates)
Capture in-year
• Financed emissions metrics for all years impacted by the error will be restated, including the baseline year.
Our approach
• 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 in which the targets were originally set.
• The cumulative progress will be for the current reporting period (using the new methodology) and the progress up
until the last reporting period (using the old methodology).
• The impact of updated external data will be included in 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
Barclays PLC
Annual Report 2023 85
TCFD Strategy Recommendation (b) | Strategic Pillar 2
Assessing financed emissions for material
sectors and net-zero-aligned targets
Basis of preparation
TM
TM
starts by selecting
As part of our commitment under the NZBA, we
1
have set targets for material
high-emitting
sectors in our portfolio. We have developed our
BlueTrack
methodology to measure and track
our targets, which incorporate a 1.5°C scenario
for our 2030 targets, for these high emitting
2
material sectors
. BlueTrack
a benchmark for a sector that 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 measure the financed
emissions within a selected boundary for a
sector, then aggregate these into a portfolio-
level metric – which is then compared to the
benchmark.
TM
is being expanded to cover the
BlueTrack
Agriculture, Aviation and UK Commercial Real
Estate sectors. The Residential Real Estate
sector is also being expanded to include housing
associations and small business buy-to-let
lending, and is now referred to as UK Housing.
During 2023 we assessed our baseline emissions
from our Shipping sector portfolio as part of our
NZBA commitment to set targets covering the
transportation sector. This assessment
concluded that we provided limited financing to a
small number of clients and have limited financed
emissions overall. We have therefore not set a
target for the Shipping sector at this time. We
may reassess our approach in the future should
this become a more material contributor to our
overall financed emissions.
+ Our Financed Emissions Methodology paper (published in
2024) provides more details of our methodology and can be
found within the ESG Resource Hub at: home.barclays/
sustainability/esg-resource-hub/reporting-and-disclosures/
Sector boundaries
We have 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
TM
we must
For each sector target in BlueTrack
consider which of a company's emissions we
should measure – for example, direct or indirect
emissions, or selected greenhouse gases such
as carbon dioxide and methane. 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 the part of a
company's value chain that generates most of
their 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 they are
significant for a company extracting fossil fuels.
The financed emissions covered under
BlueTrack
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 within both the value chain we
have chosen for the sector and the scope of
emissions we deem material for that activity.
Use of carbon credits
TM
We do not allow company-purchased offsets
such as 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, such as on-site carbon capture at a plant
– however, given this is currently marginal in the
context of emissions, there is currently no impact
on our portfolio-financed emissions metrics.
Target metrics
Barclays uses two financed emissions metrics to
set targets:
1. Emissions Intensity: how much CO2e (Carbon
Dioxide Equivalent) is released on average for a
certain amount of economic activity or
material produced;
2. Absolute Emissions: a measure of the absolute
emissions generated, or fair share, of the
company's emissions over time.
We use absolute emissions for the Energy and
Agriculture sectors, whose decarbonisation
pathway relies on a reduction in production
volume as well as on a reduction in intensity. The
Energy sector cannot reduce its carbon
emissions intensity below a certain point – a
barrel of oil cannot be decarbonised, for instance
– and therefore a reduction in absolute carbon
emissions is more appropriate. The Agriculture
sector requires a shift away from the production
of meat and dairy towards alternative protein
sources, as farmers respond to changing diets.
We use emissions intensity for the other sectors,
whose decarbonisation pathway relies primarily
on reduction in intensity rather than volumes.
These metrics are sensitive to factors which are
not directly related to real world emissions, such
as changes in the book value of debt and equity,
for absolute emissions, and changes in revenue
share for emissions intensity.
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 UK Housing portfolio and a target for
UK Agriculture, we use a UK-focused Balanced Net
Zero Scenario developed by the UK's Climate
Change Committee (CCC BNZ). For the UK CRE
portfolio we use the CRREM scenario that provides
decarbonisation pathways across different
property types consistent with the NZE2050
scenario. For the Aviation sector we use the Mission
Possible Partnership (MPP)'s 'Prudent' (PRU)
scenario – a 1.5°C-compatible roadmap for the
sector to achieve net zero emissions by 2050.
Baseline year
We measure our financed emissions for each
portfolio against a baseline metric determined in
the year we first assessed that target. The baseline
year therefore varies across the nine sectors
assessed to date, to ensure we are using the most
up-to-date data available when we set our targets –
or, in the case of UK Housing, a convergence point.
Use of target ranges
For Power, Cement, Steel, Automotive
manufacturing and Aviation, we have set
emissions intensity targets using a target range.
While we are clear on the reduction required to
o
align with the 1.5
C benchmark 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 be reduced 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.
Notes:
1 As defined in Foundations of Climate Mitigation Target Setting
published by the UNEP Finance Initiative (unepfi.org/wordpress/
wp-content/uploads/2022/05/Foundations-for-climate-
mitigation-target-setting.pdf).
2 When we first developed BlueTrack, the best available scenario
to develop Paris-aligned benchmarks for our financing portfolios
was the International Energy Agency’s Sustainable Development
Scenario (SDS) which was aligned to a 1.7°C world. The 2025
targets set for the Energy and Power sectors were informed by
the SDS scenario.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
Barclays PLC
Annual Report 2023 86
TCFD Strategy Recommendation (b) | Strategic Pillar 2
Update on progress against targets
We had set targets for our Energy and Power
portfolios in 2020, and since then we had
expanded the scope of sectors covered under a
target to also include Cement, Steel and
Automotive manufacturing.
Financed emissions metrics
Additionally, we had announced a convergence
point for the UK Housing sector. For all sectors
where we have previously set targets, we have
reported progress as at December 2023.
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.
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.
Sector
Sector boundaries
Emissions
scope
GHG included
Reference scenario Target metric
Setting our targets
Unit of
measurement
Baseline
year
Target versus baseline
Cumulative
change
Absolute emissions
(MtCO2e)
Physical intensity
Monitoring our progress in 2023
Sector
Energy
Power
Cement
Steel
Upstream Energy
1,2 & 3
Carbon dioxide and
methane
Power generators
1
Carbon dioxide
IEA SDS
IEA NZE2050
IEA SDS
IEA NZE2050
Cement manufacturers
1 & 2
All GHGs
IEA NZE2050
Steel manufacturers
1 & 2
All GHGs
IEA NZE2050
Automotive
manufacturing
Light Duty Vehicles
manufacturers
Aviation
Commercial Aviation (Air Travel)
– Passenger (including belly
cargo) and Dedicated cargo
UK Commercial
Real Estate
UK Corporate Bank
1,2 & 3
1 & 3
1 & 2
Agriculture
UK Livestock and Dairy Farming
1, 2 & 3
UK Housing2
UK buy-to-let and owner-
occupied mortgages, Social
Housing and Business Banking
1 & 2
Notes
All GHGs for Scope
1 and 2; carbon
dioxide for Scope 3
Carbon dioxide for
Scope 1; All GHGs
for Scope 3
IEA NZE2050
MPP Prudent
Carbon dioxide,
methane and
nitrous oxide
Carbon dioxide,
methane and
nitrous oxide
Carbon dioxide,
methane and
nitrous oxide
CRREM II
CCC BNZ
CCC BNZ
Physical
intensity
Physical
intensity
Physical
intensity
Physical
intensity
Physical
intensity
Physical
intensity
Absolute
emissions
Physical
intensity
Absolute
emissions
MtCO2e
(absolute)
2020
-15% by end of 2025
-40% by end of 2030
-30% by end of 2025
-44%
Δ
42.5
59.6 gCO2e/MJ
kgCO2e/MWh 2020
tCO2e/t
2021
tCO2e/t
2021
1
gCO2e/km
2022
gCO2e/RTK
2023
-50% to -69%
by end of 2030
-20% to -26%
by end of 2030
-20% to -40%
by end of 2030
-40% to -64%
by end of 2030
-11% to -16%
by end of 2030
2
kgCO2e/m
2023
-51% by end of 2030
MtCO2e
2023
-21% by end of 2030
2
kgCO2e/m
2023
Portfolio convergence
point vs. baseline
-40% by end of 2030
Baseline set in
2023
-26%
16.9
-8%
-16%
0%
0.8
1.3
6.0
4.3
0.1
Δ
2.4
1.7
Δ
241
Δ
0.573
Δ
1.635
Δ
175.2
Δ
882
Δ
30.0
N/A
Δ
32.1
1 Physical intensity (CO2e emissions per v-km travelled by LDV produced), expressed in gCO2e/km.
2 Barclays has identified a 2030 emissions intensity convergence point for UK Housing but has not set a formal target. This replaces the 2022 convergence point for ‘Residential Real Estate’.
Δ 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. Current limited assurance scope and opinions can be found within the ESG Resource Hub: home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b) | Strategic Pillar 2
Baselines at December 2023
Barclays PLC
Annual Report 2023 87
Unit
Baseline year
Baseline metric (last
reported)
Previously reported metrics
Recalculated metrics
Financed emissions for
December 2022
Change at December
2022 (percentage change)
Recalculated financed
emissions for December
2022
Theoretical
baseline metric
(re-baselined)
Sector
Energy
Power
Cement
Steel
MtCO2e (absolute)
kgCO2e/MWh
tCO2e/t
tCO2e/t
2020
2021
Automotive manufacturing
gCO2e/km
2022
Aviation
UK Commercial Real Estate
Agriculture
UK Housing1
Notes:
gCO2e/RTK
2
kgCO2e/m
MtCO2e (absolute)
2
kgCO2e/m
2023
75.7
331
0.625
Δ
1.945
167.2
Δ
882
Δ
30.0
Δ
2.4
Δ
32.1
51.7
302
0.610
-32%
-9%
-2%
51.6
298
0.611
No major impact of methodology changes
167.2
N/A
174.8
Δ
75.4
Δ
326
Δ
0.626
Δ
174.8
2
Replacing the former UK Residential Real Estate with a new baseline on an expanded scope
1 Barclays has identified a 2030 emissions intensity convergence point for UK Housing but has not set a formal target. This replaces the 2022 convergence point for ‘Residential Real Estate’.
Δ
2 The former UK residential real estate baseline, was re-baselined to 32.0
from 32.9, as reported in FY2022.
Δ 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. Current limited assurance scope and opinions can be found within the ESG Resource Hub: home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b) | Strategic Pillar 2
Progress against our existing sector targets
Barclays PLC
Annual Report 2023 88
Financed emissions - Energy
Financed emissions - Power
Financed emissions - Cement
Absolute emissions MtCO2e (Indexed 2020 = 100)
Physical Intensity kgCO2e/MWh (Indexed 2020 = 100)
Physical Intensity tCO2e/t (Indexed 2021 = 100)
Dec'23: 42.5 △
(-44%)
Dec'23: 0.573 △
(-8%)
Dec'23: 241 △
(-26%)
2020
2025
2030
2040
2020
2025
2030
2040
2020
2025
2030
2040
IEA NZE Benchmark: World Barclays' progress
Portfolio target path
Portfolio target path
IEA NZE Benchmark: World Barclays' progress
(range)
Portfolio target path
IEA NZE Benchmark: World Barclays' progress
(range)
Financed emissions - Steel
Financed emissions - Automotive manufacturing
Physical Intensity tCO2e/t (Indexed 2021 = 100)
Physical Intensity (gCO2e/km) (Indexed December 2022 = 100)
Dec'23: 1.635 △
(-16%)
Dec '23: 175.2 △
(0%)
2020
2025
2030
2040
2020
2025
2030
2040
Portfolio target path
IEA NZE Benchmark: World Barclays' progress
(range)
Portfolio target path
IEA NZE Benchmark: World Barclays' progress
(range)
Note: Δ 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. Current limited assurance scope and opinions can be found within the ESG Resource Hub: home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/
020406080100120140160020406080100020406080100120020406080100120020406080100120
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b) | Strategic Pillar 2
Progress against
our BlueTrackTM sector targets
TM
This report provides an update on our progress
towards achieving our previously announced
2025 and 2030 BlueTrack
sector targets. In
2023 and cumulatively, there are a number of
drivers behind the changes in our portfolio
emissions, including changes in our financing
across both our lending and capital markets
financing activity, our clients' emissions, client
data and metrics such as company valuation, and
other data inputs and methodology updates as
defined in our Financed Emissions Methodology
paper (published in 2024). We expect to continue
to see these impact our metrics in the future as
data availability and quality, methodologies,
guidance, and best practices for calculating our
financed emissions metrics – all of which include
differing levels of estimation –continue to evolve
and be refined.
Energy
To date our absolute financed emissions from
our upstream Energy portfolio are down 44% to
Δ
42.5 MtCO2e
from our 2020 baseline – an
additional 12% reduction from our 2022 level. Of
our total financed emissions, c.79% was related
to oil, gas and natural gas liquids (NGLs)
production, with NGLs being relatively
immaterial. The remaining c.21% was
attributable to coal production. Our progress in
2023 largely reflects reductions in our total
financing volumes for this portfolio as well as
impacts from changes in company book values
which can fluctuate year to year and thus impact
cumulative and year-over-year progress (either
positively or negatively) on our target.
Power
In 2023 our Power generation portfolio achieved
a 26% cumulative reduction in emission intensity
– an additional 17% reduction from our 2022
levels. This reflects our clients' continued
progress in reducing their own emissions
intensity, which was identified in part through
improved data collection and analysis, as well as
net reductions in the intensity of our new lending
activity – but was partially offset by a higher
intensity mix for our capital markets financing.
the decreased intensity reflects our clients'
continued progress in achieving emissions
reductions and a shift in our financing activity mix
towards lower-emissions clients.
Automotive manufacturing
Additionally a material portion of our 2023
progress was driven by a short-term transaction.
There is a risk that we are not able to replace this
with a transaction(s) of similar size and emissions
intensity which could result in an increase in our
reported emissions intensity.
TM
Within our Power portfolio our clients' ability to
continue transitioning, and therefore our ability
to continue increasing our green and transition
financing to help deliver our BlueTrack
Sustainable Financing targets, are dependent, at
least in part, on supply chains for renewable
energy, required investments in grid
infrastructure, a stable or positive policy
environment, and other factors potentially
beyond our control, including our clients'
strategic or financing decisions.
and
Despite our progress to date and the actions we
have taken to manage our portfolio, the
likelihood of achieving our targets – particularly
the 2025 target where the potential
management actions are narrowing – could be
significantly impacted by the variables and
dependencies described on this page.
Cement
The emissions intensity of our Cement portfolio
has reduced by a cumulative 8% against our
2021 baseline – a decrease of 6% from last year’s
metric. During 2023 we’ve seen a material
number of our clients in this sector update their
emissions intensity targets and receive SBTi
validation as 1.5°C-aligned.
Steel
Our Steel portfolio emissions intensity has
dropped by c.16% from our 2021 baseline – an
additional 5% decrease this year. During 2023
During 2023 our Automotive manufacturing
portfolio's emissions intensity remained broadly
flat. This reflects a reduction in the emissions
intensity of our clients as they increase their
electric vehicle sales, but was partially offset by
year-over-year reductions in our clients' green
bond issuance and a net increase in the
emissions intensity of our lending activity due to
the mix of our portfolio.
Future target progress
To date, emissions reductions in the real
economy have not been sufficient to align
economies to a 1.5°C pathway.
We expect our progress against these targets will
continue to be non-linear, due to the many
external dependencies and variables beyond
Barclays' control that may determine the pace of
transition. For example, a recent assessment
identified that plans, projections and policies for
fossil fuel production by governments are not in
line with the goals and timelines of the Paris
1
.
Agreement
Going forward our metrics will continue to have
the potential to reflect different levels of volatility
and could be impacted by a variety of external
factors, including but not limited to:
• The pace and timing of our clients’ progress,
on their individual transition pathways
•
Future technological advancements
• The public policy and regulatory environment
• Geopolitical or regional developments
• Updates to data inputs used by BlueTrack
TM
(e.g. company valuations).
The volatility of the mix and volume of capital
markets financing, which is included in our
Barclays PLC
Annual Report 2023 89
metrics, may also result in significant increases
and decreases in our metrics. Our ability to
achieve our targets may be affected positively or
negatively by these external factors.
Our target progress in future years could be
impacted by client portfolio decisions driven by
other non-financial factors, such as counterparty
risk, and other relevant business considerations.
Changes in our financing activity for a single
client within a portfolio can have a significant
impact on our reported metrics and progress and
may be outside of our control.
Progress against our targets may also be
impacted by management decisions based on
key drivers unrelated to climate or the transition,
for example prudent risk management practices.
Specifically across the Cement, Steel and
Automotive manufacturing portfolios, in addition
to the general risks and dependencies outlined
above, these targets are particularly sensitive to
even minor changes in our financing mix or
clients' emissions intensity, given the relatively
limited number of clients included in these
portfolios – so progress towards these targets
could be particularly volatile and significantly
impacted by the portfolio and client
dependencies outlined above.
Notes:
1 unep.org/resources/production-gap-report-2023
Δ 2023 data subject to independent Limited Assurance under ISAE
(UK) 3000 and ISAE 3410. Current limited assurance scope and
opinions can be found within the ESG Resource Hub:
home.barclays/sustainability/esg-resource-hub/reporting-and-
disclosures/
Managing our portfolios
We continue to manage our portfolios, balancing
between our commercial objectives, prudent risk
management practices and other non-financial
objectives in support of our strategy. As part of
this we take into account our relevant climate-
related risks and considerations, including how our
TM
portfolios are performing against our BlueTrack
targets so this can be evaluated in context
alongside other relevant business metrics.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
Barclays PLC
Annual Report 2023 90
TCFD Strategy Recommendation (b) | Strategic Pillar 2
We monitor our performance against our climate
targets on a regular basis. Where we identify
targets are potentially at risk of being missed –
particularly as target dates draw nearer and the
opportunities for us to take management actions
narrow – we will continue to reassess our
approach, taking into account broader business
considerations including potential franchise
impacts.
During 2023 we have continued to invest in
building improved reporting, tools, and
processes including our Client Transition
Framework, which enables us to adjust
management oversight based on our evolving
estimates of our future potential performance
against these targets.
+ Further details of how climate risk-related
considerations are managed can be found in the
managing impacts in lending and financing section on
page 236.
Client Transition Framework (CTF)
The CTF, first piloted in 2022, supports our
evaluation of our corporate clients' current and
expected future progress as they transition to a
low-carbon business model.
We conduct these assessments annually for
corporate clients in the Corporate and
Investment Bank that are in-scope for sectors
targets have been set. As
where BlueTrack
TM
new BlueTrack
targets are set the CTF will be
applied to our corporate clients in those sectors.
TM
During 2023 we enhanced our CTF based on
recommendations from the external review of
our pilot. The continued development of the CTF
leverages climate expertise across Barclays and
is informed by the evolving landscape and
guidance from third-party frameworks such as
TPI, CA100+ and SBTi, and other industry
initiatives including the UK's Transition Plan
Taskforce, and GFANZ. We have maintained the
general structure of our assessments with
component scores aggregating into an overall
CTF score.
The ambition component seeks to assess a
client's alignment with our emissions reduction
targets and 1.5°C scenario benchmarks across
the past, present, near- and long-term future
emissions. In our scoring assessments we place
a higher weighting on their past, present and
near-term future emissions targets than on their
long-term ones.
The credibility component seeks to assess the
qualitative elements of a client’s transition plan. It
considers criteria that indicate the likelihood a
client will meet its targets, such as board
oversight, low-carbon technologies employed,
and green capital or operational expenditure
plans. We more heavily weight the criteria that
are critical to having a credible plan than those
that are determined to be supporting criteria.
Most of these criteria are consistent across
sectors, however, we also consider some sector-
specific criteria. In total we evaluate over 80 data
points for each assessment. Examples of our
CTF criteria include, but are not limited to:
• The company’s ambition and targets to
reduce operational (Scope 1 and 2) emissions
• Historic Scope 3 disclosures and Scope 3
reduction targets, along with a 2030 target
• Any expansion of high-carbon activities
• Forward-looking green capex plan to achieve
their targets.
The sub-scores for each component are
combined to arrive at an overall CTF score from
T1 (best) to T5 (worst).
We have codified where clients would be deemed
out-of-scope for our CTF assessments. We
have set a minimum revenue share threshold to
identify which clients are required to be
assessed, though clients below this threshold
may still be assessed.
CTF overview
Ambition
Credibility
Assesses clients’ past, present and future emissions
as a proxy for their emissions reduction ambition
Assesses the critical and supporting qualitative
elements of clients’ transition plans as a proxy for
the credibility of their plans
Past
emissions
Evidence of progress
in emissions over the last
three years
Present
emissions
Comparison of current
TM
BlueTrack
emissions
against target glidepaths
Future
emissions
Assessment of client targets
including projected emissions
metrics and rates of change
to 2030 and 2050
Critical
criteria
Supporting
criteria
Assessment of disclosed
indicators that significantly
impact the likelihood of
achieving set target(s), such as
governance indicators, use of
low-carbon technologies,
green spending plans, and
expansion of carbon-intensive
assets
Assessment of the level of
consistency given to
transitioning their business,
such as the use of offsets/
credits, TCFD alignment and
SBTi target validation
submission
Sector-specific considerations
Assesses transition-related elements that have not been addressed within the other sections
Sector-specific indicators
Unscored criteria
Additional sector-specific factors that impact the
strength of a transition plan
Factoring additional data points that might be beneficial for
benchmarking purposes and/or for future reference
Energy
Power
Cement
Just transition pilot
• Methane
commitments
• Coal phase-
out plan
• Target set on
gross basis
Ambition score
A1- A5
Credibility score
C1 - C5
Client Transition Framework score
Best
T1
T2
T3
T4
T5
Worst
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
Barclays PLC
Annual Report 2023 91
TCFD Strategy Recommendation (b) | Strategic Pillar 2
Embedding the CTF
CTF assessments are increasingly used to inform
decision-making across Barclays, including client
engagement, restrictions on financing and
capital allocation.
During 2023 we expanded how CTF scores are
used in support of our broader climate strategy.
The CTF informs our engagement with clients while
also helping to identify and manage transition risk in
our own financing portfolios.
Capital is critical for a successful energy
transition and we are focusing our financing
towards clients actively engaged in the energy
transition. The scale of our business gives us the
opportunity to help finance the energy transition
– to use our global reach, products, expertise and
position in the global economy to work with our
clients, including those in the Energy sector, as
they transition to a low-carbon business model.
In 2023 we began climate-specific engagement for
those clients with CTF scores of T4 and T5,
facilitated by a newly established Client Transition
Review Forum (CTRF).
The CTRF consists of senior representatives from
across Sustainable Finance, ESG & Sustainability,
Climate Risk, Portfolio Management, and Banking
and is chaired by the Head of Sustainable Finance.
Informed by the CTF, this new forum conducts
holistic reviews of our business appetite alongside
the future client relationship potential. These are
informed by the CTF assessment and take into
account consideration of relevant risks and other
business factors.
We have found this engagement helps increase
our connectivity with these clients and can be
useful in identifying opportunities to further
finance their transition.
We are also using the CTF scores to inform our
business and credit appetite as we look to
manage transition risks within our portfolios. To
do this we have begun implementing CTF-linked
mandate and scale limits.
The CTF approach is kept under review and we are
considering enhancements in 2024, including
reviewing the weightings for criteria such as energy
clients capex, to align elements more closely to our
updated Climate Change Policy.
CTF results
n T1 (best)
n T2
n T3
n T4
n T5 (worst)
These reviews help determine our financing
appetite for these clients (including consideration
of client retention and conditions to refinancings),
alongside implications for our emissions
reduction targets, commercial, credit and
reputational impacts. Notwithstanding the
outcomes of the CTRF reviews, financing
decisions are transaction specific, and will
continue to be subject to consideration by
relevant committees, such as in relation to credit
risk, reputation, and capital impact.
As a newly established forum, its governance of the
CTRF will continue to evolve to ensure it remains fit
for purpose.
We reviewed over 300 client counterparties at
the CTRF in 2023, engaging with clients as
appropriate, to help build awareness of the need
to transition and gather information on how we
can best support them in their journey. The CTF
helps us prioritise client engagement, focusing
on those most at risk of falling behind our
transition expectations.
We have also begun to use the results from the
CTF assessments to drive engagements with
clients, facilitating discussions about their
transition plans and providing insights such as
highlighting how they benchmark against their
peers.
Note: Charts and figures exclude clients determined to be out
of scope for the CTF assessments. Clients may have scores in
multiple sectors but are included only once to avoid double-
counting.
Using our updated CTF methodology we
completed assessments covering over 1,250
counterparties during 2023 across our Power,
Energy, Steel, Cement, Automotive
manufacturing and Aviation BlueTrack
portfolios.
TM
sector
Findings, by client count, from our assessments
include:
• 86% have a public emissions reduction target
• of which 38% in SBTi-eligible sectors have
had their targets validated
• 67% have executive compensation tied to
ESG progress
• 85% have explicit board oversight of their
transition plan or emissions targets
• 40% have committed to a just transition.
5%6%21%17%36%48%37%29%1%By client countBy lending limits Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b) | Strategic Pillar 2
Energy and Power
Context: The Energy and Power transition
The successful transition of the Energy and
Power sectors is crucial to achieve net zero by
2050 as together they account for 75% of global
GHG emissions, the majority of which come from
the combustion of fossil fuels by end users – for
1
example, in automotives and power generation
.
Emissions from fossil fuel extraction, including
from flaring and venting, is also significant – and
responsible for 40% of global methane
2
.
emissions
The global economy still uses fossil fuels for
many essential activities – including electricity
generation, transport and heating. The IEA
scenarios to limit global warming to 1.5°C
assume continued but reducing use of fossil fuels
as part of the energy mix.
As Energy and Power play a fundamental role in
society, the transition must balance the need to
address energy security and shift energy supply
while meeting energy demand. Consideration
must also be given to the need for a just
transition, ensuring equitable access to energy
across communities.
We will continue to support an energy sector in
transition, focusing on the diversified energy
companies investing in low carbon and with
greater scrutiny on those engaged in developing
new oil and gas projects.
Notes:
1 See climatewatchdata.org/ghg-emissions
2 See iea.org/energy-system/fossil-fuels/methane-abatement
Reducing our Energy and Power-financed
emissions
We have set targets to reduce our financed
emissions from our Energy and Power portfolios
in line with the decarbonisation pathway set out
in the IEA Net Zero scenario (IEA NZE).
To meet our targets we utilise our full toolkit
including CTF assessments, client engagement,
portfolio management and restrictive policies,
which are included in our Climate Change
Statement.
As outlined on page 90 above, our CTF
assessments evaluate over 80 data points for
each assessment and, in relation to Energy and
Power, include the following additional criteria:
• Methane emissions reduction targets (for
Energy)
• Commitments to phase-out thermal coal (for
Power)
We actively engage with clients to help build
awareness of the need to transition and gather
information on how we can best support them in
their journey. The CTF is helping us to prioritise
client engagement, focusing on those most at
risk of falling behind our transition expectations.
We have established a climate portfolio
management team to steer our portfolio
towards achieving our targets and manage
transition risks, using CTF scores to inform our
business and credit appetite.
Total exposure to the Energy sector is subject to
a constrained and closely monitored aggregate
risk appetite. We have begun implementing CTF-
linked credit limits for the clients most at risk of
failing to transition in line with our targets and
climate risk appetite – currently identified as
those with scores of T4 and T5.
We have a Climate Change Statement which sets
out our positions and approach to sensitive
sectors. In 2024 we have updated the Climate
Change Statement to include new requirements
for the Energy sector and restrictions on the type
of exposures and risk we will finance going
forward.
Barclays PLC
Annual Report 2023 92
Notwithstanding the outcomes of the CTRF
reviews, financing decisions are transaction
specific, and will continue to be subject to
consideration by relevant committees, such as in
relation to credit risk, reputation and capital impact.
By 2026, we will only provide financing to Energy
clients with Scope 1 and 2 emissions reduction
targets, methane emissions targets, and
commitments to end all routine and non-
essential venting and flaring.
+ More details on the updated policy can be found on page 100,
our Climate Change Statement can be found home.barclays/
sustainability/esg-resource-hub/statements-and-policy-
positions/ and further information on our client engagement
can be found on page 107.
Power portfolio
• 74% of in-scope clients will have phased-out
coal by 2030
Under the updated Climate Change Statement,
Energy Groups with more than 10% of their total
planned upstream oil and gas capital expenditure in
expansion, non-diversified groups and Energy
Groups with the lowest CTF assessment scores
will be subject to mandatory annual review by the
CTRF to determine whether continued financing
support is appropriate in the context of their
expansion plans and overall transition plan.
CTF Energy and Power portfolio results
Energy portfolio
• 78% of in-scope clients have a methane-
reduction target
n T1 (best) n T2 n T3 n T4 n T5 (worst)
CTF energy portfolio score descriptions
Note: Charts and figures exclude clients determined to be out
of scope for the CTF assessments
T1
(best)
T2
T3
T4
Clients are fully aligned with our NZE targets. This requires net zero targets (NZE 1.5°C-aligned
or equivalent) across all relevant scopes, including Use of Sold Product (Scope 3, Category 11)
by 2050 (for Energy), evidence of strong progress already made, and disclosures of advanced
planning to reduce emissions further.
Clients have targets across all relevant scopes and strong plans but may be missing some of
the clarifying details of a T1 plan – or may not have demonstrated strong steps taken to date.
Clients may have very ambitious targets but lack the details to evidence that they will achieve it,
a weak target but robust disclosures evidencing that they will achieve it, or a combination
thereof. Energy clients without Scope 3 disclosures and Scope 3 targets cannot achieve better
than T3.
Clients have poorly disclosed plans. They generally have some combination of targets that are
weaker than the scenarios require, disclosures lacking in detail, or limited evidence that steps
are already being taken.
T5
(worst)
Clients have the default and lowest score. These clients provide limited publicly available
information on their sustainability targets and strategy. A client must have publicly
demonstrated transition planning including some evidence of their historic, current and future
emissions reduction efforts to score better than T5.
By client countBy lending limitsBy client countBy lending limits Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b) | Strategic Pillar 2
Aviation
Currently there are no alternative power
technologies – such as electric or hydrogen – for
commercial aircraft that are expected to be at
scale for the foreseeable future. Therefore,
decarbonising the Aviation sector over the next
10-15 years will require a significant increase in
the historical pace of emissions reductions –
which will be dependent on both the price and
availability of sustainable aviation fuel (SAF) and
the continued production and delivery of lower-
emissions aircraft.
Our Aviation emissions intensity target
We have set a target to reduce the financed
emissions intensity of our Airlines portfolio by
11-16% by end of 2030 against a 2023 baseline,
methodology:
calculated using our BlueTrack
TM
• The lower emissions reduction in the range
reflects a convergence point for our portfolio
with the MPP PRU scenario, which is consistent
with limiting global warming to 1.5°C.
• The higher emissions reduction in the range is
aligned to the rate of emissions intensity
reduction in the MPP PRU scenario, consistent
with our approach for our other existing 2030
targets.
Financed emissions - Aviation (Passenger and Cargo)
Physical Intensity (gCO2e/RTK) (Indexed December 2023 = 100)
Dec'23: 882 △
2023
2025
2030
2040
MPP Aviation Pathway
Barclays' progress Portfolio target path (range)
Estimating our financed emissions
Barclays is a founding signatory to the Pegasus
Principles – the first climate-aligned finance
framework for the Aviation sector, developed by
the Rocky Mountain Institute (RMI) in partnership
with global banks and in consultation with leading
airlines and lessors, The Pegasus Principles will
launch publicly this spring.
In developing our approach for the Aviation
sector we have worked closely to align our
BlueTrack™ methodology with this common
framework we expect will also be used by a
number of other peer banks. By aligning
ourselves with an emerging industry consensus
approach we hope to create consistency and
transparency for our clients and for our
stakeholders in our own reporting.
In line with the Pegasus Principles we are estimating
the financed emissions and emissions intensity of
our Aviation portfolio using a physical intensity
metric, gCO2e/revenue-tonne-kilometre (gCO2e/
RTK). The scope of this portfolio target includes
emissions related to direct combustion of jet fuel
by aircrafts (tank-to-wake/Scope 1) and
upstream production and refining (well-to-tank/
Scope 3) for commercial passengers (including
belly cargo) and dedicated air cargo operators.
Emissions scope can differ based on the actual
operator of the aircraft, as the owner of the
aircraft may not necessarily be the operator –
lessors versus airlines, for example. Military
aviation, corporate jets, general civil aviation, tour
operators and multi-modal logistics companies
are out of scope due to low materiality (as a share
of sector emissions) and data availability
challenges.
Barclays PLC
Annual Report 2023 93
To do this we have partnered with PACE (Platform
for Analysing Carbon Emissions), a Pegasus
Principles-qualified data provider, to provide
granular emissions and activity data based on
specific flight routes and aircraft flown for each
airline operator.
+
Further details on our financed emissions methodology can
be found in our latest Financed Emissions Methodology paper
(published in 2024) at: home.barclays/esg-resource-hub/
reporting-and-disclosures/
Future progress against this target
The general factors outlined on page 89 in
relation to progress against our targets will
equally be relevant to this portfolio. Additionally,
and more specifically, we are clear as to the level of
emissions reductions required to align with the MPP
pathway – but we recognise there are many
dependencies and variables outside of our control,
and that of our clients, which will determine how
quickly emissions intensity can reduce in this
sector.
We note that our clients’ ability to meet their own
targets is dependent on continued regulatory,
policy, technical, and supply chain support for the
industry – including the future availability and price
of SAF – and clients' progress towards achieving
their targets may impact our ability to achieve our
own.
Additionally we note that, while we are setting an
2030 interim target, many of our clients have set
their own interim targets to a 2035 date to
specifically account for hoped-for growth in SAF
production – and, since the level and timing of
that growth is an imperfect estimate, the
pathway to our targets may not be linear (or
close to linear), and may limit our ability to
accurately determine whether we are on path to
achieve, or are able to achieve, our own targets.
Note:
Δ 2023 data subject to independent limited assurance under ISAE
(UK) 3000 and ISAE 3410. Current limited assurance scope and
opinions can be found within the ESG Resource Hub:
home.barclays/sustainability/esg-resource-hub/reporting-and-
disclosures/
020406080100120 Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b) | Strategic Pillar 2
Agriculture
Barclays finances customers and clients across
the agriculture-food value chain – from farmers
and producers of food products to retailers and
restaurants. As one of the largest lenders to
farmers in the UK, Barclays is well placed to
provide support through the changing nature of
the Agricultural sector – in particular the ongoing
shifts in consumer diets. Other factors important
to consider are the impact of decarbonisation on
broader food security and affordability, where
upside and downside risks exist depending on the
form the transition takes as well as the
opportunity for carbon sequestration and
improving biodiversity – given the sector controls
71% of land in the UK.
+ Further information on our management of nature-related
risks, including in the UK Farming sector, identified during
our TNFD assessment of our European Agriculture and Food
portfolio can be found on page 276.
To support UK farmers through this transitional
period, Barclays finances activities that aim to
reduce emissions in Agriculture and result in
nature-positive outcomes. This includes
investment in low-carbon farming measures and
financing to improve machinery energy efficiency.
We also have a dedicated Agriculture Technology
Fund to support farming clients undertaking more
sustainable practices or implementing energy-
efficiency improvements. In addition, we support
early-stage companies developing technology
solutions needed for the transition to net zero
through our Sustainable Impact Capital portfolio.
For example, in 2023 we invested in Agricarbon –
a UK-based soil carbon measurement start-up.
+ Further details on our Sustainable Impact Capital can be
found on page 117.
Barclays engages with farmers to explore the
challenges and opportunities that may emerge
from the decarbonisation of the Agricultural
sector. In 2023 we launched a survey of our UK
Livestock and Dairy farming clients to better
understand the challenges they may face in
progressing towards net zero.
We also work individually with clients using our
Client Transition Tool (CTT) to identify nature
and decarbonisation risks, as well as considering
social risks. We support peer-to-peer learning
through our Farm to Farm initiative that
facilitates events for farmers in similar
geographic areas to cultivate innovative
sustainable farming practices. Over 100 farming
clients attended Farm to Farm events in 2023,
with further events planned for 2024.
Estimating our financed emissions
There are significant challenges to calculating
emissions for the Agricultural sector, notably a
critical lack of data on the activities and practices
of our agricultural customers and clients, and
modelling challenges around agricultural
emissions intensity. This is exacerbated by the
highly disaggregated nature of the farming
industry – characterised by a large number of
small farm holdings – which makes collating and
processing data challenging, and requires the use
of estimated data.
As a result Barclays has focused its initial
assessment on the UK Dairy and Livestock
sector – which is responsible for c.70% of UK
total agricultural GHG emissions. Barclays is
setting a target to reduce the absolute emissions
(MtCO2e) of our UK Dairy and Livestock portfolio
by 21% by end of 2030, against a 2023 baseline –
in line with the Balanced Net Zero (BNZ) 1.5°C-
aligned scenario developed by the CCC.
To help advance approaches to Agriculture-
financed emissions measurement, and target
setting in the banking sector more broadly,
Barclays is a member of the Banking for Impact
on Climate in Agriculture (B4ICA) working group –
which produced an introductory guide on target
setting for the sector in 2022 and worked on a
further update over 2023.
+
B4ICA Introductory guide can be found at: wbcsd.org/Focus-
Areas/Banking-for-Impact-on-Climate-in-Agriculture-B4ICA
Barclays PLC
Annual Report 2023 94
Barclays is also engaged in a three-year
collaboration with Oxford University to develop
food type production datasets for the UK. The
aim is to quantify Barclays-financed emissions in
more detail and consider additional transition
risks.
+ Further details on our partnership with Oxford University
can be found at: home.barclays/news/pressreleases/2022/10/
barclays-and-oxford-universityannounce- 3-year-agri-
climate-part/
+
Further details on our financed emissions methodology can
be found in our latest Financed Emissions Methodology paper
(published in 2024) at: home.barclays/esg-resource-hub/
reporting-and-disclosures/
Future progress against this target
The general factors outlined on page 89 in
relation to progress against our targets will
equally be relevant to this portfolio. Additionally,
and more specifically, the transition of the UK
Dairy and Livestock sector is significantly
dependent on broader consumer behavioural
change and public policy interventions – which
are outside Barclays' control and may affect our
ability to achieve this target.
Further, we expect the data underlying the UK
Dairy and Livestock model to continue to evolve
and be refined in order to address the challenges
outlined above, and that this could impact our
metrics and this target.
Financed emissions - UK Agriculture: Dairy and Livestock
Absolute emissions (MtCO2e) (Indexed December 2023 = 100)
Dec'23: 2.4 △
2023
2025
2030
2040
CCC - Synthetic BNZP Scenario: UK
Barclays' progress
Portfolio target path
Note:
Δ 2023 data subject to independent limited assurance under ISAE
(UK) 3000 and ISAE 3410. Current limited assurance scope and
opinions can be found within the ESG Resource Hub:
home.barclays/sustainability/esg-resource-hub/reporting-and-
disclosures/
020406080100120
Barclays PLC
Annual Report 2023 95
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b) | Strategic Pillar 2
Barclays' actions to decrease the emissions intensity of its Agriculture portfolio must be
complemented by public policy interventions to drive consumer and behavioural change.
Lever
Diet change
and food
waste
Low-carbon
farming
Low-carbon
machinery
Climate Change Committee's
description
Barclays' actions
20% reduction in meat and
dairy consumption (replaced
with plant-based), and 50%
reduction in food waste
(mostly holds) by end of 2030
Behavioural and innovative
measures to decarbonise food
production, such as cover
cropping and anaerobic
digestion
Electrification, hydrogen and
(later) phase-out of biofuels
• Assess and support farmers' ability to adapt income streams
in line with changing consumer habits
• Support farmers to implement low-carbon farming methods
through new and existing products
• Work across the supply chain to explore enabling low-carbon
farming methods for a greater number of farmers
• Offer customers incentives for renewables, including Green
Barclayloan, Agriculture Technology Fund, and Green Asset
Finance
• Work with the Agricultural machinery sector to understand
viability and availability of low-carbon machinery
Carbon Clarity partnership supports UK farmers
Launched in 2018, the Rebuilding Thriving Local Economies initiative was launched in four
locations across the UK to identify how Barclays can provide support over and above what we do
every day as a bank. By collaborating with local people and organisations, it has focused on
helping individuals develop skills and confidence – as well as supporting businesses to grow. In
2023 Barclays partnered with The Royal Countryside Fund to expand its Carbon Clarity
programme and provide free support for 53 farms in Somerset and Norfolk to understand how
they could better manage carbon. The programme offered an introduction to carbon reduction
on farms through group workshops, one-to-one support, and assistance in creating a carbon
‘action plan’.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b) | Strategic Pillar 2
UK Commercial Real Estate
Estimating our financed emissions
The Commercial Real Estate (CRE) sector has a
role to play in the decarbonisation of UK
buildings, the second-highest-emitting UK
sector. CRE represents the next highest portion
of GHG emissions in that sector after residential
buildings, primarily from the fossil fuel heating
systems used. There are number of significant
challenges to decarbonising the entire UK
buildings sector, which require engagement and
systematic change, outside of Barclays’ control
and as further outlined on page 97. CRE sector
challenges are further compounded by the
added complexity of landlord-tenant dynamics –
which requires collaboration on minimising
energy use, sharing of energy data and
consideration of energy intensity of fit-outs and
retrofit solutions. Further, the diverse building
stock in the UK is likely to require tailored client
strategies for these retrofit solutions.
The different characteristics of the clients in this
portfolio – which include institutional real estate
investors and quoted real estate companies with
their own transition strategies and stakeholder
expectations – mean there are different and
additional potential drivers of transition in this
portfolio. Further, the relationship-led nature of
the UK Corporate Bank and its in-house asset
management expertise enables a client-first
approach to influence transition planning at a
portfolio level. We are therefore setting a target
for this portfolio but recognise that there are
significant challenges to achieving it as a result of
factors outside of Barclays' control.
The in-scope portfolio represents the majority of
the UK commercial and residential real estate
investment financing to assets across a diverse
range of sub-sectors including office, retail,
industrial and logistics, and residential properties
managed within the UK Corporate Bank.
To support the transition of our commercial real
estate clients we have set a target to reduce the
2
financed emissions intensity (kgCO2e/m
) by
51% by end of 2030 against a 2023 baseline,
calculated using our BlueTrack
methodology
and integrating the approach recommended by
PCAF.
TM
The emission reductions required aligns with
CRREM 2022 – the leading global standard and
initiative for operational decarbonisation of real
estate assets – which provides the granularity of
pathways for sub-sectors within the in-scope
portfolio. We may expect our CRREM pathway to
change if the portfolio materially changes.
The high proportion of commercial properties
within scope has created challenges in data
matching to external sources. Consequently, we
are investing in our systems to increase the data
coverage and decrease the use of estimations in
our target setting in future years.
+ Further details on our financed emissions methodology can
be found in our latest Financed Emissions Methodology paper
(published in 2024) at: home.barclays/esg-resource-hub/
reporting-and-disclosures/
Barclays PLC
Annual Report 2023 96
Financed emissions - UK Commercial Real Estate
2
) (Indexed December 2023 = 100)
Physical Intensity (kgCO2e/m
Dec'23:30.0 △
2023
2025
2030
2040
CRREM II- 1.5 degree
Barclays' progress
Portfolio target path
Note:
Δ 2023 data subject to independent limited assurance under ISAE
(UK) 3000 and ISAE 3410. Current limited assurance scope and
opinions can be found within the ESG Resource Hub:
home.barclays/sustainability/esg-resource-hub/reporting-and-
disclosures/
Future progress against this target
The general factors outlined on page 89 in
relation to progress against our targets will
equally be relevant to this portfolio. Additionally,
and more specifically, CRE is dependent on
broader industry and regulatory changes which
are required to deliver the decarbonisation of the
UK energy grid, the phasing-out of fossil fuel
heating, and the maturity of supply chain to
deliver the required retrofit solutions. Regulation
and policy advancement will also play a key role,
especially in relation to supporting low-carbon
heating and setting requirements in relation to
EPC standards. These changes are outside
Barclays' control and may affect our ability to
achieve this target.
Further, as the data underlying our model
continues to evolve and be refined to address
the challenges outlined above, this could impact
our metrics and this target.
We will continue to engage with clients to
understand their approach to the transition and
how Barclays can best support – ranging from
education to tailored loan solutions. Over the
medium term, supporting new residential
developments through our Sustainable
Residential Development Framework – which
enables the classification and tracking of
residential development loans to our UK
Corporate Banking clients, as well as the
deployment of sustainability-linked loans – which
will support our housebuilding clients in achieving
their sustainability goals including reducing
emissions of new homes built.
+
Read more about the Sustainable Residential
Development Framework here: .barclayscorporate.com/
content/dam/barclayscorporate-com/documents/
solutions/corporate-banking-solutions/Green-solutions/
Sustainable-residential-development-landscape.pdf
020406080100120 Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b) | Strategic Pillar 2
High-level assessment of drivers of net zero for UK buildings
Driver
Barclays' role
Barclays PLC
Annual Report 2023 97
Decreasing the emissions intensity of Barclays’ UK Housing and UK CRE portfolio is highly dependent on external changes and public policy interventions to deliver the drivers below
Improvement in energy
efficiency of existing buildings
• Continue to offer education, financing products and services to incentivise retrofitting
• Advocating for external measures to drive take-up of retrofitting
Decarbonisation of UK
electricity grid
Phasing-out of fossil fuels in
heating
New homes built to net zero
standard
Behavioural change
• Support Social Housing providers and commercial landlords in their transition journey
• 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
• Continue to offer education, products and services to incentivise customers switching to low-carbon heating
• Continue to promote energy efficiency in new builds through propositions such as Green Home Mortgages
• Continue supporting our Corporate Bank's real estate clients in their transition – for example through Barclays' Sustainable Residential Development Framework
• Continue supporting our Social Housing providers to provide energy-efficient, affordable new housing (to own and rent)
• Continue to offer education to customers on energy efficiency and promote reduction of usage through tools, awareness and partnerships
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b) | Strategic Pillar 2
UK Housing
Financed emissions - UK Housing
Widened scope for UK Housing
2
) (Indexed December 2022 = 100)
Physical Intensity (kgCO2e/m
Buildings contributed 17% of total UK GHG
emissions in 2022, of which residential buildings
represented 75% – 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 an effort to confront and quantify these
challenges we are expanding the scope of our
previously announced UK Residential Real Estate
convergence point. The expanded scope, renamed
to UK Housing sector, now includes Social Housing
and Business Banking Real Estate portfolios,
alongside the previous scope of Barclays UK
residential and Private Banking mortgage portfolios.
The real estate portfolios within the UK Housing
sector share similar underlying assets – 99% are UK
residential properties – thereby referencing the
same CCC BNZ pathway and sharing similar
decarbonisation levers. Barclays continues to
support the UK Housing sector through the
provision of mortgages, financing of social housing
providers and expanded product offerings designed
to support the decarbonisation of the UK Housing
stock.
Composition of UK Housing portfolio
Dec'23
n Barclays UK/Private bank Mortgages
n Social Housing
n Business Bank Real Estate
// Dec'23: 32.1 △
2022
2023
2025
2030
2040
CCC - Synthetic BNZP Scenario: UK ▲ Portfolio convergence point // Dec 2023 baseline for new UK Housing convergence point
Progress in 2023 for previously announced UK Residential Real Estate convergence point
Note:
Δ 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. Current limited assurance scope and opinions can
be found within the ESG Resource Hub: home.barclays/sustainability/esg-resource-hub/reporting-and-disclosures/
Estimating our financed emissions
The decarbonisation of the UK Housing sector in
line with the CCC BNZ scenario depends mostly on
external changes and public policy interventions.
Without these external changes, Barclays cannot
materially decrease the emissions intensity of its UK
Housing 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 this time. In 2022 we
estimated the financed emissions and emissions
intensity of our UK Residential Real Estate sector by
integrating the PCAF approach into BlueTrack
TM
.
In 2023 the emissions intensity for that sector
increased by c.1% due to increased emissions
from the UK electricity grid – despite an
improvement in known EPC ratings for our
Barclays UK mortgage portfolio. Going forwards,
the additional portfolios making up the expanded
scope of the UK Housing sector will be tracked.
We continue to use the CCC BNZ scenario as the
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. We are maintaining a convergence point of a
40% reduction in CO2e emissions intensity by the
end of 2030. However, to reflect the expanded
scope, this will now be against a 2023 baseline for
the UK Housing sector.
+
Further details on our financed emissions methodology can
be found in our latest Financed Emissions Methodology paper
at: home.barclays/esg-resource-hub/reporting-and-
disclosures/
Barclays PLC
Annual Report 2023 98
Drivers of reduction in emissions
in UK Housing
Key drivers in the transition to net zero in the UK
Housing sector are the decarbonisation of the
UK electricity grid and the phasing-out of fossil
fuels in domestic heating through the switch to
low-carbon heating – bringing cleaner energy
into our customers' homes. This will largely be
driven by the transition of the Power sector
alongside UK Government policy to drive the
decarbonisation of the UK electricity grid and
promote take up of low-carbon heating. Barclays
can play a role through supporting renewable
energy projects and clients in the Power sector,
through Sustainable and Transition Finance
activity and through Sustainable Impact Capital
investments.
Another key driver required to reach net zero in
the UK Housing sector is to improve the energy
efficiency of existing homes – which includes
improving the fabric of homes and adopting
other energy efficiency measures. Other key
contributors include new homes being built to
net zero standard, with low-carbon energy
sources and high energy efficiency ratings, and a
reduction in energy consumption through
changes in behaviour.
+ Read more about the Barclays-commissioned report from
Ipsos UK on consumer retrofitting behaviour on page 112.
As a mortgage lender to retail and business
banking clients, we can support customers who
choose to retrofit their properties, switch to low-
carbon heating, and explore ways to reduce their
energy consumption by providing financial
products, services and partner offers.
+ Further details on our Greener Homes Propositions can be
found on page 111.
164.79.91.7Loan £ bn020406080100120 Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b) | Strategic Pillar 2
Our Social Housing business engages with clients
on ESG, including where they are on their
transition journey and what we can do to support
them. The sector is already demonstrating above-
average energy efficiency in portfolios and many
housing associations have a stated objective of
moving stock to EPC C or better by 2030. Aligned
to this objective the sector’s energy efficiency has
been improving – and we are seeing examples of
deep retrofit projects and newly delivered housing
schemes with properties rated EPC band A/B.
As an established lender to the Social Housing
sector, we continue to be an active market
participant, are structuring some of our loans with
sustainability metrics where this is within client
appetite, and have amended covenant terms we
are prepared to accept to support retrofit.
However, we expect the overall impact of our
actions to be low given the barriers to retrofitting
– such as high upfront costs and current low
customer demand due to low incentives to
change. Additionally, the potential management
actions available to Barclays are limited due to
this being a portfolio of customers or end users
who are retail in nature, and predominantly
consisting of residential properties.
To see more about Barclays actions with regards
to the drivers of net zero for UK Buildings, please
refer to the table on page 97 above for details of
Barclays' approach to drivers in UK buildings.
Our EPC ambition
1
Barclays is expanding its EPC ambition scope
to
include Social Housing, Business Banking Real
Estate and Kensington Mortgage Company
2
Limited
, alongside the previous scope of the
Barclays UK mortgages portfolio.
In line with our efforts to improve the energy
efficiency of our UK Housing portfolio, Barclays
has set an updated EPC ambition of 55% of
properties and collateral in scope of our EPC
ambition – with a known EPC to be rated band C
or better by 2030.
3
As at the end of Q3 2023, 47.9%
of Barclays
properties and collateral in scope of our EPC
ambition with a known EPC were rated band C or
better.
There are industry-wide challenges to ensure the
properties in our portfolio have EPC certificates,
given approximately one-third of housing stock
in England and Wales does not have a valid EPC
rating.
EPC ratings of properties and collateral
in scope of EPC ambition4
2023 total: 744,098
18,051
3,601
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
2,227
47.9%
of properties and collateral rated
A-C of available EPCs
Notes
1 EPC ambition scope does not currently include Private Bank due
to EPC data reporting limitations.
2 Kensington Mortgage Company Limited is not currently included
in UK Housing sector emissions intensity convergence point due
to portfolio reporting limitations.
3 Metric based on number of properties and collateral in portfolios
that make up the EPC ambition scope as of 31 December 2023.
4 EPC data for Barclays UK mortgages and Kensington Mortgage
Company Limited are as of 30 September 2023. Matched EPC
data for Social Housing and Business Banking Real Estate are as
of 31 October 2023.
Barclays PLC
Annual Report 2023 99
We intend to build on this assessment to deepen
our understanding of the emissions associated
with our financing activities. Informed by this
work, we intend to consider the most appropriate
approach to extend our target coverage with the
aim of ensuring it covers relevant areas of the
value chain and/or our financing activities.
Together, our work to set financed emissions
reduction targets as part of our commitment to
the NZBA, and to establish a baseline
assessment of the emissions associated with our
financing activities consistent with the PCAF
Standard, will aid our understanding of the extent
to which our financing aligns with the goals and
timelines of the Paris Agreement.
During 2024 we intend to further develop our
approach to the implementation of the
Transition Plan Taskforce (TPT)'s
recommendations – and to include information
relating to transition planning in future climate
disclosures. As part of this, we intend to develop
Sector Transition Strategies aimed at
summarising our approach to support the
transition in a particular sector.
Notes:
1 As defined in Foundations of Climate Mitigation Target Setting
published by the UNEP Finance Initiative (unepfi.org/wordpress/
wp-content/uploads/2022/05/Foundations-for-climate-
mitigation-target-setting.pdf).
2 With the exception of diversified mining companies where
aluminium production is a small element of their overall activities,
and where it would therefore be difficult to set standalone
aluminium emissions intensity reduction targets.
Ongoing work on portfolio alignment
As part of our commitment under the NZBA, we
1
have set targets for material
high-emitting
sectors in our portfolio.
TM
, we have assessed our
Using BlueTrack
financed emissions and have targets for eight
high-emitting sectors. These targets cover our
Energy, Power, Cement, Steel, Automotive
manufacturing, Agriculture, Aviation, and CRE
portfolios. We have also set a convergence point
for UK Housing.
We previously assessed financed emissions for
Aluminium – and, during 2023, for Shipping – but
decided against setting targets. For Aluminium,
this was the result of a detailed review of our
Metals (Steel and Aluminium) portfolios, which
found that Barclays does not have a material
2
. For Shipping,
exposure to the Aluminium sector
as explained on page 85 in relation to material
sectors and net-zero-aligned targets, our
assessment identified that due to our limited
financing volumes and financed emissions across
a small number of clients it would be difficult to
set a target at this time.
During 2023 we also developed a high-level
modelled assessment of the emissions
associated with our financing activities across
our portfolio, largely aligned to the PCAF
Standard – including undrawn commitments,
contingent liabilities and capital markets
financing.
+ See section Reducing our financed emissions
on page 80.
94,024271,732224,405130,058
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b) | Strategic Pillar 2
Restrictive policies
In addition to setting sector-specific emission
reduction targets, consistent with our Purpose
and driven by consideration of all 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.
Our restrictive policies are regularly reviewed and
updated in light of the rapidly changing external
environment and are informed by engagement
with our stakeholders, including shareholders,
clients, subject specialists and civil society
groups. In 2023 this included a review of nature-
related impacts and dependencies and social
risks of different technology types to help inform
our approach to due diligence.
Our Climate Change Statement sets out our
positions and approach to sensitive sectors with
tightening policy criteria and increasing
expectations over time. In 2024 we have updated
the Climate Change Statement to include new
requirements for upstream oil and gas and
restrictions on the type of exposures and risk we
will finance going forward, as well as additional
restrictions on financing in relation to the
Amazon Biome, ultra-deep water and extra
heavy oil).
For further details on the scope and application
of the updated positions please see page 63.
Barclays will continue to support an energy
sector in transition, focusing on the diversified
energy companies investing in low carbon and
with greater scrutiny on those engaged in
developing new upstream oil and gas projects.
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 anticipate that companies which are unable
or unwilling to reduce or eliminate their emissions
consistent with internationally accepted
pathways may find it increasingly difficult to
access financing, including through Barclays.
Further restrictions are set out in our Position
Statements relating to Forestry & Agricultural
Commodities as well as World Heritage Site and
Ramsar Wetlands, which were reviewed in April
2023. In the latter case only minor changes were
made.
We will continue to keep our policies, targets and
progress under review in light of the output of
both EDD and CTF reviews, the rapidly changing
external environment and the need to support
governments and clients, in our efforts to meet
our ambition of being a net zero bank by 2050.
Position and policy statements on sensitive sectors
Climate change
Forestry and Agricultural
commodities
• Timber, pulp and paper
• Palm oil
• Soy
• Beef (new)
• Upstream oil and gas (new)
• Unconventional oil and gas
– Oil sands
– Fracking
– Arctic oil and gas
– Amazon oil and gas (new)
– Ultra-deep water (new)
– Extra heavy oil (new)
• Thermal coal mining
• Thermal coal power
• Biomass (new)
+ Further details can be found at:
home.barclays/sustainability/esg-resource-hub/statements-and-policy-positions/
Barclays PLC
Annual Report 2023 100
Forestry and Agricultural
Commodities Statement
Barclays recognises the critical importance
of addressing deforestation in delivering on
global climate and biodiversity goals. A major
cause of deforestation is the production of
forestry and agricultural commodities such
as timber, beef, palm oil and soy, and we
have a position statement and due diligence
approach that applies to clients involved in
these activities (first published in 2019 for
forestry and palm oil and refreshed in 2020
to include soy).
We have engaged with investors, clients and
civil society organisations on this topic,
which has informed a review of our Forestry
and Agricultural Commodities Statement.
This was updated in April 2023 with a number
of significant changes.
The updated Statement now covers clients
involved in South American beef production
or primary processing, and enhances the
existing requirements for clients involved in
soy and palm oil. Among other criteria, the
Statement requires that these clients
commit to having fully traceable and
deforestation-free commodity supply chains
by the end of 2025 – a position aligned with
industry good practice guidance such as the
Accountability Framework Initiative¹ and
Agriculture Sector Roadmap for 1.5°C².
In addition, the Statement requires that
clients prohibit the production or primary
processing of soy or beef from deforested
areas of the Amazon, in recognition of the
critical nature of this biome to biodiversity
and climate objectives.
Notes:
1 accountability-framework.org/
2 tropicalforestalliance.org/en/collective-action-agenda/
cop27-roadmap/
+ For further information, please see our Forestry and
Agricultural Commodities Statement: home.barclays/
content/dam/home-barclays/documents/citizenship/our-
reporting-and-policy-positions/Forestry-and-Agricultural-
Commodities-Statement.pdf
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b) | Strategic Pillar 3
Financing the transition
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. We also announced an
extension of our Sustainable Impact Capital
portfolio, with a new mandate to invest up to
£500m into global climate tech start-ups by
the end of 2027.
Facilitating $1trn of Sustainable and
Transition Financing
At Barclays we are clear that addressing climate
change is a complex challenge that demands a
fundamental transformation of the global economy.
Low-carbon technologies, infrastructure and
capacity must be scaled up to meet growing energy
demands and for the world to reach net zero. The
financial sector has an important role to play in
supporting the transition and we are determined to
play our part. We are deploying financing to help
scale-up the necessary activities needed in the
transition to net zero.
+ For further details on climate-related
opportunities see page 70.
In December 2022 we announced a new target,
to facilitate $1trn of Sustainable and Transition
Financing between 2023 and the end of 2030.
This followed our two previously announced
targets: to deliver £150bn of social,
environmental and sustainability-linked financing
by 2025, which we surpassed in 2021, and to
deliver £100bn of green financing by 2030, which
we surpassed in 2023.
Our $1trn target encompasses the green, social,
transition and broader sustainability-linked
financing requirements of clients including
corporates, governments and the public sector,
financial institutions 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. We are also
facilitating funding into green technologies and low-
carbon infrastructure projects, as well as using our
advisory capabilities, product sets and financial
expertise to help our customers and clients realise
their own transitions to a low-carbon economy.
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. In early 2024 we
announced our Transition Finance Framework
(TFF), which outlines the criteria for transactions to
qualify as transition financing and sits alongside our
Sustainable Finance Framework (SFF) to define
what can be included against this target.
+ Examples of qualifying transactions can be seen in our case
studies on pages 30, 115 and 116.
Our ability to meet the $1trn target and progress
towards it from year to year will be dependent on
a number of factors and variables outside our
control. Factors such as market conditions,
policy, laws, regulation, geopolitical
developments and stakeholder expectations -
including approaches to product labelling and
regulatory scrutiny of green, sustainability-linked
and social products - could impact lending and
capital markets appetite and our approach to risk
management, and therefore present a risk to our
progress against, and delivery of, the target.
Barclays PLC
Annual Report 2023 101
Additionally, new climate and decarbonisation
technologies may scale at varying rates, including
being reliant on the supply and demand of raw
materials, which may impact financing volumes.
We will continue to review and adapt our approach
to Sustainable and Transition Financing in
response to the evolving market opportunities.
Progress against our $1trn target
Δ
During 2023 we facilitated $67.8bn
of Sustainable
and Transition Financing, of which $67.4bn was
sustainable financing, slightly up on 2022 of $65.3bn,
Δ
and $0.4bn
was transition financing that qualified
against our new Transition Finance Framework. Our
Δ
facilitation of $67.8bn
of Sustainable and Transition
Financing in a challenging market demonstrates our
continued focus on supporting our clients on their
sustainability journeys.
1
Bond issuance
was the largest product category in
2023, accounting for 76% of total Sustainable and
Transition Financing while loans and equity
accounted for 19% and 3% respectively. This mix
showed a small shift towards bond activity and away
from loans compared to the mix of our 2022
sustainable financing of $65.3bn, which comprised
71% bond issuance, 26% loans and 2% equity.
Sustainable finance
Sustainable financing, aligned to our Sustainable
Finance Framework, 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.
Social financing
Raising finance for clients including
supranational, national and regional development
Δ
institutions was a key driver of the $32.4bn
of
social financing facilitated in 2023 (2022:
$30.0bn). In 2023, we continued to see 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. As in
2022, we have also seen the use of social KPIs
within sustainability-linked financing such as
targets linked to gender diversity.
Environmental financing
Δ
In 2023, we facilitated $24.1bn
of environmental
financing (2022: $21.7bn). This performance
reflected continued demand from our clients and
our strategy to work with them to help facilitate
their transitions to a low-carbon economy.
Sustainability-linked financing
Sustainability-linked bonds (SLBs) and
sustainability-linked loans (SLLs) are forward-
looking, performance-based debt instruments
issued with specific sustainability performance
targets. Our sustainability-linked financing
Δ
totalled $10.9bn
in 2023 (2022: $13.7bn). The
sustainability-linked market continues to be of
importance to both investors and issuers alike
who use these instruments to embed their
sustainability targets into financing commitments
and we look forward to continuing to work with
our clients to innovate the product set.
Note
Δ 2023 data subject to independent limited assurance under ISAE
(UK) 3000 and ISAE 3410. Current limited assurance scope and
opinion can be found within the ESG Resource Hub:
home.barclays/sustainability/esg-resource-hub/reporting-and-
disclosures/
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b) | Strategic Pillar 3
Transition financing
Facilitating £100bn of green financing
Δ
In 2023, we facilitated $0.4bn
of transition
financing under our new Transition Finance
Framework. While new technologies are still
emerging, we are identifying opportunities to
finance decarbonisation pathways across high-
emitting sectors, including energy, power,
chemicals, and metals. We are looking to play
a role in supporting a range of carbon and
emission reduction projects – from the
manufacturing of blue hydrogen and related
infrastructure for end-use sectors with limited
decarbonisation alternatives, to the
electrification of compressor units, resulting in
the elimination of natural gas use, as well as the
adoption of low-carbon technologies, As
emerging technologies scale and continue to
develop, we are committed to leveraging our
expertise to further identify opportunities for
transition financing.
+
For further details on our Sustainable Finance Framework
and Transition Finance Framework see page 104.
Since 2018 we have facilitated a total of
Δ
£113.7bn
green financing – exceeding our
target of £100bn well ahead of the 2030 target
date.
Δ
In 2023 we facilitated £25.9bn
(2022: £25.5bn),
comprising:
• Labelled use of proceeds and general purpose
financing in environmental categories of
£19.8bn
(2022: £18.0bn)
Δ
• Sustainability-linked financing that
incorporates environmental performance
Δ
(2022:£7.5bn).
targets of £6.2bn
Breaking down our green financing by product
type, the largest category in 2023 was bond
issuance – accounting for 63% of the total (2022:
61%). Loans and equity made up 30% (2022:
33%) and 6% (2022: 4%) respectively.
Notes
1 Bond issuance includes Bonds (DCM), CMBS, Securitization,
Munis and PCM Debt.
Δ 2023 data subject to independent limited assurance under ISAE
(UK) 3000 and ISAE 3410. Current limited assurance scope and
opinion can be found within the ESG Resource Hub:
home.barclays/sustainability/esg-resource-hub/reporting-and-
disclosures/
Barclays PLC
Annual Report 2023 102
We continue to drive wider commercial and
strategic opportunities for Barclays UK,
Corporate Banking and Investment Banking with
those companies.
We continue to focus on decarbonisation
technologies supporting transition within
carbon-intensive sectors, particularly where
Barclays has meaningful client exposure – such
as Power, Industry, Transport, Agriculture and
Real Estate – including solutions delivering
carbon capture, carbon dioxide removal and
green hydrogen.
Sustainable Impact Capital portfolio:
Mandate to invest up to £500m into
global climate technology start-ups
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 in environmentally
focused climate technology companies by 2025
– helping support our clients to transition
towards a low-carbon economy, scale solutions
to environmental challenges, and fill their
growth-stage funding gaps.
In evidence of the success of the investments, in
December 2022 we announced an increase of
the investment mandate to invest up to £500m
by the end of 2027.
To date we have invested £138m into 21
innovative companies. These investments have
supported many aspects of climate tech
innovation, from property retrofit solutions to
long-duration energy storage and hydrogen
technologies.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b) | Strategic Pillar 3
Sustainable finance dashboard
$1trn Sustainable and Transition Financing facilitated
(2023-2030)*
Annual breakdown by category
Annual breakdown by region
($bn)
2023
2022
($bn)
2023
2022
Barclays PLC
Annual Report 2023 103
Achieved to date
$67.8bnΔ
Annual breakdown by product
($bn)
2023
2022
n Environmental n Social n Sustainability-linked n Transition
n Americas n UK/Europe n Asia and Rest of World
n Bonds n Equity n Loans n Investments n Other (Contingent)
£100bn green financing facilitated
(2018-2030)
Breakdown by year
(£bn)
2023
2022
2021
2020
2019
2018
Breakdown by region
(£bn)
2023
2022
2021
2020
2019
2018
Achieved to date
£113.7bnΔ
Breakdown by product
(£bn)
2023
2022
2021
2020
2019
2018
n Environmental n Sustainability-linked (green)
n Americas n UK/Europe n Asia and Rest of World
n Bonds n Equity n Loans n Investments n Other (Contingent)
Notes
Δ 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. Current limited assurance scope and opinions can be found within the ESG Resource Hub
* FY 2022 financing figures are provided only to facilitate comparison and do not count towards the target. FY 2022 numbers are converted based on year-end FX closing (spot) rate.
+ 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/
24.1△32.4△10.9△0.4△21.730.013.722.938.96.023.937.14.451.32.012.91.646.11.517.20.019.8△18.022.614.87.85.36.2△7.57.22.81.40.36.57.112.77.93.32.317.816.814.79.05.03.01.71.72.40.70.90.316.415.618.912.27.0 4.8 1.50.94.41.50.10.37.28.36.23.82.1 0.60.90.7
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b) | Strategic Pillar 3
Barclays' Sustainable and Transition
Finance Frameworks
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, sustainable 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.
We have updated our SFF to version 4.1,
published in February 2024, which will apply to
financing volumes from January 2024 tracked
against our 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/
Barclays PLC
Annual Report 2023 104
Transition Finance Framework
Our transition financing is tracked using the
methodology set out in the Barclays Transition
Finance Framework (TFF).
Barclays has developed and published in February
2024 the first version of the TFF for classifying
financing as 'transition' for the purpose of
tracking and disclosing our performance against
our target to facilitate $1trn of Sustainable and
Transition Financing between 2023 and the end
of 2030.
The inclusion of transition financing in this target
reflects our recognition of the importance of
lending, facilitating funding and investing in
technologies and activities that support GHG
emissions reduction, directly or indirectly, in
high-emitting and hard-to-abate sectors.
The TFF is complementary to our Sustainable
Finance Framework, The TFF augments the
scope of Barclays' SFF and determines the
eligibility of transition activities that sit outside
the sustainable finance already covered by
the SFF.
As there is no universal consensus as to how to
define 'transition' activities, Barclays has
developed its own definition of transition finance
as follows:
Our definition of transition finance
Transition finance is any financing including
lending, capital markets and other
financing solutions provided to clients for
activities – including technologies – that
support GHG emissions reduction directly
or indirectly in high-emitting and hard-to-
abate sectors towards a 1.5°C pathway.
The TFF outlines the criteria for eligible
transactions with a set of defined principles to
guide us in the application of our definition of
transition finance as we support high-emitting
clients and finance real economy
decarbonisation.
As innovation and market principles in relation to
transition finance continue to accelerate and
evolve, we will continue to consider and develop
our definition of transition finance and the
coverage under the TFF.
+ Barclays' Transition Finance Framework can be found online
in our ESG Resource Hub at: home.barclays/sustainability/esg-
resource-hub/reporting-and-disclosures/
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
Barclays PLC
Annual Report 2023 105
TCFD Strategy Recommendation (b) | Strategic Pillar 3
Financing nature
As we execute our sustainable finance strategy,
we aim to identify opportunities to play a role in
supporting the financing of nature – in particular
by bringing together our combined retail,
corporate and investment banking activities. In
2023 we identified the opportunity for Barclays
to contribute to the goal of a nature-positive
food system as one of three strategic themes
during the development of our Group
sustainable finance strategy. Although our
financing activities in relation to nature may still
be relatively nascent, we are aiming to expand
on these and have provided some examples of
progress made and initiatives developed in
2023 below.
Supporting soil through technology
investment
Regenerative agricultural practices have
significant potential to support climate
change mitigation and enhance the resilience
of food value chains through improved soil
health. Accurate measurement of soil carbon
is a factor constraining the growth of
regenerative practices in UK agriculture,
where Barclays has a strong presence.
The market for scalable, high-accuracy soil
carbon measurement is nascent, with several
early-stage companies pioneering new
technologies.
In Barclays UK we believe nature is a key area
where we can make an impact, due to our
prominent role in financing UK agriculture and
agricultural land purchases. During the past
year we have lent funds to customers to
purchase land for deployment under the
Biodiversity Net Gain scheme, and supported a
leading wilding estate in commercialising its
activities as it prepares for future sales from
nature-positive outcomes. We also support
farmers who seek to apply more sustainable
farming practices, and have been actively
investigating how we can support farmers to
safely access private nature markets. Finally,
Barclays Eagle Labs is supporting a Venture
Launchpad cohort run by Carbon13 – focused
on Land, Food and Nature.
In 2023 SIC invested in Agricarbon, a UK-
based company that has developed market-
leading soil carbon measurement technology,
to support the growth of regenerative
agricultural practices.
Agricarbon’s end-to-end measurement
process – which involves automating lab-
based processes, including elemental analysis
– addresses the gap in the market for
scalable, high-accuracy soil carbon
measurement.
Agricarbon has grown rapidly since its
commercial launch in 2021, and the company
already serves an international client base
including some of the world’s largest food and
beverage companies, carbon project
developers, and natural capital asset
managers. With the proceeds from the
fundraising, Agricarbon is seeking to
accelerate its international expansion.
We are supporting environmentally focused
start-ups through our Sustainable Impact
Capital (SIC) portfolio, led by Barclays’ Principal
Investments team – which has a mandate to
invest up to £500m by the end of 2027 in the
equity of these companies, which target the
goals and timelines of the Paris Agreement.
We are also actively developing nature-related
products and solutions to support our clients in
the Corporate and Investment Bank. In 2023
we strengthened our coverage of Agriculture
and AgTech companies through a senior hire in
our Sustainable and Impact Banking team.
We are also exploring other innovative financial
structures that can redirect financing at scale
towards nature, such as debt for nature swaps.
In addition to client offerings, we have also
identified the need to build institutional capacity
to enable us and the broader industry to tackle
the technical challenges involved in scaling
financing towards nature-based solutions.
+ The full Financing Coastal Nature-based solutions
document can be found at this link a.storyblok.com/
f/109506/x/6298e4ed77/2023-11-22_fstf-financing-
coastal-nbs-report_final.pdf
Further details on the SMI can be found on page 127.
Financing coastal nature-based solutions
document
The Sustainable Markets Initiative (SMI)
Financial Services Task Force ( FSTF) is a
group of CEO-level executives from some of
the world’s largest banks. It brings together
financial services leaders to develop and
enable solutions that aim to help facilitate the
transition to sustainable markets and support
the rapid decarbonisation required across the
real economy.
Barclays is a member of the FSTF and this
year, alongside HSBC and with support from
Pollination, developed the Financing Coastal
Nature-based Solutions (NbS) document.
The document serves as a practitioner’s
guide to building awareness and addressing
key potential considerations for embedding
coastal NbS in financial structuring.
The guide identifies key considerations for
financing coastal NbS projects in terms of
commercial viability, risk mitigation and impact
reporting through practical case studies,
including a carbon credit project and debt
conversion structures. The guide was
produced as a foundational resource for
building institutional capacity to understand
coastal NbS within the context of the financial
services industry. We expect the points raised
in the guide, which includes the role of
different asset classes in shifting capital
towards coastal NbS, to evolve, incorporating
the latest trends in coastal NbS financing.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
Barclays PLC
Annual Report 2023 106
TCFD Strategy Recommendation (b) | Strategic Pillar 3
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 how our
social and environmental financing contributes to
the SDGs is provided in the chart opposite.
Our financing covers a range of 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 our SFF in turn supports
progress towards achieving the SDGs.
For a full list of eligible social and environmental
activities see the SFF, which shows how eligible
social and environmental activities contribute to
individual SDGs – supported through an analysis
of the underlying SDG targets. As we evolve our
understanding of how our financing contributes
to the SDGs, we will refine our methodology
accordingly.
SDG illustrative breakdown of 2023 social and environmental financing
6.5bn
4.1bn
4.1bn
0.2
4.0bn
4.0bn
0.2 0.1
n No poverty
n Zero hunger
n Good health and wellbeing
n Quality education
n Gender equality
n Clean water and sanitation
n Affordable and clean
energy
n Decent work and
economic growth
n Industry, innovation
and infrastructure
n Reduced inequalities
n Sustainable cities
and communities
n Responsible consumption
and protections
Note: Includes 2023 social and environmental financing and excludes sustainability-linked financing.
n Climate action
n Life below water
n Life on land
n Peace and Justice Strong
Institutions
n Partnerships for the goals
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), and 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/
4.12.64.03.50.92.26.54.13.74.03.82.50.82.2
Barclays PLC
Annual Report 2023 107
Products and services
We support a wide range of customers and clients
– from individuals and small businesses through
our consumer and business banking services, to
mid-sized and larger businesses and institutions,
including governments, through our corporate and
investment banking services.
Barclays' position in the market, offering retail,
corporate and investment banking services,
provides us the opportunity to deliver an end-to-
end proposition – offering innovative products and
solutions to meet our clients' needs using the
power of One Barclays. Through collaboration with
our colleagues across businesses, we have built
capabilities to help support the innovation needed
to make the transition a success. For example,
through our climate-technology escalator we
provide support for scaling early-stage companies
through tailored, specialist support at each stage
of their development from idea to IPO.
This helps to ensure these companies can access
capital as they grow, for example through our
Sustainable Impact Capital mandate and network
of accelerators, our corporate bank and via the
capital markets.
During 2023, reflecting on engagement with and
feedback from our clients, we continued to build
the expertise and knowledge that clients are
looking for as they scale their businesses and
transition to a low-carbon economy. This included:
• Continuing to strengthen our dedicated teams,
capabilities and propositions supporting
businesses developing and scaling the
technologies that will help the world reduce
emissions
• Providing the finance to scale-up the
infrastructure and capacity to deliver the
renewable energy the world requires
• Enhancing our teams through specialist hires in
areas including sustainable project finance, ESG
ratings advisory and carbon trading, as well as
tailored sector training focused on
decarbonisation pathways.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b) | Strategic Pillar 3
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 business and
events
We believe the transition to a low-carbon
economy is a defining opportunity for innovation
and growth – and that we can make the greatest
difference by supporting and engaging with our
clients as they transition, using our advisory and
financial expertise to help them navigate this
period of extraordinary change.
As trusted advisers we continue to proactively
engage with our clients on the risks and
opportunities for their businesses arising from
the transition to a low-carbon economy. This
includes working with climate technology
companies across their stages of development,
and with larger, established and/or higher-
intensity clients on their transition journeys.
We support clients executing their climate
strategies, including supporting the 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 the decarbonisation of operational
activities.
By way of example of the extent of our
engagement, over the course of 2023 we had
over 17,500 (2022: 15,000) engagements with
clients within the Corporate Bank on ESG topics,
thanks to focused efforts by relationship teams
to raise ESG topics proactively.
We also held numerous client events on ESG and
sustainability topics, including our inaugural
flagship Sustainable Finance Conference in New
York with an attendance of over 400 people.
Engaging clients through our Client
Transition Framework
The CTF, as outlined on page 90, supports us to
direct our engagement efforts towards clients
that are most exposed to the risk of failing to
transition in line with the sectoral pathways
reflected in our targets.
This is informed by the outcomes of CTF
assessments, allowing us to be targeted in our
engagement efforts and provide clients with
clear communication on our expectations for
transition planning. It also helps inform our advice
on how clients best take advantage of transition
finance opportunities.
+ Further details on our Client Transition Framework on
page 90.
Engaging clients 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, the ways investors can
support the transition, and the ways Barclays is
on hand to support. In 2023 we published over
475 ESG-focused research reports.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 108
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b) | Strategic Pillar 3
Products and services offered across our client base
Consumer
Small and growth stage
Entrepreneur and
Innovation programmes
Mid-size corporates
Large corporates
and governments
Investors
Barclays is working to champion innovation and enable sustainable growth – bringing new ideas
to life is central to the way we support people, businesses, communities and the wider economy.
Barclays UK Consumer
and Business Banking
Corporate and
Investment Bank
Engaging with our retail customers and businesses to develop sustainability-related
solutions that meet the needs of our customers and clients.
Barclays UK Consumer Sustainability Hub Engages consumers through our online
Consumer Sustainability Hub to provide information on financial products, services
and partner offers that may support them in making more sustainable choices.
Green Home and Buy-to-let Mortgages
Greener Home Reward
Mortgage offering lower interest rates for
new-build properties with an EPC rating
of A or B.
Cash reward of up to £2,000 for eligible
residential mortgage customers who
install eligible energy-efficiency-
related measures in their homes.
Green Asset Finance
Fixed rate on range of eligible green
assets, supporting clients to transition
their business towards net zero.
Green Barclayloan for Business
No arrangement fees on a range of
eligible green assets, supporting clients
to transition their business towards net
zero.
Blending the existing expertise and relationships in our coverage groups with new, specialised teams focused
on sustainable finance growth areas – providing enhanced and integrated solutions for our clients.
Energy Transition Group Provides clients with integrated strategic advice and financing solutions through
the energy value chain as they transition to a low-carbon economy. The Group supports companies in their
energy transition through the adoption and implementation of renewables, biofuels, carbon capture,
hydrogen energy, renewable natural gas, sustainable aviation fuel, batteries and solar technologies.
Sustainable Banking Group
Provides a tailored approach to sustainability coverage, advice and execution across M&A, risk
management, equity and debt.
Sustainable Project Finance Group
Provides project financing solutions for clients aiming to decarbonise their businesses, accelerate
the deployment of low-carbon technologies and monetise the associated revenue.
Sustainable Product Group
Provides origination and structuring of green and sustainability-linked corporate banking products
across lending, trade finance and liquidity products.
Private Bank and
Wealth Management
Responsible investing and sustainable
investing solutions
ESG integration and dedicated
sustainable investment strategies.
Barclays WM&I now offers most Global
Access Funds as Article 8 products in a
bid to promote sustainability as part of
SFDR.
Global Markets
Provides ESG integration across a wide range of investment solutions, spanning Quantitative
Investment Strategies (QIS), Equity or Credit Structured Solutions and Funds.
Green & Social Notes programme
Issuance of green notes to fund assets
efficiently.
Treasury Green
Programmes
Managing financial sustainability and advancing climate strategy through executing principal transactions.
Sustainable Impact Capital
Green Bond Investment portfolio
Investing up to £500m into global climate
technology companies by the end of
2027, helping accelerate our clients’
transition to a low-carbon economy.
Purchase of green bonds through Barclays’
liquidity pool.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b) | Strategic Pillar 3
Entrepreneur and
innovation programmes
Strategic initiatives
Initiative
Goal
Through the Group Innovation Office, Barclays
works 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.
Addressing climate change and the transition to
net zero is a complex challenge. It will require
innovation to drive real-world decarbonisation.
The Group Innovation Office works to leverage
its innovation capability and wider programmes
of fintech initiatives to support the delivery of the
Barclays Climate Strategy – and to contribute to
the growth of Climate FinTech as a sub-sector of
fintech under Rise, created by Barclays. The
Group Innovation Office believes Climate
FinTech has the potential to make the transition
to a low-carbon future simpler, easier to
implement and more affordable.
Rise Start-Up
Academy
Rise Growth
Academy
Experimentation
Hub
Eagle Labs *
Unreasonable
Impact
250 founders supported by
the end of 2025
50 fintechs supported by the
end of 2025
30 rapid vendor evaluations by
2025
Provide up to 1,500
mentorship hours, 17 Growth
Programmes and one
Ecosystem Partnership
Programme in 2024
Support an additional 200
businesses solving social and
environmental challenges
from 2023-27
+ Further details on Barclays' Innovation can be found at:
home.barclays/who-we-are/innovation/
* Further details on Eagle Labs found on page 112.
Barclays Rise
Rise, Barclays' global fintech platform, seeks to
create the ultimate conditions for innovation and
growth in financial services, 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.
Spotlight: Nossa Data
Rise Resident and Barclays Accelerator
Alumni Nossa Data is aiming to change ESG
reporting and data management by
providing technology for non-financial
corporate disclosure. This female-founded
Climate FinTech business is collectively
supporting companies in measuring and
improving their ESG performance in order to
meet increasing regulatory requirements.
Barclays Rise Start-Up Academy
The Rise Start-Up Academy helps early-stage
fintechs, supporting emerging founders with skills
and tools to help them get from proposition to
launch. The programme supports refining their
minimum viable product (MVP) through weekly
activities and live workshops. A Climate FinTech
special edition of the Rise Start-Up Academy will
launch in 2024 to support this growing category
of fintech.
Barclays PLC
Annual Report 2023 109
Our commitment to support 250 founders by the
end of 2025, compared to our original target of
750, reflects the challenging economic and
investment climate for start-ups, and also our
intention to focus our support on companies that
are more closely aligned to Barclays’ strategic
priorities, including climate and sustainability.
Barclays Rise Growth Academy
The Rise Growth Academy helps scale high-
growth fintechs, including Climate FinTechs, and
transition their founders into CEOs with a 10-
week, digital-first curriculum with coaching,
Managing Director/Director 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/
Climate FinTech
Climate FinTech is a category of fintech
supporting climate change mitigation and
adaptation, and can be used to align and
strengthen incentives across all stakeholders.
Pioneering Climate FinTech start-ups have the
potential to help make low-carbon solutions
easier to adopt for individuals and businesses.
Our 'Climate FinTech: An Innovation Thesis' will
be published to showcase the role that Climate
FinTech can play in tackling the challenges
faced by consumers, businesses and industry –
outlining the opportunity identified to support
this sector to scale.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b) | Strategic Pillar 3
Spotlight: GreenArc
Unreasonable Impact
GreenArc, a participant of the Rise Growth
Academy 2023, is an impact analytics fintech
that uses advanced AI techniques to help
financial institutions measure and maximise
the social and environmental impact of their
investments. Investors are demanding
greater accountability and transparency to
address the growing concerns over the
validity of sustainable finance, an industry
concerned with claims of greenwashing, and
thus a robust, data-driven impact
measurement system will help enable
financial institutions to credibly assess and
report the impact of their investments.
Barclays Experimentation Hub
The Barclays Experimentation Hub – a business and
technology sandbox-as-a-service offering –
enables business units across the globe to rapidly
test and evaluate third-party vendor solutions,
while also providing a platform to influence industry
through collaborative events and hackathons. Since
2022 the Experimentation Hub has enabled
Barclays to explore new technologies such as
Generative AI, while also bringing together industry
experts across topics such as digital currencies –
exploring the application and business benefits of
key innovations within technology and fintech.
Experimentation has also supported Barclays
teams in keeping pace with the rapidly changing
landscape within ESG technologies and will
continue to support Barclays' Climate Goals
throughout 2024.
Through its Unreasonable Impact programme, a
partnership between Barclays and Unreasonable
Group which was renewed in 2023, Barclays has
supported over 300 high-growth entrepreneurs
that seek to address pressing social and
environmental challenges by connecting them
with a network of mentors and industry
specialists, including experts from across
Barclays. Through regional accelerators, at which
the entrepreneurs can engage with this network,
and other virtual and in-person events, the
Unreasonable Impact programme is designed to
help participating entrepreneurs to build
strategic relationships and quickly solve key
challenges facing their business in order to help
them scale.
After achieving its goal to support 250 ventures
by the end of 2022, Barclays will support an
additional 200 entrepreneurs over five years
through the Unreasonable Impact programme.
With billions in financing already raised by the
companies that have participated in the
programme, the partnership’s momentum
continues to grow – and the ventures are driving
innovations in a variety of industries from food
and agriculture to energy and manufacturing.
Barclays has also invested its own capital into
eight Unreasonable Impact companies through
1
its Sustainable Impact Capital
mandate,
including Airex – creators of a smart air brick –
and Brill Power, which has developed battery
management technology that aims to extend
battery life and throughput.
Note:
1 Further details on Sustainable Impact Capital found on page 117.
+ Further details on Unreasonable Impact can be found at:
home.barclays/sustainability/supporting-our-communities/
unreasonable-impact/
Barclays PLC
Annual Report 2023 110
Partnering with SaveMoneyCutCarbon
SaveMoneyCutCarbon (SMCC) is an organisation focused on simplifying energy, water and
carbon reduction. It seeks to save businesses time and money and help them achieve their
sustainability goals by providing a range of services. Alongside the installation of products,
these services include providing advice and education as well as performing building audits to
help uncover savings opportunities and developing project plans to help businesses realise
these savings.
Barclays is helping companies like SMCC to scale through its Unreasonable Impact partnership
– and by investing equity capital in SMCC through the Barclays Sustainable Impact Capital
mandate. In addition, Barclays Corporate Banking clients can utilise SMCC’s services to help
them pivot their own operations to more sustainable practices.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
Consumer Bank
Barclays UK Consumer Sustainability Hub
Barclays UK engages consumers through our
online Consumer Sustainability Hub, which
provides information on financial products,
services and partner offers that may support
them in making more sustainable choices. In
2023 we began adding links to the Consumer
Sustainability Hub in the Barclays app to further
support customer engagement on this topic. We
plan to create a dedicated in-app Sustainability
Hub to host educational sustainability-related
content, products and offers.
+
Further details on the consumer-facing Sustainability Hub
can be found at: barclays.co.uk/sustainability/
Greener home propositions
Barclays UK is supporting retail mortgage
customers' transition to a more sustainable way
of living, providing products and propositions
focused on retrofitting. In 2023 we rolled out
training on home energy efficiency and climate
risk to our mortgage advisors, and hosted a
webinar for mortgage brokers with retrofitting
industry experts.
In collaboration with British Gas, we launched an
offer of 50% off the purchase of a Hive
Thermostat Mini for eligible residential mortgage
customers.
+
Further details on Barclays Hive Thermostat Mini offer can
be found at: barclays.co.uk/sustainability/greener-homes/
hive-thermostat-mini/terms-and-conditions/
TCFD Strategy Recommendation (b) | Strategic Pillar 3
Barclays UK Consumer
and Business Banking
We are engaging with our retail and business
customers to better understand the steps they
want to take to become more sustainable – and
the role finance can play. We are using this
insight-led approach to design and develop
sustainability-related products, offers and
initiatives that meet the needs of our customers.
Throughout 2023 we have used new digital
journeys in-app and online banking to support an
additional 1.9 million customers to become
paperless and reduce their paper waste by eight
million envelopes. In 2024 we will continue our
work to encourage further adoption of paperless
banking and digitisation of communications,
further reducing paper volumes.
In 2023 we made a number of important hires to
build our sustainability leadership team in
Barclays UK. These colleagues will help drive our
client propositions and position us well to drive
the strategy in 2024. We continue to upskill and
engage colleagues on sustainability issues to
build our capability, encouraging colleagues to
integrate sustainability considerations into their
work supporting customers. This includes
tailored training for our Consumer Bank and
Business Bank colleagues, introducing our
Sustainability Champions community to bring
together our most engaged colleagues and
launching our online Colleague Sustainability Hub
to share educational sustainability-related
content.
Barclays PLC
Annual Report 2023 111
We continue to support customers purchasing
EPC A- and B-rated new-build homes with our
Green Home Mortgage, following its expansion
to include buy-to-let properties in 2022. In 2023
we lent £845m to Green Home Mortgage
customers. Since inception in 2018, Barclays UK
has lent over £3.5bn to Green Home Mortgage
customers.
Green Home Mortgage completions
Number of completions
n 2023 progress n Total since 2018
Value of completions (£m)
n 2023 progress n Total since 2018
+ Further details on Barclays Green Home Mortgages can be
found at: barclays.co.uk/mortgages/green-home-mortgage/
Further details on Barclays Green Buy-To-Let Mortgages
can be found at: barclays.co.uk/mortgages/green-buy-to-let-
mortgage/
Exploring home energy efficiency with British Gas
In partnership with British Gas, we ran an energy efficiency exhibition in the
Plymouth city centre branch to help local customers explore ways they could make
their homes more energy efficient. The ‘Exploring Home Energy Efficiency
Exhibition’ ran for six weeks between October 2023 and December 2023,
showcasing some of the technology that could help customers improve the energy
efficiency of their home and potentially help lower their bills. Each week focused on
a different energy efficiency theme, including low-carbon technology, retrofitting
and the financial support available to households. Customers were able to learn and
engage through weekly interactive sessions and Q&A panels made up of speakers
from British Gas, Barclays and others. To coincide with National Green Careers
Week in November, Plymouth City Council ran a series of carbon literacy events for
career changers, job seekers and schools in the branch – and customers had the
opportunity to take part in a ‘green careers fair’ to understand what a net zero
career could look like for them.
3,71915,6698453,563
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b) | Strategic Pillar 3
Barclays UK Greener Home Reward
In 2023 we extended registrations for the
Greener Home Reward scheme, which offers a
cash reward of up to £2,000 for eligible
residential mortgage customers who install
eligible energy-efficiency-related measures in
their homes using a registered TrustMark
installer. We have seen continuing interest in
microgeneration, with 45% of applications so far
for solar panels and solar battery storage.
However, demand for the offer remains limited.
This exemplifies the challenges the sector faces
to increase the take up of retrofitting.
Retrofit types at registration
Solar energy
Doors and windows
Low-carbon
heating
Insulation
Solid wall insulation
n Solar energy
n Doors and windows
n Low-carbon heating
n Insulation
n Solid wall insulation
+ Further details on Barclays Greener Home Reward can be
found at: barclays.co.uk/mortgages/greener-home-reward/
Barclays UK 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.
Customer retrofitting research
and parliamentary roundtable
Retrofitting homes with the aim of reducing
carbon emissions in line with UK net zero
targets is a challenge Barclays believes
requires a collaborative response. In
September 2023 we convened a roundtable
in Parliament with representatives from UK
Government, consumer groups, industry
and academia to discuss a Barclays-
commissioned report from Ipsos UK on
consumer retrofitting behaviour. The report
identified potential barriers to action among
‘able to pay’ homeowners who could
potentially undertake retrofitting to increase
the energy efficiency of their property. The
report made a series of recommendations
to improve uptake of retrofitting due to
limited levels of this activity currently. There
was agreement among roundtable
representatives that there is a significant
awareness gap that could be addressed by
promoting the benefits of retrofitting and
improving access to practical guidance.
However, there were a range of views on
how to share the burden of responsibility for
these actions – with a number of attendees,
including Barclays, underlining the important
role for bolder UK Government leadership
and policy to drive behaviour change.
Business Bank
Barclays continues to support Business Bank
clients to understand the case for sustainability,
recognising that clients are at varying stages of
their transition to net zero.
Embedding sustainability across the
Business Bank
We continue to build our net zero expertise to
give eligible businesses that bank with us the
chance to explore the options available to them
as part of transition plans towards net zero. In
2023 we provided sustainability training for
Business Bank colleagues, including Real Estate,
Agriculture and Specialist Client Solutions teams.
For clients that prefer to self-serve, we created a
series of educational videos to raise awareness
of themes relating to the transition to a low-
carbon economy.
In 2023 we launched an EPC dashboard to enable
Real Estate Relationship Managers to provide a
view of EPC ratings across a clients’ portfolio with
Barclays UK – and use it to discuss potential
benefits around EPC improvements.
In July 2023 we expanded our existing Asset
Finance proposition via our partner Propel to
offer fixed rates on a wider range of green assets
including new fully electric vehicles, solar
photovoltaic panels, battery storage units, LED
lighting, heat pumps and electric vehicle charging
points. In September 2023 we launched our
Green Barclayloan for Business, which offers no
arrangement fees for lending above £25,000 on a
range of eligible green assets – supporting our
business clients in their transition to net zero.
Barclays PLC
Annual Report 2023 112
External engagement
In 2023 we joined the Broadway Initiative and sit
on the advisory board for the UK Business
Climate Hub, which will help facilitate net zero
support for our clients.
To recognise the positive impact of ESG-
focused entrepreneurs on the wider economy,
the ‘Sustainability Award’ category for the
Barclays Entrepreneur Awards was awarded for
the second time in 2023 – attracting over 100
applications.
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. Its
growing network already supports businesses
through 37 physical sites, as well as virtually
across the UK.
¹
13,812
Total businesses supported by
Eagle Labs through propositions,
programmes, and businesses engaged
with the ecosystem since 2015
+ Further details on Barclays Eagle Labs can be found at:
labs.uk.barclays
45%22%16%14%4%
Barclays PLC
Annual Report 2023 113
Carbon13 Venture Launchpad
in partnership with Barclays
Eagle Labs
Carbon13 is a Cambridge-based, globally focused
venture builder. Eagle Labs have partnered with
Carbon13 to develop a Venture Launchpad to
help pre-seed and early-stage businesses launch
high-potential and global-impact climate tech
ventures. The first Carbon13 Venture Launchpad
programme brought together 22 companies
focused on innovation in the built environment.
From April 2023 to October 2023, founders were
supported to help set each of their businesses on
a trajectory to mitigate 10 million tonnes of CO2e
at scale. Seven programme participants each
received funding of £120,000 from Carbon13 –
including digital twins for building performance
optimisation and new systems for transporting
chilled goods.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b) | Strategic Pillar 3
Eagle Labs climate tech
Eagle Labs is building a community of climate
tech startups working on disruptive technology
to deliver a more sustainable future.
In October 2023 the Cambridge Eagle Lab was
relaunched as a centre for climate tech start-ups
and scale-ups. The lab has been retrofitted to
improve energy efficiency in line with Barclays'
net zero ambition – including hybrid solar
technology generating both electricity and heat
provided by Naked Energy, a company supported
through our Unreasonable Impact programme
and Barclays’ Sustainable Impact Capital.
+ Further details on our Unreasonable Impact programme can
be found here home.barclays/sustainability/supporting-our-
communities/unreasonable-impact/
Further details on our Sustainable Impact Capital
programme can be found here home.barclays/sustainability/
addressing-climate-change/financing-the-transition/
sustainable-impact-capital/
Digital Growth Grant
In 2022 Barclays Eagle Labs was awarded a c.
£12m Digital Growth Grant by the UK
Government, to support technology businesses
across the UK. Over a two-year period,
commencing from April 2023, the grant will
amplify Barclays Eagle Labs' overall ambition to
support the growth of up to 22,000 UK tech start-
ups and scale-ups. Since April’s launch, Barclays
Eagle Labs have opened applications for 12
dedicated growth programmes – including the
Black Venture Growth Programme, the Female
Founder Accelerator and the Sustainability Bridge.
²
849
Total businesses supported through
Digital Growth Grant Programmes as
of December 2023
Notes
1 Covering all businesses supported by Eagle Labs through
propositions, programmes, and ESE since 2015 (as of December
2023).
2 Sum of cohort sizes of the programme that have closed for
applications (as of December 2023).
Advancing Net Zero in the built
environment with
Sustainability Bridge
Through our Sustainability Bridge programme,
we are bringing together 29 startups and nine
corporates to support the transition to net
zero in the built environment – with a specific
focus on retrofit and energy efficiency.
Corporates on the programme range from
national energy companies to social housing
providers. Start-ups in the cohort are driving
cutting edge innovation, ranging from drone
thermal imaging as an EPC alternative to
climate data aggregators and companies who
believe the buildings of the future will be grown,
not built. The programme is being delivered by
CodeBase, in partnership with Barclays Eagle
Labs, and is funded by the UK Government
through the Digital Growth Grant.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b) | Strategic Pillar 3
Corporate and
Investment Bank
How we serve our clients
We continue to evolve our model to support our
clients and capture the opportunities as they
transition to a low-carbon economy.
Following the appointment of the Global Head of
Sustainable Finance in November 2022, in early
2023 we established the CIB Sustainable Finance
Management Team (CIB SF MT) with
responsibility for driving the sustainable finance
strategy in the CIB. The CIB SF MT acts as a
consolidation point for the discussion and
decision-making of key matters relating to the
strategic direction of the CIB sustainable finance
business, reviews financial performance and
ensures a robust approach to climate risk
management and controls.
At Barclays we 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 have applied this
mindset to consider how we can best serve our
clients' needs relating to Sustainable and
Transition Financing through an integrated
approach across Barclays' products and services.
This has included the strengthening of our
sustainable finance teams, working together to
deliver for our clients and embedding
sustainability across our sector and industry
coverage teams.
Strengthening our sustainable finance teams
Through the continued investment in our team
we are able to deliver a fuller suite of products,
solutions and expertise to clients as they
transition towards a low-carbon economy.
During 2023 we invested significantly in our
sustainable finance capabilities through key
senior and specialist hires which have
strengthened our existing teams and expanded
our sustainable finance product offering. This
included hiring new Heads of Sustainable Project
Finance and Carbon & Environmental Products
Trading, facilitating the expansion of our product
reach into these areas in recognition of client
demand and the commercial opportunity.
We have also continued to strengthen our existing
sustainable finance teams with the hiring of senior
specialists including across ESG ratings advisory,
AgriTech and battery technologies, and regionally
focused sustainable finance specialists covering
the Middle East, North Africa and Asia Pacific.
Following growth in the team over the past few
years, at the end of 2023 we had in excess of 90
sustainable finance-focused bankers in the CIB,
supported by ongoing investment in expertise in
our sustainable finance and ESG-focused
functional teams.
Working together to deliver for our clients
We continue to facilitate collaboration across CIB
teams in order to work more closely together on
sustainable finance topics and solutions. In 2023
we created a Sustainable Finance Leadership
Group bringing together key 'champions' of
sustainable finance from across the CIB with a
view to creating more frequent and deeper
exchanges of ideas – which will help strengthen
our dialogue with clients and drive better
outcomes for them.
We believe that the strength of our franchise is
truly unlocked when we work closely together
across our teams. Examples of this included
collaborations between our ESG advisory,
industry coverage and Sustainable Impact
Banking teams on M&A opportunities, as well as
our industry teams bringing technical experts
into client meetings to discuss
decarbonisation options.
Barclays PLC
Annual Report 2023 114
CIB Sustainable Finance ecosystem
Over the past year we continued to evaluate how
sectors and companies are best covered by the
Bank, and have adapted our model accordingly to
provide the support and resources required by
our clients. In January 2024 we announced the
creation of our new Energy Transition Group –
bringing together our Power, Energy and
Sustainable Impact Banking (SIB) teams so we
can better serve as lead advisers to clients in the
Energy and Power sectors exploring potential
energy transition opportunities.
We also announced the creation of our new
Sustainable Banking Group within Capital
Markets, combining our Sustainable Capital
Markets and ESG Advisory team (previously part
of the SIB team).
Embedding sustainability in our business
Over the course of 2023 we continued to embed
sustainability across our sector and industry
coverage teams through a number of important
initiatives to upskill our bankers and develop their
expertise to engage with clients on the transition.
We ran our first sector-level client activation
programmes – focused on the Building Materials
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
Barclays PLC
Annual Report 2023 115
Energy Transition Group
The newly formed Energy Transition Group
provides clients with integrated strategic advice
and financing solutions through the energy value
chain as they transition to a lower-carbon future.
The Energy Transition Group comprises
specialist bankers drawn from the Bank's
previous global Natural Resources and Power
sector teams and Sustainable and Impact
Investment Banking team. It aims to be a centre
of excellence providing a broad spectrum of
expertise regarding the energy transition –
including hydrogen, energy transition finance,
carbon capture, renewables and renewable
natural gas.
Sustainable Banking Group
The newly formed Sustainable Banking Group
supports the sustainability needs of our clients
across all industries through a tailored approach
to coverage, advice and execution across M&A,
risk management, equity and debt.
The team will focus on covering the range of
sponsors and investors with dedicated
sustainability capital, advising clients on
sustainability matters and offering a broad range
of sustainable capital markets products –
originating, structuring and executing
sustainable-finance-labelled instruments
including green, social, sustainable, transition and
sustainability-linked solutions and vehicles.
TCFD Strategy Recommendation (b) | Strategic Pillar 3
and Power and Utility sectors – accelerating the
ability of our bankers to identify and capture
sustainable finance opportunities by helping
them focus on key decarbonisation levers in
these sectors and how to deploy Barclays'
products and services to help clients
unlock them.
We recognise the importance of continued
training and upskilling of our workforce,
particularly in the rapidly developing climate
technologies of the future, and ran a series of
seminars and workshops throughout the year
covering these key topics. In the second half of
2023 we also developed a detailed sustainable
finance training plan for colleagues across the
CIB, which we will roll-out in 2024.
During 2023 we continued to develop our
management information as it relates to our
sustainable finance business, including
appropriate KPIs and sustainable finance metrics
on our bankers' scorecards, which are tracked
monthly – increasing the visibility of our
performance. We will continue to evolve our
approach in this area in 2024.
As we see further growth in sustainable finance
and the ESG market space the focus on controls
remains imperative to enable our business to
operate in a precise and scalable way. Dedicated
ESG review and control fora are being stood up
at the CIB and individual business level to provide
oversight of greenwashing risks in the context of
financing of clients in high emitting sectors. In
addition, we have continued to strengthen our
approach to climate risk governance within the
CIB and review climate risk, financed emissions
and transition finance metrics at appropriate fora
and committees to provide financial and
operational risk oversight.
Federal Republic of Germany: Green Bonds
Barclays acted as Joint Lead Manager on the Federal Republic of Germany’s €5.25bn 10Y Green
Bond in April 2023, and €4.5bn 30Y Green Bond in June 2023. These transactions are intended to
support the country’s transition towards a low-carbon, resource-efficient and sustainable
economy. The funds raised from the bonds will be allocated towards eligible green expenditures
including all areas of the federal budget that support the overall climate and sustainability targets
set out in the Federal Republic of Germany’s Green Bond Framework. Furthermore, the eligible
expenditures are mapped to the six environmental objectives of the EU taxonomy for
environmentally sustainable economic activities. Barclays is pleased to support the German
government in continuing its strategy of establishing a green yield curve for the euro area.
Sustainable Project Finance
Sustainable Product Group
In 2023 we established our Global Sustainable
Project Finance team. The team provides project
financing solutions for clients aiming to
decarbonise their business, accelerate the
development of low-carbon technologies and
monetise the associated revenue opportunities.
The team builds on our existing experience and
expertise in project finance to offer integrated
and innovative solutions for clients including tax
equity, global debt arrangement and structuring,
alongside strategic M&A, rates and capital
markets expertise.
The Sustainable Product Group delivers a broad
range of green and sustainability-linked
corporate banking products. The Sustainable
Product Group’s offering includes green and
sustainability-linked trade, corporate
lending, fund-financing products and deposit
solutions.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
Barclays PLC
Annual Report 2023 116
TCFD Strategy Recommendation (b) | Strategic Pillar 3
Ohmium International
Global Markets
ESG across our research teams
Sustainable and Thematic Investing
Our Global Markets team provides ESG
integration across a wide range of investment
solutions spanning Quantitative Investment
Strategies, Equity or Credit Structured Solutions
and Funds. This includes our Green & Social
Notes programme issuance of green notes
against eligible assets, earmarked in line with our
Green & Social Notes Framework. Global Markets
also provides financing solutions such as clean
tech securitisation and can embed sustainability-
linked features into hedging solutions. Our Global
Markets team also provides market access to
ESG products and a range of Prime Services –
including clearing carbon and ESG futures.
During 2023, Barclays continued to grow its
financing business backed by assets that match
its Sustainable Finance Framework and support
the long-term green, transition and broader
sustainable financing requirements of our clients,
with a focus on securitised products in residential
and solar, heat pumps and electric vehicles.
Looking forward into 2024 we expect to expand
into other sustainable and energy-efficient
technologies and opportunities.
Barclays also grew its footprint in originating and
distributing social and sustainability-linked loans,
as well as structured financing with sustainable
use of proceeds instruments
Green & Social Notes programme
The Barclays Bank PLC Green & Social Notes
Programme covers Barclays-issued products in
the Equities and Rates space, leveraging use-of-
proceeds assets including renewable energy,
low-carbon transport and energy-efficient real
estate, in line with the requirements set out in
our Green & Social Notes Framework. All green
assets in the pool are verified by a third party and
aligned to industry standards.
+
Further details on our green notes programme can be found
at: home.barclays/greenbonds/
In April 2023, Ohmium International, a leading
green hydrogen company that designs,
manufactures and deploys advanced proton
exchange membrane electrolyzer systems
using renewable energy to produce
pressurised high-purity green hydrogen,
partnered with teams across Barclays’
Corporate and Investment Bank to help
successfully close a $250m Series C growth
equity financing round. Barclays served as
Placement Agent to Ohmium on the capital
raise. The funding will be used to support
Ohmium’s expansion to 2GW in annual
manufacturing capacity and the deployment
of projects for the company’s growing global
customer pipeline in key regions. The
investment will also provide significant capital
to scale Ohmium’s business, including
accelerating its pioneering research and
development programmes to reduce the
cost of green hydrogen production. At that
time, this transaction was the fifth hydrogen
deal in 13 months for Barclays’ Sustainable
and Impact Banking Group, now known as
the Energy Transition Group, highlighting our
deep sector knowledge across the entire
hydrogen technology value chain and
ecosystem.
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
collaborates with Equity and FICC research
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,
helping asset managers structure their portfolios
and investment decisions.
Over 475 ESG-focused research reports were
published in 2023. Our expectation is that topics
such as climate change, decarbonisation and
biodiversity – 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 2023 ESG Research hosted and
contributed content to client events around the
world – including Barclays' first Sustainable
Finance Conference in New York, its fourth
annual ESG Research conference in London, its
first Sustainable Finance Conference in
Singapore, its Sustainable Policy Forum in
Brussels and its ESG Emerging Market
Corporate Day.
+
Further details on ESG Research can be found at:
cib.barclays/research
The Sustainable and Thematic Investing
Research team at Barclays focuses on
sustainability and long-term thematic disruption.
Its 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 five- to 10-year horizon,
with investment opportunities spanning both
public and private companies.
To aid thematic and ESG investors, the team
maintains an investment framework known as
the ‘2030 Thematic Roadmap: 150 Trends’ – and
has published reports on various trends relating
to disruptive technology, sustainability and
demographic change. The team has also
developed a range of investment tools including
trend momentum scores, UN SDG mapping and
company revenue tagging.
Relevant 2023 publications include Advance
Chemical Recycling, Grid Infrastructure, Digital
Safety, Vehicle Grid Integration, Cultured Meat,
Gender & Social Inclusion, Human Capital and
VC Trends.
+
Further details on the Sustainable and Thematic
Investing Research team can be found at: cib.barclays/
our-insights
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
Barclays PLC
Annual Report 2023 117
TCFD Strategy Recommendation (b) | Strategic Pillar 3
Sustainable Impact Capital programme
by Barclays Principal Investments
Barclays' Treasury plays a key role in helping
Barclays meet its climate goals by allocating,
managing and governing its financial resources
effectively and executing sustainable principal
investments and transactions, supporting
businesses to advance strategic climate
objectives in the transition towards a low-
carbon economy.
Sustainable Impact Capital
Our Sustainable Impact Capital portfolio,
managed by the Barclays Principal Investments
team in Treasury, has a mandate to invest up to
£500m into global climate technology companies
by the end of 2027 – helping 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/
We aim to drive change by strategically investing
in visionary early-stage climate tech companies
paving the way for solutions in clean energy and a
reduction in GHG emissions. The Sustainable
Impact Capital portfolio targets investments that
could potentially catalyse transformative
breakthroughs in technology, infrastructure and
scalable practices.
Our aim is to bridge financing gaps and support
the acceleration and scalability of solutions to
environmental challenges.
We have made meaningful progress towards
building a portfolio of strategic investments.
£138m of our £500m investment mandate has
been deployed since 2020, with £49m invested in
2023 – up 42% from 2022.
We continue to focus on decarbonisation
technologies supporting transition within
carbon-intensive sectors, particularly where
Barclays has meaningful client exposure – such
as Power, Industry, Transport, Agriculture and
Real Estate – including solutions delivering
carbon capture, carbon dioxide removal and
green hydrogen.
+
Further examples of our entrepreneur and innovation
programmes can be found on page 109.
Achieved to date
£138m
Our portfolio of investments since 2020
£m
n 2020 n 2021 n 2022 n 2023 n Mandate by end
of 2027
GeoPura
The investment in GeoPura, a producer of Hydrogen Power Units (HPUs), demonstrates our
support for innovative technologies that enhance the energy transition. Established to make an
impact in decarbonising global industries using zero-emission fuels, GeoPura has grown rapidly
since delivering its first HPU. Its technology and end-to-end service is a multi-purpose
replacement for diesel power worldwide.
GeoPura generates hydrogen and transports the fuel to customers for use in its HPUs.
The company is targeting sectors with the highest diesel use today – including construction,
infrastructure, outdoor events, and back-up power for hospitals, data centres and critical
infrastructure. It is also providing a solution for commercial EV charging where the local
electricity network is not capable. Headquartered in Nottingham, with manufacturing capability
in Newcastle upon Tyne, the investment is enabling mass manufacturing of HPUs – increasing
the production of green hydrogen to fuel the units and driving green skills in the North East,
while supporting the technology's global deployment.
+
Further details can be found at: home.barclays/news/press-releases/2023/02/
Giants-of-industry-manufacturing-finance-back-UK-green-hydrogen-pioneer-
GeoPura-with-36m-investment/
24303549500 Barclays PLC
Annual Report 2023 118
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b) | Strategic Pillar 3
Advanced Electric Machines
Barclays’ Sustainable Impact Capital investment in Advanced Electric Machines (AEM) – a UK-
based sustainable motors and powertrain systems developer and manufacturer – signifies its
support for innovative automotive technology. With the global transition to EVs there is growing
demand for key raw materials – especially rare-earth minerals for use in magnets essential for
EV motor production. However, the limited global production capacity of these materials poses
a significant challenge.
AEM’s next-generation electric motors and powertrain systems are designed without rare-
earth magnets and copper windings, while focused on performance, range and efficiency. This
breakthrough not only ensures a sustainable supply chain but also enhances recyclability –
contributing to a circular economy.
In an era where sustainable mobility solutions are crucial, Barclays’ investment in AEM
represents a significant step towards unlocking electric mobility’s potential while addressing
critical raw material challenges.
+
Further details can be found at: home.barclays/
news/2023/10/sic-advanced-electric-machines/
Sustainable Ventures
Barclays' Sustainable Impact Capital led Sustainable Ventures' first-ever fundraising round, with
participation from angel investors. Sustainable Ventures is an active climate tech ecosystem in
the UK. Its model combines funding, workspaces and expert support services – providing access
to a pipeline of leading climate tech investment opportunities. Sustainable Ventures’ winning
concept has supported over 500 climate tech companies to rapidly scale their technologies,
drive increased returns, and directly create more than 5,500 jobs. Barclays understands that
scaling climate technology companies require much more than venture capital. The investment
in Sustainable Ventures affirms our commitment through providing access to the bespoke
support programmes, professional services, and community these companies need and
deserve – all designed to accelerate sustainable growth. Our investment will enable Sustainable
Ventures’ regional expansion, starting with Manchester in 2024 – assisting the region in meeting
its accelerated 2038 net zero target while delivering inclusive green jobs and boosting the
economy.
Further details can be found at: barclays/news/2023/10/barclays-invests-in-sustainable-
ventures-to-help-drive-uk-expans/
+
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b) | Strategic Pillar 3
Treasury green
programmes
Green bond investment portfolio impact by
sector (%)
Private Bank and Wealth Management
Green bond investment portfolio
Treasury invests in green bonds as part of the
liquidity pool. As an investor we undertake work
to ascertain the ESG credentials of proposed
investments. We engage with green, social and
sustainability bond issuers to understand how
their frameworks and goals align with our
investment approach. The proceeds of our green
bond investments fund projects in areas such as
renewable energy and clean transport. We
continue to consider investments in new
supranational organisations and government-
issued bonds as they become available, with the
aim to invest £4bn over time.
Green bond investment portfolio
size by year £bn
2023
2022
2021
Responsible investing
Private Bank
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. This is 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 its 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
1
jurisdictions
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.
n Renewable Energy and
Energy Efficiency
n Transport
n Other
30
45
17
n Water and Waste
n Agriculture, Land Use
4
5
Green bond investment portfolio impact
by region (%)
n Europe
n Asia
n South America
73
7
7
n Africa
n North America
11
3
Barclays PLC
Annual Report 2023 119
Our Sustainable strategies seek to invest in
businesses that provide products and services to
support the transition to a more sustainable
economy. These identify businesses we believe
are able to mitigate ESG risks from an
investment perspective, demonstrate high
standards of non-financial ESG quality, and
address sustainability considerations through
their economic activities by aligning to at least
one of the UN SDGs. Our Sustainable strategies
also exclude certain companies that generate
revenues over our internally defined thresholds
from adult entertainment, alcohol, armaments,
gambling, fossil fuels, tobacco and controversial
weapons.
All our DPM strategies seek to deliver
competitive investment returns for our clients
and create long-term value for stakeholders.
We believe responsible investing helps us
achieve this.
+ Further details on the Private Bank's approach to responsible
investing can be found at: privatebank.barclays.com/what-we-
offer/investments/responsible-investing-engagement-and-
voting-activities
Barclays Investment Solutions Limited (BISL)
Just as in the Private Bank, responsible investing
for BISL means integrating material ESG
considerations – among others – into our
investment decisions, and fulfilling our
stewardship responsibilities through
engagement and voting. This is an integral
element in meeting our fiduciary duties towards
our clients. Our main ESG offering is the Multi-
Asset Sustainable Fund. We also have a range of
single-asset-class funds classified as Article 8
under the EU’s Sustainable Finance Disclosure
Regulation, which exclude certain companies
that generate revenues over our internally
defined thresholds from adult entertainment,
alcohol, armaments, gambling, fossil fuels,
tobacco and controversial weapons.
2.22.83.4304545177377113 Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b) | Strategic Pillar 3
BISL factors responsible investing into its
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 managers based on their
ESG credentials among 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; and the performance
achieved. Ultimately, we award an ESG score for
every fund 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 in the
data we use.
+
Further details on BISL's approach to responsible investing
can be found at: barclays.co.uk/wealth-management/
important-information/responsible-investing-statement
Industry initiatives
Private Bank
Barclays Private Bank Investment Management
became a signatory of the Principles for
Responsible Investment (PRI) in 2022,
completing its first reporting to the PRI on
responsible investing activities in 2023.
Being a signatory to the PRI allows us to publicly
demonstrate our commitment to responsible
investment. The PRI defines responsible
investment as a strategy and practice to
incorporate ESG factors in investment decisions
and active ownership. Its goal is to help
contribute to the creation of a sustainable
financial system, with signatories committing to
incorporate ESG issues via the six Principles in
their investment practice.
Barclays Investment Solutions Limited
BISL became a signatory to the PRI in 2023. Prior
to this, and since 2016, BISL’s subsidiary Barclays
Asset Management Limited was a signatory. BISL
also became a signatory to the UK Stewardship
Code in 2023, which sets high stewardship
standards for those investing money on behalf of
UK savers and pensioners and those that
support them. Stewardship is the responsible
allocation, management and oversight of capital
to create long-term value for clients and
beneficiaries with the aim of achieving
sustainable benefits for the economy, the
environment and society.
Engagement and voting
Private Bank and Barclays Investment Solutions
Limited (BISL)
Both the Private Bank and BISL undertake
engagement and voting in partnership with our
stewardship services provider, EOS at Federated
Hermes (EOS), in respect of certain holdings
2
. We view
relating to specific services
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.
Voting forms an integral part of the Private Bank
and BISL's overall stewardship strategy and is
used as a tactical tool to achieve desired changes
on ESG issues. Based on various metrics, BISL
filters EOS's voting recommendations in relation
to company holdings and, if deemed necessary,
our portfolio managers may deviate from EOS's
recommendation.
At Private Bank, for our direct equity holdings, we
use our rights as shareholders to seek and drive
our desired changes. Following receipt of EOS’s
voting recommendations, our Equity portfolio
managers meet to discuss this information for a
select number of voting issues in advance of
making the voting decision on behalf of our
clients. Our Equity portfolio managers are
ultimately responsible for making voting
decisions.
All voting activities sit alongside engagement
practices, reflecting both the Private Bank and
BISL approach of promoting constructive
dialogue with investee companies by building
long-term relationships to seek to influence ESG
and other practices. This is mostly undertaken by
EOS, which engages on behalf of clients including
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.
Both the Private Bank and BISL make their
engagement and voting activities publicly
available to all stakeholders on the Barclays
website. We believe such transparency is an
integral part of good governance.
+ Further details on engagement and voting can be found at:
Private Bank: privatebank.barclays.com/what-we-offer/
investments/responsible-investing-engagement-and-voting-
activities
BISL: barclays.co.uk/wealth-management/important-
information/responsible-investing-statement
Barclays PLC
Annual Report 2023 120
Responsible Lending
Private Bank
We have launched our Greener Mortgage
3
for UK properties, offering a reduced
Discount
arrangement fee for new-build properties with an
EPC rating of A-B – incentivising clients to seek
energy-efficient properties and to encourage
homebuilders to achieve maximum energy
efficiency from their projects. Clients will also be
supported in improving the energy efficiency of
their existing properties – we have publications
available to encourage clients to consider
sustainably retrofitting their homes to improve
energy efficiency, and intend to enhance this
throughout 2024. This falls into the wider work
we have undertaken on creating educational
4
content and guidance
for clients in relation to
ESG in the Real Estate space and beyond. For our
wider credit offering in this space we are
exploring opportunities to enhance our
proposition to support clients in making more
sustainable choices across the spectrum of
lending products throughout 2024 and 2025.
Notes:
1 The exception is India, where we offer strategies developed for
the local market. ESG integration and engagement and voting
are not undertaken.
2 Engagement on select material ESG issues and voting activities
are being exercised in relation to:
For Private Bank: Private Bank DPM investment strategies
globally with the exception of services provided in India.
Engagement activity is undertaken for our direct fixed income
and equity holdings in companies, while voting activity is only
undertaken for our equity holdings. Engagement and voting
activities are undertaken for portfolios managed in the UK,
Jersey, Ireland, Switzerland and Monaco. 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.
For BISL: Direct holdings within BISL DPM investment strategies
and on holdings within segregated mandates that form part of
BISL funds.
3 This is how we are now describing the Green Private Bank
Mortgages referenced in the 2022 Barclays PLC Annual Report.
4 We are continuing to explore the creation of an online hub for
this content.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b)
Embedding climate and
sustainability into our business
We are embedding climate and sustainability
throughout Barclays, 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, as well as by our Purpose to work
together for a better financial future for our
customers, clients and communities.
The risks associated with climate change are
subject to rapidly increasing societal, regulatory
and policy focus both in the UK and
internationally. In 2022, Climate risk became a
Principal Risk within our Enterprise Risk
Management Framework, aiming to ensure a
holistic approach to risk identification,
assessment and management.
Barclays' Climate Risk Framework facilitates the
structured integration of climate risk
considerations into the Bank's operations. It
undergoes regular reviews and updates –
including changes to risk taxonomy, definitions
and methodology – which align to align the
Framework with changing regulatory
expectations and external developments.
+ Further details on climate risk identification, assessment
and management can be navigated via the Risk Review
contents section on page 254.
We continue to build on our inclusion of Climate
Strategy and climate-related risks and
opportunities in our financial planning, working to
further embed these considerations into our
products and services and operations.
We have continued to work on embedding
climate and sustainability considerations into the
culture of the organisation through training and
knowledge building. We have developed several
climate- and sustainability-related mandatory
and non-mandatory training initiatives across the
organisation and provided training to a number of
functions across the Group.
Impact of climate-related risks
and opportunities on our business,
strategy and financial planning
Barclays’ 2023 financial planning process
included a review of our strategy, its
implementation, and tracking of our progress
against climate-related targets – as well as
capturing a view of climate-related risks and
opportunities.
During 2023 we enhanced our monthly reporting
framework to cover a view of the balance sheet
and revenue from Sustainable Financing. This
supports our ability to review our sustainable
financing portfolio at greater granularity and
improve relevant business engagement through
the financial planning process. Enhancements
were made to help us further evaluate the
portfolio's performance and identify
opportunities to maximise revenue generation
activities.
These outputs have been incorporated in our
financial planning process for 2023. Our planning
process also considered current climate policies
to ensure they are included in the base scenario.
We also considered impairment over the horizon
of the financial plan. At this point in time, there
are no material amendments required to the
financial plan.
All key businesses and functions are involved in
integrating climate-related risks and
opportunities into our financial planning process.
Implementing our Climate Strategy is managed
through central Sustainable Finance teams under
the Heads of Sustainable Finance for both CIB
and Barclays UK. We are developing processes
and levers that we anticipate will allow us to
further engage and impact the businesses we
work with.
For example:
• The three pillars of our Climate Strategy, as
well as our Sustainable and Transition
Financing target of $1trn, are key drivers of our
finance planning process with a pathway to
achieve this as well as risks and opportunities
reviewed with business heads
• We continue to develop our green, sustainable
and transition finance banking product sets,
including for retail customers, (for example
green mortgages), bonds/loans (including
Project Finance for renewables) and
securitised products
• We strive to continue to decarbonise our own
operations, reducing our Scope 1 and 2
emissions and our Scope 3 operational
emissions
Barclays PLC
Annual Report 2023 121
• We are tracking progress towards portfolio
alignment of our financed emissions with the
goals and timelines of the Paris Agreement
through BlueTrack™, which includes a number
of portfolio alignment metrics and levers
available to manage the portfolio against these
targets while understanding their financial
implications. The metrics are subject to
second-line review by the Climate Risk team to
assess the strategy against the targets. We
have developed an internal approach to track
and monitor progress against our targets and
how we govern these internally
• We conduct portfolio reviews to monitor
whether business activities are conducted
within Barclays’ mandate and aligned with our
expectations, and whether they 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. Furthermore, we have
introduced mandate and scale limits linked to
scoring within our Client Transition
Framework.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
Barclays PLC
Annual Report 2023 122
A range of scenario analyses was undertaken this
year with the aim to further uncover areas of risk
and opportunity, as well as integrate climate
scenario analysis into our strategic and financial
planning. This included two climate stress-tests
with the results allowing Barclays to understand
resilience to Climate risk in those scenarios.
The strategic review of sustainable financing was
also refreshed during the year across Barclays UK
and the CIB. The review built upon both new and
previously identified commercial opportunities.
The output was considered in the financial
planning process, including incremental revenue,
cost and capital.
Key opportunities continue to reside within
Equity Capital Markets, Debt Capital Markets and
lending, and some smaller new markets.
The planning process included an assessment of
our financed emissions reduction targets for
some of our highest-emitting sectors: Energy,
Power, Cement, Automotive and Steel. Barclays
has set absolute emissions or emissions intensity
targets for these sectors and the impacts of
meeting them are integrated into the financial
planning process.
Barclays continues to engage with our clients to
support their transition to a low-carbon
economy. Our current emissions targets are not
forecasted to materially impact financial
performance over the next five years.
The financial planning process also covered a
review of our net zero operations strategy.
Building on the hiring of our Heads of Sustainable
Finance in CIB and Barclays UK, over the past
year we have continued to grow our existing
talent with several strategic hires – with a focus
on expanding our product capabilities as we
continue to drive performance against our
selected targets. Each hire will allow us to further
accelerate our Climate Strategy and increase co-
ordination, with a focus on how we can help our
customers and clients with their individual
transitions to a low-carbon economy.
We will continue to further enhance how our
Climate Strategy is embedded into the way we
think about financial planning over the coming
years – reflecting on the progress we made
during 2023.
Skills, culture and training
Building our expertise
We are aware that responding effectively to
climate and sustainability issues is one of the
greatest challenges facing businesses, investors,
and society today. In 2023 we continued to
educate colleagues on sustainability and climate
change risk and opportunities, their impact on
society and the Bank, and Barclays' strategy and
response.
As we strengthen our sustainability capability and
culture, our colleagues continue to build insights
and expertise to help execute our Climate
Strategy. We have made online learning available
to grow everyone’s knowledge, and created
upskilling for specific areas in line with strategic
priorities – including mandatory training and
targeted development for certain teams relevant
to their roles and responsibilities. This is
alongside investment in our future pipeline of
colleague skills through a newly created
apprenticeship programme. A communications
campaign informed colleagues of how Barclays is
responding to climate change and sustainability
more broadly, reinforcing how they can take
action – including building their knowledge and
skills in this area.
Our suite of Sustainability training resources is
supporting wider awareness across the
organisation, comprising of videos and e-
learning. We intend to evolve this during 2024.
The topics covered include addressing climate
change, principles of sustainability, how we
support our communities, and modern slavery.
During 2023 a mandatory online climate risk
training module was provided to 12,306
colleagues across Risk, Compliance, Internal
Audit, Markets Post Trade and Business Banking.
This training focused on the elevation of climate
to a Principal Risk.
TCFD Strategy Recommendation (b)
The 2023 financial planning process used a five-
year climate baseline scenario to consider the
impacts of climate risks. The baseline scenario
considered the impact of current and agreed
climate policies across the UK, US and EU on
macroeconomic variables such as GDP and
Unemployment. This was done via a detailed
assessment of climate policy impacts, likelihood
of implementation and current level of policy
progress. The outcome of this assessment led to
a comparison between the climate baseline
scenario and the scenarios used for financial
planning, indicating a current de minimis impact
on the macroeconomic variables used to project
financial performance. We will continue to review
how climate risks manifest in the economy
through a baseline scenario – and, where these
impacts increase, will consider those within our
financial planning process.
Workstreams specifically related to finance have
been further embedded within our overall global
financial planning processes, including dedicated
climate management reporting information.
Further details of how this work has served as an
input in our five-year financial planning process
are set out below – including our approach to
sustainable financing, targets and capital
investments.
During the 2023 financial planning process we
assessed the financial impact of embedding
individual parts of our Climate Strategy, new
initiatives and targets across our businesses.
This includes the wholesale credit book,
sustainable financing and sustainable lending in
the CIB, and initiatives across our retail
businesses such as green mortgages and
sustainable investing. Build-out of new product
capabilities including Global Project Finance are
also captured.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b)
In addition, a separate mandatory training
module on Sustainability, ESG and Climate Risk
was delivered to 15,319 colleagues in 2023
across the Corporate and Investment Bank,
Trade and Working Capital, Wholesale
Onboarding and Group FCO, Finance,
Compliance and Public Policy and Corporate
Responsibility – further developing colleagues'
knowledge of the core elements of ESG. This
module focused on how Barclays manages
climate risk, as well as covering the Group
sustainability-related statements and internal
standards and how they should be applied.
+
Further details on Barclays' sustainability statements and
policy positions can be found from page 40.
In Q3 2023, Sustainability September –
a communications campaign across the
organisation – helped engage colleagues on key
sustainability-related topics. This included short
videos, a series of live recorded conversations
with senior leaders, and associated reading
materials.
To ensure our workforce of the future is well
positioned to understand climate risk, in
November 2023 we introduced a new
Sustainability Apprenticeship – targeting
internal colleagues and working in partnership
with an external provider. The apprenticeship is
one of six selected by industry experts to mark
His Majesty The King’s Coronation, gaining
recognition for educating people to understand
and develop ways to facilitate the transition to a
low-carbon economy. This will encourage the
building of a long-term pipeline of knowledge
throughout Barclays.
We also collaborated with external suppliers to
deliver accredited development programmes
for teams seeking to build specialist
sustainability knowledge. For example, a
development programme began in 2023 for 300
Corporate Bank colleagues in our Sustainability
Academy pilot to develop their climate and
sustainability knowledge. We intend to support
more Corporate Banking colleagues through
the programme during 2024. In addition, we
delivered training to colleagues in the Business
Bank on strategies for supporting SME
customers on their transition to net zero.
In Barclays UK we launched our Sustainability
Champions community to bring together our
most engaged colleagues. In the Consumer
Bank specifically, we provided training on home
energy efficiency and climate risk for mortgage
advisors, and hosted a webinar for mortgage
brokers on retrofitting. We are continuing to
build a targeted learning proposition for our
Corporate and Investment Bank to support
their ongoing development on the client
transition strategy.
Training on greenwashing was delivered to
targeted colleagues in Barclays UK, Private Bank
and Wealth Management, Corporate Bank,
Legal, Compliance, Marketing and Corporate
Communications in EMEA, the US and APAC.
This covered topics including forthcoming
regulation and how to identify and mitigate
greenwashing risk.
Barclays PLC
Annual Report 2023 123
Incentives
For the Executive Directors of Barclays PLC,
an element of each of their annual bonus
awards and Long-Term Incentive Plan awards is
driven by non-financial performance measures
– including measures relating to climate and
sustainability.
Barclays’ performance against non-financial
measures, including ESG metrics, is also
explicitly considered in the determination of the
incentive pool – directly impacting pay levels of
the wider workforce.
Non-financial performance for the Executive
Directors’ 2023 annual bonus and the 2023
incentives pool was assessed against three
categories: Customers and clients; Colleagues;
and Climate and Sustainability. The latter
included climate-related measures such as
performance against our Sustainable and
Transition Financing target, financed emissions
reduction targets, carbon footprint reduction,
and increase in renewable energy usage – as
well as measures relating to our investment
in communities.
+ Further details can be found in our Remuneration report
from page 191.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b)
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.
Just transition
During 2023 we continued to see progress on
just transition, with efforts from policymakers,
industry initiatives, civil society and the private
sector.
Following the COP27 Implementation Plan, the
first Annual High-level ministerial roundtable on
just transition took place during COP28 to
discuss the work programme on just transition
pathways. In the UK, the Transition Plan
Taskforce (TPT) integrated the
recommendations of the Just Transition
Working Group in the Disclosure Framework,
encouraging companies to disclose whether –
and how – they have identified, assessed and
taken into account the impacts and
dependencies of the transition plans on
stakeholders, society, the economy and the
natural environment throughout their value
chain.
In turn, the Taskforce for Nature-related
Financial Disclosures (TNFD) Disclosure
Framework included recommendations to
disclose details of human rights policies and
engagement activities with respect to the
assessment and response to nature-related
dependencies, impacts, risks and opportunities.
In this context Barclays continues to
acknowledge the role financial institutions play in
supporting a just transition. We have also
continued our efforts to build an approach to just
transition that considers the social risks and
opportunities of the transition and seeks to
engage relevant stakeholders.
As we pilot our approach to just transition in our
Client Transition Framework, the findings of our
pilot show that 40% of the assessed clients have
committed to a just transition. We will consider
these findings in our engagement with clients.
We also intend to include social considerations as
we develop our transition plan.
Barclays UK has continued to identify
opportunities to address the social challenges of
the transition in the context of the energy crisis.
For example, in 2023 we launched a pilot with our
strategic partner British Gas, aiming to support
thousands of customers experiencing low
financial wellbeing in accessing support with their
energy bills and relevant grants to make energy-
efficiency-related improvements to their homes.
We have continued to contribute to the
development of a just transition approach for the
financial sector through our engagement with
initiatives and the organisation of thought
leadership events and discussions, as described
below:
• During New York Climate Week Barclays
hosted an event with UNEP FI, Ceres and
Boston Consulting Group (BCG), bringing
together leaders in the sustainability and
finance space to discuss the role finance can
play in ensuring an equitable climate transition.
Barclays PLC
Annual Report 2023 124
• During COP28 Barclays co-hosted and
organised three events alongside its partners:
– an event with LSE discussing the barriers to
investing in emerging markets and
mobilising debt markets;
– an event with Ceres on the regional
approach to financing a just transition; and
– an event with BCG and Ceres discussing
whether financial institutions can facilitate a
just transition through cleantech financing
and green jobs.
• As part of our participation in the LSE
Financing a Just Transition Alliance (FJTA), we
contributed to the report 'Sowing seeds: How
finance can support a just transition in UK
agriculture', which was designed to increase
understanding across the financial sector of
how it can support a just transition in
agriculture by mobilising more finance towards
companies committed to and making
progress to support a just nature transition.
• Barclays is a Founding Funder of LSE's Just
Transition Finance Lab, which launches in
February 2024. The Lab plans to work on the
development of financial tools and
instruments for the just transition, metrics to
measure just transition performance; identify
appropriate policy reforms to help to mobilise
finance for the just transition, and develop
case studies that demonstrate how just
transition finance can be applied in practice.
Cognisant of the importance of local approaches
for just transition and the integration of the
voices of impacted stakeholders, we also
organised a stakeholder engagement, with the
support of Ceres, that allowed us to access the
perspectives of investors, non-profits, and
community leaders to help our understanding of
just transition in the US.
Our approach to nature
and biodiversity
Banks have an important role to play in
contributing to nature-positive finance and
managing their nature-related risks.
Nature is a key sustainability focus for Barclays and
the wider industry going forward, given that nature
and its ecosystem services fundamentally
underpin economies and societies. Nature is also
important to the banking sector due to the
interlinkages with climate change and social
impacts, with disclosure requirements moving
towards a holistic approach to nature, climate and
social risks and opportunities. During 2023 nature
loss continued to be recognised within new and
emerging guidance and regulation. Significantly for
companies and financial institutions, the TNFD
finalised its framework for organisations to assess
and disclose nature-related risks and
opportunities. Upcoming disclosure requirements
on nature-related topics were confirmed under
the EU Corporate Sustainability Reporting
Directive, as well as within guidance published by
the TPT regarding incorporating nature-related
impacts and dependencies associated with
climate transition plans.
We continue to work to build an understanding of
the ways our activities and those of our clients
impact and depend on nature. This includes
engaging with industry and cross-sector groups
as detailed in the 'Engagement' section on the
following page. We continue to explore how to
integrate these considerations into policy and
process and reviewing the ways our financing
activities can contribute to nature.
Given the interdependencies across the climate,
nature and social agendas, reviewing ways we
can address these areas holistically is important.
For instance, drawing on the work of the TPT, we
are considering nature-related topics in our
sector approach for Agriculture. See page 93 for
details.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b)
During 2023 we worked on setting the
foundation to our approach on nature through
planning and preparation to understand nature-
related regulatory obligations and disclosure
frameworks, and build consensus for strategic
action in 2024. 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.
During 2023 we engaged with a number of data
providers to better understand data availability
and capability. The following sets out a summary
of this work.
+ Further information on our approach to nature can be found
throughout the report.
Nature-related risk - see pages 69, 100, and 276
Nature-related opportunity - see page 105
Nature-related governance - see page 232
Nature in our operations - see page 79
TNFD pilot - see page 276
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 how we can strengthen our
approach. In 2023 we undertook a significant
update of our Forestry and Agricultural
Commodities Statement to expand the scope to
include, for the first time, requirements for
clients involved in South American beef
production or primary processing and enhanced
the existing requirements for clients involved in
palm oil and soy. See page 100.
We have continued to develop our approach to
evaluating nature-related risk in financing. This
included building on work across 2022-23 in
which we piloted the TNFD Framework on our
lending portfolio for Agriculture and Food in
Europe, with a focus on UK Farming – in which
Barclays has a significant presence. The results
informed development of new questions for the
Client Transition Tool (CTT) for UK farmers,
which are due to be incorporated in 2024. See
page 93 for details of our approach to the UK
Agriculture sector. In recognition of nature-
related impacts identified in the agricultural value
chain, we also strengthened our approach to
financing agricultural commodity sectors
exposed to significant deforestation risk.
We refined the work undertaken in 2022 to
develop a sectoral heatmap, refreshing the
industries included to align with the TNFD’s
priority sector list. Our proposed next steps
include consideration of the TNFD LEAP
framework to conduct further sector-level
analysis. See page 69 for more details.
+ 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 40.
Nature-related financing
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 $700bn per year¹.
We will continue to work towards meeting our
green and sustainable finance targets, which
include financing relevant to nature.
Our Sustainable Finance Framework includes
categories such as Sustainable Food, Agriculture,
Forestry, Aquaculture and Fisheries, which we
have mapped to nature-related UN SDGs –
including SDG14, Life Under Water, and SDG 15,
Life on Land.
In Barclays UK we believe the nature transition is
a key area where we can make an impact due to
our prominent role in financing UK agriculture
and agricultural land purchases. In 2023
examples of nature-related financing have
included lending funds in relation to the
Biodiversity Net Gain scheme and support for
farmers who seek to apply more sustainable
farming practices.
We are supporting environmentally-focused
climate technology start-ups through our SIC
portfolio led by Barclays’ Principal Investments
team. We are also exploring nature-related
products and solutions for our clients in the CIB.
See page 105 for details.
+ For more details of our green and sustainable financing and
financing nature see the ‘Financing the transition section
from page 105.
Note:
1 cbd.int/doc/decisions/cop-15/cop-15-dec-04-en.pdf
Engagement
We see appropriate collaboration and
engagement across industry as essential for
sharing learnings across the sector and a
successful nature-related transition.
In 2023 we continued to provide feedback to the
TNFD – both bilaterally, as part of our
membership of the TNFD Forum, and through
industry groups ahead of the finalisation of the
TNFD Framework.
Barclays PLC
Annual Report 2023 125
Barclays provided input into the nature
components of the TPT's disclosure guidance
for climate transition plans as part of the TPT’s
Nature Working Group. See page 61 for details of
our wider engagement with TPT.
We continued engagement with a number of
industry and cross-sector groups, including the
UN Principles for Responsible Banking (PRB)
Nature Working Group – with which we fed into a
guide to setting targets relating to banks'
practices and processes on nature. We further
provided input into the LSE's FJTA's publication
on a just nature transition – see page 124 for
details.
As part of the Sustainable Markets Initiative’s
Financial Services Task Force, Barclays co-led
the publication of a guide on Financing Coastal
Nature-based (NbS) Solutions - see page 105 for
details.
Barclays completed the third and final year of our
partnership with the Blue Marine Foundation,
which had the aim of supporting 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.
Our donation contributed to conservation
outcomes including support for more than
445,000km of newly designated Marine
2
Protected Areas (MPAs), 900km
of newly
proposed MPAs, and advocacy and educational
outreach to support the ongoing protection and
restoration of the ocean – including through the
award-winning 'The Sea We Breathe' educational
site.
+
Further details on Blue Marine Foundation can be found at:
bluemarinefoundation.com
bluemarinefoundation.com/the-sea-we-breathe/
+
For more details, see:
unepfi.org/industries/banking/nature-target-setting-
guidance/
lse.ac.uk/granthaminstitute/publication/sowing-seeds-how-
finance-can-support-a-just-transition-in-uk-agriculture/
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
Barclays PLC
Annual Report 2023 126
TCFD Strategy Recommendation (b)
Engaging with industry
We know that leveraging the relationships
we hold with stakeholders can support all of
us in achieving our objectives.
Continued engagement in the financial sector
and other areas of the real economy and public
sector will be important in delivering the actions
necessary to meet our global sustainability goals.
At a minimum, strategic partnerships with key
stakeholders enables knowledge sharing and
supports informed decision making.
Collaborating with NGOs, academia, government
agencies, private sector peers and local
communities enhances our ability to understand,
assess and address the intricate issues
associated with climate change. These
partnerships have the potential to uncover
opportunities to deploy capital into areas that
suffer from existing financing gaps and scale
companies to disrupt markets and innovate for
impact. During 2023, Barclays contributed to
several workstreams across climate, nature, just
transition, and advancing data and reporting
standards.
Our involvements in these workstreams
highlighted the significant financing gaps that
exist across sectors and markets. This theme
was in full focus throughout our conversations at
London Climate Action Week, New York Climate
Week, and COP28 in Dubai, where we hosted and
co-hosted several action-oriented sessions. At
COP28 we sponsored the Start-Up Village
located in the Green Zone, which enabled over
100 start-ups to demonstrate their various
climate technologies on a world stage – including
three Barclays SIC portfolio companies:
ZeroAvia, GeoPura, and ECOncrete.
PCAF Capital Markets working group
Barclays has been an active member of the Partnership for Carbon Accounting Financials (PCAF)
– an industry-wide initiative that aims to build consensus on approaches to carbon accounting,
disclosure and portfolio alignment – since 2020. In 2023, and for the third year running, Barclays
co-chaired the PCAF Capital Markets working group comprising eight other banks.
The working group has developed a standard to account for the facilitated emissions associated
with capital markets transactions, which was published in December 2023. The Standard (Part B)
builds on the extensive work carried out by the working group over the past three years and
follows on from the 2021 Discussion Paper, the 2022 Proposed Methodology document, and two
public consultations.
+ Further details can be found at: carbonaccountingfinancials.com/files/
PCAF-PartB-Facilitated-Emissions-Standard-Dec2023.pdf
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b)
Engaging with industry
External initiatives, signatories or memberships
Additional information
Multi-thematic
Barclays PLC
Annual Report 2023 127
Sustainable
Markets Initiative
Transition Plan
Task Force
United Nations
Environment
Programme -
Finance Initiative
LSE/Grantham
Research Institute
Ceres
Taskforce on
Nature-related
Financial
Disclosures Forum
Glasgow Financial
Alliance for Net
Zero
Net-Zero Banking
Alliance
Barclays is a member of the Sustainable Markets Initiative's (SMI) Financial Services Task Force (FSTF). The Sustainable Markets Initiative was
launched in 2020 by His Majesty King Charles III, when he was Prince of Wales. Barclays has co-led the Net Zero working group since 2021 and
in 2023 co-led the Nature-based Solutions (NbS) working group. We co-hosted a series of FSTF workshops at London Climate Action Week
and New York Climate Week contributing towards the launch of the Coastal Nature-based Solutions Practitioner's guide in November 2023.
In 2023 Barclays contributed to the Transition Plan Taskforce (TPT)'s publication of sector-agnostic and sector-specific guidance
documents. This included taking part in the TPT Sandbox, participating in the Banking, Metals & Mining, Food & Beverage, Nature and Just
Transition working groups, and providing expert reviews for the Oil & Gas working group.
Barclays has been a member of United Nations Environment Programme – Finance Initiative (UNEP FI) for over 20 years and was a founding
signatory of the UN Principles for Responsible Banking (PRB) as well as joining the Net-Zero Banking Alliance in 2021. From 2021 Barclays' Group
Head of Sustainability has been a member of the global UNEP FI Banking Board and the European Regional Board, and our CEO joined the
Leadership Council in 2022. Throughout 2023 Barclays has contributed to the PRB 2030 process, a strategic project to further develop the UN
PRB framework, and participated in the Nature Target Setting Working Group – helping build guidance and inputting on case studies.
Barclays joined over 40 financial institutions and stakeholders to form the Financing a Just Transition Alliance in 2021. In 2023 we contributed
to a report titled 'Sowing seeds: How finance can support a just transition in UK agriculture', which was designed to increase understanding
across the financial sector of how it can support a just transition in agriculture by mobilising more finance towards companies committed to
and making progress to support a ‘just nature transition’. Barclays became a Founding Funder of the Just Transition Finance Lab, launched on
20 February 2024.
Barclays has been an active member of the Ceres Company Network since 2019. In 2023 we partnered with Ceres to conduct a stakeholder
engagement as a follow up to the research Ceres conducted in 2022 on our just transition strategy. We additionally co-hosted a series of
just-transition-focused workshops at both New York Climate Week and COP28.
Barclays is a member of the Taskforce on Nature-related Financial Disclosures (TNFD) Forum, a consultative network of institutional
supporters who share the vision and mission of the TNFD. Throughout 2023 we actively provided feedback on the draft TNFD disclosure
guidance, which was officially launched in September 2023.
In 2023 Barclays contributed to the GFANZ Decarbonization Methodology working group, which at COP28 in December 2023 published a
'Technical Review Note on Scaling Transition Finance and Real-economy Decarbonization, a Supplement to the 2022 Net-Zero Transition
Plan Report'.
Barclays became a founding member of the Net-Zero Banking Alliance in 2021 and contributed to the development of NZBA guidelines throughout
2023. Barclays co-leads the NZBA Autos and Trucking Working Group, which published a white paper on emerging practice in climate target setting
for automotive sector financing, and contributed to the NZBA Real-Estate Working Group – which published a similar paper in December 2023.
Just transition
Nature and biodiversity
Climate and sustainability
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b)
Engaging with industry
Industry collaboration
Climate and sustainability
Additional information
Barclays PLC
Annual Report 2023 128
Oxford Sustainable
Finance Group
& the UK Centre for
Greening Finance
and Investment
Partnership for
Carbon
Accounting
Financials
PRA/FCA Climate
Financial Risk
Forum
RMI's Center for
Climate Aligned
Finance
World Business
Council for
Sustainable
Development
Center for Climate
and Energy
Solutions (C2ES)
UK Business
Climate Hub
As part of Barclays' three-year partnership with Oxford University, we made progress on developing new datasets and methodologies for
measuring emissions in the agriculture sector – which Barclays will leverage moving forward as it enhances its work in this area.
Barclays has been a member of PCAF since 2020. During 2023 we co-chaired the Capital Markets Working Group of eight global banks – the
work from which resulted in the publication of the PCAF Facilitated Emissions Standard (The Standard, Part B), which outlines how financial
institutions should account for the emissions associated with the facilitation of capital markets activities.
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 2023, Barclays chaired the Climate Financial Resilience Working Group.
Barclays became a Strategic Partner of the RMI (formerly Rocky Mountain Institute) Center for Climate-Aligned Finance, which acts as an
implementation partner to banks to align their investments with a net zero future, in 2022. In 2023 we participated in and hosted one of RMI's
Alignment Forum in-person workshops, seeking to identify best practices within the financial sector. In Q3 2023 Barclays became a Founding
Consortium Collaborator to support the expansion of RMI’s Oil Climate Index plus Gas – a public tool that uses a transparent, standardised
methodology to estimate methane and other GHG emissions from equivalent barrels of oil and gas. RMI has currently modelled two-thirds of
the world’s oil and gas assets. We also joined the joint RMI and UK Finance Transition Finance Alignment Forum.
Barclays became a member of the Banking for Impact on Climate in Agriculture (B4ICA) in 2021 – an initiative convened by the World Business
Council for Sustainable Development that brings together banks and expert partners to develop technical recommendations and practical
solutions to align banks’ financial portfolios in the food, agriculture, and land-use space towards net zero and Paris Agreement goals. In 2023
we contributed to B4ICA's 'Foundational Practices for Banks: Base lining, net-zero target-setting and reporting financed emissions across
the agriculture and food value chain'.
Barclays joined the Center for Climate and Energy Solutions (C2ES) Business Environmental Leadership Council (BELC) in 2022. In 2023 we
collaborated with C2ES on a range of issues, including participating in their technology working group and co-hosting an event at COP28 on
supporting the global climate technology momentum.
In the final quarter of 2023, Barclays partnered with the UK Business Climate Hub – an online portal supporting SMEs on their journey to net
zero. Barclays is helping shape and enhance the resources the Hub provides to UK business, ensuring our SME clients' voices are heard and
their needs met. This new partnership will help each SME client understand why sustainability is important for their business and what 'good'
looks like in the context of their industry.
+ 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/
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Implementing our Climate Strategy (continued)
TCFD Strategy Recommendation (b)
Barclays' approach to public policy
We have a responsibility to engage with
governments and policymakers
constructively, while 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, the customers and clients we
serve, the colleagues we employ, or the 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 seek to make contributions
that are accurate, honest and evidence-based.
Barclays’ advocacy and engagement activities,
including direct and indirect lobbying, must also be
undertaken in line with our internal controls –
including Barclays’ code of conduct (The Barclays
Way), which requires that "where we engage with
governments and regulators on issues relevant to
our business, we are honest and transparent in our
communication with them". The Barclays Way also
provides detailed guidance on speaking up and
raising concerns, directing employees to speak up if
they see "behaviours and practices that are not in
line with our Barclays Values" – making clear that
speaking up, whether formally or informally, will not
come at a consequence to them. We also believe
that Barclays should only engage on issues where
we have a legitimate interest – for example where
there is a consequence for our business, our
customers and clients, or our colleagues. Barclays’
Group Head of Strategic Policy is responsible for the
co-ordination and oversight of public policy
advocacy.
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 Barclays.
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.
In addition, 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 Barclays participates,
predominantly through the committees and
working groups formed by each. Active participation
in the discussions and working groups facilitated by
these trade associations helps encourage the
adoption of policy positions consistent with
Barclays’ public policy objectives. Where we identify
divergence on key policy matters we seek to engage
and influence these positions. The Strategic Policy
Group also supports senior executives occupying
trade association board positions, as appropriate.
As part of our commitment to transparency we
publish a range of information on our Public Policy
Engagement website, including certain details
regarding the aforementioned agencies and trade
association memberships. We also publish details of
Barclays’ bilateral responses to material
government and public policy consultations on
certain issues with which we are principally engaged,
in the UK and EU, either in full summary or part. In
other jurisdictions, including across Asia and the US,
responses to public consultations are published on
the respective government websites.
+ Our Public Policy Engagement website can be found at:
home.barclays/sustainability/esg-resource-hub/reporting-
and-disclosures/public-policy-engagement/
Climate policy engagement
Barclays seeks to proactively engage in climate and
sustainable finance-related public policy
conversations and development, directly and
indirectly, consistent with our business strategy –
including 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.
We proactively pursue opportunities for senior-
level dialogue with policymakers to demonstrate
private sector leadership on sustainable finance
and the energy transition. We provide feedback, as
an individual institution and via trade associations
to relevant consultation processes launched by
standard setters, multilateral organisations and
NGOs, including those that could inform future
policy recommendations. We also engage with
governments and other key stakeholders to
promote policies that facilitate greater investment
in climate solutions. This includes participating in
key international and domestic forums – such as
the United Nations Climate Change Conference
(COP28) and the UK’s Global Investment Summit
2023 – to promote net-zero-aligned public policy
at senior levels.
Barclays endeavours to support the development
of public policy positions that facilitate sustainable
finance and the broader energy transition through
proactive engagement in relevant trade
association working groups, where we seek to
promote positions consistent with our ambition to
be a net zero bank by 2050. We engage with many
trade associations on climate issues and will
continue to do so to promote our net zero
objectives. Reflective of the pace of developments
and regional differences in approaches to
sustainability, there can be diverging views within
trade associations. Many of these trade
associations also do not focus exclusively on
Barclays PLC
Annual Report 2023 129
sustainability, but rather engage across the full
breadth of financial services-related policy – and do
not have stated positions in relation to net zero.
Where misalignment between an association’s
advocacy position and Barclays’ own net zero
ambitions is identified, we seek to manage this
appropriately by addressing it through proactive
engagement where possible. Where there is a
material and ongoing difference identified through
our routine engagement, Barclays may 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 can exercise the option
to end our membership.
In 2023 we undertook another internal review of
the climate policy positions of certain material
trade associations, including their alignment with
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. A list
of these trade associations in scope can be found
on our Public Policy Engagement web page. This
review was informed by publicly available
information on each trade association’s website,
which could include climate policy position
statements and, where directly related to climate,
consultation responses, commission reports and
statements from an association’s senior
leadership. For a number of trade associations in-
scope of the review, we were unable to identify a
clearly articulated position on net zero. Of those
with a clear position, the majority were considered
to be aligned or partially aligned with our net zero
by 2050 ambition. In 2023 we began to proactively
engage with trade associations to better
understand their climate policy positions and
activities, and we will continue to keep our
approach under review.
Resilience of our strategy
TCFD Strategy Recommendation A:
TCFD Strategy Recommendation B:
TCFD Strategy Recommendation C:
Describe the climate-related risks and
opportunities the organisation has identified
over the short, medium, and long term.
Describe the impact of climate-related risks and
opportunities on the organisation’s businesses,
strategy, and financial planning.
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
66
67
70
Implementing our climate strategy
Achieving net zero operations
Operational footprint dashboard
All other narrative
Reducing our financed emissions
BlueTrack
dashboard
TM
All other narrative
Financing the transition
Sustainable finance dashboard
All other narrative
Working with our clients
Embedding Climate and Sustainability into our
business
Just transition and nature and biodiversity
Engaging with industry
Barclays' approach to public policy
Resilience of our strategy
Scenario analysis
Barclays’ resilience to climate scenarios
Climate stress tests
2023 Enhancements and beyond
Challenges and limitations
Macro-dependencies and objectives
Important information/disclaimers
130
131
132
132
134
135
136
137
72
73
75
76
80
88
89
101
103
104
107
121
124
126
129
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Resilience of our strategy
Scenario analysis
Climate scenario analysis forms a key part of
Barclays' approach to assessing and
quantifying the impact of physical and
transition climate risks on the Bank's
portfolios¹. It represents a tool in better
understanding the significant uncertainty
that arises from how climatic weather
patterns will change, as well as the rapidly
evolving nature of the climate transition
from government policies, new technologies
and changing individuals' sentiment.
Through climate scenario analysis, these risks
and uncertainties can be translated into financial
impacts to the Bank, allowing Barclays to better
understand the resilience of its business
strategy.
History and evolution
Since 2018 Barclays has progressively developed
its internal scenario analysis capabilities,
developing new climate assessment
methodologies, running internal targeted
exercises with external subject matter experts,
and participating in regulatory climate stress-
testing.
Barclays PLC
Annual Report 2023 131
Barclays continues to build its use of scenario
analysis to explore and further understand the
evolving landscape – identifying areas of risks and
opportunities – to challenge existing
assumptions of future climate pathways and
measure and size of the risks of climate change
to the Bank.
Note
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.
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 such
as the RA insurance climate stress and
DNB energy transition stress test.
Exploratory climate scenarios by
the Bank of England (BoE)
• Barclays participated in the BoE’s
Climate Biennial Exploratory Scenario.
• 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.
Stress-testing and integration
• Quantitative integration of stress-
testing results into internal capital
adequacy and CET1 assessments.
• Conduction of two short-term climate
stress tests, including a physical tipping
point (H1) and full macroeconomic
expansion (H2).
• Development of new climate-aware
models and methodologies.
2018
2019
2020
2021
2022
2023
External case studies through
UNEP FI
• Case study exercises covering Power,
Utilities, Oil and Gas and Residential Real
Estate.
• Scenario assessment based on REMIND
2°C scenario, assessing a specific client
set in each sector.
• Judgement-led and simplistic approach
to calculate climate probabilities of
default.
Internal climate scenarios
informed by 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.
Framework, regulatory and
internal scenario analysis
• Barclays participated in regulatory
stress-tests such as ECB CRST.
• Conduction of bespoke internal
scenario analysis exercise.
• Development of an internal framework
to structure scenario-based climate
risk measurement exercises.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Resilience of our strategy (continued)
Barclays PLC
Annual Report 2023 132
TCFD Strategy Recommendation (c)
Barclays' resilience to climate
scenarios
Based on the exercises undertaken to date,
our understanding is that Barclays' strategy
remains resilient to climate scenarios. This
assessment includes consideration of two
climate stress tests completed in 2023,
with further details included in subsequent
sections of this chapter.
In addition Barclays considers the impact of
climate scenarios within its financial
planning process, including the use of a
baseline climate scenario within the
Medium Term Planning process and the
financial impacts from Barclays meeting its
sectoral BlueTrackTM targets, aligned to
1.5°C scenario pathways. Finally, Barclays
has considered the impact of climate
scenarios within its assessment of
Expected Credit Losses reported under
IFRS9, for year-end 2023. More detail on
these two elements can be found on page
121 and 310 respectively.
Nevertheless, given the evolving climate
landscape, we seek to further enhance our
capabilities and modelling in order to refine
our understanding of the Bank's resilience
to various climate scenarios, particularly
given high uncertainty within climate
scenario analysis.
The aims of our two climate stress tests, each
with their own scenario, were to assess Barclays'
financial resiliency to climate risks over and above
the financial impact of existing macroeconomic
internal stress tests – and the extent to which
Barclays would remain within risk appetite.
Both stress tests were designed as Bank-wide
exercises, conducted over a five-year time period,
to assess an accelerated transition and specific
climate vulnerabilities to the Bank's business plan.
These exercises include an assessment of the
financial impact to our clients of a structural
decline in fossil fuel demand and consumption and
shift towards low-carbon products and services.
The two scenarios have been internally designed
with consideration of Barclays' specific portfolio
vulnerabilities. External scenarios such as those
provided by the Network for Greening the
Financial System (NGFS), while offering granular
and detailed scenario information for financial
institutions, tend to focus on longer trends and
display limited volatility, with assumptions that
may be less relevant to our specific businesses.
As such we have designed scenarios with a
greater focus on short-term tail risks and
volatility to assess Barclays' resiliency.
Results of the two exercises indicate a c.10%
drag on the Bank’s profitability, falling in the range
projected for the UK banking sector by the Bank
of England's 2021 Climate Biennial Exploratory
Scenario (CBES). In addition the exercises
represent a c.10-20% uplift in losses incurred in
existing macroeconomic internal stress tests. In
order to manage and mitigate these potential
risks, Barclays has for the first time quantitatively
integrated the results of its stress tests into its
internal capital adequacy assessments, ensuring
the Bank remains appropriately capitalised for
climate risks, and to ensure business resilience.
The results of our exercises have highlighted
risks within our key businesses to either Physical
Risk, Transition Risk or both. We have aggregated
results for Barclays' three main business units,
Barclays International, Retail and SME Banking,
and Head Office, in the heatmap on the right for
the stress test most recently completed.
The assessment indicates the relative impact
from the climate scenario against Barclays'
medium-term plan, calculated as the additional
losses compared to the expected business cycle.
Losses appear highest in the Barclays
International segment relative to the baseline.
This is predominantly attributed to our Global
Banking & Markets business, driven by exposure
to more carbon intensive sectors that are most
impacted from the fast transition scenario, such
as the introduction of carbon pricing schemes. In
addition, cascading transitional impacts drive up
unemployment, stressing our cards portfolios.
Meanwhile, within Retail, UK residential real
estate exposures face increased acute physical
events and additional energy remediation costs.
Further detail of these exercises is included in
subsequent sections.
Business
Barclays International
Retail and SME Banking
Head Office
Impacts
Medium
Low
Low
Climate stress tests
Two climate stress tests have been
conducted during 2023, each with their
own short-term scenario, to assess the
Bank's financial resiliency to transition and
physical risks. The H2 exercise builds upon
the learnings from H1, enhancing climate
stress testing design, integration, and
execution as part of the Bank's planning
and stress-testing framework. Key
developments include full macroeconomic
scenario expansion, the broadening of
assessment scope, and the refinement of
climate methodologies.
Climate stress test (H1)
In the first half of 2023 Barclays performed a Bank-
wide climate stress test, which tested the impact
of a tipping point event, with subsequent shifts in
consumer behaviour and financial market activity.
The scenario began with a substantial weakening
of the Atlantic Meridional Overturning Circulation,
leading to a disruption in heat transfer and
changes in atmospheric circulation – resulting in
direct physical risk events across the globe.
Structural changes in weather patterns drive
indirect physical risks, and industries reliant on a
stable climate begin to deteriorate. As climate
disasters manifest, societal actors including
governments, markets, consumers and NGOs
take action in attempts to curb further
materialisation of climate risks. This exercise was
used to test the Bank's resilience to credit, market,
operational, liquidity, and reputational risks arising
from climate change. The scenario was developed
internally, based on the latest scientific research
from the IPCC, with review by Oxford University.
Results and insights
Overall, losses represent a c.10% drag on profits,
falling in the range projected in the Bank of
England's CBES. Climate impacts were driven
notably by fossil-fuel-intensive industries and
assets, and those sectors where consumers
'vote with their feet' and change spending
patterns to more sustainable options. While
physical risks losses represented a lower portion
of overall losses across businesses, physical risks
are significant and concentrated in industries
with high reliance on buildings and infrastructure.
Climate internal stress test (H2)
During the second half of 2023 Barclays
undertook a climate stress test, part of an annually
scheduled climate stress-testing programme, in
line with existing internal macroeconomic stress
tests. The formal integration of climate stress-
testing into the Bank's Stress Testing Framework
is an important development and further embeds
ongoing management of climate risks, enables
consistent analysis of how these risks change
through time, and incorporates into assessments
of the Bank's risk appetite. In order to
appropriately assess Barclays' resiliency to
climate-related changes, we assess scenarios
against our internal climate risk register, to select
those most relevant to both self-identified areas
of risk and those that require further exploration.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 133
Resilience of our strategy (continued)
TCFD Strategy Recommendation (c)
Scenario
Stage 1:
Stage 2:
Stage 3:
The scenario narrative was designed over a five-year
timeframe aligned with the Bank's Medium Term
Planning and Internal Stress Testing scenarios.
Specific variables were expanded using a
combination of models and Subject Matter Expert
(SME) judgement by Barclays' internal Scenario
Expansion Team to assess both physical and
transition Climate Risks. The exercise is designed to
complement conventional Barclays macroeconomic
stress-testing, and seeks to understand:
1) How climate can influence conventional
macroeconomic stressed environment
pathways and severity; and
2) The incremental impact of climate above
macroeconomic stressed pathways.
The climate scenario involves initial policy
announcements that trigger immediate asset
repricing, while more stringent policy
requirements unfold over a longer time horizon –
dampening recovery in the outer years as
depicted in the below chart through stages 1, 2,
and 3. Against this backdrop the scenario also
includes consideration of physical risk, notably
hazards of which Barclays' clients are most
susceptible to such as flood and drought.
Implications and policies of the three stages are
outlined below:
a) Consumer preferences shift toward greener
products and practices while consumption is cut
to cope with the recessionary environment.
Behavioural shifts are pronounced at sector level
as consumers turn away from firms who finance
carbon-heavy industries.
b) Investors reassess their participation with certain
firms. Those with heavy exposure to brown income
and/or assets, combined with poor transition plans,
are negatively impacted in equity markets – with
capital reallocated to greener firms.
c) In the UK, existing proposals to tighten EPC
minimum standards are accelerated, bringing
forward the compliance date for Buy-to-Let,
Social Housing, and Commercial Real Estate
buildings to be at EPC C or above.
a) As the economy moves past peak recession,
large parts of it start to consider how it can build
back greener. Under continued behavioural
pressure from consumers and investors, large-
scale plans for transitioning to a more
sustainable business model occur where
possible.
The return of capital on these plans and the
associated delay to recovery leads to a slight
prolonging of the stress, but the creation of a
transition plan leads to confidence in financial
markets by investors.
b) Additional policies in the UK and US are
accelerated or announced. For example, the
Government will rapidly increase the investment
and deployment of EV charging infrastructure to
support faster transition in the automotive
sector.
a) The EU and UK governments ramp up their
existing emissions trading schemes to achieve
1.5C, with a carbon price shock increasing $150/
tCO2 within 12 months from 2026 and
continuously increasing. This dampens
economic recovery and leads to prolonged
higher inflation as production costs are higher
due to increased energy costs. However, to
some extent, this is offset by both public and
private investment to enable faster transition.
b) Introduction of Carbon Border Adjustment
Mechanisms, resulting in supply-side shocks, a
reduction in exports, and other trading frictions.
Scenario impact (Illustrative only)
+
A series of risk events lead to a
drastic shift in public sentiment,
demanding a policy response.
Faced with a severe economic
recession, impactful policies are
announced to take effect during
economic recovery. However it
leads to an immediate repricing
of assets.
Existing government climate
policies come into affect and
contribute to the recovery, as
these policies are largely
investment and funding which
will spur on economic activity.
More stringent government climate policies - the
expansion of the Emissions Trading Scheme (ETS) and
the rapid introduction of a Carbon Border Adjustment
Mechanism (CBAM) - come into effect. This induces a
carbon price shock and leads to a dampened recovery.
-
Jump-off
Year 1.5
Year 2.5
Stress
Recovery
Dampened recovery
— Economic Stress Scenario
— Climate Stress Scenario
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Resilience of our strategy (continued)
TCFD Strategy Recommendation (c)
The scenario will have significant impacts on
Barclays, including:
1) Amplified market shocks: additional to
existing macroeconomic shocks, there will be
further equity and credit shocks for brown
industries and financiers, as a result of
immediate repricing.
2) Amplified credit deterioration: additional
credit risk on brown industries as a result of
lower earnings expectations and refinancing
risks.
3) Increase in frequency of physical risk events:
throughout the time horizon, there is an
increase in the occurrence of physical hazards
such as flood, hurricanes and droughts.
Following the above narrative, scenario variables
are provided with varying levels of granularity. For
example, global variables – notably demand in
climate-sensitive sectors such as Energy, Power
and Automotive – national variables – including
unemployment rates, GDP, HPI, CPI,
government legislation on EPC with further
distinction between commercial and residential
real estate – and property level variables,
including subsidence and flood. Calibration is
guided by the narrative with consideration for
compounding effects of existing economic
downturn and climate stresses, informing the
shape and magnitude of variable calibration over
the scenario horizon.
Material technological development has not
been assumed within the economic projections,
given the immediate and short time horizon of
the scenario. Variables are leveraged to assess
impacts on Credit Risk, Market Risk,
Counterparty Credit Risk, Underwriting, Non-
traded Market Risk, Income and Balance Sheet,
Expenses, Pension, Liquidity, and Capital across
Barclays – with a focus on UK, US, and EU regions.
Results and insights
Overall, losses are comparable with those seen in
H1, also representing a c.10% drag on profits.
While losses are significant, they remain
manageable within the Bank's existing risk profile.
Within Barclays International, losses were driven
mostly by companies operating in heavily
emission-intensive industries due to rising carbon
prices over the scenario, or those within sectors
where demand for products and services rapidly
fall due to consumer behaviour shifts or wider
decarbonisation of the economy. In addition,
market pressures and government policies on
low-energy-efficiency Commercial Real Estate
leads to deterioration in these markets both in the
UK and US.
In addition, rising unemployment rates across
Barclays' major operating geographies cause
negative impacts on consumer affordability
through the loss of jobs and a weakened
macroeconomic environment. Nevertheless,
Barclays remains resilient to these additional
losses, and current risk management mitigates
these macroeconomic drivers.
Retail and SME segment is impacted by higher
frequency of acute events with real estate and
agricultural assets susceptible to physical risks
such as drought and flood. Despite this, the
portfolios remain resilient due to availability of
household insurance and the strong loan-to-
value profile of the lending. Sensitivity analysis was
conducted to severely constrained household
insurance availability, with Barclays remaining
resilient, albeit noting small populations would be
impacted significantly.
Barclays PLC
Annual Report 2023 134
We will continue to refine and adapt our insurance
assumptions to reflect ongoing changes in
market expectations. In addition, while transition
policies on emissions reduction and energy
efficiency improvements do yield greater impacts,
especially as customers begin to price energy
performance more explicitly in their decisions, the
resultant drag on annual profits remains
manageable.
We acknowledge, however, that further advances
in modelling capability and data availability are
needed to fully understand the extent of these
losses, given high uncertainty in climate scenario
analysis. For example, the scenario does not
capture compounding and interaction effects
between physical and transition risks that could
potentially amplify such loss.
As such, Barclays' annual climate stress-testing
cycle is in place to address these uncertainties, by
testing our business resilience under different
climate scenarios and continuously refining our
climate methodologies.
2023 Enhancements and beyond
During 2023 Barclays made several key
enhancements across climate scenario
development, climate risk modelling, and
the ways we embed climate learnings into
our risk management.
• Climate scenarios are designed and developed
with our internal specialist scenario expansion
team, leveraging the tools and approaches of
the existing scenario expansion processes and
supplementing these with specific climate
analysis. This ensures consistency in climate
scenario design alongside existing regulatory
internal scenarios, as well as detailed and
granular climate scenario expansion.
• Climate risk models are developed according
to Barclays' Climate Credit Risk Adjustment
Framework, such that model execution across
our suite of climate models follows a
consistent process – adhering to defined
principles and integrated strategically with our
existing model suite whilst still having the
flexibility to include portfolio-specific
constraints and characteristics. Although for
stress-testing purposes Barclays' focus
remains on five-year scenarios aligned with
our usual planning horizon, models in
development are designed to enable
assessment of longer horizons – 10 years or
longer – should we decide to explore these in
the future.
Climate Credit Risk Adjustment Framework
Further design and piloting of Barclays' climate
risk model methodology is underway, focusing on
integrating new climate modelling techniques
into the Bank's existing financial analysis
processes. The target state is a flexible and
adaptable process that can support various
modelling techniques and allow us to test a wide
range of possible future scenarios. Estimates of
incremental credit risk spreads will be integrated
with Capital, Impairment and Stress Testing
Models to quantify climate risk.
Residential Real Estate
We have continued to improve our
understanding of how physical and transition
risks could impact our Mortgages portfolio in the
UK, reflecting on learnings in previous scenario
analysis exercises such as the Bank of England's
Climate Biennial Exploratory Scenario, engaging
with specialist data providers, and undertaking
quantitative analysis of the impacts of
climate risks.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 135
Resilience of our strategy (continued)
TCFD Strategy Recommendation (c)
Climate scenario
Property data
Customer data
Insurance
Flood
Subsidence
EPC upgrade
Additional costs
Value shock
Loan to Income
Loan to Value
Corporates
The Barclays Corporate Transition Forecast
Model was first published in 2021. We will be
doing further work during 2024 to update and
enhance this model. Enhancements will include
improving geographical granularity by leveraging
asset-level data, incorporating sub-sector
specific drivers, considering interaction of
physical and transition risks as one, and
addressing the known enhancements as
published in 2021.
+
Further details on The Barclays Corporate Transition
Forecast can be found at: home.barclays/content/dam/
home-barclays/documents/citizenship/ESG/2021/Corporate-
Transition-Forecast-Model-2021.pdf
PD spread
LGD spread
Challenges and limitations
n Modelled n Input data n Feeders/Scenarios
The focus of physical risk analysis has been on
understanding the impacts of flood and
subsidence, and considering these at a property-
specific level – including the interaction of these
risks and insurance provision, and how impacts
may lead to changes in property values and our
customers' affordability.
For transition risks, the potential costs from
energy remediation action taken by customers
are considered – such as upgrading their
properties' EPC rating in favour of more energy
efficient homes in consideration of energy costs
and accounting for changes in property valuation
across the market.
The uncertainty around the regulatory landscape
for these risks is high, and Barclays continues to
try and improve its understanding of how EPC
regulation could feed through to customer
impacts. The schematic below outlines the
Climate Mortgage model.
The impact of climate physical and transition
drivers at a customer level are assessed, yielding
probability of default (PD) and loss given default
(LGD) spreads that are fed downstream into our
existing stress-testing models.
The Residential Real Estate Model will act as a
pilot implementation for the Climate Credit Risk
Adjustment Framework. Over time, we intend to
incorporate additional climate risk drivers such as
coastal flooding and storm damage, and refine
modelling of customer behaviour in this market
as the evidence on how customers respond to
climate-related risks becomes apparent.
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.
Data
There exist inherent challenges in climate
modelling due to limitations in data quality and
availability, given the short history of climate
assessments within the financial services industry.
• Data coverage is often lacking, where a subset
of assets may not have the appropriate
information publicly disclosed. 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
conducted at portfolio or sector level. This
creates a need for more granular data that
Barclays may not typically have maintained
• While high data granularity is desirable to model
client specific features, the balances between
high data granularity and the additional insights
provided must be investigated to assess the
appropriate level of modelling
• Data coherence issues may present
inconsistencies in modelling. Emissions data is
often one-year lagged, thus where the latest
quarter/year financials are available, the
emissions data may not be reflective of the
company's operations, especially where there
has been substantial growth or decline,
mergers and acquisitions or other special
activities.
Scenario
There exist inherent uncertainties with scenario
design largely attributed to limited history of the
interactions between climate risks and the
economy.
• Timing and interactions of physical and
transition risks can greatly impact the Bank's
assessment of capital adequacy and resilience.
Assumptions around such compounding
effects, while nuanced, are critical to our loss
assessment and subsequently risk
management processes and business
strategy
• There is a significant level of uncertainty with
climate stress-testing projections in (i) how
the scenario will manifest; (ii) how customers
and clients will react; and (iii) the final loss
quantification
• An understanding of compounding risks and
feedback loops between financial systems, the
economy, and climate risks remains a
challenge, given the lack of historical
precedent of such interactions. Over longer
time horizons, it becomes increasingly difficult
to capture the range of second-order effects
as physical and transition risks evolve, assess
the rate in which risks manifest or subside, or
identify inflection points.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Resilience of our strategy (continued)
Barclays PLC
Annual Report 2023 136
• Enhancing attractiveness of technological
innovations for lenders: A key commercial
constraint on the scalability of climate
technologies is access to cost-competitive
capital. Improving risk-adjusted returns is
required to incentivise private financial flows
towards nascent technologies and developing
nations – essential to limit global warming to
1.5°C. Blended finance mechanisms have
potential to unlock large quantities of private
investment when both public and philanthropic
funds provide first loss tranches. The
subsequent adjusted risk-return profiles can
make previously high-risk investments
marketable
+ Barclays is committed to scaling climate solutions through
our Sustainable Impact Capital portfolio, with a mandate to
invest up to £500m in global climate tech start-ups by the
end of 2027. For further information see page 117.
TCFD Strategy Recommendation (c)
Macro-dependencies and objectives
We consider the following areas to
represent some of the macro-
dependencies that may impact our clients,
customers and suppliers, and thus our
ability to deliver our Climate Strategy.
• Enhancing policy clarity in the real economy:
Comprehensive, economy-wide
decarbonisation policies are required across
sectors and regions. The absence of clearly
defined milestones for full decarbonisation at a
national level introduces ambiguity over the
channelling of financial resources to ensure an
orderly and just transition
• Optimising carbon-pricing mechanisms:
A comprehensive carbon-pricing scheme is
a key lever to address the current market
failure of externalities from GHGs emissions.
The UK and EU announcements for a carbon
border adjustment mechanism (CBAM) will go
some way to addressing this dependency.
However, IMF research¹ shows prices (avg $6/
tCO2) are currently insufficient to achieve
1.5°C or 2°C targets
Note:
1 imf.org/en/Blogs/Articles/2022/07/21/blog-more-countries-
are-pricing-carbon-but-emissions-are-still-too-cheap
• Addressing sector-specific challenges:
• Global harmonisation of regulation:
To date, an increasing number of countries
and territories have some degree of
mandatory ESG disclosure. Non-financial
regulatory requirements are necessary for
investors to accurately assess climate-related
risks – however, major jurisdictions risk
hindering the transition through regulatory
fragmentation. As a bank with a global
presence, interoperability of regulatory
frameworks is essential to enable focused
progress towards net zero.
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 or the varying
pathways individual companies take to transition.
Myriad sector-specific challenges persist. This
year a backlog of grid connectivity requests for
new renewable power projects highlighted the
complexity of a transition to net zero. Delays
to approval for low-carbon projects impacts
investor confidence, slowing the transition
+ For more information on sector-specific challenges and
dependencies, see BlueTrackTM sector pages 92 to 99.
• Cultivating consumer confidence and
investment incentives: Increased confidence
in the multi-faceted and potential financial
benefits of decarbonisation among society
would help spur action. Clear messaging and
incentives for households and businesses to
generate tangible returns on investment in
low-carbon products is critical for driving the
transition towards net zero, particularly in
sectors reliant on consumer behaviour such as
Housing and Agriculture
• Improving access to sustainability-related
risk and impacts data: Accurate assessments
of client data, including Scope 3 emissions, is
needed to enable a data-driven approach
required to mitigate non-financial risks and
plot the path to net zero. The evolving nature
of corporate and financial sector reporting,
and the persistent challenges stemming from
data gaps, can hinder progress towards these
goals
+ Barclays remains engaged in the development of
mechanisms to bridge these gaps, highlighted by our work
with the Transition Plan Taskforce to set out transition plan
disclosure guidance. For further details see page 61.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Important information/Disclaimers
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 from more traditional
areas of reporting including in relation to 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 the
disclosure of such matters. Our climate and
sustainability disclosures take into account the
wider context relevant to these topics, which
may include evolving stakeholder views, the
development of our climate strategy, longer
timeframes for assessing potential risks and
impacts, international long-term climate- and
nature-based policy goals and evolving
sustainability-related policy frameworks. Our
climate and sustainability disclosures are subject
to more uncertainty than disclosures relating to
other subjects, given market challenges in
relation to data reliability, consistency and
timeliness – the use of estimates, judgements
and assumptions which are likely to change over
time, the application and development of data,
models, scenarios and methodologies, the
change in regulatory landscape, and variations in
reporting standards.
These factors mean disclosures may be
amended, updated, and recalculated in future as
market practice and data quality and availability
develops, and could cause actual achievements,
results, performance or other future events or
conditions to differ, in some cases materially,
from those stated, implied and/or reflected in
any forward-looking statements or metrics
included in our climate and sustainability
disclosures. We give no assurance as to the
likelihood of the achievement or reasonableness
of any projections, estimates, forecasts, targets,
commitments, ambitions, prospects or returns
contained in our climate and sustainability
disclosures and make no commitment to revise
or update any such disclosures to reflect events
or circumstances occurring or existing after the
date of such statements.
Disclaimers
In preparing the climate and sustainability
content within the Barclays PLC Annual Report
wherever it appears, we have:
• Made certain key judgements, estimations and
assumptions. This is, for example, the case in
relation to financed emissions, portfolio
alignment, classification of environmental and
social financing, operational emissions and
sustainability metrics, measurement of climate
risk and scenario analysis
Barclays PLC
Annual Report 2023 137
• Continued (and will continue) to review and
develop our approach to data, models,
scenarios and methodologies in line with
market principles and standards as this subject
area matures. The data, models, scenarios and
methodologies used (including those made
available by third parties) and the judgements,
estimates and/or assumptions made in them
or by us are rapidly evolving, and this may
directly or indirectly affect the metrics, data
points, targets, convergence points and
milestones contained in the climate and
sustainability content within the Annual
Report. Further, changes in external factors
which are outside of our control such as
accounting and/or reporting standards,
improvements in data quality, data availability,
or updates to methodologies and models and/
or updates or restatements of data by third
parties, could impact – potentially materially –
the performance metrics, data points, targets,
convergence points and milestones contained
in the climate and sustainability content within
the Annual Report. In future reports we may
present some or all of the information for this
reporting period (including information made
available by third parties) using updated or
more granular data or improved models,
scenarios methodologies, market practices or
standards. Equally, we may need to re-
baseline, restate, revise, recalculate or
recalibrate performance against targets,
convergence points or milestones on the basis
of such updated data.
• Used climate and sustainability data, models,
scenarios and methodologies we consider to
be appropriate and suitable for these purposes
as at the date on which they were deployed.
This includes data, models, scenarios and
methodologies made available by third parties
(over which we have no control) and which may
have been prepared using a range of different
methodologies, or where the basis of
preparation may not be known to us.
Methodologies, interpretations or
assumptions may not be capable of being
independently verified and may therefore be
inaccurate. Climate and sustainability data,
models, scenarios and methodologies are
subject to future risks and uncertainties and
may change over time. Climate and
sustainability disclosures in this document,
including climate and sustainability-related
data, models and methodologies, are not of
the same standard as those available in the
context of other financial information and use
a greater number and level of judgements,
assumptions and estimates, including with
respect to the classification of climate and
sustainable financing activities. Climate and
sustainability disclosures are also not subject
to the same or equivalent disclosure
standards, historical reference points,
benchmarks or globally accepted accounting
principles. Historical data cannot be relied on
as a strong indicator of future trajectories in
the case of climate change and its evolution.
Outputs of models, processed data, scenario
analysis and the application of methodologies
will also be affected by underlying data quality,
which can be hard to assess, or challenges in
accessing data on a timely basis
Barclays PLC
Annual Report 2023 138
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Important information / Disclaimers (continued)
Such updated information may result in
different outcomes than those included in the
Annual Report. It is important for readers and
users of the Annual 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.
The “Implementing our climate strategy”
section of the Annual Report highlights where
information in respect of a previous reporting
period has been updated. Our principles-
based approach to reporting financed
emissions data (see page 84) sets out when
financed emissions information in respect of a
prior year will be identified and explained
• Included in the Annual Report a number of
graphics, infographics, text boxes and
illustrative case studies and credentials which
aim to give a high-level overview of certain
elements of the climate and sustainability
content within the Annual Report and improve
accessibility for readers. These graphics,
infographics, text boxes and illustrative case
studies and credentials are designed to be
read within the context of the Annual Report
as a whole.
KPMG LLP has performed limited independent
assurance over selected climate and
sustainability content, which has been marked
Δ
with the symbol
. 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 the Annual Report has been
subject to this external limited assurance.
There are a variety of internal and external
factors which may impact our reported metrics
and progress against our targets, convergence
points and milestones.
+ The limited assurance opinion is available at: home.barclays/
sustainability/esg-resource-hub/reporting-and-disclosures/
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Forward-looking statements
Barclays PLC
Annual Report 2023 139
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 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 may also 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,
business strategy, income levels, costs, assets
and liabilities, impairment charges, provisions,
capital, leverage and other regulatory ratios,
capital distributions – including policy on
dividends and share buybacks – return on
tangible equity, projected levels of growth in
banking and financial markets, industry trends,
any commitments and targets – including ESG
commitments and targets – 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; regulations, governmental
and regulatory policies, expectations and actions,
voluntary codes of practices, and the
interpretation thereof; changes in International
Financial Reporting Standards 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 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, pandemics
and similar events beyond the Group’s control;
the impact of competition in the banking and
financial services industry; capital, liquidity,
leverage and other regulatory rules and
requirements 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;
reforms to benchmark interest rates and indices;
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 conflicts in Ukraine and the Middle East on
European and global macroeconomic conditions,
political stability and financial markets; political
elections; developments in the UK’s relationship
with the European Union (EU); the risk of
cyberattacks, information or security breaches,
technology failures or other operational
disruptions and any subsequent impacts 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. In setting
its targets and outlook for the period 2024-2026,
Barclays has made certain assumptions about
the macro-economic environment, including,
without limitation, inflation, interest and
unemployment rates, the different markets and
competitive conditions in which Barclays
operates, and its ability to grow certain
businesses and achieve costs savings and other
structural actions. Additional risks and factors
that may impact the Group’s future financial
condition and performance are identified in the
description of material existing and emerging
risks beginning on page 258 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 141
Creating positive outcomes
for our stakeholders
Our
Purpose
Our
Vision
Our
Values
Working together for
a better financial future
The UK-centred leader in global finance
A comprehensive and pre-eminent UK consumer,
corporate, wealth and private banking franchise
The leading non-US based investment bank
A strong, specialist US consumer bank
Respect
Integrity
Service
Excellence
Stewardship
We harness
the power
of diversity and
inclusion in our
business, trust
those we work
with, and value
everyone’s
contribution.
We operate
with honesty,
courage,
transparency
and fairness
in all we do.
We act with
empathy and
humility,
putting the people
and businesses
we serve at
the centre of
what we do.
We prize
sustainability,
and are passionate
about leaving
things better
than we
found them.
We set high
standards
for what we do,
championing
innovation
and using
our energy,
expertise
and resources to
make a positive
difference.
Customers and clients
Colleagues
Society
Investors
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 142
Contents
Parts 1, 2 and 3 of Barclays PLC 2023 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
143
143
144
145
191
230
254
254
256
258
272
284
363
373
373
374
376
377
378
379
380
387
394
394
413
421
Inside Part 1
Strategic report
Welcome to Barclays
The Group at a glance
Chairman’s introduction
Chief Executive's review
Our business model
Our strategy
The world in which we operate
Our plan and targets
Our new divisional structure
2023 divisional review
About Barclays
Barclays UK
Barclays International: Corporate and Investment Bank
Barclays International: Consumer, Cards and Payments
Our stakeholders
Customers and clients
Colleagues
Society
Investors
Additional disclosure
Section 172(1) statement
Non-financial and sustainability information statement
Climate-related financial disclosures summary
ESG Ratings and Benchmarks
ESG-related reporting and disclosures
Managing risk
Viability statement
Shareholder information
Important 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
1
2
4
7
10
11
12
13
14
15
16
17
19
21
23
24
27
30
34
37
38
40
44
49
50
51
54
56
58
59
60
66
72
130
Governance
Our governance framework facilitates
the effective management of the Group
across its diverse businesses.
Board Governance
Directors’ report
Board of Directors
Group Executive Committee
Our governance framework
Key Board activities
Board Nominations Committee report
Other Governance
Climate and sustainability governance
145 Managing impacts in lending and financing
149 Our supply chain
150
153
156
Human rights/Modern slavery
Supporting our customers
The Barclays Way
Board Audit Committee report
166 Whistleblowing
Board Risk Committee report
Board Sustainability Committee report
How we comply
174
180
183
Tax
Financial crime
Health and safety
Other statutory and regulatory information
Remuneration report
185 Managing data privacy, security and resilience
191
231
236
238
239
242
245
246
247
249
250
251
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 144
Board Governance
Welcome to our 2023 Board Governance report. The report sets out the
composition of our Board and explains how our Board governance framework
operates, alongside the key areas of focus of our Board and Board
Committees in 2023.
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 183 to 184.
Certain additional information, signposted throughout this report,
is available at home.barclays/corporategovernance
Directors’ report
Board of Directors
Group Executive Committee
Our governance framework
Key Board activities
Board Nominations Committee report
Board Audit Committee report
Board Risk Committee report
Board Sustainability Committee report
How we comply
Other statutory and regulatory information
Remuneration report
145
149
150
153
156
166
174
180
183
185
191
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 145
Directors’ report: Board of Directors
Leading the Group, driven by
our Purpose, Values and Mindset
Board Committee membership
Audit Committee
member
Nominations
Committee member
Remuneration
Committee member
Risk Committee
member
Sustainability
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
Skills, experience and contribution:
Group Chief Executive
Appointed:
November 2021
Brian Gilvary
Senior Independent Director (SID)
Appointed:
February 2020 (Board), January 2021 (SID)
• 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.
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.
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; Chair,
Corporate Partnerships Board, The Royal
Marsden Cancer Charity; Member, CNBC
ESG Council
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 Business in the
Community Leadership Teams.
Key current appointments:
Brian spent much of his career with BP p.l.c.
in senior leadership roles, where he was most
recently Chief Financial Officer.
Non-Executive Chair, INEOS Energy, an
INEOS group company; Non-Executive
Director, Defence Board, Ministry of Defence
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 146
Directors’ report: Board of Directors (continued)
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 deep 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:
Trustee, High Watch Recovery Center
(incorporating President, Alina Lodge)
Tim Breedon CBE
Independent Non-Executive Director
Appointed:
November 2012
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
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.
Mohamed A. El-Erian
Skills, experience and contribution:
Independent Non-Executive Director
Appointed:
January 2020
• 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.
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:
Chair, The 100 Group of the FTSE Finance
Directors
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
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 147
Directors’ report: Board of Directors (continued)
Dawn Fitzpatrick
Independent Non-Executive Director
Appointed:
September 2019
Mary Francis CBE
Independent Non-Executive Director
Appointed:
October 2016
Sir John Kingman
Independent Non-Executive Director
Appointed:
June 2023
Marc Moses
Independent Non-Executive Director
Appointed:
January 2023
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; Chair, Financial Sector
Advisory Council, Federal Reserve Bank of
Dallas
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
John was also the first Chief Executive of UK
Financial Investments Ltd (UKFI); and from
2010-2012, he was Global Co-Head of the
Financial Institutions Group at Rothschild.
From 2016-2021 John was the first Chair of
UK Research & Innovations, which oversees
Government science funding of c£8bn a
year. Between 2020 and January 2023, he
was Chair of Tesco Personal Finance plc.
Key current appointments:
Chair, Legal & General Group plc; Trustee &
Deputy Chair of the Board of Trustees, The
National Gallery
He joined HSBC in 2005 where he was Group
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
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.
Skills, experience and contribution:
• extensive board-level experience across a
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.
Skills, experience and contribution:
• deep background in financial services
• strong leadership qualities and chair
experience
• extensive expertise providing strategic
advice to Government
John is Chair of Barclays Bank UK PLC. He
had a long Whitehall career, where he was
Second Permanent Secretary to HM
Treasury and was also closely involved in the
UK response to the financial crisis, handling
the resolution of Northern Rock and leading
negotiations with RBS, Lloyds and HBOS on
their £37bn recapitalisation.
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 is a chartered accountant and 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 148
Directors’ report: Board of Directors (continued)
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
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
previously served as the Chair of The 100
Group of FTSE 100 Finance Directors.
Key current appointments:
None
Prior to joining Barclays, Hannah was a Senior
Associate in the London Corporate practice
of Clifford Chance LLP.
Diane Schueneman
Skills, experience and contribution:
Independent Non-Executive Director
Appointed:
June 2015
Julia Wilson
Independent Non-Executive Director
Appointed:
April 2021
Hannah Ellwood
Group Company Secretary
Appointed:
February 2023
• 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.
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 from 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.
Relevant skills and experience:
Hannah is an experienced lawyer and company
secretary with significant experience in
corporate governance, regulatory, disclosure
and market conduct matters.
Career:
Hannah joined Barclays in September 2012 as
Chief of Staff to the Investment Bank General
Counsel. Having moved from the Legal
function to Barclays Corporate Secretariat in
2016, she was subsequently appointed Deputy
Company Secretary of Barclays PLC in 2018. In
February 2023, Hannah was appointed Group
Company Secretary.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Directors’ report: Group Executive Committee
Barclays PLC
Annual Report 2023 149
Leading the delivery of Barclays' strategy
As the most senior management committee for the Group,
our Group Executive Committee (ExCo) supports the
Group Chief Executive in executing the Group’s strategy.
C.S. Venkatakrishnan
Anna Cross
Paul Compton
Group Chief Executive
Group Finance Director
Global Head of the Corporate
and Investment Bank and
President of BBPLC
Alistair Currie
Kirsty Everett
Matt Hammerstein
Group Chief Operating Officer
and Chief Executive, BX
Group Chief Compliance
Officer
Chief Executive Officer,
Barclays UK
Vim Maru
Tristram Roberts
Taalib Shaah
Global Head of Consumer
Banking and Payments
Group Human
Resources Director
Group Chief Risk Officer
Stephen Shapiro
Sasha Wiggins
Group General Counsel
Group Head of Public Policy
and Corporate Responsibility
Changes in ExCo during 2023
• Alistair Currie was appointed Group Chief
Operating Officer and Chief Executive of
Barclays Execution Services Limited (BX),
having previously served on ExCo as
Global Head of Consumer Banking and
Payments
• Kirsty Everett joined as Group Chief
Compliance Officer
• Vim Maru joined as Global Head of
Consumer Banking and Payments
We are grateful for the contributions made
by the ExCo members who stepped down
in 2023:
• Mark Ashton-Rigby stepped down as
Group Chief Operating Officer and Chief
Executive of BX
• Matt Fitzwater stepped down as Interim
Group Chief Compliance Officer
Standing attendees
The Group Chief Executive extends invites
to a number of standing attendees to ExCo:
• Craig Bright, Chief Information Officer
• Adeel Khan and Stephen Dainton, Co-
Heads of Global Markets
• Cathal Deasy and Taylor Wright, Co-
Heads of Investment Banking
ExCo meetings are also attended on a
regular basis by the Group Chief Internal
Auditor, Lindsay O’Reilly.
Ex-officio posts
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.
During 2023, the following attended ExCo
meetings as an ex-officio member, with
each appointee serving for a four-month
rotation:
• Ingrid Hengster, CEO Barclays Germany
and Global Chair, Investment Bank
• Antoinette O'Neill, Chief Information
Officer, Corporate and Investment Bank
(CIB)
• Betty Gee, Americas Head of Equities
Distribution within the CIB
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Directors’ report: Our governance framework
Barclays PLC
Annual Report 2023 150
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.
Group structure
Barclays PLC (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),
Barclays Bank UK PLC (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.
Barclays PLC
BBPLC
Barclays Europe
Barclays US LLC
Barclays Bank Delaware
BBUKPLC
BX
Our 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 to promote Barclays’ success for
the long-term sustainable benefit of our
shareholders, having regard to the
interests of our stakeholders (including our
clients, customers, colleagues and the
society and wider environment in which we
operate).
Our Group-wide governance framework
is constructed to:
• facilitate the effective management of
the Group by our Group Chief Executive
and his ExCo across our
diverse businesses
• support and provide oversight and
constructive challenge 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 deems that it would otherwise be
appropriate in a specific instance.
Corporate Governance
Operating Manual
Our Corporate Governance Operating
Manual outlines how the Group’s significant
subsidiaries (and their respective boards
and board committees) should interact
with each other. It also provides guidance
and clarity for management and Directors
as to how these relationships and
processes should work in practice. This is a
dynamic document that evolves 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 efficiency and
co-ordination while reducing complexity
and unnecessary duplication.
As a result, membership of the BBPLC
Board is a subset of the BPLC Board. All
members of the BPLC Board (except the
Senior Independent Director, Chair of
BBUKPLC and at least one other Non-
Executive Director) also serve on the
Board of BBPLC.
We believe that having members of the
BPLC Board serving as the Chairs of some
of the Group’s main subsidiaries supports
improved efficiency, escalation and co-
ordination while ensuring an appropriate
focus is given to matters relevant to each
entity.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 151
Directors’ report: Our governance framework (continued)
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 the appointments to the
Board, Board Committees
and ExCo.
Board
Audit
Committee
Board
Risk
Committee
Reviews financial reports
and monitors the internal
control environment.
Monitors financial,
operational and legal
risk appetite.
Board
Sustainability
Committee
Oversees climate and
sustainability matters.
Board
Remuneration
Committee
Sets principles and
parameters of
remuneration policy.
+
For more information,
see page 156.
+
For more information,
see page 166.
+
For more information,
see page 174.
+
For more information,
see page 180.
+
For more information,
see page 191.
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
• approval of share allotments, dividends
and share buybacks.
Responsibility for the Group’s business on
a day-to-day basis has been delegated by
the Board to the Group Chief Executive,
supported by his ExCo, to make and
implement operational decisions.
Information provided to
the Board
The Group Chairman is responsible for
setting the Board’s agenda, primarily
focused on strategy, performance, value
creation, culture, stakeholders and
accountability. The Chairman also ensures
that Board members receive timely and
high-quality information to enable them to
make sound decisions and promote the
success of BPLC.
The Group Company Secretary, working in
collaboration with the Group Chairman, is
responsible for ensuring good governance
and information flow, to support the
Board’s effectiveness. In 2023, we
continued to strive for balanced papers
which clearly identify substantive issues
and key points for the Board’s attention,
continuing the momentum created in
previous years.
The Board is kept informed of key business
developments throughout the year
through regular updates from the
Executive Directors and senior
management, in addition to the
presentations delivered to the Board and
the Board Committees as part of formal
meetings.
+
Details of key Board activities for 2023 are set
out on pages 153 to 155.
Directors are able to seek independent
and professional advice at Barclays’
expense, where required, to enable them
to fulfil their obligations to the Board.
Attendance at Board meetings
Directors are expected to attend every
Board meeting. Where a Director is not
able to attend a Board meeting, the
relevant Director’s views are made known
to the Group Chairman in advance of the
meeting. The Chairman also meets
privately, on a regular basis, with each
Non-Executive Director.
+
Details of Director attendance at Board
meetings in 2023 are shown on the next page.
Board Committees
The Board is supported in its work by its
Committees - the Board Nominations
Committee, Board Audit Committee,
Board Risk Committee, Board
Remuneration Committee and the Board
Sustainability Committee - each of which
has its own terms of reference clearly
setting out its remit and decision-making
powers. This structure enables the Board
to spend a significant proportion of its time
focusing on the Group’s strategy.
The Board Committees are comprised
solely of Non-Executive Directors, with the
exception of the Board Sustainability
Committee of which the Group Chief
Executive is an Executive member.
The Chairs of each Committee report on
their Committee’s work at every scheduled
Board meeting.
Board effectiveness
The effectiveness of the Board, its
Committees and individual Directors are
assessed on an annual basis. We carried
out an internally facilitated effectiveness
review for 2023, which was led by the SID
and supported by the Group Company
Secretary. In line with the requirements of
the Code, we intend to conduct an
externally-facilitated review of the Board,
Board Committees and individual
Directors in 2024.
+ You can read more about the 2023 effectiveness
review, and progress against recommendations
from the 2022 review, in the Board Nominations
Committee report on page 164.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 152
Directors’ report: Our governance framework (continued)
Division of responsibilities
Roles on the Board and attendance at Board meetings
In line with the provisions of the Code, a clear division of responsibilities has been established between Executive and Non-Executive
Directors. Our Charter of Expectations sets out the individual role profiles and required behaviours and competencies for the Chair,
Senior Independent Director, Non-Executive Directors, Executive Directors and Committee Chairs.
The table below shows the role profiles for our Board members, along with details of their attendance at Board meetings in 2023. The
aggregate attendance for Board and relevant Board Committee meetings in 2023 did not fall below 75% for any Director.
Meetings
attended/
eligible to
attend1
Ad hoc
meetings
attended/
eligible to
attend2
Responsibilities
7/7
1/1 The Chair is responsible for:
•
leading the Board and its overall effectiveness in directing the Company
• promoting a culture of openness and inclusion, and facilitating and encouraging open constructive
challenge and debate between all Directors
• ensuring the Board has a clear understanding of shareholder views.
7/7
1/1 The Group Chief Executive, supported by his ExCo, leads the Executive Directors in:
•
•
running the Group’s business on a day-to-day basis and making and implementing operational decisions
leading Barclays towards the achievement of its strategic objectives and implementing the strategy
decisions taken by the Board
• promoting and demonstrating the appropriate culture, values and behaviours of the boardroom,
including Barclays’ Values and Mindset.
7/7
1/1 The Group Finance Director is responsible for:
•
together with the Group Chief Executive, the achievement of financial targets for the Group
• providing strategic and functional leadership of the Finance functions
• managing and responding to feedback on Barclays' business performance from investors, financial
institutions, regulators and auditors.
7/7
1/1 The SID is responsible for:
• providing a sounding board for the Chair; serving as a trusted intermediary for the other Directors and
shareholders when necessary
• maintaining contact with major shareholders to understand their issues and concerns, and ensures the
Board is aware of their views
•
leading the appraisal of the Chair’s performance, at least annually.
Non-Executive Directors are responsible for:
• providing effective oversight, strategic guidance and constructive challenge
• helping to develop proposals on strategy and 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
• with the support of the Board Nominations Committee, the appointment and removal and succession
planning for Executive Directors.
Notes:
1 Each Board meeting is held over the course of two days. In the 2022 Annual Report, these were reported as two separate Board
meetings. For the 2023 attendance figures, one Board meeting which was held over two days has been reported as one Board
meeting.
2 The ad hoc meeting was called at short notice.
3 As required by the Code, the Group Chairman was independent on appointment.
4 Sir John Kingman was appointed to the Board with effect from 1 June 2023.
5 Marc Moses was appointed to the Board with effect from 23 January 2023.
6 Julia Wilson was unable to attend due to a prior commitment.
7 Mike Ashley stepped down from the Board with effect from 3 May 2023.
8 Crawford Gillies stepped down from the Board with effect from 31 May 2023.
7/7
7/7
7/7
1/1
1/1
1/1
7/7
Notes
1/1
7/7
5/5
7/7
7/7
7/7
2/2
2/2
1/1
1/1
1/1
1/1
6
0/1
0/0
0/0
Role on Board
Chair
3
Nigel Higgins
Group Chief
Executive
C.S.
Venkatakrishnan
Group Finance
Director
Anna Cross
Senior
Independent
Director (SID)
Brian Gilvary
Non-Executive
Directors
Robert Berry
Tim Breedon
Mohamed A. El-Erian
Dawn Fitzpatrick
Mary Francis
4
Sir John Kingman
5
Marc Moses
Diane Schueneman
Julia Wilson
Former
Directors
7
Mike Ashley
8
Crawford Gillies
+
You can find a copy of our Charter of Expectations, which sets out the role profiles and required competencies for our Board members, at:
home.barclays/who-we-are/our-governance/board-responsibilities
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 153
Directors’ report: Key Board activities
Key Board activities in 2023
Keenly focused on strategy to drive the long-term success of Barclays.
Throughout 2023, the Board devoted
significant attention to Barclays’ strategy,
working closely with the Group Chief
Executive and his ExCo both to drive
forward the implementation of the Group’s
strategy as set by the Board and to
challenge itself on Barclays' strategic
ambitions.
Against a backdrop of geopolitical
tensions, together with high interest rates
and inflationary pressures, the Board
remained focused on driving sustainable
long-term value for the benefit of all of our
stakeholders. You can read about how the
Board has taken into account stakeholder
interests in our Section 172(1) statement
in the Strategic report from page 38.
Within the overarching consideration of
Group strategy matters, the Board
continued to give significant consideration
to our climate and sustainability strategy.
Given the importance of the work to
address the climate challenge, the Board
approved the establishment of the Board
Sustainability Committee in March 2023.
The Board Sustainability Committee
supports the Board's oversight of the
Group's climate strategy and sustainability
agenda, including our ambition to be a net
zero bank by 2050. Please see the Board
Sustainability Committee report on page
180 for further detail.
You can read more about the key areas
of Board focus in 2023 in the rest of
this section.
Spotlight
Board engagement with
colleagues
The Board strongly believes in the
importance of engaging with our
stakeholders and hearing their views,
which brings valuable outside
perspectives to the Board. In particular,
the Board recognises that our
colleagues are critical to our success.
Ensuring that Board members have an
opportunity to engage directly with
colleagues is an important part of our
method of workforce engagement and
helps the Board take the issues of
interest to our colleagues into account
in its decision-making. During 2023,
Board engagement with colleagues
included:
• The Group Chairman and Mary
Francis visited our contact centre in
Wavertree, Liverpool, to experience
the Consumer Duty 'in action',
meeting with customer-facing
colleagues and learning about how
Barclays is addressing vulnerable
customer needs.
• The Group Chief Executive and
Group Finance Director hosted
quarterly all-colleague town halls on
Barclays' financial performance.
• Robert Berry and Sir John Kingman
visited Barclays branches in London
where they met colleagues.
• The Group Chief Executive hosted
the Citizenship and Diversity Awards
to celebrate colleagues who have
made a positive impact in their
communities and have helped to
strengthen the diversity, equity and
inclusion (DEI) culture within
Barclays.
• Julia Wilson participated in a
celebration event to congratulate
newly promoted Managing Directors
from across the Group.
• The Group Chairman, along with
other Board members, visited the
new trading floors at our head office
in London, meeting colleagues in the
Markets business and experiencing
the trading floors first-hand.
• Board members spent time with
Barclays UK colleagues based in the
UK and India.
• The Group Finance Director met
colleagues during visits to our New
York, Glasgow and Northampton
Campuses, and hosted other
colleague events including an event
to mark International Women's Day.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 154
Directors’ report: Key Board activities (continued)
Key focus areas
Stakeholder groups
The following two pages highlight the key
areas of focus for the Board during 2023
and the key stakeholder groups central to
the matters considered and decisions
taken.
Strategy, including Climate
Customers and clients
Society
Colleagues
Investors
+
You can read more about how Barclays
engages with stakeholders in the
Strategic report from page 23.
Topic
Strategy and
business
review
Climate and
sustainability
Board activity
• Held regular corporate and business strategy discussions
at meetings throughout the year, including a Strategy day
in September.
• Reviewed and discussed the 2023 Medium Term Plan
ahead of its approval by the Board in early 2024.
• Received business and function reviews throughout the
year to understand key risks and opportunities, including
in relation to the Investment Bank, Consumer, Cards and
Payments and Barclays UK.
• Participated in focus sessions on 'horizontal topics' to
deepen the Board's understanding on key areas of
impact/focus across the Group, such as resilience and
cybersecurity, reputation risk, and financial crime.
• Received and discussed updates on the Group's climate
and sustainability strategy, including in relation to our
sustainable finance strategy, energy transition and client
transition plans.
• Reviewed climate and sustainability metrics and progress
against targets.
• Received updates on sustainability matters, including
nature, deforestation and biodiversity.
Key decisions
ü Endorsed the announcement in October 2023 as part of
our Q3 Interim results of an Investor Update to be held on
20 February 2024.
ü Approved the establishment of the Board Sustainability
Committee.
ü Approved new restrictions on oil and gas financing.
ü Approved targets for three additional sectors – Aviation,
Agriculture and Commercial Real Estate.
Culture, colleague and DEI
Topic
Culture and
colleague
engagement
DEI
Board activity
• Received updates on Group culture and colleague
engagement, including by way of the 'Your View' survey
results.
• Received regular updates from the Group Chief
Executive on the Group-wide cultural change
programme aimed at ensuring we deliver to a
consistently excellent standard.
• Considered Barclays' workforce engagement
mechanisms to ensure they remain effective in delivering
meaningful, regular two-way dialogue with colleagues.
Key decisions
ü Confirmed that Barclays' method of workforce engagement
has been effective in 2023.
ü Confirmed that Barclays’ workforce policies and practices
are consistent with Barclays’ Values and support Barclays’
long-term sustainable success.
+
You can read more about the 'Consistently Excellent'
programme in our Section 172(1) statement in the Strategic
report on page 38.
+ For further information on Barclays' workforce engagement
mechanisms, please see the Colleagues section in the
Strategic report on page 42.
• Received an update on Barclays’ DEI ambitions and the
actions required to achieve those ambitions, with a focus
on progress against our Gender Ambition.
ü Requested future reviews/deep dives with respect to other
aspects of diversity (in addition to Gender).
ü Adopted a revised Board Diversity and Inclusion Policy in
• Received updates on external developments in the DEI
early 2024.
space, including the PRA and FCA consultations aimed at
improving diversity and inclusion in the financial sector.
Details of the Board Diversity and Inclusion Policy can be found in
the Board Nominations Committee report on page 158.
+
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 155
Directors’ report: Key Board activities (continued)
Finance
Topic
Financial
reporting
Board activity
• Through regular updates from the Group Finance
Director, assessed the financial performance of the
Group and business divisions and received investor
feedback following publication of the Group's financial
results.
Key decisions
ü Approved the Group’s Annual Report and Accounts for the
year ended 31 December 2022.
ü Approved Q1 2023, HY 2023 and Q3 2023 financial results
announcements.
Capital position
and distributions
• Considered the Group’s capital position and
distributions policy.
ü Approved a full year dividend for the year ended
31 December 2022 of 5.0p per ordinary share and a share
buyback of up to £500m.
ü Approved a half year dividend for the period ended
30 June 2023 of 2.7p per ordinary share and a share
buyback of up to £750m.
Risk, including resilience
Topic
Risk framework
Board activity
• Considered the Group's risk profile and emerging risk
themes, particularly in the context of macroeconomic
factors such as inflationary pressures and high interest
rates, as well as geopolitical matters.
Key decisions
ü Approved an update to the Enterprise Risk Management
Framework relating to the framework and governance for
compliance with laws, rules and regulations.
Resilience and
cybersecurity
• Considered the Group Resilience Self-Assessment and
management actions to increase resilience.
Resolution and
recovery
• Received a briefing from the Group Chief Security
Officer on cybersecurity risk and controls and the
outcome of an independent external assessment of
Barclays' cybersecurity and resilience maturity and
position compared to industry peers.
• Considered the Group Resolvability Self-Assessment
ahead of its submission to the Bank of England and the
Group Recovery Plan, which sets out the actions
available in a severe financial stress scenario.
• Received a briefing from management on the lessons
learned from a resolution simulation exercise.
ü Approved the Group Resilience Self-Assessment.
ü Agreed that a Board simulation in relation to a cyber-related
incident be conducted (to be run in 2024).
ü Approved the Group Resolvability Self-Assessment.
ü Approved the Group Recovery Plan.
Governance and regulatory matters
Topic
Succession
Board activity
• Together with the Board Nominations Committee,
considered succession planning and proposed
appointments for the Board and Board Committees,
having regard to the diversity targets adopted by the
Board and wider Group.
For further information, please refer to the Board Nominations
Committee report on the next page.
+
Key decisions
ü Approved the appointments of Marc Moses and Sir John
Kingman to the Board.
ü Approved changes to Board Committee membership as
detailed in the report of the Board Nominations
Committee.
ü Approved the appointment of Hannah Ellwood as the
Group Company Secretary.
Regulatory
engagement and
oversight
•
Invited representatives from key regulators to join
meetings to hear first-hand their feedback and
observations, in addition to meetings held between
individual Directors (including the Group Chairman and
Group Chief Executive) with regulatory stakeholders
during the year.
Consumer Duty
• Received updates on the Group's implementation of the
FCA's Consumer Duty in the lead up to the
implementation deadline of 31 July 2023, and a
subsequent update post-July, including in relation to
embedment of the Consumer Duty.
ü Approved an amendment to the Matters Reserved to the
Board to provide that responsibility for overseeing the
application of the Consumer Duty regime across the
Group rests with the Board.
+
Further details on the Board's oversight of Consumer Duty
are set out in our Section 172(1) statement in the Strategic
report from page 38.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 156
Directors’ report: Board Nominations Committee report
Effective composition and robust
succession plans, with a continued
focus on diversity
Ensuring that we continue to have the right balance of skills, experience
and diversity on the Board, Board Committees and ExCo.
Introduction
In 2023, the Committee continued to
perform a key role in supporting the
delivery of the Group’s strategy through
effective oversight of Board, Board
Committee and ExCo composition, robust
succession planning and evaluating Board
performance.
Through its work, the Committee ensures
that the Board has the right balance of
skills, experience and diversity of
background and thought to be able to
provide informed and constructive
challenge to management while acting
fairly in the interests of our stakeholders.
Committee membership
and activity during 2023
The Committee is chaired by our Group
Chairman, with membership composed
solely of Non-Executive Directors.
Committee membership and meeting
attendance during the year is set out
opposite, and the Committee's activities
during 2023 are described in this report.
In discharging its responsibilities, the
Committee takes into account feedback
from key stakeholders, and from Board
discussions more widely. You can read
more about the Board’s engagement with
stakeholders within our Section 172(1)
statement in the Strategic report from
page 38.
+
The Committee’s terms of reference are available at
home.barclays/who-we-are/our-governance/board-
committees/
Board Nominations Committee
Nigel Higgins
Chair, Board Nominations Committee
Committee membership and
meeting attendance during 20231
Member
Nigel Higgins
Meetings attended/eligible to attend
(including ad hoc meetings)
3/3
Mohamed A. El-Erian
Brian Gilvary
Diane Schueneman
Julia Wilson
3/3
3/3
3/3
3/3
Note:
1 There were two scheduled meetings and one ad
hoc meeting of the Committee in 2023.
Changes to Board and Board Committee composition in 2023
Non-Executive Director
Appointments
Resignations
Audit (Chair) - 31 March 2023
Board - 3 May 2023
Audit (Committee) - 3 May 2023
Risk - 3 May 2023
Board - 31 May 2023
Risk - 1 June 2023
Mike Ashley
Crawford Gillies
Brian Gilvary
Sir John Kingman
Marc Moses
Julia Wilson
Board - 1 June 2023
Risk - 16 June 2023
Remuneration - 16 June 2023
Board - 23 January 2023
Audit - 23 January 2023
Risk - 23 January 2023
Audit (Chair) - 1 April 2023
Remuneration - 1 July 2023
A new Board Sustainability Committee was established by the Board on 23 March 2023.
The following Directors were appointed to the Committee: Nigel Higgins (Chair), Robert
Berry, Dawn Fitzpatrick, Mary Francis, Brian Gilvary, C.S. Venkatakrishnan and
Julia Wilson.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 157
Directors’ report: Board Nominations Committee report (continued)
Board size
As at 31 December 2023, the size of the
Board was 13.
Continuing to review the optimal size of
the Board is an important part of the
Committee’s medium and longer-term
succession planning. As part of this, the
Committee takes into account the need
for the Board to be small enough to
operate in an efficient and collaborative
manner yet large enough to ensure an
appropriate mix of skills and diversity, to
support succession planning and to
accommodate the additional roles and
responsibilities of some of our Directors
on Board Committees, and on the Boards
of BBPLC, BBUKPLC, Barclays Europe,
Barclays US LLC and BX.
The Committee considers that the size of
the Board contributes to its effectiveness.
Composition
Through considering the skills,
experience, knowledge and diversity
required for effective Board, Board
Committee and ExCo composition, as
well as overseeing the annual Board,
Board Committee and individual
Director effectiveness evaluations
(outlined later in this report), the
Committee regularly reviews
composition and succession planning
and Non-Executive Director
recruitment priorities.
You can find biographies for each
Director, including details of the skills,
experience and knowledge they bring
to the Board, their Board Committee
memberships and other principal
appointments on pages 145 to 148.
Changes to Board composition
in 2023
The Committee oversaw a series of
changes to Board and Board Committee
composition during the course of 2023,
building on the progress made in 2022.
Board and Board Committee changes are
set out in the table on the previous page of
this report.
The Board considers that these changes
have enhanced the effectiveness of the
Board and relevant Committees, providing
valuable input and support to their work as
well as bringing new and diverse
perspectives to discussions.
We continued to strengthen the
composition of the Board with the addition
of two Non-Executive Directors in 2023.
Marc Moses, appointed with effect from 23
January 2023, brings to the Board a strong
technical finance background and
extensive knowledge of banking and
financial services. Sir John Kingman has a
deep background in financial services,
gained from his executive and non-
executive career, and joined as a Non-
Executive Director with effect from
1 June 2023, upon taking up his role as
Chair of BBUKPLC.
Mike Ashley retired from the Board at the
conclusion of our AGM on 3 May 2023 and
Crawford Gillies retired shortly thereafter
on 31 May 2023, each having served on the
Board for around nine years. Both Mike and
Crawford made a significant contribution
to the Group during the course of their
tenure, for which the Committee and the
Board are very grateful.
Board composition as at 31 December 2023
Length of tenure (Chairman and Non-Executive Directors)
Industry and leadership experience²
(number of Directors)
(number of Directors)
0-3 years
3-6 years
6-9 years
1
9+ years
International experience3
(number of Directors)
UK
US
Rest of the World
Financial services
Political/Regulatory
experience
Current/recent
Chair/CEO
Accountancy/
Auditing
Operations/
Technology
Retail/
Marketing
Notes
1 Please refer to the section entitled ‘Succession’ later in this report in relation to Tim
Breedon’s tenure and continued independence.
2 Individual Directors may fall into one or more categories.
3 International experience is based on the location of the headquarters/registered office
of a company.
44211378131010412 Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 158
Directors’ report: Board Nominations Committee report (continued)
Diversity
The Committee and the Board
recognise the benefits of diversity in all
its forms, including in relation to
gender, ethnicity, age, sexual
orientation, disability and socio-
economic background.
Having due regard for the benefits of
diversity - at Board, Board Committee
and ExCo level - is a vital part of the
Committee’s role in leading
appointments and succession planning
for these key roles.
Gender and ethnic diversity
reporting
Disclosures in the form prescribed by the
new UK Listing Rules requirements relating
to gender and ethnic diversity of the Board
and executive management can be found
in this section.
Data relating to the gender and ethnic
diversity of the Board was collected by way
of a questionnaire. This questionnaire
asked all individual Board members to
disclose their gender identity and ethnic
background, on a voluntary self-reporting
basis, by selecting options aligned with
those in the left-hand columns of the
tables to the right (and therefore included
the option not to specify an answer).
Barclays’ employees (including executive
management, as defined in the table to the
right) are asked to confirm their gender
and ethnicity at the onboarding stage, on a
voluntary self-reporting basis, by selecting
options (which include the option not to
specify an answer). Data relating to the
gender and ethnic diversity of executive
management (as defined) was sourced
from this existing data, which is held within
Barclays’ secure HR system.
Board Diversity and Inclusion
Policy
On the recommendation of the
Committee, the Board adopted a revised
version of the Board Diversity and Inclusion
Policy on 8 February 2024.
The policy confirms the Board is
supportive of the Group’s culture in which
Barclays is committed to continuing to
build a diverse, equitable and inclusive
workplace, and that the Board recognises
the benefits of a diverse, equitable and
inclusive Board, reflective of the
communities in which we operate, in
driving effective decision-making.
Gender diversity reporting as at 31 December 2023
Board
members
Senior positions on Board
(CEO, CFO, SID and Chair)
Executive
management1
n Women
n Men
Men
Women
Other categories
Not specified/prefer not to say
n Women
n Men
Board members
Number
Percentage
8
5
62 %
38 %
n Women
n Men
Number of senior
positions on the Board
(CEO, CFO, SID and Chair)
Executive management1
Number
Percentage
3 (75%)
1 (25%)
8
4
67%
33%
1 In accordance with the requirements of the Listing Rules and for the purposes of this table only, 'executive
management' comprises the Group Executive Committee and the Group Company Secretary.
Ethnic diversity reporting as at 31 December 2023
Board
members
Senior positions on Board
(CEO, CFO, SID and Chair)
Executive
management1
n White British or other White
(including minority-white
groups)
n Asian/British Asian
n Other ethnic group,
including Arab
White British or other White
(including minority-white groups)
Mixed/Multiple Ethnic Groups
Asian/British Asian
Black/African/Caribbean/
Black British
Other ethnic group, including
Arab
Not specified/prefer not to say
n White British or other White
(including minority-white
groups)
n Asian/British Asian
n White British or other White
(including minority-white
groups)
n Asian/British Asian
Board members
Number
Percentage
Number of senior
positions on the Board
(CEO, CFO, SID and Chair)
Executive management1
Number
Percentage
10
77%
3 (75%)
1
2
8%
1 (25%)
15%
9
3
75%
25%
1 In accordance with the requirements of the Listing Rules and for the purposes of this table only, 'executive
management' comprises the Group Executive Committee and the Group Company Secretary.
It confirms Barclays’ commitment to
ensuring that Board appointments and
succession plans are based on merit and
objective criteria, recognising the benefits
that diversity, in all its forms, brings to the
Board, and that due regard will be also
given to diversity and inclusion
characteristics when considering Board
Committee appointments.
The policy sets out the Board’s existing
gender and ethnic diversity targets
detailed in the table on the following page,
which are aligned with the targets
recommended by the FTSE Women
Leaders Review on gender diversity and
the Parker Review Committee Report into
Ethnic Diversity of UK Boards, which are
reflected in the Listing Rules.
58134810123193 Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 159
Directors’ report: Board Nominations Committee report (continued)
In addition, the policy also confirms the
Board's ongoing commitment to operating
in a way that supports diversity, equity and
inclusion, where Directors’ views are both
encouraged and heard.
As set out in the table within this section,
at 31 December 2023, the proportion of
women on the Board was 38%. While this
fell short of the 40% target set out in the
Listing Rules, FTSE Women Leaders
Review and our Board Diversity and
Inclusion Policy, the Board satisfied the
target of having at least one woman in a
senior Board role.
As we reported in our 2022 Annual Report
and as set out in our Board Diversity and
Inclusion Policy (as described above), the
Committee and the Board remain
committed to ensuring that all Board
appointments and succession plans are
based on merit and objective criteria, with
due regard given to diversity, and focused
on meeting our gender diversity targets as
set out in our Board Diversity and Inclusion
Policy by 2025 while continuing to bring the
very best, diverse talent we can attract to
the Board. You can read more about the
Board appointment process and
succession planning in the sections that
follow.
We also recognise and embrace the
benefits of diversity at Board Committee
level. As at 31 December 2023, Board
Committee gender diversity was
as follows:
• Board Nominations Committee
– 40% women
• Board Audit Committee
– 50% women
• Board Risk Committee
– 43% women
• Board Sustainability Committee
– 43% women
• Board Remuneration Committee
– 60% women
Gender diversity within ExCo,
ExCo direct reports and the
wider workforce
Group-wide, Barclays remains committed
to its DEI vision and strategy, which was
refreshed in 2022, and includes a series of
principles and strategic priorities designed
to support Barclays make progress against
the six DEI agendas including its Gender
Ambition, which is focused on improving
gender diversity in senior leadership across
Barclays.
The Board received an update during the
year on Barclays' DEI ambitions, including a
focus on the Gender Ambition, as
described in the Key Board activities
section on page 153.
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% representation of women in
these roles by the end of 2021.
To achieve this ambition, Barclays focuses
on the retention, development,
progression and hiring of diverse talent at
all levels. Regular reporting on progress
against ambitions is shared with senior
management. As at 31 December 2023,
representation of women among
Managing Directors and Directors was at
30%Δ globally, and Barclays is focused on
continuing its efforts to identify diverse
talent in the market and develop existing
diverse talent within Barclays.
The Committee is also mindful of the
voluntary target recommended by the
FTSE Women Leaders Review of 40%
representation of women for ExCo and
their direct reports by the end of 2025.
As at 31 December 2023, representation
of women among ExCo and their direct
reports stood at 27%Δ, remaining level with
the 2022 year end position.
While this fell 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.
In 2023, 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 2023,
all three holders of this position
were women.
There are additional initiatives and actions
being taken across our businesses to
further strengthen the senior leadership
pipeline; these include using the ex officio
position at business unit executive
committees, sponsorship programmes to
support individual development and
working with senior recruitment partners
to strengthen our external pipeline.
Note
Δ 2023 data subject to independent Limited Assurance
under ISAE(UK)3000 and ISAE3410. Current limited
assurance scope and opinion can be found within the
ESG Resource Hub: home.barclays/sustainability/esg-
resource-hub/reporting-and-disclosures/
+
You can find details of ExCo membership,
including ex-officio appointees during the course
of 2023, on page 149.
+ You can read more about Barclays' DEI vision and
strategy and gender diversity at Barclays,
including data on the percentage of women in
Barclays’ wider workforce, in our Diversity,
Equity and Inclusion report, which will be made
available on our website later in 2024.
Board Diversity and Inclusion Policy - Targets
Gender diversity target To ensure that by 2025:
Ethnic diversity target
•
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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 160
Directors’ report: Board Nominations Committee report (continued)
Ethnic diversity reporting as at
31 December 2023
As at 31 December 2023, 23% of the
Board (three members) were from a
minority ethnic background (excluding
minority white ethnic groups), meeting the
targets set out in the Listing Rules, 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 and Inclusion Policy.
Alongside the Board, the Committee
continues to support the Group’s
Multicultural agenda, including Barclays'
Underrepresented Race and Ethnicity
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.
You can find more information on Barclays’
continued commitment to its Multicultural
agenda, including information regarding
our ethnic minority percentage target for
ExCo and their direct reports and data
relating to ethnic diversity in Barclays'
wider workforce, in our Diversity, Equity
and Inclusion report, which will be available
on our website later in 2024.
+
You can read more about Barclays' approach to DEI
within the Colleagues section in the Strategic
report from page 27.
+
You can find a copy of our Board Diversity and
Inclusion Policy at home.barclays/who-we-are/
our-governance/our-framework-code-and-rules
talent. Open advertising for Board
positions was not used in 2023.
The Committee will continue to review the
Board’s recruitment priorities and give
further consideration to the desired skills
and experience for potential candidates, to
ensure that due consideration continues
to be given to strong potential candidates
who would enhance the effectiveness of
the Board.
Non-Executive Director
independence
In line with the requirements of the Code,
a majority of our Board comprises
independent Non-Executive Directors.
The independence of our Non-Executive
Directors is considered by the Committee
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 serving on the Board as at 31
December 2023. The independence of
those who had served on the Board for
more than six years (Diane Schueneman
and Mary Francis) and more than nine
years (Tim Breedon) 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, please refer to the Succession
section below.
During 2023, Mike Ashley and Crawford
Gillies stepped down from the Board. Mike
and Crawford did not raise any concerns
about the operation of the Board or
management.
Process for
appointments
The Committee leads the process for
Board appointments, ensuring 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 - while also
promoting diversity of background
and opinion.
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
The Committee regularly reviews and
updates a series of skills-based Non-
Executive Director recruitment priorities.
These priorities underpin the searches
required for the Board to ensure orderly
succession as Non-Executive Directors
approach the end of their tenure and to
ensure an optimum balance of skills and
experience on the Board.
The Committee considered and refreshed
the priorities in 2023, in light of Non-
Executive Director recruitment activity,
including the appointments of Marc Moses
and Sir John Kingman during 2023 and two
Non-Executive Directors having stepped
down from the Board in 2023 at the end of
their tenure. The Committee has agreed
that all Board members should have the
opportunity to meet leading candidates,
and that diversity should remain a priority
in all searches.
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 search firms Spencer Stuart
and Egon Zehnder supported our targeted
external mapping and search processes
for additional Non-Executive Directors to
complement the range of skills on the
Board in 2023, based on the agreed
criteria. Diversity of background and
experience remain at the forefront of
those searches.
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
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 161
Directors’ report: Board Nominations Committee report (continued)
Director appointments and reappointments
Board and executive
appointments process
In 2023, the Committee reviewed and endorsed a refresh of the process for Board and Board Committee
memberships, appointments and removals, and management appointments and removals.
Searches for potential candidates have due regard to the clear benefits of diversity and are co-ordinated across the
Group’s significant subsidiaries where appropriate. We aim to ensure that all Board members have the opportunity to
meet leading candidates where possible.
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.
All Directors are subject to appointment or reappointment (as appropriate) each year by shareholders at the AGM.
Director term
Director appointment
and reappointment
at the AGM
Time commitment
All new Directors are asked to disclose
their other significant commitments, which
are then taken into account by the
Committee when considering any
proposed appointment to ensure that
Directors can discharge their
responsibilities to Barclays effectively.
Expected time commitments are agreed
with each Non-Executive Director on an
individual basis, and include time to
understand the business and complete
training as well as time to attend and
prepare for formal Board and Board
Committee meetings. In considering
whether a Director has sufficient time to
commit to their role, the Committee has
regard to regulatory and Code
requirements, as well as key investor and
proxy advisor guidelines. Details of the
external executive and non-executive
directorships held within listed companies
for each of the Directors are set out in the
table on this page. You can find details of
other principal appointments for each
Director in the Board of Directors section
from page 145.
The Committee reviewed the existing
commitments disclosed by each of Marc
Moses and Sir John Kingman ahead of their
respective appointments to the Board, and
was comfortable that these would not
impact their ability to devote such time as
is necessary to discharge their duties to
Barclays effectively.
Before accepting any significant new
commitment outside of Barclays, all
Directors must seek approval from the
Board (providing an indication of expected
time commitment). Prior to 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).
Barclays PLC Board – Listed company external directorships1
As at 31 December 2023
Director
Nigel Higgins
C.S. Venkatakrishnan
Anna Cross
Robert Berry
Tim Breedon
Mohamed A. El-Erian
Dawn Fitzpatrick
Mary Francis
Brian Gilvary
Sir John Kingman
Marc Moses
Diane Schueneman
Julia Wilson
Notes
Executive
Non-Executive
Non-Executive Chair
Total
2
1
3
1
2
1
4
1
2
1
None
None
None
None
2
1
None
1
None
1
None
None
None
1 For the purposes of this table, 'listed company' means companies whose shares are listed and traded on a regulated
stock exchange, excluding appointments within the Barclays Group, and directorships held with the same group or
within undertakings (including non-financial entities) in which the relevant firm holds a qualifying holding.
2 UK public listed company.
3 US public listed company.
4 UK listed closed-ended investment company.
All Directors are expected to commit
additional time as necessary to their work
on the Board, where circumstances
require. For the year ended 31 December
2023 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.
Conflicts of interest
The Board has the authority to authorise
Director conflicts of interest, in
accordance with the Companies Act 2006
and BPLC’s articles of association. 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 162
Directors’ report: Board Nominations Committee report (continued)
A conflicts register recording actual and
potential conflicts of interest, together
with any Board authorisations of conflicts,
is maintained. Authorisations are for an
indefinite period but are reviewed on an bi-
annual basis by the Board. The Board also
considers the effectiveness of the
conflicts authorisation process.
The Board retains the power to vary or
terminate conflicts authorisations at any
time.
The Group Company Secretary consults
the Group Chairman when designing each
bespoke induction schedule, taking into
account the particular needs of the new
Director.
When a Director is joining a Board
Committee, their induction schedule will
also include an induction to the operation
of that Committee.
An overview of training and development
delivered to the Board during 2023 is
described in the table below.
Director training and
development
The Committee supports the Group
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 ).
Directors are provided with the
opportunity to take part in ongoing training
and development, but can also request
specific training, as required.
All Directors receive a comprehensive
induction tailored to their individual
requirements on appointment, designed
to provide them with an understanding of
the operation of the Group and its strategy
and key business areas and functions.
Training, development and updates for the Board in 2023
Topic
Description
Areas covered included
Business and function
reviews
'Horizontal topics'
Updates from key business areas and Group
functions, to deepen and broaden the Board’s
understanding of the Group’s businesses, including
key risks and opportunities.
Compliance, Internal Audit, Barclays UK, Barclays Europe,
Markets, Legal, Transaction Banking, UK Corporate, Private
Bank and Wealth Management, Investment Bank, BX
and HR.
Focus sessions to deepen the Board's
understanding on key areas of impact/focus
across the Group.
Resilience and Cybersecurity, Consumer Duty, Conduct,
Corporate Strategy, Barclays UK Complaints, Strategic
Policy, Regulatory and Financial Crime.
Public Policy and
Corporate Responsibility
Regular updates on Public Policy and Corporate
Responsibility matters.
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.
Annual briefing on regulatory responsibilities.
Senior Managers Regime and Barclays’ conduct and
financial crime policies and standards.
Regulatory
responsibilities
Corporate governance
Regular updates on developments in corporate
governance matters.
External speakers
External input to the Board.
Board engagement
with stakeholders
Various events enabling the Board to engage
directly with stakeholders.
New Director inductions
Tailored Non-Executive Director inductions for
Marc Moses and Sir John Kingman, following their
respective appointments as Non-Executive
Directors.
DEI matters, legal and regulatory developments,
cybersecurity disclosure obligations, Directors' duties and
the Economic Crime and Corporate Transparency
Act 2023.
External briefing to the Board Sustainability Committee on
policy and regulatory developments relating to biodiversity
and nature.
+ You can read more about the Board’s engagement with
stakeholders (including colleagues) within our Section 172(1)
statement in the Strategic report from page 38 and the Key Board
activities section on page 153.
Sessions covering the Group’s strategy and culture,
stakeholder landscape and relationships, Board and Board
Committee structure and other governance matters.
Meetings with various senior executives from across the
business including from Finance, Treasury, BX and
Operations, BBUKPLC, CIB, Consumer Banking and
Payments, Risk, Compliance, Public Policy and Corporate
Responsibility, Regulatory Relations, HR, Internal Audit,
Legal and the Group’s external auditor.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 163
Directors’ report: Board Nominations Committee report (continued)
Committee-specific
induction sessions
Committee-specific induction sessions for Marc
Moses and Sir John Kingman.
Handover in accordance
with requirements of the
Senior Managers Regime
(SMR)
Formal SMR handovers from Mike Ashley (as
outgoing Board Audit Committee Chair) to
Julia Wilson (as incoming Board Audit Committee
Chair), and from Crawford Gillies (as outgoing
BBUKPLC Chair and BBUKPLC Board Nominations
Committee Chair) to Sir John Kingman (as
incoming BBUKPLC Chair and BBUKPLC Board
Nominations Committee Chair) .
Sessions providing an introduction to the relevant Board
Committee, including meetings with relevant executives
and briefings on topics relevant to the work of that
Committee.
Series of handover meetings between Mike Ashley and
Julia Wilson, and Crawford Gillies and Sir John Kingman,
relevant to the responsibilities being handed over
(including, for Julia, the role of Group Whistleblowers’
Champion), as well as various meetings with senior
executives as part of Julia's and John's inductions and
transition to their new roles.
ExCo succession
The Committee approves all changes to
ExCo composition prior to announcement,
taking into account executive succession
plans.
In 2023, the Committee received updates
regarding succession planning and
proposed appointments for ExCo,
including in relation to the review of the
balance of skills and diversity on ExCo and
for key successors. The Committee
approved the ExCo changes in 2023, as set
out on page 149, prior to implementation.
+ You can read more about gender diversity
within ExCo and their direct reports in the
Diversity section of this Board
Nominations Committee report.
Succession
Through robust succession planning
throughout the year, the Committee
ensures that we will continue to strike
the right balance of skills, experience,
diversity and effectiveness on the
Board, Committees and ExCo, as well
as accounting for current and
anticipated future business needs.
The Committee’s vital work in this area
includes both 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
As at 1 November 2023, Tim Breedon had
served on the Board for 11 years. In early
2024, the Committee undertook a
rigorous assessment of Tim’s continued
independence, as it had done in the two
previous years. Following careful
consideration, the Committee concluded
that it remained appropriate for Tim to
continue to serve on the Board beyond his
11-year tenure.
In reaching this conclusion, the Committee
recognises the significant value that Tim
continues to bring to Board discussions,
particularly given his breadth of financial
services sector experience and deep
knowledge of risk and regulatory issues.
Both the Committee and the Board
continue to believe that it is advantageous
for Group-wide decision-making to have
the Chairs of the Group’s significant
subsidiaries sit on the BPLC Board,
considering that this provides connectivity
with the Group's significant subsidiaries,
bringing with it important insight into Board
discussions. With these factors in mind,
and in light of 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 in
the near-term.
Given the Board's preference for the
Chairs of the Group's significant
subsidiaries to also be represented on the
Board, in light of Tim's tenure, the
Committee is giving due consideration to
potential successors for his roles on the
Board and as Chair of Barclays Europe.
Diane Schueneman will have been on the
Board for nine years in June 2024, and the
Committee is also giving due
consideration to potential successors for
her roles on the BPLC Board and as Chair
of BX.
Tenure
The Committee and the Board consider
that length of tenure is only one of the
factors to be considered with respect to
Director independence, and accordingly,
that tenure alone should not result in a loss
of independence. The Committee and the
Board are confident that Tim remains
independent and continues to provide
effective challenge, advice and support to
management on business performance
and decision-making. Having undertaken a
rigorous review of Tim’s performance as a
Non-Executive Director and taking into
account other relevant factors that might
be considered likely to impair, or could
appear to impair, his independence
including as set out in Provision 10 of the
Code, the Committee and the Board
consider Tim to be independent.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 164
Directors’ report: Board Nominations Committee report (continued)
Evaluation
Board, Committee and individual Director evaluation process
The Committee ensures that a formal
and rigorous review of the
performance of the Board, Board
Committees and individual Directors is
undertaken each year, in line with the
requirements of the Code.
The 2023 effectiveness review was
conducted internally, as permitted by
the Code, following the process
illustrated in the diagram on the right.
The reviews concluded that the Board,
Board Committees and individual
Directors continue to be effective.
Progress against the 2022 Board
effectiveness review
As reported in last year's Annual Report,
the 2022 Board effectiveness review was
facilitated internally, in line with the Code.
The 2024 Board effectiveness review is
expected to be externally facilitated, in line
with Code requirements that the Board
effectiveness review be conducted by
an external facilitator at least every
three years.
Board Nominations Committee approval of approach to evaluation for 2023
Board
evaluation
Committee
evaluation
Individual Director
evaluation
Interviews held
by SID with
Board members
Findings discussed with
Group Chairman and
Board Nominations
Committee
Board discussion
and agreed
action plan for 2024
Questionnaires
completed by
Committee members
and senior management
Findings discussed
with Committees
Agreed action
plan for 2024
Group Chairman held
meeting with each
Director
SID held meeting
with the Group Chairman
Confirmation of each
Director’s continuing
effectiveness
Recommendations arising out of the 2022 Board effectiveness review, together with actions taken during the course of the year to
address them, are shown in the table below.
Recommendations
from the 2022 evaluation
Actions taken during the year
Areas
Discussion of key
areas of focus
Board agendas
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.
Introduction of standing Board agenda item for open
discussion of major current topics with Board members.
Consideration should continue to be given to the
structure of Board agendas to ensure that time allocations
are appropriate.
The format of certain standing Board agenda items
continued to evolve, with positive Board feedback
received on changes made.
Board materials
Continued focus on ensuring balanced papers which
clearly identify substantive points and key issues for the
Board’s attention.
Additional time allocated on the Board agenda for
discussion of material items.
The Group Chairman and Group Chief Executive
continued to work with management to ensure that
substantive points and key issues for discussion by the
Board were as clear and concise as possible within papers
presented to the Board.
Committee reporting
to Board
Engagement with
senior executives
Continued focus on Committee reporting to the Board, to
ensure the Board has the right level of visibility on key
areas of focus.
Inclusion of written reports of certain Committee
meetings within Board papers, in addition to thematic,
forward-looking reports.
Continue to identify opportunities for more informal
engagement between the Non-Executive Directors and
senior executives outside the boardroom.
More informal engagement included engagement with
management on Board papers, Board and Committee
dinners with relevant senior executives, Board support for
certain client events and Board engagement with
colleagues as described in the Key Board activities section.
External perspectives included the external briefing
provided to the Board Sustainability Committee on policy
and regulatory developments in relation to biodiversity
and nature.
Outside perspectives Continue to identify opportunities to bring external
perspectives into the Board.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 165
Directors’ report: Board Nominations Committee report (continued)
Individual Director effectiveness
All Directors in office at the end of 2023
were subject to an individual effectiveness
review. The Group Chairman considered
each Director’s individual contribution to
the Board as well as any feedback received
as part of the broader Board and Board
Committee effectiveness reviews.
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 2024 AGM continues
to be effective and contributes to Barclays’
long-term sustainable success.
All of the current Directors of the
Company intend to submit themselves for
election or re-election at the 2024 AGM
and will be unanimously recommended by
the Board for election or re-election as
appropriate.
2023 Board effectiveness review
Feedback provided by interviewees as part
of the 2023 Board effectiveness review
provides important insight into the Board’s
performance, including areas in which the
Board could be more effective.
Following consideration of the findings of
the 2023 Board effectiveness review, the
Committee remains satisfied that the
Board is operating effectively.
Feedback from 2023 review
Feedback from this review indicated that
the Board is operating well and effectively,
with Board members commenting
favourably on the culture of the Board,
where members feel able to share their
different perspectives and views. Board
members emphasised how this culture is
supported by the inclusive style of the
Group Chairman and his values-driven
approach. The review indicated that Board
composition is considered to be a
strength, bringing together a range of
diverse and complementary backgrounds,
including deep financial services expertise.
The interaction between the Board and
the Board Committees was commented
upon favourably, with regular reporting
ensuring the Board has good visibility on
key areas of focus. The review highlighted
the positive relationship between the
Board and management, and an
appropriate level of support and challenge.
Recommendations from 2023 review
The 2023 review outlined the following key
recommendations:
• consider how Board agendas might be
structured to (i) allow for deeper
discussion of business performance;
and (ii) create more flexibility for
discussion of key topics and reflections
within the agenda
• identify opportunities for more open and
wide-ranging discussions on big picture
issues
• continue to focus on ensuring balanced
papers which clearly identify substantive
points and key issues for the Board’s
attention
• continue to identify opportunities to
bring external perspectives into the
Board.
2023 Board Committee
effectiveness review
The Board Committee reviews are 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 2023 Board
Nominations Committee effectiveness
review are reported below, and the results
of the reviews of the effectiveness of the
other Board Committees are reported
within their individual reports elsewhere in
this Board Governance report.
Following consideration of the findings of
the 2023 Board Committee effectiveness
reviews, the Committee remains satisfied
that each of the Board Committees are
operating effectively.
Review of Board Nominations
Committee effectiveness
The results of the 2023 review confirm the
Committee is operating effectively. It is
considered well constituted and chaired,
providing high-quality oversight and
constructive challenge to management in
the areas within its remit. The review
highlights that the Committee is
considered to have the right level of skills
and experience.
Feedback indicates that the allocation of
time between agenda items in Committee
meetings is appropriate, with sufficient
time for discussion and challenge, and
focus on the right areas.
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
Nominations Committee continue to be
effective, with coverage of BBPLC matters
within concurrent meetings considered
appropriate.
Interaction with the BBUKPLC Board
Nominations 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Directors’ report: Board Audit Committee report
Barclays PLC
Annual Report 2023 166
Focused on a robust internal control
environment
Overseeing the integrity of our financial disclosures and the effectiveness
of the internal control environment.
Dear Fellow Shareholders
I was appointed as Chair of the Committee
in April 2023 and so this is my first report of
the Board Audit Committee as Committee
Chair.
I would like to extend my thanks to my
predecessor, Mike Ashley, for his careful
stewardship of the Committee and
diligence in handing it over to me. We also
welcomed Marc Moses to the Committee
on 23 January 2023, bringing his strong
technical finance background with a deep
knowledge of banking and financial
services.
During the year, the Committee has had a
significant focus on management’s
initiatives to drive sustainable
improvements in the Group’s internal
control environment. Specifically, the
Committee received regular updates on
the internal control environment from the
business heads, Group Chief Internal
Auditor, Group Chief Controls Officer and
KPMG, identifying any thematic trends
which may be arising across the Group and
encouraging management to take a pro-
active approach in identifying areas for
enhancement.
The Committee also maintained close
oversight of an internal programme
established by the Group Chief Executive
at the end of 2022, and led by the Group
Chief Operating Officer, to improve senior
oversight of the more material regulatory
remediation programmes with a view to
enhancing controls in order to achieve a
consistently excellent operating
environment across the Group. This
programme operates in parallel with the
broader cultural change programme led by
our Group Chief Executive, which you can
read more about in the Section 172(1)
statement in the Strategic report.
The Committee recognises that
maintaining a robust system of internal
control is a continuous journey and there
will always be programmes in train to
ensure that ongoing improvements are
made. As part of this, the Committee has
been receiving reports on an internal
programme to enhance the system
Board Audit Committee
Julia Wilson
Chair, Board Audit Committee
Committee membership
and meeting attendance in 20231
Member
Meetings attended/eligible to attend
Julia Wilson
Robert Berry
2
Marc Moses
Diane Schueneman
3
Mike Ashley
12/12
12/12
12/12
8/12
6/6
Notes
1 There were 12 scheduled meetings of the
Committee in 2023. Owing to prior commitments,
Diane Schueneman was unable to attend four
meetings (with both sets of meetings in February and
October being held in short succession).
Committee membership in 2023
2 Appointed with effect from 23 January 2023.
3 Retired with effect from 3 May 2023.
of risk management and internal control
for compliance with laws, rules and
regulations. Financial crime controls also
continue to be an area of significant focus
for the Group and the Committee is
closely following management’s progress
in this area to ensure that the control
framework is robust. Previous reports of
the Committee also highlighted significant
work by management on control
remediation and enhancement
programmes in relation to trading controls.
While that work remains ongoing, the
Committee was pleased to see significant
progress made during 2023, with key
remediation programmes in those areas
scheduled to achieve significant
milestones or complete during 2024.
To decide 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 there are no
control issues which are considered to be a
material weakness and which merit specific
disclosure.
In overseeing the integrity of our financial
disclosures, the Committee was mindful
that the macroeconomic environment
during the year remained challenging with
continuing high interest rates, inflationary
pressures and geopolitical uncertainty.
The Committee received regular updates
from the Group Finance Director and
Group Chief Accounting Officer, focusing
on key areas including credit impairment
and coverage, provisions, valuations and
tax. The Committee will continue to closely
monitor management’s judgements in
these areas and their disclosure.
The Committee works closely with the
Board Risk Committee and Board
Sustainability Committee, ensuring a
streamlined view of matters of relevance
across the Committees. The Committee
welcomed enhanced reporting by
management with the incorporation of
operational risk dashboards to provide a
more holistic view across the controls and
risk space. This is expected to support the
effective and efficient consideration by the
Board Audit Committee and Board Risk
Committee of matters relevant to both
committees.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 167
Directors’ report: Board Audit Committee report (continued)
Committee effectiveness
Looking ahead
Management has made some significant
progress on remediation during the course
of 2023; maintaining that momentum in
2024 will be a key focus of the Committee.
Finally, after some five years in the role,
and having made significant progress in
the operation and methodologies used by
BIA, Lindsay O’Reilly will be stepping down
as Group Chief Internal Auditor during
2024. The Committee will be looking to
approve the appointment of a new Group
Chief Internal Auditor in the coming
months and would like to extend its thanks
to Lindsay for her invaluable support, which
is continuing through this transition period.
Julia Wilson
Chair, Board Audit Committee
19 February 2024
The results of the Committee
effectiveness review for 2023 confirm the
Committee is operating effectively. It is
considered well constituted and chaired,
providing an effective and appropriate level
of challenge and oversight of the areas
within its remit. Feedback recognised the
effective transition of the Chair in April
2023. The review highlights that the
Committee is considered to have the right
level of skills and experience, including
recent and relevant financial experience,
and is of an appropriate size. Feedback
indicates that the Committee is
considered to operate at the right level of
debate, and confirms that the allocation of
time between agenda items in Committee
meetings is appropriate, with sufficient
time for discussion and challenge.
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
appropriate.
Interaction with the 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.
Please see the report of the Board
Nominations Committee for details on the
process for conducting the 2023
Committee effectiveness review.
With respect to climate matters, the
Committee received input from the Board
Sustainability Committee on our external
climate and sustainability narrative
disclosures. Best practice and regulation
regarding climate and sustainability
reporting and related assurance are still
evolving, while investor and other
stakeholder appetite for information
continues to grow, and this is an area to
which the Committee will continue to have
close regard. Barclays’ climate strategy
remains a key focus of the Group and the
Committee continues to monitor that the
impact of climate change has been
addressed in preparing the Group’s
financial statements.
The independent assurance and challenge
provided by both Barclays Internal Audit
(BIA) and KPMG as statutory auditor are
critical to the Committee’s oversight role
in relation to internal controls and financial
reporting. For this reason, the Committee
continues to hold regular separate private
sessions with each of the Group Chief
Internal Auditor and the lead KPMG audit
engagement partner without
management present.
The Committee has oversight of Barclays’
whistleblowing programme and I took over
the role of Group Whistleblowers'
Champion upon my appointment as
Committee Chair. During 2023, I met with
the FCA and also held regular meetings
with the Whistleblowing team to
understand their key areas of focus and
the Committee continues to receive
detailed semi-annual whistleblowing
updates.
Throughout the year I also held regular
meetings with a number of other
colleagues and stakeholders to discuss
any material and emerging key issues
impacting the Group (including its key
subsidiaries) and of relevance to the
Committee. This included regular
meetings with the Chair of the BBUKPLC
Board Audit Committee, the Group
Finance Director, Group Chief Internal
Auditor and lead KPMG audit partner. As
Committee Chair, throughout the year I
also engaged regularly with the Group’s
key regulators, including meeting with
representatives of the PRA, FCA and
FRBNY.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 168
Directors’ report: Board Audit Committee report (continued)
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. Julia
Wilson, the Committee Chair, and who is the
designated financial expert on the
Committee for the purposes of SOx, has
significant corporate finance, tax and
accounting experience including serving as
the Group Finance Director of 3i plc from
2008 to 2022 and as Chair of the board audit
committee at Legal & General Group plc.
In 2023, the Committee met 12 times, with
no ad hoc meetings held during the year
(2022: 14 times, including four ad hoc
meetings). Attendance by members at
Committee meetings is shown on page 166.
Primary activities
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.
The Board, together with the Committee,
is responsible for ensuring the
independence and effectiveness of the
internal audit function and external
auditors. 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/
The Committee discharged its responsibilities in 2023 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
Role of Committee / Key issues considered
Conclusion/action taken
Financial reporting
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 results
announcements and the presentations to analysts. The Committee informed
these reviews through:
• consideration of reports of the Group Disclosure Committee
• direct questioning of management on the transparency and accuracy of
disclosures
• consideration of the results of management’s processes relating to financial
reporting matters, including the output of the Group’s internal control
assessments and the SOx s404 internal control processes.
The Committee closely considered the Group's financial disclosures and
provided feedback, including on areas where disclosures could be enhanced.
Recognising the increasing focus on, and prominence of, ESG reporting, the
Committee considered the governance and assurance framework for such
disclosures. The Committee emphasised the importance of management
continuing to review and enhance the processes and controls around the
disclosures (particularly in relation to the underlying data) as the disclosure
framework and expected use of the information evolves.
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 2023 Annual Report and Accounts are fair, balanced and understandable.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 169
Directors’ report: Board Audit Committee report (continued)
Areas of focus
Role of Committee / Key issues considered
Conclusion/action taken
Significant accounting judgements
Conduct
provisions
(refer to Note 23 to the
financial statements)
Impairment of
financial
instruments
(refer to Note 8 to the
financial statements)
Impairment of
goodwill and
intangibles
(refer to Note 21 to the
financial statements)
Legal,
competition and
regulatory
provisions
(refer to Note 25 to the
financial statements)
Valuations
(refer to Notes 13 to
17 to the financial
statements)
Tax
(refer to Note 9 to the
financial statements)
Barclays makes certain assumptions and
estimates, analysis of which underpins
provisions made for the costs of customer
redress. The Committee analyses the
judgements and estimates made by
management to evaluate the adequacy of
the provisions, including with regards to
Barclays' provisioning for legacy conduct
issues.
The Committee monitors management's
judgements in relation to expected credit
losses (ECLs), which 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 Committee considers management's
judgement in relation to goodwill and
intangibles. 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.
The Committee is responsible for
considering the Group's tax strategy and
overseeing compliance with the Group's Tax
Principles. 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 reviewed and challenged 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.
As part of its monitoring, the Committee considered regular reports from
management on:
•
the impact of the macroeconomic environment, including high interest
rates, inflationary pressures and unemployment levels
• model changes and model validation, and the impact of this on the use of
post-model adjustments
•
the refresh of macroeconomic variables and associated weighting.
The Committee closely considered management’s judgement on impairment
coverage levels, including the impact of increasing delinquency levels in certain
areas of the portfolio.
Having considered and scrutinised the reports, the Committee agreed with
management’s conclusion that the impairment provision was appropriate.
The Committee considered management's reports on its assessment of the
Group's goodwill balances and intangibles to identify any indicators of
impairment, including the methodology and controls applied to the process.
The Committee was satisfied with management's determination on the
indicators of impairment and quantum of the impairment amount identified.
The Committee received regular reports on the status of current legal,
competition and regulatory matters and considered the impact of those
matters on the Group’s provision levels. It also oversaw enhancements in the
reporting to the Committee on these matters. It considered management’s
judgements on the level of provision to be taken and accompanying
disclosures and agreed that the level of provision at the year end was
appropriate.
The Committee also 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 valuations, including in
respect of pensions and the leveraged finance portfolio.
The Committee was satisfied with the accounting treatment in respect of the
various matters.
The Committee:
•
•
received reports from the Global Head of Tax, including updates on the work
of the Tax Management Oversight Committee
reviewed the appropriateness of provisions made for uncertain tax
positions and management’s approach to the tax treatment of index-linked
gilts and its impact on the Group’s effective tax rate
• considered the impact of the UK Government’s implementation of the
OECD’s global minimum tax rules
• monitored the Group’s interactions with tax authorities and the material tax
risks for the Group.
The Committee approved the UK Tax Strategy statement published in the
Country Snapshot report and recommended the Country Snapshot to the
Board for approval.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 170
Directors’ report: Board Audit Committee report (continued)
Areas of focus
Role of Committee / Key issues considered
Conclusion/action taken
Going concern and viability
Going concern
and long-term
viability
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. To
support this, the Committee considers both
the going concern assumption and the form
and content of the Viability Statement.
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.
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.
The Committee assesses the distributable
reserves position in considering
management’s proposals for distributions
(dividends and share buy-backs) for the full
year ended 31 December 2022 and for the
half year ended 30 June 2023.
Having regard to the distributable reserves available to the Company, the
Committee reviewed and reported to the Board on proposals for (i) a dividend
for the financial year ended 31 December 2022 of 5.0p per share along with a
share buy-back of up to £500m; and (ii) a dividend for the half year ended
30 June 2023 of 2.7p per share along with a share buy-back of up to £750m.
In early 2024, the Committee reviewed and reported to the Board on the
distributable reserves position for the full year dividend for the year ended
31 December 2023 along with a proposed share buy-back.
The Committee considers the effectiveness
of the overall control environment, including
the status of any significant control issues
and the progress of specific remediation
plans.
The Committee:
• considered feedback received from regulatory stakeholders 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 Group Chief Controls Officer
• discussed reports from heads of key businesses (including Barclays UK and
BBPLC) on their control environment, together with views from the second
and third lines of defence.
The Committee received regular deep dive reports on the more material
remediation programmes across the Group, keeping a close eye on
management’s progress and delivery against key milestones, including
through to closure of a programme and validation by BIA. The Committee
challenged management’s approach to measuring progress and emphasised
the importance of qualitative factors such as the embedment and
sustainability of programmes.
The Committee considers 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
case.
The Committee received detailed semi-annual reports on whistleblowing from
management. It monitored key whistleblowing metrics, the 'speak up' culture
across the Group (and key metrics underpinning this) and any potential
whistleblowing trends which might emerge.
The Committee also monitored the implementation of enhancements to the
whistleblowing process following the external benchmarking review conducted
in 2022.
(refer to the Viability
Statement on page 54)
Distributions
Distributions and
return of capital
to shareholders
Internal controls
Internal controls
and business
control
environment
(read more about
Barclays' internal
control and risk
management
processes on page
184)
Whistleblowing
Raising concerns
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 171
Directors’ report: Board Audit Committee report (continued)
Areas of focus
Role of Committee / Key issues considered
Conclusion/action taken
Internal audit
Internal audit
The Committee monitors and assesses 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
External audit
The Committee monitors the work and
performance of KPMG.
Through regular reports from BIA, the Committee:
•
•
•
•
reviewed and agreed internal audit plans, methodology and deliverables for
2023, including consideration of how regulatory priorities and required
regulatory coverage has been reflected in the plan
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 BIA colleague matters, including colleague
engagement and resourcing
• discussed BIA's assessment of the control environment and management
control approach in Group companies and functions.
The Committee noted the independence of the BIA function, and through
reviewing BIA's quality assurance updates was pleased to see the reports
demonstrating the independence of BIA’s quality assurance function.
The Committee considered and was comfortable with the approach by BIA to
embed the UK Consumer Duty into the BIA framework.
The Committee conducted a performance assessment of BIA for 2023 and
concluded it was satisfied with BIA's performance against its objectives agreed
with the Committee Chair at the beginning of the year.
At the end of the year, the Committee approved the 2024 audit plan, detailing
the number of audits to be undertaken and the focus areas. It also approved
BIA's Audit Charter following the annual review.
The Committee:
• met with key members of the KPMG audit team to discuss the 2023 audit
plan and KPMG’s areas of focus
• approved the 2023 audit plan and the main areas of focus for the year
• assessed regular reports from KPMG on the progress of the 2023 audit and
any material accounting and control issues identified
• discussed KPMG’s draft reports on control areas of focus and the control
environment ahead of the 2023 year end
• approved the terms of the audit engagement letter and associated fees for
2023, on behalf of the Board.
The Committee sought KPMG's views on a number of specific matters,
including management's approach to critical accounting judgements and
estimates, and sought to understand where KPMG had challenged
management's assessment prior to reaching a conclusion. This included
considering KPMG challenge in relation to key controls matters and the
approach to disclosures in the Group's full year, half-year and interim financial
results.
The Committee considered KPMG’s response to the PRA Written Auditor
Reporting for 2022, and discussed with KPMG the questions in scope for the
2023 Written Auditor Reporting.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 172
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, Barclays’ lead audit engagement partner, has been in the role since 2022 and attends all meetings of the Committee.
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 statutory auditor. 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 particular, the Committee assessed KPMG’s effectiveness, objectivity and
independence in the following ways:
Throughout the year
• Met with senior members of the KPMG audit team from
the UK, Ireland and US to discuss the approach to the 2023
audit.
• Reviewed regular reports from management on the non-
audit services provided by KPMG to Barclays.
• Reviewed regular reports from management detailing any
employees or workers hired from KPMG.
• Discussed with KPMG their consideration of internal
controls over financial reporting.
• Considered areas in which KPMG had challenged
management’s assumptions in areas of key judgement.
• 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.
Annual assessment, audit quality
and external findings
• The Group undertakes an annual formal assessment of
KPMG’s performance, independence and objectivity. The
assessment for 2023 was conducted in early 2024, by way
of a questionnaire completed by key stakeholders across
the Group who have regular interaction with KPMG. The
questionnaire was designed to evaluate KPMG’s audit
process, its effectiveness and overall output.
• Consistent with previous years, in 2023 KPMG nominated
a senior partner of the audit team to have specific
responsibility for ensuring audit quality. The Committee
received reports from him during the year on his
assessment of audit quality.
• The findings of the FRC’s Audit Quality Report on KPMG
published in July 2023, including its inspection of the
Barclays audit for the year ended 31 December 2021,
provided further comfort to the Committee on the quality
and effectiveness of KPMG’s audit, acknowledging that
there remains areas for improvement.
Outcome
Taking into account the result of all of the above, the Committee considered that KPMG maintained its independence and
objectivity, exercised robust challenge and demonstrated professional scepticism in the audit process. The Committee was
therefore satisfied that the audit process was effective.
Non-audit services
In order to safeguard the auditor’s
independence and objectivity, Barclays has
in place the Group Policy on the Provision
of Services by the Group Statutory Auditor
(the Policy) setting out the circumstances
in which the auditor may be engaged to
provide non-audit services. 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. A summary of
the Policy can be found at home.barclays/
who-we-are/our-governance/auditor-
independence/
The Policy sets out the type of services
that the auditor is permitted to carry out
and pre-approves certain of these services
provided the fee is below a certain
threshold, except for specific categories of
permitted services that require explicit
Committee approval. All other permitted
services must be approved in advance by
the Committee. The Policy requires that all
proposed work must be sponsored by a
senior executive who is not involved in any
work to which the proposed engagement
relates. The audit assignment 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.
The Policy is reviewed by the Committee
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.
In early 2023, KPMG advised the
Committee that, following on from an
event notified to the Committee in late
2022, a further instance had been
identified of a KPMG member firm having
provided services in connection with the
preparation of local statutory accounts of
a small overseas subsidiary not in scope for
the Group audit. KPMG assured the
Committee, having made appropriate
enquiries of their member firms providing
services to the Group, that these were
isolated instances. In these circumstances,
the Committee agreed with KPMG’s
assessment that this had not impaired
their integrity or objectivity.
In view of the events notified by KPMG, the
Committee reviewed the Policy in early
2023 to determine whether any revisions
were required to ensure such events did
not arise again. While it was determined
that the Policy provided sufficiently clear
guidance in terms of prohibited non-audit
service work, certain enhancements were
made to the Policy to further support the
operation of the Policy including by
specifying examples of the type of work
prohibited under each headline service.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 173
Directors’ report: Board Audit Committee report (continued)
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.
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 Board does not intend to tender for an alternative external
auditor to be appointed before the end of the current required period of 10 years.
Accordingly, any tender is expected to be in respect of the 2027 financial year
onwards and is likely to take place in 2025. The Committee has reconfirmed that it
would not be appropriate to tender before this date. The Committee observed that
there has been significant rotation of the senior members of the audit team since
2017 and more recent changes in certain members of the Barclays senior finance
team, both of which have reduced any potential familiarisation threat.
The fees payable to KPMG for the year
ended 31 December 2023 amounted to
£78m (2022: £71m), of which £14m (2022:
£13m) 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 39 of the
financial statements. Of the £14m of non-
audit services provided by KPMG during
2023, 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 (Client Assets
Sourcebook) 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Directors’ report: Board Risk Committee report
Barclays PLC
Annual Report 2023 174
Providing considered risk oversight
through challenging times
Proactive risk management in a dynamic risk environment.
Dear Fellow Shareholders
During 2023, the Committee focused on
the financial and operational challenges
arising from ongoing macroeconomic
uncertainty and geopolitical tensions,
overseeing management’s proactive
approach to positioning the Group
appropriately for the uncertain
environment.
The macroeconomic outlook was defined
by central bank efforts to contain inflation
through higher interest rates, balanced
against the desire to protect economic
growth and employment. As the year
came to a close, market participants
remained focused on the expected turn of
the rates cycle and the implications for
asset prices and the credit cycle. The
Committee remained watchful of these
events and other risks, such as the
potential for disorderly market corrections
and economic slowdowns across the
globe; alongside wider geopolitical
tensions and their impact on Barclays’
portfolios and businesses. Throughout the
year the Committee heard from and
challenged senior business leaders, in
addition to second line risk and compliance
colleagues, about how they consider and
manage risks as they execute their
business strategies, including any
mitigating actions being taken.
2023 was undoubtedly a challenging year
for the banking sector with significant
market volatility, particularly in the first half
of the year, coupled with the collapse of a
number of US regional banks and the
takeover of a distressed global bank. In
addition to overseeing Barclays’
management of its liquidity and capital
positions, the Committee reviewed
management’s learnings from these
events to help ensure that Barclays
remains resilient through periods of stress.
Board Risk Committee
Robert Berry
Chair, Board Risk Committee
Committee membership
and meeting attendance in 20231
Notes
1 There were nine scheduled meetings and two ad hoc
meetings of the Committee in 2023. Owing to prior
commitments and ad hoc meetings being called at
short notice, Mohamed A. El-Erian was unable to
Notes
attend two scheduled meetings, Diane Schueneman
was unable to attend one scheduled meeting and
one ad hoc meeting and Brian Gilvary was unable to
attend one ad hoc meeting.
Alongside financial risks, the Committee
oversaw management’s work to drive
robust operational risk management
across Barclays; in this regard, the
Committee considered the risks of cyber-
related attacks and their potential impact
on customers and clients, and heard from
management about ongoing work to
strengthen the bank’s cybersecurity
defences. In addition, the Committee
monitored work in Barclays UK designed to
reduce risk by improving the control
environment and drive efficiencies.
The Committee tracked Barclays' progress
towards ensuring it can recover its most
important business services in the event of
material service disruption within tolerance
by the regulatory deadline of March 2025.
Meetings attended/eligible to attend
(including ad hoc meetings)
Member
Robert Berry
11/11
9/11
11/11
5/5
11/11
9/11
11/11
4/4
4/5
Mohamed A. El-Erian
Dawn Fitzpatrick
2
Sir John Kingman
3
Marc Moses
Diane Schueneman
Julia Wilson
4
Mike Ashley
5
Brian Gilvary
Committee membership in 2023
2 Appointed with effect from 16 June 2023.
3 Appointed with effect from 23 January 2023.
4 Retired with effect from 3 May 2023.
5 Retired with effect from 1 June 2023.
Financial crime risk across the financial
services sector has grown as a result of the
increasing sophistication of bad-actors. In
recognition of the growing risks, the
Committee closely monitored
management’s work to identify and
mitigate financial crime risk across the
Group, in line with increased regulatory
expectations.
Conduct risk remains a key area of
oversight. The Committee oversaw
management’s preparations for the
implementation of the Financial Conduct
Authority’s (FCA) ‘Consumer Duty' in July
2023, and continues to monitor
management's efforts to ensure good
outcomes for retail customers.
During the year, the Committee reviewed
changes to the Group’s Enterprise Risk
Management Framework (ERMF), to
underpin work to strengthen how the
Group manages the risks of non-
compliance with laws, rules and regulations
(LRR). As part of this a new LRR risk was
established alongside conduct risk under a
new Principal Risk called Compliance risk.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 175
Directors’ report: Board Risk Committee report (continued)
Looking ahead
The Committee actively encourages
management to be alert to areas of
emerging risk, particularly in light of the
rapidly evolving macroeconomic,
geopolitical and technological
environments. As we move into 2024,
geopolitical tensions, macroeconomic
uncertainty and inflationary pressures are
expected to continue, with further
uncertainty on the horizon in light of the
upcoming election cycles in many of our
key markets, including the US and UK. The
Committee will continue to work with
management to anticipate, stress test and
prepare for periods of volatility to prevent
outsized or unexpected losses
materialising and to manage emerging
risks as they arise.
Robert Berry
Chair, Board Risk Committee
19 February 2024
The Committee continued to oversee how
climate change is driving financial and
operational risks, the materiality of their
impact and how Barclays is managing them
through the Climate Principal Risk
Framework. The Committee received
updates on the Bank’s ongoing
advancements to its climate risk
management approach, including the
development of a risk appetite, monitored
through a range of quantitative metrics.
The Committee also heard from senior
business leaders about how climate risks
are being integrated into their business
strategies and plans.
The Committee approved the results of
the 2023 internal climate stress test (CST)
and considered lessons learned that will
enable Barclays to better assess specific
climate vulnerabilities as well as the impact
that climate factors can have on the
financial stresses used to calibrate overall
risk appetite. The Committee will continue
to maintain close oversight of the annual
CST as it is further integrated into the
Group’s planning and stress testing
framework.
As part of its work overseeing climate risk,
the Committee worked closely with the
Board Audit Committee and Board
Sustainability Committee, ensuring a
streamlined view of matters of relevance
across the Committees.
The Group uses models and data to
support a broad range of business
decisions and risk management activities
across the Group. This is an area impacted
by rapid technological change and
increasing regulatory scrutiny and the
Committee continued to focus on the
Bank’s approach to managing the
associated risks, including its approach to
developing and validating models, and
monitoring of their performance through a
volatile macro environment.
The volume of regulatory change across
the global financial services industry is
significant. The Committee heard from
management about the impact of these
changes for Barclays and the work
necessary to ensure compliance. This is an
area to which the Committee expects to
devote attention in 2024 and beyond.
By way of a final word, in 2023, the
Committee oversaw a change to the
senior management of the Compliance
function, with the appointment of a new
Group Chief Compliance Officer, Kirsty
Everett, who took up the role in July 2023.
In 2023 we also welcomed both Marc
Moses and Sir John Kingman (Chair of
Barclays UK) to the Committee, both of
whom bring with them a deep knowledge
of financial services.
Committee effectiveness
The results of the Committee
effectiveness review for 2023 confirm the
Committee is operating effectively; it is
considered well constituted and chaired,
providing an effective and appropriate level
of challenge and oversight of the areas
within its remit. Feedback noted members’
wide and diverse skills and experience,
recognising that recent additions to
Committee composition had been positive
in providing the Committee with a deeper
retail perspective. Feedback indicates that
the Committee is considered to operate at
the right level of debate. It also confirms
that the allocation of time between agenda
items in meetings is appropriate, with
sufficient time for discussion and
challenge.
The Committee’s interaction with the
Board, Board Committees and senior
management is also 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
Risk Committee continue to be effective,
with coverage of BBPLC matters within
concurrent meetings considered
appropriate.
Interaction with the BBUKPLC 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.
Please see the report of the Board
Nominations Committee for further details
on the process for conducting the 2023
Committee effectiveness review.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 176
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/
Committee meetings
In 2023, the Committee met 11 times
(including two ad hoc meetings) and the
attendance by members at these
meetings is shown on page 174. In addition
to its members, Committee meetings
were attended by representatives from
senior 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 colleagues from the Risk
function. The Committee held regular
private sessions with the Group Chief Risk
Officer and the Group Chief Compliance
Officer; these were not attended by other
members of management. The lead audit
engagement partner of KPMG also
attended Committee meetings.
Primary activities
The Committee discharged its responsibilities in 2023 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
Conclusion/action taken
Key role of Committee
Risk framework and
governance
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.
• To review the design of the ERMF and
recommend to the Board for approval any
relevant changes.
• To track the progress of significant risk
management projects.
• To consider risk management matters raised by
Barclays’ regulators and monitor the actions
being taken by management to respond.
• To review the effectiveness of the Company's
risk management systems.
• The Committee reviewed an update to the ERMF to
clarify roles and responsibilities of Legal, Compliance
and Risk, particularly relating to the framework and
governance for compliance with LRRs. The
Committee recommended the updated ERMF to the
Board for approval.
• The Committee reviewed reports from management
on guidance, letters and reviews received from
regulators. The Committee examined management’s
responses to the matters raised by regulators and
received updates on key remediation programmes.
• To propose to the Board an appropriate risk
appetite and tolerance for the Principal Risks,
including an overall Group risk appetite and
limits.
• The Committee discussed and approved the mandate
and scale limits as well as the stress loss limits for the
Group. Subsequent changes were reviewed and
approved during the course of the year.
• To review and approve the methodology used
to establish the Group’s risk appetite and
associated stress testing.
• 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
(IST) themes, and consider the financial
constraints and scenarios, for stress testing risk
appetite for the Medium Term Plan (MTP).
• To consider and approve the results of stress
tests required by regulatory bodies.
• The Committee considered and approved stress test
results, including those of the 2023 IST and reverse
IST, as well as the associated risk appetite for the
MTP.
• The Committee reviewed and approved the results of
the internal CST, and received a report on the lessons
learned from the exercise.
• The Committee considered feedback from the FRB
on Barclays US LLC’s Comprehensive Capital Analysis
and Review (CCAR) following the submission of the
CCAR stress test results.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 177
Directors’ report: Board Risk Committee report (continued)
Areas of focus
Risk profile
i.e. the impact on the Group’s
risk profile of geopolitical and
macroeconomic
developments and conditions.
Key role of Committee
Conclusion/action taken
• To evaluate and report to the Board on the
Group’s risk profile and monitoring of the
Principal Risks in the ERMF.
• To consider proposed material changes to the
Group’s risk profile.
• The Committee received regular updates on the
Group's risk profile from the Group Chief Risk Officer.
• The Committee examined 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.
• The Committee considered macroeconomic
developments, including economic slowdown across
several major economies, inflationary pressures,
market volatility, higher energy costs and supply chain
constraints, the path of interest rates, and the
associated consumer affordability stresses.
• The Committee monitored the Group's exposures to
geopolitical risks and considered longer-term and
emerging risk themes.
Credit risk and Market risk
i.e. the risk of financial loss if
customers, clients or
counterparties fail to fully
honour their obligations; or
due to market movements.
• To review and consider vulnerabilities to credit
• The Committee considered a report from
losses in the bank’s lending and banking
transactions which expose the firm to credit risk.
• To review and consider the risk of loss arising
from potential adverse changes in the value of
the firm’s assets and liabilities from fluctuation in
market variables.
•
management following market events in relation to
the distress of a number of financial institutions and
takeover of a global bank and lessons learned for
process and operational improvements.
In light of the challenging inflationary and rates
environment throughout 2023, the Committee
considered updates on the impact on consumer
indebtedness and Barclays consumer portfolios.
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
option.
• The Committee received regular updates on credit
risk and market risk within the CIB, with a particular
focus on the structured lending and finance and
leveraged finance portfolios.
• The Committee received reports on enhancements
to regulatory reporting.
• To review capital performance against plan,
• The Committee reviewed capital and liquidity
tracking the capital trajectory, any challenges
and opportunities and regulatory policy
developments.
• To assess liquidity performance against both
internal and regulatory requirements, and review
any challenges and opportunities.
• To monitor capital and funding requirements.
• To consider the ICAAP and ILAAP scenario
review.
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.
• The Committee received a preliminary assessment of
the ICAAP and the ILAAP in May 2023. The
Committee subsequently discussed and approved the
Group's 2023 ICAAP and the Group's 2023 ILAAP
prior to their submission to the PRA.
• The Committee recommended to the Board for
approval the Group Recovery Plan, which forms part of
the Group’s capital and liquidity risk management
framework.
• The Committee reviewed the Resolvability
Assessment Framework (RAF), along with lessons
learned from a Recovery and Resolution Simulation
Exercise and recommended the RAF to the Board for
approval.
• The Committee monitored preparations for
compliance with Trading Wind Down capabilities in the
context of recovery planning and post resolution
restructuring.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 178
Directors’ report: Board Risk Committee report (continued)
Areas of focus
Climate risk
i.e. 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.
Key role of Committee
Conclusion/action taken
• To consider and assess the impact of climate
• The Committee received regular updates on climate
risk on the Group’s activities.
risk including areas of elevated climate risk and
progress against sector targets.
• The Committee considered progress and plans
around integration of climate into business actions
and the development of quantitative climate risk
appetite and an additional climate stress as a
secondary test for the MTP.
• The Committee reviewed how climate change is
driving financial and operational risks and how Barclays
is managing them.
Operational risk
i.e. the risk of loss arising from
inadequate or failed processes
and systems, human factors or
due to external events.
• To review the Group’s operational risk profile
and consider specific areas of operational risks,
including fraud, conduct risk, operational
recovery planning, cybersecurity risk, execution
risk, technology and data, including the controls
that are in place for managing and mitigating
such risks.
• 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 technology risk, fraud, third
party risk management, cyber and information
security and the risks associated with new business
activities.
• To track operational risk key indicators.
Model risk
i.e. the potential for adverse
consequences from decisions
based on incorrect or misused
model outputs and reports.
▪ To evaluate the appropriateness of the Model
Risk Management Framework, including
receiving updates on findings in relation to
specific modelling processes.
• The Committee oversaw and provided feedback on
work to redesign the new and amended products
process, including a new governance framework.
• The Committee considered operational resilience,
including reviewing and recommending to the Board
for approval the 2023 Resilience Self-Assessment
report, detailing the resilience risks which may impact
Barclays’ ability to recover within impact tolerance,
and to ensure plans align to enhanced expectations
intended to reduce the risk of customer/client harm.
• The Committee received updates on cyber resilience
and reviewed the results of an external benchmarking
exercise to test cybersecurity and resilience.
• The Committee considered operational risks in the
context of work in Barclays UK to upgrade its
technology platform to improve the control
environment and drive efficiencies.
• The Committee reviewed and discussed regular
updates on model risk, including progress in
developing the Model Risk Management Framework,
and in relation to the continued focus and momentum
required to address increasing regulatory
expectations and the development of an uncertainty
framework for large models frameworks.
• The Committee continued its oversight of the new
independent Model Strategy and Oversight team,
particularly with respect to review of and
enhancements made to key models and
developments and remediations.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 179
Directors’ report: Board Risk Committee report (continued)
Areas of focus
Compliance risk
i.e. Compliance risk is
comprised of (i) LRR risk and (ii)
conduct risk, which is the risk
of poor outcomes to
customers, clients and
markets, arising from the
delivery of the Group's
products and services.
Legal risk
i.e. the risk of loss or
imposition of penalties,
damages or fines from the
failure of the firm to meet its
legal obligations, including
regulatory or contractual
requirements.
Remuneration
Oversight of the Risk and
Compliance functions
Key role of Committee
Conclusion/action taken
• 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.
• The Committee received regular updates on conduct
risk and assessments of potential risks to the Group
following market events.
• The Committee received updates on lessons learned
reviews undertaken in response to industry
developments and events, and continued to monitor
ongoing remediation activities.
• To oversee how Barclays mitigates the risk of
non-compliance with LRR risk.
• The Committee received regular updates on the
management of the Group’s financial crime risk.
• The Committee received briefings on the Group’s
preparations for commencement of the FCA’s new
Consumer Duty.
• To monitor the Group’s legal risk profile, including
considering potential material emerging legal risks.
• The Committee received regular updates on the legal
risks 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 make a recommendation to the Board
Remuneration Committee on the financial and
operational risk factors to be taken into account
in annual remuneration decisions.
• The Committee considered the 2023 ex-ante risk
adjustment methodology including input from the
Group Chief Risk Officer and the Group Chief
Compliance Officer.
• To safeguard the independence of, and oversee
• The Committee considered assessments of the
the performance of, Barclays' Risk and
Compliance functions.
• To satisfy itself that the Barclays Compliance
and Risk functions are adequately resourced,
and have appropriate access to information so
as to be able to perform their functions
effectively.
• To review the Compliance function’s Annual
Compliance Plan.
• To oversee the Group’s compliance and
risk culture.
performance of the Risk and Compliance functions.
• The Committee met privately with the Chief Risk
Officer and Chief Compliance Officer on a regular
basis.
• The Committee approved the Annual Compliance
Plan.
• The Committee received updates on the compliance
and risk culture within the Group.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 180
Directors’ report: Board Sustainability Committee report
Driving forward our net zero ambition
Overseeing our climate and sustainability strategy.
Dear Fellow Shareholders
I am delighted to present to you the first
report of the Board Sustainability
Committee.
In March 2020, Barclays announced its
ambition to be a net zero bank by 2050,
becoming one of the first banks to do so. In
2023, we continued to pursue
opportunities and support our clients as
they transition their businesses to a low-
carbon economy.
When I wrote to you ahead of our 2023
AGM, I highlighted that a key commitment
for Barclays over the subsequent 12
months was to help finance this transition
and in December 2022 we announced a
new target to facilitate $1trn of Sustainable
and Transition Financing between 2023
and 2030, and increased our investment
mandate to £500m of capital to invest in
early-stage climate-tech companies by the
end of 2027. Today we are reporting
$67.8bn financing facilitated towards the
$1trn Sustainable and Transition Financing
target and £138m invested since March
2020 in 21 climate-tech companies.
A second key priority was to assess
baseline emissions for the four remaining
high-emitting sectors in our portfolio, as
well as developing a high-level modelled
assessment of our overall balance sheet,
consistent with the approach outlined by
the Partnership for Carbon Accounting
Financials (PCAF). We have announced
new targets for Aviation, Commercial Real
Estate and Agriculture, and published our
first high-level modelled assessment under
PCAF. We have also published our updated
Climate Change Statement which includes
new restrictions on oil and gas financing. In
particular, we will stop directly financing
new oil and gas projects, and have set clear
expectations for our energy clients to
produce transition or decarbonisation
plans and set near-term targets to reduce
emissions.
The final key priority was to refine our
Client Transition Framework so as to
improve our ability to work with clients in
high-emitting sectors on their individual
transition plans. This will allow us to
measure and monitor our clients’
decarbonisation progress and assess the
implications for our targets, and to offer
more tailored support to clients’ transition
requirements.
Board Sustainability Committee
Nigel Higgins
Chair, Board Sustainability Committee
Committee membership
and meeting attendance in 20231
Member
Meetings attended/eligible to attend
Nigel Higgins
Robert Berry
Dawn Fitzpatrick
Mary Francis
Brian Gilvary
C.S. Venkatakrishnan
Julia Wilson
4/4
4/4
3/4
4/4
2/4
4/4
4/4
Having cross-membership on the
Committee with the Chairs of our Board
Audit, Remuneration and Risk Committees,
as well as connectivity with the BBUKPLC
Board, helps to ensure a streamlined
approach to Board-level oversight of all
climate and sustainability related matters.
Committee effectiveness
The results of the Committee
effectiveness review for 2023 confirm the
Committee is operating effectively. It is
considered well constituted and chaired,
providing high-quality oversight and
constructive challenge to management in
the areas within its remit. The review
highlights that the Committee is
considered to have the right level of skills
and experience, including climate/
sustainability expertise, and is of an
appropriate size. The review noted the
benefits of having cross-membership
between the Committee and the Board Risk
Committee and the Board Audit
Committee, and having the Group Chief
Executive as a member of the Committee
in the context of the development of
Barclays’ climate strategy as well as the
skills and experience he brings to the
Committee.
Note
1 There were four scheduled Committee meetings
held in 2023. Owing to prior commitments, Brian
Gilvary was unable to attend two meetings and Dawn
Fitzpatrick was unable to attend one meeting.
The Board has direct oversight of and
responsibility for the Group’s climate and
sustainability strategy. However, given the
importance of this work and the growing
importance of other sustainability areas,
including nature and biodiversity, in March
2023 the Board approved the
establishment of a new Board
Sustainability Committee to support and
advise the Board in its oversight of climate
and sustainability matters.
The Committee receives presentations
into the challenges and opportunities in
this area (including external input on
specific areas of focus), undertakes
detailed reviews and discussions and
makes recommendations to the Board on
key topics. The table on page 182 provides
an overview of the Committee’s work in
2023 supporting the Board in overseeing
the activities to meet our climate priorities.
In addition to myself, the members of the
Committee are Robert Berry, Dawn
Fitzpatrick, Mary Francis, Brian Gilvary, C.S.
Venkatakrishnan and Julia Wilson. Tracy
Corrigan also attends Committee
meetings as a non-executive
representative of the BBUKPLC Board.
As an Executive member of the Committee, our Group Chief Executive brings
invaluable climate and sustainability insight to the Committee’s discussions,
including the views of key external stakeholders. He is also a member of the UNEP
FI Leadership Council and a member of the CNBC ESG Council, and through those
roles he is able to bring external perspectives of key climate/sustainability matters
to the Committee’s discussions.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 181
Directors’ report: Board Sustainability Committee report (continued)
Feedback indicates that the Committee is
considered to operate at the right level of
debate, and that the allocation of time
between agenda items in Committee
meetings is appropriate, with sufficient time
for discussion and challenge, and focus on
the right matters.
The review concluded 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
and to provide feedback on key
sustainability policy matters in support of
the Board’s continued oversight. Feedback
indicated that concurrent meetings of the
BPLC and BBPLC Board Sustainability
Committee are effective, with coverage of
BBPLC matters within concurrent
meetings considered appropriate. The
addition of a representative to the
Committee from the BBUKPLC Board at
the beginning of 2024 was considered to
support ongoing BBUKPLC Board
engagement in respect of sustainability
matters impacting the Group.
Please see the report of the Board
Nominations Committee for further details
on the process for conducting the 2023
Committee effectiveness review.
Looking ahead
Looking ahead to 2024, a key focus for the
Committee will be oversight of
management’s development of Barclays'
transition plan, informed by the work of the
UK's Transition Plan Taskforce, in
conjunction with ongoing work to
implement the Group’s climate strategy by
supporting clients with their transition
plans.
A critical component of the work
undertaken to addressing the climate
challenge is the approach by governments
with respect to climate and sustainability
policy and financing. The importance of
having clear requirements for the
transition, and clarity and consistency in
respect of government policy and
financing, are key in supporting all those
committed to transitioning to a low carbon
economy. This is an area to which the
Committee will have close regard this year.
Finally, as indicated above, nature and
biodiversity are areas of growing
importance on the sustainability agenda.
The Committee is looking forward to
building on the work done in 2023 and the
external briefing it received on this subject
by having a greater focus on the impact of
these areas, including how they can be
reflected in Barclays’ own ambition to be a
net zero bank.
Nigel Higgins
Chair, Board Sustainability Committee
19 February 2024
The role of the Board and its Committees in overseeing climate-related matters
Board
Sets and oversees the Group's climate and sustainability strategy
Board Audit
Committee
Board Risk
Committee
Board Sustainability
Committee
Board Remuneration
Committee
“Best practice and
regulation regarding
climate and sustainability
reporting and related
assurance are still evolving
… and this is an area to
which the Committee will
continue to have close
regard.”
“The Committee...heard
from senior business
leaders about how climate
risks are being integrated
into their business
strategies and plans.”
“In 2023, we continued to
pursue opportunities and
support our clients as they
transition their businesses
to a low-carbon
economy.”
"When we set the
incentive pool and
Executive Directors’
incentive outcomes for
2023, we incorporated
consideration of progress
against our climate
strategy, as we will for
2024."
Julia Wilson
Chair
Robert Berry
Chair
Nigel Higgins
Chair
Brian Gilvary
Chair
Considers the impact of
climate on the Group’s
financial statements and
reviews key climate-
related narrative
reporting.
+
See the Board Audit
Committee report on
page 166.
Oversees Barclays’
progress in its climate
risk management
approach, including
a focus on developing
quantitative
risk appetites.
+
See the Board Risk
Committee report on
page 174.
Supports the Board in
its oversight of climate
matters and the
sustainability agenda.
Reflects progress
against climate-related
measures in
remuneration.
+
See the Board
Sustainability Committee
report on page 180.
+ See the Remuneration
report on page 191.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 182
Directors’ report: Board Sustainability Committee report (continued)
Committee composition and
meetings
During 2023, the Committee met four
times and the attendance by members at
these meetings is shown on page 180.
Committee meetings were also attended
by representatives from management,
including the Group Head of Public Policy
and Corporate Responsibility, the Group
Head of Sustainability, the Global Head of
Sustainable Finance and the Head of Legal,
Public Policy and Corporate Responsibility.
Role of the Committee
The role of the Committee is to provide oversight of climate matters and the
sustainability agenda, and in particular to:
• support and advise the Board on its oversight of climate and sustainability matters
relating to (i) the services and products provided to Barclays’ clients and
customers, (ii) particular sectors, and (iii) its own corporate activities
• support the Board in monitoring the implementation of the Group’s climate and
sustainability strategy
• review and make recommendations to the Board on the suitability of the Group’s
climate and sustainability strategy, position statements, frameworks, ambitions,
metrics, and targets
• report to the Board on the climate and sustainability matters for which it is
responsible, escalating issues and making recommendations to the Board where
appropriate.
The Committee’s terms of reference are available at home.barclays/who-we-are/
our-governance/board-committees/
Primary activities
During 2023, the Committee received updates from management in relation to the Group’s climate and sustainability strategy, as well
as internal and external briefings and reports on climate and sustainability matters. Set out below are the key areas of focus for the
Committee's work in 2023.
Areas of focus
Conclusion/action taken
Climate and sustainability
strategy
Target setting and progress
against targets
The Committee:
• Considered management's sustainable finance strategy proposals, which focused on the actions required to
accelerate support for our clients as they transition and for the Group to achieve its sustainable financing
target and ambition to be a net zero bank.
• Considered areas where the Group could focus, providing the greatest opportunity to support global
endeavours to transition to a low carbon economy and help the Group achieve its strategic ambitions.
• Reviewed proposals for the Group’s updated oil and gas policy and endorsed new restrictions on oil and gas
financing.
The Committee:
• Considered management’s proposals for new targets and endorsed new targets for three additional sectors
– Aviation, Agriculture and Commercial Real Estate.
• Monitored the Group’s progress against its climate and sustainability targets. As part of this, the Committee
received updates on progress towards the target to facilitate $1trn of Sustainable and Transition Financing
by the end of 2030, and considered initiatives that were underway to provide further capability to achieve the
target.
+
You can read more about Barclays’ sector targets and
progress against them in the Strategic report on page 89.
Investor feedback
Client Transition Framework
(CTF)
The Committee considered investor feedback and the perspectives of both our institutional investors as well
as our retail shareholder base. During the year, members of the Committee engaged with institutional investors
on climate-related matters, helping inform the development of our climate strategy.
The Committee received updates on the Group’s work on the CTF, including management’s approach to
working with clients going through CTF assessments, expected outcomes following the assessments and
proposed expansion of the application of the framework following further targets set by the Group.
You can read more about the CTF in the Strategic report
on page 90.
+
External briefing: Nature
The Committee received an external briefing on policy and regulatory developments in relation to biodiversity
and nature and the work done by Barclays as part of the UNEP-FI pilot on nature-related risks and opportunities
assessment.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 183
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 2023, 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 complied with the Code in 2023.
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
185 to 190. Information in relation to the Board Diversity and Inclusion Policy, as required to be disclosed pursuant to DTR 7.2.8A, can
be found on pages 158 to 160.
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
The way in which Barclays has applied the principles and provisions of the Code during 2023 is summarised below and on the next page.
Board Leadership
and Company Purpose
Division of
Responsibility
Composition, Succession
and Evaluation
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 150 to 152, including our Group-wide
governance framework and the Board's
responsibilities. Key Board activities for
2023 are set out on pages 153 to 155.
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
245 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 246.
Throughout 2023, we engaged with our
stakeholders through a variety of means.
Refer to page 23 of the Strategic report for
further detail about how Barclays engages
with our stakeholders. You can read about
how the Board engages with stakeholders in
our Section 172(1) statement in the
Strategic report from page 38 and
examples of the Board's engagement with
colleagues during 2023 can be found on
page 153.
The majority of the Board comprises
independent Non-Executive Directors.
The Group Chairman and Group Company
Secretary work in collaboration to ensure an
effective and efficient Board, as further
described in Our governance framework
from page 150. All Directors have access to
the advice of the Group Company
Secretary.
The roles of Chair, Group Chief Executive,
SID and Non-Executive Directors 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 161.
The Board is responsible for setting the
strategy for the Group. The day-to-day
management of the Group is delegated by
the Board to the Group Chief Executive who
is supported by his ExCo, the composition
of which is outlined on page 149.
Details of the number of meetings of the
Board and its Committees, and the
individual attendance by Directors, can be
found in Our governance framework on
page 152 and in each respective Board
Committee report.
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.
A revised Board Diversity and Inclusion Policy
was adopted on 8 February 2024. For further
detail, refer to the Board Nominations
Committee report on page 158.
Board appointments are made following a
rigorous and transparent process facilitated
by the Board Nominations Committee, with
the aid of external search consultancy firms.
All Directors are subject to annual re-election
at the AGM. See page 185 for further detail.
Each year, we carry out an effectiveness
review to evaluate the performance of the
Board, Board Committees and individual
Directors. In line with the Code, the review
was conducted internally for 2023, and is
expected to be conducted externally in 2024.
Refer to the Board Nominations Committee
report on page 164 for details of the 2023
effectiveness review as well as progress
against the findings from the 2022 review.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 184
Directors’ report: How we comply (continued)
Audit, Risk and
Internal Control
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
Barclays' 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.
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). It also reviews annually the
risk management and internal control
system.
The Board Audit Committee has concluded
that throughout the year ended 31
December 2023 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.
You can read more about the Board Audit
Committee and its work, including its
oversight of the internal control framework
and areas of ongoing enhancement, from
page 191.
Remuneration
The Remuneration report from page 191
sets out the purpose and activities of the
Board Remuneration Committee, a
summary of the remuneration policy for the
Executive Directors and how it is aligned
with the policy for the wider workforce, as
well as the Directors’ remuneration
outcomes for 2023.
The remuneration policies and procedures
support the Group's 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 185
Directors’ report: Other statutory and regulatory information
The Directors present their report together with the audited
accounts for the year ended 31 December 2023.
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
201, 207,
225 to 227
183 to 184
254
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)
Engagement with suppliers, customers and others in a business relationship (Sch.
7, Para 11 B 2008/2018 Regs)
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:
Page
27 to 29
24 to 26,
30 to 33 and
238 to 244
441
441
Page
477
185
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 pages 3 to 55.
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 25 (Legal,
competition and regulatory matters) to
the financial statements.
Profit and dividends
Statutory profit after tax for 2023 was
£5,323m (2022: £5,973m). The 2023 full
year dividend of 5.3p per ordinary share will
be paid on 3 April 2024 to shareholders
whose names are on the Register of
Members at the close of business on 1
March 2024. With the 2023 half year
dividend totalling 2.7p per ordinary share,
paid in September 2023, the total dividend
for 2023 is 8.0p (2022: 7.25p) per ordinary
share. The half year and full year dividends
for 2023 amounted to £1,210m (2022:
£1,028m). BPLC also completed share
buy-back programmes during 2023,
further details of which can be found later
in this section.
Shareholders may have their dividends
reinvested in Barclays by joining the
Barclays Dividend Reinvestment Plan
(DRIP). Further details regarding the DRIP
can be found at home.barclays/dividends
and shareview.co.uk/info/drip
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 2023 was £1.70m (2022:
£6.28m).
Board of Directors
The names of the current Directors of
BPLC, along with their biographical details,
are set out on pages 145 to 148 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
Role
Marc Moses Non-
Executive
Director
Mike Ashley Non-
Crawford
Gillies
Sir John
Kingman
Executive
Director
Non-
Executive
Director
Non-
Executive
Director
Effective
date
Appointed
23 January
2023
Resigned 3
May 2023
Resigned 31
May 2023
Appointed 1
June 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 intend to offer themselves for
election or re-election at the 2024 AGM.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 186
Directors’ report: Other statutory and regulatory information (continued)
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 2023 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 2023 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 2023 totalled $60,159 (2022:
$105,000).
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 2023. This information is
included in the Barclays Country Snapshot
available on the Barclays website:
home.barclays/annualreport
Support for candidates and colleagues
with disabilities and long-term
conditions
Barclays is committed to attracting and
retaining a diverse workforce, and our
commitment to inclusion means we want
to ensure that candidates with disabilities
and long-term health conditions receive
support and adjustments in the application
process and beyond. Barclays welcomes
applications from all candidates and is
committed to ensuring reasonable
adjustments (accommodations) are put in
place to ensure a fair and inclusive
recruitment process. Barclays is
committed to providing all colleagues with
the support and tools they need to have a
productive and fulfilling career. We can
consider making adjustments to remove
or reduce barriers colleagues might face if
they have a disability, health concern or
mental health condition We also ensure
opportunities for training, career
development and promotion are available
to all.
Research and development
In the ordinary course of business, the
Group develops new products and services
in each of its business divisions.
Greenhouse gas emissions,
energy consumption and energy
efficiency action
Although financed emissions account for
the greatest proportion of our climate
impact, we have also continued addressing
our operational emissions – an important
factor in meeting our ambition to be a net
zero bank by 2050.
Progress to date
1
In 2023 we achieved our milestone
of
50% reduction of our Scope 1 and 2
location-based GHG emissions ahead of
2030 – reducing these emissions by 51%Δ.
We continued to source 100% renewableΔ
2
electricity
for our global real estate
3
portfolio
and continued to meet our 90%
Scope 1 and 2 market-based emissions
4
– reducing these
reduction target
emissions by 93%Δ.
Key contributors to our progress include
5
global real estate portfolio right-sizing
and energy efficiency programmes, as well
as company vehicles electrification, and
our continued focus on renewable
electricity sourcing.
For our Scope 3 operational emissions our
focus remained on engaging with our key
stakeholders and making data
enhancements, particularly by acquiring
primary supplier data and evolving our
accounting methodology in line with
industry standards and best practice. We
also continued to pursue the integration of
ESG considerations and expectations into
processes throughout the procurement
lifecycle.
We expect that our progress against our
net zero operations targets and
milestones is likely to be variable and non-
linear. Our net zero operations strategy is
dependent on broader industry,
technological and regulatory changes that
are outside Barclays’ control and may
affect our ability to achieve our targets and
milestones. Further, as the accounting
standards and data underlying our net zero
operations strategy continue to evolve
and be refined, this could impact our
metrics, targets and milestones.
Note
Δ 2023 data subject to independent limited assurance
under ISAE (UK) 3000 and ISAE 3410. Current limited
assurance scope and opinion can be found within the
ESG Resource Hub: home.barclays/sustainability/esg-
resource-hub/reporting-and-disclosures/
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 187
Directors’ report: Other statutory and regulatory information (continued)
Notes
1 In this section, a reference to a 'milestone' denotes an
indicator we are working towards and report against.
2 We maintained 100% renewable electricity sourcing for
our global real estate portfolio through instruments
including green tariffs (55%) and energy attribute
certificates (EACs)(45%).
3 Global real estate portfolio includes offices, branches,
campuses and data centres.
4 In this section, a reference to a 'target' denotes an
indicator linked to our executive remuneration.
5 By right-sizing we are optimising our space and
associated resources for our operational needs.
Progress against our targets and
milestones may also be impacted by
management decisions based on key
drivers unrelated to climate, for example
prudent risk management practices. Our
intent is to enhance data collection and
accuracy to help identify key contributors
to our impact, determine opportunities for
improvement, and support the integration
of sustainability into our business
operations.
These measures build on those taken
during 2022 to implement our net zero
operations strategy. Further information is
available on page 191 of the Barclays PLC
Annual Report 2022.
GHG Emissions Table and Notes
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 (location and market based) and
Scope 3 operational emissions. We further
provide insights on our annual waste
production, energy, water consumption and
renewable electricity consumption by
region. For further information about
Barclays’ net zero operations strategy, see
page 73 of the Barclays PLC Annual
Report 2023.
+ The ESG Data Centre within the ESG Resource Hub
can be found at home.barclays/sustainability/esg-
resource-hub/reporting-and-disclosures
Group Operational GHG Emissions2 (tCO2e)
Total Scope 1, Scope 2 location-based, Scope 3 operational GHG emissions (000'
tonnes)
3
Scope 1 CO2e emissions (000' tonnes)
4
Scope 2 location-based CO2e emissions (000' tonnes)
5
Scope 3 CO2e emissions (000' tonnes)
Category 3 Fuel and Energy Related Activities CO2e emissions (000' tonnes)
Category 5 Business Waste in Operations CO2e emissions (000' tonnes)
Category 6 Business Travel CO2e emissions (000' tonnes)
Category 8 Upstream Leased Assets CO2e emissions (000' tonnes)
Category 13 Downstream Leased Assets CO2e emissions (000' tonnes)
Energy consumption used to calculate operational GHG emissions (MWh)
Intensity Ratio
Total Full-Time Employees (FTE)
6
Total CO2e per FTE (tonnes)
Market-based emissions
7
Scope 2 market-based CO2e emissions (000' tonnes)
Total Scope 1 and 2 market-based CO2e emissions (000' tonnes)
Notes
Current Reporting Year
20231
Previous Reporting Year
2022
UK &
Offshore Area
Global
GHG Emissions
UK &
Offshore Area
Global
GHG Emissions
91.6
9.4
35.7
46.5
12.9
0.19
15.3
18.1
0
183.5
15.3Δ
87.2Δ
81.0
13.4Δ
0.36Δ
39.5Δ
27.0Δ
0.72Δ
94.8
12.8
47.3
34.7
14.7
0.21
9.0
10.8
0
177.2
20.2
99.8
57.2
15.7
0.35
19.9
20.7
0.57
208,564
375,087Δ
285,874
463,973
45,300
2.02
0
9.4
92,900
1.97Δ
1.6Δ
16.9
44,000
2.15
0
12.8
87,400
2.03
2.0
22.1
1 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 2023 Barclays Strategic report.
2 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. We have adopted the operational control approach to define our reporting boundary. For 2023, we
have applied the latest emission factors as of 31 December 2023. Reported emissions for Scope 2 location and market-based have been recalculated back to the 2018 baseline, due to
updated internal and external data. The associated emissions have also been re-classified from Scope 2 electricity to Scope 3 Category 8 (Upstream Leased Assets) as these emissions
are currently outside of our operational control. In 2022 we reported Scope 2 location-based emissions of 103,422 tCo2e; the recalculated figure is 99,782 tCO2e. In 2022 we reported
Scope 2 market-based emissions of 1,883 tCo2e; the recalculated figure is 1,963 tCO2e. In 2022 we reported energy use of 467,939 MWh; the recalculated figure is 463,973 MWh.
3 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 expense data is available.
4 Scope 2 GHG emissions include our indirect GHG emissions from purchased electricity, purchased heat, cooling and steam . Market-based emissions have been reported for 2023 and
2022. We have used a zero emission factor where we have green tariffs or energy attribute certificates in place globally.
5 Scope 3 category 1, 2 and 4 emissions are excluded as these emissions cannot be broken down by country. Scope 3 category 1, 2 and 4 emissions can be found in the Operational
Footprint tab of the ESG Data Centre.
6 Intensity ratio calculations have been calculated using location-based emission factors only.
7 Energy consumption data is captured through utility billing; meter reads or estimates. Principal measures we have undertaken in 2023 to improve energy efficiency include the following:
• Right-sized our global real estate portfolio, therefore optimising our space and associated resources for our operational needs.
• Deployed our global energy optimisation programme by adjusting corporate offices' settings and systems during periods of low or no occupancy to reduce our demand for energy
while keeping our buildings running. In 2023 the programme contributed to approximately 9.1 GWh in energy savings at our UK sites – equivalent to the annual electricity
consumption of approximately 2,600 UK households.
Δ 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. 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/
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 188
Directors’ report: Other statutory and regulatory information (continued)
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 16 February 2024 (the latest
practicable date for inclusion in this report).
Ordinary shares therefore represent 100%
of the total issued share capital as at
31 December 2023 and as at 16 February
2024 (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 27 to the financial statements.
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.
Person interested
2
BlackRock, Inc.
Notes
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 2023, the Company had
been notified under Rule 5 of the DTRs of
the following holdings of voting rights in
its shares.
Between 31 December 2023 and
16 February 2024 (the latest practicable
date for inclusion in this report), the
Company has not received any additional
notifications pursuant to Rule 5 of
the DTRs.
Number of
Barclays Shares
% of total voting rights attaching to
issued share capital1
Nature of holding (direct or
indirect)
944,022,209
5.78
indirect
1 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.
2 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 25 January 2024, BlackRock, Inc.
disclosed by way of a Schedule 13G filed with the SEC beneficial ownership of 1,303,920,163 ordinary shares of the Company as at 31 December 2023, representing 8.6% of that class of shares.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 189
Directors’ report: Other statutory and regulatory information (continued)
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 2023
AGM. It will be proposed at the 2024 AGM
that the Directors be granted new
authorities to issue and allot and buy back
shares.
Repurchase of shares
On 13 March 2023 and 28 July 2023 the
Company commenced share buy-back
programmes to purchase its ordinary
shares of £0.25p each up a maximum
consideration of £500m and £750m,
respectively. The first share buy-back
programme concluded on 14 April 2023
and the second share buy-back
programme concluded on 23 October
2023. The Company repurchased for
cancellation 343,041,720 ordinary shares
at a volume weighted average price of
145.7549 pence per ordinary share during
the first buy-back programme and
493,603,770 ordinary shares at a volume
weighted average price of 151.9437 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
836,645,490 ordinary shares during 2023
with an aggregate nominal value of
approximately £209m (this represented
approximately 5.5% of the Company's
issued share capital as at 31 December
2023) for an aggregate consideration of
£1,250m 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 23 October
2023. 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 2023 AGM is
1,093,533,143 ordinary shares (being
1,587,136,913 less the 493,603,770
shares repurchased as part of the second
share buy-back programme).
Distributable reserves
As at 31 December 2023, the distributable
reserves of the Company were £21,162m
(2022: £21,701m).
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 2023. In making its
assessment, management utilised the
criteria set out in the 2013 COSO
framework. Management has concluded
that, based on its assessment, internal
control over financial reporting was
effective as at 31 December 2023.
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 363 to 372.
Changes in internal control over financial
reporting
There have been no changes that
occurred 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 190
Directors’ report: Other statutory and regulatory information (continued)
Disclosure of information to the auditor
Preparation of accounts
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 396 to 412, 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 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.
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.
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 145 to 148, 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 4 to
58, 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 2023 was unmodified
and its statement under Section 496 of the
Companies Act 2006 was also unmodified.
By order of the Board
Hannah Ellwood
Group Company Secretary
19 February 2024
Registered in England.
Company No. 48839
Registered office: 1 Churchill Place,
London E14 5HP
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 191
Remuneration report
Annual statement from the Chair of
the Board Remuneration Committee
Contents
Annual statement
Executive Director remuneration
outcomes at a glance
Wider workforce remuneration
Directors’ Remuneration Policy
Annual report on Directors’
remuneration
Dear fellow shareholders
191
195
197
201
207
On behalf of the Board, I am pleased to
present the Remuneration report for 2023.
Over the next few pages, we set out our
key considerations and the remuneration
decisions we took as a result – both for the
Executive Directors of Barclays PLC and
for the wider workforce.
Since last year’s report, Sir John Kingman
and Julia Wilson have joined the
Committee – bringing new perspectives
and a wealth of experience. I would like
formally to welcome them both.
I would also like to thank you, our
shareholders, for the support you showed
at our 2023 Annual General Meeting,
approving both our current Directors’
Remuneration Policy to apply for three
years from the date of that meeting –
supported by 97% of shareholder votes –
and the implementation during 2022 of our
previous Directors' Remuneration Policy.
Performance in 2023
As always, our remuneration approach is
rooted in our commitment to reward
sustainable performance. As the Group
Chief Executive sets out in his review, our
diversified income approach has enabled
us to continue to deliver well in 2023
despite an external backdrop of persistent
uncertainty – with heightened volatility
across asset classes, some significant
market disruption, and escalating
geopolitical tensions. In this testing
environment, we took deliberate, proactive
steps to protect the Group: maintaining a
prudent approach to risk management;
managing our balance sheet with care; and
continuing to invest in talent and
technology in sustainable growth areas,
while maintaining our focus on costs.
Barclays demonstrated its sound footing in
2023 and continued to see solid income
Board Remuneration Committee
Brian Gilvary
Chair, Board Remuneration Committee
Committee membership and meeting
attendance1
Meetings attended/eligible to attend
(including ad hoc meetings)
Member
Brian Gilvary
Dawn Fitzpatrick
Mary Francis
2
Sir John Kingman
Julia Wilson
3
6/6
5/6
6/6
3/3
2/2
Notes:
1 There were five scheduled meetings and one ad hoc
meeting of the Committee in 2023. Owing to a prior
commitment, Dawn Fitzpatrick was unable to attend
one scheduled meeting of the Committee.
Committee membership in 2023
2 Appointed with effect from 16 June 2023.
3 Appointed with effect from 1 July 2023.
performance across all three of our
operating businesses – resulting in Group
income of £25.4bn, up 2% on 2022.
Operating expenses for 2023 were
£16.9bn, a 1% increase on 2022, reflecting
business growth, investment spend and
inflation – delivering statutory profit before
tax of £6.6bn (2022: £7.0bn), down 6%.
This included £927m of structural cost
actions taken in the fourth quarter to help
drive future returns, having reviewed the
shape, efficiency and focus of our
businesses. Excluding these costs, profit
before tax was £7.5bn (2022: £7.7bn,
excluding the Over-issuance of Securities)
and RoTE was 10.6%, achieving our
greater-than-10% target. Our primary
frame of reference was financial outcomes
1
on this basis
, to understand the
underlying performance of the business
separate from the costs associated with
the decisions we made to shape its future.
We ended the year with a CET1 ratio of
13.8%, within our target range of 13% to
14%. We will deliver increased capital
distributions to shareholders, up c.37% on
2022, via a total dividend for the year of
8.0p per share and £1.75bn of announced
share buybacks – equivalent to a total
payout of c.19.4p per share.
Although income is down for some
business areas, those reductions are from
a starting point of strong 2022
performance for most business areas.
The Corporate and Investment Bank in
2023 saw income down slightly, a resilient
performance given the unsettled
macroeconomic backdrop and the lowest
investment banking wallet in the last
2
decade
. Global Markets continued to
grow its income from our top 100 clients
and maintained its revenue ranking of
3
sixth
. Investment Banking also maintained
its sixth rank globally, despite the subdued
dealmaking environment, and returned to
4
first in the UK
, up from fourth in 2022. For
Consumer, Cards and Payments, income
was up 18%, reflecting the expansion and
deepening of our client relationships –
including our latest partnership launch with
Microsoft and Mastercard. Income was
also up in Barclays UK, supported by the
higher interest rate environment, partially
offset by competition in mortgage and
savings products.
+
Find more about our approach to pay fairness in our
Fair Pay Report 2023 at: home.barclays/annualreport
Our UK pay gap figures for 2023 and narrative
explaining them are at: home.barclays/diversity
+
Notes:
1 Page 390 includes a reconciliation of financial results
excluding the impact of Q423 structural cost actions for
2023 and the impact of the Over-issuance of Securities
for 2022.
2 Source: Dealogic.
3 Global Markets rank and revenue share based on
Barclays’ calculations using peer-reported financials.
Top 10 peer group includes Barclays, Bank of America,
Citigroup, Goldman Sachs, JPMorgan Chase & Co,
Morgan Stanley, BNP Paribas, Credit Suisse, Deutsche
Bank, and UBS.
4 Source: Dealogic for period covering 1 January 2023 to
31 December 2023. UK rank based on UK investment
bank revenue by bank for full year 2023.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 192
Remuneration report (continued)
The Committee has maintained its focus
on ensuring we reward performance that is
sustainable. During 2023 the management
team has been embedding a new
operating standard – Consistently
Excellent – which aims to transform the
operational resilience of Barclays. Raising
our operating standards and reducing the
impact on financial performance of
unexpected issues will strengthen our
foundation to deliver sustainable
performance. This was reflected in our
objective setting, performance
assessment and reward processes for
senior colleagues for 2023, and in our
recognition platform for all colleagues, and
will be embedded more deeply and widely
during 2024. Striving to achieve a
consistently excellent standard is
becoming part of our culture, and initial
feedback suggests our work to equip all
colleagues with the right skills to achieve
this resonates as a way of driving
long-term success.
Colleague remuneration
Alongside rewarding sustainable
performance, our Fair Pay Agenda
continues to underpin all our remuneration
decisions – ensuring we are paying
colleagues fairly for the work they do and
recognising the contributions of all, within
the resources available to us. This is
especially pertinent given the challenges
colleagues continue to face – particularly
those who are lower-paid, given higher-
than-normal increases in the cost of living
over recent years. You can read more in
the 'Wider workforce remuneration'
section on page 204 and in our sixth 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.
Paying at least a living wage to all our
colleagues is a central element of our Fair
Pay Agenda. We continue to ensure we
meet or exceed living wage benchmarks in
every jurisdiction in which our employees
are based. In the UK our employees
already received more than the Living
Wage Foundation’s benchmarks, and we
are further increasing our minimum UK
full-time equivalent salary to £24,000. We
continue to meet or exceed Fair Wage
Network living wage benchmarks in all
other countries.
We have continued our work to be simpler,
more transparent and more consistent in
how we pay our more-junior colleagues.
For more junior roles in Barclays UK and
the support functions in the UK, we publish
starting salaries by role – providing
transparency for job candidates and
existing staff alike. From 2023, the
performance rating of each individual
across this population consistently drives
their annual bonus outcome as a
percentage of their salary. In previous
years a range of different approaches were
used and the annual bonus outcomes for
many of these roles were discretionary.
In setting this year's incentive pool we
considered Barclays’ financial and non-
financial performance, and the
performance of the individual businesses
that make up the Group, in both absolute
and relative terms. We considered each
business's contribution to the
achievement of our strategic targets and
its importance to our future success. The
Committee also wanted to recognise the
resilience across our operating businesses,
delivered against a backdrop of
macroeconomic uncertainty, as well as the
support our colleagues provided to
customers and clients. Taking all of this
into account, the Committee has
approved a Group incentive pool for 2023
performance of £1,745m (2022: £1,790m),
down 3% compared to the final incentive
pool for 2022, which included a c.£500m
reduction for risk and control issues that
came to light during 2022. Risk and
conduct adjustments to the 2023
incentive pool are materially less than
those for 2022, so the incentive pool
before risk adjustments each year fell by
c.15% from 2023 to 2022.
This level of incentive funding for 2023
reflects the lower year-on-year financial
outcomes in some business areas, while
also enabling us to reward colleagues for
the performance delivered – recognising
the progress made towards our strategic
priorities and our ambition to be
consistently excellent in our operations.
We also considered the competitive
market for hiring and retaining the talent
we need to achieve those priorities in the
future. In doing so, we weighed the views
and expectations of you as shareholders,
of our customers and clients, of our
colleagues, and of our stakeholders in
wider society. Consistent with our Fair Pay
Agenda, we have chosen to protect the
incentive outcomes for our more junior
colleagues – so, in business areas where
incentive spend was down year on year,
more senior colleagues experienced
greater reductions in annual bonus awards.
As always, a significant portion of the pool
will be delivered in shares, most of which
will be deferred over a number of years.
Group income
£25,378m
2022: £24,956m
Group profit before tax
£6,557m
2022: £7,012m
Group profit before impairment
(excluding adjusting items)1
£9,365m
2022: £8,906m
Group profit before tax
(excluding adjusting items)1
£7,484m
2022: £7,686m
Group RoTE
(excluding adjusting items)1
10.6%2022: 11.6%
Group cost: income ratio
(excluding adjusting items)1
63%2022: 64%
Group CET1 ratio
13.8%2022: 13.9%
Group compensation to income ratio
34.4%2022: 33.5%
Group incentive pool
£1,745m
2022: £1,790m
Note:
1 Adjusting items: Q423 structural cost actions in 2023
and the impact of the Over-issuance of Securities in
2022.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 193
Remuneration report (continued)
Executive Director remuneration
The Executive Directors' pay in 2024
The Committee carefully considered the
performance measures for the Executive
Directors’ 2024 annual bonus and the
2024-2026 LTIP, and updated elements of
both the financial and non-financial
measures in each plan to better reflect the
revised targets set out under 'Our
strategy' from page 11, and our long-term
climate strategy.
For the 2024 annual bonus, a total
operating expenses measure replaces
cost: income ratio – reflecting the
continued importance of cost discipline
while providing a more focused and simpler
measure of cost control within the year.
Other financial measures and weightings in
the bonus are unchanged.
For the 2024-2026 LTIP we have
increased slightly the weighting of RoTE,
from 25% to 30%, given the focus on
improving RoTE within the Group's 2026
targets. This is accommodated via a small
reduction to the weighting of the relative
total shareholder return measure from
25% to 20%. All other financial measures in
the LTIP remain unchanged from the
previous year's award, including the
continued use of cost: income ratio as a
longer-term cost measure.
We also reviewed the non-financial
measures for both the 2024 annual bonus
and 2024-2026 LTIP, to ensure they
reflect the Group’s shorter- and longer-
term priorities. Our commitment to align
our financing with the goals and timelines
of the Paris Climate Agreement has been
and remains a key component of our
climate strategy. Many of our climate and
sustainability targets are longer term,
including through to 2050, and progress
towards these is expected to be non-
linear. As such, we have retained the
Climate & sustainability category within the
Strategic non-financial assessment for the
annual bonus and LTIP, but increased its
weighting in the LTIP from 10% to 15% –
accommodating this by reducing the
weighting of the LTIP risk-related
measures (which this year also incorporate
assessment of operational excellence)
from 10% to 5%.
Determining Executive Directors' pay
outcomes
The Committee considered the Executive
Directors’ annual bonus outcomes in the
context of the Group’s performance and
the performance of each Executive
Director during 2023.
The 2023 annual bonus outcome for C.S.
Venkatakrishnan (known as Venkat) was
53.3% of maximum, and for Anna Cross
was 54.3% of maximum (2022: 75.4% for
both). Profit before tax provided a 21.1%
outcome out of a possible 50%, and the
cost: income ratio provided a 2.7%
outcome out of a possible 10%.
Performance against the strategic non-
financial measures was good, which
resulted in a 16.5% outcome out of a
possible 25% and the performance of each
of the Executive Directors against their
personal objectives was also assessed and
taken into account (13.0% for Venkat and
14.0% for Anna out of a possible 15%).
Before finalising those outcomes, the
Committee reflected on their
appropriateness. We reviewed the
underlying financial health of the Group,
which is strong and well-capitalised. We
considered the bonus outcomes in the
context of those for the wider workforce,
ensuring suitable 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.
Neither Venkat nor Anna Cross
participated in the 2021-2023 LTIP cycle,
as neither was an Executive Director at the
time those awards were granted. The
Committee did, however, assess
performance against the measures for this
LTIP cycle to determine the vesting
outcome for the previous Group Finance
Director, who is the sole remaining
participant. This was 53.2% of the
maximum, as outlined later in this report.
The Committee decided to grant awards
under the 2024-2026 LTIP cycle with a
face value at grant of 140% of Fixed Pay
for Venkat and 134% of Fixed Pay for Anna
Cross, reflecting the personal contribution
made by each to a solid 2023 performance
– and to provide each with a significant
incentive award subject to forward-looking
performance conditions during 2024 to
2026.
At the same time the ways we approach
and monitor risk, and ensure a high
standard of operational performance, are
fundamental to delivering sustainable
performance every year. To reflect our
focus on this across Barclays, we have
included a Risk & operational excellence
category within the Strategic non-financial
element of the 2024 annual bonus, with a
weighting of 10% – accommodated via a
slight reduction in the weighting of other
Strategic non-financial bonus measures.
The Climate & sustainability, Customers &
clients, and Colleagues categories are
each weighted 5%.
The Committee will continue to review the
measures and weightings for the Executive
Directors' incentives each year, to ensure
they appropriately support the delivery of
our strategy and reflect our priorities.
In early 2024, the Committee reviewed the
level of Fixed Pay for Venkat and Anna
Cross, in the same way and at the same
time as fixed pay was reviewed for the
wider workforce. The Committee
increased Fixed Pay by 2.5% for both
Venkat and Anna, resulting in Fixed Pay of
£2,947,000 and £1,845,000 respectively,
effective from 1 March 2024. These
percentage increases are significantly
lower than the average across the wider
workforce, in particular for other UK
employees within the scope of the 2024
UK pay deal with the union Unite – with a
5.55% budget for salary increases for
junior employees and a 3.75% budget for
other union-recognised employees. Even
following these Fixed Pay increases, the
total compensation opportunity for each
Executive Director remains well behind the
median opportunity for equivalent roles
across our international banking peer
group.
Shareholder alignment
Of the total variable pay awards to Venkat
and Anna Cross in respect of 2023
performance (2023 annual bonus plus
2024-2026 LTIP), 96% and 94%
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 with those
of our shareholders. Both Venkat and Anna
Cross already have significant
shareholdings.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 194
Remuneration report (continued)
Group Chair and Non-Executive
Director fees
The Committee periodically reviews the
Group Chair's fee, and the Directors'
Remuneration Policy allows for increases
of up to 20% during the policy's three-year
term. The Committee last increased the
Group Chair's fee with effect from 1
January 2023, having 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. Prior to that, this fee had
remained at the same level since 2015.
Early in 2024, the Committee approved a
2% increase in the Group Chair's fee, from
£840,000 to £856,800, effective 1 January
2024. Each year £100,000 of the fee will
continue to be used to purchase Barclays
shares that will be retained on the Group
Chair's behalf until he retires from the
Board. No other changes were made to
the Group Chair's remuneration
arrangements or benefits.
In January 2024 the Board reviewed the
other Non-Executive Directors' fees,
which were also last increased with effect
from 1 January 2023, and approved 2%
increases to those fees effective
1 January 2024 (with the relevant Non-
Executive Directors having recused
themselves from those discussions).
Update in respect of Jes Staley's
remuneration
As outlined in the 2021 Annual Report,
Jes Staley stepped down from the role of
Group Chief Executive on
31 October 2021 and his unvested awards
were suspended pending further
developments in respect of the regulatory
and legal proceedings related to the FCA
and PRA investigation regarding Mr Staley.
In October 2023, the FCA issued a
Decision Notice in relation to Mr Staley.
The Committee considered the detailed
findings in this Decision Notice and
concluded that Mr Staley should be
ineligible for or forfeit a number of his
awards, including the bonus award in
respect of the 2021 performance year, all
of his unvested LTIP awards – both those
for which the performance had already
been assessed and those still subject to
performance conditions – and his other
unvested deferred bonus awards from
earlier years. The total value of the lapsed
LTIP awards and forfeited deferred bonus
awards at that time was £17.8m.
Looking ahead
As we move into 2024, the Committee
maintains its commitment to rewarding
sustainable performance.
We will use our remuneration policies and
practices to incentivise the Executive
Directors and the management team to
deliver our three year plan, improving
operational and financial performance, and
improving shareholder returns.
We will support the management team to
use performance management and pay:
– to align the wider workforce to those
same priorities
– to reinforce the importance of good
conduct, strong controls and risk
management and
– to support Barclays' Purpose, Values
and Mindset, and our ambition to
achieve a standard of being consistently
excellent.
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 2023.
Beyond this, we will maintain focus on our
Fair Pay Agenda, continuing to support our
colleagues and ensuring the way we pay
our people supports the long-term health
and success of the Group.
Brian Gilvary
Chair, Board Remuneration Committee
February 2024
Removal of the regulatory
requirement to operate
a 2:1 'bonus cap'
With effect from 31 October 2023,
the PRA and FCA removed the UK
regulatory requirement for certain
banks, including Barclays, to apply a
maximum 1:1 ratio of variable to fixed
remuneration for employees who are
deemed to have a material risk impact
on their firm – known as Material Risk
Takers (MRTs) – or up to a 2:1 ratio if
shareholders approve the adoption of
that higher maximum. Our
shareholders approved the adoption
of a 2:1 maximum ratio for Barclays
MRTs around the time that these
regulations first came into effect.
Going forward, such banks – including
Barclays – will be permitted to set their
maximum variable pay ratios to be
greater than 2:1.
As the new regulations were published
close to the end of 2023, the
Committee determined that the 2:1
cap would continue to apply in
Barclays for the 2023 performance
year. The Committee will consider this
further in respect of 2024 and future
years.
A relatively small number of our
employees are potentially impacted
by this regulatory change. Our
Executive Directors’ maximum
variable pay opportunity is governed
by the Directors' Remuneration Policy
that shareholders approved at our
2023 AGM, and therefore is
unchanged by these new regulations.
The Directors' Remuneration Policy
will continue to apply until a new policy
is approved by shareholders. No new
Directors' Remuneration Policy is
proposed for 2024.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 195
Remuneration report (continued)
At a glance – Executive Director remuneration for 2023
Fixed
Pay
Pensions
and
benefits
+
+
Annual
bonus
LTIP
+
=
Total
remuneration
Total remuneration outcomes (£000)
C.S. Venkatakrishnan (Group Chief Executive)
1
2023 max
2023 actual
2022 actual
Anna Cross (Group Finance Director)
2023 max
2023 actual
2
2022 actual
2,773
2,057
4,641
5,197
5,926
9,915
Proportion in shares
of 2023
variable pay3
of maximum total
remuneration
(2023 max)
96%
80%
Proportion in shares
of 2023
variable pay3
of maximum total
remuneration
(2023 max)
94%
80%
1 The LTIP values shown for C.S. Venkatakrishnan's and Anna Cross's 2022 actual and 2023 actual total remuneration are nil as neither participated in the 2020-2022 or 2021-2023
LTIP cycles. The LTIP values shown for 2023 maximum represent the maximum LTIP award value that could have been granted under the current Directors' Remuneration Policy.
2 Anna Cross was appointed as Group Finance Director on 23 April 2022.The values shown for 2022 are part-year values for the time she served as an Executive Director during 2022.
3 2023 variable pay comprises the actual 2023 annual bonus and the grant-date face value of the 2024-2026 LTIP award that will be granted in respect of 2023 performance.
See single total figure for 2023
remuneration on page 207
+
Annual bonus outcomes
Annual bonus measures
Financial4
• Profit before tax
• Cost: income ratio
Strategic non-financial
Personal
Total
Final outcome approved
by the Committee
Weighting (proportion
of bonus opportunity)
Outcome
C.S. Venkatakrishnan
60.0%
50.0%
10.0%
25.0%
15.0%
100.0%
23.8%
21.1%
2.7%
16.5%
13.0%
53.3%
Outcome
Anna Cross
23.8%
21.1%
2.7%
16.5%
14.0%
54.3%
4 The financial measures are defined as excluding material items, which for 2023 consist of Q423 structural cost actions of £927m.
Delivery of remuneration5
Performance year
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Fixed
Pay
Pension
50% in cash
paid monthly
Cash in lieu
of pension
contributions
50% in shares with restrictions lifting over five years
Annual
bonus
Performance
period
Max.
50%6
in cash
Remainder in shares
vesting over two years
Holding
period
LTIP
Preliminary
performance
period
Three-year post-grant performance period
Deferral in shares over five years
Holding
period
5 Illustrative timing that the different elements of remuneration are normally received. Fixed Pay shares are granted quarterly and released in five equal annual instalments on the first five anniversaries of
grant. All tranches of annual bonus and LTIP shares typically vest in March of the relevant year and are subject to a 12-month holding period from the date they vest.
6 In recent years, less than 50% of annual bonus has been delivered in cash in year one, and a greater proportion of annual bonus has been delivered in shares over years one, two and three.
2,8602,8602,7673563564812,6741,4251,9494,0251,7881,7881,185106106691,6208798032,41253.3%54.3%
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 196
Remuneration report (continued)
Remuneration policy for the Executive Directors – implementation for 2024
Delivery of remuneration is intended to be the same as for the 2023 performance year, as outlined on the previous page.
Element
Fixed
Pay
Pensions
and benefits
Annual
bonus
LTIP
Shareholding
requirement
C.S. Venkatakrishnan
Anna Cross
2.5% increase to £2,947,000 effective
1 March 2024
2.5% increase to £1,845,000 effective
1 March 2024
Pension: £147,350 effective 1 March 2024,
equivalent to 5% of Fixed Pay
Benefits: entitlement as per the policy
Pension: £92,250 effective 1 March 2024,
equivalent to 5% of Fixed Pay
Benefits: entitlement as per the policy
Up to 93% of year-end Fixed Pay, based on forward-
looking performance measures set near the start of
the year
Up to 90% of year-end Fixed Pay, based on forward-
looking performance measures set near the start of
the year
Up to 140% of year-end Fixed Pay, based on forward-
looking performance measures set shortly before the
time of grant
Up to 134% of year-end Fixed Pay, based on forward-
looking performance measures set shortly before the
time of grant
Holding requirement: 233% of Fixed Pay
Post-employment shareholding requirements
apply for two years
Holding requirement: 224% of Fixed Pay
Post-employment shareholding requirements
apply for two years
Alignment of performance measures and strategy
Weighting in annual
bonus and LTIP
Alignment to strategy
Performance measures
Financial
Profit before tax (with a
CET1 ratio underpin)
Total operating
expenses (at specific FX)
Return on tangible
equity (RoTE)
Cost: income ratio
CET1 ratio
Relative total
shareholder return
Personal
Strategic non-
financial
10%
50%
•••••••
••
15%
30%
20%
25%
A measure of annual financial performance and a key factor
that drives RoTE
A measure of the ability to effectively manage costs (measured at fixed
foreign exchange rates to reduce impacts outside of management control)
30% A measure of our ability to generate returns for shareholders that underpins
the Group’s capital allocation and performance management processes
10% A measure of the productivity of our business operations over time
10% A measure of capital strength and resilience, determined in accordance with
regulatory requirements
A measure of Barclays' share performance (comprising share price
appreciation and dividends paid) relative to those of a basket of
comparable firms
Individual objectives for each Executive Director, aligned to our
strategic priorities
Includes the Group's non-financial key performance indicators, including
Climate & sustainability as a strategic priority, Customers & clients and
Colleagues as key stakeholder groups, and Risk & operational excellence,
which is fundamental to operating at a consistently excellent standard to
deliver sustainable performance
Alignment to
stakeholder groups
•
•
•
•
•
•
••••
••••
l 2024 annual bonus l 2024-2026 LTIP
l Customers & clients l Colleagues l Society l Investors
Share ownership (£000)
Shareholding shown as at 31 December 2023, using Q4 2023 average share price of £1.4374.
C.S. Venkatakrishnan
Anna Cross
¢ Actual shareholdings (including the estimated after-tax value of unvested
¢ Unvested shares subject to performance conditions (which do not count
shares not subject to performance conditions)
towards the requirement)
¢ Shareholding
requirement
Based on 31 December 2023 Fixed Pay of £2,875k.
Based on 31 December 2023 Fixed Pay of £1,800k.
C.S. Venkatakrishnan has until 31 October 2026 (five years from
the date of his appointment as Group Chief Executive) to meet
this shareholding requirement.
Anna Cross has until 22 April 2027 (five years from the date of her
appointment as Group Finance Director) to meet this
shareholding requirement.
6,5214,1126,6992,1311,3334,032
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 197
Remuneration report (continued)
Wider workforce remuneration
Our remuneration philosophy
Our Fair Pay Agenda
Our remuneration philosophy applies to all employees and sets out
the way we approach remuneration. Its aim is 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 also closely aligned
with Provision 40 of the FRC's UK Corporate Governance Code.
The remuneration decisions set out in this report are a result of the
application of our remuneration philosophy in respect of 2023.
Paying people fairly is an essential element of our pay philosophy.
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.
Our fair pay principles
Fair pay for the lowest paid
Paying fairly for work done, in a simple and transparent way.
Philosophy
Attract and retain
talent needed to
deliver Barclays’
strategy
Align pay with
investor and other
stakeholder
interests
Reward sustainable
performance
Support Barclays’
Values and culture
Align with risk
appetite, risk
exposure and
conduct
expectations
Be fair, transparent
and as simple as
possible
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, delivering good
customer outcomes, taking pride in leaving things
better than we found them and playing a valuable
role in society.
Results must be achieved in a manner consistent
with our Values. Our Values, culture and Mindset
should drive the way that business is conducted.
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.
Equal opportunities to progress
Providing equal employment opportunities to all, so everyone can
enjoy a successful career at Barclays.
Engaging 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.
Alignment of employee and Executive Director pay
Linking both Executive Director and employee pay to sustainable
business performance.
Equal pay commitment
Rewarding employees fairly for their contribution and making
sure pay and performance decisions never take into account any
protected characteristics.
Supporting our colleagues
We provided higher salary increase budgets for junior
employees, including under the UK pay deal with Unite
In business areas where the incentive spend was reduced, we
protected incentive outcomes for junior employees
Over 97% of employees globally are eligible for private
medical cover
We continued to enhance our wellbeing provision,
including the addition of a new wellbeing training module
We offer dedicated menopause support through our
healthcare providers across all our large locations as well as
training for people leaders
More information on our fair pay approach can be found in our Fair Pay Report 2023 at:
home.barclays/annualreport
+
Diversity ambitions and pay gaps
Diversity ambitions
Pay gaps
33%
50%
12.5%
5%
33% females at Managing Director
and Director level by 2025
50% increase in Managing Directors
from underrepresented ethnicities in
the UK and US combined by 2025
(from 2022 baseline)
Increase underrepresented minority
representation in the UK by 12.5% by
2025 (from 2023 baseline)
Increase underrepresented minority
representation in the US by 5% by
2025 (from 2023 baseline)
We disclose our pay gaps for locations including the UK, Ireland
and France.
• Our gender and ethnicity pay gaps are due to
underrepresentation of females and certain ethnic minority
groups in senior and other higher-paying roles.
• Being transparent about this, and the resulting pay gaps,
For information on our progress against our diversity ambitions,
see page 210
is important as it helps us track where we are in the pursuit
of our goals and understand what tangible actions we can take
to improve representation over time.
+
+
+
UK gender and ethnicity pay gaps for 2023 are shown in our UK Pay Gaps 2023
disclosure, which can be found at: home.barclays/diversity
More information on our diversity ambitions and pay gaps can be found at:
home.barclays/diversity
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 198
Remuneration report (continued)
Alignment of remuneration policy for the wider workforce and Executive Directors
Most elements of remuneration policy are aligned for the wider workforce and the Executive Directors. Differences in policy
implementation between seniority levels reflect our remuneration philosophy. For example, the balance between fixed and variable pay
is shifted toward fixed pay for employees in more-junior roles and towards variable pay for those in more-senior roles. A large
proportion of variable pay for senior employees, or the majority of variable pay and half of Fixed Pay for the Executive Directors, is
delivered in shares over multiple years – aligning their interests more closely with those of shareholders – whereas pay is primarily in
cash for more-junior employees. Aligned with our Fair Pay Agenda, UK employer pension contributions are also higher for our junior
employees.
The table below provides a summary of remuneration arrangements for the wider workforce and the Executive Directors.
Element
How Executive Director policy aligns
Senior employees
Junior employees
Fixed pay
Delivery
Pensions
Benefits
Annual bonus
Reflects the individual’s role, skills and experience and is reviewed annually. Fixed pay is
increased where justified by role change, increased responsibility or a change in the
market rate for the role. Salaries may also be increased in line with local statutory
requirements and with union and works council commitments.
All in salary for most, paid in cash. Some
roles are also entitled to receive certain
cash allowances.
All in salary for most. For a small number of
senior employees (2% globally) a
proportion is delivered in Role Based Pay
(RBP), in cash or shares, to recognise the
seniority, scale and complexity of their role.
The RBP value may change, for example,
where justified by a role or responsibility
change or a change in the market rate for
the role.
Reflects the individual’s role, skills and
experience, set to provide a market-
competitive total compensation
opportunity, and is reviewed annually.
Annual increases are typically no more than
the average increase for UK employees.
50% is delivered in cash (paid monthly), and
50% in shares. The shares are delivered in
four equal quarterly instalments and are
then subject to a holding period, with
restrictions lifting over five years.
Competitive pension offering set by
location. Minimum of 12% of salary for more
junior colleagues in the UK.
Competitive pension offering set by
location. Minimum of 10% of salary in the
UK.
The Executive Directors receive cash in lieu
of pension equal to 5% of Fixed Pay
(equivalent to 10% of the cash element of
Fixed Pay).
Market-aligned benefits offering
appropriate to the role and reflecting local
market practice to support with health and
wellbeing.
Market-aligned benefits offering, but
typically a lower proportion of total pay
than for junior employees.
Market-aligned benefits offering, but
typically a lower proportion of total pay than
for the wider workforce.
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.
Assessed against predetermined targets
and measures to align with financial
performance, strategic non-financial
performance and personal performance.
Delivery
In cash following the performance year.
Long Term
Incentive Plan
(LTIP) award
Not applicable to the wider workforce.
For many a proportion of annual bonus is
deferred to future years. Deferred
bonuses are generally delivered half in
deferred cash and half in deferred shares,
released in equal annual instalments over
three, four, five or seven years, with a
further six or 12-month holding period for
some roles.
The majority of annual bonus is generally
deferred in shares and then subject to a
further 12-month holding period. Across
the annual bonus and any LTIP award
combined, deferral will always at least meet
regulatory requirements.
The value received from LTIP awards
depends on assessment of performance
over a three-year period against Group-
wide financial and non-financial measures.
Delivery is in shares between the third and
seventh year from grant, with each release
subject to a further 12-month holding
period.
All-employee
share plans
Provide an opportunity for all employees to acquire Barclays shares, in some locations on beneficial terms. Barclays operates all-
employee share plans in locations representing 99% of employees globally.
Role of the Remuneration Committee in wider workforce remuneration
The Committee considers the overarching objectives, principles and parameters of remuneration policy across the Group, ensuring a
coherent approach in respect of all employees. In discharging this responsibility the Committee seeks to ensure 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 performs the following activities in relation to wider
workforce remuneration:
– Ensures alignment of remuneration with the remuneration philosophy, Fair Pay Agenda and Barclays' Purpose, Values, Mindset,
conduct expectations and long-term success
– Ensures alignment of wider workforce and Executive Director remuneration policies
– Approves the bonus pool across the wider workforce and reviews wider workforce pay outcomes
– Reviews the annual Group fixed pay budgets.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 199
Remuneration report (continued)
Performance management
Performance management plays a key role
both in supporting colleagues to progress
their careers and in making Barclays a
consistently excellent organisation.
Our performance management approach
centres on continuous performance
management principles.
This encourages people leaders to discuss
performance throughout the year,
including reviewing progress made against
‘what’ has been achieved (performance
versus individual objectives) and ‘how’ it
has been achieved (behaviours in line with
our Values and Mindset, in addition to our
leadership behaviours for senior leaders).
At year-end, colleagues are assessed
separately on the ‘what’ and the ‘how' of
their performance.
This assessment is reflected in colleague
performance ratings and bonus outcomes.
For 2023, our aspiration to be a
consistently excellent organisation was
reflected in performance management for
senior colleagues – and will be embedded
more deeply and widely during 2024.
+
For more details see our Fair Pay Report 2023 at:
home.barclays/annualreport
Engaging with stakeholders on remuneration
We seek to consider the views of all of our stakeholders in remuneration decision-making, including colleagues, investors and regulators.
Colleagues
Investors
Other stakeholders
We engage with colleagues to understand their
views through our Your View surveys, union and
works council engagements, and townhalls. We
also engage with colleagues through our
Employee Resource Groups, webcasts,
workshops and events.
Our ongoing engagement with the union Unite
in the UK covers a range of topics, such as fair
pay and the increasing cost of living, and this is
another opportunity for the views of colleagues
to inform decision-making. For information on
our 2024 pay deal with Unite see 'Salary budget
for 2024', below.
We publish information to explain to colleagues
how the Group’s performance and pay
approach aligns to the Fair Pay Agenda, and to
help them understand the employee benefits
Barclays provides – so they can make the most
of what is on offer. To communicate pay in a
clear way, each colleague receives a
Compensation Profile detailing their fixed pay
and incentives for the previous year and their
fixed pay for the following year.
We recognise that remuneration is an area of
particular interest to some shareholders. We
listen to their views and take these into account
when setting remuneration or considering
changes to remuneration policies. Accordingly,
the Group Chair or Remuneration Committee
Chair hold meetings each year with major
shareholders and representative groups to
understand their views, accompanied by senior
Barclays employees. In 2023, we discussed our
remuneration policies and our 2022 pay
outcomes with representatives of some of our
institutional shareholders and proxy voting
agencies.
This kind of engagement helps inform the
Committee's work and contributes directly to
the decisions it makes in relation to Executive
Directors' remuneration. For example,
shareholder views were a key consideration in
the Committee's decision to increase the
weighting of the Climate & sustainability
category from 10% to 15% for the 2024-2026
LTIP cycle.
Each year, the Barclays Internal Audit or Chief
Controls Office teams review our remuneration
policies and how we've operated our
remuneration processes, to provide assurance
to the management team and the Committee
that we are compliant with regulatory
requirements.
Whenever regulations on remuneration are
changed, we review our remuneration policies
and practices to ensure they are compliant –
and make changes if necessary.
In 2023 we continued to engage with our
regulators to ensure we understand their
perspectives, and to explain our performance,
pay priorities and decision-making. We took
their views into consideration when making our
remuneration decisions for 2023, and continue
to ensure we have ongoing regulatory dialogue
on remuneration.
Fixed pay decisions for 2024
Living wage employer
We continue to ensure that we at least
meet the living wage benchmarks for each
location, and are an accredited Living
Wage employer in the UK.
Salary budget for 2024
We targeted our salary increase budgets
so there are higher increases for the most
junior colleagues. In the UK, with the union
Unite, we have agreed a salary increase
budget of 5.55% for our junior employees
and 3.75% for other union-recognised
employees. For junior employees in India
and the US salary increase budgets are 8%
and 3.25% respectively.
The percentage Fixed Pay increases for
the Executive Directors are below the
average percentage increases for the
wider workforce; the Group Chief
Executive and Group Finance Director will
each receive a 2.5% increase in Fixed Pay.
Exceeding the living wage in key locations
We pay at least the living wage in all locations. Below are our minimum hourly rates
from 1 March 2024 for the UK, USA and India, where 90% of employees are based.
£13.19UK
2023: £12.23
$22.50USA
2023: $22.50
₹150.00
India
2023: R143.00
Pay transparency
We have continued to simplify our pay
approach for junior colleagues, making it
easier for them to understand how their
pay is set and managed.
Pay levels and annual salary increases for
our most junior roles in Barclays UK and
support functions in the UK are based on
role type, and starting salaries are published.
Annual bonus approaches for those
populations have also been harmonised.
Previously, bonus outcomes were fully
discretionary for many of these roles. From
2023, annual bonus outcomes are a set
percentage of salary, differentiated by each
employee's performance rating.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 200
Remuneration report (continued)
Incentive pool and annual bonus outcomes for 2023
Determining the Group incentive pool
Group incentive pool and Group Chief Executive bonus outcomes over the years
In determining the 2023 Group incentive pool,
the Committee considered:
• The Group's financial and non-financial
performance during 2023 (both absolute and
relative)
• The performance of individual businesses
within the Group and their contributions to
our strategic targets and vision
• The Group’s capital position and current and
future risks
• The need to reward strong performers
appropriately, as well as recognising
colleagues who have exemplified the
Barclays Values and Mindset
• Compensation market data and expected
market trends, to maintain competitiveness
where performance warrants.
The Committee used its judgement to establish
the right balance between annual bonus
outcomes that reflect the performance of the
Group and managing the Group's cost base,
while supporting its ability to attract, retain and
reward colleagues who will drive the delivery of
the Group’s strategy and sustainable growth for
shareholders in the future, in line with our
remuneration philosophy.
On that basis, the Committee approved a Group
incentive pool for 2023 performance of
£1,745m (2022: £1,790m), down 3% compared
to the final incentive pool for 2022, which itself
incorporated a c.£500m reduction for risk and
control issues that came to light during 2022.
The risk and conduct adjustments to the 2023
incentive pool are materially less than those for
2022, so the incentive pool before risk
adjustments each year fell by c.15% from 2023
to 2022 – as seen in the chart on the right.
The Group incentive pool and Group
Chief Executive bonus outcomes
The incentive approach for our Executive
Directors is significantly more structured than
for other employees, as required by institutional
shareholders for directors of UK-listed
companies. This more-structured approach,
with a need for direct alignment to financial
performance metrics, leads to greater year-on-
year volatility in incentive outcomes – both up
and down – for the Executive Directors
compared to other employees.
For 2023, like every year, the Committee
considered the Executive Director 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. It also reviewed the historical
outcomes for the Executive Directors in the
context of performance each year and
concluded they were appropriate in the context
of the performance achieved.
Consistent with our Fair Pay Agenda, incentive
outcomes for junior employees are largely
protected, so, in business areas where incentive
spend was down year on year, more senior
colleagues experienced greater reductions in
annual bonus awards.
Key performance metrics
2018
2019
2020
2021
2022
2023
Profit before
impairment (ex.
adjusting items)1
Profit before tax
(ex. adjusting items)1
RoTE (ex. adjusting
items)1
CET1 ratio
Group compensation
to income ratio2
7,169m
8,118m
8,056m
7,761m
8,906m
9,365m
5,701m
6,206m
3,218m
8,414m
7,686m
7,484m
8.5%
9.0%
3.4%
13.5%
11.6%
10.6%
13.2%
34.1%
13.8%
33.9%
15.1%
15.1%
13.9%
34.2%
34.7%
33.5%
13.8%
34.4%
< Group incentive pool (£m)
Group Chief Executive bonus outcome (% of maximum)
< Risk and conduct adjustments (£m)
Notes:
1 Figures exclude the following adjusting items (pre-tax for profit and post-tax for RoTE): 2023: Q423 structural cost
actions (£927m pre-tax and £739m post-tax); 2022: impact of Over-issuance of Securities (£674m pre-tax and
£552m post-tax); 2021: impact of Over-issuance of Securities (£220m pre-tax and £170m post-tax); 2020: litigation
and conduct (£153m pre-tax and £112m post-tax); 2019: litigation and conduct (£1,849m pre-tax and £1,733m post-
tax); 2018: litigation and conduct (£2,207m pre-tax and £2,136m post-tax).
2 2018 Group compensation to income ratio excludes £140m relating to GMP charge post-retirement benefits.
Annual percentage change in remuneration of Directors and
employees
• The annual percentage change in fixed pay earned in 2023, compared to 2022, is
3% for the Group Chief Executive and 9% for the median UK employee –
reflecting the Fixed Pay and salary increases awarded in early 2023.
+
Full details and supporting narrative
See page 223
Group Chief Executive pay ratio: 83:1
• Our Group Chief Executive median pay ratio for 2023 is down in comparison to
2022 (101:1) .
• This is due to a decrease in the CEO single total figure for remuneration from
2022 to 2023 and an increase in median total pay of UK employees over the same
period.
+
Full details and supporting narrative
See page 222
05001,0001,5002,0002,5000%20%40%60%80%100% Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 201
Remuneration report (continued)
Directors’ Remuneration Policy
The Directors' Remuneration Policy was approved at the AGM
held on 3 May 2023 and applies for three years from that date.
The Committee reviewed the Directors' Remuneration Policy and
concluded that it has been operating effectively and is well aligned
with our remuneration philosophy.
A summary of the policy for the Executive Directors, including key
remuneration elements and its implementation for 2023 and
2024, is set out below.
Remuneration policy summary – Executive Directors
The full policy, including arrangements for recruitment and leaver
provisions, and the remuneration policy for Non-Executive
Directors, can be found on pages 209 to 217 of the 2022 Annual
Report, which is available at home.barclays/annualreport.
Element and purpose
Operation
2023 pay outcomes
Implementation for 2024
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.
Pension
To support Executive
Directors to build long-
term retirement savings.
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.
• Determined based on the individual’s role,
skills and experience and set at a level that
aims to provide an appropriately competitive
total compensation opportunity, which is
benchmarked against similar roles within the
international banking peer group used by the
Committee when considering the Executive
Directors' pay.
• Delivered 50% in cash (paid monthly) and
50% in shares quarterly (subject to a holding
period of five years, with 20% released
annually).
• Reviewed annually. Increases will normally
be no more than the average annual
increase for UK employees.
• Delivered as an annual cash allowance in lieu
of participation in a pension arrangement.
• The maximum is currently 5% of Fixed Pay
(equivalent to 10% of the cash element of
Fixed Pay).
Effective 1 March 2023:
Effective 1 March 2024:
C.S. Venkatakrishnan
£2,875,000
Anna Cross
£1,800,000
C.S. Venkatakrishnan
2.5% increase to
£2,947,000
Anna Cross
2.5% increase to
£1,845,000
For comparison, the 2024
UK pay deal provides a
salary increase budget of
5.55% for junior
employees and a 3.75%
budget for other union-
recognised employees.
Effective 1 March 2023:
Effective 1 March 2024:
C.S. Venkatakrishnan
£143,750
C.S. Venkatakrishnan
£147,350
Anna Cross
£90,000
(5% of Fixed Pay for each)
Anna Cross
£92,250
Pension will remain at
5% of Fixed Pay
Benefits as per policy
• A range of benefits is provided including
Benefits as per policy
private medical cover, annual health check,
life insurance 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 202
Remuneration report (continued)
Element and purpose
Operation
2023 pay outcomes
Implementation for 2024
• Annual bonus awards are discretionary and
determined by the Committee based on
performance in the year.
• Performance is measured against Group and
personal objectives set towards the start of
the year, covering financial and non-financial
measures (at least 60% of the bonus
opportunity normally being based on financial
factors).
• Delivered in cash and shares, which may be
deferred and/or subject to a holding period.
• 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, any bonus award is
discretionary and awards can be from zero to
the maximum.
• Awards are subject to malus and clawback
provisions (described in the risk and conduct
section).
• Awards are discretionary and determined by
the Committee based on satisfactory
performance in the year.
• Performance is measured over three years
against measures set by the Committee (at
least 70% of each award normally being
based on financial factors).
• Delivered in shares and subject to a holding
period, vesting no faster than permitted by
regulations (currently in five equal tranches,
from the third to the seventh anniversary of
grant).
• The maximum LTIP opportunity is 140% of
Fixed Pay for the Group Chief Executive and
134% of Fixed Pay for the Group Finance
Director.
• Although the Committee takes a structured
approach to considering the level of LTIP
outcome, any LTIP award is discretionary and
awards can be from zero to the maximum.
• Awards are subject to malus and clawback
provisions (described in the risk and conduct
section).
• Executive Directors are entitled to participate
in our UK all-employee share plans: Barclays
Sharesave and Barclays Sharepurchase.
In respect of 2023
performance year:
C.S. Venkatakrishnan’s
annual bonus was
£1,425,000 (53.3% of
maximum)
Anna Cross’s annual
bonus was £879,000
(54.3% of maximum)
In respect of 2023
performance year:
C.S. Venkatakrishnan will
be granted a 2024-2026
LTIP award with a grant-
date face value of 140%
of Fixed Pay
Anna Cross will be
granted a 2024-2026
LTIP award with a grant-
date face value of 134%
of Fixed Pay
Performance measures
and weightings for the
2024-2026 LTIP cycle
have changed slightly
from those for the
2023-2025 LTIP cycle –
more information is
provided on page
219-220.
In respect of the
2021-2023 LTIP cycle,
neither C.S.
Venkatakrishnan nor
Anna Cross were
participants.
Eligible to participate
Annual bonus
To reward delivery of
short-term financial
targets and strategic
objectives, and the
individual performance
of the Executive
Directors in achieving
those.
Long Term Incentive Plan
(LTIP) award
To incentivise execution
of Barclays’ strategy
over a multi-year period,
encourage a long-term
view and align Executive
Directors’ interest with
those of shareholders.
All-employee share plans
To help increase the
number of employee
shareholders and
increase their
participation as
shareholders.
C.S. Venkatakrishnan up
to 93% of Fixed Pay
Anna Cross up to 90% of
Fixed Pay
Performance measures
and weightings
unchanged from 2023,
save for the following:
In the Financial measures,
a total operating
expenses measure
replaces cost: income
ratio.
In the Strategic non-
financial measures, the
weightings for Customers
& clients, Colleagues and
Climate & sustainability
categories are reduced to
5%. A new Risk &
operational excellence
category added with a
weighting of 10%.
C.S. Venkatakrishnan up
to 140% of Fixed Pay
Anna Cross up to 134% of
Fixed Pay
Performance weightings
and targets for the
2025-2027 LTIP will be
determined in early 2025.
Eligible to participate
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 203
Remuneration report (continued)
Element and purpose
Operation
2023 pay outcomes
Implementation for 2024
Shareholding requirement
To further enhance the
alignment of
shareholders’ and
Executive Directors’
interests in long-term
value creation.
Risk and conduct
adjustment – malus and
clawback
Malus and clawback
provisions discourage
excessive risk-taking and
inappropriate
behaviours.
• Executive Directors are required to hold
shares with a value equivalent to their
maximum annual variable pay opportunity
(233% of Fixed Pay for the Group Chief
Executive and 224% of Fixed Pay for the
Group Finance Director), to be built up within
five years from their date of appointment.
• Post-employment shareholding
requirements apply for two years after
stepping down as an Executive Director. The
amount to be held is as described above, or if
lower the actual number of shares held on
the date the Executive Director steps down.
• Annual bonus and LTIP awards are subject to
malus and clawback provisions.
• More detail is set out below.
Shareholding
requirements remain
unchanged
As at 31 December 2023:
C.S. Venkatakrishnan’s
shareholding was 227% of
his year-end Fixed Pay
(requirement to be met by
31 October 2026)
Anna Cross’s
shareholding was 118% of
her year-end Fixed Pay
(requirement to be met by
22 April 2027)
Annual bonus and LTIP
awards granted in respect
of 2023 performance will
be subject to malus and
clawback provisions
Annual bonus and LTIP
awards granted in respect
of 2024 performance will
be subject to malus and
clawback provisions
Risk and conduct (including malus and clawback)
Risk and conduct are taken seriously at Barclays. The Committee
ensures there are in-year adjustments, malus or clawback applied
to individual remuneration where appropriate.
All Executive Director annual bonus and LTIP awards are subject
to malus and clawback provisions. The purpose of these
provisions is to discourage excessive risk-taking and inappropriate
behaviours.
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:
– The individual in question deliberately misleading Barclays, the
market and/or shareholders in relation to the financial
performance of the Barclays Group
– The individual 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 regulations –
currently seven years from grant (which can be extended to up to
10 years in circumstances where a relevant investigation is
ongoing at the end of the initial seven-year period), in
circumstance where:
– The individual in question’s actions or omissions have
amounted to misbehaviour or material error, and/or
– Barclays or the relevant business unit has suffered a material
failure of risk management.
In addition to individual adjustments, the Committee considers
and makes collective adjustments to the incentive pool for risk
and conduct events. The Committee also adjusts the incentive
pool to take account of an assessment of future risks, including
conduct, non-financial factors that can support the delivery of a
strong risk management, control and conduct culture, and other
factors including reputation and impact on customers, markets
and other stakeholders. The Committee is supported in its
consideration of this by the Board Risk Committee. For 2023, the
total impact of risk and conduct-related collective adjustments is
a reduction of c.£185m (2022: c.£500m).
Discretion
In addition to the various operational discretions the Committee
can exercise in the performance of its duties (including those
discretions set out in the Company’s share plan rules), the
Committee reserves the right to make either minor or
administrative amendments to the Directors' Remuneration
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, and where it
is not possible, practicable or proportionate to seek or await
shareholder approval at the next AGM.
In relation to the Executive Directors' annual bonus, the
Committee has discretion to determine the appropriate
performance conditions applying each year – provided that
financial factors will normally guide at least 60% of the bonus
opportunity.
Although the Committee takes a structured approach to
considering the level of annual bonus outcome for the Executive
Directors each year, any bonus award is discretionary and the
Committee has discretion to award any amount from zero to the
maximum value.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 204
Remuneration report (continued)
In relation to the LTIP, the Committee again has discretion to
determine the appropriate performance conditions – provided
that financial measures will normally be at least 70% of the total
opportunity. In exceptional circumstances the Committee has
discretion to amend performance targets, measures or the
number of shares under awards, if circumstances occur that
cause the Committee to consider such adjustment to be
reasonable. The Committee also has the discretion to reduce the
vesting of any award, including to nil, if it deems the outcome
inconsistent with the performance delivered.
For 2023, the Committee did not exercise discretion to adjust the
variable pay outcomes as outlined on page 208.
Performance measures and targets
Measures
The performance measures and targets are set annually by the
Committee to align with our strategic priorities, ensuring the
measures support delivery of the Group’s strategy.
The Committee selects financial performance measures that are
fundamental to delivery against the Group’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,
and to provide a balanced view of our performance during the
period, which are robustly monitored and reported on to the
management team and the Board.
Targets
Targets for both the annual bonus and LTIP are calibrated to be
stretching but achievable, and are aligned with creating value for
shareholders and other stakeholders.
In respect of the annual bonus, the financial measures and
weightings are disclosed at the start of the relevant performance
year. The Committee considers the specific 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.
On that basis, the targets and performance against those targets
are disclosed at the end of the relevant performance year, in that
year’s Annual Report on Directors’ remuneration, provided that
commercial sensitivity is no longer an issue at that time.
In respect of the LTIP, the financial measures, weightings and
targets are disclosed in the Remuneration report published
immediately before the awards are granted – which is shortly after
at the start of the relevant performance period.
The Committee selects non-financial performance measures
that support the delivery of our strategy and reflect our priorities
over the next year or over a multi-year period.
ESG and remuneration
The Committee reviews the Executive Directors' incentive
measures each year to ensure they continue to support the
delivery of our strategic priorities, including ESG priorities.
The Executive Directors' annual bonus and LTIP have included
Climate & sustainability measures for over a decade. The
Committee aligns these measures each year with the Group's
evolving climate and sustainability ambitions, metrics and targets.
Most of our climate-related measures and targets are longer
term, including those relating to financing the transition and
financed emissions, and progress towards these targets is
expected to be variable and non-linear. This is reflected in a higher
weighting of Climate & sustainability measures in the LTIP,
compared to the annual bonus, as follows:
– For the 2024-2026 LTIP, 15% of the total opportunity will be
determined based on performance measures relating to
Climate & sustainability, measuring progress against each of
the three pillars of our climate strategy – including 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 Climate
Agreement.
– For the 2024 annual bonus, 5% of the total opportunity will be
determined based on Climate & sustainability measures.
A further 5% of each of the 2024 bonus and the 2024-2026 LTIP
will be determined on Colleagues measures, including diversity,
inclusion and engagement. Risk & operational excellence
measures are weighted at 10% in the 2024 bonus and 5% in the
2024-2026 LTIP, as the management of risk underpins delivery
against our strategy and is a key part of the governance of the
Group. Outcomes will be determined based on an assessment of
performance against a range of measures of our risk culture,
operational precision and controls.
In recent years, the weighting of the Climate & sustainability
category in both the LTIP and annual bonus was equal, at 10%.
As described earlier, for this year's forward-looking incentives the
Committee increased the weighting to 15% in the 2024-2026
LTIP and decreased it to 5% in the 2024 annual bonus. Given the
higher maximum opportunity under the LTIP compared to the
annual bonus, these changes equate to an increase in the total
value of remuneration that will be determined based on climate-
related measures.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 205
Remuneration report (continued)
Illustrative scenarios for Executive Directors'
remuneration
The charts below show the potential value of the current
Executive Directors’ 2024 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 applied to
LTIP’ (the Maximum scenario, assuming share price appreciation
of 50% on the LTIP).
Group Chief Executive
The value of benefits in these charts is based on an estimated
annual value for regular contractual benefits provision during
2024. Additional ad hoc benefits may arise but will always be
provided in line with the Directors' Remuneration Policy.
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, other
than for the share price appreciation applied to the LTIP value in
the 'Maximum with illustrative share price increase' scenario.
£m
Minimum
93%
Mid-point
45%
Maximum
29%
Total: 3.15
7%
3%
2%
Maximum with illustrative share price increase applied to LTIP
24%
2%
21%
Total: 6.59
31%
28%
23%
Total: 10.02
41%
34%
Total: 12.08
17%
0
2
4
6
8
10
12
Group Finance Director
£m
Minimum
Total: 1.96
94%
Mid-point
46%
Maximum
30%
6%
Total: 4.02
3%
20%
31%
2%
27%
Total: 6.09
41%
Maximum with illustrative share price increase applied to LTIP
Total: 7.33
25%
1%
23%
34%
17%
0
2
4
6
8
10
12
n Fixed Pay
n Pension and benefits
n Annual bonus
Note:
1
n LTIP
n Potential outcome of a 50% share price
increase on the LTIP
1 Pension and benefits include the value of cash in lieu of pension and the anticipated value of taxable benefits.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 206
Remuneration report (continued)
Alignment with Provision 40 of the UK Corporate Governance Code
Code requirements
Clarity – remuneration arrangements should
be transparent and promote effective
engagement with shareholders and the
workforce
How the Committee has addressed the requirement
• 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
Simplicity – remuneration structures should
avoid complexity and their rationale and
operation should be easy to understand
• Clear disclosure of rationale for and operation of each element of the Directors' Remuneration
Policy
• 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
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
• 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
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
• Maximum incentive outcomes set out in the Directors' Remuneration Policy
• Scenario charts illustrate potential payouts under each element of the Policy
• Key areas of Committee discretion clearly outlined in the Policy
• Annual bonus and LTIP measures reviewed each year to maintain alignment to strategic
priorities and 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 outcomes do not reward poor performance
Alignment to culture – incentive schemes
should drive behaviours consistent with
company Purpose, Values and strategy
• 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 & clients, Colleagues, and to the Group's
Climate & sustainability ambitions
• Commitment to pay fairness across the workforce
• Executive Director remuneration outcomes considered in the context of outcomes across the
wider workforce
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 207
Remuneration report (continued)
Annual report on Directors’ remuneration
This section explains how our Directors’ Remuneration Policy was implemented for 2023
Executive Directors
Single total figure for 2023 remuneration (audited)
The following table shows a single total figure for 2023 remuneration in respect of qualifying service for each Executive Director,
together with comparative figures for 2022.
C.S. Venkatakrishnan
2
Anna Cross
Notes:
1) Fixed Pay
£000
2) Pension
£000
3) Taxable
benefits
£000
Total
fixed pay
£000
4) Annual
bonus
£000
5) LTIP
£0001
Total
variable pay
£000
2023
2022
2023
2022
2,860
2,767
1,788
1,185
143
138
89
59
213
343
17
10
3,216
3,248
1,894
1,254
1,425
1,949
879
803
—
—
—
—
1,425
1,949
879
803
Total
£000
4,641
5,197
2,773
2,057
1 No LTIP values are shown as neither C.S. Venkatakrishnan nor Anna Cross were participants in the 2020-2022 LTIP or the 2021-2023 LTIP cycle.
2 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.
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).
More information on the Committee's considerations in respect of the Executive Directors' Fixed Pay is set out on page 217.
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 2023 was £142,958 for C.S. Venkatakrishnan and £89,375 for Anna Cross. 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 of providing him with relocation support during
2023. This is in line with the Directors' Remuneration Policy and includes immigration assistance, home search support in London, and
temporary accommodation in London (which ended on 31 October 2023). Those costs came to c.£148,000, including the cost to
Barclays of paying the income tax and social security resulting from the provision of that relocation support. As referenced in the 2021
Remuneration report, temporary accommodation in London was provided to him for a period of up to two years, following his
appointment in November 2021 as Group Chief Executive.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 208
Remuneration report (continued)
4) 2023 annual bonus
The bonus amounts included in the single total remuneration figures are 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 2023 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 Group priorities for
2023. Performance against each Executive Director's Personal objectives (15% weighting) for 2023 was assessed on an individual basis.
The outcome for each of the Financial measures was determined on a straight-line basis, between the outcome for threshold
performance – which was nil for the profit before tax measure or 20% for the cost: income ratio measure – and 100% for achievement
of maximum performance. A summary of the assessment is provided in the following table.
2023 annual bonus outcomes
Weighting
50%
Threshold
£5.8bn
Maximum
£9.8bn
2023 actual
C.S. Venkatakrishnan
Anna Cross
1
£7.484bn
21.1%
21.1%
Outcome
Measures
Profit before tax (excluding
material items), with CET1 ratio
underpin
Cost: income ratio (excluding
material items)
Strategic non-financial
10%
25%
63.5%
59.0%
1
63.1%
Performance against strategic measures, organised around
three main categories: Customers & clients, Colleagues and
Climate & sustainability
Personal
15%
Individual performance against the respective Executive
Director's personal objectives, assessed by the Committee
Total
Final 2023 annual bonus outcome approved by the Committee
Note:
1 Material items excluded from the above measures consist of Q423 structural cost actions of £927m.
2.7%
16.5%
13.0%
53.3%
53.3%
2.7%
16.5%
14.0%
54.3%
54.3%
Based on the assessment outlined above, the Committee determined an overall formulaic bonus outcome for C.S. Venkatakrishnan
and Anna Cross that equates to £1,425,000, and £879,000 respectively. The Committee reflected on the appropriateness of these
outcomes for the 2023 annual 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, and more holistically the performance and contribution of each Executive Director during 2023. The bonus
outcomes were considered in the context of those 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 each year.
The Committee believes that the overall 2023 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 Directors' Remuneration Policy, 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 dividends or 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 table below details how the 2023 annual bonus award for each Executive Director will be delivered, along with the face value of the
2024-2026 LTIP award that will be granted alongside the deferred elements of the bonus. This shows the percentage that is in Barclays
shares for the annual bonus, and also for variable pay overall (the annual bonus and LTIP combined). Of the annual bonus award for C.S.
Venkatakrishnan, 86% will be delivered in Barclays shares, and 77% for Anna Cross. Including the 2024-2026 LTIP awards, a total of 96%
of C.S. Venkatakrishnan’s 2023 variable pay will be in Barclays shares, and 94% for Anna Cross.
Upfront cash bonus
£000
Upfront bonus
shares
£000
Deferred bonus
shares
£000
Total annual bonus
£000
Percentage of bonus
in shares
2024-2026
LTIP award
£000
Percentage of 2023
variable pay
in shares
C.S. Venkatakrishnan
Anna Cross
200
200
200
200
1,025
479
1,425
879
86 %
77 %
4,025
2,412
96 %
94 %
The deferred bonus shares in respect of the 2023 annual bonus awards will vest in two equal tranches on the first and second
anniversaries of grant. All shares (both the upfront bonus shares and the deferred bonus shares) are also subject to a one-year holding
period from the point of vesting. All of the 2023 variable pay is subject to clawback provisions, which allow the Committee to recover
amounts that have been paid in certain circumstances, and the deferred elements are subject to malus provisions, which enable the
Committee to delay or reduce the vesting of unvested amounts (including reducing to nil) in certain circumstances.
Further detail follows on the assessment of the Strategic non-financial measures, and performance against Personal objectives where
applicable.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 209
Remuneration report (continued)
Assessment of the Strategic non-financial measures for the 2023 annual bonus
The weighting of the Strategic non-financial element was 25%, within which the Customers & clients and Colleagues sections are each
weighted at 7.5% and the Climate & 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 Climate & sustainability
For Customers & clients and
(max weighting 10%)
Colleagues (max weighting 7.5%)
Overall outcome
0% to 1%
1.5% to 3.0%
3.5% to 6.0%
6.5% to 7.5%
0% to 2%
2.5% to 4.5%
5.0% to 7.5%
8% to 10%
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 16.5% 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 Group. Most outcomes are either measured by an external provider, such as
NPS or Investment Banking fee ranking and share, or are subject to independent ‘limited assurance’ by KPMG (indicated by the 'Δ'
1
symbol)
, including Climate & sustainability measures.
Customers & clients
Measure
Criteria
Performance
Commentary
Global Markets
revenue ranking
and share
Maintain client rankings and
market share
6th (maintained since 2022)
• Global Markets revenue ranking maintained with a slight
Revenue share decreased
2
to 6.5% (from 7.3% in 2022
decrease in revenue share amidst a challenging
intermediation environment and compressed financing
spreads
Outcome
Slightly behind
track
• Share of wallet with our Global Markets top 100 clients
increased with income up 5%, despite lower client activity in
markets across the industry
6th (maintained since 2022)
• Maintained sixth ranking despite a year of suppressed
On track
Investment
Banking fee
ranking and
share
Net Promoter
Scores (NPS)
Improve
Fee share maintained
3
at 3.1%
Barclays UK: +17
(2022: +11)
Barclaycard UK: +13
(2022: +12)
US Consumer Bank Digital
5
: 61.3 (2022: 59.8)
tNPS
Complaints
Reduce Barclays UK
customer complaints and
improve resolution time
BUK Total Complaints
(% movement year on year):
+18%
Increase digital engagement Percentage of customer
journeys digitally enabled:
80% (2022: 76%)
Mobile active customers:
11.0m (2022: 10.5m)
CC&P US customer digital
6
(2022:
engagement: 76.0%
74.1%)
Digital
Notes:
dealmaking
•
In the UK, topped the investment banking league table –
4
in fees earned – for the first time in six years
• NPS score for Barclays UK increased to +17, up six points.
Personal customers with Blue or Premier accounts feel
more positive about their experience, but a decline in
Business Banking NPS means that improving these
relationships is a priority
• Barclaycard NPS continued to trend upward
• US Consumer Bank Digital tNPS increased with several
enhancements made to the customer digital experience,
including functionality for replacing lost and stolen cards
and the ease of user login
On track
• Complaint volumes increased during 2023, driven by
Behind track
specific issues encountered by customers and rising levels
of fraud and scams experienced across industry. A rigorous
plan is in place to address this and improve our proposition
and execution to best-in-class service
• 64% of complaints resolved within three days (2022: 61%)
• The number of active digital users has surpassed all other
7
UK banks
On track
• Further improvements made to navigation and
functionality within the Barclays app
• The US Consumer business continued to invest in the
digital servicing model, including the introduction of new
and enhanced digital engagement features and technology
advancements. Digital active user rate increased
versus 2022
Total Customers & clients: 3.5%
1 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410 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/
2 Global Markets rank and revenue share based on Barclays’ calculations using peer-reported financials. Top 10 peer group includes Barclays, Bank of America, Citigroup, Goldman Sachs,
JPMorgan Chase & Co, Morgan Stanley, BNP Paribas, Credit Suisse, Deutsche Bank and UBS. Where any of the peer group has not published results by the time we report, we use the
consensus estimate for their quarterly performance.
3 Data from Dealogic for the period covering 1 January to 31 December 2023.
4 Data from Dealogic, UK Investment Bank revenue by bank, full year 2023.
5 USCB digital tNPS is a newly tracked metric measuring USCB customer experience at the digital journey level.
6 Excluding Gap customers.
7 The number one for digital users score is from Curinos – eBenchmarkers Analyser and internal analysis, and is from its April 2023 report .
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 210
Remuneration report (continued)
Colleagues
Measure
Criteria
Performance
Commentary
Diversity
33% females at Managing
Director and Director level
by 2025
Δ
30%
in 2023, increasing
from 29% in 2022
• Continued to make progress towards 2025 Gender and
Underrepresented Race and Ethnicity Ambitions
Outcome
Slightly behind
track
• Achieved our Ambition to increase overall
underrepresented minority representation by 25% in the
UK and 20% in the US two years early. As at the end of
2023, underrepresented minorities represent 5.1% of the
total population in the UK and 21% of the total population in
the US. Ambition reset to achieve a further 12.5% increase
in the UK and 5% increase in the US by the end of 2025
• The number of Managing Directors from
underrepresented ethnicities largely unchanged versus
2022
Increase underrepresented
1
minority
representation in
the UK to 5% and in the US
to 21% by 2025
UK: 5.1% (2020 baseline of
4.0%)
US: 21.0% (2020 baseline of
18.1%)
55 Managing Directors
(2022 baseline of 56)
50% increase in the number
of Managing Directors from
underrepresented
ethnicities in the UK and the
US combined by 2025
(measured from 2022
baseline)
Inclusion
Improve inclusion indicators
Engagement
Maintain engagement at
healthy levels
Culture
Maintain culture indicators
Inclusion Index
from Your View survey
83% (2022: 82%)
Employee Engagement
score from Your View
survey 86% (2022: 84%)
86% of employees in
Your View survey would
recommend Barclays to
people they know as a
great place to work
(2022: 85%)
94% of employees in
Your View survey believe
that they and their team
do a good job of role-
modelling the Values
every day (2022: 92%)
93% of employees in
Your View survey
believe that they and
their team do a good
job of role-modelling our
Mindset every day
(2022: 92%)
• 90% of employees in Your View survey told us they feel
On track
included in their team (2022: 88%)
• 85% of employees in Your View survey told us they believe
that senior leaders are truly committed to building a diverse
workforce (2022: 84%)
• Overall Wellbeing Index score from Your View survey of
Ahead of track
88% (2022: 86%)
2
• Highest Engagement and Wellbeing index scores to date
• 89% of employees in Your View survey told us that their line
managers are supporting their efforts to maintain their
wellbeing (2022: 90%)
• As part of the culture change programme, Consistently
Excellent, the higher operating standard was incorporated
into our existing Values and Mindset behaviours and as part
of an enhanced set of leadership behaviours
Slightly ahead
of track
•
In the first Your View survey where we included questions
related to Consistently Excellent, 89% of employees told
us that they felt their peers “have a good understanding of
what it means to be a consistently excellent organisation”
• 83% of employees in Your View survey said they feel “it is
safe to speak up at Barclays” (2022: 83%)
• 62% of colleagues said it was “simple and straightforward
to get things done at Barclays”, a concept in line with one of
our key Consistently Excellent focus areas – although this
result shows that there is still more to be done in making
Barclays more efficient (2022: 60%)
Total Colleagues: 5.5%
Notes:
Δ 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. Current limited assurance scope and opinions can be found within the ESG Resource Hub: home.barclays/
sustainability/esg-resource-hub/reporting-and-disclosures/
1 Underrepresented minorities refer to individuals who are Black and Multiracial in the UK, and African American/Black, multiracial, Hispanic/Latinx, Native Alaskan/Native American, or
Native Hawaiian/Pacific Islander in the US.
2 On a comparable basis since the current measurement framework has been used (since 2019 for Engagement and since the introduction of the Wellbeing index in 2021).
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 211
Remuneration report (continued)
Climate & sustainability
Measure
Criteria
Sustainable and
Transition
Financing
Facilitate $1trn of
Sustainable and Transition
Financing between 2023
and end of 2030
Performance
Δ
$67.8bn
Reducing our
financed
emissions
Reducing our
greenhouse gas
(GHG) emissions
Renewable
electricity
Deliver progress on our
commitment to align our
financing with goals and
timelines of the Paris
Climate Agreement:
30% reduction in power
portfolio emissions intensity
(Scope 1) by the end of
2025, from a 2020 baseline
15% reduction in energy
portfolio absolute emissions
(Scope 1, 2 and 3) by the end
2025, from a 2020 baseline
90% reduction in Scope 1
and 2 GHG emissions
(market-based, against a
2018 baseline by end of
2025)
100% renewable electricity
sourcing for our global real
estate portfolio by end of
2025
Power portfolio emissions
Δ
intensity: 241
KgCO2e/MWh,
26% down versus 2020
Energy portfolio absolute
Δ
emissions: 42.5
MtCO2e,
44% down versus 2020
Δ
reduction
93%
Δ
100%
LifeSkills –
people upskilled
Upskill 8.7 million people
from 2023 to end of 2027
with 2.6 million people
upskilled in 2023
Δ
upskilled in 2023
2.6m
LifeSkills –
people placed
into work
Unreasonable
Impact
(partnership
with the
Unreasonable
Group)
Place 250,000 people into
work (2023 to the end of
2027)
Support an additional 200
businesses solving social
and environmental
challenges (2023 to the end
of 2027)
Δ
people placed into
53,500
work in 2023
Δ
ventures supported
41
Outcome
On track
Commentary
• Progress made towards Barclays' target to facilitate $1trn
of Sustainable and Transition Financing between 2023 and
end of 2030
•
In 2023, developed a Group sustainable finance strategy
setting out the strategic focus for the Group in delivering
the $1trn target and our Transition Finance Framework,
which outlines the criteria for transactions to qualify as
transition financing
• Ahead of 2025 energy target and broadly on-track for
On track
2025 power target
• Eight high-emitting sectors now covered by 2030 financed
emissions reduction targets, including the three sectors for
which new targets are being announced : Aviation, UK
Commercial Real Estate and UK Agriculture
• Future progress against these targets will be non-linear and
may be volatile due to the many external dependencies and
variables beyond Barclays’ control that may determine the
pace of transition and impact our ability to achieve our
targets
• Continued to reduce emissions in 2023, having achieved
our 90% GHG market-based emissions reduction target
for Scope 1 and Scope 2 in 2022
Ahead of track
• Continued to source 100% renewable electricity for our
1
global real estate portfolio operations
Ahead of track
• Maintained focus on improving energy efficiency and
replacing fossil-fuel-powered infrastructure with lower-
emission alternatives
• From 2023, new investment through LifeSkills is focused
on targeted support for people in the most underserved
communities and underrepresented groups
On track
•
In 2023, the number of people upskilled was in line with our
per annum target
• Exceeded our per annum target of 50,000 people placed
into work in 2023
Slightly ahead
of track
• After achieving our goal to support 250 ventures by the
On track
end of 2022, this strategic global partnership with
Unreasonable Group was renewed in 2023 to enable
Barclays to support an additional 200 entrepreneurs over
five years. More than 300 ventures have been
supported so far
•
In 2023, the number of ventures supported met our per
annum target
Overall strategic non-financial outcome (out of a maximum possible 25%)
Total Climate & sustainability: 7.5%
16.5%
Notes:
Δ 2023 data subject to independent limited assurance under ISAE (UK) 3000 and ISAE 3410. Current limited assurance scope and opinions can be found within the ESG Resource Hub: home.barclays/
sustainability/esg-resource-hub/reporting-and-disclosures/
1 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.
+
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 212
Remuneration report (continued)
Assessment of performance against the Personal objectives set for the 2023 annual bonus (15% weighting)
Individual performance against each of the Executive Directors’ personal objectives for 2023 (15% weighting overall) was assessed by
the Committee. Performance for C.S. Venkatakrishnan and Anna Cross was assessed against both the individual objectives set for their
respective roles and their shared personal objectives.
The table below summarises performance against the shared personal objectives.
Shared personal objectives for C.S. Venkatakrishnan and Anna Cross
Objective
Outcomes
Deliver improving shareholder
returns, with a focus on RoTE
• Excluding Q423 structural cost actions, Group RoTE for 2023 remained aligned with our medium-term target
of greater than 10%, for the third consecutive year
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
• Group income of £25.4bn, up 3% year-on-year excluding the impact in 2022 of the Over-issuance of Securities,
against a challenging macroeconomic backdrop and significant market-wide declines for some business areas
• Total shareholder distributions in respect of 2023 equivalent to c.19.4p per share
• During 2023 a three-year plan was developed, through to 2026, designed to deliver further value for
shareholders and improve operational and financial performance; this is now being implemented
• Strong capital position maintained, with Group CET1 of 13.8%, within our target range of 13% to 14%
• Similarly strong capital ratios prevail in all main operating entities: at the end of 2023, Barclays Bank PLC’s CET1
ratio was 12.1% and Barclays Bank UK PLC’s CET1 ratio was 14.8%, well in excess of regulatory minimums
1
• Number of active digital users is higher than for any other UK bank
• Maintained focus on ensuring that digital banking with Barclays UK is smooth, easy and rewarding by making
further improvements to the navigation and functionality within the app and enabling 80% of customer
transactions across all Barclays UK channels to be completed digitally
•
Improvements made to our digital offering for USCB customers helped boost the Android app star rating to 4.7
2
out of 5 in 2023, up from 4 in 2022, and increased our USCB Digital tNPS
from 59.8 in 2022 to a full year
average of 61.3 in 2023
• Share of wallet with our top 100 Global Markets clients grew, with income from these clients up 5% year on year,
despite lower client activity in markets across the industry
• Despite a decline in fee income due to the reduced fee pool across the industry, Investment Banking continued
to deliver for clients - including leadership in high profile IPOs, e.g. ARM, the largest IPO to price in 2023.
3
Investment Banking maintained its sixth rank globally and improved its ranking in the UK to #1
• Corporate Banking revenues grew off the back of elevated deposits income which continued to benefit from a
strong net interest margin, and increased deposit balances with clients
• Facilitated $67.8bn of Sustainable and Transition Financing in 2023, against our target to facilitate $1trn by the
end of 2030, and published a Transition Finance Framework for Barclays
•
In support of our Sustainable and Transition Financing target, formed a new Energy Transition Group,
comprising our Energy, Power and Sustainable Impact Banking teams
• Advised and helped companies raise capital for emerging climate technology, including Nextracker’s IPO and
first Follow-on Offering
• Continued to develop green and sustainable banking products for business clients, including the new Green
Barclayloan and, in partnership with Propel, a reduced fixed rate to business clients who take out finance on
environmentally friendly purchases
• Extended the Greener Home Reward to 2024, enabling eligible residential mortgage customers to make energy
efficiency-related home improvements
• Named Best Bank for Environment, Social and Governance (ESG) in the UK for 2023 by Euromoney
• Continued to use and enhance data and insights to ensure our strategy, products and services for retail
customers deliver the intended outcomes, with a focus on meeting the needs of people with vulnerable
characteristics
• Barclaycard Payments introduced new digital features – including the launch of Smartpay Anywhere and
Smartpay Fuse, enabling small business customers to take online payments as part of a seamless experience
• Continued to invest in enhancing our Corporate Banking digital capabilities globally to provide our clients with
seamless access to our transaction banking product set
Notes:
1 The number one for digital users score is from Curinos – eBenchmarkers Analyser and internal analysis, and is from its April 2023 report.
2 A newly tracked metric for USCB measuring customer experience at digital journey level.
3 Data from Dealogic, global data based on full-year 2023, UK data based on full-year 2023 UK Investment Bank revenue by bank.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 213
Remuneration report (continued)
In addition to the shared personal objectives described above, the table below summarises performance against the personal
objectives for C.S. Venkatakrishnan.
Personal objectives for C.S. Venkatakrishnan
Objective
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
Effectively manage relationships
with key external stakeholders,
including societal stewardship
Drive leadership accountability to
further strengthen our risk
management and controls culture
• Continued to transform our physical support model in 2023, including by expanding Barclays Local (the largest
network of alternative branch formats in the UK, for Barclays UK customers who need in-person support) by
more than 159 new sites, to a total of 351 sites, as well as continuing to provide services through innovative new
Shared Banking Hubs
• Broadened the Group’s UK mortgages proposition through the acquisition of Kensington Mortgage Company,
the UK’s leading residential specialist mortgage lender, known for its support of specialist customer groups and
the intermediary market
• Engaged extensively with customers to get regular insights to inform our design principles and the
transformation of our customer journeys, including 1.4 million pieces of customer feedback obtained in Barclays
UK in 2023
• Some progress made in addressing the volume of Barclays UK customer complaints with more work to do to
improve the overall customer experience and address and remove the root causes of customer complaints
• Successfully completed the transfer of UK Wealth Management & Investments business to sit alongside the
Private Bank, with the transition of 300,000 clients and 1,000 colleagues
•
•
Improved support to financially vulnerable customers by enhancing tools, training, support and systems
Increased the number of colleagues who believe that they and their team do a good job of role modelling our
Mindset every day (2023: 93%; 2022: 92%; 2021: 89%)
• Continued the design, delivery and embedment of the Group-wide cultural change programme, Consistently
Excellent, which challenges colleagues to address five key areas – Precision, Service, Focus, Efficiency and
Diversity of Thought – and ensured delivery to this standard is incorporated into our key processes for
attracting, retaining and developing talent, planning for succession, and recognising and rewarding performance
• Colleague engagement increased across the Group to 86%, an increase of 2% points versus 2022, with the
annual Your View survey also showing positive results across most other measures
•
Inclusion Index score for 2023 was 83%, continuing its upward trajectory since it was launched in 2020, with 90%
of colleagues telling us that they feel included in their team
• Continued to make progress towards our 2025 Gender and Underrepresented Race and Ethnicity Ambitions,
increasing senior female representation globally and representation of underrepresented minority groups in the
UK and the US
• Venkat has built strong connections and proactively collaborated with UK and US regulators throughout the
year, working to support the broader UK economy
•
In 2023, our societal programmes reached more than 3.27 million people around the world, helping to unlock the
skills and employment opportunities people need to progress
• Continued the design, delivery and embedment of the Group-wide cultural change programme, Consistently
Excellent, which includes a focus on risk awareness and operational excellence
• Consistently Excellent workshops have been delivered to senior leaders during 2023, and in 2024 all other
colleagues will be invited to attend, to ensure that there is a common understanding of what it means to deliver
to a consistently excellent standard
• Progress in embedding the new operating standard with colleagues has been reflected in the results from the
Autumn 2023 Your View survey, where 89% of colleagues felt their peers “have a good understanding of what it
means to be a consistently excellent organisation”
Recognising C.S. Venkatakrishnan's very strong performance against both his individual and shared personal objectives, and his
leadership of the organisation through 2023 – including the embedment of a new operating standard, Consistently Excellent – the
Committee assessed that an outcome of 13% out of a maximum of 15% was appropriate.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 214
Remuneration report (continued)
The table below summarises performance against the personal objectives for Anna Cross.
Personal objectives for Anna Cross
Objective
Outcomes
Support the business to grow
sustainably, in line with the
Group’s strategy, with specific
focus on climate, capital and costs
• Maintained cost discipline. Excluding the Q423 structural cost actions in 2023 and the impact in 2022 of the
Over-issuance of Securities, the 2023 cost: income ratio was 63%, as the Group delivered positive cost: income
jaws of 1%
• Strong capital position maintained, with Group CET1 of 13.8% at the end of 2023, balanced with delivering total
cash returns to shareholders and investment in the business
•
Instrumental in defining the future strategic priorities in the lead up to the Investor Update
• Leveraged technology to enhance the delivery of financial management reporting, including Group Balance
Sheet reporting and Internal Reporting, increasing efficiency and automation
• The Basel IV programme is on track to be completed in required timeframes
• Continued improvements in Liquidity Reporting Infrastructure, including migration of additional reporting onto
core architecture, resulting in improved controls
• Progress made in the strategic transformation of Asset and Liability Management and Hedge Accounting
infrastructure to improve precision in our operations, risk management and controls
• Control Environment and Management Control Approach overall rated satisfactory in 2023
• High level of colleague engagement across Finance, at 85% (2022: 85%)
• Continued focus on embedding the Barclays Mindset with high scores on all three indices: Empower at 87%
(2022:89%); Challenge at 84% (2022:85%); and Drive at 88% (2022:87%)
• Senior female representation increased to 34% in Group Finance with half the roles on the Finance
Management Team occupied by females as at the end of 2023
• Established effective and open relationships with regulators and the investment community
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
In addition to the personal objectives set for Anna Cross at the start of 2023, at times during the year she carried out some responsibilities (both
internally and externally) that are usually performed by the Group Chief Executive, due to his illness.
The Committee recognised the high level of achievement during 2023 against these objectives, and also the additional responsibility
taken on at times due to the Group Chief Executive's illness, as outlined in the table above. Based on Anna Cross's strong performance
against both her individual and shared personal objectives, and her strong leadership through 2023, the Committee assessed that an
outcome of 14% out of a maximum of 15% was appropriate.
5) Vesting of the 2021-2023 LTIP cycle for the current Executive Directors
No LTIP awards were granted to C.S. Venkatakrishnan and Anna Cross in 2021 as they were not Executive Directors at that time.
Vesting of the 2021-2023 LTIP cycle for other participants
Former Group Finance Director Tushar Morzaria is the only remaining participant in the 2021-2023 LTIP cycle, having been granted an
award in March 2021 while he still served as an Executive Director.
The Committee assessed performance against the performance conditions for that LTIP award, based on performance over the
period from 1 January 2021 to 31 December 2023, with straight-line vesting applied between the threshold and maximum targets
shown for the financial measures. The Committee determined that 53.2% of the award will vest, as detailed in the table that follows.
Before finalising the vesting, the Committee considered whether this outcome was appropriate in the context of the performance
achieved, and concluded that it was – and that no further discretionary adjustment was warranted.
The vesting portion of the award will be released in five equal annual tranches, starting from March 2024. After release, each tranche of
shares is subject to an additional 12-month holding period.
The value that Tushar Morzaria is expected to receive from the vesting of this award is £1,174,634, estimated (as this 2023 Annual
Report will be finalised prior to the vesting date) using the Q4 2023 average share price of £1.4374 (which includes 18% share price
depreciation since the date of grant). The performance achieved against the performance targets is shown in the table that follows.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 215
Remuneration report (continued)
2021-2023 LTIP outcomes
Performance measure
Weighting
Threshold
Maximum vesting
Actual
% of award
vesting
2023 return on tangible
equity (RoTE) (excluding
material items)
1, 2
25%
0% of award vests for RoTE of 6.0%,
rising on a straight-line basis
25% of award vests for RoTE of 12.0%
10.8 %
20.0 %
Average cost: income ratio
3
(excluding material items)
10%
Maintain CET 1 ratio within
the target range
10%
Relative total shareholder
5
return
Risk scorecard
Climate
25%
10%
10%
10% of award vests for average cost:
income ratio of 62.0%
64.1 %
3.0 %
CET1 ratio between 180bps and 280bps
above MDA hurdle throughout the period,
or CET1 ratio more than 280bps above
MDA hurdle but making progress towards
the target range during the period
Within
range
10.0 %
0% of award vests for average cost:
income ratio of 65.0%, rising on a
straight-line basis
4
If CET1 is below MDA hurdle
+180bps
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 +280bps
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
25% of award vests for performance at or
above the upper quartile
6.25% of award vests for performance
6
at median of the peer group
, rising on
a straight-line basis
The Risk scorecard captures a range of risks and reflects the considerations within the incentive
risk alignment framework shared with regulators. The current framework measures
performance against three broad categories – Capital & liquidity, Control environment and
Conduct – using a combination of quantitative and qualitative metrics
Below
median
Performance is measured on progress towards our ambition to be a net zero bank by 2050
including:
• our commitment to align our financing with the goals of the Paris Climate Agreement
• our commitment to facilitate £100bn of green financing by 2030
The Committee determined the percentage of the award that may vest between 0% and 10%
Strategic non-financial
10%
Performance is measured against the Strategic non-financial measures. The Committee
determined the percentage of award that may vest between 0% and 10%. The measures are
organised around three categories: Customers & clients, Colleagues, and Society (Citizenship).
Each of the three main categories has equal weighting
Total
Final 2021-2023 LTIP vesting outcome approved by the Committee
Notes:
1 Using average tangible shareholders’ equity based on a CET1 ratio of 13.5%.
2 Material items consist of Q423 post-tax structural cost actions (2023: £739m).
3 Material items consist of certain structural cost actions (2023: £927m taken in Q423; 2022: £151m, 2021: £648m). The litigation and conduct impacts from the Over-issuance of
Securities and the devices settlements are not excluded.
4 Currently 12%.
5 Performance assessed over the period from 1 January 2021 to 31 December 2023. Start and end total shareholder return data is the Q4 average for 2020 and 2023 respectively and is
measured in GBP for each company.
6 The peer group is comprised of banks in 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 2021-2023 LTIP award was Banco Santander, Bank of America, BBVA, BNP Paribas, Citigroup, Credit Agricole, Credit Suisse, Deutsche Bank, HSBC, ING Group, Lloyds
Banking Group, Morgan Stanley, NatWest Group, Societe Generale, Standard Chartered, UBS, and UniCredit.
0.0 %
6.0 %
7.5 %
6.7 %
53.2 %
53.2%
Average return on tangible
equity (RoTE) (excluding
1
material items)
Average cost: income ratio
(excluding material items)
Maintain CET 1 ratio within the
2
target range
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 216
Remuneration report (continued)
LTIP awards granted during 2023
Awards were granted to C.S. Venkatakrishnan and Anna Cross on 8 March 2023 under the 2023-2025 LTIP, based on a value per share
of £1.32067, 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 Directors' Remuneration Policy. This is the value used to calculate the number of shares below.
Performance period
Face value at grant
Number of shares
% of Fixed Pay
C.S. Venkatakrishnan
Anna Cross
140 %
134 %
2,946,989
1,750,247
£3,892,000
£2,311,499
2023-2025
2023-2025
The performance measures for the 2023-2025 LTIP awards are as follows:
Performance measure
Weighting
Threshold
25%
0% of award vests for RoTE of 8.0%, rising on a straight-line basis
Maximum vesting
25% of award vests for RoTE of 12.5% or
higher
10%
10%
0% of award vests for average cost: income ratio of 62.5%, rising on a
straight-line basis
10% of award vests for average cost:
income ratio of 58.0% or lower
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
10% vests if either:
•
CET1 is within the range during the
period
Relative total shareholder
3
return
Strategic non-financial
25%
20%
Risk scorecard
10%
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
4
6.25% vests for performance at the median of the peer group
, rising
on a straight-line basis
or
• CET1 is above but making progress
towards the target range
25% of award vests for performance at or
4
upper quartile
above the peer group
The evaluation will focus on key performance measures, 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:
Climate & sustainability (weighted 10%) – progress to be measured against four key objectives: progress towards
our Sustainable and Transition Financing target; reduce our financed emissions; reduce our operational
emissions; and support our communities
Customers & clients (weighted 5%) – drive world-class outcomes for customers and clients; Improve Net
Promoter Scores; reduce Barclays UK 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
The Risk scorecard captures a range of risks and reflects the considerations within the incentive risk alignment
framework shared with regulators. The current framework measures performance against three broad
categories – Capital & 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:
1 Using average tangible shareholders’ equity based on a CET1 ratio at the mid-point of the Group target range 13% to 14%.
2 Currently 13.8%.
3 Performance assessed over the period from 1 January 2023 to 31 December 2025. Start and end total shareholder return data will be the Q4 average for 2022 and 2025 respectively
and will be measured in GBP for each company.
4 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 Group,
Lloyds Banking Group, Morgan Stanley, NatWest Group, Societe Generale, Standard Chartered, UBS, and UniCredit.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 217
Remuneration report (continued)
Executive Directors:
Statement of implementation of remuneration policy in 2024
An overview of how the Directors' Remuneration Policy will be implemented in 2024 is provided alongside the summary of the policy on
page 201.
2024 Fixed Pay and market competitiveness of the Executive Directors’ total compensation opportunity
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 therefore includes other
large universal banks from continental Europe, and the large US universal and investment banks. Around half of the peer group are US-
based, as these are among the most relevant comparators given their business mix and also form part of the peer group used internally
when comparing the Group's performance. Barclays actively competes with those US-based peers for talent, which is reflected in
several current and former Executive Directors having been recruited into Barclays from those firms. The Committee also recognises
that some of those peers are larger than Barclays, and that market pay levels for executive directors of US companies are often higher
than those of UK companies. To help maintain balance, the international banking peer group also includes the larger UK-listed banks
most comparable to Barclays.
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 Directors' Remuneration Policy approved by shareholders in 2023. In February 2024 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 the median of that offered for comparable roles in our
international banking peer group. The Committee considered this relative market positioning in the context of the robust performance
and significant personal contribution made by each of the Executive Directors, and determined that Fixed Pay would be increased by
2.5% for both C.S. Venkatakrishnan and Anna Cross – to £2,947,000 and £1,845,000 respectively, effective 1 March 2024. The
Committee noted that these are lower percentage increases than the average fixed pay increase for the wider workforce, and in
particular for UK employees within the scope of the 2024 UK pay deal with the union Unite – with a 5.55% budget for salary increases for
junior UK employees and a 3.75% budget for other union-recognised employees. To align the Executive Directors' interests with those
of shareholders, half of Fixed Pay for each Executive Director is delivered in shares, which are granted quarterly and released in
instalments over five years. The other half of their Fixed Pay is delivered in cash, paid monthly via payroll in the same way as salary for
other employees.
The following charts compare each Executive Director's maximum total compensation opportunity for 2024 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 between the market lower quartile and median for
C.S. Venkatakrishnan and slightly below lower 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 Barclays’ mix of businesses, as outlined above. However, this comparison is provided
alongside the international banking peer group to provide additional UK context.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 218
Remuneration report (continued)
Executive Director maximum total 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 2nd quartile
n Top quartile
Positioning of maximum total compensation opportunity at Barclays relative to market benchmarks
Notes
• Barclays and market benchmark data reflect 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 company's 2022 or
2022/23 financial years, incorporating assumptions where companies do not disclose a maximum total compensation opportunity.
• Barclays’ international banking peer group currently comprises the following international banks: Bank of America, BNP Paribas, Citigroup, Deutsche Bank, Goldman Sachs, HSBC
Holdings, JPMorgan Chase & Co, Lloyds Banking Group, Morgan Stanley, Standard Chartered, and UBS Group.
2024 annual bonus performance measures
Performance measures with appropriately stretching targets were selected to cover a range of financial and non-financial goals that
support the key strategic objectives of the Group.
For the 2024 annual bonus, slight amendments were made to the performance measures compared to the 2023 annual bonus:
– Within the Financial measures, total operating expenses replaces cost: income ratio, reflecting the continued importance of cost
discipline while providing a more focused and simpler measure of cost control within the year.
– Within the Strategic non-financial measures, the weightings for the Customers & clients and Colleagues categories are each reduced
from 7.5% to 5%, and the weighting for the Climate & sustainability category is reduced from 10% to 5%. Those reductions
accommodate the introduction of a Risk & operational excellence measure, weighted at 10% – reflecting the focus on risk, control
and operational excellence.
The other measures were largely unchanged. Performance measures and weightings are shown below:
Performance measure
Weighting
Metrics
Financial measures
Profit before tax (excluding
1
material items)
50%
Total operating expenses at
specific FX (excluding material
1
items)
10%
Strategic non-financial measures
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 measure is tied to a specific USD:GBP exchange rate to minimise the impact
of FX volatility.
The evaluation will focus on a range of key metrics, with a detailed retrospective narrative on progress against each during the year. Performance
against the measures will be assessed by the Committee to determine the percentage of the award that may vest between 0% and 25%. The
measures are organised around four main categories and measures will likely include the following:
Climate & sustainability
5%
Progress to be measured against four key objectives:
• Progress towards our Sustainable and Transition Financing target
• Reduce our financed emissions
• Reduce our operational emissions
• Support our communities
Customers & clients
5%
Drive world-class outcomes for customers and clients:
•
Improve Net Promoter Scores
• Reduce Barclays UK customer complaints and improve resolution time
• Maintain rankings and market share within Barclays Investment Bank
•
Increase digital engagement
Note
1 Material items are defined as those large atypical one-offs that are called out in the financial reporting. As in previous years, the exclusion is not automatic, and the Committee will
determine whether each item should be treated as material for these purposes at the time that outcomes are determined.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 219
Remuneration report (continued)
Performance measure
Weighting
Metrics
Colleagues
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 indicators
Risk & operational excellence
10%
Support a consistently excellent operating standard, risk management and controls
Performance measured against two categories – Operational excellence and Risk & conduct – using a
combination of quantitative and qualitative metrics
Personal objectives
Personal objectives
15%
Joint personal objectives:
• Deliver new financial targets including RoTE and capital distributions
• Maintain robust capital ratios across the Group and within the main operating entities
• Continue to simplify the organisation in terms of its operations and financial reporting
• Deliver better customer outcomes, income quality and investment priorities across our businesses
• Demonstrate progress towards reallocating capital to the highest returning businesses
• Continue to drive the sustainability strategy of the bank to achieve our ambition to be a net zero bank
by 2050
C.S. Venkatakrishnan:
• Continued focus on customer and client outcomes
• Drive delivery to a consistently excellent standard
• Continue to develop a high-performing culture in line with our Values and Mindset, with a focus on
employee engagement, succession planning, talent and diversity
• Effectively manage relationships with key external stakeholders
• Drive leadership accountability to further strengthen our risk management and controls culture
Anna Cross:
• Continue to simplify, standardise and automate Finance and Treasury processes to improve
effectiveness and efficiency
• Appropriate management of capital and resources using oversight committees to ensure we comply
with governance and regulatory requirements
• Effectively manage relationships with key external stakeholders, including regulators and investors
• Oversee the effective management of the risk and control across Group Finance, ensuring we take
full ownership of our end-to-end processes
• Retain focus on the colleague agenda across Group Finance - driving employee engagement,
continuing to improve diversity & inclusion, developing senior talent and succession
2024-2026 LTIP awards and performance measures
The Committee decided to grant awards under the 2024-2026 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 2024 increases
outlined earlier in this Remuneration report. Those maximum award multiples are in line with those for 2023. These share-based awards
ensure alignment with future performance over the three-year assessment period, as well as share price alignment over the long
release period (up to eight years from initial date of grant).
For the 2024-2026 LTIP, changes were made to the financial and non-financial performance measures, compared to the 2023-2025
LTIP cycle granted early in 2023. Within the Financial measures, the weighting of RoTE was increased slightly, from 25% to 30%, given
that improving RoTE is a key part of the Group's priorities and revised targets, as set out in the 'Our strategy' section from page 11. This
was accommodated via a small reduction to the weighting of relative total shareholder return from 25% to 20%. The RoTE measure is
based on RoTE performance achieved in 2026, aligned with the Group's revised targets. This is underpinned by a requirement based on
average RoTE across the performance period, to ensure an appropriate level of RoTE is maintained throughout.
Within the Strategic non-financial measures, the Climate & sustainability weighting is increased from 10% to 15%. To accommodate
this, the weighting of the risk-related measure – which this year also incorporates assessment of operational excellence – is reduced
from 10% to 5%. The other measures are largely unchanged.
The Group's Climate & sustainability targets are longer term, through to 2050, and progress towards these targets is expected to be
variable and non-linear – hence the increased weighting of Climate & sustainability in the 2024-2026 LTIP and reduced weighting in the
2024 annual bonus.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 220
Remuneration report (continued)
The 2024-2026 LTIP award will be subject to the following forward-looking performance measures.
Performance measure
Weighting
Threshold
Maximum vesting
Financial measures
2026 RoTE, with an underpin
based on average RoTE over
the performance period (RoTE
excluding material items in
1
each case)
Average cost: income ratio
1
(excluding material items)
Maintain CET1 ratio within the
2
target range
10%
10%
30%
6% of award vests for 2026 RoTE of 10.0%, rising
on a straight-line basis
30% of award vests for 2026 RoTE of 14.0% or
higher
This element is also subject to an underpinning requirement that average RoTE over the performance
period is at least 10%. If average RoTE over the period is less than 10%, the Committee will consider the
reasons why and determine what portion of this element of the LTIP award should vest, if any
0% of award vests for average cost: income ratio
of 62.5%, rising on a straight-line basis
10% of award vests for average cost: income ratio
of 58.0% or lower
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
10% vests if either:
• CET1 is within the range during the period or
• CET1 is above but making progress towards the
target range
Relative total shareholder
3
return
Strategic non-financial measures
20%
5% vests for performance at the median of the
4
, rising on a straight-line basis
peer group
20% of award vests for performance at or above
4
upper quartile
the peer group
The evaluation will focus on a range of key metrics, with a detailed retrospective narrative on progress against each during the year. Performance
against the measures will be assessed by the Committee to determine the percentage of the award that may vest between 0% and 30%. The
measures are organised around four main categories and measures will likely include the following:
Climate & sustainability
15%
Customers & clients
Colleagues
5%
5%
Progress to be measured against four key objectives:
Progress towards our Sustainable and Transition Financing target; reduce our financed emissions; reduce our
operational emissions; and support our communities
Drive world class outcomes for customers and clients:
Improve Net Promoter Scores; reduce Barclays UK customer complaints and improve resolution time;
maintain client rankings and market share within Barclays Investment Bank; and increase digital engagement
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 indicators
Risk & operational excellence
5%
Support a consistently excellent operating standard, risk management and controls:
Performance measured against two categories – Operational excellence and Risk & conduct – using a
combination of quantitative and qualitative metrics
Notes
1 Material items are defined as those large atypical one-offs that are called out in the financial reporting. The exclusion is not automatic, and the Committee will determine whether each
item should be treated as material for these purposes at the time that outcomes are determined.
2 Currently 13-14%.
3 Performance assessed over the period from 1 January 2024 to 31 December 2026. Start and end total shareholder return will be the Q4 average for 2023 and 2026 respectively and will
be measured in GBP for each company.
4 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 2024-2026 LTIP award is Banco Santander, Bank of America, BBVA, BNP Paribas, Citigroup, Credit Agricole, Deutsche Bank, HSBC, ING Group, Lloyds Banking
Group, Morgan Stanley, NatWest Group, Societe Generale, Standard Chartered, UBS, and Unicredit.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 221
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 10 years ended 31 December 2023. 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 2013
Year ended 31 December
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Antony
Jenkins
Antony
Jenkins
John
McFarlane
Jes
Staley
Jes
Staley1
Jes
Staley1
Jes
Staley1
Jes
Staley1
Jes
Staley1
Jes
Staley2
C.S.
Venkata-
krishnan3
C.S.
Venkata-
krishnan
C.S.
Venkata-
krishnan
5,467
3,399
305
277
4,233
3,873
3,362
5,929
4,220
2,121
866
5,197
4,641
57.0%
48.0%
n/a
n/a
60.0% 48.5% 48.3% 75.0% 38.6%
2
n/a
92.6%
75.4%
53.3%
30.0% 39.0%
4
n/a
4
n/a
4
n/a
4
n/a
4
n/a
48.5% 23.0%
2
n/a
4
n/a
4
n/a
4
n/a
Group Chief Executive
Single total remuneration
figure for Group Chief
Executive
Annual bonus award as
a % of maximum
Long-term incentive plan
vesting as a % of
maximum
Notes:
1 Jes Staley's remuneration figures for performance years 2016 to 2020 reflect the single total figures of remuneration as disclosed at the time. These have not been restated for the
decision made by the Committee during 2023 that Jes Staley's unvested bonus and LTIP awards should be forfeited, as outlined earlier in this Remuneration report.
2 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 1January 2021
and 31 October 2021. This figure does not include variable remuneration as the Committee determined that Jes Staley should be ineligible for 2021 bonus and should forfeit his
unvested LTIP awards.
3 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.
4 Not applicable as the individual was not a participant in a long-term incentive cycle that vested in the period.
1009285898262786382727310010199118133121142126149155167BarclaysFTSE 10020132014201520162017201820192020202120222023 Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 222
Remuneration report (continued)
Group Chief Executive pay ratios
The table below shows, for each year since 2019, the ratios of the Group Chief Executive’s total remuneration to the total remuneration
of UK employees. The change in these pay ratios for 2023 is explained below the table.
2023
2022
1
2
2
2021
2020
2019
Notes:
Option
25th percentile
Median
75th percentile
A
A
A
A
A
122 x
154 x
95 x
144 x
213 x
83 x
101 x
62 x
95 x
140 x
49 x
58 x
35 x
53 x
77 x
1 2021 pay ratios reflect the sum of the 2021 single total figures for remuneration for C.S. Venkatakrishnan and Jes Staley, for their respective periods of service as Group Chief Executive
in 2021. Jes Staley was ineligible for an annual bonus in respect of 2021 after he stepped down as Group Chief Executive.
2 The 2020 and 2019 ratios reflect the disclosed 2020 and 2019 single total figures for remuneration for Jes Staley and have not been restated for the decision made by the Committee in
2023 that Jes Staley's unvested bonus and LTIP awards should be forfeited, as outlined earlier in the report.
The Directors' Remuneration Report 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 2023 calendar year, and an estimate of pension and benefits for 2023 (based on what
new UK hires at each corporate grade currently receive). Other elements of pay such as overtime and shift allowances have been
excluded. 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 2023.
Total pay and fixed pay for the UK employees at the 25th percentile, median and 75th percentile are set out in the table below.
2023
2022
2021
2020
2019
25th percentile
Median
75th percentile
Total pay
Fixed pay
Total pay
Fixed pay
Total pay
Fixed pay
£38,194
£31,897
£55,801
£45,230
£95,341
£75,583
£33,711
£31,404
£29,380
£27,875
£28,300
£26,035
£24,706
£23,348
£51,493
£48,253
£44,631
£42,362
£41,608
£39,461
£37,460
£35,158
£89,911
£85,407
£79,324
£77,488
£71,071
£67,408
£64,272
£62,263
The Group Chief Executive pay ratios for 2023 are lower than those for 2022, primarily driven by the lower 2023 annual bonus for
C.S. Venkatakrishnan as outlined in the 2023 annual bonus outcomes section of this Remuneration report. Higher-than-normal
employee salary increases in early 2023 as part of that year’s UK pay deal, which were weighted towards more-junior employees, also
contributed to the lower pay ratios for 2023.
Barclays' remuneration philosophy is set out earlier in this report, and all remuneration decisions for the Executive Directors and the
wider workforce are made within this framework. The Group Chief Executive pay ratios are the outcomes of all of these decisions, which
are explained in more detail in the Committee Chair’s annual statement. To ensure Executive Director remuneration outcomes are
commensurate with those of the wider workforce, each year, when considering whether a discretionary adjustment should be made to
the Executive Directors’ incentive outcomes, the Committee specifically considers whether the bonus and LTIP outcomes for the
Executive Directors appropriately reflect the Group’s performance and the remuneration outcomes for the wider workforce.
It should be noted that the ratios for 2024 are expected to increase, all other things being equal, as it will be the first year in which
C.S. Venkatakrishnan is a participant in the LTIP cycle due to vest and be included in the single total figure for remuneration.
C.S. Venkatakrishnan’s single total remuneration figure for 2023 does not include any LTIP value as he was not an Executive Director at
3
.
the time of the relevant LTIP grant
Note:
3 The LTIP that would be included in the 2023 single total figure for remuneration is the 2021-2023 LTIP cycle, under which awards were granted in March 2021, with vesting based on
performance over the performance period 2021 to 2023.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 223
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 2019 and
2023, compared with the percentage change in each of those components of pay for UK-based employees of Barclays Group and for
employees of Barclays PLC, the Group’s parent company.
For the Executive Directors, year-on-year percentage change figures are calculated using the single total figures for remuneration,
annualised to a full-year equivalent where the individual served as an Executive Director for only part of the year.
Fixed pay
Benefits
Annual bonus
2022/2023
1
C.S. Venkatakrishnan
2
Anna Cross
Median UK employee
3
Median employee of Barclays PLC
1
C.S. Venkatakrishnan
2
Anna Cross
2021/2022
Tushar Morzaria
Median UK employee
3
Median employee of Barclays PLC
1
C.S. Venkatakrishnan
2020/2021
Tushar Morzaria
4
Jes Staley
Median UK employee
3
Median employee of Barclays PLC
Tushar Morzaria
4
Jes Staley
Median UK employee
3
Median employee of Barclays PLC
2019/2020
Notes:
3%
4%
9%
1%
2%
n/a
2%
5%
10%
n/a
2%
1%
5%
11%
0%
0%
7%
7%
(38%)
17%
11%
10%
853%
n/a
82%
10%
15%
n/a
(10%)
(12%)
6%
0%
9%
10%
20%
26%
(27%)
(25%)
(5%)
(43%)
(16%)
n/a
(20%)
3%
(2%)
n/a
152%
n/a
42%
38%
(49%)
(49%)
(16%)
(16%)
1 C.S. Venkatakrishnan was appointed as Group Chief Executive with effect from 1 November 2021. His remuneration figures for 2021 are annualised to a full-year equivalent for the
purpose of this comparison. The value of his benefits includes the cost to the Group of providing him with relocation support, including immigration assistance, home search support in
London, and payments (which ended on 31 October 2023) for temporary accommodation 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.
2 Anna Cross was appointed as Group Finance Director with effect from 23 April 2022. Her remuneration figures for 2022 are annualised to a full-year equivalent for the purpose of this
comparison. 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.
3 The Barclays PLC comparison is included because this is a statutory requirement, though Barclays PLC employs only a very small number of Head Office employees (51 in 2023).
4 Jes Staley's bonus figures reflect the disclosed figures and have not been restated for the decision made by the Committee in 2023 that Jes Staley should be ineligible for 2021 bonus
and should forfeit his unvested bonus awards, as outlined earlier in this Remuneration report.
For C.S. Venkatakrishnan and Anna Cross, the 2022 to 2023 Fixed Pay changes reflect the 3.4% and 4.3% increases agreed respectively
for each, effective 1 March 2023. The annual bonus outcome for C.S. Venkatakrishnan is down 27% and the outcome for Anna Cross is
down 25% (on a full-time equivalent basis) – the 2023 annual bonus outcomes section of this Remuneration report provides more
information. The reduction in the value of benefits for C.S. Venkatakrishnan in 2023 primarily reflects his temporary accommodation in
London ending during the year and some relocation-related benefits costs in 2022 that were not repeated in 2023.
For UK employees across the Group, the 9% increase in median fixed pay primarily reflects higher-than-normal salary increases in early
2023 as part of that year's UK pay deal. The 5% decrease in median bonus in respect of 2023 performance reflects the change in pay
structure during 2023 to simplify pay for junior employees in Barclays UK and support functions in the UK. For some employees, a
portion of previous bonus opportunity was transferred into fixed pay – leading to lower 2023 bonus outcomes for those employees.
The 11% increase in benefits is largely due to increased life assurance and private medical insurance costs.
Barclays PLC only employs a very small number of Head Office employees (51 in 2023), and there is frequent movement of employees
between Barclays PLC and other entities within the Barclays Group. For comparison purposes the Barclays PLC figures are therefore
based only on the 40 individuals who were employed by Barclays PLC in both years.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 224
Remuneration report (continued)
The table below shows the percentage change in fee each year between 2019 and 2023 for the Chairman and the Non-Executive
Directors serving on the Barclays PLC Board during 2023, including fees for Board Committee memberships and/or subsidiary board
positions. The changes in fees shown relate to changes in responsibilities of the Non-Executive Directors. The Non-Executive
Directors appointed to the Barclays PLC Board during 2023 are not shown, as they did not receive relevant fees prior to 2023 so no
percentage change figures can be calculated.
2022/2023 fees1,2
2021/2022 fees1
2020/2021 fees1
2019/2020 fees1
Nigel Higgins
Mike Ashley
Robert Berry
Tim Breedon
3
Mohamed A. El-Erian
4
Dawn Fitzpatrick
5
Mary Francis
Crawford Gillies
Brian Gilvary
6
Diane Schueneman
7
Julia Wilson
Notes:
5%
1%
9%
1%
12%
11%
24%
5%
2%
12%
107%
0%
(2%)
n/a
(19%)
3%
18%
5%
(2%)
3%
4%
13%
0%
0%
n/a
64%
11%
14%
8%
108%
95%
(4%)
n/a
0%
19%
n/a
24%
n/a
36%
(3%)
4%
n/a
3%
n/a
1 In the year that a Non-Executive Director was appointed to or stepped down from the Barclays PLC Board, fees for that year are annualised to a full-year equivalent. Additional
information has been provided in the notes that follow where 2022/2023 percentage changes in fees, which excludes benefits, were greater than 10%.
2 Fees for the Group Chairman and Non-Executive Director roles on the Board and Board Committees of Barclays PLC were increased by 5%, with effect from 1 January 2023. This
excluded the Board Sustainability Committee, which was established on 23 March 2023.
3 Mohamed A. El-Erian joined the Board Nominations Committee with effect from 1 September 2022 and received pro-rata fees for that year. For 2023, the full-year fees were paid,
therefore increasing the fees paid from 2022 to 2023.
4 Dawn Fitzpatrick joined the Board Sustainability Committee with effect from 23 March 2023 and received pro-rata fees for that year, therefore increasing the fees paid from 2022 to
2023.
5 Mary Francis was appointed the BBPLC Consumer Duty Champion with effect from 10 November 2022 and received pro-rata fees for that year. For 2023, full-year fees for that role
were paid. She also joined the Board Sustainability Committee with effect from 23 March 2023 and received pro-rata fees for that year, therefore increasing the fees paid from 2022 to
2023.
6 The increase in fees paid from 2022 to 2023 for Diane Schueneman was primarily driven by an increase in fees for her role as Chair of Barclays Execution Services Limited and as a Non-
Executive Director of Barclays US LLC.
7 Julia Wilson joined the Board Nominations Committee and Board Risk Committee with effect from 1 September 2022 and received pro-rata fees for that year. For 2023, the full-year
fees for that role were paid. She also joined the Board Sustainability Committee with effect from 23 March 2023, the Barclays Bank PLC Board with effect from 1 April 2023, and the
Board Remuneration Committee with effect from 1 July 2023. She was appointed Chair of the Board Audit Committee with effect from 1 April 2023 and Chair of the Barclays Capital
Securities Limited Board with effect from 24 April 2023, and received pro-rata fees for that year – therefore increasing the fees paid from 2022 to 2023.
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 2023 do not include the
dividends and share buyback programme announced on 20 February 2024.
Group compensation costs
Distributions to shareholders9
£m
2023
2022
£m
2023
2022
n Other compensation-related income statement charges
n Income statement charge for performance costs
8
n Share buybacks
n Dividends
Notes:
8 Relates to costs arising from salaries and other elements of fixed pay, social security costs, post-retirement benefits and other compensation costs.
9 The chart shows dividends paid and share buyback programmes completed during the year. For example, for 2023, the figure represents the 2022 full-year dividend paid, the share
buyback programme announced with the 2022 results, the 2023 half-year dividend, and the share buyback programme announced with the half-year results. The shareholder
distributions announced on 20 February 2024 are not reflected in this chart.
8,7198,3496,9696,5131,7501,8362,4602,5281,2501,5001,2101,028 Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 225
Remuneration report (continued)
Chairman and Non-Executive Directors
Remuneration for Non-Executive Directors reflects their responsibilities and time commitment, and the fees paid are comparable with
those paid in Barclays' international peer group, with a particular focus on the UK banks. Fees shown reflect actual fees paid for periods
of service on the Board, any Board Committees and, where applicable, subsidiary Boards and Board Committees.
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 2023 remuneration (audited)
Chairman
1
Nigel Higgins
Non-Executive Directors
2
Mike Ashley
Robert Berry
Tim Breedon
Mohamed A. El-Erian
Dawn Fitzpatrick
3
Mary Francis
4
Crawford Gillies
Brian Gilvary
5
Sir John Kingman
6
Marc Moses
Diane Schueneman
Julia Wilson
Notes:
2023
£000
840
85
273
396
173
221
210
214
246
334
178
433
279
Fees
2022
£000
800
260
213
392
155
200
173
490
241
—
—
388
135
2023
£000
Benefits
2022
£000
8
—
—
—
—
—
—
—
—
—
—
—
—
7
—
—
—
—
—
—
—
—
—
—
—
—
2023
£000
848
85
273
396
173
221
210
214
246
334
178
433
279
Total
2022
£000
807
260
213
392
155
200
170
490
241
—
—
388
135
1 Nigel Higgins does not receive a fee in respect of his role as Chairman of Barclays Bank PLC.
2 Mike Ashley stepped down from the Board with effect from 3 May 2023.
3 Mary Francis was appointed the BBPLC Consumer Duty Champion with effect from 10 November 2022 and received pro-rata fees for that year as a retrospective payment in 2023. The
2022 fees have been updated to reflect that payment, which is therefore not included in the 2023 fees.
4 Crawford Gillies stepped down from the Board with effect from 31 May 2023.
5 Sir John Kingman was appointed to the Board with effect from 1 June 2023.
6 Marc Moses was appointed to the Board with effect from 23 January 2023.
Chairman and Non-Executive Directors: Statement of implementation of remuneration policy in 2024
The fees for the Chairman and Non-Executive Directors (including Board and Board Committee roles) were reviewed in early 2024 and
increased by 2% with effect from 1 January 2024, as set out in the table below.
7
Chairman
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
8
Membership of Board Sustainability Committee
Notes:
1 January 2024
1 January 2023
£
£
856,800
96,400
840,000
94,500
38,600
85,700
75,000
32,100
16,100
15,300
37,800
84,000
73,500
31,500
15,750
15,000
7 The Chairman does not receive any fees in addition to the Chairman fees shown above.
8 The Board Sustainability Committee was established on 23 March 2023 and the 2023 fees in respect of membership of this Committee commenced from that date.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 226
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 2023 (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. All Barclays
employees, including the Executive Directors, are prohibited from investment activities that may create conflicts of interest, and in
particular from using personal hedging strategies to undermine the risk alignment effects embedded in remuneration, or any other
hedging in respect of Barclays securities. 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 16 February 2024 were the same as shown below for all Directors in service as at 31 December 2023.
Interests in Barclays PLC shares as at 31 December
(or date of retirement from the Board, if earlier)
Executive Directors
C.S. Venkatakrishnan
Anna Cross
Chairman
Nigel Higgins
Non-Executive Directors
1
Mike Ashley
Robert Berry
Tim Breedon
Mohamed A. El-Erian
Dawn Fitzpatrick
Mary Francis
2
Crawford Gillies
Brian Gilvary
3
Sir John Kingman
4
Marc Moses
Diane Schueneman
Julia Wilson
Notes:
Unvested deferred awards
Subject to
performance
measures
Not subject to
performance
measures
Total
Owned outright
2,943,614
878,859
5,972,199
1,750,247
3,326,049
12,241,862
1,139,575
3,768,681
1,852,564
388,187
15,138
217,374
153,289
957,323
81,889
226,332
257,482
1,798
5,454
126,557
31,628
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,852,564
—
—
—
—
—
—
—
—
—
—
—
—
388,187
15,138
217,374
153,289
957,323
81,889
226,332
257,482
1,798
5,454
126,557
31,628
1 Mike Ashley stepped down from the Board with effect from 3 May 2023 and as a result his shareholdings are shown as at that date.
2 Crawford Gillies stepped down from the Board with effect from 31 May 2023 and as a result his shareholdings are shown as at that date.
3 Sir John Kingman was appointed to the Board with effect from 1 June 2023.
4 Marc Moses was appointed to the Board with effect from 23 January 2023.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 227
Remuneration report (continued)
Executive Directors’ shareholdings and share interests (audited)
The charts below show the value of Barclays shares held as at 31 December 2023 by C.S. Venkatakrishnan and Anna Cross, in each case
using the Q4 2023 average Barclays ordinary share price of £1.4374.
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, as well as
unvested shares that are 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 those of shareholders through share price exposure – and are therefore shown below
after deduction of estimated income tax and social security withholding. 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 relevant plan rules and the Directors' Remuneration Policy.
Executive Directors are issued a shareholding statement twice yearly, informing them of the shareholding requirement and the level of
shareholding they are required to meet and maintain. After an Executive Director has stepped down, the shareholding requirement is
monitored and maintained through self-certification, to the extent it is not met via shares held within the Group’s employee share plans
and nominee accounts.
C.S. Venkatakrishnan
£000
Actual
Requirement
Anna Cross
£000
Actual
Requirement
Based on 31 December 2023 Fixed Pay of £2,875k.
Based on 31 December 2023 Fixed Pay of £1,800k.
C.S. Venkatakrishnan has until 31 October 2026 to meet this
shareholding requirement, five years from the date of his
appointment as Group Chief Executive.
Anna Cross has until 22 April 2027 to meet this shareholding
requirement, five years from the date of her appointment as
Group Finance Director.
n Actual shareholdings (including estimated after-tax value of unvested shares
n Unvested shares subject to performance conditions (which do not count
not subject to performance conditions)
towards the requirement)
n Shareholding
requirement
Payments to former Directors (audited)
Former Group Finance Director: Tushar Morzaria
As disclosed in the 2022 Remuneration report, Tushar Morzaria was provided with UK and US tax compliance services during 2023 in
respect of Barclays employment income.
Former Group Chief Executive: Jes Staley
As disclosed in the 2022 Remuneration report, Jes Staley was provided with UK and US tax compliance services during 2023 in respect
of Barclays employment income. As he is receiving no further Barclays employment income, these services ended in 2023.
Former Group Finance Director: Chris Lucas
In 2023, 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 2023.
6,5214,1126,6992,1311,3334,032 Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 228
Remuneration report (continued)
Previous AGM voting outcomes
The table below shows the shareholder voting result in respect of our 2022 Remuneration report and Directors’ Remuneration Policy
(approved by shareholders at the AGM held on 3 May 2023).
For (% of votes cast and total
number)
Against (% of votes cast and
total number)
Withheld (total number)
Vote on the 2022 Remuneration report at the 2023 AGM
87.76 %
12.24 %
Vote on the Directors’ Remuneration Policy at the 2023 AGM
8,531,247,575
1,189,880,467
19,393,115
96.69 %
9,402,353,401
3.31 %
322,148,965
16,010,604
Barclays Board Remuneration Committee
Committee responsibilities
The Board Remuneration Committee is responsible for overseeing Barclays’ remuneration. The role of the Committee, as set out in
the Terms of Reference, is to:
• Set the overarching principles and parameters of remuneration policy across the Group
• Consider and approve the remuneration arrangements of (i) the Group 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 is equal to or exceeds an amount determined by the Committee
from time to time
• Exercise oversight of remuneration issues (including retirement benefits).
+ 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 £142,000
(excluding VAT) in fees for its advice to the Committee in 2023 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, risk and controls, operational models and cost,
taxation, technology, pensions, HR and sustainability issues.
Throughout 2023, Willis Towers Watson (WTW) provided the Committee with market data on compensation, as context when
considering incentive levels and remuneration packages. WTW was paid £78,500 (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 brokerage services to the Barclays Group, 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 or other representatives from the Legal function, and the Company Secretary advised on legal and governance-related
matters. No Barclays employee or Director participated in decisions of the Committee relating to his or her own remuneration. No
other advisers provided services to the Committee in the year.
Committee effectiveness in 2023
The results of the Committee effectiveness review for 2023 confirm the Committee is operating effectively. It is considered to be well
constituted and chaired, providing an effective and appropriate level of constructive challenge and oversight of the areas within its
remit, including in respect of areas of judgement and discretion. The review highlights that the Committee is considered to have the
right level of skills and experience, and is of an appropriate size, having benefited from the addition of new members during the year.
Feedback indicates that the Committee is considered to operate at the right level of debate, and confirms that the allocation of time
between agenda items in Committee meetings is appropriate, with sufficient time for discussion and challenge.
The Committee’s interaction with the Board, Board Committees and senior management is considered effective, noting the strong
level of support provided to the Committee by senior management, and that sufficient time is allocated at Board meetings for the Chair
to report to the Board on the work of the Committee. The Committee’s interaction with the BBPLC and BBUKPLC Board Remuneration
Committees was also considered effective, and operates in line with regulatory requirements.
+
More information on the 2023 Committee effectiveness review
process can be found in the Board Nominations Committee report
page 164
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 229
Remuneration report (continued)
Committee activity in 2023 and early 2024
The following table summarises the Committee’s activity during 2023, and at the January and February 2024 meetings at which
remuneration decisions reported in this Remuneration report were finalised. The Committee is also provided with updates at each
scheduled meeting on: the operation of the Committee’s Remuneration Control Framework on hiring, retention and termination;
headcount and employee attrition; and extant LTIP performance.
January
2023
February
2023
June
2023
October
2023
December
2023
January
2024
February
2024
Overall
remuneration
Finance and Risk updates
Incentive funding proposals including risk
and control adjustments
Remuneration report 2022
Group budgets for fixed pay increases
Wider workforce considerations
Incentive funding approach
Barclays’ Fair Pay Agenda and Report
Directors' Remuneration Policy
Remuneration report 2023
Executive Directors’ and senior
executives’ bonus outcomes
Annual bonus and LTIP performance
measures and target calibration
Regulatory and stakeholder matters
Discussion with independent adviser
Remuneration Review Panel update
Review of Committee effectiveness
Executive
Directors’ and
senior
executives’
remuneration
Governance
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
One ad-hoc Committee meeting was called during 2023.
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 230
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 144 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 2023.
Climate and sustainability governance
Managing impacts in lending and financing
Our supply chain
Human rights / Modern slavery
Supporting our customers
The Barclays Way
Whistleblowing
Tax
Financial crime
Health and safety
Managing data privacy, security and resilience
231
236
238
239
242
245
246
247
249
250
251
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 231
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
Board Sustainability
Committee
Board Risk Committee
Board Audit
Committee
Board Remuneration
Committee
Group Executive Committee (Group ExCo)
Group Reputation Risk
Committee
Group Risk
Committee
Group Sustainability
Committee
Disclosure
Committee
Climate Risk
Committee
Business / Legal Entity Functions / Committees & Forums
Operational Sustainability
Steering Committee
BBplc Transaction
Review Committee
Principal Investments
Equity Committee
Financed Emissions
Programme
Group
Chief
Compliance
Officer
Group
Sustainability
Chief
Information
Officer
Group
Chief Operating
Officer
Group
Chief Risk
Officer
Group
Head of
PPCR
Group
Head of
Climate Risk
Group
Head of
Sustainability
Group Head
of Sustainable
Finance -
Corporate &
Investment
Bank
CEOs -
Corporate
& Investment
Bank and
Barclays UK
Head of Social
Purpose and
sustainable
Finance -
Barclays UK
Group
Finance
Director
BX Risk and
Finance Chief
Operating
Officer
Group Head of
Finance -
Sustainability
and ESG
Note
1 The presentation of senior management is not directly aligned to the committees / forums upon which they reflect.
Climate and Sustainability Governance changes during 2023
During 2023 a number of changes were made to the governance of Climate and Sustainability related matters. In particular the Board
Sustainability Committee and the Group Sustainability Committee (GSC) were established to provide oversight of climate matters and
the Group's sustainability agenda. The GSC has incorporated the work of the Climate and Sustainable Finance Council and oversees the
activity of the Financed Emissions Programme, one of the three pillars of our Climate Strategy. Further details on these Committees
can be found below. For transaction-related oversight and approval, the Transaction Review Committee has absorbed the
responsibilities of the Climate Transaction Review Committee and reflects the business-as-usual approach to reviewing transactions.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 232
ESG Governance (continued)
Roles and responsibilities of the Board and Board Committees with respect to climate-related matters
Board / Board Committee
Board
Board Sustainability
Committee
Board Risk
Committee
Board Audit
Committee
Board Remuneration
Committee
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, including in respect of climate.
Responsible for oversight of climate matters and the Group’s sustainability agenda, and supports the
Board in considering the suitability of the Group’s climate and sustainability strategy, position
statements, frameworks, ambitions, metrics, and targets and monitoring the implementation of the
Group’s climate and sustainability strategy.
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.
Responsible for overseeing the integrity of the Group's financial disclosures, the effectiveness of the internal
control environment and consideration of non-financial reporting. This Committee oversees financial and
narrative reporting which encompasses ESG and climate disclosures within the Annual Report.
Responsible for setting the overarching principles and parameters of remuneration policy across the
Group. This Committee has responsibility for aligning Executive Director remuneration with strategic
priorities, including in relation to climate and sustainability matters.
Board and Board Committee
oversight of climate-related risks
and opportunities
Barclays PLC Board
The Board and, as appropriate, its
Committees are responsible for the
oversight of climate and sustainability
matters, including climate-related risks
and opportunities.
During 2023, the Board received six
climate-related updates. These covered
matters such as progress against our
climate strategy, progress against targets
and target setting, and stakeholder
engagement. Outside of formal Board
briefings, the Group Head of Public Policy
and Corporate Responsibility also engaged
with Board members on matters relating
to the Group’s climate strategy. Please see
the Key Board activities section on page
153 for further detail about what the Board
considered in relation to climate and
sustainability matters in 2023.
The Board is supported in its work by its
Committees, each of which has its own
Committee terms of reference setting out
its remit and decision-making powers. The
Chairs of each of the Board Committees
provide a report on the work of their
Committee at every scheduled Board
meeting.
Board Sustainability Committee
During 2023, the Board Sustainability
Committee met four times. It reviewed
significant climate and sustainability
updates and proposals prior to Board
consideration and received regular
progress updates from management in
relation to the Group’s climate and
sustainability strategy, as well as internal
and external briefings on climate and
sustainability matters. Please refer to page
180 for further detail on the work of the
Board Sustainability Committee.
Board Risk Committee
During 2023, the Board Risk Committee
received quarterly reports from the
businesses (including the Corporate and
Investment Bank and Barclays UK) on their
climate strategy and also received an
update from the Head of Climate Risk. The
Committee received a teach-in from the
Risk function, providing an overview of how
climate change was driving financial and
operational risks, the materiality of their
impact and how Barclays was managing
them through the Climate Principal Risk
Framework. The Committee also received
three Climate risk dashboards during the
year, updating the Committee with key
Climate risk metrics. Please refer to page
174 for further detail on the work of the
Board Risk Committee.
Board Audit Committee
The Board Audit Committee provides
oversight of the climate and sustainability
disclosures within the Group's narrative
reporting, receiving input also from the
Board Sustainability Committee on those
disclosures. The Committee continues to
monitor that the impact of climate change
has been addressed in preparing the
Group’s financial statements. Please refer
to page 166 for further detail on the work
of the Board Audit Committee.
Board Remuneration
Committee
The Board Remuneration Committee is
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.
The performance measures for the 2024
annual bonus and 2024-2026 Long Term
Incentive Plan awards for the Executive
Directors include a 'Climate and
sustainability' category, focusing on
climate-related 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. The
measures include progress towards our
Sustainable and Transition Financing
target, reducing financed emissions and
operational emissions, and supporting our
communities. Please refer to the
Remuneration report from page 191 for
further detail on the work of the Board
Remuneration Committee.
Nature-related governance
The Board Sustainability Committee
provides formal oversight of climate
and sustainability matters, including
nature and biodiversity.
During 2023, the Board Sustainability
Committee and Group Sustainability
Committee, a sub-committee of the
Group Executive Committee, each
received a briefing on nature and
biodiversity delivered by an external
organisation. The sessions covered
nature-related policy and regulatory
developments, and work conducted by
Barclays as part of the UNEP FI pilot to
test the draft TNFD framework risk
assessment process (LEAP FI) on our
agriculture and food portfolio in the UK
and Europe.
+
You can read more about our approach to
nature and biodiversity on page 124.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 233
ESG Governance (continued)
Management's role in assessing
and managing climate-related
risks and opportunities
Oversight and management of Barclays'
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. In 2023
the Group Sustainability Committee was
established as a dedicated forum to
identify and discuss climate-related
matters across the Group with a specific
mandate to review and propose
amendments to the Group Climate
strategy prior to consideration by Group
ExCo.
Group Executive Committee
(Group ExCo)
Throughout 2023 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. In particular, the Group
Head of PPCR provided updates on the
Climate strategy including proposed
amendments to the oil and gas policy and
the establishment of new targets for
aviation, agriculture and commercial real
estate. Updates were also provided on a
range of other matters, such as
greenwashing, deforestation and
biodiversity.
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).
During 2023, Group ExCo established the
Group Sustainability Committee to advise
and provide recommendations on a broad
range of sustainability issues as further
described in the Climate and Sustainability
Governance section of this report. Group
ExCo was presented with updates on the
proposed policy for upstream oil & gas
financing.
Capturing the opportunity as we transition
towards a low-carbon economy was
identified as a key strategic growth pillar for
Barclays in 2022 and informed the setting
of a $1trn Sustainable and Transition
Financing target by the end of 2030. In
2023, a Group sustainable finance strategy
was developed by the new CIB Global Head
of Sustainable Finance and the BUK Head
of Social Purpose & Sustainable Finance,
setting out areas of strategic focus for the
group in delivering the $1trn target. The
strategy was presented to Group ExCo
and Group Board.
All submissions to the Barclays PLC Board
on Climate Strategy and climate-related
matters are reviewed either by Group
ExCo or the relevant Group ExCo member
in advance.
Executive Remuneration
Annual bonus outcomes and Long
Term Incentive Plan (LTIP) award
outcomes for the Executive Directors
of Barclays PLC 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 annual
bonus and LTIP is driven by non-
financial performance measures,
including measures relating to climate
and sustainability.
The weighting of the Climate and
sustainability category is 15% in the
2024-2026 LTIP and 5% in the 2024
annual bonus. The climate-related
measures reflect 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. The measures
include progress towards our
Sustainable and Transition Financing
target, reducing financed emissions
and operational emissions, and
supporting our communities.
Further details can be found in our
+
Remuneration report from page 191.
Group Sustainability Committee (GSC)
The Group Sustainability Committee
(GSC), a sub-committee of Group ExCo, is
chaired by the Group Head of PPCR with
senior representation from the Group
Head of Sustainability, Head of Sustainable
Finance for CIB and Head of Social
Purpose and Sustainable Finance for
Barclays UK, as well as members
representing key functions across the
Group.
The GSC is responsible for recommending
the overall Group sustainability strategy for
approval by Group ExCo, and ensuring
alignment of business unit climate
strategies to the overall strategy. The GSC
is also responsible for determining,
agreeing or recommending position
statements, frameworks, targets, relevant
disclosures and advocacy areas necessary
to support strategy delivery and agreeing
the strategic change priorities to support
overall sustainability strategy.
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
material to Barclays such as climate
change. In 2023, in relation to climate, 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 and
mitigation plans
• the Climate Risk Framework and Climate
Risk Appetite constraints
• scenario theme, severity and results of
the climate stress test and internal
stress test, including implications on
stress loss limits
In relation to Principal Risks, the GRC
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 GRC receives escalations from the
Climate Risk Committee, noting none were
received in 2023
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 234
ESG Governance (continued)
Climate Risk Committee (CRC)
To support the oversight of Barclays'
climate risk profile, the CRC was
established in 2021 as a sub-committee of
GRC. The authority of the CRC is
delegated by the GRC, and the Group
Head of Climate Risk is the Chair of CRC.
The CRC has reviewed and approved a
range of updates including the climate risk
appetite and plans for embedding climate
risk into business activities. Additionally,
quantitative and qualitative metrics,
emerging climate risk trends and progress
against targets are presented and
discussed at the CRC.
Disclosure Committee (DisCom)
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
Group ExCo, DisCom also reports to the
BAC.
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.
Group Reputation Risk Committee
(GRRC)
The Group Reputation Risk Committee
(GRRC) is a sub-committee of the Group
ExCo which reviews and challenges, and
directs as appropriate, the management
and mitigation of Reputation Risk matters
in the Barclays Group as they are brought
to the attention of the Committee via
relevant Reputation Risk assessment and
escalation processes. This includes
Reputation Risk associated with climate-
related matters. The GRRC is chaired by
the Group Chief Compliance Officer, as
the Principal Risk owner for Reputation
Risk in the Bank, and members include the
Group CRO and Group Head of PPCR. In
2023 the GRRC considered certain
transactions in scope of the bank's
Sustainability Standards to evaluate their
alignment with the bank's climate change
and sustainability strategy.
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.
The Group CEO has been an active
member of the Sustainable Markets
Initiative's Financial Services Taskforce and
both attended and spoke at the Autumn
CEO Summit during New York Climate
Week in September 2023. In 2023, the
Group CEO co-led the Nature-based
Solutions (NbS) workstream which
published the Coastal NbS Practitioners
Guide in November 2023. The Group CEO
has also been a Leadership Council
member of the United Nations
Environment Programme Finance Initiative
(UNEP FI) since 2022 and attended the
annual council meeting in December 2023.
The Group CEO also participated in
London Climate Action week, hosting a
roundtable discussion with company CEOs
from Barclays' Sustainable Impact Capital
Portfolio.
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.
Group Head of PPCR
The Group Head of PPCR leads the
Group’s overall sustainability and
citizenship agendas. Specifically, the role is
responsible for leading Barclays’ efforts in
tackling climate change, and for integrating
our ambition 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 support
innovation in sustainable product
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 Group Head of Climate Risk is the
Climate Principal Risk owner accountable
for the management and oversight of the
climate risk profile. The Group Head of
Climate Risk reports directly to the Group
CRO and is the Chair of CRC.
The Group Head of Climate Risk is
responsible for the development and
implementation of climate risk
governance, including ownership of
Barclays’ Climate Risk Framework and
Policy. The Group Head of Climate Risk is
also responsible for integrating climate risk
considerations into existing risk
management processes and overseeing
climate risk management activities,
including identifying, assessing, and
monitoring climate risk drivers and
proposing climate risk appetite, limits and
controls. The Group Head of Climate Risk
also leads the development of climate risk
methodologies and Barclays’ approach to
carbon modelling, including the
BlueTrack™ methodology.
Group Sustainability Chief Information
Officer
Created in 2023, the Group Sustainability
Chief Information Officer (CIO) brings
together technology, data and change
execution expertise. The Group
Sustainability CIO works in partnership with
the business and functions to deliver new
capabilities that enable and accelerate
delivery against the Group's sustainability
strategy.
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 ambition to be
a net zero bank by 2050. This includes
embedding climate-related disclosures
such as the TCFD into our framework of
disclosure procedures, governance and
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 235
ESG Governance (continued)
controls supporting the creation, review
and 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
CIB and the Group Head of PPCR. 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. The Group Head of Sustainable
Finance for CIB is also a member of the
Barclays Sustainable Impact Capital
portfolio Investment Committee, which
has a mandate to invest up to £500m in
global climate technology companies by
the end of 2027. The role partners closely
with Barclays’ Sustainability & ESG team on
our net zero ambition and environmental
and social risk management and with the
Head of Social Purpose and Sustainable
Finance for Barclays UK to deliver change
across the Group.
Head of Social Purpose and Sustainable
Finance - Barclays UK
The role of Head of Social Purpose and
Sustainable Finance for Barclays UK 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.
Implementation - business
working level committees,
forums and reports
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
entity.
These are supported by Subcommittees/
other governance bodies/forums which
can operate on a legal entity basis or
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.
Operational Sustainability Steering
Committee (OSSCo)
Barclays’ Operational Sustainability
Steering Committee (OSSCo) is
responsible for the development and
implementation of the Group’s net zero
operations strategy.
OSSCo is chaired by the Barclays
Execution Services (BX) Chief Operating
Officer and comprises leadership from
Corporate Real Estate Solutions (CRES) &
Location Strategy, Barclays UK,
Procurement and Sourcing, Group
Technology Infrastructure Services (GTIS),
Corporate Communications, Group
Sustainability & ESG, and Legal. OSSCo
reviews and approves environmental
operational targets, reviews operational
sustainability programmes and mitigates
risks to the delivery of the net zero
operations strategy. OSSCo also facilitates
coordination and alignment across the
functions responsible for implementing
the net zero operations strategy.
OSSCo provides updates to the GSC every
quarter, which then reports to the Barclays
PLC Board twice a year.
BBplc Transaction Review Committee
The BBplc Transaction Review Committee
(TRC) is convened for senior management
to review all BBplc Transactions that
contain material Reputation Risk and
escalates directly to the Group Reputation
Risk Committee. The TRC has
responsibility to ensure alignment with
local entity and regulatory expectations
and requirements when making decisions
that impact the various subsidiaries of
BBplc, including Barclays Bank Ireland PLC
('Barclays Europe') and the US
Intermediate Holding Company.
Transactions reviewed include
transactions, relationships, agreements,
strategies and other business activities.
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 ExCo. The
Committee consists of senior
stakeholders who 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.
Financed Emissions Programme
The Group change programme on climate
('the programme') is focused on driving the
execution of one of the three pillars of our
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 at the GSC. The overall
Accountable Executive of the programme
is the Group Head of Sustainability, also
the chair of its governance body
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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 236
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
Monitoring
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 current restrictions on business
appetite and includes restrictions in
respect of certain sensitive energy
subsectors (thermal coal mining, coal-fired
power generation, mountain-top coal
removal, upstream oil & gas and
unconventional oil & gas including oil
sands, Arctic oil & gas, hydraulic fracturing
('fracking'), Amazon oil & gas, ultra-deep
water and extra heavy oil), as well as
referencing new enhanced due diligence
requirements for biomass which will be
introduced during 2024.
We have also established positions on
Forestry and Agricultural Commodities,
World Heritage and Ramsar Wetlands and
on the Defence and Security sector. In
addition, we have developed internal
standards for each of these which reflect
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.
Our standards currently include an
enhanced due diligence approach for
certain clients operating in the following
energy sub-sectors covered by our
Climate Change Statement: thermal coal
mining, coal-fired power generation,
mountain-top coal removal, oil sands,
Arctic oil & gas and hydraulic fracturing
('fracking') and clients in-scope of our
Forestry and Agricultural Commodities,
World Heritage Sites and Ramsar Wetlands
and Defence and Security standards where
a similar approach is taken. This approach
will be extended to cover the additional
sectors brought into scope of the updated
Climate Change Statement.
All clients in-scope of the above
mentioned standards must be assessed
annually via a detailed Sustainability
enhanced 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.
High and certain medium ESI rated clients
would require further risk assessment prior
to execution of transactions with those
clients.
We undertook 593 (2022:597) reviews in
2023, being a combination of Sustainability
annual due diligence reviews and individual
transaction reviews. Environmental risk
reviews are captured within the business-
as-usual credit process and are therefore
no longer included within this number.
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.
Escalation and decision-making
Where client relationships or transactions
are assessed as higher-risk (high or
medium ESI rating) or outside appetite (in
the case of Defence and Security)
following a Sustainability enhanced due
diligence review, they are then considered
for escalation to the appropriate business
unit review committee (e.g. BBplc
Transaction Review Committee) for
consideration and a decision on whether to
proceed if transaction related. Business
unit review committees comprise of
Business management and
representatives from the control
functions, including Reputation risk.
Should the front office business team or
the Sustainability and ESG team believe
the issues are sufficiently material, these
clients/relationships would be escalated to
the Group Reputation Risk Committee
(GRRC) for more senior consideration and
decision.
GRRC 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 237
ESG Governance (continued)
Training
Barclays continues to expand the range
and coverage of training to educate
colleagues on ESG and climate change
risk, its impact on society and Barclays'
strategy and response.
+
Further details on Barclays skills, culture & training
can be found on page 122.
Transactions and client relationships
reviewed by Group Sustainability
n Agriculture
n Chemicals
n Commodity
Traders
n Defence,
Aerospace &
Security
n Infrastructure &
Transportation
n Manufacturing
n Metals & Mining
n Oil & Gas
n Paper &
Forestry
n Power & Utilities
n Waste
n Other
9
2
1
5
1
3
1
8
1
9
12
2023
Total 593
2022
Total 597
Equator Principles
For project-related finance, we conduct
assessments for environmental and social
risks in line with the Equator Principles and
relevant International Finance Corporation
(IFC) Performance Standards. Barclays was
one of the four banks that contributed to
developing the Principles ahead of their
launch in 2003. During 2023, 4
transactions (2022: 1 transaction) were
reviewed for social and environmental risks
under the scope of the Equator Principles.
+ Further details can be found at:
equator-principles.com/
Equator Principles Transactions in 2023
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
3
B
3
B
3
B
3
B
3
1
A
1
A
1
A
1
A
1
C
C
C
C
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.
1632327721092528740792111920
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 238
ESG Governance (continued)
Supporting our supply chain
With nearly 9,0001 companies
coming from 29 countries supplying
us, our supply chain helps our
businesses deliver for our
customers, clients and colleagues.
Though our businesses are geographically
2
diverse, more than 92%
of our third-party
spending is 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. Over the past
several years, Barclays has sought to
reduce the size of its supply chain while at
the same time creating opportunities for
3
which encompass micro,
diverse suppliers
small or medium-sized enterprises and
4
diverse-owned
businesses.
+ Please see further details on our requirements of
external suppliers at: home.barclays/who-we-are/
our-suppliers/our-requirements-of-external-
suppliers/
Highlights
8.5%
Global spend with micro, small
and medium-sized enterprises
and diverse-owned suppliers
(2022: 8.5%)
93%Prompt payment rate
(2022: 93%)
Third party operational and
reputational risk management
Barclays Directors, via management, must
effectively manage, monitor and mitigate
risks in our supply chain. We expect our
Third Party Service Providers (TPSP) to
make responsible decisions that, where
relevant, take our stakeholders` needs into
account in both the short and long term.
Barclays expects the TPSPs to comply with
applicable laws, regulations and standards
within the geographies in which they
5
to
operate. Barclays` standard approach
new TPSP on-boarding and renewal begins
by assessing the services that are being
provided and ascertaining the level of risk.
TPSPs that are assessed as being above a
low risk of exposure from a business risk
perspective (at the point of onboarding
and on an ongoing basis) are subject to
Barclays` Supplier Control obligations
(SCOs). TPSPs to whom the SCOs apply
become managed TPSPs and are subject
to ongoing management and controls
assurance during the term of service. Prior
to contractual agreement and service go
live, these TPSPs are required to complete
a pre-contractual questionnaire which
captures their adherence to the SCOs and
Barclays` TPSP Code of Conduct (TPSP
CoC). The TPSP CoC encourages our
TPSPs to adopt our approach to doing
business and details our expectations for
matters including environmental
management, human rights, diversity and
inclusion and also for living the Barclays
Values.
Managed TPSPs are subject to controls
assurance on an annual basis to assess
whether the controls required of them
under the SCOs are maintained and
operating effectively. They are also asked
to complete an annual self-certification
against the individual topics contained
within the TPSP CoC. Where TPSPs are
unable to meet our expectations under the
TPSP CoC and SCOs, the issue will be
escalated and we will look for options to
manage the risk, which may include
additional oversight, heightened Barclays
controls or electing not to do business with
the TPSP. The TPSP CoC and SCOs are
published on the Barclays public website
for all new and existing suppliers to view
and are refreshed periodically.
Notes
1 Includes non-addressable spend and One Time
Vendors (OTV).
2 92% by invoice value
3 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.
4 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)
5 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
TPSP on-boarding procedures and which are therefore
not subject to the TPSP CoC.
+
Please see further details on our climate change initiatives
in our supply chain within our Achieving net zero
operations section from page 73 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 TPSPs
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 TPSP spend
paid within 45 days following invoice date.
The measurement applies against all
invoices by value over a three-month
rolling average period for all entities where
invoices are managed centrally. At the end
of 2023, we achieved 93% on-time
payment to our TPSPs compared to 93%
at the end of 2022, exceeding our public
commitment to pay 85% of TPSPs on time
(by invoice value).
The need to promptly pay our diverse
TPSPs became even more important
during the COVID-19 pandemic. Barclays
established a process to expedite the
payments for diverse TPSPs at this critical
time. This process remained in place
during 2023.
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.
Diversity, Equity and
Inclusion in our supply chain
Barclays believes that diversity across our
supply 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, now celebrating
10 years of impact since 2013. The GSD
initiative aims to position Barclays as a
leader in providing inclusive procurement
opportunities and driving economic impact
to diverse businesses – diverse in size,
ownership make-up or mission.
As part of our GSD initiative in 2023, 8.5%
1
of our global addressable spend
was
placed with small and medium-sized
enterprises and diverse-owned
businesses as measured by first- and
second-tier direct spending. First-tier
suppliers are contracted directly by
Barclays and second-tier direct suppliers
are subcontractors to first-tier suppliers
on Barclays-specific work. 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 2023, we added a new
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 239
ESG Governance (continued)
diverse supplier category of mission-
diverse, also known as social enterprises.
Though a small segment of our diverse
supplier spend, we will recognise and
account for spend with businesses that are
driven primarily by a social mission where
they do not already qualify as small or
ownership-diverse.
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),
Minority Supplier Development UK
(msduk.org.uk), Women’s Business
Enterprise National Council (wbenc.org),
WeConnect International
(weconnectinternational.org), National
LGBTQ Chamber of Commerce
(nglcc.org), OutBritain (outbritain.co.uk),
National Veteran Owned Businesses
Association (NaVoba.org) and Disability:IN
(disabilityIn.org).
In 2021, we pledged to double our spend
with Black and women-owned businesses
by 2025, with 2020 as the baseline year,
and to grow overall spend with SMEs and
diverse-owned businesses to 10% of
Barclays annual global addressable spend.
As of 2023, we are tracking to plan to
double spend with Black and women-
owned businesses by 2025 and to meet
the overall 10% diverse supplier spend
goal.
As we institutionalise DEI across our supply
chain, 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
1 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.
Modern slavery in our supply
chain
Barclays is committed to trying to identify
and seeking to address modern slavery
risks in our supply chain.
Regardless of the industry or geography in
which our Third Party Service Providers
(TPSP) operate, we require them to
comply with applicable laws and
regulations. We describe our standard
process of TPSP onboarding and renewal
in the "Third Party operational and
reputational risk management" section
above.
TPSPs that are assessed as being above a
low risk of exposure from a business risk
perspective become managed TPSPs and
are requested to complete an annual self-
attestation against topics contained within
our TPSP Code of Conduct (TPSP CoC).
The TPSP CoC identifies our expectations
with regards to respecting human rights
through areas such as occupational health
and safety, freely chosen employment,
avoidance of child labour and practices
which could lead to exploitation of workers,
freedom of religion and belief in the
workplace, freedom of association and
collective bargaining, zero tolerance for
discrimination, harassment and abuse,
accessible grievance and whistleblowing
mechanisms. These expectations (which
relate to human rights topics) are an
important part of our efforts to meet our
responsibility to respect human rights.
We continue to strengthen the way we
identify and assess modern slavery and we
describe the ways we aim to do this in our
Modern Slavery Statement.
We are continuing to work with our TPSPs
to support our ambition that those making
1
will have
up 70% of our addressable spend
a modern slavery policy or standard in
place by 2025.
Note
1 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.
Human rights
Barclays continues to take action to
enhance and further embed our approach
to respecting human rights.
During 2023 we worked towards two
important milestones for our human
rights work.
We completed a saliency assessment of
human rights risks in our Corporate and
Investment Bank (CIB) financing portfolio to
guide our next steps in enhancing the CIB
approach to managing human rights risks.
Insights from the saliency assessment
informed updates to Barclays' Statement
on Human Rights, which we published
alongside this Annual Report. The
Statement seeks to reflect our evolving
approach to human rights and align with the
relevant normative frameworks, in particular
the UN Guiding Principles on Business and
Human Rights (UNGPs).
The Statement reiterates our commitment
to respecting human rights as defined in the
International Bill of Human Rights and the
International Labour Organization’s (ILO)
Declaration on Fundamental Principles and
Rights at Work (ILO Declaration). Our
approach is guided by the UNGPs and the
OECD Guidelines for Multinational
Enterprises on Responsible Business
Conduct. It also incorporates our Focus
Areas for Progress, which set out our plans
to enhance our approach to respecting
human rights.
In addition, during 2023 we continued our
efforts to monitor issues and developments
globally that may present new or elevated
human rights risks and worked to evaluate
our potential involvement and consider our
responsibilities to seek to address,
these risks.
We also continued to embed human rights
considerations into our position statements
and related enhanced due diligence
approach. For example, in our Forestry and
Agricultural Commodities Statement we
have introduced a requirement for in-scope
clients to have a policy commitment to
respect human rights across their
operations and supply chain and the
expectation that they undertake human
rights due diligence across their operations
and supply chain.
+
For further information of our management of
environmental and social impacts in our lending
please see page 236.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 240
ESG Governance (continued)
Saliency Assessment for CIB
Salient Issue
What is the issue?
Human
impacts of
climate
change and
the energy
transition
Indigenous
Peoples
Land
Rights
Modern
Slavery
Weapons and
dual-use
technology
exports
Notes:
Climate change presents a number of physical risks and its impacts are varied and
multifaceted. For example, sea level rise and extreme weather can threaten the
rights to housing, to adequate standard of living, to food and water; and predicted
increases in disease impact right to health. The transition from fossil fuels to low
carbon energy is not without its own risks and challenges, climate change
mitigation activities can contribute to impacts such as job losses and energy
scarcity for communities who depend on fossil fuels. The development of clean
energy sources can also have human rights impacts including exploitative land
and labour practices as well as impact vulnerable communities like Indigenous
Peoples.
International law guarantees the rights of Indigenous Peoples, including traditional
lands, cultural preservation, livelihoods, knowledge, security and their right to give
or withhold their consent for any action that would affect their lands, territories or
rights (Free Prior and Informed Consent (FPIC)).Indigenous Peoples' rights are
increasingly being threatened, particularly in relation to the activities of certain
sectors such as extractive, energy, and agriculture. The transition to renewable
energy could exacerbate these impacts; recent research suggests that over half
of energy transition metals and minerals projects are located on or near
1
.
Indigenous Peoples' lands
Business practices such as community relocation and resettlements are not
uncommon in certain sectors, such as mining and agriculture, and can impact a
range of human rights, including the right to adequate housing, food, water,
health, education, and decent work. Resistance and protest against resettlement
or other potential infringements of land-related rights by human rights defenders
and local communities could also expose people to risk of additional adverse
impacts such as suppression of freedom of association, detention or even
physical harm.
An estimated 50 million people were living in situations of modern slavery on any
2
given day in 2021, according to the latest Global Estimates of Modern Slavery
.
Modern slavery violates all human rights relating to decent work. However,
modern slavery can also impact a multitude of other rights, for example to health,
family life, freedom of movement, and even freedom from torture, cruel, inhuman
or degrading treatment. The impacts of modern slavery can be severe and lasting,
and this issue is prevalent in all geographies and most sectors.
Technologies associated with the Defence and Security sector are continuously
developing. This includes advancements such as autonomous weapons and dual-
use technology which could be used in a multitude of applications including in
weapons and surveillance technology. Weapons and dual use technologies, if
misused, have the potential to cause some of the most severe human rights
violations, in particular, in the context of repressive state action or conflict.
1 nature.com/articles/s41893-022-00994-6
2 cdn.walkfree.org/content/uploads/2022/09/12142341/GEMS-2022_Report_EN_V8.pdf
Barclays worked with Shift, a non-profit and
leading centre of expertise on business and
human rights, and gathered a range of
perspectives through engagement with
both internal and external stakeholders, to
seek to understand the most salient human
rights risks to people connected to the CIB
financing portfolio.
We recognise that engagement, including
with credible proxies for affected
stakeholders, is essential to developing our
understanding of the actual and potential
human rights risks and enhancing the
robustness and legitimacy of the process.
In our external engagement, we engaged
with ten civil society organisations (CSOs),
selected by reference to their previous
contact with Barclays in relation to human
rights issues, and/or their recognised
expertise, in particular, on the intersection
between financial institutions and human
rights. Engagement took place through a
series of focused discussions, mostly
facilitated by Shift.
Our internal engagement included a series
of workshops with colleagues from a range
of functions including Sustainability, Risk,
Compliance, Legal and the business and
across the US, UK and APAC, followed by
deep dive interviews with some of these
colleagues.
The insights gathered during this proactive
engagement, complemented by insights
from previous relevant engagement with
CSOs, as well as desk-based research by
the Barclays Social Policy team and Shift,
informed the identification of a long list of
human rights impacts.
These impacts were then prioritised,
through consideration of the relative
severity of the impacts on people and their
likelihood of occurrence, to produce a
shortlist. This list and related analysis were
presented to core stakeholders to review
and test the application of the severity and
likelihood criteria to finalise our five salient
human rights issues, as set out in the table
at right.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 241
ESG Governance (continued)
We have subsequently identified our Focus Areas for Progress, setting out the actions we intend to undertake over time to enhance our
approach to the management of our salient issues across the Barclays Group. We will report our progress in these Focus Areas in future
Annual Reports.
Corporate
Culture
Strengthen a culture of
respect for human
rights
• Build capacity to
support colleagues’
understanding of
human rights risks
and responsibilities
Saliency
Assessments
Identify salient issues
beyond CIB
• Extend saliency
assessment to other
areas of the bank,
looking to engage
with internal and
external stakeholders
Focus Areas for Progress
Policies
and EDD
Just
Transition
Remedy
Develop our approach to
remedy
• Explore approach to
remedy in engagement
with clients
Enhance sustainability
policies and EDD to
reflect salient issues for
CIB
• Review existing
sustainability policies
and EDDs and work to
integrate salient issues
• Evolve our approach to
engaging with clients
when responding to
salient issues
Support a transition to a
low-carbon economy
which accounts for the
social risks as well as the
opportunities
• Work to consider just
transition in our
Transition Plan and
Client Transition
Framework
• Continue engagement
to help shape the way
just transition is defined
and implemented in
practice
Corporate culture
We aim to take steps to build capacity to
support colleagues' understanding of
human rights risks and responsibilities by
providing tailored training and guidance.
Saliency assessments
Taking an approach based on a risk-to-
people lens, we prioritised CIB as an area
for review. Our aim is to continue to
identify the salient human rights impacts
we may be connected to through our
operations and value chain. We aim to
initiate further saliency assessments,
incorporating engagement with
appropriate stakeholders.
Policies and enhanced due
diligence
Our aim is to enhance our existing position
statements and associated enhanced due
diligence processes to better reflect the
salient human rights issues identified
through our assessment of CIB.
Additionally, in response to analysis of our
exposure to salient issues through our CIB
financing portfolio, we may consider the
development of additional position
statements. To build on our risk
identification and assessment, we aim to
develop a pilot for engaging with clients in
response to the salient risks identified.
Just transition
Barclays seeks to support a just transition
which accounts for the potential social
risks as well as opportunities of the energy
transition and seeks effective dialogue
with relevant stakeholders.
We have taken steps to pilot the approach
to just transition in our Client Transition
Framework, and will consider the findings
of the pilot in our engagement with clients.
We also intend to include social
considerations as we develop our
transition plan.
We believe that industry engagement is
essential to advance our collective
understanding and strategy to ensure a
just transition. As such we intend to
continue to work with peers and industry
groups, and we have become founding
members of the LSE Just Transition
Finance Lab to help shape the way just
transition is defined and implemented in
the financial sector.
+
For more information on our approach to just
transition, please see page 124.
Remedy
We recognise the importance of remedy in
the context of human rights and aim to
develop our understanding of good
practice in this area. We will look to explore
approaches to remedy through our
engagement with our clients.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 242
ESG Governance (continued)
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 inflationary pressures on household
budgets and increased interest rates. We
are endeavouring to support customers
during these challenging times, and during
2023 have continued to focus 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.
To better support financially vulnerable
customers, we have enhanced our
Barclays' tools, training, support and
systems, continuing to improve our
ongoing support when customers need us
the most.
In July 2023 Barclays implemented support
measures following the introduction of the
Mortgage Charter by HMT. These
measures provided residential mortgage
customers, who are up to date with their
payments, with a range of support options
which included:
• The ability to apply to extend the term of
their mortgage to reduce their monthly
payment amount .
• Apply to switch their mortgage from
repayment to interest only for a period
of 6 months to temporarily reduce their
monthly payment amount.
Barclays continued a nationwide
engagement campaign into 2023,
providing practical support and guidance
to the cost of living crisis. Launching at the
end of 2022 and reaching across 254 local
and national commercial radio stations; in
print across 12 major national dailies and
26 major regional titles. In Q1/Q2 2023,
the campaign extended with additional AV
campaign across TV, cinema and VOD
reaching 99% of our core audience with
practical support and guidance.
We delivered content targeted to the
needs of our most vulnerable audiences
with content across video, social media
and owned channels.
In the second half of the year, we launched
new content marketing activity in
collaboration with influencers to engage
consumers around topics of everyday
money management, travel and
remortgaging. Guiding people on how to
make money work better for them through
the rising pressures of inflation, with this
activity targeted at both low financial
wellbeing and broader audiences. This was
supported with marketing across our
branches and locals that provided
guidance on the benefits of the Barclays
app to support with everyday money
management and travel.
Provided ongoing Cost of living support by
proactively contacting over 1.38m
customers with proactive SMS offering a
conversation to provide support and
guidance on managing their finances and
offering them help ranging from budgeting
to direct financial support, where required
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.
+ Further details can be found on page 39 in relation
to Consumer Duty within the Strategic Report in
Part 1 of the Annual Report
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 11.0 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 aiming to transform the role of
physical locations across the UK to ensure
non digitally engaged customers can still
access banking. We are working with other
banks, the Post Office and LINK, to keep
Barclays at the heart of the community.
We have launched our own initiatives,
including a cashback without purchase
service and Barclays Local - the largest
network of alternative branch formats in
the UK, with a presence in over 300
locations.
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 take our responsibility to protect our
customers’ money very seriously and are
proud to have one of the lowest scam rates
and highest reimbursement rates in the
industry. This is due to our continued
investment in robust security systems and
our established programme to educate
customers and prevent them from falling
victim to scams.
We have a dedicated 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, for each of the 50 million+
payments our UK customers make every
month, our fraud detection systems and
machine learning models determine in less
than a second if it is likely to be a fraudster
rather than the customer, or if our
customer appears at risk of being
scammed. If the transaction seems risky,
the customer is presented with additional
checks prior to the payment being
released.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 243
ESG Governance (continued)
We continue to invest in security features
that protect against fraud and scams,
including ‘App ID’, which allows customers
to verify they’re speaking to a Barclays
colleague and not an impersonator.
We are also 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 proud 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.
We have published a series of policy
recommendations to tackle the spread of
scams.
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/news/press-releases/2023/08/eight-
in-ten-brits-feel-unsafe-on-social-media-due-to-
scammers/
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) 2.2 AA
level.
+
barclays.co.uk/accessibility/statement/
The Barclays Accessibility statement
Building financial wellbeing
As part of our aim to deliver a world-class
money management experience and help
money work for our customers, particularly
through the cost of living crisis, we are
delivering more tools and features to
educate them on managing their money.
We are providing knowledge and expertise
through our colleagues, whether that be
helping customers to use our digital
platforms via the Digital Eagles, or
supporting customers in their
understanding of financial products, to
build financial plans, and save money
through budgeting via our Barclays Money
Mentors®. The Barclays Money
Management Hub gives us the ability to
provide proactive money management
information directly to customers, giving
them a better grasp on their spending
behaviours and steps they can take to
improve their financial wellbeing and
provide customers greater control over
their finances.
We also have a range of early intervention
strategies which aim to support customers
whose account behaviours may be
showing signs of lacking financial resilience.
These strategies largely focus on pro-
active communication with the customer,
based on sets of customer behavioural
triggers, and look to support customers to
help them maintain or regain control of
their finances. Where customers engage
with these contact strategies, our BFA
colleagues provide broad money
management advice and, where
appropriate, may suggest a range of
solutions to manage their financial
situation. This suite of solutions includes
forbearance and non-forbearance options.
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
dedicated training available for colleagues
to help them understand and support
customers impacted by problematic
gambling. Our Specialist Colleagues are
available to help customers in complex
situations and sign post where needed to
external support charities and
organisations.
+
Further details can be found at:
barclays.co.uk/gambling-support/
Domestic abuse
To support customers impacted by
domestic abuse, we have partnered with
Refuge, a national charity providing
specialist support for women and their
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 2023,
the Barclays Refuge Partnership was
recognised at the Business Charity Awards
for Addressing Economic and Tech Abuse.
We are a committed signatory 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. Barclays
has partnered with charities to help those
most impacted by the current
environment through dedicated financial
inclusion support.
Bereavement
We continue to prioritise making this
extremely difficult time in people’s lives a
little easier. Our programme of work to
enhance the customer experience across
all of our channels, including physical
locations and online remains front of mind.
Highlights this year, include: delivery of an
automated, online bereavement
notification and document upload
capability and a new email confirmation,
providing real time acknowledgment of the
bereavement notification. We’ve also
made it easier for colleagues to help
customers needing probate support with a
referral to Co-op Legal Services, who we
have a partnership with. Further
enhancements are planned for 2024.
+
Further details can be found at:
barclays.co.uk/what-to-do-when-someone-dies/
notify-us/
Authorised users
Since launching Authorised User in 2022,
we’ve continued to give customers the
ability to effectively manage their finances
with support of other trusted persons.
In October 2023, we’ve made this even
easier by removing the monthly service fee
for customers to add someone they trust
to spend on their account.
Further details can be found at:
+
barclays.co.uk/ways-to-bank/authorised-users/
manage-account/
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 244
ESG Governance (continued)
Specialist support team
Basic current account
We have a dedicated specialist team who
receive in-depth training on a wide variety
of vulnerable scenarios. They are available
to support colleagues and customers in
complex and heightened vulnerable
circumstances.
Accessibility & Vulnerability
(A&V) Indicators Platform
Over 2023 we have enhanced our
Accessibility & Vulnerability framework,
giving colleagues within Barclays the ability
to record disclosed customer vulnerability
on our systems. This allows us to provide
customers with the correct level of service
based on their particular needs and/or
adjustments. We have focused on
improving the colleague journey to include
support on soft skills, internal & external
sign posting and escalations to specialist
teams. This ensures colleagues have the
best available support in the moment when
dealing with customers in vulnerable
circumstances.
Training for colleagues
Over 20,000 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.
We also this year launched ‘Threat to Life’
training materials for our colleagues to
help further support colleagues when
liaising with customers who are suicidal. In
addition we rolled out new induction
training to equip new colleagues with how
to identify and support customers who
may be vulnerable or going through a life
event.
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.
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
650,000 Barclays basic current accounts
open at the end of 2023.
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.
Periodically we also review accounts to
upgrade customers from Basic Current
Account to Barclays Bank Account where
eligible.
Number of basic current accounts
(#)
2023
2022
2021
Barclays mortgages and
first-time buyers
2023 has been a year of change in the
mortgages market. There were eight
successive increases in the Bank of
England Base Rate, which led to significant
increases in the cost of borrowing for
mortgage customers. Our commitment
has remained to support customers
through this period. In late 2022 we
changed our policy for customers reaching
the end of their fixed rate period, to allow
them to rate switch earlier, helping over
200,000 customers in 2023 secure a new
product up to 180 days in advance when
their existing rate is ending. The Mortgage
Charter mandated participating banks to
implement 180 day switching in June 2023,
by which time we had already been live with
the 180 day switching for over eight
months.
Despite the challenges with the market in
2023, we still helped almost 22,000 first-
time buyers get onto the property ladder.
We have continued to support customers
buying their first home with 95% loan-to-
value mortgages through the UK
Government Mortgage Guarantee
Scheme, and Barclays Family Springboard
Mortgage.
The 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.
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 2023, 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.
650,863661,991642,468 Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 245
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.
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.
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"
2023
2022
% 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/
“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.”
9492 Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 246
ESG Governance (continued)
None of the retaliation concerns closed in
2023 were substantiated.
In addition, 54 actions arising from
concerns raised in 2023 were
implemented to address issues identified
during the course of investigation
concerns . This includes
recommendations to enhance processes
and controls.
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. In 2023, Julia
Wilson became the Group Whistleblowers’
Champion on her appointment as Chair of
the Group Board Audit Committee.
The Whistleblowers’ Champions 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 and assurance of
the whistleblowing process.
Barclays also works with Protect, the UK
Whistleblowing Charity. The
whistleblowing programme has
benchmarked highly under Protect’s best
practice benchmark framework.
Whistleblowing cases closed by region
60Cases closed
in 2023
Whistleblowing cases opened by (top 4) categories
1 Breach of controls,
process or other
2 Retaliation
3 Fraud
4 Market misconduct
5
5. Other
7
21
19
15
Whistleblowing
We support a culture
where 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. 83%
of global respondents of the 2023 Your
View survey said it was 'safe to speak up' at
Barclays.
Colleagues 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 available.
The Raising Concerns team carefully
assess concerns 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.
One of the channels to which concerns
may be referred is the whistleblowing
programme. Information about the
whistleblowing programme is provided to
colleagues globally, including through
annual mandatory training.
Whistleblowing relates to concerns which
fall within the wider public interest. This
may include a breach of our policies or
procedures, breaches of law and regulation
or other behaviour that harms or is likely to
harm the reputation or financial wellbeing
of the Group.
Concerns assessed by Raising Concerns
as whistleblowing are directed to a
dedicated impartial team within the
Compliance function. All whistleblowing
concerns are taken seriously, and controls
are in place to protect the confidentiality
and identity of whistleblowers.
Barclays has a zero-tolerance approach to
retaliation against any whistleblower or any
individual who has provided information as
part of an investigation. Any act of
retaliation by a colleague may result in
disciplinary action, including dismissal.
In 2023, the whistleblowing team received
a total of 67 whistleblowing concerns
including 19 retaliation concerns.
25% of whistleblowing concerns closed in
2023 were found to have some level of
substantiation and other issues were
identified in a further 38% of concerns.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 247
ESG Governance (continued)
Tax
Barclays supports a fair and transparent tax system.
“We received the PwC Building Public Trust
Award 2023 for Tax Reporting in the FTSE 350
(Multinationals) Group.”
Barclays takes a responsible approach to
tax. We have strong governance and risk
management over tax risk and are
committed to transparency around tax.
We know that it is important for our
investors, customers and clients,
regulators, tax authorities and other
stakeholders to understand our approach
to tax and our tax contribution in the
countries in which we operate.
In recognition of the clear explanations we
provide of our tax affairs and our
responsiveness to both stakeholder
interest and the continually changing tax
transparency landscape, we received the
PwC Building Public Trust Award 2023 for
Tax Reporting in the FTSE 350
(Multinationals) Group. This award reflects
the transparency of both our 2022
Country Snapshot and the tax reporting in
our 2022 Annual Report.
+
For further details, see our Country Snapshot Report
at: home.barclays/annualreport
Taxes paid globally
£2,505m
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
2022 taxes paid globally
£2,255m
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 2023 was £5,899m. This
includes taxes paid of £2,505m which
represent a cost to us, and taxes collected
on behalf of governments of £3,394m.
Barclays was ranked as the sixth-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 paid 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 make clear disclosures
to tax authorities and we are committed to
only dealing with customer and client
assets that have been appropriately
declared to the relevant tax authority.
We are also 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 our external publications
such as the Country Snapshot.
Our Country Snapshot is publicly available,
it sets out our approach to tax in detail,
including our Tax Principles, and is
reviewed and approved annually by the
Barclays PLC Board.
Key highlights from 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.
Tax governance, control and
risk management
As a Global 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 all risks, including tax risk, are
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
83675562720978 Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 248
ESG Governance (continued)
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
• 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 2023 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 169 for details of BPLC Board Audit
Committee oversight of tax related matters
• 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,
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 249
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 crime
has an adverse effect on individuals and
communities wherever it occurs. Endemic
financial crime 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, and
a. Support governments, regulators, and
law enforcement in wider financial crime
prevention.
Barclays does not tolerate any deliberate
breach of financial crime laws and
regulations that apply to our business and
the transactions we undertake.
We have adopted a holistic approach to
financial crime risk management and have
one group-wide Financial Crime Policy.
The Financial Crime Policy applies to all
businesses, legal entities and employees. It
is designed to ensure that Barclays has
adequate systems, procedures, and
controls in place to manage the risk of
being used to facilitate financial crime and
to manage the legal, regulatory, and
reputational risks associated with financial
crime. Employees are made aware that
failure to comply with the Financial Crime
Policy may give rise to disciplinary action,
up to and including dismissal.
The Financial Crime Policy sets control
obligations to manage four key risks: anti-
bribery & corruption (ABC); anti-money
laundering & counter-terrorist financing
(AML); anti-tax evasion facilitation (ATEF)
and sanctions, including proliferation
financing. This combined approach allows
us to identify and manage relevant
synergies and connections between these
risks.
Anti-Bribery & Corruption
Anti-Tax Evasion Facilitation
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 has been identified as
major threats to the international financial
services community and therefore to
Barclays. The Barclays Financial Crime
Policy includes the requirement for
Barclays businesses and legal entities to
have adequate systems, procedures, and
controls in place to manage the risk of
Barclays being used to facilitate money
laundering. The requirements of UK
legislation apply to Barclays globally. As a
transatlantic bank, the Financial Crime
Policy also 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.
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 sanctions risk
appetite may be stricter than its legal
obligations.
The Financial Crime Policy is designed to
ensure that Barclays and its 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/
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 250
ESG Governance (continued)
Health and Safety
Barclays has a comprehensive Health and
Safety Management System operating
globally, which is independently certified to
the international standard ISO45001 in the
USA, UK, India, Singapore, Hong Kong and
Japan.
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,
with quantitative targets set through key
indicators (KIs) and control environment
characteristics (CECs). A program of
internal control testing ensures that our
KIs and CECs continue to perform
satisfactorily, and that any opportunity for
improvement identified can be acted upon.
Performance is reported on at the Group
Health & Safety Forum which oversees
effective management of health and
safety across Barclays.
Barclays has in place global risk
assessments which identify the hazards
and control measures needed to reduce
risks to as low as reasonably practicable,
these are underpinned by local regulatory
requirements and procedures. The global
risk assessments are published on the H&S
intranet site.
Measure
Number of High or Exceptional Accidents
Lost Time Incidents (per 100 employees)
% Completion Mandatory Training
Q1 2023
Q2 2023
Q3 2023
Q4 2023
0
0.023
0
0.02
0
0
0.024
0.025
99.9 %
99.9 %
99.9 %
99.9 %
Barclays suppliers are subject to a supplier
risk evaluation during onboarding, a
minimum of annually thereafter and when
they notify of a change in service delivery.
In addition, they will complete an annual
control obligation review.
The Barclays H&S team, who operate
globally, provide support, competent
advice and assurance where required.
There is a programme of H&S assurance
and technical risk assessments to ensure
the hazard and risk controls remain
relevant and to identify emerging themes
and trends.
Onsite monitoring is undertaken across
our portfolio by the Barclays H&S team,
supported by the customer care leads for
retail sites or by our building facilities
management partners for corporate sites.
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 the
risk assessment or local regulatory
requirements.
Barclays has an incident reporting system
to ensure incidents are recorded and
investigated appropriately. Review of
incident data is completed by each region
to identify themes and trends, which are
then reviewed at the Group H&S Forum
and lessons learned shared. Incidents are
reported and escalated as required by local
regulatory statute and as per Barclays’ risk
framework for risk issues and events.
Information and knowledge is available
through our H&S safety intranet, which
provides key information on the hazard
register, risk assessments, training and
templates (for personal emergency
evacuation plans, Display Screen
Equipment (DSE) assessments, manual
handling, occupational stress
assessments, lone working assessments
etc).
Barclays operates a reward and
recognition scheme where colleagues are
recognised for improving our risk controls
and supporting our health and safety
management system.
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
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 251
ESG Governance (continued)
Managing data privacy,
security and resilience
We have strict policies to protect privacy and keep data secure.
Data privacy
As we have transitioned to a more hybrid
working model, we have educated
colleagues on cybersecurity risks in order
to help minimise the risk of data
exploitation or leakage.
Data resilience
Barclays' CSO operates key controls that
mitigate cybersecurity-related risks. CSO
focuses on understanding internal and
external threats and delivering on our
capabilities to counteract them.
As part of our efforts to continuously
review and improve our response and
recovery plans in preparation for evolving
threats, Barclays works with industry
bodies to learn from risk events in other
organisations. Our teams use intelligence
to create plausible cybersecurity and data
compromise scenarios which we simulate
to help us focus on continuous
improvement.
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
wish to understand how this may impact
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.
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
Barclays deploys automated controls to
protect its sensitive information and the
data that has been entrusted to us by
customers and clients, in line with our
standards, taking into account findings
from internal and external reviews of our
controls. 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 controls and monitoring in place
designed to secure cloud-hosted data and
maintain its integrity.
Barclays seeks to protect the security of
data we share with third parties, including
by 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 252
ESG Governance (continued)
Operational resilience
Chief Security Office
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 the continued
provision of third-party services, all of
which have a direct impact on the quality of
our service.
Barclays' CSO exists to keep the bank, its
customers, clients, and colleagues safe
and secure, and to maintain the resilience
of our operations. CSO supports Barclays'
business to operate in a protected and
secure environment, and actively
promotes the culture that security is
everyone's responsibility.
Resilience and Security is a focus for the
board. 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 for disruption events, such as cyber
or data integrity disruptions. We review
and validate these recovery plans through
regular testing which supports our aim to
reduce the volume and impact of
operational incidents year on year. We also
conduct regular assurance on third parties
to assess their capability, as defined by our
contractual Information & Cyber Security
Supplier Control Obligations.
Resilience and security is the responsibility
of everyone within the Group. All
permanent employees are required to
complete mandatory training on these
topics at regular intervals across the year.
Please refer to pages 178 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 266 to 267
for further details on cyberattacks, data
management and information protection.
Please refer to the 'Supervision and regulation'
section in our Risk review on pages 370 for further
details on our regulatory approach to managing such
risks.
The Chief Security Officer for the Group
heads Barclays' CSO and reports up
through the Chief Operating Officer, who
sits on the Group Executive Committee.
The Group CISO reports directly to the
Chief Security Officer and is supported by
a team of CISOs for individual business
units and jurisdictions, as well as other
teams of cybersecurity experts and
analysts. Barclays' Group Chief Security
Officer combines 10 years of law
enforcement experience with over 20
years of experience serving in senior
leadership roles managing security at
global financial institutions. The Group
CISO and supporting leadership team
collectively have advanced degrees and
senior level experience managing security
risks in a variety of sectors, including those
that represent critical national
infrastructure, such as
telecommunications and peer financial
institutions. They are supported by
analysts and subject matter experts in a
variety of specialisations, such as
intelligence, penetration testing,
cyberforensic investigations, security
engineering, and vulnerability
management.
CSO leadership manages Barclays’
cybersecurity activities and is accountable
for the day-to-day monitoring of residual
risk, identification of gaps, oversight of
remedial actions and implementation of
strategy. As described below, the Chief
Security Officer and CISO for the Group
provide updates to the Board and Board
Risk Committee about cybersecurity risks
facing the Group.
Within its oversight of Operational risk as a
Principal Risk, the Board Risk Committee is
responsible for oversight of risks arising
from cybersecurity threats. As part of this
oversight, the Board Risk Committee
receives periodic updates from Barclays'
Chief Security Officer or CISO for the
Group on cybersecurity matters. In 2023,
such updates addressed topics that
included the shifting cybersecurity threat
landscape, measurement of Barclays' risk
and control posture, cybersecurity incident
trends and Barclays' response, Barclays'
ability to recover from a material
cyberattack scenario, third party control
and assurance monitoring, privileged
access to Barclays' systems, regulatory
developments, and Barclays' technology
and resource investment strategy.
Barclays assesses its cybersecurity
activities against the industry-recognised
National Institute of Standards and
Technology (NIST) security maturity
framework, and we periodically engage
external security consultants to conduct
independent benchmarking assessments.
In 2023, findings from such an assessment
conducted in late 2022 were briefed to the
Board and Board Risk Committee.
Barclays' CSO partners with third-party
security providers throughout the Group's
cybersecurity activities, including for cyber
recovery, penetration testing, software
vulnerability scanning, distributed denial of
service (DDoS) attack prevention, phishing
simulations, third-party risk management,
incident response, intelligence, fraud
prevention, and industry benchmarking.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 253
ESG Governance (continued)
This is achieved through our own
assurance capabilities and use of a third
party assurance utility. Activity is
structured on a risk-based approach that
prioritises suppliers that underpin our most
important business services.
Identified issues are managed formally, but
we also engage proactively with third-party
suppliers to help them strengthen their
security and resilience posture. To
recognise the changing risk presented by
third-party suppliers, which are
increasingly targeted by threat actors, we
regularly alert third-party suppliers where
we anticipate that they may be more
vulnerable and should take preventative
action.
Notwithstanding such third-party risk
management efforts, Barclays does not
have direct control over the cybersecurity
of the systems of its third parties, limiting
the Group’s ability to effectively protect
and defend against certain threats.
Certifications
Barclays holds three ISO27001
certifications (i.e., the international
standard on how to manage information
security), Cyber Essentials / Cyber
Essentials Plus Certification, and has a UK
certification for Digital Banking.
Under Barclays' Enterprise Risk
Management Framework, there is an
Information and Cyber Security Policy
supported by ten Standards which define
the minimum requirements for
cybersecurity matters across the entire
Barclays Group. These Standards cover
the following topics: Cryptography,
Network Security, Security Configuration,
Data Loss Prevention, Vulnerability
Management, Data Security, Incident
Response & Threat Intelligence, Threat
Management, Governance, and Identity &
Access Management.
An important part of Barclays’
cybersecurity environment 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. The JOCs
deliver security responsiveness by uniting
core security functions and providing a
central information and coordination point
for security incident management.
To manage security risk related to our
third-party suppliers, many of which
perform critical services for Barclays and
handle sensitive Barclays data, we have a
set of contractual Information & Cyber
Security Supplier Control Obligations that
are based off of the requirements of our
internal standards. We conduct assurance
over our third and fourth parties against
those obligations through a dedicated
External Cyber Assurance & Monitoring
team (ECAM) and a set of control
indicators.
Reporting phishing
CSO performs a number of key activities
related to identifying, investigating,
responding to and containing phishing /
malicious email incidents. CSO has
embedded an operational process that
provides education and awareness
content via email to colleagues who click a
malicious link or attachment in a phishing
email, with escalating training exercises
and management interventions for
repeated instances. To report suspected
phishing to Barclays' JOC for further
investigation, colleagues have a tool
integrated into their email account, and
colleagues receive feedback on whether
the reported email was suspect or
genuine. CSO also runs monthly phishing
simulations to understand colleagues'
susceptibility to real attacks, using the
analysis to refine education and training.
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
2023 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 Framework (ERMF)
Segregation of duties – the ‘Three Lines
of Defence’ model
Principal risks
Risk appetite
Risk committees
Barclays’ risk culture
Material existing and emerging risks potentially
impacting more than one principal risk
Climate risk
Credit risk
Market risk
Treasury and Capital risk
Liquidity risk
Capital risk
Interest rate risk in the banking book (IRRBB)
Operational risk
Tax risk
Model risk
Compliance risk
Legal risk
Page
256
256
257
257
257
257
258
262
263
265
265
265
265
266
266
268
269
269
270
Pillar 3
Report
106
106
106
107
109
111
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
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
Market risk management
Treasury and capital risk management
Climate risk performance
Credit risk performance
Model risk management
Operational risk management
Compliance risk management
Reputation risk management
Legal risk management
Carbon-related assets
Elevated risk sectors
Financing (capital markets)
Credit risk
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
Forbearance
Market risk performance
Market risk overview and summary of performance
Treasury and capital risk performance Treasury and Capital risk
Operational risk performance
Model risk performance
Compliance risk performance
Reputation risk performance
Legal risk performance
Supervision and regulation
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 overview
Compliance risk overview
Reputation risk overview
Legal risk overview
Page
272
276
278
278
280
280
281
282
283
284
284
287
291
293
295
Pillar 3
Report
116
119
153
171
184
180
187
189
191
N/A
N/A
N/A
N/A
N/A
N/A
298
N/A
307
311
320
322
329
332
336
338
350
357
359
359
361
361
362
362
363
N/A
N/A
N/A
N/A
N/A
N/A
92
N/A
N/A
N/A
102
104
N/A
N/A
N/A
N/A
N/A
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 256
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)
are needed, and high level governance
arrangements
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
Board Committees
▪ 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 Group 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
proactively identifying, communicating
and providing legal advice on applicable
laws, rules and regulations. 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 compliance risks, as well
as with respect to the legal risk to which
the bank is exposed.
Barclays PLC Board
Barclays PLC Board
Risk Committee
Barclays PLC Board
Audit Committee
Barclays PLC Board
Remuneration
Committee
Group
Remuneration
Review Panel
Management Level
Committees/Forums
Barclays Group
ExCo
Group Risk Committee
Business Level
Committees/Forums
Barclays Risk Committees
(aligned to product/risk type or business)
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 257
Risk management (continued)
Principal risks
• The Barclays PLC Board Risk
Barclays’ risk culture
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.
• 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.
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. This is
supported by our Purpose, Values and
Mindset, as well by as by setting a standard
of consistent excellence. 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.
The ERMF identifies nine principal risks
namely: credit risk, market risk, treasury
and capital risk, climate risk, operational
risk, model risk, compliance risk, reputation
risk and legal risk. Note that "compliance
risk" replaced "conduct risk" in 2023 with
an expanded definition. See page 269 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 Risk
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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 258
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 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 2023 was severely
hampered by inflationary pressures
resulting from: (i) restricted labour
markets, industrial disputes, and upward
pressure on employment costs; (ii) high
energy prices intensified by the conflicts
in Ukraine and the Middle East; and (iii)
resilient consumer spending, particularly
on services, funded by drawing
household savings. High inflation has led
to the on-going 'cost of living' pressures
in much of the world, including in the UK.
• In response to persistent inflation, 2023
saw central banks continue to tighten
monetary policy through raising interest
rates and exercising quantitative
tightening. While markets are
forecasting that rates are at or near their
cycle peak and inflation has begun to
ease back (albeit remaining well above
central banks' targets), economies in
which the Group operates are vulnerable
to recession risk in 2024. Such risk is
heightened by the turbulent geopolitical
outlook and volatile market conditions
with these factors acting as a drag on
potential global economic growth.
Higher mortgage rates, rising taxes,
elevated bond yields, depleted
household savings, higher corporate
insolvencies, and rising unemployment
have potentially negative implications
for the Group's performance, including
increased impairment allowances.
• The loss of ‘the presumption of
compliance’ is widely reported to have
raised costs for UK customers exporting
to the European Union (EU) which,
together with the risk of regulatory
divergence between the UK and the EU,
could adversely impact both the Group's
EU and UK 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 slowdown in the UK and/or
one or more member states of the EU
in which the Group operates, with
lower growth, higher unemployment
and a greater fall in 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. In
addition, depositor perceptions of
banking fragility as seen in certain
institutions in 2023 could increase the
severity and velocity of deposit
outflows, impacting the Group’s
liquidity position;
– 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 have a
material adverse impact on the
Group’s interest margins and liquidity
position and/or
– a market-wide widening of credit
spreads 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. Political instability and/or
increased polarisation ahead of the
2024 elections together with the
possibility of significant changes in US
policy in certain sectors may negatively
impact the Group’s associated
portfolios. Stress in the US economy,
weakening GDP and associated
exchange rate fluctuations, heightened
political and/or trade tensions (such as
between the US and China), and
increased unemployment could lead to
higher 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 and/or outright
export bans on specific products and/or
in specific sectors) may have a material
adverse effect on the Group’s business
in the affected regions.
• In China, a significant global economy,
the property market slump, shrinking
exports, and weakened currency (and
resulting capital outflows) have caused
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 259
Material existing and emerging risks (continued)
an economic slowdown, with deflation a
real risk. The high levels of debt,
particularly in the property sector,
remain a concern given the high
leverage multiples, despite government
and regulatory action. Any property
shock risks contaminating the financial
sector and precipitating a wider banking
crisis. A shift away from market-based
reforms towards state led initiatives to
stimulate the economy could damage
private-sector confidence and
economic growth.
• High US interest rates and a potential
global slow-down in demand for natural
resources, means an economic
deterioration in emerging markets still
remains a risk. This could have 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.
• New strains of COVID-19 (or reduced
vaccine efficacy) could impact the
Group's ability to conduct business in
the jurisdictions in which it operates
through disruptions to: (i)) infrastructure
and supply chains, (ii) business
processes and technology services
provided by third parties and (iii), the
availability 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. It may also have the effect of
increasing the likelihood and/or
magnitude of other risks described
herein (with consequential impairment
charge volatility) 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.
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.
ii) 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 either due to higher refinancing
costs or due to deposit balance mix
changes as customers prefer higher rate
deposits. Interest rate rises however 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 2023. 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. This could result in
higher credit losses driving increased
impairment charges 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.
iii) 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,
prevailing market environment and
changes to 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
compared to many activities undertaken
by banks. Furthermore, the introduction of
central bank digital currencies could have
significant impact on the banking system
and the role of commercial banks by
disrupting the current provision of banking
products and services. This disruption
could allow new competitors, some
previously hindered by banking regulation
(such as certain FinTechs), to provide
customers with access to banking facilities
and increase the disintermediation of
banking services.
New technologies and changing consumer
behaviour have previously required, and
could continue to require, the Group to
incur additional costs 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 the
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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 260
Material existing and emerging risks (continued)
iv) 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 of the foregoing in the UK,
the US, the EU and the other markets in
which it operates. Many regulatory
changes that are 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 effect or its global operations
mean that the Group gives 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 structural 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 and customers are treated.
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
new Consumer Duty in the UK and
measures resulting from ongoing
thematic reviews into the workings of
the retail, small and medium enterprises
and wholesale banking sectors and the
provision of financial advice to
consumers;
• the implementation of any conduct
• the incorporation of climate change
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 ‘v) 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, including
the use of artificial intelligence (AI),
digital assets and digital money
(including central bank digital
currencies), financial technology risks,
payments and related infrastructure,
operational resilience, and
cybersecurity. This also includes the
introduction of new and/or enhanced
regulatory standards in these areas,
underpinned by customer protection
principles;
• increasing regulatory expectations of
firms around governance and risk
management frameworks, particularly
for the management of climate change
and other ESG risks, enhanced ESG
disclosure and reporting obligations, and
proposals for a new regulatory
framework on diversity and inclusion in
the UK;
• the continued evolution of the UK’s
regulatory framework following the UK's
withdrawal from the EU, particularly
following the introduction of the
Financial Services and Markets Act 2023
(FSMA 2023) which provides for the
revocation of retained EU law relating to
financial services and the UK financial
services regulatory reform agenda
announced in December 2022, 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;
within the global prudential framework,
including the transition risks resulting
from a shift to a low-carbon economy
and its financial effects;
• the increased regulatory focus in the UK
on the introduction of potential
measures designed to maximise access
to cash for consumers (including
retention of specific branches) and,
separately, regulatory scrutiny of the
reasons for refusing to open or
decisions to close customer bank
accounts;
• proposed reforms to the UK ring-
fencing regime, which requires the
separation of core banking operations
for retail and small and medium
enterprise depositors from other
wholesale and investment banking
operations;
• the reform of corporate criminal liability
in the Economic Crime and Corporate
Transparency Act 2023, which includes
a failure to prevent fraud offence;
• 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
material risk or data to companies
located in other countries, which could
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
and are protecting customers from
cyber-enabled crime and in the UK,
reforms relating to authorised push
payment fraud reimbursements;
• 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;
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 261
Material existing and emerging risks (continued)
• 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 and reviews of the role of
critical third party providers;
• 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 on 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 363.
v) Impact of benchmark interest rate
reforms on the Group
Global regulators have driven international
efforts to reform benchmarks and indices,
used to determine the amounts payable
under a wide range of transactions to
increase reliability and robustness. These
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 benchmarks,
and the introduction of implementing
legislation and regulations. Specifically,
certain London Interbank Offered Rate
(LIBOR) tenors either ceased at the end of
2021 or became permanently
unrepresentative, with synthetic 3-month
GBP LIBOR ceasing to be published at the
end March 2024 and synthetic 1-, 3- and
6-month USD LIBOR settings intended to
cease being published at the end of
September 2024. 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 benchmarks.
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 the
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 an
affected benchmark to determine an
amount payable which are included in the
Group’s financial assets and liabilities) that
use these benchmarks and indices, and
present a number of risks for the Group,
including but not limited to:
• Compliance risk: in undertaking actions
to transition away from using certain
benchmarks 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 and 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 exposures, 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 contracts
and securities linked to a relevant
benchmark, and (iii) the Group’s
preparation and readiness for the
replacement of benchmarks which have
ceased or will shortly cease to be
published 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, which means that the
amount of interest payable is only known
after the period has finished because it is
calculated by reference to observed
historical rates. In contrast, forward-
looking 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
benchmarks and indices,
discontinuation of any benchmarks or
index and transition to alternative RFRs
may impact the pricing mechanisms
used by the Group on certain
transactions.
• Operational risk: changes to existing
benchmarks and indices, the
discontinuation of any benchmark 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 benchmark or index is no
longer available to calculate amounts
payable, the Group may incur expenses
in amending documentation for new and
existing transactions and/or effecting
the transition from the original
benchmark or index to a new one.
• 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 262
Material existing and emerging risks (continued)
vi) Change delivery and execution risks
The Group constantly adapts and
transforms 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.
vii) 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).
viii) Application of resolution measures
and stabilisation powers under the UK
Banking Act
Under the UK 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 the UK's 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 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,
transfer or cancellation 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.
The ‘no creditor worse off’ safeguard
within the Banking Act requires that no
shareholder or creditor must be left worse
off from the use of resolution powers than
they would have been if the relevant entity
entered insolvent liquidation. Whilst
shareholders may be entitled to
compensation where there is determined
to have been a shortfall following a
valuation, there can be no assurance that
shareholders would recover any such
compensation promptly or that such
compensation will be equivalent to the full
losses incurred in resolution.
Material existing and emerging
risks impacting individual
principal risks
i) Climate risk
Climate risk is the impact on Financial
(Credit, Market, Treasury & Capital) and
Operational Risks arising from climate
change through physical risks and risks
associated with transitioning to a lower
carbon economy.
The effects of climate change may be
highly significant in their breadth and
magnitude and could affect a large number
of firms operating in different sectors and
geographies, leading to potential
downstream effects to the financial
system.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 263
Material existing and emerging risks (continued)
There is potential direct impact on banks
and other financial institutions through
their operations, as well as indirectly
through customers and clients. Given this
context and to support the Group’s
ambition to be a net zero bank by 2050,
Climate Risk is a Principal Risk under
Barclays’ ERMF.
Scientific research suggests that physical
risks arising due to climate change such as
acute events (e.g. cyclone, hurricanes and
floods) and chronic events (longer term
shifts in climate patterns) may occur in
increasing frequency and severity,
Potential tipping points can cause
unprecedented damage to particular
geographies. Some regions are expected
to be more severely affected than others if
they are more exposed and/or more
vulnerable to certain events.
The potential impact of physical risk
events on the economy may include lower
GDP growth, higher unemployment,
shortage of raw materials and products
due to supply chain disruptions and
significant changes in asset prices. These
factors could subsequently impact
business model and profitability of Barclays
and its clients. Damage to the properties
and operations of the Group's clients could
decrease their production capacity,
increase operating costs, affect insurability
and decrease value of those properties.
This in turn would lead to a decline in the
creditworthiness of clients, which may
result in higher defaults, delinquencies,
write-offs and impairment charges in the
Group's portfolios. Physical hazards may
also impact the creditworthiness of the
sovereigns of countries in which they
occur. The deterioration in the credit
ratings of sovereign bonds could affect
their access to capital and their eligibility
for inclusion in banks' liquidity buffers.
These hazards may also impact the value
of investments which the Group holds.
A transition to a low-carbon economy
requires policy and regulatory changes,
new national or regional commitments,
new technological innovations and
changes to supply and demand systems
within industries. The transition to a low-
carbon economy may also trigger changes
in consumer behaviour and market
sentiment. These changes may result in
increased costs and reduced demand for
the products and services of a company
including early retirement and impairment
of assets, or decreased revenue and
profitability.
The Group's clients that are more
susceptible and exposed to these changes
may face financial difficulties which in turn
may impact their creditworthiness. In
addition, impacts to the creditworthiness
of the Group's clients, customers and
counterparties (particularly in high carbon
sectors), can also arise a result of climate-
related legal actions or investigations,
where outcomes of such actions have
material financial impacts. This in turn can
increase credit risk within group portfolios
(for further details on credit risk, refer to ii)
Credit Risk on page 263). Both transition
and physical risk drivers may lead to
increased price volatility and repricing of
market instruments, which in turn may
impact the value of market instruments
held by the Group.
The Group's own premises may also suffer
physical damage due to weather events
leading to increased costs for the Group.
As the economy transitions to a lower
carbon economy, financial institutions also
face significant and rapid developments in
stakeholder expectations, policy, law and
regulation, which could impact lending
activities and the risks associated with
lending portfolios as well as asset values.
Failure to adequately embed climate risk
management into the risk framework may
have a material and adverse impact on the
Barclays' brand, competitiveness,
profitability, capital requirements, cost of
funding, financial condition and ability to
expand its business.
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, and
any other climate-related ambitions or
targets the Group may commit to in
future, the Group will 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. These include
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 national and international
standards, industry and scientific
practices, regulatory requirements and
market expectations regarding climate
change, which remain under continuous
development.
There remains a possibility that these
standards, practices, requirements and
expectations could 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 external
factors which are beyond the Group’s
control, including geopolitical issues,
energy security, energy poverty and other
considerations such as a 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 (among
other things) international regulatory
developments or stakeholder
expectations in the UK, the US, the EU or
other markets.
Achieving Barclays’ climate-related
ambitions and targets will also depend on a
number of factors outside the Group’s
control, including reliable forecasts of
hazards from the physical climate models
and availability of data/models to
measure/assess climate impact on clients.
The pathway to net zero is uncertain,
complex and dependent on progress in
various areas such as advances in low-
carbon technologies, collective action by
clients to meet their own net zero goals,
and supportive public policies in markets
where Barclays operates. If there is a lack
of progress in the aforementioned areas,
Barclays may fail to achieve its climate-
related ambitions and targets, and this
could have a material adverse effect on
Barclays’ business, operations, financial
condition, prospects and reputation.
+
For further details on the potential legal risk from
failing to achieve our climate-related ambitions and
targets, refer to page 270.
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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 264
Material existing and emerging risks (continued)
a) Impairment
Impairment is calculated in line with the
requirements of IFRS9. Loss allowances,
based on ECLs, are measured on a
forward-looking basis using a broad range
of financial metrics and application of
complex judgements. Accordingly,
impairment charges are potentially volatile
and may not successfully predict actual
credit losses, particularly under stressed
conditions. 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. Additionally, the Group
is subject to a concentration of those risks
where it 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: this remains a
key area of focus, particularly in
unsecured lending, as cost of living
pressures persist. Macroeconomic
factors, such as unemployment, high
interest rates or broader inflationary
pressures, which 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:
despite holding up reasonably well during
most of 2023, continuing cost of living
pressures, falling consumer confidence,
or other macroeconomic factors
adversely affecting consumers could
trigger a contraction in demand which,
together with rising business costs and,
for UK retail, a structural shift to online
shopping, would add pressure to sectors
heavily reliant on consumer discretionary
spending during 2024. 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.
• 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 2023 rising
mortgage interest rates and increasing
economic concerns have reduced both
housing market activity and customer
borrowing capacity, resulting in modest
house price declines year on year. These
challenging market conditions are likely
to continue in 2024 as the effect of
higher interest rates continues to feed
through to disposable incomes,
especially in London and the South East
of the UK where the Group has a high
exposure. Additionally, as mortgages roll
off existing rates onto new higher rates,
there is a risk of increased borrower
defaults. This could put further
downward pressure on property prices
and, in turn, impact the Group’s
impairment and capital position.
Furthermore, certain 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 conservatively
positioned with low LTVs but remains
vulnerable to a deteriorating economic
environment, and moderate stress has
been experienced in the Group's
(predominantly) US office commercial
real estate exposure during 2023. As
structural shifts in working patterns, such
as the normalisation of ‘hybrid’ working,
mature, the Group remains exposed to
further stress. Landlords serving
business tenants whose income is based
on discretionary consumer spending are
also at risk from reduced rent collection.
• Leveraged Finance Underwriting:the
Group takes on non-investment grade
underwriting exposures, including single
name risk, particularly in the US and the
UK. The subdued investor appetite in the
underwriting market during 2023
exposed the Group to extended
underwriting periods and negative
movements in marks, which could
deteriorate further and result in losses
for the Group (and higher capital
charges) if market conditions remain
challenging during 2024 and exposures
remain on book for further extended
periods.
• Oil & Gas sector: high market energy
prices during 2023 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 returned to profit in
2023 as lower margin (tourist) demand
for air travel recovered to pre-pandemic
levels. That said, there remains a
heightened risk to the revenue streams
of the Group’s clients and,
consequentially, their ability to service
debt obligation. These risks stem from
the structural decline in higher margin
business travel, consolidation within the
European airline market, reputational
damage and/or costs associated with
the emerging ‘fake parts’ scandal, volatile
oil prices, increasingly extreme weather
patterns and concerns about the impact
of air travel on climate change.
• Information Technology sector: while
dominated by well-known US firms,
many companies struggle to monetise
their product offerings and face
increasing reputational risk particularly as
regulatory scrutiny increases. Given the
nature of their activities, the Group’s
clients in this sector face heightened risk
from data security breaches and
ransomware and/or cyber attacks as well
as from the malicious use of Artificial
Intelligence, all of which could negatively
impact their ability to service debt
obligations.
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) in both 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.
Impact to the creditworthiness of the
Group's clients, customers and
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 265
Material existing and emerging risks (continued)
counterparties (particularly in high carbon
sectors), can also arise out of climate-
related legal actions or investigations
commenced against the Group's clients,
customers and counterparties (particularly
in high carbon sectors), where outcomes
of such actions have material financial
impacts, which can in turn increase credit
risk within Group portfolios.
+
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 rates, 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
geopolitical conflicts and idiosyncratic
market events. A disruptive adjustment to
higher or lower 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
could be vulnerable were there to be
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 assets.
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
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 money or capital
markets and/or the 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 and
restrictions on distributions (including in
respect of its shares and/or additional
tier 1 instruments), leading to an inability
to comply with the Group's distribution
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
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 266
Material existing and emerging risks (continued)
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, cyber and/or
data integrity disruptions, unavailability of a
Group site, closure of real estate services
provided through its retail branch network,
or unavailability of personnel or services
supplied by third parties, and there are
particular challenges with recovering from
a major cyberattack. 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
clients, and reputational damage.
b) Cyberattacks
Cyberattacks continue to be a global
threat 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. In 2023,
cybersecurity incidents experienced by
Barclays included distributed denial of
service (DDoS), phishing, credential
stuffing, and exploitation of software
vulnerabilities.
The Group cannot provide absolute
security against cyberattacks. Malicious
actors, who are increasingly sophisticated
in their methods, tactics, techniques and
procedures, seek to steal money, gain
unauthorised access to, destroy or
manipulate data, and disrupt operations.
Further, 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. Other attacks
may take advantage of the window during
which patching or the deployment of other
defences is underway, but not yet
complete. 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 have included
ransomware attacks that have disrupted
the service providers’ or suppliers’
operations and, in some cases, have had
impacts 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; the onset of AI, which may be
used to facilitate increasingly sophisticated
attacks; 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
recent years, the Group has faced a
heightened risk of cyberattack as a result
of the conflicts in Eastern Europe and the
Middle East.
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 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 takeover; 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
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 267
Material existing and emerging risks (continued)
impact of a successful cyberattack is also
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 a 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. The rapid development in AI is
another area the Group is monitoring
closely. This includes the identification of
potential use cases for responsible
adoption of AI in the Group's own
operations as well as managing the threats
third party usage of AI may pose, including
with respect to cybersecurity and fraud.
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
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 (the
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 for 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
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 268
Material existing and emerging risks (continued)
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. The risk of
systems or human error in connection with
such transactions increases with these
developments, 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
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. Any of
these events could also lead to breaches
of laws, rules or regulations and, hence,
regulatory enforcement actions, which
could result in significant financial loss,
imposition of additional capital
requirements, enhanced regulatory
supervision and reputational damage.
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.
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 and regulatory returns and
disclosures, include credit impairment
provisions, taxes, fair value of financial
instruments, goodwill and intangible
assets, pensions and post-retirement
benefits, the calculation of RWAs and
capital, and provisions including conduct
and legal, competition and regulatory
matters (please 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 or are altered as a result of
subsequent feedback from the Group's
regulators, this could result in material
losses to the Group, beyond what was
anticipated or provided for, including as a
result of changes to treatments in
regulatory returns and capital disclosures.
If capital requirements are not met as the
result of changes in interpretation,
compliance with the Group's distribution
policy could be impacted and/or additional
measures may be required to strengthen
the Group's capital or leverage position,
which may also lead to the Group's inability
to achieve stated targets. 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.
In 2023, the UK Government enacted
legislation on the OECD Inclusive
Framework on Base Erosion and Profit
Shifting Pillar Two Framework introducing
a global minimum tax rate of 15%.
The UK’s Pillar Two rules apply for
accounting periods beginning on or after
31 December 2023 which will increase the
Group's tax compliance obligations. In the
USA, the corporate alternative minimum
tax on adjusted financial statements
income introduced by the Inflation
Reduction Act became effective on 1
January 2023. These new tax regimes
require systems and process changes that
introduce potential additional operational
risks.
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
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 269
Material existing and emerging risks (continued)
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) Compliance risk
Compliance 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 (conduct risk) and the risk to
Barclays, its clients, customers or markets
from a failure to comply with the laws, rules
and regulations (LRR) applicable to the
firm. 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 (which incorporates
regulatory requirements set by law and our
regulators) 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 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 also a risk of
regulatory censure or enforcement action.
In July 2023, the FCA’s new Consumer
Duty came into force for new and existing
products or services that are open to sale
or renewal. It will apply to closed products
and services from 31 July 2024. The duty
sets higher expectations for the standard
of care that firms provide to retail
customers and impacts all aspects of
Barclays’ retail businesses, including every
retail customer journey, product and
service as well as our relationships with
partners, suppliers and third parties. This
has resulted in significant implementation
costs and there will also be higher ongoing
costs for the industry as a result of
extensive monitoring and evidential
requirements.
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 or other 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 clients, and the markets in
which the Group operates. Understanding
the Conflicts of Interest that impact or
potentially impact the Group enables them
to be identified, managed and mitigated
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
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 270
Material existing and emerging risks (continued)
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.
g) Laws, rules and regulations
Barclays is subject to range of laws, rules
and regulations across the world. A failure
to comply with these may have an adverse
effect on the Barclays Bank Group’s
business, customers and the markets
within which it operates and could result in
reputational damage, penalties, damages
or fines.
+ For further details on the Group’s approach to
compliance risk, refer to the compliance risk
management and compliance 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. Claims of
potential greenwashing arising from
sustainability-related statements made by
Barclays may also give rise to reputation
risk.
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, rules 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 applicable laws, rules, regulations
or contractual requirements or to assert or
defend their intellectual property rights.
Legal risk may arise in relation to any
number of the material existing and
emerging risks identified above.
A breach of applicable laws, rules 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 25. In addition
to matters specifically described in Note
25, 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 (including skilled person reviews)
by regulators, governmental and other
public bodies. These may be in connection
with business activities in which the Group
is, or has been, engaged, or areas of
particular regulatory focus, such as
financial crime, money laundering or
terrorist financing. The Group may also
(from time to time) be subject to claims
and/or legal proceedings and other
investigations relating to financial and non-
financial disclosures made by members of
the Group (including, but not limited to,
regulatory capital and liquidity reporting
and ESG disclosures). Additionally, due to
the increasing number of new climate and
sustainability-related laws and regulations,
growing demand from investors and
customers for sustainable products and
services, and regulatory and NGO 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, including
greenwashing risk.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 271
Material existing and emerging risks (continued)
This may include laws and regulatory
processes and policies seeking to restrict
or prohibit doing certain business with
entities identified as "boycotting" or
"discriminating" against particular
industries or considering ESG factors in
their investment processes, including to
protect the energy and other high carbon
sectors from any risks of divestment or
challenges in accessing finance.
Furthermore, there is a risk that
shareholders, campaign groups,
customers and other interest groups could
seek to take legal action (including under
"soft law" mechanisms) against the Group
for financing or contributing to climate
change and environmental degradation or
because the Group's response to climate
change or other ESG factors is perceived
to be ineffective, insufficient or
inappropriate.
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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 272
Principal risk management
Climate risk management
Climate risk is the impact on Financial
(Credit, Market, Treasury & Capital) and
Operational Risks arising from climate
change through physical risks and risks
associated with transitioning to a lower
carbon economy.
• Physical risks: Result from a changing
climate and can be event-driven (acute
risks), including increased frequency
and/or severity of extreme weather
events such as cyclones, hurricanes and
flooding. Physical risks can also be driven
by longer term shifts in climate patterns
(chronic risks) arising from sustained
higher temperatures that may cause
rises in sea levels, rising mean
temperatures and more frequent/
severe weather events.
• Transition risks: The transition to a lower
carbon economy is likely to involve
significant and rapid policy, regulatory
and legal changes, as evolving
technology and markets adapt to a
changing climate and associated
impacts.
Overview
The Group has developed a Climate Risk
Framework (CRF) for financial and
operational risks stemming from climate
change. This enables Barclays to foster a
systematic and consistent approach for
managing climate risk across the firm. The
key principle underpinning this framework
is that climate risk is recognised as a driver
of other existing financial (Credit, Market,
Treasury and Capital) and non financial
(including Operational and Reputational)
risks, and not treated as a standalone risk
type. The CRF is supported by policies,
standards and other relevant documents
which contain control objectives that must
be met.
The CRF:
• Defines climate risk
• Establishes principles for the
The Climate Risk Policy sets objectives for
the management of climate risks and
establishes key principles for quantifying
and reporting, including escalations
required to senior stakeholders up to and
including the Board Risk Committee (BRC).
The Framework and Policy are applicable
for Barclays' business activities, with a
focus on lending, advisory, sales and
trading, capital markets and investments.
Climate risk may also drive non-financial
risks such as reputational risk, which
continue to be managed under the
respective risk frameworks.
To support the embedment of the
Principal Risk, in 2023 the Group delivered
the following with three overarching
objectives:
1. Enhance and improve risk appetite and
associated controls for climate risk
2. Develop a plan for refining modelling and
scenario analysis capabilities
3. Expand BlueTrack™, which now covers
nine segments comprising of Energy,
Power, Cement, Steel, Automotive
Manufacturing, UK Housing, Commercial
Real Estate, Agriculture and Aviation
Organisation, roles and responsibilities
The Group Head of Climate Risk is the
Principal Risk owner accountable for the
management and oversight of the climate
risk profile. The Group Head of Climate
Risk reports directly to Group CRO.
On behalf of the Board, the BRC reviews
and approves the Group's approach to
managing climate risk.
The Group Risk Committee (GRC) is the
most senior executive body responsible for
reviewing and challenging risk practices for
climate.
To support the oversight of Barclays'
climate risk profile, a Climate Risk
Committee (CRC) has been established as a
sub-committee of the GRC. The Group
Head of Climate risk is the Chair of the CRC.
Any material issues are escalated by the
CRC to the GRC, and the GRC
subsequently escalates to the BRC as
appropriate.
A Climate Risk control environment has
been established in alignment with the
Barclays' Control Framework. A Climate Risk
Control Forum (CRCF) was established in
2022 to oversee implementation and
operation of the Barclays Control
Framework, including reviewing risk events,
policy and issues management. Climate risk
assurance groups were also established and
are responsible for performing climate risk
specific reviews to support the embedding
of the Climate Risk Framework and Policy.
Entity Heads of Climate Risk have been
appointed across key Barclays legal entities,
namely Barclays Bank UK (BBUK) PLC,
Barclays Bank (BB) PLC, Barclays Bank
Ireland (BBI) PLC, and the US Intermediate
Holding Company (US IHC).
Broader sustainability matters and
reputation risk associated with climate
change are coordinated by the Group
Sustainability and ESG Team, led by the
Group Head of Sustainability.
Enterprise Risk Framework (ERMF)
Governance
Climate Risk Framework (CRF)
Board Risk Committee (BRC)
Reputation Risk Management
Framework (RRMF)
Board Sustainability
Committee (BSC)
identification, measurement, monitoring
and reporting of climate risk
Risk
Credit, market, treasury &
capital and operational risks
Sustainability matters and
reputation risk associated with
climate change
• Outlines the process for establishing
climate risk appetite
• Summarises the impact of climate risk
on other principal financial and
operational risk types
• Outlines roles and responsibilities
applicable to the Climate Risk
Framework
Group Risk Committee (GRC)
Ownership
Group Chief Risk Officer
Group Sustainability
Committee (GSC)
Head of Public Policy and
Corporate Responsibility
Group Head of Climate Risk
Group Head of Sustainability
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 273
Principal risk management (continued)
Risk appetite
Barclays' approach to setting climate risk appetite is aligned with its ambition to be a net zero bank by 2050 and reducing financed
emissions in line with its disclosed sector targets. In accordance with the risk appetite policy and tolerance standards, Barclays has
established a climate risk appetite at the Group level, comprising of qualitative risk appetite statements and quantitative constraints.
This is reviewed and revised (where applicable) annually and formally approved by the Board.
In 2023, Barclays has enhanced its approach for the quantification of climate risk appetite by implementing additional limits and
controls, including around the expected financed emissions target (BlueTrack) pathways. The progress against these targets is
monitored on a regular basis whilst acknowledging the challenges and external dependencies to reduce financed emissions. The Group
continues to regularly review its risk appetite and enhance risk metrics including expansion of risk limits for priority sectors.
Risk identification
Physical and transition risk drivers can lead to adverse financial impacts through various transmission channels. Transmission channels
are causal chains that explain how climate risk drivers impact firms such as Barclays either directly through their own operations and
infrastructure or indirectly through their financing and investment activities as described earlier in the "Climate-related Risks" section on
page 67. The diagram below illustrates these dynamics.
The potential impact of physical risk events at the macro level may include lower GDP growth, higher unemployment and significant
changes in the availability and prices of products or commodities. At the micro level, damage to properties and operations of Barclays's
clients could lead to increasing costs and possible decline in revenues, which in turn might impact their ability to repay the loans. Thus
through these transmission channels, risks for Barclays may materialise in its traditional risk categories such as credit risk, market risk,
treasury and capital risk, operational risk and reputational risk. The impact of climate risk drivers may be significant and widespread,
affecting companies, households and the general economy leading to potential financial system contagion.
Climate risks
Economic transmission channels
Transition risks
• Policy and legal
(e.g. carbon tax,
litigation actions)
• Reputation (e.g.
stakeholder
concern, change
in consumer
preferences)
• Technology (e.g.
substitute
technologies,
emissions
capture)
• Market (e.g.
change in market
sentiment,
uncertainty in
market signals)
Physical risks
• Chronic
(e.g. temperature,
precipitation,
agricultural
productivity,
sea levels)
• Acute
(e.g. heatwaves,
floods, cyclones
and wildfires)
Micro
Affecting individual businesses and households
Businesses
Households
• Property damage and
business disruption from
severe weather
• Stranded assets and new
capital expenditure due to
transition
• Changing demand and costs
• Legal liability (from failure to
mitigate or adapt)
• Loss of income (from
weather disruption and
health impacts, labour
market frictions)
• Property damage (from
severe weather) or
restrictions (from low-
carbon policies) increasing
costs and affecting
valuations
Financial risks
Credit risk
• Defaults by
businesses and
households
• Collateral depreciation
Market risk
• Repricing of equities,
fixed income,
commodities etc.
Compliance risk
•
Increased costs to
comply with
regulatory
requirements
Financial
system
contagion
Macro
Aggregate impacts on the macroeconomy
• Capital depreciation and increased investment
• Shifts in prices (from structural changes, supply shocks)
• Productivity changes (from severe heat, diversion of investment
to mitigation and adaptation, higher risk aversion)
• Labour market frictions (from physical and transition risks)
• Socioeconomic changes (from changing consumption patterns,
migration, conflict)
• Other impacts on international trade, government revenues,
fiscal space, output, interest rates and exchange rates.
Operational risk
• Supply chain
disruption
• Forced facility closure
Liquidity risk
•
Increased demand
for liquidity
• Refinancing risk
Climate and economy feedback effects
Economy and financial system feedback effects
Adapted from Network for Greening the Financial System (NGFS), September 2022 and in consideration of transmission channels relevant to Barclays.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 274
Principal risk management (continued)
Barclays' work on assessing climate-related risks have been focused on the short (0-1 year) and medium term (1-5 years) horizons, in
line with our financial planning cycle. 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, treasury and capital risk, operational risk
(including legal risk) and reputational risk. Examples of these feedback effects are set out in the table below.
Principal risk
Credit risk
Example effects of climate risk drivers
Increase in credit risk due to reduction in borrowers' ability to repay and service debt if the borrower is affected by
physical risk events that severely damages its infrastructure and operations. Borrowers that are subjected to higher
carbon taxes, penalties or fines for not adequately addressing their impact on climate (i.e. exposed to higher litigation
and reputational damages) or do not successfully transition to a lower carbon economy might see deterioration in their
credit ratings. In some instances, this could lead to borrowers going into default and impact banks' ability to recover loan
value.
Market risk
Treasury & capital risk
Operational risk
Reputation risk
Uncertainty about timing, severity and frequency of extreme physical climate events may lead to higher volatility in
financial markets. Equity prices of corporates operating in carbon intensive sectors may decrease due to reduced
demand for products or services. Reduction in financial asset values can potentially lead to abrupt price adjustments,
resulting in market risk losses where climate risk is not priced into the asset value.
Severe physical events could trigger a sharp increase in demand for liquidity for financial firms, corporates and
households. Reduction in banks' access to stable sources of funding or withdrawal of deposits due to climate risk drivers
may negatively impact banks' liquidity positions. Deterioration of clients' risk profile due to climate risk drivers may also
lead to higher capital requirements.
Acute physical risk events may cause damage to banks' essential infrastructure and disrupt operations leading to higher
operational risks. Banks rely on a complex network of supplier and service providers. Climate change can disrupt supply
chains by affecting the availability of goods and services leading to delays or interruptions in critical operations.
Increasingly stringent climate and sustainability-related laws and regulations and the pace at which the regulations are
implemented means that banks, through their business activities, may face increasing litigation and other claims if they
are perceived to have contributed to or failed to prevent climate change or environmental damage, including by
financing client activities.
Banks may face reputational risks related to climate change in various ways, as the public and stakeholders increasingly
expect banks to demonstrate their commitment to environmental sustainability. Banks that are perceived as not
adequately addressing climate risks may face reputational damage. Additionally, banks can be accused of greenwashing
if the information disclosed is misleading or if they are not able to meet their climate goals.
Barclays has developed an internal climate
risk identification process to identify and
assess the potential impact of climate risk
as a driver of other principal risks. Drivers
of climate risk are identified and collated
through quarterly horizon scanning
exercises, following which information is
disseminated to relevant principal risk
teams. Following review by principal risk
teams, the relevant information feeds into
the Climate Risk Register. The Climate Risk
Register is maintained as per the ERMF and
is integrated into the Group Risk Register.
The Group Risk Register contains all
material risks that may impact forward-
looking business plans across key legal
entities (Barclays PLC, BBUK PLC, BBI PLC)
and business units (BUK and BI).
Quantitative (typically based on stress
testing) or qualitative assessments are
performed to quantify the impact of
material risks on capital or liquidity
positions of legal entities/business units.
Following this assessment, each material
risk is mapped to key drivers along with the
risk ratings (which are derived based on
magnitude of impact and materiality
thresholds). The Group Risk Register is
refreshed on at least an annual basis and is
subsequently used to support strategic
planning, scenario design, sensitivity
analysis and capital adequacy
assessments.
Barclays has also developed processes to
identify sectors, sovereigns and US States
which other Principal Risks must prioritise
for assessment of climate risks. Within
these processes, the Group analyses and
assesses the sensitivity and vulnerability of
different industry sectors and geographies
(including sovereigns and US states) to
various physical and transition risk drivers
and categorise them into different risk
buckets. Following this assessment, the
industry sectors and geographies that are
highly exposed to climate risks are deemed
to be of elevated risk. These assessments
are regularly reviewed and benchmarked
against external studies and research and
incorporate inputs from the subject matter
experts.
The outcomes of the above mentioned
processes namely the Climate Risk
Register, elevated sector and geography
(including sovereigns and US states)
assessments and underlying exposures,
form the basis of Barclays' approach and
priorities for further granular assessment.
Details on exposures to elevated sectors
are on pages 284 to 287.
In the UK Mortgages portfolio, segments
that are vulnerable to subsidence and
flood risk have been identified. Additionally,
Energy Performance Certificate (EPC)
ratings have been identified for portfolios
that are particularly vulnerable to transition
risk. Methodology and breakdown of
subsidence risk and flood risk bands in the
portfolio is available on page 288.
Additionally, through individual client
assessments and scenario analysis
exercises, Barclays identifies portfolios
that are more vulnerable to climate-
related risks.
Risk assessment
The emissions resulting from the activities
of customers and clients to whom
financing is provided is measured using
Barclays' bespoke tool BlueTrack™.
Currently, BlueTrack™ covers nine
segments comprising of Energy, Power,
Cement, Steel, Automotive
Manufacturing, UK Housing, Commercial
Real Estate, Agriculture and Aviation.
Details on the BlueTrack™ methodology
and targets are on pages 86 to 99.
Furthermore, Barclays has developed the
Client Transition Framework (CTF) to
evaluate clients' progress as they
transition to a low-carbon business model.
Using BlueTrack™ data and public
disclosures, the framework evaluates both
qualitative and quantitative components
to assess transition trajectories against
Barclays’ targets and benchmarks. This
allows the Group to prioritise engagement
with clients based on their CTF scores.
Details on the CTF methodology are on
page 90.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 275
Principal risk management (continued)
During 2023, Barclays conducted industry-
specific deep dives to identify risk factors
and characteristics for those sectors. For
example, the power sector review
incorporated analysis of carbon intensity,
transition plans and the results of a
bespoke power utilities scenario analysis
(such as the effect of carbon pricing on
client financial performance).
Furthermore, Barclays has industry-
specific risk management processes
where appropriate. Granular asset-level
assessment is performed in the oil and gas
portfolio, prioritising the assessment of
clients that are non-investment grade and
operating in the upstream and midstream
sub-sectors. Taking into account factors
such as breakeven costs, geological
concerns, infrastructure constraints and
regulatory/geopolitical uncertainty,
Barclays has subsequently classified
clients and their assets into tiers from 1 to
3, with tier 3 considered the riskiest. Asset
tiering and assessment for these clients
are reviewed at least annually.
For Credit Risk, Barclays continues to
embed climate risk assessment into credit
assessment, annual review and transaction
approval processes to ensure that
climate-related risks are considered for
Wholesale Credit and Retail customers in
elevated risk sectors.
At a client level, the Climate Lens
questionnaire is used to evaluate physical,
transition and environmental risks
associated with firms operating in elevated
risk sectors. Each question is rated as Low,
Moderate or High based on the client’s
exposure and vulnerability to various
climate and environmental risk factors.
Climate Lens is currently being re-
developed with the aim of making it more
quantitative and improving its integration
within the credit processes.
For Market Risk, the impact of climate
change is measured by applying stress
scenarios that stress the core risks
susceptible to climate change over long
and short-term horizons to individual risk
factors. This process is conducted every
quarter. 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.
For Treasury and Capital Risk, Barclays’
conducts Group-wide climate stress tests
to understand and assess the potential
impact on Barclays' capital position.
Climate risk considerations have also been
incorporated into the Internal Capital
Adequacy Assessment Process (ICAAP).
For Liquidity Risk, Barclays identifies and
assesses potential vulnerabilities of certain
industries and asset classes that may
deteriorate under a climate stress
scenario, and subsequently impact funding
and liquidity ratios. Climate risk
considerations have also been
incorporated into the Internal Liquidity
Adequacy Assessment Process (ILAAP).
For Pension Risk, key risk indicators based
on the impact of physical and transition risk
drivers on the pension fund have been
defined. These are reviewed and
monitored on a quarterly basis.
For operational risk, climate-related risks
continue to be assessed as part of existing
business-as-usual operational risk
processes. This includes working with
Premises and Operational Recovery
Planning teams to evaluate and respond to
climate-related impacts and regulatory
requirements Climate factors have been
integrated into Structured Scenario
Assessments, which capture extreme but
plausible operational tail risks. As part of
the assessment in 2023, climate risk has
been included in the building destruction
scenario (physical risks) and
greenwashing-related scenarios
(transition risks).
For reputational risk, the primary
responsibility for identifying and managing
reputation risk and adherence sits with the
front line business and support functions
where the risk arises. The Enhanced Due
Diligence process and other relevant
processes in these business units facilitate
the assessment of climate-related
reputational risk - details on this are on
page 236, while details on oversight and
management are embedded with the
Barclays governance framework on pages
231 to 232.
Across Barclays' portfolios, scenario
analysis continues to form a key part of the
Group’s approach to assessing and
quantifying the impact of climate change.
Details on the progress and outcomes of
our scenario analysis and stress testing
exercises are available on pages 131 to
136.
Risk monitoring and reporting
In addition to the climate risk appetite,
Barclays has integrated climate risk
considerations into policies, standards and
lending guidelines. Consistent with our net
zero ambition and taking into account
considerations of all relevant business
factors, policies have been introduced to
progressively curtail or prohibit financing of
certain activities in sensitive sectors,
including upstream oil and gas, thermal
coal mining and coal-fired power
generation, Arctic oil and gas, oil sands,
hydraulic fracturing (fracking), Amazon oil
and gas, extra heavy oil and ultra-deep
water. These policies are reviewed
regularly and updated with respect to
external developments. Details on
restrictive policies are on page 100.
Mandate and scale (M&S) exposure
controls translate risk appetite into a
detailed series of limits to control day-to-
day risk taking. Barclays has implemented
climate-aware limits and controls for
priority sectors, including based on,
BlueTrack™ measures of emissions
intensity and the Client Transition
Framework. For the UK retail portfolio,
physical and transition risk mandates are in
place for the UK Mortgages and Business
Banking Agriculture portfolios.
Quantitative and qualitative information
are presented and reviewed at the CRC. A
Group-level climate risk dashboard is
presented to BRC on a quarterly basis,
which is used to inform progress against
sector targets, current exposure to
portfolios with high physical and transition
risks, concentrations and climate risk
trends. The climate dashboard periodically
includes outputs and learnings from
internal stress test and regulatory
exercises and external developments
based on horizon scanning.
Legal entity specific climate risk
dashboards for monitoring and reviewing
climate-sensitive exposures have been
developed and presented to appropriate
committees. Where Climate Risk limits are
subject to ongoing monitoring, they will be
reported at the appropriate Principal Risk
Committees and CRC.
Barclays continues to enhance and
sophisticate our risk management
capabilities with our increased knowledge
and ability to quantify and manage climate-
related risks.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 276
Principal risk management (continued)
Nature Risk Assessment
In 2022-23, Barclays participated in a
TNFD pilot with UNEP FI, alongside
other financial institutions, focused on
UK and 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.
As reported last year, this involved
assessing our clients’ locations in
terms of production and sales and
applying a number of different 2030
scenarios to the portfolio. During
2023, we used the results of the pilot
to inform the management of nature-
related risks identified during the
assessment. For example, the results
informed the development of new
questions for the Client Transition
Tool (CTT) for UK farmers, which are
due to be incorporated in 2024. This
will help identify clients that may need
support in managing their nature-
related risks alongside
decarbonisation actions, and to
inform our client engagement
proposition. See page 94 for more
details on our work with the UK
farming sector.
Further, in recognition of nature-
related impacts identified in the
agricultural value chain, we updated
our Forestry and Agricultural
Commodities Statement, which
included strengthening our existing
restrictions and introducing additional
new restrictions on clients operating
in agricultural commodity sectors
exposed to significant deforestation
risk. See page 100 for details.
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.
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,
including risk return objectives, 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
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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 277
Principal risk management (continued)
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 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 three 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.
• first loss exposures across pools of
• model maintenance: monitoring of
credit risk can be hedged via synthetic
securitisation structures, typically via
CLN (credit lending notes) issuance. As
these are fully funded upfront they
provide for a direct reduction in credit
risk exposure on referenced pools.
+ Detailed policies are in place to appropriately
recognise and record credit risk mitigation. For more
information, refer to pages 131 to 134 of the Barclays
PLC Pillar 3 Report 2023 (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 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 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
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.
iii) 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 278
Principal risk management (continued)
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 2023 (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.
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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 279
Principal risk management (continued)
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
and leverage 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.
The Group aims to prudently manage its
overall leverage position (including risk of
excessive leverage) by utilising plausible
stress scenarios, reviewing and deploying
management actions in response to
deteriorating economic and commercial
positions. In order to manage contingent
leverage risk, the Group considers the
context from which the business
consumption arises, the impact of client
utilisation on leverage and the available
actions to manage.
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 2023, Barclays
complied with all regulatory minimum
capital requirements. Contingent leverage
risk is managed by; i) setting
comprehensive leverage (and RWA)
targets for each business as part of the
Treasury capital management process,
taking into account adherence to early
warning indicators and maintain a healthy
leverage ratio, and; ii) Monitoring execution
of actions taken to course-correct as
necessary.
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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 280
Principal risk management (continued)
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
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 Bank 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 Barclays Group has a dedicated Model
Risk Management (‘MRM’) function that
consists of six 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) Infrastructure Delivery and Oversight,
responsible for the delivery of model
inventory including associated data quality
& reporting and oversight of Quantitative
Processes;
(v) COO, responsible for strategy,
communications and business
management; and
(vi) 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. VCoE
is aligned to the Group Model Risk
Governance team.
The Group Model Risk Committee is
MRM’s primary risk committee and a
subcommittee of the Group Risk
Committee. It is convened with senior
executives in the first and second line of
defence to oversee the model risk profile
and risk appetite.
The Model Risk Framework is defined and
implemented through Model Risk Policy
and Standards that prescribe the Barclays
Group-wide, end-to-end requirements for
the identification, measurement and
management of model risk, covering
model documentation, development,
testing, monitoring, annual review,
independent validation and approval,
change and reporting processes.
The function reports to the Barclays Group
CRO and operates a global framework.
Implementation of best practice standards
is a central objective of the Barclays Group.
The key model risk management activities
include:
• Correctly identifying models across all
relevant areas of the Bank and recording
models in the Barclays Group Models
Database (‘GMD’), the Barclays 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 the Independent
Validation Unit (IVU) for validation and
ensure 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 use and on a continual basis.
• Defining the model risk appetite in terms
of risk tolerance, and qualitative metrics
which are used to track and report on
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 and oversee 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 281
Principal risk management (continued)
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, including risk-based review and
challenge. 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
compliance with Group Resolution
Planning Prudential regulatory
requirements.
+ 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 2023.
Compliance 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 (conduct risk), and the risk to
Barclays, its clients, customers or markets
from a failure to comply with the laws, rules
and regulations (LRR) applicable to the
firm.
Overview
Compliance risk incorporates market
integrity, customer protection, financial
crime, product design and review, and the
newly created laws, rules and regulation
risks. Barclays has no appetite to operate
its business other than in full accordance
with all applicable laws, rules and
regulations, in order to deliver good
outcomes for / avoid harm to customers,
clients and markets. Barclays will act in
good faith; seeking to avoid causing
foreseeable harm and to enable and
support customers to pursue their
financial objectives.
Organisation, roles and responsibilities
The Compliance 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 compliance 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 conduct
related controls to manage its
performance and assess conformance to
these policies and controls. The
responsibility for LRR risk management
sits across various functions and business
units, including Legal, Chief Controls
Office, Risk and Compliance.
Senior managers are accountable within
their areas of responsibility for owning and
managing compliance risk in accordance
with the CRMF, as defined within their
regulatory Statement of Responsibilities,
and a dedicated team has been
established in Compliance to oversee LRR
risk management.
Compliance as an independent second line
function oversees that compliance risks
are effectively identified, managed,
monitored and escalated, and has a key
role in helping Barclays achieve the right
conduct outcomes and evolve a
compliance-focused culture.
The governance of Compliance 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
Compliance Risk Profile. The risk
committees’ responsibilities include the
identification and discussion of any
emerging compliance risk exposures in the
Barclays Group and Barclays Bank Group. A
new sub-committee of the Group Risk
Committee was established in August
2023 to provide oversight on LRR risk. This
committee is chaired by the Group Chief
Compliance Officer.
Compliance Risk
By effectively managing Compliance 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 282
Principal risk management (continued)
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 27 in the Strategic
Report for more information on the Barclays
Mindset.
Managing Compliance risks
See page 179 in the Directors' report in
+
addition to pages 269 and 361 in the risk review
section for more information on how the
Group defines, manages and mitigates
Compliance risks.
Product design and review risk
It is important that the design of our
products and services meets the needs of
clients, customers and 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 Compliance risk and the
Compliance risk profile for their respective entities.
Please refer to the report of the BPLC Board Risk
Committee on pages 174 and 179 and the reports of
the BBPLC and BBUKPLC Board Risk Committees
within the BBPLC and BBUKPLC 2023 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:
• 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 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.
Strategic
report
Climate and
sustainability report
Shareholder
information
Governance
Risk
review
Financial
review
Financial
information
Barclays PLC
Annual Report 2023 283
Principal risk management (continued)
Organisation, roles and responsibilities
Legal Risk management
Organisation, roles and responsibilities
The risk of loss or imposition of penalties,
damages or fines from the failure of the
firm to meet applicable laws, rules,
regulations or contractual requirements
or assert or defend its intellectual property
rights.
Overview
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. This seeks to
mitigate legal risk, including through the
implementation of Group-wide legal risk
policies requiring engagement of legal
professionals in situations that have the
potential for legal risk, identification and
management of legal risks by those
professionals, and escalation of legal risk
as necessary. Legal Risk is also mitigated
by the complementary requirements of
the compliance risk management
framework, including the responsibility of
legal professionals to proactively identify,
communicate and provide legal advice on
applicable laws, rules and regulations.
Notwithstanding these mitigating actions,
the Group operates with a level of residual
legal risk, for which the Group has limited
tolerance.
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 Head of Public Policy and Corporate
Responsibility is responsible for the
publication of appropriate Reputation Risk
policies 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.
The Group's businesses and functions
have responsibility for identifying and
escalating to the Legal Function legal risk in
their areas, 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 provides support to all areas of
the bank and is not formally part of any of
the three lines of defence. Except in
relation to the legal advice it provides or
procures, the Legal Function is subject to
oversight from the second line of defence
with respect to its own operational and
compliance risks, as well as with respect to
the legal risk to which the bank is exposed.
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, producing the Group-wide risk
appetite statement 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 284
Risk performance - Climate risk
Climate risk performance
Carbon-related assets
According to TCFD, certain industry segments are more likely to be financially impacted than others due to their exposure to certain
transition and physical risks around greenhouse gas (GHG) emissions, energy, or water dependencies associated with their operations
and products. These non-financial industries are grouped into four key areas: Energy; Transportation; Materials and Buildings; and
Agriculture, Food, and Forest Products. Barclays’ exposures to the industries within these groups are reported as carbon-related assets
and can be found in the table on the following page.
Elevated risk sectors
Based on portfolio level assessments (including for industry sectors) on climate risk, Barclays identifies and categorises sectors with
heightened risk to climate change as elevated sectors. However, in each sector there are a range of vulnerabilities, meaning not all of
our clients in these sectors have high emissions, and accordingly should not be interpreted as an indicator of relative carbon intensity.
Residential Real Estate exposures are also included in this table. Barclays recognises Residential Real Estate portfolio as elevated risk,
therefore on that basis they have been included in the table. The sectors highlighted blue in the table represent the sectors considered
as elevated at the Group level.
Elevated risk sector
Example drivers of risk
Aviation
Automotive
Cement
Coal Mining and Coal
Terminals
Chemicals
Mining (including
diversified miners)
Oil and Gas
Power Utilities
Agriculture
More stringent air emission and carbon regulations, requiring high levels of capital investment and Research &
Development (R&D) expenditure. Vulnerable to shift in consumer preferences.
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.
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.
Technological advances in low-carbon and sustainable alternatives along with new and more stringent environmental
regulations, including carbon tax. 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, vulnerable to litigation cases and
reputational damage.
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.
Policy pressure to cut emissions and move to renewable sources of energy, leading to increased capital expenditure costs,
plus potential exposure to carbon taxes.
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
Residential Real Estate
Evolving minimum energy efficiency requirements and increasing physical risks from flood, subsidence and coastal erosion
have the potential to impact house prices and homeowner affordability.
Shipping
Steel
Road Haulage
More stringent carbon tax regulations and policy pressure to cut emissions and adopt low-emission fuels, requiring higher
levels of R&D expenditure and capital investment.
Being an energy-intensive sector, the sector is exposed to the policy pressure to cut emissions and evolving air pollution
regulation .
Policy pressure to cut emissions, requiring high levels of capital investment.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 285
Risk performance - Climate risk (continued)
Carbon-related assets (Incl. sub-sector breakdown)1,2
2023
£m
2022
£m
Loans &
advances3
Loan
commitments4
Total
Loans &
advances3
Loan
commitments4
Total
% Change
Agriculture, Food and Forest Products (logging)
Agriculture
Energy & Waters
Power Utilities
Metals (waste & recycling)
Manufacturing
Automotive
Cements
Chemicals
Food, Bev and Tobacco
Manufacturing - Others
Metals
Oil and Gas (refining)
Packaging Manufacturers: Metal, Glass and Plastics
Paper and Forest Products (excluding logging)
Steel
Materials and Building
Construction and Materials
Homebuilding and Property Development
Real Estate Management and Development
Mining and Quarrying
5
Mining (incl. diversified miners)
Oil and Gas (extraction)
Transport & storage
Aviation
Oil and Gas (midstream)
Other Transport Services
Ports
Road Haulage
Shipping
Wholesale and Retail Distribution and Leisure
Oil and Gas (wholesale)
Others
Other Financial Institutions
Real Estate Management and Development (REITs)
Home Loans
Residential Real Estate
Subtotal (Elevated risk sectors)
3,597
3,597
1,019
948
71
6,030
858
161
372
962
3,118
157
60
113
186
43
23,650
452
3,272
19,926
1,714
221
1,493
1,869
262
328
687
75
398
119
1,628
375
1,253
515
515
171,512
171,512
180,747
914
914
13,141
13,049
92
31,449
5,691
381
3,947
5,705
12,710
408
1,411
303
748
145
10,640
641
2,247
7,752
8,370
1,705
6,665
7,139
2,349
2,187
1,263
124
417
799
5,417
2,139
3,278
1,726
1,726
8,226
8,226
50,025
4,511
4,511
14,160
13,997
163
37,479
6,549
542
4,319
6,667
15,828
565
1,471
416
934
188
34,290
1,093
5,519
27,678
10,084
1,926
8,158
9,008
2,611
2,515
1,950
199
815
918
7,045
2,514
4,531
2,241
2,241
179,738
179,738
230,772
3,762
3,762
2,536
2,481
55
6,773
968
222
474
908
3,537
261
100
95
168
40
25,024
802
3,521
20,701
1,528
201
1,327
2,297
465
328
647
95
453
309
2,554
995
1,559
941
941
173,770
173,770
185,895
822
822
13,463
13,318
145
32,161
5,493
160
4,223
6,111
13,180
479
1,375
314
642
184
10,980
752
2,126
8,102
8,759
2,262
6,497
7,012
2,221
2,426
1,166
87
429
683
4,326
1,615
2,711
2,853
2,853
12,170
12,170
4,584
4,584
15,999
15,799
200
38,934
6,461
382
4,697
7,019
16,717
740
1,475
409
810
224
36,004
1,554
5,647
28,803
10,287
2,463
7,824
9,309
2,686
2,754
1,813
182
882
992
6,880
2,610
4,270
3,794
3,794
185,940
185,940
53,878
239,773
Carbon-related assets Grand total
211,534
87,022
298,556
Total Loans & Advances & Loan Commitments
399,496
375,234
774,730
219,185
92,546
311,731
398,779
382,037
780,816
Carbon-related assets / Total Loans & Advances
and Loan Commitments
53%
23%
39%
55%
24%
40%
(2) %
(11) %
(4) %
(5) %
(2) %
(3) %
2 %
(41) %
(3) %
(4) %
(4) %
(1) %
Sub-total of sectors spanning in multiple
industries
Oil and Gas
Notes
2,256
12,402
14,658
2,750
11,913
14,663
0 %
1 The sectors have been represented based on the standard nomenclature of economic activities (NACE codes) this year. These sector headings are consistent across our disclosures
on credit risk concentration by industry for contractual maturity, staging and geography (page 320). The prior year comparatives have been represented in line with the updated sector
headings.
2 As industries decarbonise, sectors will increasingly include both carbon and non-carbon related activities e.g. Power Utilities will also include, in part, their generation capacity from
renewable energy sources.
3 Loans & advances includes debt securities at amortised cost amounting to £56,789m (2022: £45,487m) of which carbon related assets are £2,906m (2022: £3,482m). These carbon
related assets comprises £2,643m (2022: £3,406m) in Material & Buildings, £238m (2022: £74m) in Transport and storage and £25m (2022: £2m) in Energy and water.
4 Loan commitments excludes the fair value exposures of £15,203m in 2023 (2022: £13,471m).
5 Diversified miners with minority interests in thermal coal mining are included in this category.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 286
Risk performance - Climate risk (continued)
Credit exposure to nature priority sectors
For the first time we disclose credit exposure to sectors defined by TNFD in its Additional Guidance for Financial Institutions as “Nature
priority sectors” which we note is a core TNFD metric for banks under the TNFD disclosure framework published in September 2023. As
part of our efforts to calculate and disclose this metric, we have mapped the industry codes provided by TNFD to Barclays Industry
classifications. The monitoring and reporting of our exposures to these TNFD identified nature priority sectors will continue to evolve in
line with approaches taken to nature-related risk management and as the list of priority sectors set out in the TNFD Guidance for
Financial Institutions is updated and as such, are subject to change in future. Nature-related risks within a sector may vary substantially
according to company and project.
Credit exposures to nature priority sectors 1, 2
2023
(£m)
2022
(£m)
Loans & advances3
Loan
commitments4
Total
Loans & advances3
Loan
commitments⁴
Total % change
3,597
962
186
2,256
948
161
372
452
3,272
80
240
242
228
221
113
43
858
262
687
75
398
119
315
278
914
5,705
748
12,402
13,049
381
3,947
641
2,247
729
886
526
500
1,705
303
145
5,691
2,349
1,263
124
417
799
6,022
562
4,511
6,667
934
14,658
13,997
542
4,319
1,093
5,519
809
1,126
768
728
1,926
416
188
6,549
2,611
1,950
199
815
918
6,337
840
1,889
654
18,908
1,699
1,565
65,319
3,588
2,219
84,227
3,762
908
168
2,750
2,481
222
474
802
3,521
103
121
239
316
201
95
40
968
465
647
95
453
309
596
360
754
464
822
6,111
642
11,913
13,318
160
4,223
752
2,126
739
1,028
490
624
314
184
5,493
2,221
1,166
87
429
683
4,584
7,019
810
14,663
15,799
382
4,697
1,554
5,647
842
(2%)
(5%)
15%
—%
(11%)
42%
(8%)
(30%)
(2%)
(4%)
1,149
(2%)
729
940
5%
(23%)
(22%)
409
2%
224
(16%)
6,461
2,686
1,813
182
882
992
1%
(3%)
8%
9%
(8%)
(7%)
2%
2,262
2,463
5,642
6,238
567
1,160
1,679
927
(9%)
1,914
2,143
87%
4%
21,314
64,835
86,149
(2%)
Agriculture
Food, Bev and Tobacco
Paper and Forest Products
Oil and Gas
Power Utilities
Cement
Chemicals
Construction & Materials
Homebuilding and Property Development
Manufacturing - Personal Care Products
Manufacturing - Semiconductors and
Semiconductor Equipments
Manufacturing - Textiles, Apparel and
Luxury Goods
Metals
5
Mining (incl. diversified miners)
Packaging manufacturers: Metal, Glass
and Plastics
Steel
Automotive
Aviation
Other Transport Services
Ports
Road Haulage
Shipping
Pharmaceuticals
Sewerage, Waste Collection, Treatment
and Disposal
Power Utilities - Renewable
Water Utilities
Nature Priority Sector Assets Grand Total
Total Loans & Advances and Loan
Commitments
Nature priority sectors assets / Total
loans & advances and loan commitments
Notes
399,496
375,234
774,730
398,779
382,037
780,816
(1%)
5 %
17 %
11 %
5 %
17 %
11 %
1 As industries decarbonise, sectors will increasingly include both carbon and non-carbon related activities e.g. Power Utilities will also include, in part, their generation capacity from
renewable energy sources.
2 The TNFD highlights real estate development as a high-priority sector for nature. Barclays has £29,919m (2022: £32,597m) of Loans & Advances and Loan Commitments to Real
Estate Management and Development, of which the majority is from real estate investment activity. As a result, this has been excluded from the Priority sector assets for Nature.
3 Loans & advances includes debt securities at amortised cost amounting to £56,789m (2022: £45,487m) of which nature priority sector assets are £2,906m (2022: £3,482m). These
nature priority sector assets comprises £2,643m (2022: £3,406m) in Material & Buildings, £238m (2022: £74m) in Transport and storage and £25m (2022: £2m) in Energy and water.
4 Loan commitments excludes the fair value exposures of £15,203m in 2023 (2022: £13,471m).
5 Diversified miners with minority interests in thermal coal mining are included in this category.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 287
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 2022 and 2023 financing below. We have
constructed this table based on the mapping of issuers’ industry assignment in Dealogic data and Barclays’ internal industry taxonomy
called Barclays Industry Classification (BIC). 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)1, 2, 3
31.12.2023 (£m)
31.12.2022 (£m)
% Change
Energy & Waters
Power Utilities
Manufacturing
Automotive
Cements
Chemicals
Food, Bev and Tobacco
Manufacturing - Others
Metals
Oil and Gas (refining)
Packaging Manufacturers: Metal, Glass and Plastics
Paper and Forest Products
Steel
Materials and Building
Construction and Materials
Homebuilding and Property Development
Real Estate Management and Development
Mining and Quarrying
4
Mining (Incl. diversified miners)
Oil and Gas (extraction)
Transport & storage
Aviation
Oil and Gas (midstream)
Other Transport Services
Road Haulage
Shipping
Wholesale and retail distribution and leisure
Oil and Gas (wholesale)
Others
Other Financial Institutions
Real Estate Management and Development (REITs)
Carbon-related Assets Grand Total
Capital Market Financing Total
Financing to Carbon-related Sector / Total Capital Market Financing
Sub-total of sectors spanning in multiple industries
Oil and Gas
Notes
20,329
20,329
31,336
7,333
279
2,523
6,991
11,743
145
1,381
217
102
622
3,143
446
457
2,240
2,992
877
2,115
7,858
1,797
3,887
997
202
975
3,005
720
2,285
1,163
1,163
69,826
27,021
27,021
24,782
3,136
162
2,241
4,310
11,443
604
1,793
27
711
355
6,668
82
617
5,969
2,527
354
2,173
7,654
1,731
2,752
2,149
—
1,022
6,227
1,193
5,034
3,178
3,178
78,057
311,054
22 %
304,249
26%
(25) %
26 %
(53) %
18 %
3 %
(52) %
(63) %
(11) %
2 %
8,103
7,911
2 %
1 The sectors have been represented based on the standard nomenclature of economic activities (NACE codes) this year. These sector headings are consistent across our disclosures
on credit risk concentration by industry for contractual maturity, staging and geography (page 320). The prior year comparatives have been represented in line with the updated sector
headings.
2 As industries decarbonise, sectors will increasingly include both carbon and non-carbon related activities e.g. the clients present within the sector exposure reported under Power
Utilities will also have part of their generation capacity from renewable energy sources, which represents a non-carbon related activity.
3 In 2022, this table was presented in USD. As it is now presented in GBP, the comparative figures have been represented.
4 Diversified miners with minority interests in thermal coal mining are included in this category.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 288
Risk performance - Climate risk (continued)
Subsidence: Total Volume of stock (as % of total UK
Mortgages portfolio) per risk band
Flood: Total Volume of stock (as % of total UK Mortgages
portfolio) 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.
Barclays works with a third-party climate data provider to support
climate risk data enhancements within the UK Mortgages
portfolio. This has enabled Barclays to move from postcode level
to property level flood data granularity. 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 be eligible for Flood Re (a subsidised flood
insurance scheme).
As at 30 September 2023
Risk Band
Negligible
Very Low
Low
Moderate
High
Very High
Missing
Note
Volume %
81.3
7.6
1.8
1.6
2.6
1.2
3.9
Data collected from 3rd party source based on one quarter lag. 30 September 2023 closest
available dataset.
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.
Barclays works with a third-party climate data provider to support
climate risk data enhancements within the UK Mortgages
portfolio. This includes the ability to map subsidence risk at a
property level granularity. The subsidence risk 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 9 is around
nine times as likely as a property in class 1 to make a subsidence
claim. A small proportion of the UK Mortgage portfolio is not
mapped to a subsidence risk score (c.5.2%). This is due either to a
lack of data coverage (i.e. the property is not covered by
underlying maps), or a lack of certainty in address matching.
As at 30 September 2023
Risk Band Qualitative Risk Score
No Subsidence Risk
Low
Moderate
High
Very High
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Missing
Note
Volume %
0.01
9.51
35.96
23.54
4.71
4.72
3.36
2.41
0
0.25
5.43
0
2.64
0
0
2.26
5.2
Data collected from 3rd party source based on one quarter lag. 30 September 2023 closest
available dataset.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 289
Risk performance - Climate risk (continued)
Flood: Very High & High Flood Risk Exposure per region (as % of Total Regional Exposure)
The map below represents the proportion of properties within the UK Mortgages portfolio at High and Very High risk of flood per region
as a percentage of the total regional exposure (excluding Kensington Mortgage Company originated properties). The flood metrics are
presented on present day risk levels and 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. The
mapping covers c.95% of the UK Mortgages portfolio on a total exposure basis - the remaining c.5% of properties are not currently
mapped to flood risk ratings on a property level basis as a result of a lack of data coverage (i.e. the property is not covered by underlying
maps), or a lack of certainty in address matching.
% of Total Lending
– High: 2.7%
– Very High: 1.0%
N. Ireland
% of Total Lending: 0.9%
of which:
– High: 1.4%
– Very High: 0.7%
North West
% of Total Lending: 5.8%
of which:
– High: 2.9%
– Very High: 1.8%
Wales
% of Total Lending: 2.2%
of which:
– High: 2.4%
– Very High: 0.7%
West Midlands
% of Total Lending: 5.0%
of which:
– High: 1.6%
– Very High: 0.6%
South West
% of Total Lending: 6.3%
of which:
– High: 2.5%
– Very High: 1.0%
Scotland
% of Total Lending: 3.5%
of which:
– High: 2.0%
– Very High: 1.0%
North East
% of Total Lending: 1.9%
of which:
– High: 1.3%
– Very High: 0.7%
Yorks & the Humber
% of Total Lending: 3.9%
of which:
– High: 2.4%
– Very High: 1.4%
East Midlands
% of Total Lending: 4.3%
of which:
– High: 2.9%
– Very High: 2.6%
East of England
% of Total Lending: 12.2%
of which:
– High: 2.6%
– Very High: 0.9%
London
% of Total Lending: 33.2%
Of which
– High: 2.8%
– Very High: 0.7%
South East
% of Total Lending: 20.8%
of which:
– High: 3.1%
– Very High: 1.1 %
Darker shades indicate higher proportion of high or very high flood risk exposure
High and Very High Flood Risk are shown as % of regional exposure
Note
Data collected from third party source based on one quarter lag. 30 September 2023 closest available dataset.
Business Banking - Dairy & Cattle Exposure
The transition risk in the Business Banking portfolio is assessed via the percentage Dairy & Cattle lending of the Business Banking
Agriculture portfolio. Given methane’s global warming potential the Dairy & Cattle sector is a significant contributor to the UK’s
emissions footprint and is therefore susceptible to the transition risks of climate change, namely consumer preference changes and
potential emissions taxation.
Barclays utilises exposure data to identify what proportion of the Business Banking Agriculture portfolio consists of lending to Dairy
& Cattle clients.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 290
Risk performance - Climate risk (continued)
EPC: Total Volume of stock (as % of total UK Mortgages portfolio) per EPC rating
The transition risk in the UK Mortgages portfolio is assessed via the distribution of EPC ratings across the portfolio. One of the levers to
decarbonise the UK housing stock for the UK Government is to tighten energy efficiency requirements. It is anticipated that any
tightening of minimum energy efficiency standards (MEES) will focus initially on buy-to-let properties. Buy-to-Let properties which are
privately rented are currently required to have a minimum EPC rating of E. The transition risk identified has the potential to impact the
valuation of properties directly, alongside impacting affordability as properties which fall under MEES may no longer be able to be rented
out or the landlord may need to pay for retrofitting to be brought up to standard.
EPC ratings range from A (most efficient) to G (least efficient). EPC ratings are used as the basis for assessing expected energy costs
but do not give a precise picture of emission intensity. The UK Mortgages portfolio is mapped to the Government EPC Register.
Properties may not feature on the Government EPC Register as some properties may have never been required to have an EPC rating
(not been sold or rented out since 2007), their EPC rating may have expired (EPC ratings are valid for 10 years) or the property may be in
Scotland or Northern Ireland (which use separate databases). Whilst Barclays’ proportion of ‘missing EPC ratings’ has declined year on
year, the issue of missing EPC ratings is prevalent across the industry.
EPC: Residential & Buy-to-let balances and volumes per EPC rating as at September 2023
EPC Rating
Residential Balances (£m)
Balance as % of
Residential Mortgages
portfolio
Volume as % of
Residential Mortgages
portfolio
Buy-to-Let Balances (£m)
Balance as % of Buy-to-
Let Mortgages portfolio
Volume as % of Buy-to-
Let Mortgages portfolio
A
B
C
D
E
F
G
Missing
Total
Note
£m
487
22,514
24,954
41,575
17,546
4,132
780
30,528
142,516
%
0.3
15.8
17.5
29.3
12.3
2.9
0.5
21.4
100
%
0.2
14.3
16.6
26.4
10.2
2.2
0.4
29.7
100
£m
20
2,144
5,781
6,842
1,991
129
31
3,033
19,971
%
0.1
10.7
28.9
34.3
10.0
0.6
0.2
15.2
100
%
0.1
8.9
29.6
34.4
10.1
0.7
0.2
16.0
100
1 Data matching provided by 3rd party source based on one quarter lag, 30 September 2023 closest available dataset - EPC monitoring based on Sept-23 portfolio and Sept-23
Government EPC Register. If no valid EPC is mapped, the expired EPC (where available) is included as a proxy.
EPC: Residential & Buy-to-let balances and volumes per EPC rating as at September 2022
EPC Rating
Residential Balances (£m)
Balance as % of
Residential Mortgages
portfolio
Volume as % of
Residential Mortgages
portfolio
Buy-to-Let Balances (£m)
Balance as % of Buy-to-
Let Mortgages portfolio
Volume as % of Buy-to-
Let Mortgages portfolio
A
B
C
D
E
F
G
Missing
Total
Note
£m
341
18,913
21,585
38,179
17,022
4,118
746
39,458
140,362
%
0.2
13.5
15.4
27.3
12.1
2.9
0.5
28.1
100
%
0.2
12.0
14.5
24.5
9.7
2.1
0.4
36.5
100
£m
17
1966
5053
6445
2066
157
36
4716
20456
%
0.1
9.6
24.6
31.5
10.1
0.8
0.2
23.1
100
%
0.1
8.1
25.6
32.2
10.2
0.8
0.2
22.8
100
1 Data matching provided by 3rd party source based on one quarter lag, 30 September 2022 closest available dataset - EPC monitoring based on Sept-22 portfolio and Sept-22
Government EPC Register. If no valid EPC is mapped, the expired EPC (where available) is included as a proxy.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 291
Risk performance - Credit risk
Credit risk
Credit risk: summary of contents
Credit risk represents a significant risk and mainly arises
from exposure to 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 geography
– Loans and advances at amortised cost by product
– Movement in gross exposure and impairment allowance
including provisions for loan commitments and financial
guarantees
– Stage 2 decomposition
– Stage 3 decomposition
Management adjustments to models for impairment
Measurement uncertainty and sensitivity analysis
Analysis of the concentration of credit risk
Page
292
293
295
295
297
298
305
306
307
311
320
– Credit risk concentration by Industry for contractual maturity,
320
staging and geography
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
– Retail Credit cards and Retail Other
Forbearance
– Retail forbearance programmes
– Wholesale forbearance programmes
322
322
322
323
325
329
329
331
332
333
334
334
335
This section provides an analysis of credit risk on debt
securities and derivatives.
Analysis of debt securities
Analysis of derivatives
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 292
Risk performance - Credit risk (continued)
Credit risk
Credit quality
Charge
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 loans and advances together with the
counterparty credit risk arising from
derivative contracts entered with clients.
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.
Task force on Disclosure about Expected
Credit Losses (DECL)
Credit risk disclosures have been enhanced
to include DECL III recommendations for
minimum product grouping and
geographical breakdown for this period and
prior period comparatives have been
aligned.
Summary of performance in the
period
Gross exposure
Gross loans and advances at amortised
cost to customers and banks have
remained broadly stable at £405bn, which
includes increase in debt securities driven
by Treasury investments and strategic
acquisitions in Home Finance. This is offset
by a reduction due to the German
consumer finance business classified as
assets held for sale and foreign exchange
movements in Corporate & Investment
Bank (CIB) and US Cards portfolio.
Maximum exposure
The Group’s net exposure to credit risk is
broadly stable at £1,030bn (2022:
£1,033bn). Overall, the extent to which the
mitigation is held against its total exposure
has decreased to 42% (2022: 44%)
primarily due to decrease in derivative
financial instruments (£46bn) and reverse
repurchase agreements (£14bn), both of
which are highly secured instruments.
Delinquencies are broadly stable across the
group with an increase observed in US
cards, which was anticipated. A range of
activities are in place to protect our existing
defensive positioning against current
macroeconomic headwinds.
Credit impairment charges were £1,881m
(2022: £1,220m), reflecting an increase in
delinquencies in US cards, which was
anticipated, and led to higher coverage in
CC&P.
Management Adjustments
Economic uncertainty adjustments have
decreased to £198m (2022: £317m). The
reduction is informed by the rebuild of
certain impairment models which better
capture the macroeconomic outlook.
Furthermore, adjustments have been
reassessed to capture affordability
headwinds in UK retail lending.
+ Refer to the Management adjustment to models
for impairment section on page 307 for further
details.
Climate
Barclays has performed a credit risk
assessment of physical and transition risk
due to climate change. This was delivered
through a combination of a scenario
approach and targeted reviews on specific
portfolios identified as more susceptible to
climate risk. The analysis did not result in a
separately identifiable impairment charge
for year end 2023 reporting.
+ 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.
+
Corporate loans 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 decrease of £3.2bn is observed in
Stage 2 gross exposure driven by an
improved GDP forecast and higher
repayments in Corporate loans partially
offset by an increase in retail lending
following resumption of more regular spend
activity and higher interest rates.
Stage 3 balances have increased to £7.2bn
(2022: £7.1bn) driven by higher
delinquencies in US cards partially offset by
repayments in Business Banking.
+ Refer to pages 305 to 306 for further details.
Scenario
Economic uncertainty continues, linked to
higher interest rates and ongoing
inflationary pressures in major economies.
For Q423, macroeconomic scenarios have
been refreshed and are designed around a
broad range of economic outcomes. The
Downside 2 (DS2) scenario has been
aligned to Barclays 2023 Internal Stress
Test (IST23) which is less severe in terms of
GDP deterioration, resulting in increased
DS2 weights.
ECL
Impairment allowances on loans and
advances at amortised cost including off-
balance sheet has increased to £6,252m
(2022:£6,175m) predominantly driven by
increase in US cards partially offset by a
reduction due to the German consumer
finance business classified as assets held
for sale. On-balance sheet coverage has
remained strong and stable at 1.4%.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 293
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 131 to 134 of the Barclays PLC Pillar 3 Report
2023 (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 2023, as a result of the
enforcement of collateral, was £6m (2022: £31m).
Maximum exposure and effects of netting, collateral and risk transfer (audited)
Maximum
exposure
Netting and
set-off
Cash
collateral
Non-cash
collateral
Risk transfer
Exposure net
of risk
mitigation
As at 31 December 2023
On-balance sheet:
Cash and balances at central banks
Cash collateral and settlement balances
Loans and advances at amortised cost:
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Total loans and advances at amortised cost
Of which credit-impaired (Stage 3):
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Total credit-impaired loans and advances at amortised cost
Debt securities 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
Assets held for sale
Total on-balance sheet
Off-balance sheet:
Contingent liabilities
Loan commitments
Total off-balance sheet
Total
£m
—
—
£m
—
—
£m
£m
—
—
224,634
108,889
(13) (171,484)
—
—
(2,329)
(1,028)
(1,117)
(61,892)
(2,158) (235,705)
—
—
(39)
(14,716)
(14,755)
—
—
(23)
(4)
(27)
—
—
—
—
—
(1,994)
—
(263)
(1,098)
(3,355)
(956)
(2,594)
(521)
(189)
(710)
—
—
—
(546)
(546)
(156)
—
—
—
—
15
34,221
6,556
45,461
86,253
2
387
31
308
728
55,637
—
74,977
12,464
87,441
(47)
—
(41,334)
(221)
(3,416) (145,292)
—
—
(31,211)
(3,463) (186,847)
(10,036)
(362)
—
—
—
(1)
—
(4)
—
—
—
(4)
(3,791)
(198)
—
—
6,254
2,365
423
110
9,152
12,989
71,270
2,196
3,855
(18,904) 662,316
£m
224,634
108,889
171,512
34,221
9,952
127,062
342,747
£m
—
—
—
—
—
(3,876)
(3,876)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(198,809)
—
—
—
1,996
387
317
1,956
4,656
56,749
2,594
75,498
12,653
88,151
47,639
2,586
149,131
110
199,466
256,836
71,830
2,197
3,855
1,357,948
25,340
390,437
415,777
(202,685)
(36,833) (437,210)
—
—
—
(2,225)
(358)
(283)
22,474
(1,506)
(41,862)
(1,773) 345,296
(3,731)
(42,220)
(2,056) 367,770
1,773,725
(202,685)
(40,564) (479,430)
(20,960) 1,030,086
Off-balance sheet exposures are shown gross of provisions of £504m (2022: £583m). See Note 24 for further details. In addition to the
above, the Group holds forward starting reverse repos with notional contract amounts of £54.3bn (2022: £48.4bn). These balances are
fully collateralised. Corporate loans at amortised cost include £5.3bn (2022: £8bn) of BBLS, CBILS and CLBILS supported by UK
government guarantees of £5.1bn (2022: £7.6bn), 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. Loan commitments reported also include
exposures relating to financial assets classified as assets held for sale.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 294
Risk performance - Credit risk (continued)
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:
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Total loans and advances at amortised cost
Of which credit-impaired (Stage 3):
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Total credit-impaired loans and advances at amortised cost
Debt securities 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
Assets held for sale
Total on-balance sheet
Off-balance sheet:
Contingent liabilities
Loan commitments
Total off-balance sheet
Total
Maximum
exposure
Netting and
set-off
Cash
collateral
Non-cash
collateral
Risk transfer
Exposure net
of risk
mitigation
£m
256,351
112,597
173,770
34,584
15,084
129,854
353,292
2,000
425
412
2,030
4,867
45,487
776
55,475
13,198
68,673
39,429
3,249
164,681
118
207,477
£m
—
—
—
—
—
£m
—
—
£m
—
—
£m
£m
—
256,351
—
112,597
(328)
(173,308)
(98)
36
—
—
—
34,584
(1,208)
(4,184)
(224)
9,468
(4,442)
(672)
(60,617)
(17,190)
46,933
(4,442)
(2,208)
(238,109)
(17,512)
91,021
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(1)
(1,996)
—
(32)
(6)
—
(323)
(742)
(39)
(3,061)
—
—
—
—
—
(695)
(776)
(530)
(250)
(780)
—
—
(3)
(709)
(712)
3
425
54
573
1,055
(196)
44,596
—
—
—
(48)
(48)
54,945
12,900
67,845
(17)
(31,544)
(9)
—
(321)
(3,672)
(160,347)
—
—
—
—
—
7,859
2,928
662
118
(3,689)
(192,212)
(9)
11,567
302,380
(238,337)
(34,547)
(11,434)
(7,275)
10,787
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
1,833,456
(242,779)
(41,868)
(487,741)
(27,697) 1,033,371
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 295
Risk performance - Credit risk (continued)
Expected Credit Losses
Loans and advances at amortised cost by geography
Total loans and advances at amortised cost in the credit risk performance section includes loans and advances at amortised cost to
banks and loans and advances at amortised cost to customers.
The table below presents a product and geographical breakdown by stages of loans and advances at amortised cost. Also included are
stage allocation of debt securities and off-balance sheet loan commitments and financial guarantee contracts by gross exposure,
impairment allowance and coverage ratio as at 31 December 2023.
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 corporate 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 geography (audited)
As at 31 December 2023
Retail mortgages
Retail credit cards
Retail other
1
Corporate loans
Total UK
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Total Rest of the world
Total loans and advances at amortised cost
Debt securities at amortised cost
Total loans and advances at amortised cost
including debt securities
Off-balance sheet loan commitments and
2
financial guarantee contracts
Total3,4
Gross exposure
Impairment allowance
Stage 1
Stage 2
£m
146,001
8,094
6,832
54,257
215,184
4,201
22,315
1,637
58,248
86,401
301,585
52,869
£m
19,123
2,128
1,252
8,673
31,176
346
3,450
91
4,629
8,516
39,692
3,907
Stage 3
£m
1,812
198
264
1,692
3,966
612
1,522
229
862
3,225
7,191
—
Total
Stage 1
Stage 2
£m
166,936
10,420
8,348
64,622
250,326
5,159
27,287
1,957
63,739
98,142
348,468
56,776
£m
43
111
56
191
401
7
412
3
96
518
919
11
£m
77
492
117
214
900
28
1,138
1
200
1,367
2,267
16
Stage 3
£m
112
107
144
346
709
316
1,226
32
252
1,826
2,535
—
Total
£m
232
710
317
751
2,010
351
2,776
36
548
3,711
5,721
27
354,454
43,599
7,191
405,244
930
2,283
2,535
5,748
374,063
728,517
24,208
67,807
1,037
399,308
8,228
804,552
173
1,103
287
2,570
44
2,579
504
6,252
As at 31 December 2023
Retail mortgages
Retail credit cards
Retail other
1
Corporate loans
Total UK
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Total Rest of the world
Total loans and advances at amortised cost
Debt securities at amortised cost
Total loans and advances at amortised cost
including debt securities
Off-balance sheet loan commitments and
2
financial guarantee contracts
Total3, 4
Notes
Net Exposure
Coverage ratio
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
£m
145,958
7,983
6,776
54,066
214,783
4,194
21,903
1,634
58,152
85,883
300,666
52,858
£m
19,046
1,636
1,135
8,459
30,276
318
2,312
90
4,429
7,149
37,425
3,891
£m
1,700
91
120
1,346
3,257
296
296
197
610
1,399
4,656
—
£m
166,704
9,710
8,031
63,871
248,316
4,808
24,511
1,921
63,191
94,431
342,747
56,749
353,524
41,316
4,656
399,496
373,890
727,414
23,921
65,237
993
398,804
5,649
798,300
%
—
1.4
0.8
0.4
0.2
0.2
1.8
0.2
0.2
0.6
0.3
—
0.3
—
0.2
%
0.4
23.1
9.3
2.5
2.9
8.1
33.0
1.1
4.3
16.1
5.7
0.4
5.2
1.2
3.8
%
6.2
54.0
54.5
20.4
17.9
51.6
80.6
14.0
29.2
56.6
35.3
—
35.3
4.2
31.3
Total
%
0.1
6.8
3.8
1.2
0.8
6.8
10.2
1.8
0.9
3.8
1.6
—
1.4
0.1
0.8
1 Includes Business Banking, which has a gross exposure of £15.2bn and an impairment allowance of £431m. This comprises £99m impairment allowance on £9.8bn Stage 1 exposure,
£81m on £4.1bn Stage 2 exposure and £251m on £1.3bn Stage 3 exposure. Excluding this, total coverage for corporate loans in UK is 0.6%.
2 Excludes loan commitments and financial guarantees of £16.5bn carried at fair value and includes exposures relating to financial assets classified as assets held for sale.
3 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 £183.6bn and impairment allowance of £151m. This comprises £16m ECL on £182.8bn Stage 1 exposure, £2m on
£0.6bn Stage 2 exposure and £133m on £140m Stage 3 exposure.
4 The annualised loan loss rate is 46bps after applying the total impairment charge of £1,881m.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 296
Risk performance - Credit risk (continued)
Assets held for sale
During 2023, gross loans and advances and related impairment allowances for the German consumer finance business were
reclassified from loans and advances to customers to assets held for sale in the balance sheet. Disclosures relating to assets held for
sale are provided in the credit risk tables, primarily where the disclosure is relevant to the measurement of these financial assets.
For further details on assets held for sale, see Note 40 to the financial statements.
Loans and advances to customers classified as assets held for sale
As at 31 December 20231
Retail credit cards
Retail other
Total Rest of the World
Note
Stage 1
Stage 2
Stage 3
Total
Gross
£m
1,621
1,561
3,182
ECL Coverage
Gross
ECL Coverage
Gross
ECL Coverage
Gross
ECL Coverage
£m
15
20
35
%
0.9
1.3
1.1
£m
445
288
733
£m
41
32
73
%
9.2
11.1
10.0
£m
92
84
£m
68
60
%
£m
73.9
2,158
71.4
1,933
176
128
72.7
4,091
£m
124
112
236
%
5.7
5.8
5.8
1 In 2022, total gross exposure of £4.3bn and impairment allowance of £296m was included in loans and advances at amortised cost which has now been classified as assets held for sale.
This comprises £37m ECL on £3.1bn Stage 1 exposure, £141m on £1.0bn Stage 2 exposure and £118m on £153m Stage 3 exposure.
Loans and advances at amortised cost by geography (audited)
As at 31 December 2022
Retail mortgages
Retail credit cards
Retail other
1
Corporate loans
Total UK
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Total Rest of the World
Total loans and advances at amortised cost
Debt securities at amortised cost
Total loans and advances at amortised cost
including debt securities
Off-balance sheet loan commitments and
2
financial guarantee contracts
Total3,4
As at 31 December 2022
Retail mortgages
Retail credit cards
Retail other
1
Corporate loans
Total UK
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Total Rest of the World
Total loans and advances at amortised cost
Total loans and advances at amortised cost
Debt securities at amortised cost
including debt securities
Off-balance sheet loan commitments and
2
financial guarantee contracts
Total3, 4
Notes
Gross exposure
Impairment allowance
Stage 1
Stage 2
Stage 3
£m
£m
£m
Total
£m
145,821
7,119
8,202
55,187
216,329
7,851
22,669
5,268
56,704
92,492
308,821
41,724
17,735
2,569
1,197
12,528
34,029
465
3,880
271
4,290
8,906
42,935
3,805
1,481
251
293
2,008
4,033
933
1,129
427
564
3,053
7,086
165,037
9,939
9,692
69,723
254,391
9,249
27,678
5,966
61,558
104,451
358,842
—
45,529
Stage 1
Stage 2
Stage 3
£m
21
127
72
317
537
8
331
28
144
511
1,048
9
£m
49
493
138
264
944
24
1,127
28
160
1,339
2,283
33
£m
58
137
145
360
700
356
818
163
182
1,519
2,219
0
Total
£m
128
757
355
941
2,181
388
2,276
219
486
3,369
5,550
42
350,545
46,740
7,086
404,371
1,057
2,316
2,219
5,592
372,945
723,490
30,694
77,434
1,180
8,266
404,819
809,190
245
1,302
315
2,631
23
2,242
583
6,175
Net Exposure
Coverage ratio
Stage 1
Stage 2
Stage 3
£m
£m
£m
Total
£m
145,800
6,992
8,130
54,870
215,792
7,843
22,338
5,240
56,560
91,981
307,773
41,715
349,488
372,700
722,188
17,686
2,076
1,059
12,264
33,085
441
2,753
243
4,130
7,567
40,652
3,772
44,424
30,379
74,803
1,423
114
148
1,648
3,333
577
311
264
382
1,534
4,867
—
4,867
164,909
9,182
9,337
68,782
252,210
8,861
25,402
5,747
61,072
101,082
353,292
45,487
398,779
1,157
6,024
404,236
803,015
Stage 1
Stage 2
Stage 3
Total
%
—
1.8
0.9
0.6
0.2
0.1
1.5
0.5
0.3
0.6
0.3
—
0.3
0.1
0.2
%
0.3
19.2
11.5
2.1
2.8
5.2
29.0
10.3
3.7
15.0
5.3
0.9
5.0
1.0
3.4
%
3.9
54.6
49.5
17.9
17.4
38.2
72.5
38.2
32.3
49.8
31.3
—
31.3
1.9
27.1
%
0.1
7.6
3.7
1.3
0.9
4.2
8.2
3.7
0.8
3.2
1.5
0.1
1.4
0.1
0.8
1 Includes Business Banking, which has a gross exposure of £18.1bn and an impairment allowance of £519m. This comprises £149m impairment allowance on £10.5bn Stage 1 exposure,
£121m on £6.0bn Stage 2 exposure and £249m on £1.6bn Stage 3 exposure. Excluding this, total coverage for corporate loans in UK is 0.8%.
2 Excludes loan commitments and financial guarantees of £14.9bn carried at fair value.
3 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 exposure, £9m on
£1.5bn Stage 2 exposure and £144m on £149m Stage 3 exposure.
4 The annualised loan loss rate is 30bps after applying the total impairment charge of £1,220m.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 297
Risk performance - Credit risk (continued)
Loans and advances at amortised cost by product (audited)
The table below presents a product breakdown by stages of loans and advances at amortised cost. Also included is a breakdown of
Stage 2 past due balances.
Loans and advances at amortised cost by product (audited)
As at 31 December 2023
Gross exposure
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Total
Impairment allowance
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Total
Net exposure
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Total
Coverage ratio
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Total
As at 31 December 2022
Gross exposure
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Total
Impairment allowance
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Total
Net exposure
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Total
Coverage ratio
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Total
Stage 1 Not past due
Stage 2
<=30 days
past due
>30 days past
due
Total
Stage 3
Total
£m
150,202
30,409
8,469
112,505
301,585
50
523
59
287
919
150,152
29,886
8,410
112,218
300,666
%
—
1.7
0.7
0.3
0.3
£m
16,834
4,858
1,094
12,960
35,746
73
1,257
82
399
1,811
16,761
3,601
1,012
12,561
33,935
%
0.4
25.9
7.5
3.1
5.1
£m
1,971
392
126
179
2,668
20
166
18
8
212
1,951
226
108
171
2,456
%
1.0
42.3
14.3
4.5
7.9
£m
664
328
123
163
1,278
12
207
18
7
244
652
121
105
156
1,034
%
1.8
63.1
14.6
4.3
19.1
£m
19,469
5,578
1,343
13,302
39,692
105
1,630
118
414
2,267
19,364
3,948
1,225
12,888
37,425
%
0.5
29.2
8.8
3.1
5.7
£m
2,424
1,720
493
2,554
7,191
£m
172,095
37,707
10,305
128,361
348,468
428
1,333
176
598
2,535
583
3,486
353
1,299
5,721
1,996
387
317
1,956
4,656
171,512
34,221
9,952
127,062
342,747
%
17.7
77.5
35.7
23.4
35.3
%
0.3
9.2
3.4
1.0
1.6
£m
£m
£m
£m
£m
£m
£m
153,672
29,788
13,470
111,891
308,821
29
458
100
461
1,048
153,643
29,330
13,370
111,430
307,773
%
—
1.5
0.7
0.4
0.3
15,990
5,731
1,232
16,552
39,505
53
1,334
118
401
1,906
15,937
4,397
1,114
16,151
37,599
%
0.3
23.3
9.6
2.4
4.8
1,684
284
104
159
2,231
11
100
22
13
146
1,673
184
82
146
2,085
%
0.7
35.2
21.2
8.2
6.5
526
434
132
107
1,199
9
186
26
10
231
517
248
106
97
968
%
1.7
42.9
19.7
9.3
19.3
18,200
6,449
1,468
16,818
42,935
73
1,620
166
424
2,283
18,127
4,829
1,302
16,394
40,652
%
0.4
25.1
11.3
2.5
5.3
2,414
1,380
720
2,572
7,086
174,286
37,617
15,658
131,281
358,842
414
955
308
542
2,219
516
3,033
574
1,427
5,550
2,000
425
412
2,030
4,867
173,770
34,584
15,084
129,854
353,292
%
17.1
69.2
42.8
21.1
31.3
%
0.3
8.1
3.7
1.1
1.5
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 298
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.
Transfers between stages in the tables have been reflected as if they had taken place at the beginning of the year. 'Net drawdowns,
repayments, net-remeasurement and movements due to exposure and risk parameter changes' includes additional drawdowns and
partial repayments from existing facilities. Additionally, the below tables do not include other financial assets subject to impairment such
as debt securities at amortised cost, cash collateral and settlement balances, financial assets at fair value through other comprehensive
income and other assets.
The movements are measured over a 12-month period.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 299
Risk performance - Credit risk (continued)
Loans and advances at amortised cost (audited)
Retail mortgages
As at 1 January 2023
Transfers from Stage 1 to Stage 2
Transfers from Stage 2 to Stage 1
Transfers to Stage 3
Transfers from Stage 3
1
Business activity in the year
Refinements to models used for calculation
Net drawdowns, repayments, net re-measurement
and movements due to exposure and risk parameter
changes
Final repayments
2
Disposals
Write-offs
As at 31 December 2023
Retail credit cards
As at 1 January 2023
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 year
3
Refinements to models used for calculation
Net drawdowns, repayments, net re-measurement
and movements due to exposure and risk parameter
changes
Final repayments
4
Transfers to assets held for sale
2
Disposals
Write-offs
As at 31 December 2023
Retail other
As at 1 January 2023
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 year
Refinements to models used for calculation
Net drawdowns, repayments, net re-measurement
and movements due to exposure and risk parameter
changes
Final repayments
4
Transfers to assets held for sale
2
Disposals
Write-offs
As at 31 December 2023
Notes
Stage 1
Stage 2
Stage 3
Total
Gross
exposure
£m
ECL
£m
Gross
exposure
£m
153,672
(9,557)
6,052
(453)
26
23,329
—
29
(2)
22
—
1
13
—
18,200
9,557
(6,052)
(530)
122
978
—
ECL
£m
73
2
(22)
(13)
2
7
—
Gross
exposure
£m
ECL
£m
Gross
exposure
£m
2,414
—
—
983
(148)
26
—
414
—
—
13
(3)
11
—
174,286
—
—
—
—
24,333
—
ECL
£m
516
—
—
—
—
31
—
(11,505)
(8)
(1,136)
65
(502)
27
(13,143)
84
(10,837)
(525)
—
150,202
29,788
(2,406)
2,900
(678)
54
2,775
—
(3)
(2)
—
50
(1,666)
(4)
—
19,469
(9)
—
—
105
(328)
(2)
(19)
2,424
(15)
—
(19)
428
(12,831)
(531)
(19)
172,095
458
(68)
590
(27)
32
60
(28)
6,449
2,406
(2,900)
(874)
31
332
—
1,620
68
(590)
(374)
18
116
37
1,380
—
—
1,552
(85)
29
—
955
—
—
401
(50)
25
11
37,617
—
—
—
—
3,136
—
(27)
(2)
(19)
583
3,033
—
—
—
—
201
20
(162)
(465)
649
797
(47)
998
440
1,330
(241)
(1,621)
—
—
30,409
13,470
(1,179)
463
(549)
33
7,302
—
(14)
(15)
—
—
523
100
(13)
36
(4)
3
27
—
(70)
(445)
—
—
5,578
1,468
1,179
(463)
(154)
9
197
—
(21)
(41)
—
—
1,630
(26)
(92)
(186)
(805)
(19)
(68)
(115)
(805)
(337)
(2,158)
(186)
(805)
1,720
1,333
37,707
(54)
(124)
(115)
(805)
3,486
166
13
(36)
(44)
4
23
—
720
—
—
703
(42)
28
—
308
—
—
48
(7)
21
—
15,658
—
—
—
—
7,527
—
574
—
—
—
—
71
—
(4,163)
(57)
(247)
31
(146)
115
(4,556)
89
(5,347)
(1,561)
—
—
8,469
(13)
(20)
—
—
59
(358)
(288)
—
—
1,343
(7)
(32)
—
—
118
(421)
(84)
(134)
(131)
493
(44)
(60)
(74)
(131)
176
(6,126)
(1,933)
(134)
(131)
10,305
(64)
(112)
(74)
(131)
353
1 Business activity in the year reported within Retail mortgages includes an acquisition of Kensington Mortgage Company in UK Mortgages of £2.4bn.
2 The £531m of disposals reported within Retail mortgages relate to transfer of facilities to a non-consolidated special purpose vehicle for the purpose of securitisation. The £186m of
disposals reported within Retail credit cards include debt sales undertaken during the year. The £134m of disposals reported within Retail other include £64m part sale of Wealth
portfolio in Italy and £70m of debt sales undertaken during the year.
3 Refinements to models used for calculation reported within Retail credit cards include a £88m movement in UK Cards, £43m movement in US Cards and £(111)m movement in the
German consumer finance business. These reflect model enhancements made during the year. Barclays continually reviews 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 helps to ensure that the models used
continue to reflect the risks inherent across the businesses.
4 Transfers to assets held for sale reported within Retail credit cards and Retail other relate to the German consumer finance business.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 300
Risk performance - Credit risk (continued)
Loans and advances at amortised cost (audited)
Corporate loans
As at 1 January 2023
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 year
1
Refinements to models used for calculation
Net drawdowns, repayments, net re-measurement
and movements due to exposure and risk parameter
2
changes
Final repayments
3
Disposals
Write-offs
As at 31 December 2023
Stage 1
Stage 2
Stage 3
Total
Gross
exposure
£m
ECL
£m
Gross
exposure
£m
ECL
£m
Gross
exposure
£m
ECL
£m
Gross
exposure
£m
111,891
(6,172)
5,592
(758)
195
23,213
—
461
(45)
108
(10)
16
43
(61)
16,818
6,172
(5,592)
(1,011)
403
933
—
424
45
(108)
(27)
22
29
174
2,572
—
—
1,769
(598)
205
—
542
—
—
37
(38)
29
—
131,281
—
—
—
—
24,351
—
ECL
£m
1,427
—
—
—
—
101
113
2,079
(179)
(1,618)
(73)
(667)
405
(206)
153
(23,149)
(386)
—
112,505
(43)
(3)
—
287
(2,689)
(114)
—
13,302
(46)
(26)
—
414
(406)
(108)
(213)
2,554
(65)
(99)
(213)
598
(26,244)
(608)
(213)
128,361
Reconciliation of ECL movement to credit impairment charge/(release) for the period
Stage 1
Stage 2
Stage 3
Retail mortgages
Retail credit cards
Retail other
Corporate loans
ECL movements excluding assets held for sale, disposals and write-offs4
ECL movement on loan commitments and other financial guarantees
ECL movement on other financial assets
ECL movement on debt securities at amortised cost
5
Recoveries and reimbursements
Total exchange and other adjustments
Total credit impairment charge for the year
Notes
£m
23
80
(21)
(171)
(89)
(72)
6
2
4
£m
32
51
(16)
16
83
(28)
(7)
(17)
(4)
1 Refinements to models used for calculation reported within Corporate loans include a £93m movement in Corporate and Investment Bank and £20m movement in Barclaycard
Payments. These reflect model enhancements made during the year. Barclays continually reviews 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 helps to ensure that the models used continue to reflect the risks
inherent across the businesses.
2 'Net drawdowns, repayments, net re-measurement and movements due to exposure and risk parameter changes' reported within Corporate loans also include assets of £0.8bn
derecognised due to payment received on defaulted loans from government guarantees issued under government’s Bounce Back Loans Scheme.
3 The £608m of disposals reported within Corporate loans relate to debt sales undertaken during the year.
4 In 2023, gross write-offs amounted to £1,168m (2022: £1,620m) and post write-off recoveries amounted to £44m (2022: £64m). Net write-offs represent gross write-offs less post
write-off recoveries and amounted to £1,124m (2022: £1,556m).
5 Recoveries and reimbursements include £29m 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 £44m.
(154)
(128)
(213)
1,299
Total
£m
88
£m
33
1,366
1,497
133
368
96
213
1,900
1,894
21
(11)
—
(73)
(79)
(12)
(15)
(73)
166
1,881
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 301
Risk performance - Credit risk (continued)
Loan commitments and financial guarantees (audited)
Stage 1
Stage 2
Stage 3
Total
Retail mortgages
As at 1 January 2023
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 2023
Retail credit cards1
As at 1 January 2023
Net transfers between stages
Business activity in the year
Gross
exposure
£m
11,714
(62)
4,184
(7,669)
(391)
7,776
144,957
448
19,098
ECL
£m
—
—
—
—
—
—
50
61
16
Gross
exposure
£m
450
53
—
(11)
(44)
448
5,435
(538)
224
Net drawdowns, repayments, net re-
measurement and movement due to exposure
and risk parameter changes
Limit management and final repayments
As at 31 December 2023
(5,863)
(59)
(1,769)
(13,849)
144,791
(9)
59
(545)
2,807
Retail other1
As at 1 January 2023
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 2023
Corporate loans
As at 1 January 2023
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 2023
Note
10,427
(171)
1,639
(1,690)
(1,598)
8,607
5
—
—
1
—
6
520
140
1
(93)
(33)
535
205,847
190
24,289
2,416
54,807
23
27
(2,423)
2,271
3,556
(106)
97
ECL
£m
—
—
—
—
—
—
83
(61)
13
53
(34)
54
—
—
—
2
—
2
232
(23)
43
25
Gross
exposure
£m
6
9
—
(11)
—
4
228
90
1
(101)
(76)
142
80
31
4
(59)
(12)
44
866
7
39
206
ECL
£m
—
—
—
—
—
—
Gross
exposure
£m
12,170
—
4,184
(7,691)
(435)
8,228
—
150,620
—
19,323
—
—
—
—
—
—
—
—
—
11,027
—
1,644
(1,842)
(1,643)
9,186
23
231,002
—
57,117
—
2
24
ECL
£m
—
—
—
—
—
—
133
—
29
5
—
—
3
—
8
445
—
72
(7,733)
(6)
—
(14,470)
—
147,740
(43)
113
(53,737)
(26)
(3,816)
(46)
(271)
(5)
(57,824)
212,889
108
20,418
231
847
44
234,154
(77)
383
3,859
(57)
1 Loan commitments reported within Retail credit cards and Retail other also include financial assets classified as held for sale.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 302
Risk performance - Credit risk (continued)
Loans and advances at amortised cost (audited)
Retail mortgages
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 year
Refinements to models used for calculation
Net drawdowns, repayments, net re-
measurement and movements due to exposure
and risk parameter changes
Final repayments
Disposals
Write-offs
As at 31 December 2022
Retail credit cards
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 year
1
Refinements to models used for calculation
Net drawdowns, repayments, net re-
measurement and movements due to exposure
and risk parameter changes
Final repayments
2
Disposals
Write-offs
As at 31 December 2022
Retail other
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 year
1
Refinements to models used for calculation
Net drawdowns, repayments, net re-
measurement and movements due to exposure
and risk parameter changes
Final repayments
2
Disposals
Write-offs
As at 31 December 2022
Notes
Stage 1
Stage 2
Stage 3
Total
Gross
exposure
£m
ECL
£m
Gross
exposure
£m
ECL
£m
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
—
59
1
(24)
(6)
4
7
—
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
(2)
—
—
29
(2,123)
—
—
18,200
23,654
(2,661)
1,554
(416)
44
5,060
—
698
(67)
445
(16)
26
120
82
4,287
2,661
(1,554)
(542)
9
389
—
(4)
—
—
73
1,526
67
(445)
(260)
4
128
(50)
(426)
—
(27)
2,414
1,551
—
—
958
(53)
122
—
(9)
—
(27)
414
(16,491)
—
(27)
174,286
1,092
—
—
276
(30)
97
96
29,492
—
—
—
—
5,571
—
(15)
—
(27)
516
3,316
—
—
—
—
345
128
2,973
(801)
1,296
685
59
579
4,328
463
(261)
(159)
—
29,788
13,413
(734)
367
(224)
43
6,190
—
(25)
(4)
—
458
106
(10)
39
(4)
7
50
—
(68)
(29)
—
6,449
1,288
734
(367)
(155)
16
370
—
(24)
(11)
—
1,620
(34)
(219)
(1,004)
1,380
(18)
(133)
(1,004)
955
(363)
(407)
(1,004)
37,617
(67)
(148)
(1,004)
3,033
154
10
(39)
(43)
9
54
—
774
—
—
379
(59)
34
—
406
—
—
47
(16)
28
—
15,475
—
—
—
—
6,594
—
666
—
—
—
—
132
—
(1,853)
(77)
(146)
28
97
176
(1,902)
127
(3,732)
—
—
13,470
(11)
—
—
100
(272)
—
—
1,468
(7)
—
—
166
(194)
(56)
(255)
720
(42)
(36)
(255)
308
(4,198)
(56)
(255)
15,658
(60)
(36)
(255)
574
1 Refinements to models used for calculation reported within Retail credit cards include a £0.3bn movement in US Cards and £(0.2)bn in UK Cards. These reflect model enhancements
made during the year. Barclays continually reviews 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 helps to ensure that the models used continue to reflect the risks inherent across the businesses.
2 The £0.4bn of disposals reported within Retail credit cards include a £0.2bn sale of NFL portfolio within US Cards and £0.2bn of debt sales undertaken during the year. The £0.1bn
disposals reported within Retail other include debt sales undertaken during the year.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 303
Risk performance - Credit risk (continued)
Loans and advances at amortised cost (audited)
Corporate 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 year
1
Refinements to models used for calculation
Net drawdowns, repayments, net re-
measurement and movements due to exposure
2
and risk parameter changes
Final repayments
3
Disposals
Write-offs
As at 31 December 2022
Gross
exposure
£m
ECL
£m
Gross
exposure
£m
ECL
£m
Gross
exposure
£m
ECL
£m
Gross
exposure
£m
102,337
(7,662)
5,278
(1,489)
204
24,187
—
377
(68)
60
(6)
21
86
(60)
15,609
7,662
(5,278)
(694)
339
2,655
—
270
68
(60)
(15)
28
79
(61)
2,756
—
—
2,183
(543)
239
—
625
—
—
21
(49)
31
(374)
120,702
—
—
—
—
27,081
—
ECL
£m
1,272
—
—
—
—
196
(495)
11,023
91
303
163
(1,449)
725
9,877
979
(21,987)
—
—
111,891
(40)
—
—
461
(3,747)
(31)
—
16,818
(48)
—
—
424
(231)
(49)
(334)
2,572
(56)
(47)
(334)
542
(25,965)
(80)
(334)
131,281
Reconciliation of ECL movement to credit impairment charge/(release) for the period
Stage 1
Stage 2
Stage 3
Retail mortgages
Retail credit cards
Retail other
Corporate loans
ECL movement derecognised due to disposals and write-offs4
ECL movement on loan commitments and financial guarantees
ECL movement on other financial assets
ECL movement on debt securities at amortised cost
5
Recoveries and reimbursements
Total exchange and other adjustments
Total credit impairment charge for the year
Notes
£m
10
(236)
(6)
84
(148)
28
4
3
£m
14
105
12
154
285
13
8
27
(122)
(63)
1 Refinements to model used for calculation reported within Corporate loans include a £(0.5)bn movement in Business Banking. These 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.
2 'Net drawdowns, repayments, net re-measurement and movements due to exposure and risk parameter changes' reported within Corporate loans also include assets of £1.3bn
derecognised due to payment received on defaulted loans from government guarantees issued under government’s Bounce Back Loans Scheme.
3 The £80m of disposals reported within Corporate loans relate to debt sales undertaken during the year.
4 In 2022, gross write-offs amounted to £1,620m. 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. Net write-offs represent gross write-offs less post write-off recoveries and amounted to £1,556m.
5 Recoveries and reimbursements include £199m for reimbursements expected to be received under the arrangement where Group has entered into financial guarantees contracts
which provide credit protection over certain assets with third parties and cash recoveries of previously written off amounts of £64m.
(144)
(47)
(334)
1,427
Total
£m
68
869
199
536
£m
44
1,000
193
298
1,535
1,672
—
37
(1)
(78)
41
49
29
(263)
(308)
1,220
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 304
Risk performance - Credit risk (continued)
Loan commitments and financial guarantees (audited)
Stage 1
Stage 2
Stage 3
Total
Retail mortgages
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
Retail credit cards
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
Retail other
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
Corporate 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
107,980
(3,029)
35,573
ECL
£m
Gross
exposure
£m
ECL
£m
—
—
—
—
—
—
Gross
exposure
£m
3
9
—
(6)
—
6
532
(17)
—
(21)
(44)
450
4,727
2,834
408
56
(42)
27
187
195
1
—
—
—
—
—
—
38
41
23
ECL
£m
Gross
exposure
£m
—
—
—
—
—
—
1
1
—
11,368
—
8,034
(6,820)
(412)
12,170
112,894
—
35,982
ECL
£m
—
—
—
—
—
—
95
—
50
18
11,581
(45)
(2,087)
65
(73)
(2)
9,421
(7,148)
144,957
(7)
50
(447)
5,435
(23)
83
(82)
228
—
(7,677)
—
150,620
(30)
133
10,983
(203)
2,254
(1,665)
(942)
10,427
5
—
—
—
—
5
507
121
3
(102)
(9)
520
—
—
—
—
—
—
10
82
2
(8)
(6)
80
—
—
—
—
—
—
11,500
—
2,259
(1,775)
(957)
11,027
5
—
—
—
—
5
182,346
174
29,049
5,668
44,060
66
30
(5,664)
4,273
246
(64)
54
(4)
26
1,098
22
212,493
442
(2)
—
2
5
48,359
34,331
—
86
15
28,070
(51)
6,193
61
68
(54,297)
(29)
(9,562)
205,847
190
24,289
(65)
232
(322)
866
(4)
(64,181)
23
231,002
(98)
445
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 305
Risk performance - Credit risk (continued)
Stage 2 decomposition
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.
A small number of other accounts (1.5% of impairment allowance and 2.2% 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.
Loans and advances at amortised cost1
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 2023
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Total UK
Retail mortgages
2
Retail credit cards
2
Retail other
Corporate loans
Total Rest of the World
Retail mortgages
2
Retail credit cards
2
Retail other
Corporate loans
Total Stage 2
As at 31 December 2022
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Total UK
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Total Rest of the World
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Total Stage 2
Notes
£m
8,905
1,798
775
6,745
18,223
301
2,399
9
3,593
6,302
9,206
4,197
784
10,338
24,525
£m
9,106
2,020
749
10,364
22,239
361
2,999
187
3,249
6,796
9,467
5,019
936
£m
9,589
330
462
1,845
12,226
28
1,020
41
964
2,053
9,617
1,350
503
2,809
14,279
£m
8,160
547
390
2,071
11,168
72
848
76
992
1,988
8,232
1,395
466
13,613
29,035
3,063
13,156
£m
629
—
15
83
727
17
31
41
72
161
646
31
56
155
888
£m
469
2
58
93
622
32
33
8
49
122
501
35
66
142
744
£m
19,123
2,128
1,252
8,673
31,176
346
3,450
91
4,629
8,516
19,469
5,578
1,343
13,302
39,692
£m
17,735
2,569
1,197
12,528
34,029
465
3,880
271
4,290
8,906
18,200
6,449
1,468
16,818
42,935
£m
49
416
104
177
746
24
750
1
155
930
73
1,166
105
332
1,676
£m
28
404
120
212
764
19
801
26
114
960
47
1,205
146
326
1,724
£m
22
76
12
36
146
2
367
—
42
411
24
443
12
78
557
£m
17
89
17
48
171
2
304
1
45
352
19
393
18
93
523
£m
6
—
1
1
8
2
21
—
3
26
8
21
1
4
34
£m
4
—
1
4
9
3
22
1
1
27
7
22
2
5
36
£m
77
492
117
214
900
28
1,138
1
200
1,367
105
1,630
118
414
2,267
£m
49
493
138
264
944
24
1,127
28
160
1,339
73
1,620
166
424
2,283
1 Where balances satisfy more than one of the above three criteria for determining a significant increase in credit risk, the corresponding gross exposure and impairment allowance has
been assigned in order of categories presented.
2 Exposures reported within Retail credit cards and Retail other exclude the German consumer finance business which has now been classified as assets held for sale.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 306
Risk performance - Credit risk (continued)
Stage 3 decomposition
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.
Loans and advances at amortised cost
Gross Exposure
Exposures
individually
assessed or in
recovery book
Exposures not
charged-off
Total Stage 3
Impairment Allowance
Exposures not
charged-off
Exposures
individually
assessed or in
recovery book
Total Stage 3
As at 31 December 2023
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Total UK
Retail mortgages
1
Retail credit cards
1
Retail other
Corporate loans
Total Rest of the World
Retail mortgages
1
Retail credit cards
1
Retail other
Corporate loans
Total Stage 3
As at 31 December 2022
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Total UK
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Total Rest of the World
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Total Stage 3
Note
£m
1,473
198
177
1,198
3,046
155
617
65
50
887
1,628
815
242
1,248
3,933
£m
1,211
167
156
1,504
3,038
270
551
160
43
1,024
1,481
718
316
1,547
4,062
£m
339
—
87
494
920
457
905
164
812
2,338
796
905
251
1,306
3,258
£m
270
84
137
504
995
663
578
267
521
2,029
933
662
404
1,025
3,024
£m
1,812
198
264
1,692
3,966
612
1,522
229
862
3,225
2,424
1,720
493
2,554
7,191
£m
1,481
251
293
2,008
4,033
933
1,129
427
564
3,053
2,414
1,380
720
2,572
7,086
£m
67
107
80
139
393
23
413
2
3
441
90
520
82
142
834
£m
52
124
80
125
381
23
359
45
—
427
75
483
125
125
808
£m
45
—
64
207
316
293
813
30
249
1,385
338
813
94
456
1,701
£m
6
13
65
235
319
333
459
118
182
1,092
339
472
183
417
1,411
£m
112
107
144
346
709
316
1,226
32
252
1,826
428
1,333
176
598
2,535
£m
58
137
145
360
700
356
818
163
182
1,519
414
955
308
542
2,219
1 Exposures reported within Retail credit cards and Retail other exclude the German consumer finance business which has now been classified as assets held for sale.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 307
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, and are presented by product and
geography below:
Management adjustments to models for impairment allowance presented by product and geography (audited)1
Impairment
allowance pre
management
adjustments2
Economic
uncertainty
adjustments
(a)
Other
adjustments
(b)
Management
adjustments
(a+b)
Total
impairment
allowance3
Proportion of
Management
adjustments to
total impairment
allowance
As at 31 December 2023
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Total UK
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Total Rest of the World
Total
Debt securities at amortised cost
Total including debt securities at amortised cost
As at 31 December 2022
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Total UK
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Total Rest of the World
Total
Debt securities at amortised cost
Total including debt securities at amortised cost
£m
54
700
251
761
1,766
354
2,855
45
828
4,082
5,848
27
5,875
£m
39
679
257
682
1,657
388
2,307
198
1,058
3,951
5,608
42
5,650
£m
57
45
9
71
182
—
—
—
16
16
198
—
198
£m
4
93
23
249
369
—
—
2
(54)
(52)
317
—
317
£m
121
(9)
62
10
184
(3)
8
(6)
(4)
(5)
179
—
179
£m
85
32
80
166
363
—
55
19
(229)
(155)
208
—
208
£m
178
36
71
81
366
(3)
8
(6)
12
11
377
—
377
£m
89
125
103
415
732
—
55
21
(283)
(207)
525
—
525
£m
232
736
322
842
2,132
351
2,863
39
840
4,093
6,225
27
6,252
£m
128
804
360
1,097
2,389
388
2,362
219
775
3,744
6,133
42
6,175
%
76.7
4.9
22.0
9.6
17.2
(0.9)
0.3
(15.4)
1.4
0.3
6.1
—
6.0
%
69.5
15.5
28.6
37.8
30.6
—
2.3
9.6
(36.5)
(5.5)
8.6
—
8.5
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 308
Risk performance - Credit risk (continued)
Economic uncertainty adjustments presented by stage (audited)
Stage 1
Stage 2
Stage 3
Total
As at 31 December 2023
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Total UK
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Total Rest of the World
Total
As at 31 December 2022
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Total UK
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Total Rest of the World
Total
Notes
£m
12
8
3
48
71
—
—
—
4
4
75
£m
32
37
6
12
87
—
—
—
12
12
99
£m
13
—
—
11
24
—
—
—
—
—
24
Stage 1
Stage 2
Stage 3
£m
1
17
7
189
214
—
—
—
(8)
(8)
206
£m
3
76
15
60
154
—
—
2
(46)
(44)
110
£m
—
—
1
—
1
—
—
—
—
—
1
£m
57
45
9
71
182
—
—
—
16
16
198
Total
£m
4
93
23
249
369
—
—
2
(54)
(52)
317
1 Positive values reflect an increase in impairment allowance and negative values reflect a reduction in the impairment allowance.
2 Includes £5.2bn (2022: £4.8bn) of modelled ECL, £0.4bn (2022: £0.4bn) of individually assessed impairments and £0.3bn (2022: £0.5bn) ECL from non-modelled exposures and debt
securities.
3 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. As such there is a risk that the modelled output fails to capture the appropriate response to
changes in macroeconomic variables including higher interest rates and continuing inflationary stress 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.
Economic uncertainty adjustments have decreased from last year following the re-build of UK cards and certain CIB impairment models
which better capture the macroeconomic outlook. Furthermore, adjustments have been reassessed to capture affordability headwinds
in UK retail lending.
The balance as at 31 December 2023 is £198m (2022: £317m) and includes:
Customer and client uncertainty provisions of £166m (2022: £423m):
UK retail lending includes adjustments applied to customers considered most vulnerable to affordability pressures.
• Retail mortgages (UK) £25m (2022: £4m): The increase primarily reflects the risk of borrowers refinancing onto higher rates in the
medium term.
• Retail credit cards (UK) £45m (2022: £93m): The reduction reflects the re-build of UK cards impairment models which better
capture sensitivity to movements in interest rates and inflation.
• Retail other (UK) £9m (2022: £23m): The reduction reflects customer resilience to affordability headwinds.
Corporate loans £87m (2022: £301m): This includes an adjustment of £71m in UK to reflect possible cross default risk on Barclays’
lending in respect of clients who have taken bounce back loans and £16m in Rest of the World (ROW) to provide for downside
uncertainties on European Corporates reflecting recent changes in the macroeconomic outlook.
The reduction of £(214)m in UK and ROW is informed by retirement of an adjustment for high risk sectors following a granular credit risk
assessment, and re-build of certain CIB impairment models which more appropriately capture downside risk.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 309
Risk performance - Credit risk (continued)
Model uncertainty provisions of £32m (2022: £(106)m):
Retail mortgages (UK) £32m (2022: nil ): This includes an adjustment to correct for higher recovery expectations impacted by model
oversensitivity to certain macroeconomic variables.
Corporate loans £nil (2022: £(106)m): The adjustment held in the previous year to correct for model oversensitivity has been retired
following the re-build of certain CIB impairment models which more appropriately capture the macroeconomic outlook.
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 £179m (2022: £208m) includes:
Adjustments for definition of default (DOD) under the Capital Requirements Regulation and model monitoring in Retail mortgages,
Retail other and Corporate loans.
Retail mortgages (UK) £121m (2022: £85m): The increase reflects re-sizing of an adjustment for DOD and an ECL provision for
Kensington Mortgages which was acquired during the year.
Retail credit cards:
• UK £(9)m (2022: £32m): The reduction is informed by retirement of operational adjustments following the re-build of UK cards
impairment models.
• ROW £8m (2022: £55m): The reduction is informed by retirement of an adjustment in US cards for high-risk account management
(HRAM) accounts following model remediation during the year.
Retail other:
• UK £62m (2022: £80m): The underlying adjustments were re-sized and remain broadly in line with the previous year.
• ROW £(6)m (2022: £19m): The reduction is informed by the German consumer finance business classified as assets held for sale.
Corporate loans:
• UK £10m (2022: £166m): The reduction is informed by retirement of model monitoring adjustments in CIB following the re-build of
certain impairment models. Further, operational adjustments have been introduced during the year to remediate conservative
modelled recovery expectations in the ESHLA portfolio.
• ROW £(4)m (2022: £(229)m): The previously held adjustments linked to model monitoring and ECL sensitivity to the macroeconomic
variable for Federal Tax Receipts have been retired following the re-build of certain CIB impairment models.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 310
Risk performance - Credit risk (continued)
Climate Risk ECL assessment
Barclays performed a credit risk assessment of physical and transition risk due to climate change. This was delivered through a
combination of a scenario approach and targeted reviews on specific portfolios identified as more susceptible to climate risk. The
analysis did not result in a separately identifiable impairment charge for year end 2023 reporting.
Scenario Approach: The climate stress test macroeconomic scenario was used in lieu of the production Downside 2 scenario to
determine impact on the weighted average ECL output. The output of this analysis was not significant to warrant an additional climate-
related impairment charge.
Specific Approach: The approach reviewed portfolios previously identified from both internal and external stress tests as more
susceptible to climate risks. In particular, the UK Mortgage portfolio was reviewed to determine the impact of a plausible change in
regulation requiring landlords to upgrade properties to minimum EPC rating of C in the buy-to-let portfolio. In addition, within the
Wholesale portfolio, certain elevated risk sectors (predominantly Oil & Gas, Automotive and Power sectors) were subject to a review
that considered probability of default impact at a counterparty level determined by individual susceptibility to transition climate risks.
The output of this review did not provide variances in ECL deemed sufficiently certain to warrant raising an additional climate-related
charge in 2023.
Barclays acknowledges that impairment could increase over time as risks become more tangible and impact consumers and clients
through physical risks or via impacts from the transition to a low carbon economy. Therefore, Barclays continues to review credit risk
outputs to determine if any additional physical or transition climate risks are identified that are not sufficiently captured via model
output.
Refer to the Barclays resilience to climate scenarios on page 132 for further details.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 311
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 Q423 with the Baseline scenario reflecting the latest consensus
macroeconomic forecasts available at the time of the scenario refresh. In the Baseline scenario, whilst UK and US economies avoid a
recession, GDP growth remains weak in the coming quarters and beyond as restrictive monetary policies, which impact economies with
a lag, continue to restrain growth. Having peaked in 2022, consumer price inflation in key regions continues to ease over 2023 and 2024.
The UK and US unemployment rates rise to 4.8% and 4.4% respectively over 2024 and then stabilise. With the significant decline in
inflationary pressures, major central banks refrain from further interest rate increases. UK house prices continue to decline in 2024
before stabilising and resuming the upward trend from 2025. The housing market in the US remains more resilient, with house prices
continuing to grow.
In the Downside 2 scenario, inflationary pressures are assumed to intensify again, mainly driven by strong wage growth. Central banks
raise rates further, with the UK bank rate and the US federal fund rate each reaching 8.5% in Q324. High interest rates suddenly bring
stress into the financial and non-financial system, causing joblessness to spike and triggering a housing markets crisis and central banks
are forced cut interest rates aggressively. Falling demand reduces UK and US GDP and headline inflation drops to close to zero. In the
Upside 2 scenario, tighter and more productive labour markets help to accelerate economic growth whilst keeping inflationary
pressures under control. With inflation quickly returning to target, central banks lower interest rates, further stimulating aggregate
demand and GDP growth.
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
increases in the Downside scenario weightings reflected a reduction in GDP stress severity in the Downside scenarios which brought
the GDP of these scenarios closer to the Baseline. The increases in the Upside scenario weightings were driven by the improvement in
actual GDP and the Baseline scenario, bringing the Baseline scenario closer to the Upside scenarios. For further details see page 314.
The economic uncertainty adjustments of £0.2bn (2022: £0.3bn) have been applied as overlays to the modelled ECL output. These
adjustments consist of a customer and client uncertainty provision of £0.2bn (2022: £0.4bn) which has been applied to customers and
clients considered most vulnerable to affordability pressures, and a model uncertainty adjustment of £0.0bn (2022: £(0.1)bn). For
further details see pages 307 to 309.
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).
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 312
Risk performance - Credit risk (continued)
Baseline
As at 31 December 2023
1
UK GDP
2
UK unemployment
3
UK HPI
UK bank rate
1
US GDP
4
US unemployment
5
US HPI
US federal funds rate
Downside 2
1
UK GDP
2
UK unemployment
3
UK HPI
UK bank rate
1
US GDP
4
US unemployment
5
US HPI
US federal funds rate
Downside 1
1
UK GDP
2
UK unemployment
3
UK HPI
UK bank rate
1
US GDP
4
US unemployment
5
US HPI
US federal funds rate
Upside 2
1
UK GDP
2
UK unemployment
3
UK HPI
UK bank rate
1
US GDP
4
US unemployment
5
US HPI
US federal funds rate
Upside 1
1
UK GDP
2
UK unemployment
3
UK HPI
UK bank rate
1
US GDP
4
US unemployment
5
US HPI
US federal funds rate
Notes
1 Average Real GDP seasonally adjusted change in year.
2 Average UK unemployment rate 16-year+.
3 Change in year end UK HPI = Halifax All Houses, All Buyers index, relative to prior year end.
4 Average US civilian unemployment rate 16-year+.
5 Change in year end US HPI = FHFA house price index, relative to prior year end.
2023
%
0.5
4.2
(3.3)
4.7
2.4
3.7
5.4
5.1
0.5
4.2
(3.3)
4.7
2.4
3.7
5.4
5.1
0.5
4.2
(3.3)
4.7
2.4
3.7
5.4
5.1
0.5
4.2
(3.3)
4.7
2.4
3.7
5.4
5.1
0.5
4.2
(3.3)
4.7
2.4
3.7
5.4
5.1
2024
%
0.3
4.7
(5.1)
4.9
1.3
4.3
3.4
5.0
(1.5)
5.2
(19.3)
6.6
(0.6)
5.2
(6.5)
6.3
(0.6)
4.9
(12.4)
5.8
0.3
4.7
(1.7)
5.7
2.4
3.9
7.8
4.3
2.8
3.5
6.1
4.3
1.4
4.3
1.2
4.6
2.0
3.9
4.7
4.7
2025
%
1.2
4.7
0.7
4.1
1.7
4.3
3.0
3.9
(2.6)
7.9
(16.8)
1.3
(2.0)
7.2
(5.7)
1.8
(0.7)
6.3
(8.3)
2.7
(0.2)
5.8
(1.4)
2.9
3.7
3.5
7.6
2.7
3.1
3.6
4.3
2.9
2.5
4.1
4.1
3.4
2.4
3.9
3.7
3.5
2026
%
1.6
4.8
3.1
3.8
1.9
4.3
3.3
3.8
2.4
6.3
14.5
1.0
3.1
5.9
7.2
1.5
2.0
5.6
8.7
2.5
2.5
5.1
5.2
2.8
2.9
3.6
4.5
2.5
2.8
3.6
4.5
2.8
2.3
4.2
3.8
3.3
2.4
4.0
3.9
3.3
2027
%
1.6
5.0
5.3
3.5
1.9
4.3
3.3
3.8
1.6
5.5
12.4
1.0
2.0
5.2
6.4
1.5
1.6
5.2
8.8
2.3
1.9
4.8
4.8
2.8
2.4
3.6
5.6
2.5
2.8
3.6
4.6
2.8
2.0
4.3
5.4
3.0
2.4
4.0
3.9
3.3
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 313
Risk performance - Credit risk (continued)
Baseline
As at 31 December 2022
1
UK GDP
2
UK unemployment
3
UK HPI
UK bank rate
1
US GDP
4
US unemployment
5
US HPI
US federal funds rate
Downside 2
1
UK GDP
2
UK unemployment
3
UK HPI
UK bank rate
1
US GDP
4
US unemployment
5
US HPI
US federal funds rate
Downside 1
1
UK GDP
2
UK unemployment
3
UK HPI
UK bank rate
1
US GDP
4
US unemployment
5
US HPI
US federal funds rate
Upside 2
1
UK GDP
2
UK unemployment
3
UK HPI
UK bank rate
1
US GDP
4
US unemployment
5
US HPI
US federal funds rate
Upside 1
1
UK GDP
2
UK unemployment
3
UK HPI
UK bank rate
1
US GDP
4
US unemployment
5
US HPI
US federal funds rate
Notes
1 Average Real GDP seasonally adjusted change in year.
2 Average UK unemployment rate 16-year+.
3 Change in year end UK HPI = Halifax All Houses, All Buyers index, relative to prior year end.
4 Average US civilian unemployment rate 16-year+.
5 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
3.3
3.7
8.4
1.8
1.8
3.7
11.2
2.1
3.3
3.7
8.4
1.8
1.8
3.7
11.2
2.1
3.3
3.7
8.4
1.8
1.8
3.7
11.2
2.1
3.3
3.7
8.4
1.8
1.8
3.7
11.2
2.1
2023
%
(0.8)
4.5
(4.7)
4.4
0.5
4.3
1.8
4.8
(3.4)
6.0
(18.3)
7.3
(2.7)
6.0
(3.1)
6.6
(2.1)
5.2
(11.7)
5.9
(1.1)
5.1
(0.7)
5.8
2.8
3.5
8.7
3.1
3.3
3.3
5.8
3.6
1.0
4.0
1.8
3.5
1.9
3.8
3.8
3.9
2024
%
0.9
4.4
(1.7)
4.1
1.2
4.7
1.5
3.6
(3.8)
8.4
(18.8)
7.9
(3.4)
8.5
(4.0)
6.9
(1.5)
6.4
(10.6)
6.1
(1.1)
6.6
(1.3)
5.4
3.7
3.4
7.5
2.6
3.5
3.3
5.1
2.9
2.3
3.9
2.9
3.3
2.3
4.0
3.3
3.4
2025
%
1.8
4.1
2.2
3.8
1.5
4.7
2.3
3.1
2.0
8.0
(7.7)
6.6
2.0
8.1
(1.9)
5.8
1.9
6.0
(2.8)
5.3
1.7
6.4
0.2
4.4
2.9
3.4
4.4
2.5
2.8
3.3
4.5
2.8
2.4
3.8
3.3
3.0
2.2
4.0
3.4
3.0
2026
%
1.9
4.2
2.2
3.4
1.5
4.7
2.4
3.0
2.3
7.4
8.2
5.5
2.6
7.1
4.8
4.6
2.1
5.8
5.2
4.6
2.1
5.9
3.6
3.9
2.4
3.4
4.2
2.5
2.8
3.3
4.5
2.8
2.1
3.8
3.2
2.8
2.2
4.0
3.4
3.0
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 314
Risk performance - Credit risk (continued)
Scenario probability weighting (audited)1
As at 31 December 2023
Scenario probability weighting
As at 31 December 2022
Scenario probability weighting
Note
Upside 2
%
Upside 1
%
13.8
10.9
24.7
23.1
Baseline
Downside 1
Downside 2
%
32.4
39.4
%
18.3
17.6
%
10.8
9.0
1 For further details on changes to scenario weights see page 311.
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.
Macroeconomic variables (specific bases) (audited)1
Upside 2
Upside 1
Baseline
Downside 1
Downside 2
As at 31 December 2023
2
UK GDP
3
UK unemployment
4
UK HPI
UK bank rate
2
US GDP
3
US unemployment
4
US HPI
US federal funds rate
As at 31 December 2022
2
UK GDP
3
UK unemployment
4
UK HPI
UK bank rate
2
US GDP
3
US unemployment
4
US HPI
US federal funds rate
%
13.4
3.5
23.8
2.5
15.1
3.4
27.4
2.8
13.9
3.4
37.8
0.5
14.1
3.3
35.0
0.1
%
9.6
3.9
11.5
3.0
12.3
3.5
23.5
3.3
9.4
3.6
21.0
0.5
9.6
3.6
27.5
0.1
%
1.1
4.7
0.1
4.2
1.8
4.2
3.7
4.3
1.4
4.2
1.2
3.5
1.3
4.4
3.8
3.3
%
(1.3)
6.5
(22.5)
6.8
0.6
5.9
0.4
6.8
(3.2)
6.6
(17.9)
6.3
(2.5)
6.7
3.7
6.0
%
(4.1)
8.3
(35.0)
8.5
(1.7)
7.5
(7.6)
8.5
(6.8)
8.5
(35.0)
8.0
(6.3)
8.6
0.2
7.0
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)1
Upside 2
Upside 1
Baseline
Downside 1
Downside 2
As at 31 December 2023
5
UK GDP
6
UK unemployment
7
UK HPI
UK bank rate
5
US GDP
6
US unemployment
7
US HPI
US federal funds rate
As at 31 December 2022
5
UK GDP
6
UK unemployment
7
UK HPI
UK bank rate
5
US GDP
6
US unemployment
7
US HPI
US federal funds rate
Notes
%
2.4
3.7
4.4
3.3
2.8
3.6
5.0
3.6
3.0
3.5
6.6
2.5
2.9
3.4
6.2
2.8
%
1.7
4.2
2.2
3.8
2.3
3.9
4.3
4.0
2.2
3.8
3.9
2.9
2.1
3.9
5.0
3.1
%
1.1
4.7
0.1
4.2
1.8
4.2
3.7
4.3
1.4
4.2
1.2
3.5
1.3
4.4
3.8
3.3
%
0.6
5.2
(1.7)
3.6
1.4
4.8
2.4
3.9
0.7
5.4
(2.6)
4.7
0.7
5.5
2.5
4.3
%
0.1
5.8
(3.5)
2.9
0.9
5.4
1.2
3.2
0.0
6.7
(6.4)
5.8
0.0
6.7
1.2
5.2
1 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 Q123 (2022: Q122).
2 Maximum growth relative to Q422 (2022: Q421), based on 20 quarter period in Upside scenarios; 5-year yearly average CAGR in Baseline; minimum growth relative to Q422 (2022:
Q421), based on 20 quarter period in Downside scenarios.
3 Lowest quarter in Upside scenarios; 5-year average in Baseline; highest quarter in Downside scenarios. Period based on 20 quarters from Q123 (2022: Q122).
4 Maximum growth relative to Q422 (2022: Q421), based on 20 quarter period in Upside scenarios; 5-year quarter end CAGR in Baseline; minimum growth relative to Q422 (2022: Q421),
based on 20 quarter period in Downside scenarios.
5 5-year yearly average CAGR, starting 2022 (2022: 2021).
6 5-year average, Period based on 20 quarters from Q123 (2022: Q122).
7 5-year quarter end CAGR, starting Q422 (2022: Q421).
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 315
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
(%)
US GDP
(%)
UK unemployment
(%)
US unemployment
(%)
GDP growth based on year on year growth each quarter (Q/(Q-4)).
U2U1BLD1D22021202320252027202920312033-30-20-100102030U2U1BLD1D22021202320252027202920312033-15-10-5051015U2U1BLD1D22021202320252027202920312033012345678910U2U1BLD1D2202120232025202720292031203302468101214 Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 316
Risk performance - Credit risk (continued)
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.
As at 31 December 2023
Stage 1 Model exposure (£m)
Retail mortgages
2
Retail credit cards
2
Retail other
Corporate loans
Stage 1 Model ECL (£m)
Retail mortgages
2
Retail credit cards
2
Retail other
Corporate loans
Stage 1 Coverage (%)
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Stage 2 Model exposure (£m)
Retail mortgages
2
Retail credit cards
2
Retail other
Corporate loans
Stage 2 Model ECL (£m)
Retail mortgages
2
Retail credit cards
2
Retail other
Corporate loans
Stage 2 Coverage (%)
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Stage 3 Model exposure (£m)3
Retail mortgages
2
Retail credit cards
2
Retail other
Corporate loans
Stage 3 Model ECL (£m)
Retail mortgages
2
Retail credit cards
2
Retail other
4
Corporate loans
Stage 3 Coverage (%)
Retail mortgages
Retail credit cards
Retail other
4
Corporate loans
Total Model ECL (£m)
Retail mortgages
2
Retail credit cards
2
Retail other
4
Corporate loans
Total Model ECL
Weighted1
Upside 2
Upside 1
Baseline
Downside 1
Downside 2
Scenarios
145,226
147,415
146,653
145,405
142,543
138,925
66,512
66,459
66,482
66,497
66,580
66,580
8,749
8,915
8,841
8,758
8,631
8,479
175,282
179,567
177,923
175,903
172,328
167,541
9
562
32
275
—
0.8
0.4
0.2
4
529
31
243
—
0.8
0.3
0.1
5
545
32
257
—
0.8
0.4
0.1
7
561
32
270
—
0.8
0.4
0.2
11
584
32
298
—
0.9
0.4
0.2
22
605
31
318
—
0.9
0.4
0.2
20,615
17,769
18,702
20,149
23,836
28,822
7,076
1,382
6,897
1,216
6,976
1,290
7,064
1,373
7,183
1,500
7,387
1,653
24,374
19,919
21,621
23,763
27,445
32,375
41
23
27
34
59
1,684
1,554
1,609
1,668
1,775
85
663
0.2
23.8
6.2
2.7
1,672
1,827
164
3,436
333
1,315
95
77
19.9
72.0
57.9
2.2
383
3,561
212
1,015
5,171
72
509
0.1
22.5
5.9
2.6
1,672
1,827
164
3,436
308
1,279
94
71
18.4
70.0
57.3
2.1
335
3,362
197
823
78
565
0.1
23.1
6.0
2.6
1,672
1,827
164
3,436
316
1,296
94
73
18.9
70.9
57.3
2.1
348
3,450
204
895
84
633
0.2
23.6
6.1
2.7
1,672
1,827
164
3,436
325
1,313
95
75
19.4
71.9
57.9
2.2
366
3,542
211
978
4,717
4,897
5,097
95
782
0.2
24.7
6.3
2.8
1,672
1,827
164
3,436
351
1,341
96
82
21.0
73.4
58.5
2.4
421
3,700
223
1,162
5,506
123
1,922
105
1,031
0.4
26.0
6.4
3.2
1,672
1,827
164
3,436
393
1,366
97
89
23.5
74.8
59.1
2.6
538
3,893
233
1,438
6,102
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 317
Risk performance - Credit risk (continued)
Reconciliation to total ECL
Total weighted model ECL
4
ECL from individually assessed exposures
ECL from non-modelled exposures and others
ECL from debt securities at amortised cost
ECL from post model management adjustments
Of which: ECL from economic uncertainty adjustments
Total ECL
Notes
£m
5,171
401
276
27
377
198
6,252
1 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.
2 Model exposures and ECL reported within Retail credit cards and Retail other excludes the German consumer finance business which has now been classified as assets held for sale.
3 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 2023 and not on
macroeconomic scenario.
4 Material corporate loan defaults are individually assessed across different recovery strategies. As a result, ECL of £401m is reported as an individually assessed impairment in the reconciliation table.
The use of five scenarios with associated weighting results in a total weighted ECL uplift from the Baseline ECL of 1.5%.
Retail mortgages: Total weighted ECL of £383m represents a 4.6% increase over the Baseline ECL (£366m) with coverage ratios
remaining steady across the Upside scenarios, Baseline and Downside 1 scenario. Under the Downside 2 scenario, total ECL increases
to £538m driven by a significant fall in UK HPI.
Retail credit cards: Total weighted ECL of £3,561m is broadly aligned to the Baseline ECL (£3,542m). Total ECL increases to £3,893m
under the Downside 2 scenario, driven by an increase in UK and US unemployment rate.
Retail other: Total weighted ECL of £212m is aligned to the Baseline ECL (£211m). Total ECL increases to £233m under the Downside
2 scenario, largely driven by an increase in UK unemployment rate.
Corporate loans: Total weighted ECL of £1,015m represents a 3.8% increase over the Baseline ECL (£978m). Total ECL increases to
£1,438m under the Downside 2 scenario, driven by a decrease in UK and US GDP.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 318
Risk performance - Credit risk (continued)
As at 31 December 2022
Stage 1 Model exposure (£m)
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Stage 1 Model ECL (£m)
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Stage 1 Coverage (%)
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Stage 2 Model exposure (£m)
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Stage 2 Model ECL (£m)
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Stage 2 Coverage (%)
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Stage 3 Model exposure (£m)2
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Stage 3 Model ECL (£m)
Retail mortgages
Retail credit cards
Retail other
3
Corporate loans
Stage 3 Coverage (%)
Retail mortgages
Retail credit cards
Retail other
3
Corporate loans
Total Model ECL (£m)
Retail mortgages
Retail credit cards
Retail other
3
Corporate loans
Total Model ECL
Weighted1
Upside 2
Upside 1
Baseline
Downside 1
Downside 2
Scenarios
144,701
147,754
146,873
145,322
142,599
138,619
67,204
12,282
67,622
12,428
67,352
12,341
67,080
12,235
66,908
12,111
66,636
11,986
155,794
163,699
161,070
157,710
150,435
138,226
7
509
52
341
—
0.8
0.4
0.2
3
493
45
259
—
0.7
0.4
0.2
3
503
49
290
—
0.7
0.4
0.2
4
512
52
325
—
0.8
0.4
0.2
9
517
54
397
—
0.8
0.4
0.3
30
521
55
443
—
0.8
0.5
0.3
18,723
15,670
16,551
18,102
20,825
24,805
7,611
1,559
6,551
1,386
7,118
1,485
7,691
1,601
8,313
1,741
9,062
1,881
24,935
16,858
19,550
23,031
30,432
42,837
33
1,624
124
610
0.2
21.3
8.0
2.4
1,553
1,354
216
2,891
332
880
132
70
21.4
65.0
61.1
2.4
372
3,013
308
1,021
4,714
15
1,361
96
399
0.1
20.8
6.9
2.4
1,553
1,354
216
2,891
311
861
129
66
20.0
63.6
59.7
2.3
329
2,715
270
724
18
1,487
109
470
0.1
20.9
7.3
2.4
1,553
1,354
216
2,891
317
871
131
68
20.4
64.3
60.6
2.4
338
2,861
289
828
23
1,624
124
569
0.1
21.1
7.7
2.5
1,553
1,354
216
2,891
323
881
132
70
20.8
65.1
61.1
2.4
350
3,017
308
964
4,038
4,316
4,639
45
1,811
144
816
0.2
21.8
8.3
2.7
1,553
1,354
216
2,891
347
893
134
78
22.3
66.0
62.0
2.7
401
3,221
332
1,291
5,245
151
2,032
160
1,303
0.6
22.4
8.5
3.0
1,553
1,354
216
2,891
405
902
136
85
26.1
66.6
63.0
2.9
586
3,455
351
1,831
6,223
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 319
Risk performance - Credit risk (continued)
Reconciliation to total ECL
Total weighted model ECL
3
ECL from individually assessed exposures
ECL from non-modelled exposures and others
ECL from debt securities at amortised cost
ECL from post model management adjustments
Of which: ECL from economic uncertainty adjustments
Total ECL
Notes
£m
4,714
434
460
42
525
317
6,175
1 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.
2 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.
3 Material corporate 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 320
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 table below presents an industry credit risk concentration analysis of loans and advances at amortised cost net of impairment
allowance including breakdown by geographical location of the counterparty or customers, impairment stage, maturity and an indicator
of inclusion in carbon-related sectors. A further table is included with geography, impairment stage and maturity allocation of debt
securities at amortised cost, off- balance sheet commitments and financial guarantees and contingent liabilities at amortised cost.
Further detail on the Group policies with regard to managing concentration risk is presented in the Barclays PLC Pillar 3 Report 2023
(unaudited).
Credit risk concentration by Industry for contractual maturity, staging and geography
Loans and advances at amortised cost net of impairment allowance
Industry
United
Kingdom
Geography (audited)
Stage (audited)
Maturity
Americas
Europe
Others
Total
Stage 1
Stage 2
Stage 3
Total
< 1 year 1-5 Years
>5 years
Total
Carbon
related
sectors ¹
As at 31 December
2023
Agriculture, Food
and Forest
Products
Mining and
Quarrying
Manufacturing
Government and
central bank
Banks
Energy and water
Materials and
Building
Wholesale and
retail distribution
and leisure
Transport and
storage
Home Loans
Business and other
services
Other Financial
Institutions
Cards, unsecured
loans and other
personal lending
Total loans and
advances at
amortised cost
Debt securities at
amortised cost³
Total loans and
advances at
amortised cost
including debt
securities
Contingent
liabilities
Loan
commitments
Total off-balance
sheet²
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
3,597
—
—
5
3,602
2,734
611
257
3,602
808
1,071
1,723
3,602
490
843
4,200
1,279
260
826
121
1,714
1,526
188
—
1,714
814
897
416
6,721
5,036
1,515
170
6,721
2,873
3,522
3
326
5,987
—
5
30
6,022
5,975
437
3,606
1,520
1,896
7,459
7,458
2,181
486
879
180
3,726
3,394
46
1
324
1
6,022
2,218
4
3,800
—
7,459
7,365
94
8
3,726
750
2,033
—
943
1,714
6,721
6,022
7,459
3,726
18,631
2,623
448
118
21,820
18,918
2,318
584
21,820
5,154
9,156
7,510
21,820
7,585
1,061
481
452
9,579
7,099
2,151
329
9,579
3,114
5,169
1,296
9,579
868
536
182
118
1,704
1,275
395
34
1,704
402
1,046
256
1,704
166,704
97
3,882
829
171,512
150,152
19,364
1,996
171,512
2,009
10,334
159,169
171,512
13,802
6,032
3,151
1,021
24,006
19,815
3,726
465
24,006
7,088
12,190
4,728
24,006
6,093
25,589
6,481
2,546
40,709
38,988
1,613
108
40,709
13,955
22,111
4,643
40,709
17,741
24,317
1,385
730
44,173
38,296
5,173
704
44,173
8,109
15,839
20,225
44,173
248,316
66,469
19,500
8,462
342,747
300,666
37,425
4,656
342,747
54,659
83,466
204,622
342,747
26,093
11,681
10,262
8,713
56,749
52,858
3,891
—
56,749
10,061
28,739
17,949
56,749
Yes
Yes
Yes
Yes
Yes
Yes
Yes
274,409
78,150
29,762
17,175
399,496
353,524
41,316
4,656
399,496
64,720
112,205
222,571
399,496
5,668
10,262
5,919
2,225
24,074
20,884
2,607
583
24,074
24,073
96,135
227,618
43,397
8,084
375,234
353,179
21,601
454
375,234
375,179
101,803
237,880
49,316
10,309
399,308
374,063
24,208
1,037
399,308
399,252
1
55
56
—
24,074
—
375,234
—
399,308
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 321
Risk performance - Credit risk (continued)
Loans and advances at amortised cost net of impairment allowance
Industry
United
Kingdom
Geography (audited)
Stage (audited)
Maturity
Americas
Europe
Others
Total
Stage 1
Stage 2
Stage 3
Total
< 1 year 1-5 Years
>5 years
Total
Carbon
related
sectors ¹
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
As at 31 December
2022
Agriculture, Food
and Forest
Products
Mining and
Quarrying
Materials and
Building
Wholesale and
retail distribution
and leisure
Transport and
storage
Home Loans
Business and other
services
Other Financial
Institutions
Cards, unsecured
loans and other
personal lending
Total loans and
advances at
amortised cost
Debt securities at
amortised cost³
Total loans and
advances at
amortised cost
including debt
securities
Contingent
liabilities
Loan
commitments
Total off-balance
sheet²
Notes
3,762
—
—
3,762
—
2,706
757
299
3,762
743
1,226
1,793
Manufacturing
4,929
1,683
578
757
152
803
1,529
8,025
42
610
1,292
208
5,935
1,981
1,529
8,025
29
109
642
796
3,165
4,483
91
377
Government and
central bank
Banks
6,306
—
16
434
781
3,406
1,472
2,251
Energy and water
1,825
751
1,278
196
6,743
7,870
3,379
13
37
657
6,756
7,910
4,050
—
3
14
2,489
7,535
50
4,217
375
734
2,464
—
852
3,762
1,529
8,025
6,756
7,910
4,050
6,756
7,910
4,050
22,572
11,362
2,235
173,815
22,761
37,602
19,694
2,264
438
176
8,939
1,176
679
568
1,111
598
186
340
164,946
763
6,698
1,408
13,754
6,019
1,645
1,343
6,113
23,502
5,916
2,071
18,768
3,396
408
22,572
4,188
10,233
8,151
22,572
8,084
2,913
365
11,362
3,754
6,079
1,529
11,362
1,706
456
2,235
73
553
1,379
303
2,994
11,562
159,259
2,235
173,815
153,684
18,127
2,004
18,059
4,042
660
35,617
1,883
102
173,815
22,761
37,602
6,058
13,397
3,306
22,761
12,587
21,426
3,589
37,602
19,472
24,854
5,749
838
50,913
43,930
6,182
801
50,913
10,550
19,340
21,023
50,913
252,210
65,773
25,032
10,277
353,292
307,773
40,652
4,867
353,292
55,992
92,810
204,490
353,292
18,344
9,078
7,452
10,613
45,487
41,715
3,772
45,487
—
4,424
27,824
13,239
45,487
270,554
74,851
32,484
20,890
398,779
349,488
44,424
4,867
398,779
60,416
120,634
217,729
398,779
6,485
9,987
4,699
1,611
22,782
19,472
2,768
542
22,782
22,781
103,185
229,716
42,118
7,018
382,037
353,473
27,926
638
382,037
382,000
109,670
239,703
46,817
8,629
404,819
372,945
30,694
1,180
404,819
404,781
1
37
38
22,782
382,037
—
—
—
404,819
Yes
Yes
Yes
Yes
Yes
Yes
Yes
1 Refer to Carbon related assets table on page 285 for more details on the "Exposures towards sectors that highly contribute to carbon related assets" under the respective Industry
sectors.
2 The Off-balance sheet contingent liabilities and loan commitments excludes the fair value balance of £16,469m in 2023 (2022: £14,894m) and includes exposures relating to financial
assets classified as assets held for sale.
3 Debt securities at amortised cost primarily includes £34,237m (2022: £27,233m) in Government and central bank, £16,265m (2022: £11,579m) in other financial institutions, £2,854m
(2022: £3,457m) in materials & building and £1,516m (2022: £1,816m) in Banks.
- For analysis of Debt securities by issuer, refer to "Analysis of Debt Securities" on page 334.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 322
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
>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%
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%
9.32%
10.00%
11.35%
18.65%
10.67%
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%
100%
100%
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
Baa2
Baa3
Baa3
Ba1
Ba1
AA-
A+
A, A-
BBB+
BBB
BBB
BBB-
BBB-
BB+
BB+
Satisfactory
Ba1, Ba2
BB, BB-
Ba1, Ba2, Ba3 BB, BB-
Satisfactory
Ba3
Ba3
B1
B1
B2
Satisfactory
B3, Caa1
B3, Caa1
B3, Caa1
Satisfactory
B3, Caa1
BB-
B+
B+
B+
B+
B
B-
B-
B-
Higher Risk
Caa2
CCC+
Higher Risk
Caa3, Ca, C
Credit
Impaired
D
CCC, CCC-,
CC+ ,CC, C
D
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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 323
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 2023, the ratio of the Group’s on-balance sheet assets classified as strong (0.0 to <0.60%) remained stable at 87%
(2022: 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)
As at 31 December 2023
Cash and balances at central banks
Cash collateral and settlement balances
Loans and advances at amortised cost:
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Total loans and advances at amortised cost
Debt securities 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
Assets held for sale
Total on-balance sheet
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%
£m
£m
£m
£m
%
224,634
99,092
—
9,789
—
8
224,634
108,889
100
91
160,647
10,201
6,005
89,972
266,825
56,398
8,313
22,322
3,490
32,824
66,949
350
2,552
171,512
1,698
457
4,266
8,973
1
34,221
9,952
127,062
342,747
56,749
2,424
170
—
2,594
65,469
4,006
9,642
5,893
69,475
15,535
387
2,754
3,141
75,498
12,653
88,151
30,509
16,852
1,449
1,095
278
42
47,639
2,586
112,799
35,988
344
149,131
88
22
—
110
144,845
245,086
53,957
11,616
664
199,466
134
256,836
71,375
2,138
1,110
1,183,402
455
56
2,618
161,495
—
3
127
13,051
71,830
2,197
3,855
1,357,948
94
30
60
71
77
99
93
86
32
78
64
56
76
80
73
95
99
97
29
87
%
—
9
5
65
35
26
20
1
7
13
46
18
35
42
24
20
27
5
1
3
68
12
%
—
—
1
5
5
3
3
—
—
1
22
4
1
2
—
—
—
—
—
—
3
1
Total
%
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 324
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%
£m
£m
£m
£m
%
As at 31 December 2022
Cash and balances at central banks
Cash collateral and settlement balances
Loans and advances at amortised cost:
Retail mortgages
Retail credit cards
Retail other
Corporate loans
Total loans and advances at amortised cost
Debt securities 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
Assets held for sale
Total on-balance sheet
256,351
101,365
—
10,944
—
288
256,351
112,597
167,368
12,312
9,672
83,966
273,318
45,295
3,866
20,668
4,840
40,737
70,111
189
2,536
173,770
1,604
572
5,151
9,863
3
34,584
15,084
129,854
353,292
45,487
776
—
—
776
50,253
3,214
53,467
4,891
8,273
13,164
331
1,711
2,042
55,475
13,198
68,673
14,684
2,122
124,794
98
141,698
284,491
65,051
1,599
—
24,630
1,062
38,339
20
64,051
17,606
3
57
—
115
65
1,548
—
39,429
3,249
164,681
118
1,728
283
207,477
302,380
—
—
—
65,054
1,656
—
1,223,411
176,125
14,207
1,413,743
100
90
97
35
64
65
77
100
100
90
24
78
38
65
76
83
68
94
100
97
—
87
%
—
10
2
60
32
31
20
—
—
9
63
19
62
33
23
17
31
6
—
3
—
12
%
—
—
1
5
4
4
3
—
—
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
100
—
100
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 325
Risk performance - Credit risk (continued)
Credit exposures by internal PD grade
The below tables represent credit risk profiles 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, 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 retail mortgages (audited)
PD range
Grading
%
As at 31 December 2023
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
1 - 3
4 - 5
6 - 8
9 - 11
12 - 14
15 - 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 <11.35% Satisfactory
11.35 to <100% Higher Risk
100%
Credit Impaired
25,759
587
—
26,346
58,656
3,386
—
62,042
51,292
7,235
—
58,527
11,350
2,447
—
13,797
2,833
3,114
—
5,947
194
2,243
457
118
—
—
2,437
—
575
—
2,424
2,424
150,202
19,469
2,424
172,095
1
12
18
12
6
1
—
—
50
—
2
8
12
25
39
19
—
105
Total
£m
Net
exposure
Coverage
ratio
£m
%
1
26,345
14
62,028
26
58,501
24
13,773
31
5,916
40
2,397
19
556
—
—
—
0.2
0.5
1.6
3.3
—
—
—
—
—
—
—
428
428
428
1,996
583
171,512
17.7
0.3
Credit risk profile by internal PD grade for retail credit cards (audited)4
PD Range
Grading
%
As at 31 December 2023
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
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 <11.35% Satisfactory
11.35 to <100% Higher Risk
100%
Credit Impaired
133
1,463
3,374
5,248
11,010
—
4
6
11
173
8,867
3,436
314
1,948
—
133
—
1,467
—
3,380
—
5,259
—
11,183
—
12,303
—
2,262
—
—
1,720
1,720
—
2
9
27
137
314
34
—
—
—
—
—
14
699
917
—
—
—
—
—
—
2
9
133
1,465
3,371
27
5,232
151
11,032
—
1,013
11,290
—
951
1,311
—
1,333
1,333
387
30,409
5,578
1,720
37,707
523
1,630
1,333
3,486
34,221
—
0.1
0.3
0.5
1.4
8.2
42.0
77.5
9.2
Credit risk profile by internal PD grade for retail other (audited)4
PD Range
Grading
%
As at 31 December 2023
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
1 - 3
4 - 5
6 - 8
9 - 11
12 - 14
15 - 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 <11.35% Satisfactory
11.35 to <100% Higher Risk
100%
Credit Impaired
67
569
964
4,369
1,899
583
18
—
—
4
6
50
241
862
180
—
—
—
—
67
573
970
—
4,419
—
2,140
—
1,445
—
493
198
493
8,469
1,343
493
10,305
1
1
2
16
15
22
2
—
59
—
—
—
4
15
43
56
—
118
—
—
—
—
—
—
—
176
176
Total
£m
Net
exposure
Coverage
ratio
£m
%
1
1
2
66
572
968
20
4,399
30
2,110
65
1,380
58
176
140
317
353
9,952
1.5
0.2
0.2
0.5
1.4
4.5
29.3
35.7
3.4
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 326
Risk performance - Credit risk (continued)
Credit risk profile by internal PD grade for corporate loans (audited)
PD Range
Grading
%
As at 31 December 2023
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
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 <11.35% Satisfactory
11.35 to <100% Higher Risk
100%
Credit Impaired
36,981
23,344
10,833
17,914
146
92
346
390
17,433
4,694
5,779
5,360
221
2,274
4
37,131
—
23,436
—
11,179
—
18,304
—
22,127
—
11,139
—
2,495
—
112,505
—
13,302
2,550
2,554
2,550
128,361
4
15
9
41
106
101
11
—
287
—
—
3
4
68
167
172
—
414
2
—
—
—
—
—
—
6
37,125
15
23,421
12
11,167
45
18,259
174
21,953
268
10,871
183
2,312
—
0.1
0.1
0.2
0.8
2.4
7.3
596
598
596
1,299
1,954
127,062
23.4
1.0
Credit risk profile by internal PD grade for loans and advances at amortised cost (audited)4
PD Range
Grading
%
As at 31 December 2023
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
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 <11.35% Satisfactory
11.35 to <100% Higher Risk
100%
Credit Impaired
62,940
733
84,032
3,486
66,463
7,593
38,881
2,898
33,175
8,222
15,423
11,901
671
4,859
4
63,677
—
87,518
—
74,056
—
41,779
—
41,397
—
27,324
—
5,530
6
30
38
96
264
438
—
2
11
20
122
948
2
—
—
—
—
8
63,669
32
87,486
49
74,007
116
41,663
386
41,011
—
1,386
25,938
47
1,164
—
1,211
4,319
—
301,585
—
39,692
7,187
7,191
7,187
348,468
—
919
—
2,267
2,533
2,535
2,533
5,721
4,654
342,747
—
—
0.1
0.3
0.9
5.1
21.9
35.2
1.6
Credit risk profile by internal PD grade for retail mortgages (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
1 - 3
4 - 5
6 - 8
9 - 11
12 - 14
15 - 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 <11.35% Satisfactory
11.35 to <100% Higher Risk
100%
Credit Impaired
32,991
762
93,388
8,851
11,346
2,957
14,830
2,290
888
1,674
63
1,281
166
385
—
33,753
—
102,239
—
14,303
—
17,120
—
2,562
—
1,344
—
551
—
153,672
—
18,200
2,414
2,414
2,414
174,286
1
9
4
14
1
—
—
—
29
—
5
5
9
16
23
15
—
73
—
—
—
—
—
—
—
414
414
Credit risk profile by internal PD grade for retail credit cards (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
33,752
14
102,225
9
14,294
23
17,097
17
2,545
23
1,321
15
414
516
536
2,000
173,770
—
—
0.1
0.1
0.7
1.7
2.7
17.1
0.3
Total
£m
Net
exposure
Coverage
ratio
£m
%
1 - 3
4 - 5
6 - 8
9 - 11
12 - 14
15 - 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
194
2,556
4,139
5,446
3
3
5
18
0.60 to <2.15%
Satisfactory
4,370
1,370
2.15 to <11.35% Satisfactory
12,719
3,463
11.35 to <100% Higher Risk
364
1,587
—
197
—
2,559
—
4,144
—
5,464
—
5,740
—
16,182
—
1,951
—
6
14
30
57
299
52
—
—
—
2
145
753
720
—
—
—
—
—
—
197
6
2,553
14
4,130
32
5,432
202
5,538
—
1,052
15,130
—
772
1,179
100%
Credit Impaired
—
29,788
—
6,449
1,380
1,380
1,380
37,617
—
458
—
1,620
955
955
955
3,033
425
34,584
—
0.2
0.3
0.6
3.5
6.5
39.6
69.2
8.1
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 327
Risk performance - Credit risk (continued)
Credit risk profile by internal PD grade for retail other (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
1 - 3
4 - 5
6 - 8
9 - 11
12 - 14
15 - 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 <11.35% Satisfactory
11.35 to <100% Higher Risk
100%
Credit Impaired
101
816
1,350
7,379
2,875
924
25
1
6
9
55
260
929
208
—
—
102
822
—
1,359
—
7,434
—
3,135
—
1,853
—
233
1
1
3
36
21
36
2
—
—
—
4
19
72
71
—
—
—
—
—
—
—
—
13,470
—
1,468
720
720
720
15,658
—
100
—
166
308
308
Credit risk profile by internal PD grade for corporate loans (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
1
3
101
821
1,356
40
7,394
40
3,095
108
1,745
73
308
574
160
412
15,084
1.0
0.1
0.2
0.5
1.3
5.8
31.3
42.8
3.7
Total
£m
Net
exposure
Coverage
ratio
£m
%
1 - 3
4 - 5
6 - 8
9 - 11
12 - 14
15 - 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
35,960
21,674
767
234
11,046
1,389
12,214
774
0.60 to <2.15%
Satisfactory
19,612
3,494
2.15 to <11.35% Satisfactory
10,820
7,432
11.35 to <100% Higher Risk
565
2,728
5
36,732
—
21,908
—
12,435
—
12,988
—
23,106
—
18,252
—
3,293
100%
Credit Impaired
—
111,891
—
16,818
2,567
2,572
2,567
131,281
5
9
17
38
223
153
16
—
461
11
1
5
8
66
179
154
—
424
3
—
—
—
—
—
—
19
36,713
10
21,898
22
12,413
46
12,942
289
22,817
332
17,920
170
3,123
0.1
—
0.2
0.4
1.3
1.8
5.2
539
542
539
1,427
2,028
129,854
21.0
1.1
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
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
69,246
1,533
118,434
9,094
27,881
4,360
39,869
3,137
0.60 to <2.15%
Satisfactory
27,745
6,798
5
70,784
—
127,528
—
32,241
—
43,006
—
34,543
7
25
38
118
302
11
6
10
23
246
3
—
—
—
—
21
70,763
31
127,497
48
32,193
141
42,865
548
33,995
2.15 to <11.35% Satisfactory
24,526
13,105
—
37,631
488
1,027
—
1,515
36,116
11.35 to <100% Higher Risk
1,120
4,908
—
6,028
70
960
—
1,030
4,998
100%
Credit Impaired
—
308,821
—
42,935
7,081
7,086
7,081
358,842
—
1,048
—
2,283
2,216
2,219
2,216
5,550
4,865
353,292
—
—
0.1
0.3
1.6
4.0
17.1
31.3
1.5
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 328
Risk performance - Credit risk (continued)
Credit risk profile by internal PD grade for contingent liabilities (audited)1
PD range
Grading
%
As at 31 December 2023
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
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 <11.35% Satisfactory
11.35 to <100% Higher Risk
100%
Credit Impaired
7,582
3,337
3,211
2,848
2,388
79
3
157
285
701
1,501
1,027
—
7,661
—
3,340
—
3,368
—
3,133
—
3,089
—
2,528
17
—
355
—
—
583
372
583
20,884
2,607
583
24,074
As at 31 December 2022
1-3
4-5
6-8
9-11
12-14
15-19
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%
0.60 to <2.15%
Satisfactory
2.15 to <11.35% Satisfactory
11.35 to <100% Higher Risk
100%
Credit Impaired
5,695
4,210
2,733
3,161
1,989
1,626
58
—
19,472
149
348
180
214
751
686
440
—
2,768
—
—
—
—
—
—
—
542
542
5,844
4,558
2,913
3,375
2,740
2,312
498
542
22,782
Credit risk profile by internal PD grade for loan commitments (audited)1
1
2
3
3
8
29
1
—
47
7
2
3
8
21
49
2
—
92
—
—
1
4
6
41
61
—
113
1
1
3
1
6
35
64
—
111
—
—
—
—
—
—
—
22
22
—
—
—
—
—
—
—
3
3
1
2
4
7
7,660
3,338
3,364
3,126
14
3,075
70
2,458
62
22
182
310
561
23,892
8
3
6
9
27
84
66
3
206
5,836
4,555
2,907
3,366
2,713
2,228
432
539
22,576
—
0.1
0.1
0.2
0.5
2.8
16.7
3.8
0.8
0.1
0.2
0.2
0.3
1.0
3.6
13.3
0.6
0.9
PD range
Grading
%
As at 31 December 2023
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
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 <11.35% Satisfactory
11.35 to <100% Higher Risk
100%
Credit Impaired
77,689
75,399
715
479
—
78,404
—
75,878
63,545
2,798
—
66,343
66,423
1,441
—
67,864
54,686
4,177
—
58,863
14,690
8,275
747
3,716
—
22,965
—
4,463
—
—
454
454
2
6
12
22
38
40
6
—
—
1
1
2
15
71
84
—
353,179
21,601
454
375,234
126
174
As at 31 December 2022
1-3
4-5
6-8
9-11
12-14
15-19
20-21
22
Total
Notes
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
85,917
4,004
67,381
2,349
57,553
2,081
0.60 to <2.15%
Satisfactory
33,465
6,681
2.15 to <11.35% Satisfactory
30,374
8,068
—
78,829
—
89,921
—
69,730
—
59,634
—
40,146
—
38,442
11.35 to <100% Higher Risk
100%
Credit Impaired
706
—
3,991
—
—
638
4,697
638
3
7
13
15
50
62
3
—
1
1
2
4
28
86
82
—
353,473
27,926
638
382,037
153
204
—
—
—
—
—
—
—
22
22
—
—
—
—
—
—
—
20
20
2
7
78,402
75,871
13
66,330
24
67,840
53
58,810
111
22,854
90
4,373
22
432
322
374,912
4
8
78,825
89,913
15
69,715
19
59,615
78
40,068
148
38,294
85
20
4,612
618
377
381,660
—
—
—
—
0.1
0.5
2.0
4.8
0.1
—
—
—
—
0.2
0.4
1.8
3.1
0.1
1 Excludes loan commitments and financial guarantees of £16.5bn (2022: £14.9bn) carried at fair value.
2 PD bandings 2.15% to <10% and 10% to <11.35% have been merged for an enhanced presentation. The prior period comparative has been aligned accordingly.
3 Loan commitments reported also include exposures relating to financial assets classified as assets held for sale.
4 Exposures reported within Retail credit cards and Retail other does not include the German consumer finance business which is classified as assets held for sale.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 329
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.
Secured home loans
The UK home loans portfolio comprises first lien home loans and accounts for 95% (2022: 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 (%)
1
Recovery book impairment coverage ratio (%)
Note
1 Recovery Book Impairment Coverage Ratio excludes KMC.
Within the UK home loans portfolio:
Barclays UK
2023
163,639
2022
162,380
0.2
0.5
0.6
7.2
0.1
0.5
0.5
5.2
• Gross loans and advances increased by £1.3bn (0.8%) following an increase in Residential (1.2%), and a decrease in Buy to Let (BTL)
(2.1%).
• Owner-occupied interest-only home loans comprised 17% (2022: 17%) of total balances. The average balance weighted LTV on
owner occupied loans increased to 53.1% (2022: 50.0%).
• BTL home loans comprised 12.3% (2022: 12.7%) of total balances. In BTL, the average balance weighted LTV increased to 56.9%
(2022: 53.2%).
Home loans principal portfolios - distribution of balances by LTV1
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
%
%
%
%
%
%
%
%
%
%
%
%
73.5
12.3
1.5
—
78.8
8.8
0.6
—
10.4
1.2
0.1
—
10.5
0.5
—
—
0.9
0.1
—
—
0.8
—
—
—
84.8
13.6
1.6
—
90.1
9.3
0.6
—
8.5
7.4
1.2
0.3
10.2
3.9
0.3
0.1
16.2
16.7
2.5
0.7
30.8
9.7
0.3
0.6
26.7
12.8
3.6
3.4
33.2
5.2
2.4
3.3
51.4
36.9
7.3
4.4
74.2
18.8
3.0
4.0
—
0.1
0.1
1.0
—
—
—
0.4
0.2
1.9
2.6
12.1
0.2
1.4
1.5
21.4
3.8
27.9
63.3
100.0
2.9
30.8
85.0
64.9
0.1
0.4
0.6
12.4
0.1
0.1
0.4
13.1
Barclays UK
As at 31 December 2023
<=75%
>75% and <=90%
>90% and <=100%
>100%
As at 31 December 2022
<=75%
>75% and <=90%
>90% and <=100%
>100%
Note
1 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 2023.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 330
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 2023
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
2023
2022
53.6
40.0
75
65
146.7
123.6
11.5
Barclays UK
2023
22,669
0.6
62.6
53.8
50.4
37.3
34
26
210.6
145.5
18.9
2022
30,307
2.8
68.1
59.6
New home loans bookings in 2023 decreased 25% to £22.7bn (2022: 30.3bn) and the 90 day arrears rate increased to 0.2% (2022:
0.1%), 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 in 2023.
Head Office: Italian home loans and advances at amortised cost reduced to £3.6bn (2022: £4.5bn) 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
55.6% (2022: 58.8%). 90-day arrears increased to 2.4% (2022: 1.2%) due to deterioration caused by affordability stress related to rising
inflation and interest rates. The gross charge-off rate was broadly stable at 0.7% (2022: 0.6%).
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 331
Risk performance - Credit risk (continued)
Retail Credit Cards and Retail Other
The principal portfolios listed below accounted for 91% (2022: 87%) of the Group’s total retail credit cards and retail other.
Retail Credit Cards and Retail Other
As at 31 December 2023
Barclays UK
UK cards
UK personal loans
Barclays Partner Finance
Barclays International
US cards
As at 31 December 2022
Barclays UK
UK cards
UK personal loans
Barclays Partner Finance
Barclays International
US cards
German consumer finance business
Retail Credit Cards and Retail Other held for sale
As at 31 December 2023
Barclays International
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
%
%
%
%
10,420
3,641
2,344
27,286
9,939
4,023
2,612
25,554
4,269
0.9
1.5
0.6
2.9
0.9
1.4
0.5
2.2
1.7
0.2
0.6
0.3
1.5
0.2
0.6
0.2
1.2
0.7
1.4
1.3
0.7
2.3
3.7
4.1
0.7
2.4
0.7
1.3
1.0
0.7
2.3
3.6
3.8
0.7
2.3
0.6
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
1.0
4,094
1.7
0.8
1.0
German consumer finance business
UK cards: 30 day and 90 day arrears rates remained stable at 0.9% (2022: 0.9%) and 0.2% (2022: 0.2%) respectively. Total exposure
increased from £9.9bn to £10.4bn due to growth in spend and promotional balances. Both the gross and net write off rates decreased
by 2.3% driven by the impact of a strategy change in 2022 to align the point of charge off and write off in that year and lower charge off
rates in 2023.
UK personal loans: 30 and 90 day arrears rates have remained broadly stable at 1.5% (2022: 1.4%) and 0.6% (2022: 0.6%) respectively.
Both the gross and net write off rates decreased by 2.8%, driven by the impact of a strategy change in 2022 to align the point of charge
off and write off in that year and by the impact of large bulk sales in 2022 which reduced the flow to write off in 2023.
Barclays Partner Finance: 30 and 90 day arrears rates increased marginally to 0.6% (2022: 0.5%) and 0.3% (2022: 0.2%) respectively as
the weighting of lower risk customers with larger balances reduced. Total exposure fell to £2.3bn (2022: £2.6bn) due to a strategic
decision to reduce the number of active partner businesses. Annualised gross and net write off rates remained stable.
US cards: 30 and 90 day arrears rates increased to 2.9% (2022: 2.2%) and 1.5% (2022: 1.2%) respectively due to an anticipated higher
flow into and through delinquency, as rates returned to pre-pandemic levels. Write off rates remained broadly stable at 2.3%.
German consumer finance business: Gross exposure decreased 4% following business reprioritisation and discontinuation of Open
Market loans originations. 30 and 90 day arrears rates remained stable and write-off rates increased due to the impact of accepting
higher loan amount applications during 2022, which has since been discontinued.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 332
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 2023
Barclays UK
Barclays International
Head Office
Total retail
Barclays UK
Barclays International
Head Office
Total wholesale
Group total
As at 31 December 2022
1
Barclays UK
Barclays International
Head Office
Total retail
2
Barclays UK
Barclays International
Head Office
Total wholesale
Group total
Stage 1
Stage 2
Stage 3
£m
59
—
39
98
133
2
—
135
233
73
1
20
94
102
—
—
102
196
£m
£m
82
—
20
102
224
1,196
—
1,420
1,522
151
3
30
184
188
903
—
514
290
60
864
502
649
—
1,151
2,015
391
243
101
735
636
698
—
1,091
1,275
1,334
2,069
Total
£m
655
290
119
1,064
859
1,847
—
2,706
3,770
615
247
151
1,013
926
1,601
—
2,527
3,540
Stage 1
Stage 2
Stage 3
£m
—
—
—
—
1
—
—
1
1
1
—
—
1
1
—
—
1
2
£m
12
—
2
14
3
29
—
32
46
26
—
2
28
5
21
—
26
54
£m
137
128
9
274
52
125
—
177
451
143
114
15
272
57
108
—
165
437
Total
£m
149
128
11
288
56
154
—
210
498
170
114
17
301
63
129
—
192
493
Retail balances on forbearance reflected increases in UK Home Finance and US cards.
Wholesale balances subject to forbearance increased to £2.7bn (2022: £2.5bn) with increases in exposure in Corporate Bank and
Investment Bank of £107m and £155m respectively. Impairment allowances increased to £210m (2022: £192m) with a range of new
cases, partially offset by write offs. Barclays International accounted for 68% of wholesale forbearance with corporate cases
representing 87% of these balances.
Notes
1 Following a review of forbearance programmes across Barclays UK in 2023 which resulted in the identification of a segment of written off balances inflating the forbearance stock, UK
cards 2022 balances have been updated to reflect a decrease of £74m with a corresponding decrease in ECL of £2m.
2 Following a review of forbearance programmes across Barclays UK in 2023 which resulted in 'Breathing Space', a 1–2-month cessation of interest and customer contact to allow
businesses to talk to all creditors now being included within Business Banking for the first time, UK Business Banking 2022 balances have been updated to reflect an increase of £222m
with a corresponding increase in ECL of £11m.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 333
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% (2022: 99%) of total
retail forbearance balances.
Analysis of Key Portfolios in Forbearance Programmes
Balances on Forbearance Programmes
% of gross retail
loans and advances
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
As at 31 December 2023
Barclays UK
UK Home Loans
UK cards
UK personal loans
Barclays Partner Finance
Barclays International
US cards
Head Office
Italy Mortgages
As at 31 December 2022
Barclays UK
UK Home Loans
1
UK cards
UK personal loans
Barclays Partner Finance
Barclays International
US cards
German consumer finance business
Head Office
Italy Mortgages
Total
£m
366
215
46
17
290
119
263
265
59
16
206
40
151
£m
%
%
£m
%
0.2
2.1
1.3
0.7
1.1
3.3
0.2
2.7
1.5
0.6
0.8
0.9
3.4
44.7
n/a
n/a
n/a
n/a
32.2
n/a
n/a
n/a
15
86
30
10
n/a
128
59.8
44.6
11
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
4
116
33
10
87
27
17
4.1
40.0
65.2
58.8
44.1
9.2
1.5
43.8
55.9
62.5
42.2
67.5
11.3
Analysis of Portfolios- held for sale 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
£m
%
%
£m
%
% of gross retail
loans and advances
Total
£m
As at 31 December 2023
Barclays International
German consumer finance business
Note
32
0.8
n/a
n/a
22
68.8
1 Following a review of forbearance programmes across Barclays UK in 2023 which resulted in the identification of a segment of written off balances inflating the forbearance stock, UK
cards 2022 balances have been updated to reflect a decrease of £74m with a corresponding decrease in ECL of £2m.
UK home loans: Forbearance balances rose to £366m (2022: £263m) due to an increase in less-than-interest-only payment
arrangements and concessionary interest rates given to support customers facing rising mortgage interest rates and increased
affordability stress.
UK cards: Balances on forbearance decreased to £215m (2022: £265m) due to increased outflow, against a stable forbearance inflow
across 2023.
UK personal loans: Balances on forbearance programmes decreased to £46m (2022: £59m), as inflow steadily reduced across 2023,
flattening in Q423, and outflow remained stable.
Barclays Partner Finance: Balances on forbearance remained stable and aligned to the total delinquent stock.
US cards: Forbearance balances increased to £290m (2022: £206m) reflecting an increase in new enrolments in 2023 in line with
increased delinquency trends as more customers required assistance.
German consumer finance business: Forbearance balances decreased to £32m (2022: £40m) due to lower customer demand and
increased operational focus on early delinquency stages.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 334
Risk performance - Credit risk (continued)
Italian home loans: Forbearance balances decreased to £119m (2022: £151m) due to the continued availability of COVID-related
government schemes, which are not classified as forbearance, and exits from pre-COVID forbearance schemes.
Wholesale forbearance programmes
The table below details balance information for wholesale forbearance cases.
Analysis of wholesale balances in forbearance programmes
As at 31 December 2023
Barclays UK
Barclays International
Total
As at 31 December 2022
1
Barclays UK
Barclays International
Total
Note
Balances on forbearance programmes
Total balances
£m
859
1,847
2,706
926
1,601
2,527
% of gross
wholesale loans
and advances
%
2.0
1.3
1.5
2.0
1.2
1.4
Impairment
allowances marked
against balances
on forbearance
programmes
Total balances on
forbearance
programmes
coverage ratio
£m
56
154
210
63
129
192
%
6.5 %
8.3 %
7.8 %
6.8 %
8.1 %
7.6 %
1 Following a review of forbearance programmes across Barclays UK in 2023 which resulted in 'Breathing Space', a 1–2-month cessation of interest and customer contact to allow
businesses to talk to all creditors now being included within Business Banking for the first time, UK Business Banking 2022 balances have been updated to reflect an increase of £222m
with a corresponding increase in ECL of £11m.
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. 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
2023
£m
130,816
43,001
12,907
19,168
205,892
%
63.5
20.9
6.3
9.3
100
2022
£m
106,676
41,794
6,399
14,174
169,043
%
63.1
24.7
3.8
8.4
100
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 335
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
2023
Balance sheet
assets
Counterparty
netting
£m
89,533
109,609
7,662
48,171
1,861
£m
69,570
79,861
6,758
40,946
1,674
256,836
198,809
2022
Balance sheet
assets
Counterparty
netting
£m
£m
109,938
134,579
5,423
48,665
3,775
88,096
101,646
4,356
41,200
3,039
302,380
238,337
Net
exposure
£m
19,963
29,748
904
7,225
187
58,027
31,211
26,816
Net
exposure
£m
21,842
32,933
1,067
7,465
736
64,043
34,547
29,496
Derivative asset exposures would be £230bn (2022: £273bn) 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 £(223)bn (2022:
£(264)bn) lower reflecting counterparty netting and collateral placed. In addition, non-cash collateral of £10bn (2022: £11bn) 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
Total OTC derivative assets/(liabilities)
Notional contract
amount
£m
36,163
15,950
1,216
478
53,807
18,365
42,791
716
1,406
63,278
2023
Fair value
Assets
£m
986
161
9
15
1,171
595
2,207
—
115
2,917
6,139,730
19,202,160
572,188
433,737
4,431
83,319
100,071
4,749
13,390
43
26,352,246
201,572
372,404
419,568
13,352
13,159
303
4,102
2,357
178
4,272
1
818,786
27,288,117
10,910
216,570
Liabilities
£m
Notional contract
amount
£m
2022
Fair value
Assets
£m
1,130
151
26
3
37,149
17,967
823
19
55,958
1,310
22,673
61,158
144
492
638
2,270
—
96
Liabilities
£m
(677)
(57)
(224)
(2)
(960)
(637)
(2,752)
—
(26)
84,467
3,004
(3,415)
5,381,723
14,566,844
582,943
393,664
4,303
102,077
124,463
3,635
9,505
14
(95,377)
(107,895)
(3,790)
(12,280)
(50)
20,929,477
239,694
(219,392)
349,569
287,026
35,933
16,101
108
5,638
3,119
601
3,075
—
(6,979)
(6,864)
(717)
(4,416)
(1)
688,737
21,758,639
12,433
256,441
(18,977)
(242,744)
(611)
(51)
(394)
(45)
(1,101)
(484)
(2,726)
—
(59)
(3,269)
(76,345)
(86,135)
(5,278)
(19,890)
(2)
(187,650)
(5,324)
(4,088)
(333)
(5,785)
(2)
(15,532)
(207,552)
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 336
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
Page
336
336
336
337
Summary of performance in the
period
Traded market risk review
Review of management measures
Average management VaR increased 17%
to £42m (2022: £36m) and the range
narrowed. The increase was driven by the
impact of funded, fair value leverage loan
exposure in Investment Banking since Q4
2022, partially offset by lower market
volatility and credit spread levels in 2023 as
geopolitical tensions eased, relative to
2022, inflation declined and the pace of
interest rate rises moderated.
Management VaR declined in 2023 from a
high of £73m in November 2022, driven by
a reduction in the size of the funded, fair
value leverage loan exposure in
Investment Banking.
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
2023 (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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 337
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
1
Diversification effect
Total management VaR
Note
2023
Average
High1
£m
40
15
6
13
9
4
—
6
(51)
42
£m
57
25
10
25
14
9
1
11
n/a
60
Low1
£m
22
9
3
8
5
1
—
2
n/a
24
2022
Average
High1
£m
25
13
10
12
7
8
—
6
(45)
36
£m
71
23
29
24
11
25
1
17
n/a
73
Low1
£m
8
4
4
4
3
2
—
3
n/a
13
1 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)
100
75
50
25
0
Dec 2021
Dec 2022
Dec 2023
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 338
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
– Internal Liquidity Stress Tests
– 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.
– 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
Provides details on the contractual maturity of all financial instruments and other assets
and liabilities.
Capital risk performance
Contractual maturity of financial assets and
liabilities
Page
339
339
339
340
341
341
341
341
342
342
342
342
343
343
346
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.
Capital risk overview and summary of performance 350
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
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
350
350
350
351
351
351
352
353
353
353
354
354
355
355
355
355
355
355
356
356
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 339
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.
Net interest income sensitivity
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.
– by business unit
– by 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.
Analysis of equity sensitivity
Volatility of the FVOCI portfolio in the liquidity pool
Page
357
357
358
358
358
Liquidity risk
Summary of performance
Liquidity risk stress testing
All disclosures in this section are
unaudited unless otherwise stated.
Overview
The Group Liquidity Risk is managed within
Treasury and Capital Risk framework 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
and PRA Regulatory requirements. 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 172 to 174 of the Barclays PLC Pillar
3 Report 2023 (unaudited).
Key metrics
1
Liquidity Coverage Ratio
161%
2
Net Stable Funding Ratio
138%
1 LCR represents average of the last 12 spot month end
ratios.
2 NSFR represents average of the last four spot quarter
end ratios.
The liquidity pool at £298bn (December
2022: £318bn) reflects the Group’s
prudent approach to liquidity
management. The Average Liquidity
Coverage Ratio (LCR) remained well above
the 100% regulatory requirement at 161%
(December 2022: 156%), equivalent to a
surplus of 118bn (December 2022:
£114bn).
The decrease in the liquidity pool over the
year was driven by a decrease in wholesale
funding, a slight reduction in net deposits
where a decrease in Barclays UK deposits
is largely offset by a growth in Corporate
Bank deposits, and changes in business
funding consumption. A decrease in net
stress outflows led by an increase in the
proportion of corporate deposits treated
as operational led to an increase in the
LCR ratio. The Net Stable Funding Ratio
(average of last four quarter ends) was
138%, which represents a surplus of
£167bn above the 100% regulatory
requirement.
During the year, the Group issued £14.1bn
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 33% (December 2022: 39%).
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).
Internal Liquidity Stress Tests (ILST
formally known as 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 ILST, 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
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 340
Risk performance - Treasury and Capital risk (continued)
Key ILST assumptions
For the year ended 31 December 2023
Drivers of Liquidity Risk
Wholesale Secured and Unsecured Funding Risk
Retail and Corporate Funding Risk
Intraday Liquidity Risk
Intra-Group Liquidity Risk
Cross-Currency Liquidity Risk
Off-Balance Sheet Liquidity Risk
Franchise-Viability Risk
ILST Combined stress – key assumptions
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 deposit outflows as counterparties seek to diversify their deposit balances
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)
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
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 2023, 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 and the 12 month market-wide scenario.
Liquidity regulation
Barclays Group monitors its position against both the LCR and NSFR according to the PRA regulatory requirements which include
certain Basel III standards that were retained in the UK regulatory framework from 1 January 2022 as part of the UK's withdrawal from
the EU. The LCR requirement takes into account the relative stability of different sources of funding and potential incremental funding
requirements in a stress. The LCR 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. The NSFR has been developed to promote a
sustainable and stable structure of assets and liabilities.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 341
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.
Liquidity Coverage Ratio (LCR)1
2023
2022
As at 31 December
LCR Eligible High Quality Liquid Assets (HQLA)
Net stress outflows
Surplus
Liquidity coverage ratio
Note
£bn
310
(192)
118
161 %
£bn
320
(206)
114
156 %
1 Liquidity Coverage Ratio is now shown on an average basis, based on the average of the last 12 spot month end ratios. The HQLA, Net Stress outflow, and Surplus balances in the table
above are average month end balances for the past 12 months. Prior period HQLA, Net Stress Outflows, Surplus & LCR comparatives have been updated for consistency.
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 (a measure of assets on the balance sheet and certain off
balance sheet exposures which may require longer term funding). The NSFR was 138% at December 2023 ( December 2022: 137%)
(average of last four quarter ends) equivalent to a surplus of £167bn (2022: £155bn) above the regulatory requirement and
demonstrates Barclays’ stable balance sheet funding profile.
Net Stable Funding Ratio (NSFR)1
Total Available Stable Funding
Total Required Stable Funding
Surplus
Net Stable Funding Ratio
Note
1 Average represents the last four spot quarter end ratios.
2023
£bn
607
440
167
138 %
2022
£bn
576
421
155
137 %
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 2023 was £298bn (2022: £318bn). In 2023, the month-end liquidity pool ranged from
£298bn to £342bn (2022: £309bn to £359bn), and the month-end average balance was £328bn (2022: £331bn). 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 2023
LCR eligible High Quality Liquid Assets (HQLA)1
Liquidity pool
Cash and deposits with central banks2
Government bonds3
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 2023
Total as at 31 December 2022
Notes
Cash
£bn
211
211
248
Level 1
Level 2A
Level 2B
£bn
£bn
£bn
40
1
1
42
4
3
3
10
52
31
5
1
6
3
3
9
15
2
2
2
1
Total
£bn
211
45
2
1
48
4
3
6
2
15
274
295
2023
£bn
232
48
1
1
50
5
3
7
1
16
298
2022
£bn
263
39
3
—
42
6
2
5
—
13
318
1 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 Barclays subsidiaries. It also reflects differences in eligibility of assets between the LCR and Barclays’ Liquidity Pool.
2 Includes cash held at central banks and surplus cash at central banks related to payment schemes. Of which over 99% (2022: over 99%) was placed with the Bank of England, US Federal
Reserve, European Central Bank, Bank of Japan and Swiss National Bank.
3 Of which over 80% (2022: over 79%) comprised UK, US, French, German, Japanese, Swiss and Dutch securities.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 342
Risk performance - Treasury and Capital risk (continued)
The Group liquidity pool is well diversified by major currency and the Group monitors ILST stress scenarios for major currencies.
Liquidity pool by currency
Liquidity pool as at 31 December 2023
Liquidity pool as at 31 December 2022
Management of the liquidity pool
USD
£bn
82
72
EUR
£bn
76
79
GBP
£bn
117
142
Other
£bn
23
25
Total
£bn
298
318
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 2023, 59% (2022: 60%) of the liquidity pool was located in Barclays Bank PLC, 22% (2022: 25%) in Barclays Bank UK
PLC and 11% (2022: 9%) 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 ILST, 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 2023, the Group had £72.5bn (December 2022: £83.3bn) of assets positioned
at various central banks.
For more detail on the Group’s other unencumbered assets, see pages 197 to 201 of the Barclays PLC Pillar 3 Report 2023 (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
1
Loans and advances at amortised cost
Group liquidity pool
Reverse repurchase agreements, trading
portfolio assets, cash collateral and
settlement balances
Derivative financial instruments
2
Other assets
Total assets
Notes
2023
£bn
386
298
435
257
101
1,477
2022
£bn
Liabilities
385 Deposits at amortised cost
318
<1 Year wholesale funding
>1 Year wholesale funding
Repurchase agreements, trading portfolio
liabilities, cash collateral and settlement
balances
412
302 Derivative financial instruments
97 Other liabilities
Equity
1,514 Total liabilities
2023
£bn
539
59
118
380
250
59
72
2022
£bn
546
73
111
370
290
55
69
1,477
1,514
1 Adjusted for liquidity pool debt securities reported at amortised costs of £18bn (December 2022: £14bn).
2 Other assets include fair value assets that are not part of reverse repurchase agreements or trading portfolio assets, and other asset categories.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 343
Risk performance - Treasury and Capital risk (continued)
Deposit funding
Funding of loans and advances
As at 31 December 2023
Barclays UK
Barclays International
Head Office
Barclays Group
Note
2023
2022
Loans and
advances,debt
securities at
amortised cost
£bn
221
174
4
399
Deposits at
amortised cost
Loan: deposit
ratio1
Loan: deposit
ratio
£bn
241
298
539
%
92 %
58 %
74 %
%
87 %
59 %
73 %
1 The loan: deposit ratio is calculated as loans and advances at amortised cost and debt securities at amortised cost divided by deposits at amortised cost.
As at 31 December 2023, £224bn (2022: £224bn) of total customer deposits were insured through the UK Financial Services
Compensation Scheme (FSCS) and other similar schemes. In addition to these customer deposits £5.6bn (2022: £5.7bn) 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 £14.1bn of MREL instruments from Barclays PLC 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 2023, the Group’s total wholesale funding outstanding (excluding repurchase agreements) was £176.8bn (2022:
£184.0bn), of which £19.0bn (2022: £19.2bn) was secured funding and £157.8bn (2022: £164.8bn) unsecured funding. Unsecured
funding includes £69.2bn (2022: £59.7bn) of privately placed senior unsecured notes issued through a variety of distribution channels
including intermediaries and private banks.
Wholesale funding of £58.6bn (2022: £72.5bn) matures in less than one year, representing 33% (December 2022: 39%) of total
2
. Although not a requirement, the
wholesale funding outstanding. This includes £18.7bn (2022: £15.0bn) related to term funding
liquidity pool exceeded the wholesale funding maturing in less than one year by £239bn (2022: £246bn).
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 2023, Barclays repaid £0.9bn of its TLTRO drawings, reducing its outstanding balance to £0.5bn as at 31 December 2023. In addition,
the total outstanding principal amount of TFSME remained at £21.9bn at year end.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 344
Risk performance - Treasury and Capital risk (continued)
Maturity profile of wholesale funding1,2
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)
3
Senior unsecured (Privately placed)
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 23
Of which secured
Of which unsecured
Total as at 31 December 22
Of which secured
Of which unsecured
Notes
<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
1.2
—
—
0.6
2.4
—
1.4
—
—
1.9
—
—
7.5
2.4
5.1
11.1
4.9
6.2
—
—
—
9.7
8.2
—
1.6
—
0.1
—
—
—
19.6
8.2
11.4
26.5
6.7
19.8
0.3
—
—
8.6
1.0
1.0
2.9
0.1
—
—
—
—
13.9
1.1
12.8
16.4
1.3
15.1
—
—
0.4
7.5
—
—
8.5
1.0
0.2
—
—
—
17.6
1.0
16.6
18.5
0.2
18.3
1.5
—
0.4
5.5
—
—
26.4
11.6
1.0
14.4
1.1
0.3
1.9
—
—
58.6
12.7
45.9
72.5
13.1
59.4
1.3
—
—
12.1
1.2
0.2
—
—
—
20.3
1.2
19.1
22.4
1.8
20.6
9.7
—
1.5
—
—
—
8.4
0.5
0.3
—
—
—
20.4
0.5
19.9
16.9
0.7
16.2
5.9
—
—
—
—
—
5.2
—
0.1
—
—
0.5
11.7
0.5
11.2
14.5
0.5
14.0
4.7
—
1.5
—
—
—
7.0
0.1
—
—
—
0.2
13.5
0.3
13.2
9.7
1.0
8.7
20.0
47.3
1.0
5.8
1.0
9.2
—
—
—
21.1
3.1
0.4
27.7
11.6
1.0
68.2
6.0
1.3
—
0.2
0.7
1.9
0.2
1.4
52.3
176.8
3.8
19.0
48.5
157.8
48.0
184.0
2.1
19.2
45.9
164.8
1 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.
2 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.
3 Includes structured notes of £54.7bn, of which £11.5bn matures within one year.
Currency composition of wholesale debt
As at 31 December 2023, 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 31 December 2023
Total as 31 December 2022
USD
%
74
83
61
55
80
72
64
61
EUR
%
19
11
22
20
13
9
19
22
GBP
Other
%
6
6
13
5
7
17
8
11
%
1
—
4
20
—
2
9
6
To manage cross currency refinancing risk, the Group manages to currency mismatch limits, which limit risk at specific maturities.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 345
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 2023
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+/Stable
A-1
A+/Stable
A-1
A1/Stable
P-1
A1/Stable
P-1
BBB+/Stable
Baa1/Stable
A-2
P-2
A+/Stable
F1
A+/Stable
F1
A/Stable
F1
In March 2023, Moody’s upgraded Barclays PLC’s long-term rating by one notch to Baa1 and reverted the outlook to stable, reflecting
Moody's expectation that the Group’s earnings will be higher, more diversified and more sustainable than before, while asset risk will
remain broadly stable and capital and liquidity will remain strong. This followed the review for upgrade that had been placed on Barclays
PLC in December 2022. Moody’s also revised Barclays Bank PLC’s outlook to stable from negative, reflecting Moody’s expectation that
the Bank’s capital and liquidity will remain strong and whilst profitability will reduce from the exceptional levels of the last couple of years
for capital markets and investment banking, it will remain sound due to improving income from other businesses and lower litigation and
conduct costs.
In May 2023, S&P upgraded all Barclays rated entities by one notch and reverted the outlooks to stable, reflecting S&P’s view that
Barclays PLC's diversified international banking franchise has performed well against a difficult economic and financial backdrop and
S&P's expectation that Barclays PLC will generate solid earnings over the next 12-24 months, even as interest rates approach their
peak. This action upgraded Barclays PLC’s long-term rating to BBB+ and Barclays Bank PLC and Barclays Bank UK PLC’s long-term
ratings to A+.
In July 2023, 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 2023 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 ILST 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 £2bn 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 ILST stress scenarios and a portion of the liquidity pool is held against these risks.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 346
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 ‘not more than one month'
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)
As at 31 December 2023
Assets
Cash and balances at central banks
Cash collateral and settlement balances
Loans and advances at amortised cost to banks
and customers
Debt securities 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 financial assets
Total financial assets
Other assets
Total assets
Liabilities
Deposits at amortised cost from banks and
customers
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
Other financial liabilities
Total financial liabilities
Other liabilities
Total liabilities
Over one
month but
not more
than three
months
Over three
months but
not more
than six
months
Not more
than one
month
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
£m
£m
£m
£m
£m
£m
£m
Total
£m
224,634
—
61,837
47,052
—
—
—
—
—
—
—
—
—
224,634
—
108,889
22,457
3
5,907
4,779
9,929
16,366
579
4,700
50,126
16,626
33,340
204,622
342,747
12,113
17,949
56,749
1,435
174,605
—
—
—
—
34
—
1,123
—
—
—
2
2,594
—
174,605
158,213
17,761
6,214
5,902
11,119
254,655
100
91
160
1,070
2,966
533
4,476
206,651
227
256,836
1,789
2,122
2,421
26
365
36
8,699
12,424
17,179
28,959
71,836
9
1
1
2
2,197
901,750
78,046
17,214
35,870
92,489
66,132
256,237
1,447,738
29,749
1,477,487
440,122
65,227
36,812
28,857
22,665
29,464
7,691
1,321
714
538,789
—
—
—
—
—
94,084
12,164
5,535
—
58,669
12,433
17,004
121
—
1,307
9,949
—
—
247
8,279
7,092
79
7,286
17,558
12,079
27,414
584
—
1,987
1,554
6,248
—
—
—
41,601
96,825
10,494
58,669
180,554
31,587
13,867
14,579
23,469
13,994
19,489
297,539
249,481
6,492
21
265
—
40
24
77
82
266
64
182
372
250,044
377
7,699
1,018,244
127,100
47,828
52,261
59,332
36,286
54,693
1,395,744
9,879
1,405,623
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 347
Risk performance - Treasury and Capital risk (continued)
Contractual maturity of financial assets and liabilities (audited)
As at 31 December 2022
Assets
Over one
month but
not more
than three
months
Over three
months but
not more
than six
months
Not more
than one
month
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
£m
£m
£m
£m
£m
£m
£m
Total
£m
Cash and balances at central banks
256,351
—
Cash collateral and settlement balances
62,295
50,302
—
—
—
—
—
—
—
—
—
256,351
—
112,597
Loans and advances at amortised cost to banks
and customers
22,581
6,644
9,104
17,663
49,259
43,551
204,490
353,292
Debt securities at amortised cost
—
1,258
612
2,554
14,856
12,968
13,239
45,487
Reverse repurchase agreements and other similar
secured lending
Trading portfolio assets
Financial assets at fair value through the income
statement
442
133,813
333
—
—
—
—
—
—
—
—
—
1
776
—
133,813
158,699
21,016
6,771
6,765
11,413
3,292
5,612
213,568
Derivative financial instruments
301,679
22
66
70
462
44
37
302,380
Financial assets at fair value through other
comprehensive income
Other financial assets
Total financial assets
Other assets
Total assets
Liabilities
Deposits at amortised cost from banks and
customers
Cash collateral and settlement balances
Repurchase agreements and other similar
secured borrowing
Debt securities in issue
Subordinated liabilities
Trading portfolio liabilities
2,908
1,561
3,533
4,535
3,082
16,766
16,418
17,820
65,062
49
—
43
—
1
2
1,656
940,329
83,157
21,088
30,177
92,756
76,274
241,201
1,484,982
477,022
68,930
29,790
27,997
19,388
13,665
4,590
—
—
—
—
943
6,139
399
9,419
9,621
—
72,924
23,488
13,259
11,876
16,252
17
—
—
—
262
—
1,181
—
28,717
1,513,699
499
—
10,069
14,808
1,987
—
828
545,782
—
96,927
83
27,052
23,577
112,881
7,976
—
11,423
72,924
Financial liabilities designated at fair value
171,096
26,481
14,352
9,104
24,548
8,528
17,528
271,637
Derivative financial instruments
Other financial liabilities
Total financial liabilities
Other liabilities
Total liabilities
288,582
7,841
36
48
63
43
7
84
262
409
273
247
397
289,620
484
9,156
1,105,435
108,256
47,105
35,941
53,381
36,411
50,873
1,437,402
7,037
1,444,439
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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 348
Risk performance - Treasury and Capital risk (continued)
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 'not more than one month' column at
their fair value.
Contractual maturity of financial liabilities - undiscounted (audited)
As at 31 December 2023
Deposits at amortised cost from banks and
customers
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
Other financial liabilities
Total financial liabilities
As at 31 December 2022
Deposits at amortised cost from banks and
customers
Cash collateral and settlement balances
Repurchase agreements and other similar
secured borrowing
Debt securities in issue
Subordinated liabilities
Trading portfolio liabilities
Over one
month but
not more
than three
months
Over three
months but
not more
than six
months
Not more
than one
month
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
£m
£m
£m
£m
£m
£m
£m
Total
£m
440,184
65,230
37,101
29,096
23,055
30,377
8,107
1,540
882
541,246
—
—
—
—
—
94,326
12,196
5,546
—
58,669
12,516
17,142
1,326
10,121
252
9,042
7,902
213
43,447
7,481
18,674
13,688
40,154
112,806
121
—
—
—
601
—
2,241
1,822
8,594
—
—
—
13,379
58,669
180,687
31,794
14,174
15,013
24,891
15,309
34,035
315,903
249,482
6,492
21
269
—
45
24
89
90
309
75
220
705
250,397
615
8,039
1,018,486
128,060
48,721
53,837
63,354
40,556
85,198
1,438,212
477,050
68,930
29,921
28,185
19,393
13,798
4,606
—
—
—
—
946
6,920
401
23,580
13,375
12,165
16,964
499
—
1,082
546,349
—
97,115
12,234
16,790
252
30,183
34,078
126,598
17
—
—
—
263
—
1,274
2,356
10,331
—
—
—
14,241
72,924
9,430
9,646
—
72,924
Financial liabilities designated at fair value
171,296
26,674
14,905
9,399
25,662
9,847
33,099
290,882
Derivative financial instruments
Other financial liabilities
Total financial liabilities
288,582
7,841
98
58
101
56
8
109
290
488
321
308
793
290,193
564
9,424
1,105,699
108,934
47,830
36,688
56,204
42,355
80,199
1,477,909
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 349
Risk performance - Treasury and Capital risk (continued)
Maturity of off-balance sheet commitments given
The table below presents the maturity split of the Group’s off-balance sheet commitments 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 given (audited)
Not more than
one month
Over one month
but 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
£m
£m
£m
£m
£m
£m
£m
Total
£m
As at 31 December 2023
Contingent liabilities and financial
guarantees
Documentary credits and other short-
term trade related transactions
Standby facilities, credit lines and other
commitments
Total off-balance sheet
commitments given
As at 31 December 2022
Contingent liabilities and financial
guarantees
Documentary credits and other short-
term trade related transactions
Standby facilities, credit lines and other
commitments
Total off-balance sheet
commitments given
25,217
119
2,348
388,030
3
—
415,595
122
24,118
1,742
393,723
419,583
71
1
—
72
2
1
—
3
14
5
—
19
1
—
—
1
1
—
—
1
1
—
55
56
1
—
37
38
—
—
—
—
—
—
—
—
—
25,340
—
2,352
—
388,085
—
415,777
—
24,205
—
1,748
—
393,760
—
419,713
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 350
Risk performance - Treasury and Capital risk (continued)
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 2023 (unaudited).
Key metrics
Common Equity Tier 1 ratio
13.8%
UK leverage ratio
5.2%
Own funds and eligible liabilities ratio as a
percentage of RWAs
33.6%
Summary of performance in the
period
The Group continues to be in excess of
overall capital, leverage and MREL
regulatory requirements.
The CET1 ratio decreased to 13.8%
(December 2022: 13.9%) as RWAs
increased by £6.2bn to £342.7bn
partially offset by an increase in CET1
capital of £0.4bn to £47.3bn
▪ c.125bps increase from 2023
attributable profit, including the c.25bps
negative impact of structural cost
actions, of which c.10bps are offset in
other capital movements
▪ c.70bps decrease driven by returns to
shareholders including the 8p per share
total dividend and £1.25bn of share
buybacks announced with FY22 and
H123 results
▪ c.10bps decrease from other capital
movements, including the impact of
regulatory change on 1 January 2023
relating to IFRS 9 transitional relief, the
impact of the KMC acquisition, and
movements in other regulatory capital
deductions
▪ c.50bps decrease as a result of a
£13.2bn increase in RWAs excluding the
impact of foreign exchange
movements, primarily driven by higher
CIB and CC&P RWAs
▪ An £8.2bn decrease in RWAs as a result
of foreign exchange movements was
offset by a £1.1bn decrease in CET1
capital due to a decrease in the currency
translation reserve
The UK leverage ratio decreased to 5.2%
(December 2022: 5.3%) primarily due to a
£38.3bn increase in leverage exposure to
£1,168.3bn, largely driven by an increase in
trading portfolio assets within Global
Markets
Minimum capital requirements
The Group’s Overall Capital Requirement
for CET1 increased to 12.0%, following the
latest PRA Individual Capital Requirement
(ICR) notice and comprises a 4.5% Pillar 1
minimum, a 2.5% Capital Conservation
Buffer (CCB), a 1.5% Global Systemically
Important Institution (G-SII) buffer, a 2.6%
Pillar 2A requirement and a 0.9%
Countercyclical Capital Buffer (CCyB).
The Group’s CCyB is based on the buffer
rate applicable for each jurisdiction in which
the Group has exposures. Following the
Financial Policy Committee (FPC)
announcement on 5 July 2022, the UK
CCyB increased from 1% to 2% with effect
from 5 July 2023. The buffer rates set by
other national authorities for non-UK
exposures are not currently material.
The Group’s updated Pillar 2A requirement
increased by 25bps to 4.6% of which at
least 56.25% needs to be met with CET1
capital, equating to 2.6% 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 UK leverage ratio
requirement of 4.1% as at 31 December
2023. 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 0.3%.
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.
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
4.6% Pillar 2A equating to 25.2% 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 351
Risk performance - Treasury and Capital risk (continued)
Capital resources
Capital ratios1, 2
As at 31 December
CET1
Tier 1 (T1)
Total regulatory capital
MREL ratio as a percentage of total RWAs
Own funds and eligible liabilities (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
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
Less : Ineligible T2 capital (including minority interests) issued by subsidiaries
Eligible liabilities
Total own funds and eligible liabilities3
Total RWAs (Unaudited)
Notes
2023
13.8 %
17.7 %
20.1 %
33.6 %
2023
£m
71,204
(13,259)
(795)
(43)
(1,901)
(7,790)
(1,630)
3,707
(296)
136
(2,654)
(20)
288
357
47,304
13,263
(60)
13,203
60,507
7,966
569
—
(160)
68,882
(569)
46,995
2022
13.9 %
17.9 %
20.8 %
33.5 %
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
13,284
(60)
13,224
60,102
9,000
1,095
35
(160)
70,072
(1,095)
43,851
115,308
342,717
112,828
336,518
1 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.
2 The fully loaded CET1 ratio, as is relevant for assessing against the conversion trigger in Barclays PLC AT1 securities, was 13.7%, with £47.0bn of CET1 capital and £342.7bn of RWAs
calculated without applying the transitional arrangements of the CRR as amended by CRR II.
3 As at 31 December 2023, the Group's MREL requirement, excluding the PRA buffer, was to hold £103.0bn of own funds and eligible liabilities equating to 30.1% of RWAs. The Group
remains above its MREL regulatory requirement including the PRA buffer.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 352
Risk performance - Treasury and Capital risk (continued)
Movement in CET1 capital
Opening balance as at 1 January
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
Decrease 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
Adjustment under IFRS 9 transitional arrangements
Other regulatory adjustments
Decrease in regulatory capital due to adjustments and deductions
Closing balance as at 31 December
2023
£m
46,878
5,259
49
(1,218)
(1,250)
(991)
1,849
104
194
(1,101)
(42)
(845)
(855)
776
(79)
(175)
434
(130)
(177)
(412)
(39)
(499)
47,304
CET1 capital increased £0.4bn to £47.3bn (December 2022: £46.9bn).
£5.3bn of capital generated from profit, including the impacts of structural cost actions, was partially offset by distributions of £3.5bn
comprising:
• £1.25bn of share buybacks announced with FY22 and H123 results
• £1.2bn of ordinary share dividend paid and foreseen reflecting £0.4bn interim dividend paid and a £0.8bn accrual towards the FY23
dividend
• £1.0bn of equity coupons paid and foreseen
Other significant movements in the period were:
• £1.1bn decrease in the currency translation reserve driven by the strengthening of GBP against USD
• £0.4bn decrease in IFRS 9 transitional relief primarily due to the relief applied to the pre-2020 impairment charge reducing to 0% in
2023 from 25% in 2022 and the relief applied to the post-2020 impairment charge reducing to 50% in 2023 from 75% in 2022
• £0.2bn increase in PVA, which includes an increase for price uncertainty within corporate loans, including the leveraged finance loan
portfolio
• £0.4bn increase primarily driven by intangible impairment structural cost actions. The impact of this was capital neutral with the
offsetting decrease within attributable profit.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 353
Risk performance - Treasury and Capital risk (continued)
Risk weighted assets
Risk weighted assets (RWAs) by risk type and business
Credit risk1
Std
IRB
Std
Counterparty credit risk
Settlement
risk
IRB
Market risk
Operational
risk
Total RWAs
CVA
Std
IMA
As at 31 December 2023
Barclays UK
Corporate and Investment Bank
Consumer, Cards and Payments
Barclays International
Head Office
Barclays Group
As at 31 December 2022
Barclays UK
Corporate and Investment Bank
Consumer, Cards and Payments
Barclays International
Head Office
Barclays Group
Note
£m
10,472
40,315
28,218
68,533
3,881
82,886
£m
50,761
65,499
5,515
71,014
6,963
128,738
£m
178
18,775
182
18,957
—
19,135
£m
—
22,033
55
22,088
—
22,088
£m
—
159
—
159
—
159
£m
94
3,260
38
3,298
—
3,392
£m
274
14,625
2
14,627
—
14,901
£m
—
25,222
638
25,860
—
25,860
6,836
35,738
27,882
63,620
2,636
73,092
54,752
75,413
3,773
79,186
6,843
140,781
167
16,814
214
17,028
—
17,195
—
21,449
46
21,495
—
21,495
—
80
—
80
—
80
72
3,093
61
3,154
—
3,226
233
13,716
—
13,716
—
13,949
—
22,497
388
22,885
—
22,885
1
In Q323 credit risk RWAs of £9.8bn relating to deferred tax assets were reclassified from IRB to STD with no impact to total RWAs.
Movement analysis of risk weighted assets
£m
11,715
26,887
7,631
34,518
£m
73,494
216,775
42,279
259,054
(675) 10,169
342,717
45,558
11,023
27,064
6,559
33,623
(831)
43,815
73,083
215,864
38,923
254,787
8,648
336,518
Risk weighted assets
As at 31 December 2022
Book size
Acquisitions and disposals
Book quality
Model updates
Methodology and policy
1
Foreign exchange movement
Total RWA movements
As at 31 December 2023
Note
Credit risk
£m
213,873
(1,338)
688
1,512
(2,600)
5,175
(5,686)
(2,249)
211,624
Counterparty
credit risk
Market risk
Operational risk
Total RWAs
£m
41,996
2,122
—
(136)
—
2,700
(1,908)
2,778
44,774
£m
36,834
3,325
—
—
1,200
—
(598)
3,927
40,761
£m
43,815
1,743
—
—
—
—
—
1,743
45,558
£m
336,518
5,852
688
1,376
(1,400)
7,875
(8,192)
6,199
342,717
1 Foreign exchange movements does not include impact of foreign exchange for modelled market risk or operational risk.
Overall RWAs increased £6.2bn to £342.7bn (December 2022: £336.5bn).
Credit risk RWAs decreased £2.2bn:
• A £1.3bn decrease in book size within CIB and mortgages within Barclays UK, partially offset by higher credit card balances within
CC&P
• A £1.5bn increase in book quality RWAs primarily driven by changes in risk parameters and HPI refresh within Barclays
UK
• A £2.6bn decrease in model updates primarily driven by capital LGD model update for the mortgage portfolio to reflect the significant
decrease in repossession volume during and post the COVID pandemic
• A £5.2bn increase in methodology and policy primarily driven by the recalibration of the post model adjustment (PMA) introduced to
address the IRB roadmap changes and a change in treatment of non-credit obligation exposures
• A £5.7bn decrease as a result of foreign exchange movements primarily due to the strengthening of GBP against USD
Counterparty Credit risk RWAs increased £2.8bn:
• A £2.1bn increase in book size primarily due to increased trading activity within CIB
• A £2.7bn increase in methodology and policy due to a recalibration of the PMA introduced to address the IRB roadmap changes and a
change in treatment of certain securities financing transactions collateral
• A £1.9bn decrease as a result of foreign exchange movements primarily due to the strengthening of GBP against USD
Market risk RWAs increased £3.9bn:
• A £3.3bn increase in book size primarily due to increased trading activity within CIB
• A £1.2bn increase in model updates to capture incremental risk arising from Stressed Value at Risk (SVaR), measured on a 10-day
basis
Operational risk RWAs increase £1.7bn:
• A £1.7bn increase in book size primarily driven by the inclusion of higher 2023 CC&P and Barclays UK income compared to 2020
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 354
Risk performance - Treasury and Capital risk (continued)
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 ratios1,2
As at 31 December
3
UK leverage ratio
T1 capital
UK leverage exposure
Average UK leverage ratio
Average T1 capital
Average UK leverage exposure
Notes
2023
£m
5.2 %
60,507
1,168,275
4.8 %
60,343
1,266,880
2022
£m
5.3 %
60,102
1,129,973
4.8 %
60,865
1,280,972
1 Capital and leverage measures are calculated applying the transitional arrangements of the CRR as amended by CRR II.
2 Fully loaded UK leverage ratio was 5.2%, with £60.2bn of T1 capital and £1,168.0bn of leverage exposure. Fully loaded average UK leverage ratio was 4.7% with £60.0bn of T1 capital and
£1,266.6bn of leverage exposure. Fully loaded UK leverage ratios are calculated without applying the transitional arrangements of the CRR as amended by CRR II.
3 Although the leverage ratio is expressed in terms of T1 capital, the leverage ratio buffers and 75% of the minimum requirement must be covered solely with CET1 capital. The CET1
capital held against the 0.53% G-SII ALRB was £6.1bn and against the 0.3% CCLB was £3.5bn
The UK leverage ratio decreased to 5.2% (December 2022: 5.3%) primarily due to a £38.3bn increase in leverage exposure to
£1,168.3bn, largely driven by an increase in trading portfolio assets within Global Markets.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 355
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 2023
USD
EUR
JPY
Other currencies
Total
31 December 2022
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
26,524
9,868
646
3,329
(7,308)
(5,603)
(174)
(72)
40,367
(13,157)
(2,179)
17,037
—
—
(1,565)
(3,744)
4,265
472
1,692
23,466
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
(7,326)
(276)
—
(505)
(8,107)
(8,688)
(283)
—
(279)
(9,250)
9,711
3,989
472
1,187
15,359
9,304
4,029
492
1,375
15,200
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 2023, total structural currency exposure net of hedging instruments increased by £0.2bn to £15.4bn (2022: £15.2bn). Foreign
currency net investments decreased by £0.8bn to £40.4bn (2022: £41.2bn) driven predominantly by a £0.9bn decrease in USD, offset
by £0.1bn increase in EUR. The hedges (excluding economic hedges) associated with these investments increased by £0.1bn to
£16.9bn (2022: £16.8bn).
Pension risk review
The UK Retirement Fund (UKRF) represents approximately 96% (2022: 96%) 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 2023 (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 a diversified mix of return seeking assets as well as liability matching assets to better match future pension
obligations. The two largest risks within the asset portfolio are credit spread and growth assets. The split of scheme assets is shown
within Note 32 to the financial statements. The fair value of the UKRF assets was £24.2bn as at 31 December 2023 (2022: £24.7bn).
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 356
Risk performance - Treasury and Capital risk (continued)
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;
• 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
2023 that takes account of the future inflation indexing of payments to beneficiaries. The majority of the cash flows (approximately
96%) 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 32 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
30.7
32.6
22.2
11
3.3
0.3
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 2023 the decrease in the UKRF
surplus was driven by assets underperforming the discount rate and lower corporate bond yields.
Refer to Note 32 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 the Pensions Executive Board. The VaR model takes into account the valuation of the liabilities on an IAS 19
basis (see Note 32 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 32 to the
financial statements). To mitigate part of this risk the UKRF has entered into longevity reinsurance contracts 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 overall capital requirement for the Group.
3.8bn4.7bn3.6bnDec 2021Dec 2022Dec 2023
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 357
Risk performance - Treasury and Capital risk (continued)
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 177 of
the Barclays PLC Pillar 3 Report 2023
(unaudited), which includes
documentation of the main model
assumptions.
Interest rate risk in the banking
book
Key metrics
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 page 177 of the
Barclays PLC Pillar 3 Report 2023
(unaudited).
AEaR
-£57m
AEaR across the Group from a -25bps
Shock to forward interest rate curves.
Summary of performance in the
period
NII sensitivity to interest rate shocks has
decreased year on year due to changes in
the customer banking book's composition.
NII sensitivity asymmetry is due to the
timing impact of customer rate changes
following a rate shock and is also impacted
by changes in balance sheet composition.
Net interest income sensitivity (AEaR) by business unit (audited)
As at 31 December
2023
+25bps
-25bps
2022
+25bps
-25bps
Note
Barclays UK
£m
45
(78)
15
(59)
Barclays
International
£m
(8)
5
25
(29)
Head Office
£m
(16)
16
(15)
15
Total
£m
21
(57)
25
(73)
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 2023 without hedging in place for +/-25bp rate shocks would be £184m/£(220)m respectively.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 358
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
Analysis of equity sensitivity
2023
2022
+25 basis points
-25 basis points
+25 basis points
-25 basis points
£m
(1)
17
20
(15)
21
£m
(33)
(18)
(21)
15
(57)
£m
(6)
43
3
(15)
25
£m
(40)
(45)
(4)
16
(73)
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
2023
+25 basis
points
£m
21
(5)
16
-25 basis
points
£m
(57)
13
(44)
2022
+25 basis
points
£m
25
(5)
20
-25 basis
points
£m
(73)
15
(58)
0.3%
(0.8%)
0.3%
(1.0%)
16
(246)
(744)
228
(746)
(1.0%)
(44)
254
744
(230)
724
1.0%
20
(291)
(774)
288
(757)
(1.1%)
(58)
302
774
(291)
727
1.0%
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
76
2023
High
£m
90
Low
£m
61
Average
£m
48
2022
High
£m
62
Low
£m
35
Daily Value at Risk has trended upwards in H1 2023 due to increase in time series volatility and addition in interest rate risk positioning.
Daily Value at Risk reduced towards the end of H2 2023 as time series volatility subsided.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 359
Risk performance - Operational risk
Summary of performance in the
period
1
During 2023, total operational risk losses
reduced to £141m (2022: £161m) while
the number of recorded events for 2023
(2,914) remained broadly in line with the
level for 2022 (2,964). The total
operational risk losses for the year were
mainly driven by events falling within the
Execution, Delivery & Process
Management and External Fraud
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
2023, 83% (2022: 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 33%
(2022: 32%) 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.
Operational risk
All disclosures in this section are unaudited unless otherwise stated.
Overview
Key metrics
83%
of the Group’s net reportable operational
risk events had a loss value of £50,000 or
less
85%
of events by number are due to External
Fraud
56%
of losses are from events aligned to
External Fraud
40%
of losses are from events aligned to
Execution, Delivery and Process
Management
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: Cybersecurity, Data, and
Resilience. These themes 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 pages
181 to 183 of the Barclays PLC Pillar 3
Report 2023. 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 2023. 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 compliance risk events,
see the compliance risk section.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 360
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 category1
% of total risk events by count
% of total risk events by value
Internal fraud
Internal fraud
2023
2022
External fraud
2023
2022
2023
2022
0.4
0.4
External fraud
2023
2022
Execution delivery
and process management
Execution delivery
and process management
2023
2022
2023
2022
Employment practices
and workplace safety
Employment practices
and workplace safety
2023
2022
2023
2022
Damage to physical assets
Damage to physical assets
2023
2022
2023
2022
Clients, products
and business practices
Clients, products
and business practices
2023
2022
2023
2022
Business disruption
and system failures
Business disruption and system
failures
2023
2022
Note
2023
2022
1 The data disclosed includes operational risk losses for reportable events impacting the Barclays Group business
areas, having impact of > £10,000 and excludes events that are compliance 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 85% of
total events in 2023 (2022: 86%). Impacts
from events arising from External Fraud
increased slightly in 2023 to £79m (2022:
£76m) and accounted for 56% of total
2023 losses (2022: 47%). In this category,
high volume, low value events are driven
by transactional fraud often related to
debit and credit card usage. Note: total
External Fraud losses in 2023 including
those from events with impact <£10,000
amounted to £183m (2022: £190m).
• Execution, Delivery and Process
Management impacts decreased to £56m
(2022: £83m) and accounted for 40%
(2022: 52%) 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 (2022: 14%).
Investment continues to be made in
improving the control environment across
the Group. Specific 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.
Additionally, the Group continues to invest
in its processing infrastructure to manage
the risk of processing errors as well as
ensuring scalability of operations.
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 cybersecurity incidents did
not materially impact the Group's business
strategy, results of operations, or financial
condition. For further information, refer to the
operational risk management section.
0.20.285.185.914.113.60.100.20.10.100.20.25647.439.751.6001.80.20.90.11.20.2 Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 361
Risk performance - Model risk, Compliance risk, Reputation risk
and Legal risk
Model risk, Compliance risk, Reputation risk and Legal risk
All disclosures in this section are unaudited unless otherwise stated.
Compliance risk
Model risk
Barclays is committed to continuously
improving model risk management and
made a number of enhancements in 2023,
including:
• Continued improvements to the
transparency and oversight of model
risk through further upgrades to model
risk governance structure.
• Continued enhancements to model risk
policy and standards to ensure
comprehensiveness, consistency and
cohesiveness of the model risk
framework.
• Continued focus on improving the
model risk control framework .
• Enhanced the Group Model Risk
Appetite Statement, incorporating
model quality and uncertainty around a
model’s output.
• Continued strengthening of validation
practices through expansion of model-
level validation procedures, use of an
on-going validation training program
and further 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, newly emerging
model risks, and an enhanced focus on
regulatory models .
• Progressed model inception validation
by bringing more models into
compliance with the model risk
management framework, including our
first algorithmic trading models
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 Compliance risk and
appropriately consider the relevant tools,
governance and management information
in decision-making processes. Focus on
management of Compliance 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 Compliance risk events and
issues in remuneration decisions at both
the individual and business level.
In 2023, the Group maintained focus on
new and heightened inherent Compliance
risks, including those relating to the cost of
living crisis, the evolving threat landscape
as related to financial crime, and
challenges in ensuring customer and client
data is handled appropriately. These risks
continue to be monitored on an ongoing
basis.
A key area of focus has been the
implementation and embedment of the
FCA’s new Consumer Duty, with rules for
open products and services taking effect
at the end July 2023.
Businesses have continued to assess the
potential customer, client and market
impacts of strategic change. As part of the
2023 medium-term planning process,
material Compliance risks associated with
strategic and financial plans were
assessed.
Throughout 2023, Compliance 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.
During 2023, laws, rules and regulation risk
(LRR risk) was created as a new risk under
the Compliance Principal Risk. LRR is
intended to mitigate the risk of failing to
identify applicable LRRs, and ensure
appropriate steps are in place to monitor
and oversee LRRs. Work is underway to
implement processes to support the
management and oversight of LRR Risk.
The Group continued to incur costs in
relation to litigation and conduct matters,
refer to Note 25 Legal, competition and
regulatory matters and Note 23 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 financial crime 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 Compliance 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 362
Risk performance - Model risk, Compliance risk, Reputation risk
and Legal risk (continued)
Other improvements during 2023 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
implementation of changes to the
compliance risk management framework
referred to above (and described in more
detail on page 361) also mitigate legal risk.
Reputation risk
Barclays is committed to identifying
reputation risks and issues as early as
possible and managing them appropriately.
At a Group level throughout 2023,
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
global conflicts; Barclays’ association with
sensitive sectors; access to banking;
lending practices and the resilience of key
Barclays systems and processes.
The Group continued to incur costs in
relation to litigation and conduct matters,
refer to Note 25 Legal, competition and
regulatory matters and Note 23 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 2023 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. During 2023, the
Group-wide legal risk management
framework was updated to complement
and accommodate the introduction of
changes to the compliance risk
management framework, which includes
the responsibility of the Legal Function to
proactively identify, communicate and
provide legal advice on applicable laws,
rules and regulations.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 363
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, and
conduct of business regulations, amongst
other applicable regulatory requirements.
Regulatory developments in one or more
jurisdictions may impact the Group
globally. We focus particularly on UK, US
and EU regulation in this Report 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 both authorised with permission
to accept deposits, amongst other things,
and are subject to prudential supervision
by the PRA and 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 sub-
consolidated basis and on an individual
basis. The Group as a whole 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 (BCSL)
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, information gathering,
regular supervisory visits and regular
meetings with the Group’s 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
meetings, regular supervisory visits,
information gathering and regular
meetings with management and directors
to discuss issues such as customer
strategy, fair treatment of customers, and
financial crime controls, as well as cross-
sectoral reviews 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 individuals within relevant firms.
FCA supervision has focused on conduct
risk and customer/client outcomes
through implementation of the Consumer
Duty (including product design and fair
value), fraud and anti-money laundering
controls, market operations, access to
cash, fair treatment of vulnerable
customers and payment account access
and closures.
PRA supervision has focused on financial
and operational resilience, controls, credit
risk management, systems and controls,
climate risk and resolvability, where
resolvability is reviewed in conjunction with
the Resolution Directorate (a 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 ongoing, but based on current
indications, potential areas of divergence
in approach between the UK and the EU in
existing areas of regulation appear
moderate and are not expected to result in
materially different standards of
regulation. Divergence might become
more marked in new areas of regulation,
such as ESG and Digital. The Financial
Services and Markets Act 2023 (FSMA
2023) established a framework for the
revocation of retained EU law relating to
financial services, with HM Treasury
intending to repeal retained EU legislative
provisions subject to the transfer of its
provisions to the UK regulators’ rules
where appropriate. The Government is not
expected to revoke retained EU law
relating to financial services unless the
FCA and/or PRA have drafted and
consulted on rules in the relevant areas,
where it is appropriate that the provisions
are replaced. However, HM Treasury may
specify parts of retained EU law where the
regulators are exempt from such
requirements, for example where they are
restating retained EU law revoked through
FSMA 2023 in their rulebooks without
material changes or where they are
replacing revoked retained EU law with
material changes but the only material
effect is to reduce a regulatory burden.
Where changes also have other material
effects, which may include impacts on the
regulators’ objectives, for example, the
Government has indicated that it is
appropriate to require the regulators to
consult. The medium term outlook for the
costs and impact of operating under the
post-Brexit UK regime remains unclear as
the regulatory landscape continues to
develop. There is potential for an increase
in regulatory implementation costs in the
near term to adapt systems and controls.
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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 364
Supervision and regulation (continued)
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 EU
jurisdictions where they are established.
Barclays Bank Ireland PLC is subject to the
requirements set by the Single Resolution
Board (SRB) as the 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, Barclays Bank
PLC and BCSL are authorised in certain
EEA Member States to enable them to
continue to conduct a limited range of
activities without a presence, including
accessing EEA trading venues and
interdealer trading. Barclays Bank PLC also
has a branch in Paris (to facilitate access to
Target 2), which is regulated by the ACPR.
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, restrictions on activities 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 when the UK
withdrew 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 365
Supervision and regulation (continued)
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 capital. In November 2023,
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 subject to a ‘combined buffer
requirement’ consisting of (i) a capital
conservation buffer of 2.5% of RWAs, 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 the UK, the CCyB rate is set
by the FPC and is currently 2%.
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
requirement must be met with at least
56.25% CET1 capital and no more than
25% tier 2 capital. In addition, 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. The PRA buffer 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).
The purpose of the SRB was to increase
the capacity of ring-fenced bodies, such as
Barclays Bank UK PLC, to absorb stress.
With the implementation of CRD V, the
Other Systemically Important Institutions
Buffer (O-SII buffer) replaced the SRB. The
O-SII buffer can be set between 0% and
3% and has to be met solely with CET1
capital. The O-SII buffer rate applicable to
Barclays Bank UK PLC is currently set by
the PRA at 1%.
Previously, total assets were used as the
metric to determine O-SII buffer rates but
the FPC announced in 2022 that this would
change to the UK leverage exposure
measure and that it would 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 PRA’s 2023 review of
the O-SII buffer was based on end-2022
leverage exposure measures and
maintained the O-SII buffer rate applicable
to Barclays Bank UK PLC at 1% (applicable
from January 2025). For future reviews,
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. In addition,
Barclays Bank Ireland PLC is identified as a
O-SII by the CBI, which has imposed an O-
SII buffer on Barclays Bank Ireland PLC of
1%.
On 30 November 2022, the PRA published
a consultation paper 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. In December
2023 the PRA published its first collection
of near-final policy proposals for
implementing these measures, including
those for market risk, operational risk and
the Credit Valuation Adjustment (CVA) and
counterparty credit risk. A further
collection of policies, including those for
credit risk and credit risk mitigation, are
expected to be published by the PRA in Q2
2024. The implementation date for these
standards has been extended to 1 July
2025. In June 2023, the EU reached a
provisional agreement on the
implementation of the remaining parts of
the Basel III reforms. In December 2023,
the preparatory bodies of the Council and
Parliament endorsed this banking package.
It consists of a legislative act to amend the
Capital Requirements Directive (Directive
2013/36/EU), and a legislative act to
amend the Capital Requirements
Regulation (Regulation No (EU)2013/575)
(referred to as CRR III and CRD VI,
respectively). The relevant measures are
scheduled to apply from January 2025 and
mid-2025 respectively.
In the US, the Barclays Bank Group
(including BUSL) is subject to prudential
requirements for large domestic US
banking organisations, foreign banking
organisations and their intermediate
holding companies (IHCs) set by the FRB
and other US regulatory agencies. BUSL is
a “Category III” IHC. BUSL (and Barclays
Bank Delaware) is subject to reduced
(calibrated at 85%) standardised liquidity
requirements, including the liquidity
coverage ratio and NSFR.
BUSL is also subject to the FRB’s 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 BUSL, as a US BHC, 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 has complied with the
CUSO requirement since 1 January 2022,
with the first certification applicable for its
Q1 2022 results. To date, Barclays Bank
PLC has not relied on home country
certification.
In July 2023, the FRB and other US
regulatory agencies proposed changes to
the regulatory capital rules applicable to US
banks, BHCs and IHCs with total
consolidated assets of $100 billion or more
(Large Banking Organizations). These
changes are intended to be broadly
consistent with revisions to Basel III
finalised by the Basel Committee on
Banking Supervision in 2017. The US
proposal would end the use of internal
models for credit risk, credit valuation
adjustments, and operational risk, create
an expanded risk-based credit capital
approach in addition to retaining a
modified version of the current
standardised approach, and make changes
to the modelling requirements for market
risk. A Large Banking Organization would
be required to calculate its risk-based
capital ratios under both the expanded
risk-based approach and the current
standardised approach and would use the
lower of the two. All capital buffer
requirements would apply regardless of
whether the expanded risk-based
approach or the existing standardised
approach produces the lower ratio. The
proposal was subject to a public comment
period which ended on 16 January 2024,
and would not be effective until 1 July
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 366
Supervision and regulation (continued)
2025. Certain aspects of the proposal
would be subject to a three-year phase-in
period. We are analysing the potential
effects of the proposed changes, including
the timing of implementation.
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 and stress testing capability,
including model risk management and
internal management processes and
controls.
Recovery and Resolution
Stabilisation and resolution framework
The current 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 entity’s
equity and write-down or conversion of
the claims of a relevant entity's 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 entity's business to a private
sector purchaser; and (iii) the transfer of all
or part of a relevant entity's 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 and distinct from bail-in, the
BoE has the power to permanently write-
down, or convert into equity, tier 1 capital
instruments, tier 2 capital instruments and
internal eligible liabilities at the point of
non-viability of an institution pursuant to
broader resolution powers under the
Banking Act.
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
applicable UK legislation and rules, 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. 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. The submission of resolution
packs was suspended by the PRA in 2018
until further notice and replaced by annual
resolution reporting. It continues to be
suspended pending PRA assessment of
areas of potential duplication between
different reporting expectations. The
Barclays Group, however, is required to
provide the PRA with a recovery plan
biennially, although the Group maintains
and refreshes this on an annual basis.
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 resolution
planning for each firm, and the BoE can
require firms to make significant changes
in order to enhance their resolvability.
Under the BOE’s 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.
Barclays Group’s second self-assessment
report on resolvability under the RAF was
submitted to the PRA/BoE in 2023 and
public disclosures by both Barclays Group
and the PRA/BoE on the most recent
report are due in June 2024. Updated
reports and disclosures are required every
two years. The BoE’s assessment on the
2021 report, published in June 2022,
concluded that there were 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 non-UK 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. In August 2023, the FRB
and FDIC proposed new guidance for
triennial full filers (such as the Group) that
would affect the content required to be
included in the US Resolution Plan. The
proposal generally represents an
expansion of the current 165(d) resolution
planning guidance the Group is subject to
as a “specified foreign banking
organization.” The Group’s next
submission of the US Resolution Plan in
respect of its US operations will be a “full
plan” due 31 March 2025, unless the FRB
and FDIC provide a further extension.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 367
Supervision and regulation (continued)
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
Single Resolution Board (SRB), as the
resolution authority for the European
Banking Union. 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 is required to meet the SRB’s
requirements for resolution as set out in
the SRB’s ‘Expectations for Banks’
document by 31 July 2024 (this deadline
was extended by the SRB in October 2023
from the original deadline of 31 December
2023).
In April 2023, the EU Commission
proposed certain reforms to strengthen
the EU’s bank crisis management and
deposit insurance (CMDI) framework,
including extending depositor protection
to public entities and client money
deposited in certain types of client funds.
The EU legislative process remains
ongoing. Provisional agreement was
reached in December 2023 between the
Council and the European Parliament on
the treatment of internal MREL in bank
resolution groups, referred to as the ‘Daisy
Chains’ proposal (a confined part of the
CMDI proposals). This treatment is
expected to apply from the second half of
2024.
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).
Since 1 January 2022, G-SIBs with
resolution entities incorporated in the UK
have been 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 May 2023,
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. From 1 January 2024,
a revised deduction regime will apply for
the indirect subscription of instruments
eligible for internal MREL to avoid the
double-counting of MREL elements at the
level of intermediate entities within a
resolution group.
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.
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 implemented
this requirement by way of a tax on the
balance sheets of banks known as the
‘Bank Levy’, which remains in place.
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 (a ‘ring-fenced bank’),
which is not permitted to undertake a
range of activities. In 2023, HM Treasury
issued a public call for evidence on aligning
the ring-fencing and resolution regimes,
amongst other things, and a consultation
on reforms to the ring-fencing regime,
including amendments to the thresholds
above which the regime applies, permitting
ring-fenced banks to establish branches
and subsidiaries outside the UK or the EEA
and the introduction of a transitional
period for compliance with the ring-
fencing regime following mergers or
acquisitions. HM Treasury plans to
introduce legislation to implement these
reforms in early 2024. The PRA consulted
on complementary reforms to HM
Treasury's proposals in 2023 and,
separately, conducted a review of its ring-
fencing rules in compliance with its
statutory duty under FSMA to do so every
five years. The PRA announced in early
2024 that it intends to consult on targeted
reforms to its ring-fencing rules as a result
of its review, although the overall
conclusion was that most of those rules
are performing satisfactorily.
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 Organization 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
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 368
Supervision and regulation (continued)
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 the EU as part of the
EU’s ongoing focus on the development of
a stronger Capital Markets Union. In the
UK, FSMA 2023 introduced reforms to
remove certain requirements which were
previously applicable to trading in
wholesale markets and to promote
investment in line with the Wholesale
Markets Review. Other changes proposed
by the review are being progressed by way
of amendments to regulatory rules and
guidance.
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. This prohibition
does not currently apply in respect of third
country benchmark administrators, as the
prohibition on usage of such benchmarks
will take effect from the end of 2025 (EU)
and 2030 (UK). The FCA has also been
working to phase out use of LIBOR, with all
LIBOR panels now having ended. Synthetic
versions of GBP and USD LIBOR have been
made available only for a limited period of
time for holders of legacy contracts. 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) 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
collateral requirements and a requirement
to centrally clear certain OTC derivatives
contracts on a broad range of market
participants. Access to the clearing
services of certain Central 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 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. The EU has introduced two
legislative proposals to amend EMIR which
introduce, inter alia, changes to the
intragroup transactions exemption making
it easier to rely on the exemption, as well as
aiming to reduce the concentration of
exposures to systemically important third-
country central counterparties (in
particular, UK Central Counterparties). The
legislative process is ongoing.
US regulators have imposed similar rules
as in 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. 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. Barclays Bank PLC is
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 both subject
to CFTC rules on business conduct,
record-keeping and reporting, and
Barclays Bank PLC is subject to SEC rules
on business conduct, record-keeping and
reporting. However, since Barclays Bank
PLC and Barclays Bank Ireland PLC are
non-US swap dealers, they are only subject
to certain of the CFTC’s requirements in
respect of swap transactions with US
persons and certain persons guaranteed
by or affiliated with US persons. In addition,
since Barclays Bank PLC is a non-US
security-based swap dealer, it is only
subject to certain of the SEC’s
requirements in respect of security-based
swap transactions with US persons or
which are arranged, negotiated, or
executed by US personnel. Additionally,
Barclays Bank PLC and Barclays Bank
Ireland PLC have elected to comply with
certain CFTC/SEC requirements, as
applicable, through ‘substituted
compliance’ with EU/UK requirements
pursuant to relevant determinations and
related relief issued by the SEC and the
CFTC, as applicable.
Barclays Bank PLC and Barclays Bank
Ireland PLC are subject to FRB rules on
capital and margin.
In 2022, the SEC proposed new rules 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
In 2023, the SEC finalised amendments to
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 requires significant
changes to BCI’s settlement procedures
and practices, and introduced new rules
requiring market-wide improvements in
the rate of same-day affirmations and on
central matching service providers.
On 13 October 2023, the SEC adopted
new rules to establish broad reporting
requirements of the terms of securities
loans to FINRA for public dissemination,
and requiring FINRA to make publicly
available certain information it receives
regarding those lending transactions.
On 13 October 2023, the SEC adopted
new rules requiring a wide range of firms to
file monthly reports with the SEC for large
short positions in equity securities on a
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 369
Supervision and regulation (continued)
new Form SHO, and amendments to the
National Market System plan governing
the Consolidated Audit Trail, which adds an
additional reporting requirement for CAT-
reporting firms relying on the bona fide
market maker exception to Reg SHO’s
locate requirement.
On 30 October 2023, the SEC issued
exemptive relief, which exempts broker-
dealers from their review obligations
concerning the issuer of an over-the-
counter security prior to publication or
submission of a quotation in that security
with respect to a fixed-income security to
be sold in compliance with the safe harbor
in Rule 144A under the Securities Act of
1933.
On 13 December 2023, the SEC adopted
rule amendments under the Exchange Act
that, among other things, will mandate
central clearing of certain US Treasury
securities transactions and amend the
broker-dealer customer protection rule as
it applies to margin posted for transactions
in US Treasury securities. These rule
amendments could impose additional
costs on the Group’s Treasury securities
trading activity.
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
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 July 2023, the FCA’s new Consumer
Duty came into force for new and existing
products or services that are open to sale
or renewal. It will apply to closed products
and services from 31 July 2024. The duty
sets higher expectations for the standard
of care that firms provide to retail
customers and impacts all aspects of
Barclays' retail businesses, including every
retail customer journey, product and
service as well as our relationships with
partners, suppliers and third parties. This
has resulted in significant implementation
costs and there will also be higher ongoing
costs for the industry as a result of
extensive monitoring and evidential
requirements.
Our regulators have enhanced their focus
on the promotion of cultural values as a
key area for banks. The UK regulators have
also begun focusing on diversity and
inclusion in financial services firms, with the
PRA and FCA having published a
consultation on the introduction of a new
regulatory framework on diversity and
inclusion in September 2023. The UK
regulators expect to publish final rules on
this issue in 2024.
FSMA 2023 contains provisions mandating
that the Payment Systems Regulator
(PSR) require the reimbursement of
authorised push payment scams by
payment service providers, including
Barclays. This reimbursement requirement
will be split 50:50 between the sending and
receiving firms. Changes to the rules of the
Faster Payments Scheme and a new
Specific Direction issued by the PSR to
require reimbursement will take effect in
October 2024.
Data protection
Most jurisdictions where the Group
operates have adopted or are considering
comprehensive laws concerning data
protection and privacy. 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) and the UK’s General
Data Protection Regulation (UK GDPR)
provide a framework of rights and duties
designed to safeguard personal data and
apply to the activities conducted from an
establishment in the EU or the UK,
respectively. The extraterritorial effect of
the GDPR and the UK GDPR means
entities established outside the EU or the
UK may fall within the GDPR or the UK
GDPR’s ambit when offering goods or
services to EU/UK based customers or
clients or conducting behavioural
monitoring of individuals in the EU/UK. The
Data Protection and Digital Information
(No.2) Bill was introduced to the UK
Parliament in March 2023, which if enacted
will bring some divergence between the EU
GDPR and UK GDPR. The UK government
has indicated that it expects the Bill to
become law in mid-2024, although there is
still some uncertainty on timing and
content.
The data regime in China is likely to
continue to evolve, governing the
collection, processing and cross-border
transfers of China-based individuals'
personal data and related restricted data
(e.g., macro/derived characteristics data
which, if tampered with, divulged or
destroyed, may endanger China's
economic operation, social stability,
national security - among other things -
having regard to the volume and
granularity of the data). In India, the Digital
Personal Data Protection Act, 2023, may
be implemented in phases during 2024 and
beyond. Except under certain exemptions,
its scope would include the processing of
personal data in India and would extend to
the profiling of, and offering goods and
services to, India-based individuals outside
of India. As the global data protection
regulatory landscape develops, non-
compliance with any such requirements
and rules 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
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 370
Supervision and regulation (continued)
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 in March 2021
requires firms to be able to remain within
impact tolerances set for their important
business services, in severe but plausible
disruption scenarios such as a cyber
attack, by no later than 31 March 2025.
FSMA 2023 introduced a new regime for
designated critical third party providers,
and in 2023 the FCA and PRA issued a
consultation on proposed rules and
guidance for supervising the resilience of
critical third party providers.
The EU’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 2023, the SEC finalised disclosure rules
regarding cybersecurity risk management,
governance and incident reporting by US-
listed companies, including foreign private
issuers such as Barclays PLC and Barclays
Bank PLC. The new rules require foreign
private issuers to annually disclose the
policies and procedures relied upon to
identify and manage cybersecurity risks,
including risk management strategy and
whether any risks from cybersecurity
threats, including as a result of any
previous cybersecurity incidents, have
materially affected or are reasonably likely
to materially affect the issuer, its business
strategy, results of operations or financial
condition. In addition, Barclays PLC and
Barclays Bank PLC must annually describe
Barclays’ board of directors’ oversight of
risks from cybersecurity threats, the board
committee responsible for the oversight
of such risks, and the processes by which
the board or such committee is informed
thereof; and details of management’s
expertise and role in assessing and
managing material risks from
cybersecurity threats. If Barclays PLC or
Barclays Bank PLC are required or
determine to disclose material
cybersecurity incidents under home
country or stock exchange rules, they are
required to also furnish this information
with the SEC on the SEC's website, in
accordance with their obligations as
foreign private issuers.
Similarly, NYDFS amended its
cybersecurity regulation applying to the
New York Branch of Barclays Bank PLC.
The NYDFS's amended cybersecurity
regulation contains significant updates,
including enhanced notification
requirements, cybersecurity governance
obligations, and requirements applicable to
cybersecurity policies and procedures
(e.g., encryption and multi-factor
authentication, business continuity and
incident response plans, and vulnerability
management).
Regulatory initiatives on ESG disclosure
The EU Regulation on Sustainable Finance
Disclosures Regulation (SFDR) and related
Delegated Regulations require financial
market participants (FMPs) to disclose how
they integrate environmental, social and
governance factors in their investment
decisions for certain financial products and
to publish principal adverse impact
statements. The SFDR applies to entities
established in the EU and in-scope
products marketed in the EU, regardless of
the location of the entity. The SFDR is
currently under review by the Commission.
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. It sets mandatory
entity-level disclosure requirements for
companies which fall under the scope of
the EU Accounting Directive, in relation to
eligibility and alignment of their business
activities with the EU Taxonomy
Regulation. The EU Taxonomy Regulation
also imposes product level disclosure
obligations for FMPs on the extent to
which their financial products are
Taxonomy aligned or not. The taxonomy,
and with it the Taxonomy Regulation, is
under review to include further sectors
and, for example, social elements.
The EU Corporate Sustainability Reporting
Directive will introduce sustainability
related reporting obligations for various
entities, including EU banks and certain
non-EU companies and banks (by virtue of
having EU listings or significant business in
the EU), with reporting to commence on a
phased basis from the financial year 2024.
Related technical sustainability reporting
standards have been developed by the
European Financial Reporting Advisory
Group.
The second EU Capital Requirements
Regulation established, for certain large
financial institutions, a Pillar 3 disclosure
framework for information on
environmental, social and governance
risks, including physical risks and transition
risks. Amendments proposed by the CRR
III and CRD VI banking package will extend
the scope of these disclosures and the
emphasis on ESG. The ECB has made, and
continues to regard, the supervision of the
approach of institutions to ESG risk a
priority.
In December 2023, the European Council
and Parliament institutions reached
political agreement on the Directive on
Corporate Sustainability Due Diligence,
which will require EU firms, and certain
non-EU firms, including financial
institutions, to carry out due diligence with
regard to their own operations and
companies in their upstream value chain, in
order to identify and prevent, bring to an
end or mitigate the adverse impact of their
activities on human rights and the
environment. Firms will also be required to
establish a climate change transition plan.
These obligations are expected to come
into force on a phased basis from the
second half of 2027, at the earliest.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 371
Supervision and regulation (continued)
In the UK, the FCA published final rules on
the UK Sustainability Disclosure
Requirements regime in November 2023
which set out new requirements to
prepare sustainability-related product and
entity level disclosures for certain firms, as
well as a new sustainable investment
labelling regime and anti-greenwashing
rule applicable to all authorised firms.
Currently, the new anti-greenwashing rule
(and associated guidance) is due to apply
from 31 May 2024, whilst the rest of the
changes will take effect on a phased basis,
beginning in the second half of 2024. The
UK Government has expressed its
intention to consider how best to
incorporate the Taskforce on Nature-
related Financial Disclosures framework
for nature-related risk management and
disclosures into UK legislation and to
consult on introducing Transition Plan
Taskforce Disclosure Framework (TPT
Framework) related requirements for the
UK’s largest companies. The Government
is also progressing plans to endorse UK
Sustainability Disclosure Standards based
on the International Sustainability
Standards Board (ISSB) sustainability
reporting standards (IFRS S1 on general
requirements for sustainability disclosures
and IFRS S2 on climate disclosures) for use
in the UK by July 2024. The FCA plans to
consult in 2024 on incorporating
provisions relating to the ISSB standards
and TPT Framework into its Handbook.
Additionally, TCFD-aligned reporting
requirements apply to UK publicly quoted
companies, large private companies and
LLPs (in addition to existing TCFD-related
reporting requirements under the Listing
Rules).
In the UK, the UK Government has
confirmed its intention to develop a UK
Green Taxonomy, and the Green
Technical Advisory Group continues to
publish advice and reports on the
development of a Green Taxonomy.
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 is expected to draw 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).
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. In addition, bills proposed or
adopted by the legislatures of certain US
states may impose additional or stricter
climate related-disclosure requirements
on businesses operating in such US states.
For example, in October 2023, California
adopted the Climate Corporate Data
Accountability Act (SB-253) and the
Greenhouse Gases: Climate-Related
Financial Risk bill (SB-261) which are
expected to apply commencing in 2026.
Barclays is monitoring such legislative
developments and their impact on
Barclays’ US operations and reporting
obligations.
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.
In 2023, the Economic Crime and
Corporate Transparency Act 2023
became law. This creates a new offence of
failing to prevent a person associated with
the Group from committing fraud for the
benefit of the Group. These 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 procedures in place to
prevent the criminal facilitation of tax
evasion by persons acting for, or on behalf
of, the Group. The Economic Crime and
Corporate Transparency Act similarly
requires the Group to have reasonable
procedures in place to prevent a person
associated with the Group from
committing fraud.
The Sanctions and Anti-Money Laundering
Act 2018 (the Sanctions Act) became law
in the UK in 2018. Following the UK’s
withdrawal from the EU, the Sanctions Act
allowed for the adoption of an
autonomous UK sanctions regime which
came into force in 2021, as well as a more
flexible licensing regime post-Brexit. This
regime applies within the UK and in relation
to the conduct of all UK persons wherever
they are in the world; it also applies to
overseas branches of UK companies
(including the Barclays Bank PLC New York
branch).
Within the EU, there is a system of
autonomous sanctions by which the
European Council adopts a decision made
by the EU’s Common Foreign and Security
Policy. The measures stated in the Council
decision are either implemented at the EU
level, by way of Regulation, or at a national
level in Member States. Regulations are
binding and directly effective throughout
the EU. Each measure will specify the
territorial scope of the relevant sanctions
but these can apply broadly within the
territory of any EU Member States and to
EU nationals wherever they are located as
well as to third country branches of EU
companies. The EU enforces its anti-
money laundering regime through the
Fourth Anti-Money Laundering Directive
(EU) 2015/849 and the Fifth Anti-Money
Laundering Directive (EU) 2018/849 with
further changes being proposed through
the Sixth Anti-Money Laundering Directive
and a package of further reforms currently
under discussion.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 372
Supervision and regulation (continued)
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 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
374
376
377
378
379
380
387
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 374
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. KPIs reflect the targets and ambitions followed during 2023. On 20 February
2024, the Investor Update set out refreshed targets and ambitions which future progress will be measured against. Please see page 13
of the strategic report for further detail, or home.barclays/who-we-are/our-strategy/
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.
Return on average tangible
shareholders’ equity (RoTE)
RoTE is calculated as Group attributable
profit, as a proportion of average tangible
shareholders’ equity
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 13.8% (2022: 13.9%) as
£4.3bn of attributable profit, including the negative impact
of structural cost actions, was more than offset by returns
to shareholders, impacts of regulatory change from 1
January 2023, the impact of KMC acquisition and
movements in other capital deductions, as well as an
increase in RWAs excluding the impact of foreign exchange
movements, primarily driven by higher CIB and CC&P RWAs.
An £8.2bn decrease in RWAs driven by foreign exchange
movements was offset by a £1.1bn decrease in CET1
capital due to a decrease in the currency translation reserve
within CET1.
Group target: a CET1 ratio in the range of 13-14%.
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.
Statutory RoTE was 9.0% (2022: 10.4%) including £0.9bn of
structural cost actions in Q423. Excluding Q423 structural
cost actions, RoTE was 10.6%.
Group target: RoTE of greater than 10%.
CET1 ratio
13.8%
2022: 13.9%
2021: 15.1%
Group RoTE
9.0%
2022: 10.4%
2021: 13.1%
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 375
Key performance indicators (continued)
Definition
Total operating expenses
Cost: income ratio
Total operating expenses divided by total
income.
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 £16.9bn (2022:
£16.7bn) reflecting £0.9bn of structural cost actions in
Q423,bringing total structural cost actions for FY23 to
£1.0bn (2022: £0.2bn), business growth and investments in
resilience and controls partially offset by lower litigation and
conduct charges. The prior year included £1.0bn of litigation
and conduct charges related to the Over-issuance of
Securities.
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.
The Group cost: income ratio was 67% (2022: 67%).
Excluding Q423 structural cost actions, Group cost: income
ratio was 63% driven by increased income.
Group target: a cost: income ratio below 60%.
Total operating expenses
£16.9bn
2022: £16.7bn
2021: £14.7bn
Cost: income ratio
67%
2022: 67%
2021: 67%
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 376
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
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
2023
£m
35,075
(22,366)
12,709
10,121
(3,592)
6,529
6,140
25,378
(16,714)
(180)
(37)
(16,931)
(9)
8,438
(1,881)
6,557
(1,234)
5,323
(64)
(985)
4,274
27.7p
26.9p
9.0%
67%
2022
£m
19,096
(8,524)
10,572
9,637
(3,038)
6,599
7,785
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%
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
(14,092)
(13,434)
(170)
(397)
(299)
(153)
(14,659)
(13,886)
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%
2019
£m
15,456
(6,049)
9,407
9,122
(2,362)
6,760
5,465
21,632
(13,359)
(226)
(1,849)
(15,434)
71
6,269
(1,912)
4,357
(1,003)
3,354
(80)
(813)
2,461
14.3p
14.1p
5.3%
71%
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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 377
Income statement commentary
2023 compared to 2022
Barclays delivered a profit before tax of £6,557m (2022: £7,012m), RoTE of 9.0% (2022: 10.4%) and EPS of 27.7p (2022: 30.8p).
Group income increased 2% to £25,378m primarily driven by the net benefit from the higher interest rate environment, including
continued structural hedge income, and higher balances in US cards, partially offset by the non-repeat of the prior year income from
hedging arrangements related to the Over-issuance of Securities and lower income in Global Markets and Investment Banking,
Group total operating expenses increased to £16,931m (2022: £16,730m).
Group operating expenses excluding litigation and conduct charges increased to £16,894m (2022: £15,133m) driven by:
1
in Q423 supporting the Group’s structural transformation and updated strategic priorities,
• £927m of structural cost actions
bringing total structural cost actions for FY23 to £1,046m (2022: £151m)
•
•
the impact of business growth and the Kensington Mortgage Company (KMC) acquisition in Barclays UK, as well as investments in
resilience and controls;
the impact of inflation on the Group was more than offset by efficiency savings.
Litigation and conduct charges decreased to £37m (2022: £1,597m). Prior year charges included £966m of costs related to the Over-
issuance of Securities, £282m of customer remediation costs relating to legacy loan portfolios in CC&P and £165m related to the
2
.
Devices Settlements
Credit impairment charges were £1,881m (2022: £1,220m), driven by higher delinquencies in US cards, which was anticipated and led to
higher coverage ratios. Total coverage ratio remains strong at 1.4% (December 2022: 1.4%).
The effective tax rate (ETR) was 18.8% (2022: 14.8%). The 2023 ETR includes tax relief on payments made under Additional Tier 1
(AT1) instruments and on holdings of inflation-linked government bonds.
Attributable profit was £4,274m (2022: £5,023m).
Notes
1 To help drive future returns, Barclays has taken £0.9bn of structural cost actions in Q423. Structural cost actions include initiatives across people, property and infrastructure.
2 Refers to the settlements with the SEC and Commodity Futures Trading Commission (CFTC) in connection with their investigations of the use of unauthorised devices for business
communications.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 378
Consolidated summary balance sheet
As at 31 December
Assets
Cash and balances at central banks
Cash collateral and settlement balances
Debt securities at amortised cost
Loans and advances at amortised cost to banks
Loans and advances at amortised cost to customers
Reverse repurchase agreements and other similar secured
lending at amortised cost
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 from banks
Deposits at amortised cost from customers
Cash collateral and settlement balances
Repurchase agreements and other similar secured borrowings at
amortised cost
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
2023
£m
2022
£m
2021
£m
2020
£m
2019
£m
224,634
108,889
56,749
9,459
333,288
2,594
174,605
206,651
256,836
71,836
31,946
1,477,487
14,472
524,317
94,084
41,601
96,825
10,494
58,669
297,539
250,044
17,578
1,405,623
4,288
13,259
(77)
53,734
71,204
660
71,864
1,477,487
382p
331p
15,155
1.28
1.15
256,351
112,597
45,487
10,015
343,277
776
133,813
213,568
302,380
65,062
30,373
238,574
92,542
31,831
9,698
191,127
101,367
23,805
8,900
150,258
83,256
17,752
9,624
319,922
309,927
311,739
3,227
147,035
191,972
262,572
61,753
25,159
9,031
127,950
175,151
302,446
78,688
21,122
3,379
114,195
133,086
229,236
65,750
21,954
1,513,699
1,384,285
1,349,514
1,140,229
19,979
525,803
96,927
27,052
112,881
11,423
72,924
271,637
289,620
16,193
17,819
501,614
79,371
28,352
98,867
12,759
54,169
250,960
256,883
13,450
17,343
463,693
85,423
14,174
75,796
16,341
47,405
249,765
300,775
11,917
15,402
400,385
67,341
14,517
76,369
18,156
36,916
204,326
229,204
11,953
1,444,439
1,314,244
1,282,632
1,074,569
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
1,513,699
1,384,285
1,349,514
1,140,229
347p
295p
339p
291p
315p
269p
309p
262p
15,871
16,752
17,359
17,322
1.20
1.13
1.35
1.19
1.37
1.11
1.32
1.18
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 379
Balance sheet commentary
Total assets
Total assets decreased £36.2bn to £1,477.5bn.
Cash and balances at central banks decreased by £31.7bn to £224.6bn driven by lower customer deposits in Barclays UK reflecting the
broader market trends.
Debt securities at amortised cost increased by £11.3bn to £56.7bn and Financial assets at fair value through other comprehensive
income increased £6.8bn to £71.8bn driven by increased investment in debt securities in Barclays International.
Loans and advances at amortised cost to banks and customers decreased £10.5bn to £342.7bn driven by loan repayments across
Barclays International and Barclays UK.
Trading portfolio assets increased £40.8bn to £174.6bn driven by an increase in debt and equity securities as we facilitate client demand
in Barclays International.
Derivative financial instrument assets decreased £45.5bn to £256.8bn, driven by lower market volatility and a decrease in the forward
interest rates. Cash collateral and settlement balances decreased by £3.7bn to £108.9bn.
Financial assets at fair value through the income statement decreased £6.9bn to £206.7bn driven by increased secured lending being
more than offset by trade optimisations.
Total liabilities
Total liabilities decreased £38.8bn to £1,405.6bn.
Deposits at amortised cost to banks and customers decreased £7.0bn to £538.8bn driven by a reduction in customer deposits
reflecting broader market trends in Barclays UK, partially offset by an increase in short-term money market deposits and growth in
customer deposits in Barclays International.
Repurchase agreements and other similar secured borrowing at amortised cost increased £14.5bn to £41.6bn driven by increased
secured borrowing.
Debt securities in issue decreased £16.1bn to £96.8bn driven by maturities.
Derivative financial instrument liabilities decreased £39.6bn to £250.0bn driven by lower market volatility. Cash collateral and settlement
balances decreased by £2.8bn to £94.1bn.
Trading portfolio liabilities decreased £14.3bn to £58.7bn driven by decreases in equity securities as clients repositioned their demand.
Financial liabilities designated at fair value increased £25.9bn to £297.5bn driven by increased repurchase agreements and prime
brokerage deposits.
Total shareholders’ equity
Total shareholders’ equity increased £2.6bn to £71.9bn.
Other equity instruments remained at £13.3bn as the issuance of three AT1 instruments (£1.50bn, $1.8bn and SGD400m) was offset
by two redemptions (£1.3bn and $2.5bn). 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 increased by £2.1bn, mainly due to an increase in the cash flow hedging reserve of £3.5bn to £3.7bn debit, as a result of
fair value movements on interest rate swaps held for hedging purposes due to an decrease in major interest rate curves. This was
partially offset by an decrease in the currency translation reserve of £1.1bn to £3.7bn, driven by the appreciation of GBP against USD.
Retained earnings increased £0.9bn to £53.7bn, mainly due to profits of £4.3bn, offset by share repurchases of £1.3bn and dividends of
£1.2bn.
Tangible net asset value per share increased to 331p (December 2022: 295p) including: EPS of 27.7p, positive cash flow hedge reserve
movements of 22p, and 8p from the reduction in share count following share buybacks of £1.25bn completed in 2023. This was partially
offset by an 8p reduction from dividends paid during 2023 and net negative other reserve movements.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 380
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
1
Average LTV of mortgage portfolio
1
Average LTV of new mortgage lending
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
Note
2023
£m
6,431
1,156
7,587
(4,393)
(30)
8
(4,415)
—
3,172
(304)
2,868
1,962
£202.8bn
£293.1bn
£241.1bn
92%
£73.5bn
£10.2bn
£160.9bn
£22.7bn
54%
63%
306
11.0m
0.9%
6,800
19.2%
£10.2bn
58%
14
3.13%
2022
£m
5,893
1,366
7,259
2021
£m
5,202
1,334
6,536
(4,260)
(4,357)
(26)
(41)
(36)
(37)
(4,327)
(4,430)
—
2,932
(286)
2,646
1,877
—
2,106
365
2,471
1,756
£205.1bn
£313.2bn
£258.0bn
87%
£73.1bn
£10.1bn
£208.8bn
£321.2bn
£260.6bn
85%
£72.3bn
£10.0bn
£162.2bn
£30.3bn
£158.1bn
£33.9bn
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%
1 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 381
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
2023 compared to 2022
2023
£m
4,729
964
1,894
7,587
(170)
(162)
28
(304)
£170.1bn
£9.7bn
£23.0bn
£202.8bn
£185.4bn
—
£55.7bn
£241.1bn
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
£169.7bn
£165.4bn
£9.2bn
£26.2bn
£8.7bn
£34.7bn
£205.1bn
£208.8bn
£195.6bn
£196.4bn
—
£62.4bn
£258.0bn
—
£64.2bn
£260.6bn
Profit before tax increased 8% to £2,868m with a RoTE of 19.2% (2022: 18.7%).
Total income increased 5% to £7,587m. Net interest income increased 9% to £6,431m with a net interest margin of 3.13% (2022:
2.86%), as higher interest rates and associated structural hedge benefit outweighed mortgage margin pressure and adverse deposit
dynamics reflecting wider market trends. Net fee, commission and other income decreased 15% to £1,156m including the impact of
the transfer of WM&I to CC&P.
• Personal Banking income increased 4% to £4,729m, driven by higher interest rates, partially offset by mortgage margin compression
and movements in deposit volumes and mix resulting from cost of living pressures and customers searching for yield.
• Barclaycard Consumer UK income decreased 12% to £964m as higher customer spend volumes were more than offset by lower
interest earning lending balances following repayments and ongoing prudent risk management.
• Business Banking income increased 16% to £1,894m driven by higher interest rates, partially offset by lower government scheme
lending as repayments continue and lower deposit volumes.
Total operating expenses increased 2% to £4,415m, including £168m impact from Q423 structural cost actions. Excluding the impact
of Q423 structural cost actions, operating expenses decreased 2%, driven by the transfer of WM&I to CC&P partially offset by the
impact of inflation and the acquisition of KMC. Ongoing efficiency savings continue to be reinvested, including in our transformation
programme to support sustainable improvement to the cost: income ratio over the longer term.
Credit impairment charges increased to £304m (2022: £286m), consistent with low delinquencies in UK cards and a high quality
mortgage lending portfolio. UK cards 30 and 90 day arrears remained low at 0.9% (Q422: 0.9%) and 0.2% (Q422: 0.2%) respectively.
The UK cards total coverage ratio was 6.8% (December 2022: 7.6%).
Loans and advances to customers at amortised cost decreased by 1% to £202.8bn (December 2022: £205.1bn), primarily reflecting
continued repayment of government scheme lending in Business Banking, subdued mortgage lending amid lower market demand,
partially offset by the acquisition of KMC.
Customer deposits at amortised cost decreased 7% to £241.1bn (December 2022: £258.0bn). Primarily driven by reduced current
account balances in Personal and Business Banking, reflecting broader market trends. The loan: deposit ratio increased to 92%
(December 2022: 87%).
RWAs increased to £73.5bn (December 2022: £73.1bn), primarily due to the acquisition of KMC, broadly offset by reduction across
lending portfolios.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 382
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 (expenses)/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
2023
£m
6,197
5,878
5,843
17,918
(11,578)
(136)
(47)
(11,761)
(2)
6,155
(1,548)
4,607
3,025
£126.8bn
£8.4bn
£39.0bn
£174.2bn
£174.6bn
£255.2bn
£203.7bn
£103.6bn
£254.8bn
£1,166.1bn
£297.7bn
£249.8bn
58%
£259.1bn
£37.6bn
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
2021
£m
3,263
5,693
6,709
15,665
(9,076)
(134)
(345)
(9,555)
40
6,150
288
6,438
4,647
£133.7bn
£106.4bn
£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
£1,181.3bn
£1,044.1bn
£287.6bn
£288.9bn
59%
£254.8bn
£36.8bn
£258.8bn
£256.4bn
52%
£230.9bn
£33.2bn
12,400
10,900
10,400
8.2%
£37.0bn
66%
87
5.78%
10.2%
£37.6bn
67%
54
5.02%
14.4%
£32.4bn
61%
(21)
4.01%
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 383
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 (expenses)/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
2023
£m
2,551
6,056
4,003
12,610
(8,335)
(129)
6
(8,458)
(3)
4,149
(23)
4,126
2,667
£87.8bn
£7.4bn
£38.9bn
£134.1bn
£174.5bn
£255.1bn
£203.6bn
£102.9bn
£205.4bn
£1,075.6bn
£217.7bn
£249.7bn
£216.8bn
8.4%
£31.7bn
67%
2
4,845
2,373
7,218
593
219
1,148
1,960
475
2,957
3,432
12,610
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
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
13,368
12,334
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 384
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 before tax
Attributable profit
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
1
Value of payments processed
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
1 Includes £311bn (2022: £296bn; 2021: £270bn) of merchant acquiring payments.
2023
£m
3,646
1,662
5,308
(3,243)
(7)
(53)
(3,303)
1
2,006
(1,525)
481
358
£39.0bn
£90.5bn
£80.0bn
£42.3bn
2.9%
12%
88%
402k
£324bn
6.7%
£5.3bn
62%
354
3,569
1,190
549
5,308
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
£43.2bn
£80.2bn
£81.8bn
£38.9bn
£33.0bn
£64.8bn
£69.4bn
£30.2bn
2.2%
1.6%
11%
89%
395k
10%
90%
380k
£307bn
£277bn
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
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 385
Analysis of results by business (continued)
2023 compared to 2022
Barclays International RoTE was 8.2% (2022: 10.2%) with a profit before tax of £4,607m (2022: £4,965m) including £306m (CIB: £188m,
CC&P: £118m) of Q423 structural cost actions. CIB delivered a RoTE of 8.4% (2022: 10.2%) and CC&P 6.7% (2022: 10.0%)
• Total income was broadly flat at £17,918m, prior year included a £292m income impact from hedging arrangements related to the
Over-issuance of securities
• Total operating expenses decreased 2% to £11,761m including £306m of structural cost actions in Q423. Prior year included £966m
of litigation and conduct charges relating to the Over-issuance of securities
Excluding the impact of Q423 structural cost actions and the Over-issuance of Securities in the prior year1:
Total income increased to £17,918m (2022: £17,575m)
CIB income decreased 4% to £12,610m (2022: £13,076m)
2
. FICC income decreased 15% to
• Global Markets income decreased 16% to £7,218m against a record prior year comparative
£4,845m, reflecting lower market volatility and client activity. Equities income decreased 17% to£2,373m, driven by a decline in
derivatives income reflecting less volatile equity market conditions.
•
3
. Advisory decreased 23% and
Investment Banking fees decreased 12% to £1,960m due to the reduced fee pool across the industry
Debt capital markets decreased 10%, while Equity capital markets increased 32%
• Within Corporate, Transaction banking income increased 16% to £2,957m driven by improved deposit margins in the higher interest
rate environment with stable deposit balances. Corporate lending income increased to £475m (2022: £231m loss) mainly driven by
lower costs of hedging and lower fair value losses on leverage finance lending net of mark to market gains on related hedges.
CC&P income increased 18% to £5,308m.
•
International Cards and Consumer Bank income increased 23% to £3,569m reflecting higher cards balances and improved margins,
including the Gap Inc. portfolio acquisition in Q222.
• Private Bank income increased 17% to £1,190m, due to the transfer of WM&I from Barclays UK, client balance growth and improved
deposits margin in the higher rate environment.
• Payments income decreased 4% to £549m driven by margin compression.
Total operating expenses increased 4% to £11,455m
• CIB total operating expenses increased 4% to £8,270m, reflecting investment in talent and technology, and the impact of inflation,
4
partially offset by the non-repeat of prior year litigation and conduct charges mainly relating to Device Settlements
and efficiency
savings
• CC&P total operating expenses increased 4% to £3,185m, driven by higher investment spend to support growth, mainly in marketing
and partnership costs, the transfer of WM&I from Barclays UK, and the impact of inflation, partially offset by the non-repeat of prior
year litigation and conduct charges mainly relating to customer remediation costs and efficiency savings
Credit impairment charges were £1,548m (2022: £933m).
• CIB credit impairment charges were £23m (2022: £119m), driven by single name charges, partially offset by the benefit of credit
protection.
• CC&P credit impairment charges increased to £1,525m (2022: £814m), driven by higher delinquencies in US cards, which was
anticipated and led to higher coverage ratios. 30 and 90 day arrears at 2.9% (Q422: 2.2%) and 1.5% (Q422: 1.2%) respectively. The
US cards total coverage ratio was 10.2% (December 2022: 8.1%).
Loans and advances at amortised cost increased £4.6bn to £174.2bn driven by increased investment in debt securities in Treasury. In
addition, there has been balance growth in CC&P which was offset by net loan repayments in CIB and transfer to held for sale of the
German consumer finance business.
Trading portfolio assets increased £40.8bn to £174.6bn driven by an increase in debt and equity securities as we facilitate client demand
in Global Markets.
Derivative assets and liabilities decreased £46.5bn and £39.1bn to £255.2bn and £249.8bn respectively reflecting lower market volatility
and a decrease in the forward interest rates.
Financial assets at fair value through the income statement decreased £6.8bn to £203.7bn driven by increased secured lending which
was more than offset by trade optimisations.
Deposits at amortised cost increased £10.1bn to £297.7bn driven by increased deposits in CIB.
RWAs increased to £259.1bn (December 2022: £254.8bn) driven by higher CC&P RWAs.
Notes
1 The Over-issuance of Securities in the prior year impacted Equities within Global markets, CIB and Barclays International only.
2 Period covering 2014-2023. Pre 2014 data was not restated following re-segmentation in 2016.
3 Data source: Dealogic for the period covering 1 January to 31 December 2023.
4 Refers to the settlements with the SEC and CFTC in connection with their investigations of the use of unauthorised devices for business communications.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 386
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 information
Total assets
Risk weighted assets
Period end allocated tangible equity
Key facts
Number of employees (full time equivalent)
1, 2
Performance measures
Average allocated tangible equity
Notes
2023
£m
81
(208)
(127)
(743)
(14)
2
(755)
(7)
(889)
(29)
(918)
(713)
£18.3bn
£10.2bn
£2.3bn
73,200
£0.2bn
2022
£m
(248)
78
(170)
(336)
(17)
(53)
(406)
(22)
(598)
(1)
(599)
(698)
2021
£m
(392)
131
(261)
(659)
—
(15)
(674)
220
(715)
—
(715)
(198)
£19.2bn
£8.6bn
£(0.2)bn
£19.0bn
£11.0bn
£5.5bn
70,300
64,100
£0.7bn
£5.0bn
1 Head Office includes employees in Barclays Execution Services.
2 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.
2023 compared to 2022
Loss before tax was £918m (2022: £599m), including £453m Q423 structural cost actions.
Total income was an expense of £127m (2022: £170m) primarily reflecting hedge accounting and treasury items.
Total operating expenses increased to £755m (2022: £406m) primarily driven by £453m of Q423 structural cost actions partially offset
by lower litigation and conduct charges.
• Head Office structural cost actions principally include the software intangibles impairment related to the merchant acquiring
business (c.£260m), and the Canary Wharf office lease exit (c.£140m).
RWAs were £10.2bn (December 2022: £8.6bn) primarily driven by methodology and policy updates, and increases in non-customer
assets.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 387
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
Definition
Total loans and advances at amortised cost divided by total deposits at amortised cost. The components
of the calculation have been included on page 343.
Profit after tax attributable to ordinary shareholders of the parent.
Attributable profit
Period end tangible equity refers to:
Period end tangible
shareholders' equity (for
Barclays Group)
Period end allocated tangible
equity (for businesses)
Shareholders' equity attributable to ordinary shareholders of the parent, adjusted for the deduction of
intangible assets and goodwill.
Allocated tangible equity is calculated as 13.5% (2022: 13.5%, 2021: 13.5%) of RWAs for each business,
adjusted for capital deductions, excluding goodwill and intangible assets, reflecting the assumptions the
Barclays Group uses for capital planning purposes. Head Office allocated tangible equity represents the
difference between the Barclays Group’s tangible shareholders’ equity and the amounts allocated to
businesses.
Average tangible equity refers to:
Average tangible shareholders’
equity (for Barclays Group)
Average allocated tangible
equity (for businesses)
Calculated as the average of the previous month’s period end tangible shareholders' equity and the
current month’s period end tangible shareholders' equity. The average tangible shareholders’ equity for
the period is the average of the monthly averages within that period.
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.
Return on tangible equity (RoTE) refers to:
Return on average tangible
shareholders’ equity (for
Barclays Group)
Return on average allocated
tangible equity (for businesses)
Group attributable profit, as a proportion of average tangible shareholders’ equity. The components of the
calculation have been included on pages 389.
Business attributable profit, as a proportion of that business's average allocated tangible equity. The
components of the calculation have been included on page 389.
Operating expenses excluding
litigation and conduct
Operating costs
Cost: income ratio
Loan loss rate
Net interest margin
Tangible net asset value per
share
Profit before impairment
Structural cost actions
Performance measures
excluding the impact of Q423
structural cost actions
Performance measures
excluding the impact of the
Over-issuance of Securities
A measure of total operating expenses excluding litigation and conduct charges.
A measure of total operating expenses excluding litigation and conduct charges and UK bank levy.
Total operating expenses divided by total income.
Quoted in basis points and represents total impairment charges divided by total gross loans and advances
held at amortised cost at the balance sheet date.
Net interest income divided by the sum of average customer assets. The components of the calculation
have been included on page 388.
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 393.
Calculated by excluding credit impairment charges or releases from profit before tax.
Cost actions taken to improve future financial performance.
Calculated by excluding the impact of Q423 structural cost actions from performance measures. The
components of the calculations for Barclays Group and businesses have been included on page 390 and
page 392 respectively.
Calculated by excluding the impact of the Over-issuance of Securities from performance measures. The
components of the calculations for Barclays Group and businesses have been included on pages 390 to
392 respectively.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 388
Non-IFRS performance measures (continued)
Margins analysis
For the year ended 31 December
Barclays UK
Corporate and Investment Bank
Consumer, Cards and Payments
Barclays International
Total Barclays Group
1
Other
Total Barclays Group net interest income
Note
Net interest
income
2023
Average
customer
assets
Net interest
margin
Net interest
income
2022
Average
customer
assets
Net interest
margin
Net interest
income
2021
Average
customer
assets
Net interest
margin
£m
£m
%
£m
£m
%
£m
£m
%
6,431
205,667
1,991
54,600
3,646
42,910
5,637
97,510
12,068
303,177
641
12,709
2,979
5,893
1,796
3.13
3.65
8.50
5.78
4,775
3.98 10,668
(96)
10,572
205,972
56,008
39,193
95,201
301,173
2.86
3.21
7.60
5.02
3.54
5,202
1,238
206,628
47,725
1,911
30,805
3,149
78,530
8,351
285,158
2.52
2.59
6.21
4.01
2.93
(278)
8,073
1 Other comprises net interest income from Markets within Barclays International and Head Office including hedge accounting.
The Barclays Group NIM has increased 44bps from 3.54% to 3.98% in 2023, driven by the higher interest rate environment and
continued structural hedge income momentum across the Group as well as higher balances in CC&P including the Gap Inc. portfolio
acquisition, partially offset by product dynamics in deposits and mortgages.
The Group’s combined product and equity structural hedge notional as at 31 December 2023 was £246bn (December 2022: £263bn),
with an average duration of close to 2.5 years. Gross structural hedge contributions of £3,623m (2022: £2,196m) and net structural
hedge contributions of £(8,209)m (2022: £(1,544)m) are included in Group net interest income. 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 389
Non-IFRS performance measures (continued)
Returns
Return on average tangible equity
Attributable profit/(loss)
Average equity
Average goodwill and intangibles
Average tangible equity
For the year ended 31 December 2023
Barclays UK
Corporate and
Investment Bank
Consumer, Cards
and Payments
Barclays
International
Head Office
Barclays Group
£m
1,962
£m
2,667
£m
358
£m
3,025
£m
(713)
£m
4,274
£14.0bn
£(3.8)bn
£10.2bn
£31.7bn
—
£31.7bn
£6.1bn
£(0.8)bn
£5.3bn
£37.8bn
£(0.8)bn
£37.0bn
£4.0bn
£(3.8)bn
£0.2bn
£55.8bn
£(8.4)bn
£47.4bn
Return on average tangible equity
19.2%
8.4%
6.7%
8.2%
n/m
9.0%
Barclays Group average tangible shareholder's
equity based on a CET1 ratio of 13.5%
Return on average tangible equity
Attributable profit/(loss)
Average equity
Average goodwill and intangibles
Average tangible equity
Barclays UK
£m
1,877
£13.6bn
(£3.6bn)
£10.0bn
£m
3,364
£32.8bn
—
£32.8bn
For the year ended 31 December 2022
Corporate and
Investment Bank
Consumer, Cards
and Payments
Barclays
International
£m
480
£m
3,844
£46.5bn
Head Office
Barclays Group
£m
(698)
£m
5,023
£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 equity
18.7%
10.2%
10.0%
10.2%
n/m
10.4%
Return on average tangible equity
Attributable profit/(loss)
Average equity
Average goodwill and intangibles
Average tangible equity
For the year ended 31 December 2021
Barclays UK
Corporate and
Investment Bank
Consumer, Cards
and Payments
Barclays
International
Head Office
Barclays Group
£m
1,756
£m
4,032
£m
615
£m
4,647
£m
(198)
£m
6,205
£13.6bn
(£3.6bn)
£10.0bn
£28.3bn
—
£28.3bn
£4.8bn
(£0.7bn)
£4.1bn
£33.1bn
(£0.7bn)
£32.4bn
£8.7bn
(£3.7bn)
£5.0bn
£55.4bn
(£8.1bn)
£47.3bn
Return on average tangible equity
17.6%
14.3%
15.0%
14.4%
n/m
13.1%
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 390
Non-IFRS performance measures (continued)
Reconciliation of financial results excluding adjusting items1
For the year ended 31 December 2023
For the year ended 31 December 2022
Barclays UK
Corporate and Investment Bank
Consumer, Cards and Payments
Barclays International
Head Office
Total income
Barclays UK
Corporate and Investment Bank
Consumer, Cards and Payments
Barclays International
Head Office
Total operating costs
UK bank levy
Litigation and conduct
Total operating expenses
Other net (expenses)/income
Profit before impairment
Credit impairment charges
Profit before tax
Attributable profit
Average tangible shareholders' equity
Return on average tangible shareholders' equity
Cost: income ratio
Statutory
Adjusting
items1
£m
7,587
12,610
5,308
17,918
(127)
25,378
£m
—
—
—
—
—
—
Excluding
adjusting
items
£m
7,587
Statutory
£m
7,259
12,610
13,368
5,308
17,918
(127)
25,378
4,499
17,867
(170)
24,956
(4,393)
(168)
(4,225)
(4,260)
Adjusting
items1
Excluding
adjusting
items
£m
% Change
£m
—
292
—
292
—
292
—
—
—
7,259
13,076
4,499
17,575
(170)
24,664
(4,260)
(7,630)
(2,731)
(8,335)
(3,243)
(11,578)
(743)
(16,714)
(180)
(37)
(16,931)
(9)
8,438
(1,881)
6,557
4,274
£47.4bn
9.0%
67%
(188)
(118)
(306)
(453)
(927)
—
—
(927)
—
(927)
(8,147)
(3,125)
(7,630)
(2,731)
(11,272)
(10,361)
— (10,361)
(290)
(336)
—
(336)
(15,787)
(14,957)
— (14,957)
(180)
(176)
—
(176)
(37)
(16,004)
(1,597)
(16,730)
(9)
9,365
6
8,232
(966)
(966)
—
(674)
(631)
(15,764)
6
8,906
—
(1,881)
(1,220)
—
(1,220)
(927)
(739)
7,484
5,013
7,012
5,023
(674)
(552)
7,686
5,575
£47.4bn
£48.3bn
10.6%
10.4%
63%
67%
£48.3bn
11.6%
64%
5
(4)
18
2
25
3
1
(7)
(14)
(9)
14
(6)
(2)
94
(2)
5
(54)
(3)
(10)
Note
1 Adjusting items: Q423 structural cost actions in 2023 and impact of Over-issuance of Securities in 2022
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 391
Non-IFRS performance measures (continued)
Performance measures excluding the impact of Q423 structural cost actions
Total operating expenses
Q423 structural cost actions
Total operating expenses excluding Q423
structural cost actions
For the year ended 31 December 2023
Barclays UK
Corporate and
Investment Bank
Consumer, Cards
and Payments
Barclays
International
Head Office
Barclays Group
£m
£m
£m
£m
(4,415)
(168)
(4,247)
(8,458)
(188)
(8,270)
(3,303)
(118)
(3,185)
(11,761)
(306)
(11,455)
£m
(755)
(453)
(302)
£m
(16,931)
(927)
(16,004)
Total income
7,587
12,610
5,308
17,918
(127)
25,378
Cost: income ratio excluding Q423 structural
cost actions
56%
66%
60%
64%
n/m
63%
Profit before tax
Pre-tax impact of Q423 structural cost actions
Profit/(loss) before tax excluding Q423 structural
cost actions
Attributable profit/(loss)
Post-tax impact of Q423 structural cost actions
Attributable profit/(loss) excluding the impact of
Q423 structural cost actions
2,868
(168)
3,036
1,962
(122)
2,084
4,126
(188)
4,314
2,667
(140)
2,807
481
(118)
599
358
(100)
458
4,607
(306)
4,913
3,025
(240)
3,265
(918)
(453)
(465)
(713)
(376)
(337)
6,557
(927)
7,484
4,274
(739)
5,013
Average tangible equity
£10.2bn
£31.7bn
£5.3bn
£37.0bn
£0.2bn
£47.4bn
Return on average tangible equity excluding
Q423 structural cost actions
20.4%
8.9%
8.6%
8.8%
n/m
10.6%
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 392
Non-IFRS performance measures (continued)
Reconciliation of financial results excluding adjusting items1
For the year ended 31 December 2023
For the year ended 31 December 2022
Statutory
Adjusting
items1
Excluding
adjusting
items
Statutory
Adjusting
items1
Excluding
adjusting
items
£m
£m
£m
£m
£m
£m
% change
Income
Corporate and Investment Bank
12,610
—
12,610
13,368
292
13,076
(4)
of which:
FICC
Equities
Global Markets
Consumer, Cards and Payments
Barclays International
Total operating expenses
Corporate and Investment Bank
Consumer, Cards and Payments
Barclays International
4,845
2,373
7,218
5,308
17,918
—
—
—
—
—
4,845
2,373
7,218
5,308
5,695
3,149
8,844
4,499
17,918
17,867
—
292
292
—
292
5,695
2,857
8,552
4,499
17,575
(8,458)
(3,303)
(11,761)
(188)
(118)
(306)
(8,270)
(8,945)
(3,185)
(11,455)
(3,052)
(11,997)
(966)
—
(966)
(7,979)
(3,052)
(11,031)
(15)
(17)
(16)
18
2
(4)
(4)
(4)
Note
1 Adjusting items: Q423 structural cost actions in 2023 and impact of Over-issuance of Securities in 2022.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 393
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
Shares in issue
Tangible net asset value per share
2023
£m
71,204
(13,259)
(7,794)
50,151
2022
£m
68,292
(13,284)
(8,239)
46,769
2021
£m
69,052
(12,259)
(8,061)
48,732
15,155m
15,871m
16,752m
331p
295p
291p
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 2023 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
Notes to the financial statements
Financial performance and returns
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
Material accounting policies
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
396
413
414
415
416
417
418
421
425
427
428
430
430
431
431
434
439
439
440
440
441
448
448
449
459
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
Accruals, provisions, contingent
liabilities and legal proceedings
Property, plant and equipment
Leases
Goodwill and intangible assets
Other liabilities
Provisions
Capital instruments,
equity and reserves
Employee benefits
Scope of consolidation
Contingent liabilities and commitments
Legal, competition and regulatory matters
Subordinated liabilities
Ordinary shares, share premium and other equity
Reserves
Non-controlling interests
Staff costs
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
Assets and liabilities included in disposal group classified
as held for sale
Subsequent events
Barclays PLC (the Parent company)
Related undertakings
Page
Note
460
461
464
468
468
469
470
475
477
478
479
480
481
483
489
491
495
495
497
499
501
502
502
503
504
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
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 396
KPMG LLP’s independent auditor’s report
to the members of Barclays PLC
1. Our opinion is unmodified
Basis for opinion
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
2023, and of the Group’s and the Parent
Company’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 Group and Parent Company 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
2023 (FY23) 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 material accounting policies
Parent Company (Barclays PLC)
• Statement of comprehensive income
• Balance sheet
• Statement of changes in equity
• Cash flow statement
• Note 42 to the Consolidated Financial
Statements, including the summary of
material accounting policies
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
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 FY22 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
general economic uncertainty has led to
sustained affordability pressures
associated with rising inflation and interest
rates.
This economic uncertainty and change has
brought both pressures and opportunities.
The higher interest rate environment has
provided an uplift to net interest income,
and has driven increased competition for
deposits.
Lower market volatility and reduced client
activity have created a challenging
environment within the Corporate and
Investment Bank, resulting in lower income
for FY23.
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 (including open enforcement
actions against the Group) 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 and their assessment of whether
the risk could be more pervasive.
Key Audit Matters
Item
Impairment allowance on
loans and advances at
amortised cost, including off-
balance sheet elements of the
allowance
& 4.1
Valuation of financial
instruments held at fair value
1 4.2
Valuation of gross defined
benefit pension obligation in
respect of the UK retirement
fund ('UKRF')
User access management
Recoverability of Parent
Company’s investment
in subsidiaries
1 4.3
1 4.4
1 4.5
Similar risk to FY22
Increased risk since FY22
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 included, 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, the effective tax rate and
uncertain tax positions
• IT auditors for our testing of automated
and general IT controls
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 397
KPMG LLP’s independent auditor’s report
to the members of Barclays PLC (continued)
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
each year so that the selection criteria do
not become predictable. Outside of
journals, for a selection of fair value
financial instruments, we performed intra-
month independent re-pricing to
incorporate an element of unpredictability
in our audit procedures.
Innovation in the audit: Our audit is
committed to driving innovation and the
increased use of technology. In 2023 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 valuation of financial instruments,
by using the Digital Media Analytics tool to
gather market news and data for key
principal investments and leveraged
finance exposures for consideration as
part of our risk assessment procedures.
Board Audit Committee (“BAC”)
interaction
During the year, the BAC met 11 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 twice in the
year to receive a report on his assessment
of audit quality. The Board Audit
Committee also met with KPMG’s Head of
Audit Quality who provided an update on
the initiatives KPMG is taking to sustain
high levels of audit quality.
The matters included in the BAC Chair’s
report on page 166 are materially
consistent with our observations of those
meetings.
In addition, KPMG are invited to attend the
Board Risk Committee meetings.
Our independence
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.
Apart from the matters noted below, we
have not performed any non-audit
services during the year ended 31
December 2023 or subsequently which are
prohibited by the FRC Ethical Standard.
We have identified that a KPMG member firm
has provided preparation of local financial
statements services over the period 2018 to
2023. That member firm had no involvement
in the group audit of Barclays PLC. The
services, which have been terminated, were
administrative in nature 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 related 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 these services would not
impair our integrity or objectivity for any of
the impacted financial years. The Board
Audit Committee 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 seven
financial years ended 31 December 2023.
The Group lead engagement partner is
required to rotate after five years. This is
the second set of UK Financial Statements
that Stuart Crisp has signed and he will be
required to rotate after the FY26 audit.
The average tenure of key audit partners
who are responsible for component audits,
as set out in section 7 below, is two 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
£64m
£12m
£2m
31 March 2017
7 years
31 December 2027
2 years
2 years
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 398
KPMG LLP’s independent auditor’s report
to the members of Barclays PLC (continued)
Materiality
(Item 6 below)
Group scope
(Item 7 below)
Coverage of Group financial statements
Group total income*
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 £350m
(FY22: £275m).
We determined that profit before tax (PBT)
remains the key benchmark for the
Barclays PLC Group. For FY23, we adjusted
PBT for items which do not represent the
normal, continuing operations of the
Group. As such, for FY23 we based our
materiality on normalised profit before tax
of £7,484m, of which it represents 4.7%
(FY22: 3.9%).
Materiality for the parent company
financial statements as a whole was set at
£170m (2022: £100m), which is the
component materiality for the parent
company determined by the group audit
engagement team. This is lower than the
materiality we would otherwise have
determined with reference to a benchmark
of net assets of which it represents 0.3%
(FY22: 0.2%).
Normalised profit before tax £7,484m
(2022 PBT: £7,012m)
n Normalised
profit before
tax
£7,484m
n Group
materiality
£350m
We have performed risk assessment and
planning procedures 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:
n 2023 Full scope
audit
n 2023 Audit of
account balances
n 2023 Specific audit
procedures
n 2023 Other risk
assessment
procedures
n 2022 Full scope
audit
n 2022 Audit of
account balances
n 2022 Other risk
assessment
procedures
Group total assets*
n 2023 Full scope
audit
n 2023 Audit of
account balances
n 2023 Specific audit
procedures
n 2023 Other risk
assessment
procedures
n 2022 Full scope
audit
n 2022 Audit of
account balances
n 2022 Other risk
assessment
procedures
(2022:
95 %)
(2022:
97%)
Note
* Percentage of Group total income and assets over
which we performed full scope audit or audit of
account balances
A £350m
Whole financial
statements materiality
(2022: £275m)
B £227m
Performance materiality
(2022: £179m)
£17m
Misstatements reported to the
Board Audit Committee
(2022: £13m)
C
96%98%
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 399
KPMG LLP’s independent auditor’s report
to the members of Barclays PLC (continued)
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 Climate and Sustainability report,
which has been incorporated into the 2023
Annual Report on pages 59 -129.
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.
We also read and discussed with
management the quantitative analysis
prepared by the Group to support its
assessment of the impact of climate risk
on credit risk.
• 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.
• 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 Group
or the Parent Company or to cease their
operations, and they have concluded that
the Group’s and the Parent Company’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 we
considered most likely to adversely affect
the Group’s and Parent Company’s
available financial resources over this
period 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 400
KPMG LLP’s independent auditor’s report
to the members of Barclays PLC (continued)
We are also required to review the Viability
Statement set out on page 54 under the
Listing Rules.
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.
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 54 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 401
KPMG LLP’s independent auditor’s report
to the members of Barclays PLC (continued)
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 of the allowance
Financial Statement Elements
FY23
FY22
Our assessment of risk vs FY22
Impairment allowances on loans and advances
at amortised cost, including off-balance sheet
elements of the allowance (see page 292)
£6.3bn
£6.2bn
& Our assessment is that the risk has increased since FY22.
There is increased uncertainty arising from higher interest
rates and continued inflationary pressures.
Our results
FY23:
Acceptable
FY22:
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 ECL are:
• Model estimations – Inherently judgemental
modelling and assumptions are used to
estimate ECL which involves determining
Probability of Default (“PD”), Loss Given
Default (“LGD”), and Exposure at Default
(“EAD”). ECL 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 ECL 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 associated scenario probability
weightings, and the key economic variables
that drive the scenarios. There is also a high
level of 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 of the allowance
within the Group’s financial statements. As part of these risk assessment procedures, we identified
the portfolios 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;
• completeness, 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 for a population of wholesale customers,
including a risk-based selection.
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 whether model changes (including updated model code), for a selection of models which
were changed or updated during the year, 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.
•
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 402
KPMG LLP’s independent auditor’s report
to the members of Barclays PLC (continued)
Description of the Key Audit Matter
▪ Qualitative adjustments – Adjustments to
the model-driven ECL results are raised by
management to address known impairment
model limitations, emerging trends, or risks
not captured by models. They represent
approximately 6.1% of the ECL. These
adjustments are inherently uncertain and
significant management judgement is
involved in identifying and 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 of the allowance 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 291-335) 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.
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, 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;
• assessing the completeness of post model adjustments identified based on our knowledge gained
from other risk-assessment and substantive audit procedures; and
• selecting a sample of credit reviews 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.
Further information in the Annual Report
and Accounts: See the Board Audit
Committee Report on page 166 for details
on how the Board Audit Committee
considered impairment as an area of
focus, page 431 for the accounting policy
on accounting for the impairment of
financial assets under IFRS 9, pages
291-335 for the credit risk disclosures, and
page 431 for the financial disclosure note
8; Credit Impairment charges.
Areas of particular auditor judgement
We identified the following as the areas of
particular auditor judgement:
• The appropriateness of the model
estimations and qualitative 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 (2022 result:
acceptable).
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 403
KPMG LLP’s independent auditor’s report
to the members of Barclays PLC (continued)
4.2 Valuation of financial instruments held at fair value
Financial Statement Elements
FY23
FY22
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)
£560bn
£571bn
£19bn
£6.2bn
£595bn
£572bn
£21bn
£7.5bn
Our assessment of risk vs FY22
1 Our assessment is that the risk is similar to FY22.
Our results
FY23:
Acceptable
FY22:
Acceptable
* In addition to Level 3 portfolios, the key audit matter identified relates to one Level 2 derivatives portfolio within these balances, and certain X VA 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 harder-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 control;
• FVAs, including exit adjustments (to mark the portfolio to bid or offer prices), model shortcoming
reserves to address model limitations and XVAs; and
•
the validation, completeness, implementation and usage of valuation models. This included
controls over assessment of model limitations and assumptions.
Our valuations expertise: We involved our own valuation professionals with specialised skills and
knowledge, who assisted 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 and XVAs, including comparison to industry practice.
Seeking contradictory evidence: For a selection of collateral disputes identified through
management’s control where significant fair value differences were observable with the market
participant on the other side of the trade, we challenged management’s valuation by inspecting
evidence of the investigation and resolution of the disputes. We also utilised collateral dispute data to
identify fair value financial instruments with significant fair value differences against market
counterparties and selected these to independently reprice.
Inspection of movements: We inspected trading revenue arising on level 3 positions to assess
whether material day one 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 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, collateral 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 for the
Level 3 portfolios is therefore primarily due to
these unobservable inputs.
In addition, for the Level 2 portfolios, there
may also be valuation complexity, 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 Level 3 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 in Level 3 portfolios 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 404
KPMG LLP’s independent auditor’s report
to the members of Barclays PLC (continued)
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
Level 3 and harder-to-value level 2
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 (2022 result: acceptable).
Further information in the Annual Report
and Accounts: See the Board Audit
Committee Report on page 166 for details
on how the Board Audit Committee
considered Valuations as an area of focus,
page 449 for the accounting policy on
financial assets and liabilities, and page 449
for the financial disclosure note 17; Fair
value of financial instruments.
4.3 Valuation of the gross defined benefit pension obligation in respect of the UK Retirement Fund (‘UKRF’)
Financial Statement Elements
Gross defined benefit obligation related to
UKRF (note 32)
FY23
FY22
£20.6bn
£20.0bn
Our assessment of risk vs FY22
1 Our assessment is that the risk is similar to FY22.
Our results
FY23:
Acceptable
FY22:
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.
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; and
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; and
• comparing the assumptions used by Barclays PLC to our independently compiled expected ranges
based on market observable indices and our market experience.
Assessing transparency: We assessed the adequacy of the Group’s financial statements disclosures
in the context of the relevant accounting standards.
Areas of particular auditor judgement
Our results
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).
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 (2022
result: acceptable).
Further information in the Annual Report
and Accounts: See page 483 for the
accounting policy on defined benefit
schemes, and page 483 for the financial
disclosure note 32; Pensions and post-
retirement benefits.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 405
KPMG LLP’s independent auditor’s report
to the members of Barclays PLC (continued)
4.4 User access management
Financial Statement Elements
Our assessment of risk vs FY22
User access management has a potential impact
throughout the financial statements.
1 Our assessment is the risk is similar to FY22
Our results
FY23 and FY22:
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, previously identified control
deficiencies remain open around monitoring of activities
performed by privileged users on infrastructure
components. Management has an ongoing programme
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.
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.
• 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;
•
•
re-certification of user access rights; and
restricting access to make changes to systems and data.
We performed procedures to assess whether additional detective compensating controls
operate at the required level of precision to support our assessed risk of unauthorised
activities and we tested management’s detective controls.
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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 406
KPMG LLP’s independent auditor’s report
to the members of Barclays PLC (continued)
4.5 Recoverability of parent company’s investment in subsidiaries
Financial Statement Elements
Investment in subsidiaries (Parent company
accounts and note 42)
FY23
FY22
£64.5bn
£64.5bn
Our assessment of risk vs FY22
1 Our assessment is the risk is similar to FY22.
Our results
FY23:
Acceptable
FY22:
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 recoverable amount
of the investment. Barclays has estimated the recoverable
amount using 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
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 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 to assess the carrying value of the
Parent Company’s investment in subsidiaries. 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 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 its net assets, being an approximation of their minimum
recoverable amount, were in excess of its carrying amount. We assessed for potential
indicators that investments in subsidiaries might be impaired.
Benchmarking assumptions: For the two largest subsidiaries (Barclays Bank PLC and
Barclays Bank UK PLC) we compared key assumptions in the associated VIU calculations
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.
Assessing transparency We assessed whether the disclosures around the assessment
of recoverability of the Parent Company’s investment in subsidiaries adequately reflects
key assumptions and sensitivities considering the level of risks inherent in the
assessment of recoverable amount of the Parent Company’s investment in subsidiaries.
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 (2022 result: acceptable).
Further information in the Annual Report
and Accounts: See page 503 for the
accounting policy on the recoverability of
the investment in subsidiaries and page
503 for the financial disclosure note 42;
Barclays PLC (the Parent Company).
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 407
KPMG LLP’s independent auditor’s report
to the members of Barclays PLC (continued)
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; and
• 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 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 four 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. Existence and accuracy of unconfirmed
over-the-counter bilateral derivatives
4. 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. On this audit, we have not
identified a significant risk of fraud related
to revenue recognition for the Group as a
whole. However, we have identified a fraud
risk in relation to revenue recognition
within some of the individual components.
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. Outside of journals,
for a selection of fair value financial
instruments, we performed intra-month
independent re-pricing to incorporate an
element of unpredictability in our audit
procedures.
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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 408
KPMG LLP’s independent auditor’s report
to the members of Barclays PLC (continued)
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 requirements
• 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 companies 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.
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.
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.
Audit response
In relation to the legal, competition and
regulatory matters disclosed in note 25 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 25 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.
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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 409
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
2023: £350m 2022: £275m
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 £350m
(FY22: £275m).
We determined that profit before tax (PBT)
remains the key benchmark for the
Barclays PLC Group. We selected PBT as
the benchmark because it is the metric in
the primary statements which best
reflects the focus of the users of the
financial statements. During FY23,
Barclays PLC took actions that resulted in
significant additional costs of £927m in Q4
as disclosed in note 7. These are one-off
costs to help drive future returns. Given
the nature of these costs, we normalised
PBT by adding back these items because
they do not represent the normal,
continuing operations of the Group. As
such, for FY23 we based our Group
materiality on Group normalised PBT of
£7,484m (2022: £7,012m).
Our Group materiality of £350m (2022:
£275m) was determined by applying a
percentage to normalised PBT. When
using a profit-related measure to
determine overall materiality, KPMG’s
approach is to apply a percentage between
3% and 5% to the measure. In setting
overall materiality, we applied a percentage
of 4.7% (2022: 3.9%) of the benchmark.
Materiality for the parent company
financial statements as a whole was set at
£170m (2022: £100m), which is the
component materiality for the parent
company determined by the group audit
engagement team. This is lower than the
materiality we would otherwise have
determined with reference to a benchmark
of net assets of which it represents 0.3%
(FY22: 0.2%).
Performance materiality
2023: £227m 2022: £179m
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% (2022: 65%) of
materiality for Barclays PLC Group’s
financial statements as a whole to be
appropriate.
The Parent Company performance
materiality was set at £110m (FY22: £65m)
which equates to 65% (FY22: 65%) of
materiality for the Parent Company
financial statements as a whole.
We applied this percentage in our
determination of performance materiality
based on the level of control deficiencies
during the prior period.
Audit misstatement posting threshold
2023: £17m 2022: £13m
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% (2022: 5%) of
materiality for Barclays PLC’s Group
financial statements.
We also report to the Audit Committee
any other identified misstatements that
warrant reporting on qualitative grounds.
The overall materiality for the Group financial statements of £350m (2022: £275m) compares as follows to the other main financial
statement elements amounts.
Total Revenue
Total Assets
Net Assets
2023
2022
2023
2022
2023
2022
Group Materiality as % of caption
£25,378m £24,956m £1,477,487m £1,513,699m £71,864m £69,260m
0.40%
0.02 %
0.49 %
1.38 %
1.10%
0.02%
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 410
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 (2022: four) of the
Group’s 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 in 2023
and 2022;
• The third component, Barclays PLC
Solus was subject to a full scope audit by
us in 2023 and 2022; and
• The fourth component, Barclays Bank
PLC sub-group, was subject to a full
scope audit by us in 2023 and 2022, as
detailed below.
In addition, the group has a large number
of other components, and we performed
specified, risk-focused audit procedures
over some account balances selected
from amongst those components. The
components over which we performed
work represented 0.19% (2022: 7.68%) of
Barclays PLC Group’s total income and
0.26% (2022: 0.24%) of the Group’s total
assets.
Within the Barclays Bank PLC sub-group
we specified components as follows:
• Barclays Bank Solus to be subject to a
full scope audit carried out by us in 2023
and 2022;
• Barclays Bank Delaware and Barclays
Capital Inc to be subject to a full scope
audit as instructed by us in 2023 and
2022; and
• Barclays Bank Ireland PLC and Barclays
Capital Securities Limited to be subject
to an audit of certain account balances
as instructed by us in 2023 and 2022.
The components within the scope of our
work accounted for the percentages
illustrated in section 2 – Group scope.
Barclays PLC has centralised certain
Group-wide processes in 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
certain audit procedures on the following
areas on behalf of relevant 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
applicable 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. This included:
• A global planning conference held in
London and led by the Group audit team
to discuss key audit risks and obtain
input from component teams and other
participating locations.
• 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. Throughout the
audit, we inspected the components’
key working papers to understand and
challenge the audit approach and audit
findings of each component, 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
lead engagement partner and audit
quality partner.
• Monthly 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 and Board Risk
Committee for Barclays PLC and
Barclays Bank PLC and at least one
Board Audit Committee for Barclays
Bank UK, Barclays Bank Europe, and the
IHC covering Barclays Capital Inc. and
Barclays Bank Delaware.
The materiality levels applied to the audits
of the components of Barclays PLC are as
follows:
Scope
Number of components
Range of materiality applied
Full scope audit
4
£135m - £230m
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 411
KPMG LLP’s independent auditor’s report
to the members of Barclays PLC (continued)
8. Other information in
the annual report
Directors’ remuneration report
Our responsibility
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
• in our opinion those reports have been
prepared in accordance with the
Companies Act 2006.
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.
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
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.
We have nothing to report in this respect.
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.
• the section of the annual report that
Our reporting
describes the review of the
effectiveness of the Group’s risk
management and internal control
systems.
We have nothing to report in this respect.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 412
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
19 February 2024
9. Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement
set out on page 190, 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
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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 413
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/(expense)
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 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
30
7
7
7
7
8
9
29
10
10
2023
£m
35,075
(22,366)
12,709
10,121
(3,592)
6,529
5,945
61
134
25,378
(10,017)
(4,095)
(2,782)
(37)
(16,931)
(9)
8,438
(1,881)
6,557
(1,234)
5,323
4,274
985
5,259
64
5,323
p
27.7
26.9
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
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
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 414
Consolidated financial statements (continued)
2023
£m
5,323
2022
£m
5,973
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
1
Currency translation differences
Tax
Fair value through other comprehensive income reserve movements relating to debt securities
Net gains/(losses) from changes in fair value
Net (gains)/losses transferred to net profit on disposal
Net (gains)/losses relating to (releases of) impairment
Net (losses)/gains due to fair value hedging
Tax
Cash flow hedging reserve
Net gains/(losses) from changes in fair value
Net losses/(gains) transferred to net profit
Tax
Other comprehensive income/(loss) 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 (loss)/income not recycled to profit or loss
Other comprehensive income/(loss) for the year
Total comprehensive income for the year
Attributable to:
Equity holders of the parent
Non-controlling interests
Total comprehensive income for the year
Note
1 Includes nil gain (2022: £1m gain; 2021: £26m loss ) on recycling of currency translation differences to net profit.
(1,110)
9
1,486
(26)
(1)
(1,184)
(78)
4,447
423
(1,342)
2,624
(1,193)
(3)
(983)
611
(1,568)
1,056
6,379
6,315
64
6,379
2021
£m
7,056
(131)
—
(1,668)
(305)
(8)
1,354
198
(2,280)
(1,173)
1,025
(2,988)
1,298
141
(106)
(563)
770
2,032
—
(7,516)
111
9
5,452
523
(9,052)
339
2,331
(5,771)
(754)
228
2,092
(156)
1,410
(4,361)
(2,218)
1,612
4,838
1,567
45
1,612
4,791
47
4,838
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 415
Consolidated financial statements (continued)
Consolidated balance sheet
As at 31 December
Assets
Cash and balances at central banks
Cash collateral and settlement balances
Debt securities at amortised cost
Loans and advances at amortised cost to banks
Loans and advances at amortised cost to customers
Reverse repurchase agreements and other similar secured lending at amortised cost
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
Assets included in disposal group classified as held for sale
Other assets
Total assets
Liabilities
Deposits at amortised cost from banks
Deposits at amortised cost from customers
Cash collateral and settlement balances
Repurchase agreements and other similar secured borrowing at amortised cost
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
Provisions
Liabilities included in disposal group classified as held for sale
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
Notes
12
13
14
15
35
21
19
9
32
40
26
12
16
14
9
32
23
40
22
27
27
28
29
2023
£m
224,634
108,889
56,749
9,459
333,288
2,594
174,605
206,651
256,836
71,836
879
7,794
3,417
121
5,960
3,667
2022
£m
256,351
112,597
45,487
10,015
343,277
776
133,813
213,568
302,380
65,062
922
8,239
3,616
385
6,991
4,743
3,916
6,192
1,477,487
—
5,477
1,513,699
14,472
524,317
94,084
41,601
96,825
10,494
58,669
297,539
250,044
529
22
266
1,584
3,164
12,013
1,405,623
4,288
13,259
(77)
53,734
71,204
660
71,864
1,477,487
19,979
525,803
96,927
27,052
112,881
11,423
72,924
271,637
289,620
580
16
264
1,544
—
13,789
1,444,439
4,373
13,284
(2,192)
52,827
68,292
968
69,260
1,513,699
The Board of Directors approved the financial statements on pages 413 to 508 on 19 February 2024.
Nigel Higgins
Group Chairman
C.S. Venkatakrishnan
Group Chief Executive
Anna Cross
Group Finance Director
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 416
Consolidated financial statements (continued)
Consolidated statement of changes in equity
Called up share
capital and share
premium1
£m
4,373
Other equity
instruments1 Other reserves2
£m
£m
Retained
earnings
£m
13,284
(2,192)
52,827
—
4,274
Total equity
excluding non-
controlling
interests
Non-controlling
interests
Total equity
13,259
(77)
53,734
71,204
4,536
12,259
—
—
—
—
—
—
—
124
—
—
—
—
—
(209)
—
4,288
—
—
—
—
—
—
—
70
—
—
—
—
—
—
(233)
—
—
985
—
—
—
—
—
985
—
(30)
(985)
—
—
—
—
5
905
—
—
—
—
—
(1,101)
194
3,528
—
(710)
1,911
—
—
—
(285)
277
—
209
3
1,770
—
2,032
(1,193)
(6,382)
—
1,463
905
(4,080)
—
1,032
(905)
—
—
—
—
—
—
(7)
—
—
—
(84)
(248)
253
—
233
(36)
—
£m
68,292
5,259
(1,101)
194
3,528
(855)
(710)
6,315
—
—
—
(855)
—
3,419
497
621
(38)
—
—
(506)
(1,210)
(1,257)
2
(68)
(985)
(285)
(229)
(1,210)
(1,257)
10
50,487
5,023
—
—
—
(281)
—
4,742
69,052
5,928
2,032
(1,193)
(6,382)
(281)
1,463
1,567
476
546
28
—
84
—
(485)
(1,028)
(1,508)
36
(5)
1,060
(905)
—
(248)
(232)
(1,028)
(1,508)
—
(12)
4,373
13,284
(2,192)
52,827
68,292
£m
968
64
—
—
—
—
—
64
—
(312)
—
—
—
(64)
—
4
660
£m
69,260
5,323
(1,101)
194
3,528
(855)
(710)
6,379
621
(380)
(985)
(285)
(229)
(1,274)
(1,257)
14
71,864
989
70,041
45
—
—
—
—
—
45
—
(20)
—
—
—
—
(45)
—
—
(1)
968
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
Balance as at 1 January 2023
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
Increase in treasury shares
Vesting of shares under employee share
schemes
Dividends paid
Repurchase of shares
Other reserve movements
Balance as at 31 December 2023
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
Balance as at 31 December 2022
Notes
1 For further details refer to Note 27.
2 For further details refer to Note 28.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 417
Consolidated financial statements (continued)
Consolidated cash flow statement
For the year ended 31 December
Notes
Reconciliation of profit before tax to net cash flows from operating activities:
Profit before tax
Adjustment for non-cash items:
Credit impairment charges/(releases)
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 decrease/(increase) in cash collateral and settlement balances
Net decrease/(increase) in loans and advances at amortised cost
Net (increase)/decrease in reverse repurchase agreements and other similar secured lending
Net (decrease)/increase in deposits at amortised cost
Net (decrease)/increase in debt securities in issue
Net increase/(decrease) in repurchase agreements and other similar secured borrowing
Net decrease/(increase) in derivative financial instruments
Net (increase)/decrease in trading portfolio assets
Net (decrease)/increase in trading portfolio liabilities
Net (decrease)/increase in financial assets and liabilities at fair value through the income statement
Net increase in other assets
Net (decrease)/increase 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
(Acquisition of business)/Disposal of subsidiary net of cash disposed
Other cash flows associated with investing activities
Net cash from investing activities
2023
£m
6,557
1,881
2,147
482
11
10,729
1,165
10,947
(1,818)
(6,958)
(19,640)
14,549
5,968
(40,792)
(14,255)
32,819
(1,521)
(2,362)
(836)
(927)
(19,977)
7,332
(66,415)
59,756
(1,718)
(2,415)
23
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
1
Issuance of debt securities
1
Redemption of debt securities
Net purchase of treasury shares
Net cash from financing activities
Effect of exchange rates on cash and cash equivalents
Net (decrease)/increase 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:
2022
£m
2021
£m
7,012
8,194
1,220
1,786
1,724
54
(13,298)
(653)
2,076
468
39
3,093
(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
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
26
26
(23,414)
(2,259)
1,523
(2,239)
3,251
(4,750)
9,836
(6,252)
(499)
(1,389)
(5,053)
(30,783)
(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
278,790
248,007
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
224,634
6,639
15,450
1,284
248,007
256,351
6,431
15,150
858
278,790
238,574
6,488
13,532
612
259,206
Note
1 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.
Interest received was £62,298m (2022: £40,975m; 2021: £17,194m) and interest paid was £48,246m (2022: £28,709m; 2021: £8,063m). These amounts include interest paid and received
arising from trading activities. Dividends received were £0m (2022: £31m; 2021: £20m). The Group is required to maintain balances with central banks and other regulatory authorities.
These amounted to £3,758m (2022: £3,457m; 2021: £4,750m) 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 418
Parent company accounts
Statement of comprehensive income
For the year ended 31 December
Dividend received from subsidiaries
Net interest expense
Other income/ (expense)
Impairment reversal of investment in subsidiary
Operating expenses
Profit before tax
Taxation
Profit after tax
Other comprehensive income
Total comprehensive income
Profit after tax attributable to:
Ordinary equity holders
Other equity instrument holders
Profit after tax
Total comprehensive income attributable to:
Ordinary equity holders
Other equity instrument holders
Total comprehensive income
Notes
42
42
42
2023
£m
2,818
(11)
1,174
—
(296)
3,685
81
3,766
—
3,766
2,781
985
3,766
2,781
985
3,766
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
For the year ended 31 December 2023, profit after tax was £3,766m (2022: £2,163m, 2021: £4,343m) and total comprehensive income
was £3,766m (2022: £2,163m, 2021: £4,343m). The Company has 61 members of staff (2022: 61, 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
42
42
42
2023
£m
64,461
18,926
35,787
33
407
119,614
542
18,308
10,018
31,832
711
175
61,586
3,789
499
13,198
997
39,545
58,028
119,614
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
The financial statements on pages 418 to 420 and the accompanying note on page 503 were approved by the Board of Directors on 19
February 2024 and signed on its behalf by:
Nigel Higgins
Group Chairman
C.S.Venkatakrishnan
Group Chief Executive
Anna Cross
Group Finance Director
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 419
Parent company accounts (continued)
Statement of changes in equity
Balance as at 1 January 2023
Profit 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 2023
Balance as at 1 January 2022
Profit 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
Called up share
capital and share
premium
£m
4,373
—
124
—
—
—
—
(209)
4,288
4,536
—
70
—
—
—
—
(233)
4,373
Other equity
instruments
£m
13,250
985
—
(52)
—
—
(985)
—
13,198
12,241
905
—
1,009
—
—
(905)
—
13,250
Other reserves
Retained earnings
Total equity
£m
788
—
—
—
—
—
—
209
997
555
—
—
—
—
—
—
233
788
£m
39,256
2,781
22
(25)
(22)
(1,210)
—
(1,257)
39,545
40,505
1,258
34
17
(22)
(1,028)
—
(1,508)
39,256
£m
57,667
3,766
146
(77)
(22)
(1,210)
(985)
(1,257)
58,028
57,837
2,163
104
1,026
(22)
(1,028)
(905)
(1,508)
57,667
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 420
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 before tax
Adjustment for non-cash items:
Reversal of impairment of subsidiary
Other non-cash items
Changes in operating assets and liabilities
Net cash generated from operating activities
1
Net increase in loans and advances to subsidiaries of the parent
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
2
Net increase in debt securities in issue
Proceeds of borrowings and issuance of subordinated debt
Repurchase of shares
Dividends paid
Coupons paid on other equity instruments
Net cash (used in)/generated from financing activities
Net increase in cash equivalents
Cash equivalents at beginning of year
Cash equivalents at end of year3
Net cash generated from operating activities includes:
Dividends received
Net interest paid
Notes
2023
£m
3,685
—
(627)
17
3,075
(2,587)
83
(2,504)
3,251
(3,181)
3,585
(764)
(1,257)
(1,210)
(985)
(561)
10
476
486
2,818
(11)
2022
£m
2021
£m
1,723
4,267
—
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
2,797
(163)
1,356
(161)
1 Includes financial assets at fair value through the income statement.
2 Includes financial liabilities designated at fair value.
3 Cash equivalents comprise loans and advances to banks with original maturity of three months or less, contained within loans and advances to subsidiaries.
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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 421
Notes to the financial statements
For the year ended 31 December 2023
This section describes the Group’s material 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 Material 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, with the exception of International Tax
Reform-Pillar Two Model Rules (Amendments to IAS 12), which is effective from 1 January 2023 and applies retrospectively; and the
Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2), and Definition of an Accounting Estimate
(Amendments to IAS 8) which were applied from 1 January 2023.
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 54.
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 material 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 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.
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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 422
Notes to the financial statements (continued)
For the year ended 31 December 2023
Details of the principal subsidiaries are given in Note 33.
(ii) Foreign currency translation
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.
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
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.
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, (iii) features that could modify the time value of money, and (iv)
Social, Environmental and Sustainability-linked features. Terms with de minimis impact do not preclude cash flows from representing
SPPI.
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
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.
It may not be obvious whether substantially all of the risks and rewards of a transferred asset, or portion of an asset, have been
transferred. It is often necessary to perform a quantitative analysis that 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 423
Notes to the financial statements (continued)
For the year ended 31 December 2023
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
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) 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.
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, with the exception of the following:
International Tax Reform—Pillar Two Model Rules (Amendments to IAS 12)
On 23 May 2023, the IASB issued amendments to IAS 12 to provide a mandatory temporary exemption to the requirements to account
for deferred taxes assets and liabilities related to Pillar Two income taxes, as published by the Organisation for Economic Co-operation
and Development (OECD).
The amendments are effective for accounting periods beginning on or after 1 January 2023 and the mandatory temporary exemption
is applied retrospectively to prior periods.
Disclosures related to the amendments are made in Note 9 on page 434.
Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)
The amendments require entities to disclose their material rather than their significant accounting policies. The Group adopted the
amendments effective 1 January 2023. Whilst these amendments do not change the Group’s accounting policies, the Group has
reviewed the accounting policy information disclosed in these financial statements against the new requirements.
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.
Definition of an Accounting Estimate (Amendments to IAS 8)
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 1 January 2023
and were adopted on this date.
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 has replaced 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 apply.
IFRS 17 was effective for accounting periods beginning on or after 1 January 2023 but the impact to the Group is not material.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 424
Notes to the financial statements (continued)
For the year ended 31 December 2023
Future accounting developments
The following accounting standards have been issued by the IASB but are not yet effective:
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 12 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.
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 431
▪ Tax on page 435
▪ Fair value of financial instruments on page 449
▪ Goodwill and intangible assets on page 466
▪ Pensions and post-retirement benefit obligations on page 485
▪ Provisions including conduct and legal, competition and regulatory matters on page 468.
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 276 to 277 and 291 to 335
▪ Market risk on page 278 and 336 to 337
▪ Treasury and Capital risk – liquidity on page 278 to 279 and 339 to 349
▪ Treasury and Capital risk – capital on page 279 and 350 to 356.
These disclosures are covered by the Audit opinion (included on pages 396 to 412) where referenced as audited.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 425
Notes to the financial statements (continued)
For the year ended 31 December 2023
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
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 2023
Total income
Operating costs
UK bank levy
Litigation and conduct
Total operating expenses
1
Other net income/(expenses)
Profit/(loss) before impairment
Credit impairment charges
Profit/(loss) before tax
Total assets (£bn)
Total liabilities (£bn)
Number of employees (full time equivalent)
Average number of employees (full time equivalent)
Average number of employees (headcount)
Note
Barclays UK
Barclays
International
Head Office
Group results
£m
£m
£m
£m
7,587
(4,393)
(30)
8
17,918
(11,578)
(136)
(47)
(4,415)
(11,761)
—
3,172
(304)
2,868
293.1
264.2
6,800
(2)
6,155
(1,548)
4,607
1,166.1
1,077.9
12,400
(127)
(743)
(14)
2
(755)
(7)
(889)
(29)
(918)
18.3
63.5
73,200
25,378
(16,714)
(180)
(37)
(16,931)
(9)
8,438
(1,881)
6,557
1,477.5
1,405.6
92,400
92,900
94,800
1 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 426
Notes to the financial statements (continued)
For the year ended 31 December 2023
For the year ended 31 December 2022
Total income
Operating costs
UK bank levy
Litigation and conduct
Total operating expenses
1
Other net income/(expenses)
Profit/(loss) before impairment
Credit impairment charges
Profit/(loss) before tax
Total assets (£bn)
Total liabilities (£bn)
Number of employees (full time equivalent)
Average number of employees (full time equivalent)
Average number of employees (headcount)
Note
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
287.3
6,200
17,867
(10,361)
(133)
(1,503)
(11,997)
28
5,898
(933)
4,965
1,181.3
1,093.9
10,900
(170)
(336)
(17)
(53)
(406)
(22)
(598)
(1)
(599)
19.2
63.2
70,300
24,956
(14,957)
(176)
(1,597)
(16,730)
6
8,232
(1,220)
7,012
1,513.7
1,444.4
87,400
83,900
86,200
1 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.
For the year ended 31 December 2021
Total income
Operating costs
UK bank levy
Litigation and conduct
Total operating expenses
1
Other net income
Profit/(loss) before impairment
Credit impairment releases
Profit/(loss) before tax
Total assets (£bn)
Total liabilities (£bn)
Number of employees (full time equivalent)2
Average number of employees (full time equivalent)
Average number of employees (headcount)
Notes
Barclays UK
Barclays
International
£m
£m
6,536
(4,357)
(36)
(37)
(4,430)
—
2,106
365
2,471
321.2
291.8
7,100
15,665
(9,076)
(134)
(345)
(9,555)
40
6,150
288
6,438
1,044.1
965.4
10,400
Head
Office
£m
(261)
(659)
—
(15)
(674)
220
(715)
—
(715)
19.0
57.0
64,100
Group results
£m
21,940
(14,092)
(170)
(397)
(14,659)
260
7,541
653
8,194
1,384.3
1,314.2
81,600
82,900
85,600
1 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.
2 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.
Barclays PLC has announced on 20 February 2024 changes to the way that the business is being managed and it has published
comparative financial information to reflect these changes to its segmental reporting which are effective from January 2024.
From Q124, the Group will present its financial disclosures through the following new segments:
• Barclays UK
• Barclays UK Corporate Bank
• Barclays Private Bank and Wealth Management
• Barclays Investment Bank
• Barclays US Consumer Bank
The previously reported Head office will additionally include the held for sale German consumer finance business and the merchant
acquiring component on the Payments business both previously reported within Barclays International as part of CC&P.
Considering the revised segmentation in January 2024, our assessment has not led to any further financial impacts. These changes do
not affect legal entities nor do they impact the Group’s previously reported consolidated financials. A copy of the resegmentation
document is available at home.barclays/investor-relations/reports-and-events/financial-results/
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 427
Notes to the financial statements (continued)
For the year ended 31 December 2023
Income by geographic region1
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 income1
For the year ended 31 December
United Kingdom
United States
Note
1 The geographical analysis is based on the location of the office where the transactions are recorded.
3 Net interest income
Accounting for interest income and expenses
2023
£m
13,295
2,517
8,109
87
1,370
25,378
2023
£m
13,295
7,911
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
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
Debt securities at amortised cost
Loans and advances at amortised cost
Fair value through other comprehensive income
Negative interest on liabilities
1
Other
Interest and similar income
Deposits at amortised cost
Debt securities in issue
Subordinated liabilities
Negative interest on assets
2
Other
Interest and similar expense
Net interest income
Notes
2023
£m
10,262
2,337
14,742
4,907
46
2,781
35,075
(11,252)
(6,344)
(866)
(7)
(3,897)
(22,366)
12,709
2022
£m
2,916
1,251
12,125
1,963
208
633
19,096
(3,573)
(3,240)
(530)
(208)
(973)
(8,524)
10,572
2021
£m
184
177
9,363
550
248
718
11,240
(561)
(1,340)
(507)
(374)
(385)
(3,167)
8,073
1 Other interest and similar income includes interest income from cash collaterals and reverse repurchase agreements and other similar secured lending at amortised cost.
2 Other interest and similar expense includes interest expense from cash collaterals and repurchase agreements and other similar secured borrowing at amortised cost.
Interest and similar income presented above represents interest revenue calculated using the effective interest method. Costs to
originate credit card balances of £935m (2022: £786m; 2021: £652m) have been amortised to interest and similar income during the
year.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 428
Notes to the financial statements (continued)
For the year ended 31 December 2023
4 Net fee and commission income
Accounting for net fee and commission income
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. Incremental costs are reported within fee and commission
expense if they are directly attributable to generating identifiable fee and commission income. 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
2023
Barclays
International
Head Office
£m
£m
1,124
52
234
33
36
1,479
—
1,479
(368)
1,111
3,692
903
1,763
2,080
62
8,500
139
8,639
(3,217)
5,422
£m
—
—
—
—
3
3
—
3
(7)
(4)
Barclays UK
2022
Barclays
International
Head Office
£m
£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
—
—
—
—
3
3
—
3
(6)
(3)
2021
Barclays
International
Head Office
Barclays UK
£m
£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
—
1
—
—
3
4
—
4
(5)
(1)
Total
£m
4,816
955
1,997
2,113
101
9,982
139
10,121
(3,592)
6,529
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
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 429
Notes to the financial statements (continued)
For the year ended 31 December 2023
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. 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 2023 (2022: £nil; 2021: £nil).
Impairment of fee receivables and contract assets
During 2023, there have been no material impairments recognised in relation to fees receivable and contract assets (2022: £nil; 2021:
£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 2023 are £217m (2022:
£198m; 2021: £154m).
Capitalised contract costs are amortised over the customer relationship period depending on the transfer of services to which the
asset pertains. In 2023, the amount of amortisation was £55m (2022: £47m; 2021: £36m) and there was no impairment loss recognised
in connection with the capitalised contract costs (2022: £nil; 2021: £nil).
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 430
Notes to the financial statements (continued)
For the year ended 31 December 2023
5 Net trading income
Accounting for net trading income
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. Incremental costs are reported within net
trading income if they are directly attributable to generating identifiable trading income.
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.
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
6 Net investment income/(expense)
Accounting for net investment income/(expense)
2023
£m
4,257
380
1,308
5,945
2022
£m
6,021
508
1,520
8,049
2021
£m
3,992
692
1,110
5,794
Dividends are recognised when the right to receive the dividend has been established. Incremental costs are reported within net
investment income if they are directly attributable to generating identifiable investment income. Other accounting policies relating to
net investment income are set out in Note 13 and Note 15.
Net gains/(losses) from financial instruments mandatorily at fair value
Net gains/(losses) 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
1
Net losses on other investments
Net investment income/(expense)
Note
2023
£m
171
26
(17)
—
(119)
61
2022
£m
(51)
(111)
(18)
31
(285)
(434)
2021
£m
73
305
114
20
(201)
311
1 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 431
Notes to the financial statements (continued)
For the year ended 31 December 2023
7 Operating expenses
Infrastructure costs
1
Property and equipment
Depreciation and amortisation
1
Impairment of property, equipment and intangible assets
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 costs1
Litigation and conduct2
Operating expenses
Notes
2023
£m
1,948
1,784
363
4,095
782
585
180
1,235
2,782
10,017
37
16,931
2022
£m
1,649
1,723
63
3,435
669
500
176
1,101
2,446
9,252
1,597
16,730
2021
£m
1,538
1,673
403
3,614
610
399
170
958
2,137
8,511
397
14,659
1 Infrastructure costs & Staff costs included £927m relating to structural cost actions taken in Q4 2023 and £266m taken as a part of real estate review in 2021.
2 Includes costs related to the Over-issuance of securities (2022: £966m, 2021: £220m).
For further details on staff costs including accounting policies, refer to Note 30.
8 Credit impairment charges/(releases)
Accounting for the impairment of financial assets
Impairment
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%.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 432
Notes to the financial statements (continued)
For the year ended 31 December 2023
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.
Refer to the Measurement uncertainty and sensitivity analysis section on page 311 for further details.
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
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
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 433
Notes to the financial statements (continued)
For the year ended 31 December 2023
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.
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
Currently, Internal Ratings- Based models are leveraged to calculate the point-in-time PD and LGD, which serve as key inputs to the
IFRS 9 models. Thereafter, these inputs are extrapolated by the IFRS 9 models to create macroeconomic sensitive forecast of PDs,
LGDs and in turn ECL.
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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 434
Notes to the financial statements (continued)
For the year ended 31 December 2023
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.
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 307 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.
Impairment
charges /
(releases)
£m
2,017
2023
2022
2021
Recoveries and
reimbursements1
Total2
Impairment
charges /
(releases)
Recoveries and
reimbursements1
£m
£m
£m
£m
Impairment
charges /
(releases)
Recoveries and
reimbursements1
£m
£m
Total
£m
Total
£m
(73) 1,944
1,428
(263)
1,165
(361)
240
(121)
(61)
1,956
4
(1)
(5)
—
(61)
(73) 1,883
—
—
—
4
(1)
(5)
18
1,446
28
9
—
—
18
(263)
1,183
(514)
(875)
— (514)
240
(635)
—
—
28
9
—
(4)
(8)
(6)
—
—
—
(4)
(8)
(6)
1,954
(73) 1,881
1,483
(263)
1,220
(893)
240
(653)
3
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 asset measured at cost
Credit impairment charges /(releases)
Notes
1 Recoveries and reimbursements includes £29m (2022: £199m, 2021: £(306)m) 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 £44m (2022: £64m, 2021:
£66m).
2 Includes net impairment charges of £19m relating to the German consumer finance portfolio classified as assets held for sale during the year.
3 Includes Debt securities at amortised cost.
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 £597m (2022: £949m). 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 £2,690m (2022: £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 (2022: £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 £149m (2022: £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
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 435
Notes to the financial statements (continued)
For the year ended 31 December 2023
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
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 which included consideration for the current view of
climate impacts. 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 (credit)/charge
Current year
Adjustments in respect of prior years
Tax charge
2023
£m
1,359
(181)
1,178
(95)
151
56
1,234
2022
£m
1,045
(444)
601
235
203
438
1,039
2021
£m
1,417
317
1,734
(352)
(244)
(596)
1,138
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 436
Notes to the financial statements (continued)
For the year ended 31 December 2023
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 applicable UK corporation tax rate of 23.5%
(2022: 19%; 2021: 19% )
Impact of profits/losses earned in territories with different statutory rates
to the UK (weighted average tax rate is 23.6% (2022: 21.4%; 2021: 22.4% ))
Recurring items:
Non-creditable taxes including withholding taxes
Non-deductible expenses
Impact of UK bank levy being non-deductible
1
and other items
Banking surcharge
Impact of Barclays Bank PLC's overseas branches being taxed both locally
and in the UK
Tax adjustments in respect of share-based payments
Adjustments in respect of prior years
Changes in recognition of deferred tax and effect of unrecognised tax
losses
Non-taxable gains and income
Tax relief on holdings of inflation-linked government bonds
Tax relief on payments made under AT1 instruments
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
2023
£m
6,557
2023
%
2022
£m
7,012
2022
%
2021
£m
8,194
2021
%
1,541
23.5%
1,332
19.0%
1,557
19.0%
4
0.1%
167
2.4%
277
3.4%
130
65
42
31
14
4
(30)
(58)
(65)
(214)
(222)
2.0%
1.0%
0.6%
0.5%
0.2%
0.1%
(0.5%)
(0.9%)
(1.0%)
(3.3%)
(3.4%)
—
—
(8)
1,234
—
—
(0.1%)
18.8%
126
51
33
101
17
13
1.8%
0.7%
0.5%
1.4%
0.2%
0.2%
(241)
(3.4%)
134
80
32
83
25
(5)
73
1.6%
1.0%
0.4%
1.0%
0.3%
(0.1%)
0.9%
(146)
(2.1%)
(140)
(1.7%)
(135)
(556)
(172)
346
93
10
(1.9%)
(7.9%)
(2.4%)
(198)
(169)
(149)
(2.4%)
(2.1%)
(1.8%)
4.9%
1.3%
0.1%
(462)
(5.6%)
—
—
—
—
1,039
14.8%
1,138
13.9%
Note
1 Banking surcharge includes the impact of the 4.25% UK banking surcharge rate on profits/losses and tax adjustments relating to UK banking entities.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 437
Notes to the financial statements (continued)
For the year ended 31 December 2023
Factors influencing the effective tax rate
As a result of the increase in the UK corporation tax rate from 19% to 25% from 1 April 2023, the applicable UK corporation tax rate for
the year ended 31 December 2023 is 23.5%. In addition, the banking surcharge rate reduced from 8% to 3% from 1 April 2023 resulting
in a total tax rate applicable to banks’ UK profits of 27.75% for the year ended 31 December 2023.
The effective tax rate of 18.8% is lower than the applicable UK corporation tax rate of 23.5% primarily due to tax relief on payments
made under AT1 instruments and tax relief on holdings of inflation-linked government bonds. These factors, which have each
decreased the effective tax rate, are partially offset by non-creditable taxes including withholding taxes.
Factors that may influence the effective tax rate in future periods
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.
Tax law is, at times, complex, and it is the role of courts and tribunals to act as the final authority on the correct interpretation of tax law.
In October 2023, a First-tier Tax Tribunal hearing took place between Barclays Bank PLC and HM Revenue & Customs in respect of the
UK corporation tax treatment of an element of the finance costs associated with reserve capital instruments issued as part of the
capital raising announced by Barclays in October 2008, which have since been redeemed. The maximum additional tax liability that could
arise under the dispute is £215m and a provision of £106m is carried in respect of this uncertainty. The judgement is expected to be
received in early 2024.
The OECD and G20 Inclusive Framework on Base Erosion and Profit Shifting announced plans under the Pillar Two Framework to
introduce a global minimum tax rate of 15% and the OECD issued model rules in 2021. Further OECD guidance has been released
during 2022 and 2023 and the UK Government enacted legislation on 11 July 2023 to implement the global minimum tax rules and a UK
domestic minimum tax. The UK’s Pillar Two rules apply for accounting periods beginning on or after 31 December 2023 and will apply in
respect of profits for every jurisdiction where the Group operates.
Additionally, the Group may be subject to Qualifying Domestic Minimum Top-up Taxes (QDMTTs) under the Pillar Two rules
implemented in its operating jurisdictions. The application of QDMTT rules should not affect the overall impact of any additional taxes
resulting from the Pillar Two regime on the Group’s tax charge, as any taxes paid under a local QDMTT would be expected to result in a
reduction in any top-up tax being payable in the UK.
The Group has adopted the International Tax Reform - Pillar Two Model Rules amendments to IAS 12, which were issued on 23 May
2023 and approved by the UK Endorsement Board on 19 July 2023, and has applied the exception set out in paragraph 4A in respect of
recognising and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes.
The Group has reviewed the published UK legislation alongside the OECD model rules and guidance and has performed an assessment
of the expected impact of the new regime. Additional taxes resulting from the implementation of Pillar Two are expected to arise from 1
January 2024 in respect of a limited number of jurisdictions in which the Group operates, principally in the Isle of Man, Jersey, Guernsey,
and Ireland, by virtue of their low statutory tax rates. However, these additional taxes are not expected to significantly increase the
Group's future tax charge based on an estimated impact of c.£20m per annum, with actual future liabilities being dependent on levels of
profits in particular jurisdictions. The Group will continue to review further guidance due to be released by the OECD and governments
implementing this new tax regime to assess the potential impact.
In the USA, the corporate alternative minimum tax on adjusted financial statements income introduced by the Inflation Reduction Act
became effective on 1 January 2023. The Group will continue to review the regulations and guidance as they are issued. However, the
Group’s tax liability was not increased as a result of the corporate alternative minimum tax in 2023 and it is not expected that it will
materially increase the Group’s future effective tax rate.
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.
Tax included directly in equity
Tax included directly in equity comprises a £9m credit (2022: £1m) 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
US Intermediate Holding Company 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
2023
£m
4,081
973
386
520
5,960
(22)
5,938
2022
£m
4,925
1,094
482
490
6,991
(16)
6,975
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 438
Notes to the financial statements (continued)
For the year ended 31 December 2023
US deferred tax assets in the IHC and US Branch Tax Groups
The deferred tax asset in the IHC Tax Group of £973m (2022: £1,094m) includes £35m (2022: £21m) 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 £386m (2022:
£482m) relates entirely to temporary differences.
In relation to the IHC Tax Group, these temporary differences include £387m (2022: £434m) 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 that all of the New
York State attributable amounts will be utilised prior to expiry and that £38m of the New York City attributable amounts previously
recognised will not be utilised prior to expiry. Accordingly, in the current period the deferred tax asset recognised has been reduced by
£38m.
UK Tax Group deferred tax asset
The deferred tax asset in the UK Tax Group of £4,081m (2022: £4,925m) includes £1,566m (2022: £1,535m) 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.
Other deferred tax assets (outside the UK and US tax groups)
The deferred tax asset of £520m (2022: £490m) in other entities within the Group includes £147m (2022: £90m) 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 £520m (2022: £490m), an amount of £20m (2022: £33m) 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
1,296
(77)
1,219
£m
675
—
675
(63)
(26)
£m
2,875
—
2,875
—
£m
40
(1,315)
(1,275)
£m
702
—
702
(26)
(43)
(78)
(1,398)
327
£m
—
(190)
(190)
—
273
2
85
85
—
85
426
—
426
—
£m
433
—
433
43
(14)
(13)
449
449
—
449
414
—
414
14
—
(31)
628
628
—
628
693
—
693
(3)
(11)
—
20
702
702
—
702
(616)
(17)
—
(190)
—
(190)
(190)
22
433
433
—
433
—
571
571
—
571
155
—
155
(6)
523
3
675
675
—
675
—
1,477
1,477
(2)
(976)
38
—
(1,014)
1,477
(976)
521
—
521
—
2,354
—
2,875
2,875
40
(1,674)
(1,634)
357
5
(1,275)
40
—
(1,315)
2,875
(1,275)
—
(3)
1,153
1,277
(124)
1,153
1,647
(42)
1,605
(458)
—
72
1,219
1,296
(77)
1,219
Other
temporary
differences
Tax losses
carried
forward
£m
£m
Total
£m
1,280
1,646
8,947
(390)
890
(46)
—
(1,972)
1,646
105
6,975
(56)
—
—
(890)
(41)
(3)
(91)
803
1,146
1,748
1,748
5,938
7,419
(343)
—
(1,481)
803
1,748
5,938
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)
890
1,646
6,975
Assets
Liabilities
As at 1 January 2023
Income statement
Other comprehensive
income and reserves
Other movements
Assets
Liabilities
As at 31 December
2023
Assets
Liabilities
As at 1 January 2022
Income statement
Other comprehensive
income and reserves
Other movements
Assets
Liabilities
As at 31 December
2022
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 £5,325m (2022: £8,155m). The amount of
deferred tax liability expected to be settled after more than 12 months is £1,173m (2022: £1,864m). 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 439
Notes to the financial statements (continued)
For the year ended 31 December 2023
Unrecognised deferred tax
Tax losses and temporary differences
Deferred tax assets have not been recognised in respect of gross deductible temporary differences of £527m (2022: £111m), unused
tax credits of £381m (2022: £323m), and gross tax losses of £21,681m (2022: £22,537m). The tax losses include capital losses of
£3,965m (2022: £3,935m). Of these tax losses, £79m (2022: £149m) expire within five years, £13m (2022: £401m) expire within six to
ten years, £10,504m (2022: £10,393m) expire within eleven to twenty years and £11,085m (2022: £11,594m) 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 £873m (2022: £852m).
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
2023
£m
4,274
2023
million
15,445
450
15,895
Earnings per ordinary share
Basic earnings per share
Diluted earnings per share
2023
p
27.7
2022
p
30.8
2021
p
36.5
2023
p
26.9
2022
p
29.8
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 450m (2022: 534m, 2021: 435m) shares. The number of share options outstanding,
under schemes that were considered to be potentially dilutive was 750m (2022: 789m, 2021: 688m) in total. These options have strike
prices ranging from £0.83 to £1.51.
Of the total number of employee share options and share awards at 31 December 2023, 39m (2022: 27m, 2021: 5m) were anti-dilutive.
The 888m decrease (2022: 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 each year.
11 Dividends on ordinary shares
The Directors have approved a total dividend in respect of 2023 of 8.00p per ordinary share of 25p each. The full year dividend for 2023
of 5.30p per ordinary share will be paid on 3 April 2024 to shareholders on the Share Register on 1 March 2024. On 31 December 2023,
there were 15,155m ordinary shares in issue. The financial statements for the year ended 31 December 2023 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
2024.
The Directors have confirmed their intention to initiate a share buyback of up to £1bn after the balance sheet date. The proposed
share buyback is expected to commence in the first quarter of 2024. The financial statements for the year ended 31 December 2023
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 2023 financial statements include the 2023 interim dividend of £417m (2022: £364m, 2021: £339m); a full year dividend declared in
relation to 2022 of £793m (2021: £664m, 2020: £173m ) and two share buyback programmes totalling £1,250m (2022: £1,500m, 2021:
£1,200m). Dividends and share buybacks are funded out of distributable reserves.
2022
£m
2021
£m
5,023
6,205
2022
million
16,333
534
16,867
2021
million
16,985
435
17,420
2021
p
35.6
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 440
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. 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
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/(liabilities)
Trading portfolio assets
Trading portfolio liabilities
2023
£m
75,498
86,353
12,653
101
174,605
2022
£m
55,475
65,031
13,198
109
133,813
2023
£m
(40,547)
(18,122)
—
—
2022
£m
(39,531)
(33,393)
—
—
(58,669)
(72,924)
13 Financial assets at fair value through the income statement
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.
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.
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
2023
£m
3,082
130
—
—
—
3,212
2022
£m
3,658
205
—
—
1
3,864
2023
£m
44,557
2,456
7,185
149,131
110
203,439
2022
£m
35,771
3,044
6,091
164,681
117
209,704
2023
£m
47,639
2,586
7,185
149,131
110
206,651
2022
£m
39,429
3,249
6,091
164,681
118
213,568
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 designated at
fair value as they have minimal exposure to credit risk due to limited gross exposure.
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
2023
£m
3,081
613
2022
£m
3,658
855
2023
£m
3
(5)
2022
£m
10
(1)
2023
£m
(3)
(5)
2022
£m
(9)
(1)
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 441
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.
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.
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
Notional contract
amount
£m
2023
Fair value
Assets
£m
Total derivative assets/(liabilities) held for trading
Total derivative assets/(liabilities) held for risk
management
Derivative assets/(liabilities)
64,993,491
254,643
299,576
2,193
65,293,067
256,836
2022
Notional contract
amount
£m
Fair value
Assets
£m
Liabilities
£m
52,689,773
301,647
(288,573)
285,505
733
(1,047)
52,975,278
302,380
(289,620)
Liabilities
£m
(249,458)
(586)
(250,044)
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:
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 442
Notes to the financial statements (continued)
Assets and liabilities held at fair value
Derivatives held for trading and held for risk management
2023
2022
Notional
contract
amount
£m
Fair value
Assets
£m
Liabilities
£m
Notional
contract
amount
£m
Fair value
Assets
£m
Liabilities
£m
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
Total derivatives cleared by central counterparty
Total exchange traded derivatives
Derivative assets/(liabilities) held for trading
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
6,536,257
86,987
186,672
17,899
529
2
6,740,828
87,518
19,671,577
27,662,853
6,800,161
104,618
1,989
2,824
54,134,591
109,431
587,472
860,878
1,448,350
448,780
2,017,045
2,465,825
4,734
199,163
203,897
64,993,491
27,248,820
28,710,403
9,034,268
4,936
2,726
7,662
17,792
30,379
48,171
44
1,817
1,861
254,643
214,377
5,244
35,022
64,993,491
254,643
26,661
195
130,961
157,817
8,697
129,318
138,015
3,744
3,744
299,576
39,297
260,279
1,904
—
—
1,904
178
—
178
111
111
2,193
2,193
—
299,576
2,193
(82,711)
(512)
(2)
(83,225)
(92,467)
(2,065)
(2,895)
(97,427)
(6,005)
(2,625)
(8,630)
(25,779)
(32,549)
(58,328)
(4)
(1,844)
(1,848)
(249,458)
(206,966)
(5,202)
(37,290)
(249,458)
(8)
—
—
(8)
(533)
—
(533)
(45)
(45)
(586)
(586)
—
(586)
5,775,206
108,833
(103,439)
113,455
19,426
440
15
(473)
(6)
5,908,087
109,288
(103,918)
14,924,915
21,927,570
5,654,126
129,920
(116,752)
2,319
2,257
(2,371)
(2,167)
42,506,611
134,496
(121,290)
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
23,148,402
7,806,720
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)
(6,052)
(16,724)
(36,774)
(53,498)
(51)
(3,764)
(3,815)
(288,573)
(241,697)
(4,165)
(42,711)
52,689,773
301,647
(288,573)
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)
(815)
—
(815)
(20)
(20)
(1,047)
(1,047)
—
(1,047)
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 443
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:
▪
▪ Currency derivatives to swap foreign currency exposures into the entity’s functional currency, and net investment exposure to local
Interest rate derivatives to swap interest rate exposures into either fixed or variable rates.
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 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.
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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 444
Notes to the financial statements (continued)
Assets and liabilities held at fair value
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
statements1
£m
£m
£m
2023
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
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
Note
3,543
450
2,390
8,119
42,420
5,237
62,159
(3,193)
(1,867)
246
—
(24)
(836)
(21)
(57)
113
3
49
(30)
(1,392)
(202)
(5,401)
(667)
(176)
1,244
(84)
(2,788)
1,295
(64,734)
(64,734)
(2,575)
3,105
3,105
1,034
1,034
(2,296)
(1,754)
(1,462)
(1,462)
(167)
4,906
445
159
4,858
33,583
8,514
52,465
(3,474)
(1,268)
243
(19)
(1,304)
(3,758)
(261)
(8,573)
—
(11)
(1)
(4,405)
(111)
(133)
(1,693)
(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)
11
(5)
21
(26)
197
(10)
188
(24)
(24)
164
44
2
(20)
(16)
168
(9)
169
13
13
182
1 Hedge ineffectiveness is recognised in net interest income.
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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 445
Notes to the financial statements (continued)
Assets and liabilities held at fair value
The following table shows the fair value hedging instruments which are carried on the Group’s balance sheet:
Carrying value
Derivative assets
Derivative liabilities
Loan liabilities
Nominal amount
Change in fair value used as a
basis to determine
ineffectiveness
Hedge type
Risk category
As at 31 December 2023
Fair value
Interest rate risk
Inflation risk
Total
As at 31 December 2022
Fair value
Interest rate risk
Inflation risk
Total
£m
2
176
178
—
83
83
£m
(2)
(531)
(533)
—
(815)
(815)
£m
—
—
—
—
—
—
£m
123,016
14,999
138,015
109,761
16,299
126,060
The following table profiles the expected notional values of current hedging instruments in future years:
As at 31 December
Fair value hedges of:
2023
£m
2024
£m
2025
£m
2026
£m
2027
£m
2028
£m
£m
261
70
331
3,596
2,585
6,181
2029 and
later
£m
Interest rate risk (outstanding notional amount)
Inflation risk (outstanding notional amount)
123,016
107,339
14,999
14,671
94,291
14,433
75,792
12,140
61,853
52,346
47,646
9,520
7,627
7,115
There are 1,996 (2022: 1,796) interest rate risk fair value hedges with an average fixed rate of 1.64% (2022: 1.97%) across the
relationships and 136 (2022: 94) inflation risk fair value hedges with an average rate of 0.85% (2022: 0.54%) across the relationships.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 446
Notes to the financial statements (continued)
Assets and liabilities held at fair value
Hedged items in cash flow hedges and hedges of net investments in foreign operations
Description of hedge
relationship and hedged risk
2023
Cash flow hedge of:
Interest rate risk
Loans and advances at
amortised cost
Cash and balances at Central
Banks
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
2022
Cash flow hedge of:
Interest rate risk
Loans and advances at
amortised cost
Cash and balances at Central
Banks
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 statement1
£m
£m
£m
£m
£m
£m
£m
(1,172)
(1,371)
(463)
(1,088)
395
470
30
333
(313)
(4,407)
(181)
1,047
—
—
—
—
—
—
(595)
(113)
(118)
(826)
—
—
—
—
1,421
33
119
1,573
4,059
4,389
3
483
362
9,296
1,240
265
34
1,539
2,990
3,467
(13)
601
142
7,187
—
—
—
—
—
—
—
—
1,886
141
242
2,269
2,069
2,051
—
—
21
4,141
—
—
—
—
1,374
1,484
—
—
16
2,874
—
—
—
—
—
—
—
—
—
—
—
—
23
23
—
—
—
—
—
—
23
23
(1,172)
(1,371)
(463)
(1,088)
(313)
(4,407)
(595)
(113)
(118)
(826)
4,059
4,389
3
483
98
9,032
1,240
265
34
1,539
34
115
6
1
—
156
—
—
—
—
(42)
(41)
2
—
33
(48)
—
—
—
—
Note
1 Hedge ineffectiveness is recognised in net interest income.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 447
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:
Carrying value
Derivative assets
Derivative liabilities
Loan liabilities
Nominal amount
Change in fair value used as a
basis to determine
ineffectiveness
Hedge type
Risk category
As at 31 December 2023
Cash flow
Interest rate risk
Foreign exchange risk
Inflation risk
Total
Net investment
Foreign exchange risk
As at 31 December 2022
Cash flow
Interest rate risk
Foreign exchange risk
c
Inflation risk
Total
Net investment
Foreign exchange risk
£m
—
1,904
—
1,904
111
—
549
—
549
101
£m
—
(8)
—
(8)
(45)
(1)
(211)
—
(212)
(20)
£m
—
—
—
—
(13,157)
—
—
—
—
(12,824)
£m
128,349
26,661
2,807
157,817
16,901
140,901
11,946
2,636
155,483
16,786
£m
2,692
1,558
313
4,563
826
(8,531)
(484)
(329)
(9,344)
(1,539)
There are 50 (2022: 58) foreign exchange risk cash flow hedges with an average foreign exchange rate of 147.94 JPY:1 GBP (2022:
148.00 JPY:1 GBP) across the relationships and 8 (2022: nil) foreign exchange risk cash flow hedges with an average foreign exchange
rate of 1.25 USD:1 GBP (2022: nil) 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:
2023
2022
Description of hedge relationship and hedged risk
Cash flow hedge of interest rate risk
Recycled to net interest income
Cash flow hedge of foreign exchange risk
Recycled to trading income
Hedge of net investment in foreign operations
Recycled to trading income
Amount recycled
from other
comprehensive
income due to
hedged item
affecting income
statement
£m
(1,752)
1,327
—
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
£m
2
—
(6)
£m
£m
(320)
(6)
—
(13)
—
(58)
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
2023
2022
Cash flow hedging
reserve
Currency
translation reserve
Cash flow hedging
reserve
Currency
translation reserve
£m
(7,235)
40
4,407
423
(1,342)
(3,707)
£m
4,772
(1,942)
826
6
9
3,671
£m
£m
(853)
(20)
(9,032)
339
2,331
2,740
3,513
(1,539)
58
—
(7,235)
4,772
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 448
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).
Debt securities and other eligible bills
Equity securities
Loans and advances
Financial assets at fair value through other comprehensive income
16 Financial liabilities designated at fair value
Accounting for liabilities designated at fair value through profit and loss
2023
£m
71,059
6
771
71,836
2022
£m
64,832
8
222
65,062
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
Repurchase agreements and other similar secured borrowing
Other financial liabilities
Financial liabilities designated at fair value
The cumulative own credit net loss recognised is £307m (2022: £674m gain).
2023
2022
Fair value
£m
68,261
43,552
Contractual
amount due
on maturity
£m
82,820
44,862
Fair value
£m
57,846
41,037
Contractual
amount due
on maturity
£m
73,757
42,455
185,716
186,593
10
10
297,539
314,285
172,746
173,511
8
8
271,637
289,731
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 449
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.
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.
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
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
456.
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. Within less active
markets, for counterparties and instruments identified as being more susceptible to climate change risk, an impact assessment was
performed through increasing their probability of default. The change in valuation of the assets and liabilities from this assessment was
sufficiently immaterial to necessitate any amendment to the reported year end valuations.
Valuation
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. For certain instruments that derive a fair value using unobservable inputs that are not considered significant, then the asset
or liability may be classified as Level 2.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 450
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
Derivative financial assets
Financial assets at fair value through other
comprehensive income
Investment property
Total assets
2023
2022
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
94,658
73,438
6,509
174,605
62,478
64,855
6,480
133,813
5,831
192,571
8,249
206,651
107
253,189
3,540
256,836
5,720
198,723
9,125
213,568
10,054
287,152
5,174
302,380
30,247
40,511
1,078
71,836
—
—
2
2
130,843
559,709
19,378
709,930
20,704
44,347
—
—
11
5
65,062
5
98,956
595,077
20,795
714,828
Trading portfolio liabilities
Financial liabilities designated at fair value
Derivative financial liabilities
Total liabilities
(29,274)
(29,027)
(117) (296,200)
(81) (245,310)
(29,472) (570,537)
(368)
(58,669)
(1,222) (297,539)
(4,653) (250,044)
(6,243) (606,252)
(44,128)
(28,740)
(56)
(72,924)
(133)
(270,454)
(1,050)
(271,637)
(10,823)
(272,434)
(6,363)
(289,620)
(55,084)
(571,628)
(7,469)
(634,181)
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
Loans
Private equity investments
1
Other
Total
Note
2023
2022
Assets
Liabilities
Assets
Liabilities
£m
2,211
111
241
977
1,867
209
10,614
1,375
1,773
19,378
£m
(1,701)
(91)
(820)
(2,041)
(352)
(517)
—
(10)
(711)
(6,243)
£m
£m
2,362
1,513
290
1,009
1,677
37
11,233
1,291
1,383
(2,858)
(1,474)
(603)
(1,428)
(49)
(434)
—
(8)
(615)
20,795
(7,469)
1 Other includes 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 451
Notes to the financial statements (continued)
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.
Loans
Description: A drawn lending facility issued to corporate clients and customers.
Valuation: Loans are valued either using a price-based approach, or through models that discount expected future cash flows based
on interest rates and loan spreads.
Observability: Within this loan population, the price or loan spread may be generally unobservable.
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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 452
Notes to the financial statements (continued)
Assets and liabilities held at fair value
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 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 (2022: 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. 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.
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
income2
Other
income
Total gains
or (losses)
recognised
in OCI
Corporate debt
Loans
Other
Trading portfolio assets
Corporate debt
Loans
Private equity investments
Reverse repurchase and
repurchase agreements
Other
Financial assets at fair value
through the income statement
Corporate debt
Loans
Private equity investments
Other
Assets at fair value through
other comprehensive income
As at 1
January
2023
£m
597
£m
352
£m
(146)
4,837
1,425
(1,734)
1,046
1,617
(1,143)
6,480
3,394
(3,023)
1,080
40
(145)
6,396
3,630
(3,263)
1,284
97
(26)
37
328
166
33
—
(1)
9,125
3,966
(3,435)
—
—
7
4
193
533
—
200
11
926
—
—
—
—
—
£m
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Investment properties
5
—
(4)
Trading portfolio liabilities
(56)
(367)
45
—
Financial liabilities designated at
fair value
(1,050)
(40)
—
(403)
Interest rate derivatives
Foreign exchange derivatives
Credit derivatives
Equity derivatives
Net derivative financial
instruments1
(496)
130
(31)
39
—
(313)
(351)
—
56
(419)
(419)
(1)
(1,189)
(640)
24
—
—
—
—
—
£m
(220)
(382)
—
£m
76
(34)
(31)
(602)
11
£m
—
—
—
—
—
(1,361)
10
176
(8)
(14)
(6)
(64)
86
—
6
(62)
(19)
—
(3)
(1,429)
109
61
—
—
—
—
—
—
—
—
—
—
—
—
1
—
(38)
(3)
—
—
—
(3)
(3)
—
—
—
58
37
(15)
87
(15)
(2)
3
(162)
83
(92)
—
—
—
—
—
59
239
(387)
8,249
As at 31
December
2023
£m
681
4,469
1,359
6,509
888
5,612
1,371
209
169
Out
£m
(34)
(27)
(749)
(810)
(89)
(165)
—
—
(133)
—
—
—
—
—
—
298
533
4
243
1,078
2
10
(368)
Transfers
In
£m
56
384
619
—
1,059
£m
—
—
—
—
—
—
—
—
—
—
—
(3)
—
—
—
—
—
—
—
—
—
—
213
—
—
26
105
—
—
42
—
—
11
51
—
(3)
147
(147)
459
(1,222)
326
436
510
20
(579)
(52)
(5)
(66)
(1,064)
388
313
(1,113)
Total
13,326
7,239
(6,393)
(403)
(1,951)
(10)
(3) 1,686
(415) 13,135
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 453
Notes to the financial statements (continued)
Assets and liabilities held at fair value
£m
—
—
—
—
—
—
—
—
—
—
—
—
—
Analysis of movements in Level 3 assets and liabilities
As at 1
January
2022
Purchases
Sales
Issues Settlements
Total gains and (losses)
in the period
recognised in the
income statement
Trading
income2
Other
income
Total gains
or (losses)
recognised
in OCI
Corporate debt
Loans
Other
Trading portfolio assets
£m
£m
£m
389
394
(182)
758
7,009
(2,635)
1,134
665
(412)
2,281
8,068
(3,229)
Corporate debt
Loans
816
405
—
7,608
8,689
(7,559)
Private equity investments
1,095
192
(64)
Reverse repurchase and
repurchase agreements
Other
Financial assets at fair value
through the income statement
13
180
—
127
—
—
9,712
9,413
(7,623)
£m
£m
(18)
(19)
(39)
(264)
(298)
(43)
(335)
(346)
(189)
48
(1,485)
(804)
£m
—
—
—
—
—
—
(24)
—
(2)
95
24
3
(66)
—
3
(1,700)
(634)
(63)
£m
—
—
—
—
—
—
—
—
—
—
Transfers
In
£m
87
10
275
372
—
49
56
—
17
As at 31
December
2022
£m
597
4,837
1,046
6,480
1,080
6,396
1,284
37
328
Out
£m
(34)
(22)
(275)
(331)
—
(102)
—
—
—
122
(102)
9,125
Private equity investments
Other
Assets at fair value through
other comprehensive income
Investment properties
—
38
38
7
—
—
—
—
—
—
—
(1)
—
Trading portfolio liabilities
(27)
(23)
8
—
—
(32)
(32)
—
—
—
—
—
—
—
—
—
1
(2)
(1)
(1)
—
6
—
6
—
—
—
—
—
7
4
11
5
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
instruments1
(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
431
(11)
571
(38)
(496)
16
(12)
39
(313)
(419)
537
148
(1,189)
13,326
Total
Notes
9,552
16,739
(10,847)
(98)
(1,547)
(1,012)
(64)
(1)
456
1 The derivative financial instruments are represented on a net basis. On a gross basis, derivative financial assets are £3,540m (2022: £5,174m) and derivative financial liabilities are
£4,653m (2022: £6,363m).
2 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 454
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
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
Note
2023
Income statement
Trading
income1
Other
income
Other
compre-
hensive
income
£m
10
113
—
—
—
(38)
(107)
(22)
£m
—
72
—
1
—
(3)
—
70
£m
—
—
(3)
—
—
—
—
(3)
2022
Income statement
Trading
income1
Other
income
£m
£m
(290)
(551)
—
—
8
55
(80)
(858)
—
(66)
—
(1)
—
—
—
(67)
Total
£m
10
185
(3)
1
—
(41)
(107)
45
Other
compre-
hensive
income
£m
—
—
1
—
—
—
—
1
Total
£m
(290)
(617)
1
(1)
8
55
(80)
(924)
1 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.
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)1
Significant unobservable inputs
Min
Max
Min
Max
Units2
2023 Range
2022 Range
Derivative financial
instruments3
Interest rate derivatives
Discounted cash flows
Correlation model
Option model
Credit derivatives
Equity derivatives
Discounted cash flows
Comparable pricing
Option model
Discounted cash flow
Non-derivative financial
instruments
Loans
Discounted cash flows
Comparable pricing
EBITDA multiple
Earnings multiple
Discounted cash flow
Comparable pricing
Discounted cash flows
Private equity investments
Corporate debt
Reverse repurchase and
repurchase agreements
Notes
Discounted cash flows
Repo spread
Inflation forwards
Credit spread
Yield
Growth curve
Inflation forwards
Inflation volatility
Interest rate volatility
FX - IR correlation
IR - IR correlation
Credit spread
Price
Equity volatility
Equity - equity
correlation
Discount margin
Loan spread
Credit spread
Yield
Price
EBITDA multiple
Earnings multiple
Credit spread
Discount margin
Price
Loan spread
4
15
1
(1)
—
66
26
(20)
(20)
1
46
5
40
(238)
40
186
7
0
15
3
380
8
—
—
385
7
1,672
7
2
—
257
515
78
98
765
99
138
100
110
802
870
18
287
17
25
630
10
352
—
468
3
17
(3)
—
(20)
49
36
(20)
12
3
79
3
40
(205)
50
200
5
0
11
4
496
8
0
229
321
5
2,159
56
—
(13)
315
430
78
99
2,943
92
140
100
634
801
426
34
101
15
23
559
10
232
834
502
%
bps
%
%
%
bps vol
bps vol
%
%
bps
points
%
%
bps
bps
bps
%
points
Multiple
Multiple
bps
%
points
bps
bps
1 A range has not been provided for Net Asset Value as there would be a wide range reflecting the diverse nature of the positions.
2 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%.
3 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 29-1672bps (2022: 17-2,159bps).
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 455
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.
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.
Loans containing unobservable input loan spreads into their valuation primarily consist 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 40bps to 307bps (2022: 50bps to 589bps), the
vast majority of spreads are concentrated towards the bottom end of this range, with 98% of the loan notional being valued with
spreads less than 200bps for the current period.
In general, a significant increase in loan spreads in isolation will result in a fair value decrease for a loan.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 456
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
2023
2022
Favourable changes
Unfavourable changes
Favourable changes
Unfavourable changes
Income
statement
Equity
Income
statement
Equity
Income
statement
Equity
Income
statement
Equity
£m
78
4
27
142
34
612
263
126
1,286
£m
—
—
—
—
—
2
1
1
4
£m
(158)
(9)
(32)
(226)
(22)
(801)
(263)
(118)
(1,629)
£m
—
—
—
—
—
(2)
(1)
(1)
(4)
£m
119
16
79
161
45
338
268
49
1,075
£m
—
—
—
—
—
—
1
—
1
£m
(155)
(22)
(71)
(168)
(27)
(551)
(281)
(52)
(1,327)
£m
—
—
—
—
—
—
(1)
—
(1)
Interest rate derivatives
Foreign exchange derivatives
Credit derivatives
Equity derivatives
Corporate debt
Loans
Private equity investments
1
Other
Total
Note
1 Other includes, Equity Cash Products, Fund and Fund Linked, Government and Government Sponsored Debt, Asset backed securities.
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 £1,290m (2022: £1,076m) or to decrease fair values by up to £1,633m
(2022: £1,328m) with substantially all the potential effect impacting profit and loss. Unfavourable changes shown in the table above are
partly provided for through the capital and prudential valuation adjustment framework
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
Exit price adjustments derived from market bid-offer spreads
2023
£m
(569)
(4)
(209)
144
2022
£m
(577)
(11)
(319)
208
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 decreased by £8m to £(569)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 £(4)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. The derivative funding adjustment has decreased by £7m to £(4)m .
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 457
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 decreased by £110m to £(209)m as a result of tightening input counterparty credit spreads.
Derivative debit valuation adjustments decreased by £64m to £144m as a result of tightening input Barclays Bank PLC 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 £205m (2022: £126m) for financial instruments measured at fair value and £192m (2022:
£216m) for financial instruments carried at amortised cost. There are additions and FX loss of £136m (2022: £59m additions and FX
gains), and amortisation and releases of £57m (2022: £66m) for financial instruments measured at fair value and additions of £0m
(2022: £0m) and amortisation and releases of £24m (2022: £14m) 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 £5,162m (2022:
£5,197m).
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 458
Notes to the financial statements (continued)
Assets and liabilities held at fair value
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
Debt securities at amortised cost
Loans and advances at amortised cost
Reverse repurchase agreements and
other similar secured lending
Assets included in disposal groups
classified as held for sale
Financial liabilities
Deposits at amortised cost
Repurchase agreements and other
similar secured borrowing
Debt securities in issue
Subordinated liabilities
Liabilities included in disposal groups
classified as held for sale
2023
2022
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
56,749
55,437
13,976
39,014
2,447
342,747
334,706
5,854
80,533
248,319
45,487
44,512
9,952
33,285
1,275
353,292
347,149
5,165
79,868
262,116
2,594
2,594
—
2,594
3,855
3,855
—
3,855
—
—
776
776
—
—
—
—
776
—
—
—
(538,789) (538,502) (382,345) (150,757)
(5,400) (545,782) (545,738) (426,016) (116,157)
(3,565)
(41,601) (41,601)
—
(41,601)
(96,825) (98,123)
—
(95,999)
(10,494) (10,803)
—
(10,608)
—
(27,052) (27,054)
(2,124) (112,881) (113,276)
(195) (11,423) (11,474)
—
—
(27,054)
(110,151)
—
(3,125)
—
(11,254)
(220)
(3,078)
(3,078)
—
(3,078)
—
—
—
—
—
—
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.
Financial assets
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 2023, 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
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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 459
Notes to the financial statements (continued)
Assets and liabilities held at fair value
18 Offsetting financial assets and financial liabilities
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
offset1
Net amounts
reported on
the balance
sheet
Financial
instruments
Financial
collateral2
Net amount
Amounts not
subject to
enforceable
netting
arrangements3
Balance sheet
total4
£m
£m
£m
£m
£m
£m
£m
£m
307,429
(55,781)
251,648
(198,809)
(41,247)
11,592
5,188
256,836
677,175
(527,864)
149,311
—
(148,888)
423
984,604
(583,645)
400,959
(198,809)
(190,135)
12,015
2,414
7,602
151,725
408,561
(297,449)
54,241
(243,208)
198,809
27,978
(16,421)
(6,836)
(250,044)
(731,200)
527,864
(203,336)
—
(1,028,649)
582,105
(446,544)
198,809
203,336
231,314
—
(23,980)
(227,316)
(16,421)
(30,816)
(477,360)
As at 31 December 2023
Derivative financial assets
Reverse repurchase agreements and
5
other similar secured lending
Total assets
Derivative financial liabilities
Repurchase agreements and other
5
similar secured borrowing
Total liabilities
As at 31 December 2022
Derivative financial assets
374,253
(76,429)
297,824
(238,337)
(45,981)
13,506
4,556
302,380
Reverse repurchase agreements and
5
other similar secured lending
Total assets
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
5
similar secured borrowing
Total liabilities
Notes
(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)
1 Amounts offset for derivative financial assets additionally includes cash collateral netted of £7,527m (2022: £15,199m). Amounts offset for derivative financial liabilities additionally
includes cash collateral netted of £9,067m (2022: £15,098m). Settlements assets and liabilities have been offset amounting to £29,297m (2022: £24,250m).
2 Financial collateral of £41,247m (2022: £45,981m) was received in respect of derivative assets, including £31,211m (2022: £34,547m) of cash collateral and £10,036m (2022: £11,434m)
of non-cash collateral. Financial collateral of £27,978m (2022: £26,639m) was placed in respect of derivative liabilities, including £24,260m (2022: £25,222m) of cash collateral and
£3,718m (2022: £1,417m) of non-cash collateral. The collateral amounts are limited to net balance sheet exposure so as to not include overcollateralisation.
3 This column includes contractual rights of set-off that are subject to uncertainty under the laws of the relevant jurisdiction.
4 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’.
5 Reverse repurchase agreements and other similar secured lending of £151,725m (2022: £165,457m) is split by fair value £149,131m (2022: £164,681m) and amortised cost £2,594m
(2022: £776m). Repurchase agreements and other similar secured borrowing of £227,316m (2022: £199,798m) is split by fair value £185,715m (2022: £172,746m) and amortised cost
£41,601m (2022: £27,052m).
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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 460
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 property, plant and equipment, leases 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 Property, plant and equipment
Accounting for property, plant and equipment
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 including consideration
on future Climate and Sustainability investments.
The Group uses the following annual rates in calculating depreciation:
Annual rates in calculating depreciation
Freehold land
Freehold buildings
Leasehold property
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
Depreciation rate
Not depreciated
2-3.3%
Over the remaining life of the lease
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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 461
Notes to the financial statements (continued)
Assets at amortised cost and other investments
Investment
property
Property
Equipment
Right of use
assets1
£m
£m
£m
Cost
As at 1 January 2023
Additions
2
Disposals
Exchange and other movements
As at 31 December 2023
Accumulated depreciation and impairment
As at 1 January 2023
Depreciation charge
Impairment
2
Disposals
Exchange and other movements
As at 31 December 2023
Net book value
Cost
As at 1 January 2022
Additions
Disposals
Exchange and other movements
As at 31 December 2022
Accumulated depreciation and impairment
As at 1 January 2022
Depreciation charge
Impairment
Disposals
Exchange and other movements
As at 31 December 2022
Net book value
Notes
£m
5
—
(3)
—
2
—
—
—
—
—
—
2
7
—
(1)
(1)
5
—
—
—
—
—
—
5
3,585
112
(24)
(95)
3,578
(1,642)
(163)
(33)
10
50
(1,778)
1,800
4,131
273
(923)
104
3,585
(2,255)
(181)
(23)
882
(65)
(1,642)
1,943
3,018
297
(954)
(14)
2,347
(2,244)
(256)
—
944
(7)
1,950
20
(50)
82
2,002
(157)
(27)
48
21
(1,563)
(1,171)
784
831
3,210
313
(641)
136
3,018
(2,586)
(227)
0
630
(61)
1,920
37
(68)
61
1,950
(872)
(206)
(22)
65
(21)
(2,244)
(1,056)
774
894
Total
£m
8,558
429
(1,031)
(27)
7,929
(576)
(60)
1,002
64
(4,512)
3,417
9,268
623
(1,633)
300
8,558
(5,713)
(614)
(45)
1,577
(147)
(4,942)
3,616
(1,056)
(4,942)
1 Right of use (ROU) asset balances relate to property leases under IFRS 16. Refer to Note 20 for further details.
2 Disposals primarily pertain to fully depreciated assets which are not in use.
Property rentals of £12m (2022: £10m) 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.
20 Leases
Accounting for leases
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.
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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 462
Notes to the financial statements (continued)
Assets at amortised cost and other investments
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.
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.
2023
2022
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
3
2
—
—
—
—
5
£m
—
—
—
—
—
—
—
£m
3
2
—
—
—
—
5
£m
—
—
—
—
—
—
—
£m
14
9
2
1
1
1
£m
(1)
(1)
—
—
—
—
£m
13
8
2
1
1
1
28
(2)
26
£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 significant impairment allowance for finance lease receivables in current and previous year.
The Group does not have any material operating leases as a lessor.
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
As a Lessee
2023
£m
1
—
2022
£m
2
—
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 19 for the carrying amount of ROU assets.
The total expenses recognised during the year for short term leases were £2m (2022: £1m). 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
1
Cash payments
Exchange and other movements
As at 31 December (see Note 22)
Note
1 Cash payments include one time lease liability payment of £182m related to structural cost action in relation to the real estate review.
2023
£m
1,216
54
19
(11)
(406)
99
971
2022
£m
1,317
56
42
(13)
(239)
53
1,216
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 463
Notes to the financial statements (continued)
Assets at amortised cost and other investments
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
Total undiscounted lease liabilities as at 31 December
2023
£m
174
169
144
120
97
338
282
2022
£m
229
216
193
160
140
457
105
1,324
1,500
In addition to the cash flows identified above, Group is exposed to:
▪ Variable lease payments: This variability will typically arise from either inflation index instruments or market-based pricing
adjustments. Currently, Barclays has 517 (2022: 401) leases out of the total 756 (2022: 896) leases which have variable lease payment
terms based on market-based pricing adjustments. Of the gross cash flows identified above £1,062m (2022: £1,087m) 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 £441m (2022: £516m) 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 2023, Group does not have any sale and leaseback transaction (2022: £88m).
The Group does not have any restrictions or covenants imposed by the lessor on its property leases which restrict its businesses.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 464
Notes to the financial statements (continued)
Assets at amortised cost and other investments
21 Goodwill and intangible assets
Accounting for goodwill and intangible assets
Goodwill
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 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
Amortisation period
Goodwill
1
Internally generated software
Other software
Customer lists
Licences and other
Note
Not amortised
12 months to 6 years
12 months to 6 years
12 months to 25 years
12 months to 25 years
1 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 465
Notes to the financial statements (continued)
Assets at amortised cost and other investments
Intangible assets
Goodwill
£m
Internally
generated
software
£m
Other
software
£m
Brand
£m
Customer
lists
£m
Licences
and other
£m
4,737
311
—
(13)
5,035
(825)
—
—
(33)
—
(858)
4,177
4,718
—
—
19
4,737
7,627
1,203
(1,546)
(94)
7,190
(4,195)
1,546
(1,050)
(309)
43
(3,965)
3,225
7,180
1,047
(774)
174
7,627
620
164
19
(86)
717
(385)
(26)
(69)
(3)
5
(478)
239
626
18
(36)
12
620
(825)
(3,884)
(364)
—
—
—
—
(825)
3,912
774
(946)
(18)
(121)
(4,195)
3,432
36
(50)
—
(7)
(385)
235
—
7
—
—
7
—
—
(1)
—
—
(1)
6
—
—
—
—
—
—
—
—
—
—
—
—
1,654
—
—
(85)
1,569
(1,475)
—
(39)
—
76
(1,438)
131
1,431
76
(12)
159
1,654
(1,300)
12
(44)
—
(143)
(1,475)
179
984
4
(2)
(830)
156
(503)
2
(49)
—
410
(140)
16
908
19
(39)
96
984
(429)
39
(69)
—
(44)
(503)
481
Total
£m
15,622
1,689
(1,529)
(1,108)
14,674
(7,383)
1,522
(1,208)
(345)
534
(6,880)
7,794
14,863
1,160
(861)
460
15,622
(6,802)
861
(1,109)
(18)
(315)
(7,383)
8,239
2023
Cost
As at 1 January 2023
Additions
1
Disposals
2
Exchange and other movements
As at 31 December 2023
Accumulated amortisation and
impairment
As at 1 January 2023
1
Disposals
Amortisation charge
Impairment charge
2
Exchange and other movements
As at 31 December 2023
Net book value
2022
As at 1 January 2022
Additions
1
Disposals
Exchange and other movements
As at 31 December 2022
Accumulated amortisation and
impairment
As at 1 January 2022
1
Disposals
Amortisation charge
Impairment charge
Exchange and other movements
As at 31 December 2022
Net book value
Notes
1 Disposals pertain to fully amortised assets which are not in use.
2 In the current year the group has reclassified assets with a total net book value of £412m recognised on balance sheet relating to sign-on bonus payments made to co-brand credit card
partners from Intangible Assets (Licenses and other) to Other Assets. This change in classification has been made to more appropriately reflect the nature of the assets.
The German consumer finance business moved to assets held for sale during the year and this resulted in an impairment of Intangible
assets of £32m.
Goodwill
Goodwill and Intangible assets are allocated to business operations according to business segments as follows:
Barclays UK
Barclays International
Head Office
Total
2023
Goodwill
Intangibles
£m
3,872
267
38
4,177
£m
1,096
2,519
2
3,617
Total
£m
4,968
2,786
40
7,794
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
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 466
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 prospects of the business and
market conditions at the point in time the assessment is prepared, including the potential effect of climate change. 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.
2023 impairment review
The 2023 impairment review was performed during Q4 2023, with the approach and 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.
Goodwill is initially allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the acquisition that
generated it. Goodwill is only reallocated if there is a change in its use or when reporting structures are altered in a way that changes the
composition of one or more cash-generating units to which goodwill has been allocated. During the year, the Merchant Acquiring
business was split from the Cards & Payments business and was identified as a CGU.
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 during 2023
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, 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 identified the cost of equity associated with market participants that closely resemble the
Group's CGUs. The cost of equity has been used as the discount rate in the 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 a pre-tax method adjusted for varying tax rates. Using the resultant VIU the equivalent pre-tax discount rate has
been calculated. The cost of equity rate used for all CGUs in this year’s calculation has been increased to the reflect the relative volatility
of Barclays PLC’s stock price versus the average of our peers. The range of equivalent pre-tax discount rates applicable across the
CGUs range from 14.7% to 18.5% (2022: 14.1% to 16.5%).
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% (2022: 2.0%).
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 467
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 £3,064m ( 2022: £2,752m), of which £2,501m (2022: £2,501m)
was attributable to Woolwich, and within Business Banking was £629m (2022: £629m), fully attributable to Woolwich.
The largest portion of the Group's intangible assets sits within the Investment Bank CGU, part of Barclays International with an
allocation of £1,043m (2022: £919m).
The recoverable amount for both Personal Banking and Business Banking have decreased in comparison to the 2022 impairment
review, reflective of changes in the interest rate and macroeconomic outlook.
An impairment of £33m of goodwill and £257m of intangible assets has been identified and recognised for the year, fully impairing the
goodwill and intangibles of the Merchant Acquiring CGU. In all other CGUs, the value in use exceeds the carrying value and no
impairment has been identified.
The outcome of the impairment review for Personal Banking, Business Banking, Barclaycard UK 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 2022
Personal Banking
Cards and Payments
Business Banking
Barclaycard UK
Total
£m
6,130
3,626
1,836
1,938
£m
3,066
180
629
179
£m
740
800
239
164
£m
9,936
4,606
2,704
2,281
13,530
4,054
1,943
19,527
£m
12,297
5,342
5,990
2,307
25,936
£m
2,361
736
3,286
26
6,409
£m
4,667
1,598
6,623
364
13,252
All CGUs showed a reduction in value in use in the period which is mainly attributable to the increase in the discount rates used in the
assessment as a result of increases in interest rates as well as the introduction of the Barclays share price volatility premium.
The value in use for Barclaycard UK has reduced to a level that an adverse movement in any of the key judgement areas would result in
an impairment.
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 100bps 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 CGU's 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 100bps 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 for certain CGUs holding goodwill balances 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
Personal Banking
Cards and Payments
Total
£m
£m
£m
9,936
12,297
2,361
4,606
5,342
736
14,542
17,639
3,097
%
18.2
16.8
%
£m
£m
£m
£m
2.0
(1,042)
(710)
(263)
(1,337)
2.0
(647)
(473)
(250)
(724)
%
2.5
1.2
%
(4.1)
(1.6)
%
4.5
1.5
Cash
flows
%
(17.6)
(10.2)
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 468
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.
22 Other liabilities
Accruals and deferred income
Other creditors
Items in the course of collection due to other banks
Lease liabilities (refer to Note 20)
Other liabilities
23 Provisions
Accounting for provisions
2023
£m
4,315
6,638
89
971
12,013
2022
£m
4,618
7,870
85
1,216
13,789
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.
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 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 25 for more detail of
legal, competition and regulatory matters.
As at 1 January 2023
Additions
Amounts utilised
Unused amounts reversed
Exchange and other movements
As at 31 December 2023
Undrawn contractually committed facilities and guarantees1
As at 1st January 2023
Net change in expected credit loss provision and other movements
As at 31 December 2023
Total Provisions
As at 1st January 2023
As at 31 December 2023
Note
Redundancy and
restructuring Customer redress
Legal,
competition and
regulatory
matters
Sundry
provisions
£m
136
469
(166)
(38)
(4)
397
£m
378
84
(152)
(60)
45
295
£m
159
29
(75)
(11)
(3)
99
£m
288
132
(56)
(69)
(6)
289
Total
£m
961
714
(449)
(178)
32
1,080
583
(79)
504
1,544
1,584
1 Undrawn contractually committed facilities and guarantees provisions are accounted for under IFRS 9. Further analysis of the movement in the expected credit loss provision is
disclosed within the 'Movement in gross exposures and impairment allowance including provisions for loan commitments and financial guarantees' table on page 298.
Provisions expected to be recovered or settled within no more than 12 months after 31 December 2023 were £1,357m (2022:
£1,348m).
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 469
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. 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.
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 25.
Sundry provisions
This category includes provisions that do not fit into any of the other categories, such as fraud losses and dilapidation provisions.
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 298.
24 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 and letters of credit 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
2023
£m
17,353
7,987
25,340
1,266
2,352
388,085
390,437
15,203
2022
£m
17,760
6,445
24,205
1,423
1,748
393,760
395,508
13,471
Provisions for expected credit losses held against contingent liabilities and commitments equal £504m (2022: £583m) and are reported
in Note 23. Further details on contingent liabilities relating to legal and competition and regulatory matters can be found in Note 25.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 470
Notes to the financial statements (continued)
Accruals, provisions, contingent liabilities and legal proceedings
25 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 and other proceedings
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.
Other proceedings
In November 2023, Barclays received requests for arbitration from two Jersey special purpose vehicles connected to PCP International
Finance Limited asserting claims in relation to the October 2008 capital raising. Barclays is defending these claims.
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.
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 reached a settlement of $17.75m for both actions, which received final court
approval in March 2023. This matter is now concluded.
ICE LIBOR civil action
In August 2020, an action related to the LIBOR benchmark administered by the Intercontinental Exchange Inc. and certain of its
affiliates (ICE) was filed by a group of individual plaintiffs in the US District Court for the Northern District of California on behalf of
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 471
Notes to the financial statements (continued)
Accruals, provisions, contingent liabilities and legal proceedings
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 filed an amended complaint, which was dismissed in October 2023. The plaintiffs are
appealing the dismissal.
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.
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 of all claims against them in the matter. A
settlement payment was made in April 2023 and the matter is now concluded. 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 filed an amended complaint. The defendants’ motion for
summary judgment was granted in March 2023, dismissing the plaintiffs’ remaining claims. The plaintiffs have appealed the decision.
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. In July 2023 (as amended in November 2023), the Court of Appeal overturned the CAT’s decision and found that the
claims should be certified on an opt out basis. The Court of Appeal upheld the CAT’s determination as to which of the two purported
class representatives should be chosen to bring the claim. Subject to any further appeal, only the claim brought by the chosen class
representative will now proceed in the CAT. 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 payment referred to under the US FX opt out civil action above and the matter is now concluded.
Metals-related civil actions
A US civil complaint alleging manipulation of the price of silver in violation of the CEA, the Antitrust Act and state antitrust and consumer
protection laws was brought by a proposed class of plaintiffs against a number of banks, including Barclays Bank PLC, BCI and BX, and
transferred to the SDNY. The complaint was dismissed against these Barclays entities and certain other defendants in 2018, and
against the remaining defendants in May 2023. The plaintiffs have appealed the dismissal of the complaint against all defendants.
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 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 parties have agreed to settle the litigation. The financial
impact of the settlement is not material to the Group’s operating results, cash flows or financial position. Barclays’ motion to dismiss
the other repurchase action was denied in October 2023. Barclays is appealing the decision.
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
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 472
Notes to the financial statements (continued)
Accruals, provisions, contingent liabilities and legal proceedings
the amended complaint was granted in March 2022. The plaintiffs appealed this decision, and in February 2024 the appellate court
affirmed the dismissal.
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. This
action remains stayed.
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. The SDNY actions were dismissed and these matters are now concluded.
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 and the plaintiffs’ motion for class
certification was granted in September 2023, which means the case may proceed as a class action. The defendants are appealing this
decision. In the California action, the California appeals court reversed the dismissal of the plaintiffs’ claims in April 2023. In the Illinois
action, the defendants reached a settlement with the Attorney General for the State of Illinois to resolve the litigation. The court
approved the settlement in October 2023 and dismissed the matter. The financial impact of the settlement is not material to the
Group’s operating results, cash flows or financial position. This matter is now concluded.
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.
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’
motion to dismiss was denied in June 2023.
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 actions, including one putative class action and individual actions brought by certain
swap execution facilities, which are consolidated in the SDNY. The complaints allege the defendants conspired to prevent the
development of exchanges for IRS and demand unspecified money damages. The plaintiffs’ motion for class certification was denied in
December 2023, meaning the case cannot proceed as a class action. The plaintiffs have sought the court’s leave to appeal that
decision.
In 2017, Tera Group Inc. (Tera) filed a separate civil antitrust action in the SDNY claiming that certain conduct alleged in the IRS cases
also caused Tera to suffer harm with respect to the Credit Default Swaps market. In 2019, the court dismissed Tera’s claims for unjust
enrichment and tortious interference but denied motions to dismiss the antitrust claims. Tera filed an amended complaint in January
2020. Barclays’ motion to dismiss all claims was granted in August 2023. Tera has filed a Notice of Appeal.
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 judgment 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 filed cross-motions on the scope of trial. In January 2024, the court ruled in Barclays’ favour. BDC is appealing, and the trial is
adjourned until the appeal is decided.
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 has been withdrawn.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 473
Notes to the financial statements (continued)
Accruals, provisions, contingent liabilities and legal proceedings
Civil actions in respect of the US Anti-Terrorism Act
Eight civil actions, on behalf of more than 4,000 plaintiffs, were 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, and judgment was entered, in January 2023. The court has given the plaintiffs until February 2024 to make a
motion to vacate the judgment. The other two dismissed actions in the EDNY were consolidated into one action. The plaintiffs in that
action, and in one other action in the EDNY, filed amended complaints in December 2023. The two other actions in the EDNY are
currently 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 appealed the
decision, and the dismissal was unanimously affirmed in June 2023 by the First Judicial Department in New York. The plaintiff has sought
leave to appeal the First Judicial Department’s decision to the New York Court of Appeals.
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.
Skilled person review in relation to historic timeshare loans and associated matters
Clydesdale Financial Services Limited (CFS), which trades as Barclays Partner Finance and houses Barclays’ point-of-sale finance
business, was required by the FCA to undertake a skilled person review in 2020 following concerns about historic affordability
assessments for certain loans to customers in connection with timeshare purchases. The skilled person review was concluded in 2021.
CFS complied fully with the skilled person review requirements, including carrying out certain remediation measures. CFS was not
required to conduct a full back book review. Instead, CFS reviewed limited historic lending to ascertain whether its practices caused
customer harm and is remediating any examples of harm. This work was substantially completed during 2023, utilising provisions
booked to account for any remediations.
Motor finance commission arrangements
In January 2024, the FCA announced that it was appointing a skilled person to undertake a review of the historical use of discretionary
commission arrangements and sales in the motor finance market across several firms. This follows two final decisions by the UK
Financial Ombudsman Service (FOS), including one upholding a complaint against CFS in relation to commission arrangements and
disclosure in the sale of motor finance products and a number of complaints and court claims, including some against CFS. Barclays will
co-operate fully with the FCA’s skilled person review, the outcome of which is unknown, including any potential financial impact. The
FCA plans to set out next steps on this matter by the end of September 2024. Barclays ceased operating in the motor finance market in
late 2019.
Over-issuance of securities in the US
In March 2022, executive management became aware that Barclays Bank PLC had issued securities materially in excess of the set
amount under its US shelf registration statements. As a result, Barclays Bank PLC commenced a rescission offer on 1 August 2022, by
which Barclays Bank PLC offered to repurchase relevant affected securities from certain holders, which expired on 12 September 2022.
Further, in September 2022, the SEC announced the resolution of its investigation of Barclays PLC and Barclays Bank PLC relating to
such over-issuance of securities.
In September 2022, a purported class action claim was filed in the US District Court in Manhattan seeking to hold Barclays PLC, Barclays
Bank PLC and former and current executives responsible for declines in the price of Barclays PLC’s American depositary receipts, which
the plaintiffs claim occurred as a result of alleged misstatements and omissions in its public disclosures. The defendants have moved to
dismiss the case. In addition, holders of a series of ETNs have brought claims against Barclays PLC, Barclays Bank PLC, and former and
current executives and board members in the US alleging, among other things, 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. Two such actions are purported class actions that have been consolidated into a
single action in federal court in New York. Barclays has moved to dismiss the complaint.
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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 474
Notes to the financial statements (continued)
Accruals, provisions, contingent liabilities and legal proceedings
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 either removing certain Barclays overseas subsidiaries that have operations in the
UK from Barclays’ UK VAT group or preventing them from joining it. Supplies between members of a UK VAT group are generally free
from VAT. The notices had both retrospective and prospective effect. Barclays has appealed HMRC’s decisions to the First Tier
Tribunal (Tax Chamber) in relation to both the retrospective VAT assessments and the on-going VAT payments made since 2018.
£181m of VAT (inclusive of interest) was assessed retrospectively by HMRC covering the periods 2014 to 2018, of which approximately
£128m is expected to be attributed to Barclays Bank UK PLC and £53m to Barclays Bank PLC. This retrospectively assessed VAT was
paid in 2018 and an asset, adjusted to reflect expected eventual recovery, is recognised. Since 2018 Barclays has paid, and recognised
as an expense, VAT on intra-group supplies from the relevant subsidiaries to the members of the VAT group.
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 enforcement investigation which is focused on aspects of Barclays’ transaction monitoring in relation to certain
business lines now in Barclays Bank UK PLC. The FCA has informed Barclays that it is closing the enforcement investigation into this
matter.
3. Barclays PLC
Civil action in respect of Barclays’ statements regarding the relationship between its former CEO and Jeffrey Epstein
In November 2023, a purported class action was filed in federal court in California against Barclays PLC and a number of current and
former members of the Board of Directors of Barclays PLC. The complaint seeks to hold the defendants responsible for declines in the
price of Barclays PLC’s American depositary receipts, which the plaintiffs claim occurred as a result of alleged misstatements and
omissions in Barclays’ public disclosures relating to its former CEO’s relationship with Jeffrey Epstein.
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, guarantees, 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, measures to combat money laundering and financial crime, 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 475
Notes to the financial statements (continued)
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.
26 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
2023
£m
11,423
1,523
(2,239)
(213)
10,494
2022
£m
12,759
1,477
(2,679)
(134)
11,423
Issuances of £1,523m comprise £1,180m USD 7.119% Fixed-to-Floating Rate Subordinated Callable Notes, issued externally by
Barclays PLC, £315m USD Floating Rate Notes, and £28m JPY Floating Rate Notes issued externally by Barclays subsidiaries.
Redemptions of £2,239m comprise £1,345m EUR 2% Fixed Rate Subordinated Notes and £599m partial repurchase of USD 4.375%
Fixed Rate Subordinated Notes issued externally by Barclays PLC, £194m USD Floating Rate Notes and £28m JPY Floating Rate Notes
issued externally by Barclays subsidiaries, £43m EUR Subordinated Floating Rate Notes and £30m USD Junior Undated Floating Rate
Notes issued externally by Barclays Bank PLC.
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 liabilities1
Barclays Bank PLC issued
Undated Notes
Junior Undated Floating Rate Notes (USD 38m)
Total undated subordinated liabilities
Note
1 Instrument values are disclosed to the nearest million.
2023
£m
—
10,494
10,494
2023
£m
—
—
2022
£m
28
11,395
11,423
2022
£m
28
28
Initial call date
Any interest payment date
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 476
Notes to the financial statements (continued)
Capital instruments, equity and reserves
Dated subordinated liabilities1
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)
7.119% Fixed-to-Floating Rate Subordinated Callable Notes (USD 1,500m)
3.811% Fixed Rate Resetting Subordinated Callable Notes (USD 1,000m)
Barclays Bank PLC issued
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
Note
1 Instrument values are disclosed to the nearest million.
Dated subordinated liabilities
Initial call date
Maturity date
2023
2025
2025
2026
2027
2027
2029
2030
2033
2041
2028
2024
2030
2030
2026
2031
2028
2032
2030
2035
2034
2042
2023
2026
2027
2032
2040
2033
2023
£m
—
380
466
117
1,529
817
1,499
1,033
1,078
654
1,175
623
—
286
84
45
59
649
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
10,494
11,395
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 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% USD 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% USD Fixed Rate Resetting Subordinated Callable notes, 1.125%
EUR Fixed Rate Resetting Subordinated Callable Notes, 3.564% USD Fixed Rate Resetting Subordinated Callable Notes, and the
8.407% GBP 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% USD
Fixed-to-Floating Rate Subordinated Callable Notes and 7.119% USD Fixed-to-Floating Rate Subordinated Callable Notes are 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 2023 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 477
Notes to the financial statements (continued)
Capital instruments, equity and reserves
27 Ordinary shares, share premium, and other equity
Called up share capital, allotted and fully paid
As at 1 January 2023
Issued to staff under share incentive plans
AT1 securities issuance
AT1 securities redemption
Repurchase of shares
Other movements
As at 31 December 2023
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
Called up share capital
Number of shares
Ordinary share
capital
Ordinary share
premium
Total share capital
and share premium
Other
equity instruments
m
15,871
121
—
—
(837)
—
15,155
£m
3,968
30
—
—
(209)
—
3,789
16,752
4,188
50
—
—
(931)
—
15,871
13
—
—
(233)
—
3,968
£m
405
94
—
—
—
—
499
348
57
—
—
—
—
405
£m
4,373
124
—
—
(209)
—
4,288
4,536
70
—
—
(233)
—
4,373
£m
13,284
—
3,140
(3,170)
—
5
13,259
12,259
—
3,158
(2,126)
—
(7)
13,284
Called up share capital comprises 15,155m (2022: 15,871m) ordinary shares of 25p each.
Share repurchase
At the 2023 AGM on 3 May 2023, Barclays PLC was authorised to repurchase up to an aggregate of 1,587m of its ordinary shares of
25p. The authorisation is effective until the AGM in 2024 or the close of business on 30 June 2024, whichever is the earlier. During 2023,
837m shares were repurchased with a total nominal value of £209m (2022: 931m shares with a nominal value of £233m).
Other equity instruments
Other equity instruments of £13,259m (2022: £13,284m) 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 2023, there were three issuances of AT1 instruments, in the form of Fixed Rate Resetting Perpetual Subordinated Contingent
Convertible Securities, for £3,140m (2022: three issuances for £3,158m) which includes issuance costs of £10m (2022: £9m). There
were two redemptions in 2023 totalling £3,170m (2022: two redemptions totalling £2,126m).
AT1 equity instruments
AT1 equity instruments - Barclays PLC
1
7.25% Perpetual Subordinated Contingent Convertible Securities
7.75% Perpetual Subordinated Contingent Convertible Securities (USD 2,500m)
1
5.875% Perpetual Subordinated Contingent Convertible Securities
8% Perpetual Subordinated Contingent Convertible Securities (USD 2,000m)
1
7.125% Perpetual Subordinated Contingent Convertible Securities
6.375% Perpetual Subordinated Contingent Convertible Securities
6.125% Perpetual Subordinated Contingent Convertible Securities (USD 1,500m)
8.300% Perpetual Subordinated Contingent Convertible Securities (SGD 450m)
8.875% Perpetual Subordinated Contingent Convertible Securities
1
4.375% Perpetual Subordinated Contingent Convertible Securities (USD 1,500m)
9.250% Perpetual Subordinated Contingent Convertible Securities
7.300% Perpetual Subordinated Contingent Convertible Securities (SGD 400m)
1
8.000% Perpetual Subordinated Contingent Convertible Securities (USD 2,000m)
9.625% Perpetual Subordinated Contingent Convertible Securities (USD 1,750m)
Total AT1 equity instruments
Note
1 Reported net of securities held by the Group.
Initial call date
2023
2023
2024
2024
2025
2025
2025
2027
2027
2028
2028
2028
2029
2029
2023
£m
—
—
1,241
1,509
996
996
1,142
264
1,247
1,077
1,497
248
1,647
1,395
13,259
2022
£m
1,243
1,925
1,244
1,509
993
996
1,142
264
1,247
1,078
—
—
1,643
—
13,284
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 478
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.
28 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 31. 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
2023
£m
3,671
(1,366)
(3,707)
(240)
1,565
(77)
2022
£m
4,772
(1,560)
(7,235)
467
1,364
(2,192)
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 479
Notes to the financial statements (continued)
Capital instruments, equity and reserves
29 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
2023
£m
40
24
—
64
2022
£m
31
14
—
45
2023
£m
529
126
5
660
2022
£m
529
438
1
968
2023
£m
40
24
—
64
2022
£m
31
14
—
45
In 2023, there were no issuances (2022: none) and three redemptions of £312m (2022: £20m) relating to the Undated Floating Rate
Primary Capital Notes Series 1 (£93m) and Series 2 (£179m) and 9% Permanent Interest Bearing Capital Bonds (£40m)
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 2023, 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.
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 and are redeemable in whole, but not in part, at the
initial call date and on any dividend payment date after the initial call date, pursuant to their respective terms. Upper Tier 2 instruments
are repayable, at the option of Barclays Bank PLC in whole at the initial call date and 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)
9% Permanent Interest Bearing Capital Bonds (£100m)
6.125% Undated Subordinated Notes (£550m)
Total Upper Tier 2 Instruments
2023
£m
318
211
529
—
—
39
53
—
34
126
2022
£m
318
211
529
93
179
39
53
40
34
438
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 480
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.
30 Staff costs
Accounting for staff costs
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 31 and Note
32 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
1
Post-retirement benefits
Other compensation costs
Total compensation costs2
Other resourcing costs:
Outsourcing
3
Redundancy and restructuring
Temporary staff costs
Other
Total other resourcing costs
Total staff costs
Notes
2023
£m
1,202
543
1,745
(384)
390
(1)
1,750
5,120
755
539
555
8,719
601
452
91
154
1,298
2022
£m
1,241
549
1,790
(388)
399
35
1,836
4,732
714
563
504
8,349
607
(7)
113
190
903
2021
£m
1,278
667
1,945
(457)
280
(23)
1,745
4,290
619
539
431
7,624
357
296
109
125
887
10,017
9,252
8,511
1 Post-retirement benefits charge includes £371m (2022: £313m; 2021: £289m) in respect of defined contribution schemes and £168m (2022: £250m; 2021: £250m) in respect of
defined benefit schemes.
2 £860m (2022: £604m; 2021: £484m) of Group compensation cost was capitalised as internally generated software and excluded from the Staff cost disclosed above .
3 Redundancy and restructuring cost included £340m relating to structural cost actions taken in Q4 2023.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 481
Notes to the financial statements (continued)
Employee benefits
31 Share-based payments
Accounting for share-based payments
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. For other share-based payment schemes such as Sharesave and Sharepurchase, there are non-
vesting conditions which must 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:
Share Value Plan (SVP)
Charge for the year
2023
£m
284
191
475
4
479
2022
£m
295
214
509
4
513
2021
£m
256
216
472
5
477
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 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:
2023
2022
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
1,2
DSVP and SVP
1
Others
£
1.49
1.68
0.31-1.69 1.43-1.69
£
in years
(000s)
£
£
in years
(000s)
1 495,724
1.43
0-3 288,755 0.38-1.64
1.61
1 501,454
1.59-1.66
0-3 316,534
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 482
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 34.10% for 3 years and 33.12% for 5 years. The risk free
interest rates used for valuations are 4.60% and 4.36% for 3 years and 5 years respectively. The pure dividend yield rates used for
valuations are 5.27% and 5.02% for 3 years and 5 years respectively. The repo rates used for valuations are (0.50)% and (0.57)% 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 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:
DSVP and SVP1,2
Number (000s)
Others1,3
Number (000s)
Weighted average ex. price (£)
2023
2022
2023
2022
Outstanding at beginning of year/acquisition date
501,454
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:
Notes
232,479
(196,900)
(41,309)
—
495,724
—
413,859
291,876
(178,634)
(25,647)
—
501,454
—
316,534
198,386
(193,669)
(29,424)
(3,072)
288,755
67,967
335,976
146,203
(133,682)
(28,789)
(3,174)
316,534
34,247
2023
0.97
1.17
0.88
1.20
1.42
1.06
0.87
2022
0.95
1.33
1.15
1.01
1.23
0.97
1.19
1 Options/award granted over Barclays PLC shares.
2 Weighted average exercise price is not applicable for SVP and DSVP awards as these are not share option schemes.
3 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 44,109,518). 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 2023 and 2022.
As at 31 December 2023, the total liability arising from cash-settled share-based payments transactions was £5m (2022: £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 2023 was 19m
(2022: 14m). 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 £1.54 (2022: £1.59) was £29m (2022: £22m). For accounting of treasury shares, see Note 28.
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 £481m and has been recorded in retained earnings.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 483
Notes to the financial statements (continued)
Employee benefits
32 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% (2022: 96%) 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, deferred or 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 484
Notes to the financial statements (continued)
Employee benefits
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
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 30 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
Remeasurement – return on scheme assets (less)/greater than discount rate
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
2023
£m
165
(222)
—
3
(54)
2022
£m
227
(122)
20
3
128
2021
£m
247
(26)
—
3
224
2023
2022
Of which relates to
UKRF
Total
£m
(20,881)
(165)
(959)
—
(708)
311
(264)
(5)
1,115
43
(21,513)
25,360
1,181
54
(532)
5
(1,115)
(39)
24,914
3,401
3,667
(266)
3,401
£m
(19,990)
(141)
(929)
—
(683)
310
(260)
(1)
1,075
1
(20,618)
24,680
1,155
39
(548)
1
(1,075)
(18)
24,234
3,616
3,616
—
3,616
Of which relates to
UKRF
£m
Total
£m
(31,899)
(30,859)
(227)
(724)
(20)
(197)
(707)
(20)
10,995
10,734
268
(521)
(4)
1,339
(88)
(20,881)
35,467
846
1,808
270
(510)
—
1,299
—
(19,990)
34,678
829
1,785
(11,510)
(11,313)
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 £694m (2022: £690m) relating to overseas pensions and £201m (2022: £201m) relating to other
post-employment benefits.
As at 31 December 2023, the UKRF’s scheme assets were in surplus versus IAS 19 obligations by £3,616m (2022: £4,690m). The
decrease in the UKRF surplus during the year was driven by lower corporate bond yields and the assets underperforming the discount
rate.
The weighted average duration of the benefit payments reflected in the defined benefit obligation for the UKRF is 12 years (2022: 13
years). The UKRF expected benefits promised to date are projected to be paid out for in excess of 50 years, although 30% of the
benefits are expected to be paid in the next 10 years; 35% in years 11 to 20 and 20% in years 21 to 30. The remainder of the benefits are
expected to be paid beyond 30 years.
Of the £1,075m (2022: £1,299m) UKRF benefits paid out, £122m (2022: £390m) related to transfers out of the fund.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 485
Notes to the financial statements (continued)
Employee benefits
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
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)
2023
% p.a.
4.49
3.17
2022
% p.a.
4.80
3.21
The UKRF discount rate assumption for 2023 was based on a standard WTW RATE Link model. The RPI inflation assumption for 2023
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 best estimates 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 2022 core projection model published by the Continuous Mortality Investigation
Bureau subject to a long-term trend of 1.25% per annum in future improvements (2022: 1.25% per annum). 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
2023
2022
2021
26.5
29.3
28.0
30.7
26.8
29.5
28.3
31.0
27.3
29.6
29.1
31.4
Through transactions in 2020 and 2022 approximately three-quarters of the longevity risk for current pensioners has been reinsured,
and the transactions will provide income to the UKRF if pensions are paid out for longer than expected. The contracts form part of the
UKRF’s investment portfolio.
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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 486
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
Assets
2023
2022
(Decrease)/
Increase in UKRF
defined benefit
obligation
(Decrease)/
Increase in UKRF
defined benefit
obligation
£bn
£bn
(1.2)
(0.6)
0.6
1.3
0.8
0.4
(0.4)
(0.8)
0.6
(0.6)
(1.1)
(0.6)
0.6
1.2
0.8
0.4
(0.4)
(0.8)
0.6
(0.5)
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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 487
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
Total
Of which relates to UKRF
As at 31 December 2023
Equities
Private equities
Bonds - fixed government
Bonds - index-linked government
Bonds - corporate and other
Property
Infrastructure
Hedge funds
Derivatives
Longevity reinsurance contracts
2
Cash and liquid assets
Mixed investment funds
Other
Fair value 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 contract
2
Cash and liquid assets
Mixed investment funds
Other
Fair value of scheme assets
Notes
—
9.3
5.3
38.8
29.1
4.9
6.3
5.4
(6.4)
(0.5)
7.8
—
—
% of total fair
value of
scheme
assets
%
Quoted
£m
Unquoted1
£m
Value
£m
% of total fair
value of
scheme
assets
%
Quoted
£m
Unquoted1
£m
Value
£m
116
—
1,544
9,400
6,014
17
814
11
25
—
—
2,259
—
—
1,237
1,197
720
1,309
116
2,259
1,544
9,400
7,251
1,214
1,534
1,320
(1,584)
(1,559)
(131)
(131)
0.5
9.1
6.2
37.7
29.1
4.9
6.2
5.3
(6.3)
(0.5)
—
—
1,289
9,383
5,818
—
814
—
25
—
—
2,259
—
—
1,237
1,197
720
1,309
—
2,259
1,289
9,383
7,055
1,197
1,534
1,309
(1,584)
(1,559)
(131)
(131)
(1,134)
3,036
1,902
7.6
(1,143)
3,036
1,893
12
5
—
47
12
52
—
0.2
—
—
—
5
—
5
16,824
8,090
24,914
100.0
16,186
8,048
24,234
100.0
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
(20)
(1,837)
(1,857)
—
(123)
(123)
(1,776)
3,286
1,510
11
7
—
51
11
58
0.5
10.8
5.3
38.9
29.3
5.2
6.2
5.4
(7.3)
(0.5)
6.0
—
0.2
—
—
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)
(1,789)
3,286
1,497
—
—
—
6
—
6
—
11.1
4.4
39.9
29.3
5.3
6.4
5.5
(7.5)
(0.5)
6.1
—
—
16,236
9,124
25,360
100.0
15,601
9,079
24,680
100.0
1 Valuation of unquoted assets is provided by the underlying managers or qualified independent valuers. The valuation for some of the unquoted assets, in particular private equities, is
based on valuations as at 30 September 2023 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. Barclays does not believe these valuations will differ materially from the fair value, in the context of the overall UKRF asset size.
2 Cash and liquid assets for the UKRF consists of £354m (2022: £521m) Cash, £91m (2022: £80m) Receivables/payables, £3,036m (2022:£3,286m) Pooled cash funds and £(1,588)m
(2022: £(2,390)m) Repurchase agreements.
Included within the fair value of UKRF scheme assets was nil (2022: nil) relating to shares in Barclays PLC and nil (2022: 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.
During 2023, the Trustee undertook a review of the investment strategy to reflect updated liabilities and market assumptions. The
Trustee agreed to continue their existing de-risking plan and make no fundamental changes to the investment strategy.
At 31 December 2023, 39% of the UKRF assets were 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.
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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 488
Notes to the financial statements (continued)
Employee benefits
The UKRF has a comprehensive and robust liquidity framework in place. The aim of the liquidity framework is to ensure that pension
payments and other liquidity outflows are paid in due course, sufficient liquidity and collateral is maintained to achieve strategic
allocation targets and that all liquidity outflows/collateral needs are covered without forced sale or strategic asset allocation changes.
The UKRF holds two longevity reinsurance contracts covering c75% of the current pensioner liabilities. The contracts provide income
to the UKRF if pensions are paid out for longer than expected. At 31 December 2023, the combined value of the contracts was £(131)m
(2022: £(123)m). The negative value reflects the estimated impact of changes in the reinsurance market, demographic assumptions
and risk premia since the contracts were entered into by the UKRF.
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 http://epa.towerswatson.com/accounts/barclays/public/barclays-bank-responsible-
investment-policy/.
Triennial valuation
The UKRF annual funding update as at 30 September 2023 showed a funding surplus of £2.03bn compared to £1.97bn at 30
September 2022 triennial actuarial valuation. The improvement was mainly due to asset returns outperforming the change in liabilities.
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 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 test was passed in September, so no regular employer contributions are required for 2024.
The next funding valuation of the UKRF is due to be completed in 2026 with an effective date of 30 September 2025.
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 if the UKRF is in a funding deficit. 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 any required 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. 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 any collateral above).
Defined benefit contributions paid with respect to the UKRF were as follows:
Contributions paid
2023
2022
2021
£m
39
1,785
955
There were nil (2022: nil) Section 75 contributions included within the Group’s contributions paid as no participating employers left the
UKRF in 2023.
The Group’s expected contribution to the UKRF in respect of defined benefits in 2024 is £22m. In addition, the expected contributions
to UK defined contribution schemes in 2024 is £32m to the UKRF and £293m to the BPSP.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 489
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.
33 Principal subsidiaries
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
Nature of business
United Kingdom
United Kingdom
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
%
1
—
—
—
—
—
—
—
—
%
—
—
—
—
—
—
—
—
—
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 29 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 490
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 34.
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 £2,022bn (2022: £1,962bn) and
£1,927bn (2022: £1,869bn) 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 26 and
Note 27 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. 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 37.
Other restrictions
The Group is required to maintain balances with central banks and other regulatory authorities, and these amounted to £3,758m (2022:
£3,457m).
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 491
Notes to the financial statements (continued)
Scope of consolidation
34 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 36 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 £22.4bn (2022: £20.8bn) 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 2023, the Group provided undrawn liquidity facilities of £3.7bn (2022: £3.8bn) 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:
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 492
Notes to the financial statements (continued)
Scope of consolidation
Summary of interests in unconsolidated structured entities
As at 31 December 2023
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
Debt securities at amortised cost
Reverse repurchase agreements and other similar secured
lending
Other assets
Total assets
Liabilities
Derivative financial instruments
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
Debt securities 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
—
74,551
—
—
—
—
896
—
15,482
—
—
—
—
—
—
—
£m
—
—
5,685
—
—
—
—
—
£m
—
1,141
—
838
34,316
18,487
—
130
Total
£m
15,482
75,692
5,685
838
34,316
18,487
896
130
75,447
15,482
5,685
54,912
151,526
—
—
6,173
—
6,173
—
75,166
—
—
—
—
117
—
8,632
—
—
—
—
—
—
—
—
—
4,555
—
—
—
—
—
—
2,459
—
423
30,750
13,542
—
69
8,632
77,625
4,555
423
30,750
13,542
117
69
75,283
8,632
4,555
47,243
135,713
Derivative financial instruments
—
—
8,460
—
8,460
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 2023, Barclays entered into transactions with approximately 6,000 (2022:
6,000) structured entities.
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
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 493
Notes to the financial statements (continued)
Scope of consolidation
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
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 £335,552m (2022: £244,780m).
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 2023
Financial assets at fair value through the income statement
Financial assets at fair value through other comprehensive
income
Loans and advances at amortised cost
Debt securities 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 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
Debt securities 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
Note
Multi-seller
conduit
programme
£m
—
—
8,903
—
38
8,941
11,947
20,888
35,439
—
—
8,681
—
32
8,713
10,552
19,265
66,504
Other
£m
Total
£m
1,103
1,141
Of which: Barclays
owned, not
consolidated
entities1
£m
907
—
—
—
—
907
—
907
838
34,316
18,487
130
54,912
24,547
79,459
309,509
8,704
200
—
18,487
4
19,794
—
19,794
108,751
Lending
£m
38
638
25,413
—
88
26,177
12,600
38,777
165,319
59
2,400
2,459
2,284
220
22,069
—
33
22,381
10,926
33,307
160,002
203
—
13,542
4
16,149
—
16,149
88,779
423
30,750
13,542
69
47,243
21,478
68,721
315,285
—
—
—
—
2,284
—
2,284
8,690
1 Comprises of Barclays owned, not consolidated structured entities per IFRS 10 Consolidated Financial Statements, and Barclays sponsored entities, Refer to Note 33 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
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 494
Notes to the financial statements (continued)
Scope of consolidation
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
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 immaterial impairment 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 2023,
assets transferred to sponsored unconsolidated structured entities were £1,420m (2022: £1,665m).
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 495
Notes to the financial statements (continued)
Scope of consolidation
35 Investments in associates and joint ventures
Accounting for associates and joint ventures
The equity accounted associates include the Group's investment in the Business Growth Fund £648m (2022: £669m) which has
decreased due to a fair value loss in its investments by £(10)m (2022: £(21)m).
Equity accounted
Held at fair value through profit or loss
Total
2023
Associates
Joint ventures
£m
670
—
670
£m
209
516
725
Total
£m
879
516
1,395
2022
Associates
Joint ventures
£m
695
—
695
£m
227
435
662
Total
£m
922
435
1,357
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 2023, 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
2023
£m
(10)
—
(10)
2022
£m
(21)
—
(21)
2021
£m
219
1
220
2023
£m
1
(3)
(2)
2022
2021
£m
26
1
27
£m
35
5
40
Unrecognised shares of the losses of individually immaterial associates and joint ventures were £nil (2022: £nil).
The Group has provided £nil (2022: £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 (2022: £474m) The Barclays share of the associates and joint
ventures unutilised credit facilities commitments amounted to £1,695m (2022: £1,796m).
36 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
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 496
Notes to the financial statements (continued)
Scope of consolidation
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:
2023
2022
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
Loans and advances at amortised cost
Credit cards, unsecured and other retail lending
Mortgage Loans
Financial assets at FVTPL
Mortgage Loans
Total
6,451
478
452
7,381
6,996
(2,369)
499
(21)
(2,336)
(26)
5,324
496
5,761
439
(1,537)
(1,460)
(20)
(20)
452
—
—
7,947
(2,390)
(2,362)
330
6,150
330
6,530
—
(1,557)
—
(1,480)
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. Total Financial assets of £3,353m (2022:
£828m) 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 37.
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.
The table below shows the potential financial implications of such continuing involvement:
Type of transfer
2023
Asset backed securities
Residential mortgage backed securities
Commercial mortgage backed securities
Total
2022
Asset backed securities
Residential mortgage backed securities
Commercial mortgage backed securities
Total
Note
Continuing involvement1
Gain from continuing involvement
Carrying amount
Fair value
Maximum
exposure to loss
For the year ended
Cumulative to 31
December
£m
2
1,798
392
2,192
8
913
412
£m
2
1,796
341
2,139
8
907
357
£m
2
1,798
392
2,192
8
913
412
1,333
1,272
1,333
£m
—
49
3
52
1
18
5
24
£m
3
68
19
90
3
22
16
41
1 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.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 497
Notes to the financial statements (continued)
Scope of consolidation
37 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 197 to 201 of the
Barclays PLC Pillar 3 Report 2023 (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.
Collateralised transactions, such as securities lending and borrowing, repurchase and derivative transactions are conducted in
accordance with standard terms which are customary in the market.
The following table summarises the nature and carrying amount of the assets pledged as security:
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
2023
£m
73,495
71,018
117,325
9,847
23,503
295,188
2022
£m
78,996
64,772
63,969
8,220
18,210
234,167
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:
As at 31 December 2023
Derivatives
Repurchase agreements
Securities lending arrangements
Other
As at 31 December 2022
Derivatives
Repurchase agreements
Securities lending arrangements
Other
Transferred assets
Associated
liabilities
£m
£m
78,390
86,712
118,632
11,454
295,188
79,474
74,291
67,554
12,848
234,167
(78,390)
(55,006)
—
(10,179)
(143,575)
(79,474)
(46,617)
—
(11,055)
(137,146)
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.
2023
Recourse to transferred assets only
2022
Recourse to transferred assets only
Carrying value
Associated
Transferred assets
liabilities Transferred assets
Fair value
Associated
liabilities
Net position
£m
£m
£m
£m
£m
7,381
(2,390)
7,947
(2,362)
5,585
6,150
(1,557)
6,530
(1,480)
5,050
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 498
Notes to the financial statements (continued)
Scope of consolidation
The Group has an additional £6.4bn (2022: £5.3bn) 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.
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. Collateralised transactions, such as securities lending and borrowing, repurchase and derivative
transactions are conducted in accordance with standard terms which are customary in the market.
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
2023
£m
1,207,697
1,105,140
2022
£m
988,340
892,026
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 499
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, Barclays PLC (the Parent company)
disclosure, Directors’ remuneration and Transition disclosures. Related parties include any subsidiaries, associates, joint ventures and
Key Management Personnel.
38 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 33.
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 35.
Amounts included in the Group’s financial statements, in aggregate, by category of related party entity are as follows:
Associates
Joint ventures
Pension funds
For the year ended and as at 31 December 2023
Total income
Credit impairment charges
Operating expenses
Total assets
Total liabilities
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
£m
13
—
(20)
—
158
(2)
—
(15)
—
408
—
—
(20)
£m
70
—
—
1,254
—
91
—
—
1,336
—
50
—
—
£m
4
—
(1)
—
144
5
—
(1)
3
166
5
—
(1)
Total liabilities includes derivatives transacted on behalf of the pension funds of £77m (2022: £110m).
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
1
Loans issued during the year
2
Loan repayments during the year
As at 31 December
Notes
1 Includes loans issued to existing Key Management Personnel and new or existing loans issued to newly appointed Key Management Personnel.
2 Includes loan repayments by existing Key Management Personnel and loans to former Key Management Personnel.
2023
£m
7.5
2.5
(1.7)
8.3
2022
£m
7.8
1.4
(1.7)
7.5
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 500
Notes to the financial statements (continued)
Other disclosure matters
No allowances for impairment were recognised in respect of loans to Key Management Personnel (or any connected person).
Deposits outstanding
As at 1 January
1
Deposits received during the year
2
Deposits repaid during the year
As at 31 December
Notes
2023
£m
15.2
105.7
(105.5)
15.4
2022
£m
9.1
47.9
(41.8)
15.2
1 Includes deposits received from existing Key Management Personnel and new or existing deposits received from newly appointed Key Management Personnel.
2 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 2023 were £0.5m (2022: £0.5m).
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
Disclosure required by the Companies Act 2006
2023
£m
33.3
—
7.2
10.2
6.3
57.0
(6.3)
1.1
6.0
57.8
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
The following information regarding the Barclays PLC Board of Directors is presented in accordance with the Companies Act 2006:
1
Aggregate emoluments
2
Amounts paid under LTIPs
Notes
2023
£m
9.8
—
9.8
2022
£m
9.3
0.4
9.7
2021
£m
8.2
1.2
9.4
1 The aggregate emoluments include amounts paid for the 2023 year. In addition, deferred share awards for 2023 with a total value at grant of £1.5m (2022: £2.3m, 2021: £1.4m) will be
made to Directors which will only vest subject to meeting certain conditions.
2 The figure above for "Amounts paid under LTIPs" relates to LTIP awards that were released to Directors during the year. Dividend shares released on the awards are excluded (where
applicable). The LTIP figure in the single total figure table for Executive Directors' 2023 remuneration in the Directors' Remuneration report relates to awards that are scheduled to be
released in 2024 in respect of the 2021-2023 LTIP cycle.
There were no pension contributions paid to defined contribution schemes on behalf of Directors (2022: £nil, 2021: £nil). There were no
notional pension contributions to defined contribution schemes.
As at 31 December 2023, there were no Directors accruing benefits under a defined benefit scheme (2022: nil, 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 26 persons) at
31 December 2023 amounted to 14,833,002 (2022: 15,944,986) ordinary shares of 25p each (0.10% of the ordinary share capital
outstanding).
As at 31 December 2023, Executive Directors and Officers of Barclays PLC (involving 16 persons) held options to purchase a total of
67,319 (2022: 62,268) Barclays PLC ordinary shares of 25p each at a weighted average price of 92p under Sharesave.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 501
Notes to the financial statements (continued)
Other disclosure matters
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 2023 to
persons who served as Directors during the year was £0.3m (2022: £0.2m). The total value of guarantees entered into on behalf of
Directors during 2023 was £nil (2022: £nil).
39 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:
1
Audit of the Company's subsidiaries
2
Other audit related fees
Other services
Total Auditor's remuneration
Notes
2023
£m
11
53
12
2
78
2022
£m
10
48
11
2
71
2021
£m
9
41
10
2
62
1 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.
2 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 2023 audit fee includes £1m
(2022: £2m, 2021: £3m ) relating to the previous year’s audit.
Barclays associated pension schemes
Audit fee
2023
£m
0.3
2022
£m
0.3
2021
£m
0.3
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 502
Notes to the financial statements (continued)
Other disclosure matters
40 Assets and liabilities included in disposal group classified as held for sale
Accounting for non-current assets held for sale and associated liabilities
The Group applies IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. Non-current assets (or disposal groups) are
classified as held for sale when their carrying amount is to be recovered principally through a sale transaction rather than continuing use.
In order to be classified as held for sale, the asset must be available for immediate sale in its present condition subject only to terms that
are usual and customary, and the sale must be highly probable. Non-current assets (or disposal groups) held for sale are measured at
the lower of carrying amount and fair value less cost to sell. Assets and liabilities classified as held for sale are presented separately in
the consolidated balance sheet.
Management accounting estimates and judgements
Management judgement is required in determining whether the IFRS 5 held for sale classification criteria are met, in particular whether
the sale is highly probable and expected to qualify for recognition as a completed sale within 12 months of classification. This
assessment requires consideration of how committed management is to the sales plan, the likelihood of obtaining regulatory or other
external approvals which is often required for sales of banking operations and how committed the buyer is to complete the sales
transaction within the agreed timelines.
Barclays is currently engaged in a process to sell its German consumer finance business (comprising credit cards, unsecured personal
loans and deposits), currently within CC&P, as part of our ambition to simplify Barclays and support our focus on growing our key
businesses. A sale is expected to complete in 2024.
The perimeter of the disposal group has been accounted for in line with the requirements of IFRS5 as at 31 December 2023. A detailed
analysis of the disposal group is presented below:
As at 31 December
Assets included in disposal groups classified as held for sale
Loans and advances to customers
Intangible assets
Property, plant and equipment
Other assets
Total assets classified as held for sale
Liabilities included in disposal groups classified as held for sale
Deposits from customers
Other liabilities
Provisions
Total liabilities classified as held for sale
Net assets classified as held for sale
41 Subsequent events
2023
£m
3,855
15
24
22
3,916
3,077
83
4
3,164
752
Barclays announced on 9 February 2024 that Barclays Bank UK PLC has entered into an agreement with Tesco Personal Finance plc
(operating using the trading name “Tesco Bank”) to acquire its retail banking business, which includes credit cards, unsecured personal
loans, deposits and the operating infrastructure. Additionally upon completion, Barclays Bank UK PLC will enter into a long-term,
exclusive strategic partnership with Tesco Stores Limited for an initial period of 10 years to market and distribute credit cards,
unsecured personal loans and deposits using the Tesco brand, as well as explore other opportunities to offer financial services to Tesco
customers. The transaction involves the acquisition of approximately £8.3bn of unsecured lending balances, including approximately
£4.2bn of gross credit card receivables and £4.1bn of gross unsecured personal loans, together with approximately £6.7bn in customer
deposits. The acquisition is expected to occur in H2 2024, subject to court sanction and regulatory approvals.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 503
Notes to the financial statements (continued)
Other disclosure matters
42 Barclays PLC (the Parent company)
Total income
Dividend received from subsidiaries
Dividends received from subsidiaries of £2,818m (2022: £2,797m, 2021: £1,356m) relates to dividends received from Barclays
Execution Services Limited £165m, Barclays Bank UK PLC £1,305m and Barclays Bank PLC £1,348m.
Other income
Other income of £1,174m (2022: £(654)m expense, 2021: £659m income) includes fair value and foreign exchange gains of £50m
(2022: £1,673m, 2021: £250m) on positions with subsidiaries and £985m (2022: £905m, 2021: £804m) 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 £64,461m (2022: £64,544m) predominantly relates to investments in the ordinary shares of Barclays
Bank PLC of £36,340m (2022: £36,340m) and their AT1 securities of £10,757m (2022: £10,760m), as well as investments in the
ordinary shares of Barclays Bank UK PLC of £14,245m (2022: 14,245m) and their AT1 securities of £2,439m (2022: £2,570m). The
decrease of £83m during the year resulted from a capital injection of £50m to Barclays Principal Investments Limited offset by a
decrease in the AT1 holdings and associated fair value which totalled £133m.
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 profits
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 2023 review identified the value in use calculated was higher
than the carrying value for all subsidiaries.
Loans and advances to subsidiaries
During the year loans and advances to subsidiaries decreased by £4,702m to £18,926m (2022: £23,628m). The decrease was largely
driven due to maturities of £4,982m intra-group loans to Barclays PLC subsidiaries and foreign exchange impact of £1,049m due to the
appreciation of GBP largely against USD. This was partially offset by the new issuances of intra-group loans to Barclays PLC subsidiaries
of £1,260m.
Subordinated liabilities and debt securities in issue
During the year, Barclays PLC issued USD1,500m of Fixed-to-Floating Rate Resetting Subordinated Callable Notes, which are included
within the subordinated liabilities balance of £10,018m (2022: £11,230m). Debt securities in issue of £18,308m (2022: £24,086m) have
reduced during the year primarily due to maturities of £4,931m senior issuances and the foreign exchange impact of £847m due to the
appreciation of GBP largely against USD.
Financial assets and liabilities designated at fair value
Financial liabilities designated at fair value of £31,832mm (2022: £22,971m) primarily included new issuances during the year of
EUR1,250m Fixed Rate Resetting Senior Callable Notes, £2,000m Fixed Rate Resetting Senior Callable Notes, USD8,200m Fixed-to-
Floating Rate Senior Callable Notes and USD300m Floating Rate Senior 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 £35,787m (2022: £28,930m). 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 £1,838m (2022: £2,100m).
Derivative financial instruments
During the year derivative financial liabilities decreased by £195m to £711m (2022: £906m). This is primarily driven by the gain in
derivatives due to a decreasing rate environment.
Total equity
Called up share capital and share premium
Called up share capital and share premium of Barclays PLC is £4,288m (2022: £4,373m). The decrease in the year is primarily due to
837m shares repurchased with a total nominal value of £209m. This decrease was offset by shares issued under employee share
schemes.
Other equity instruments
Other equity instruments of £13,198m (2022: £13,250m) 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 £1,500m, USD1,750m and
SGD400m and redemptions with principal amounts totalling £1,250m and USD2,500m. For further details, please refer to Note 27.
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 504
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
2023.
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%)
Non-Redeemable Ordinary Shares
Notes
R
S
T
U
V
W
X
Y
Z
AA
BB
CC
Class A, B and D Shares
Class A and Class B Shares
PEF Carry Shares
Not Consolidated (see Note 33 Principal
Subsidiaries)
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
Wholly owned subsidiaries
Note
Barclays SAMS Limited
Barclays Security Trustee Limited
Barclays Services (Japan) Limited
Barclays Shea Limited
Barclays Term Funding Limited Liability
Partnership
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
BNRI ENG GP LLP
Note
BNRI England 2010 Limited Partnership
BNRI England 2012 Limited Partnership
A
B
B
B
B
B
Carnegie Holdings Limited
H, I, J
Aequor Investments Limited
Chapelcrest Investments Limited
Alynore Investments Limited Partnership
B
Clydesdale Financial Services 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
Cornwall Home Loans Limited
CPIA England 2009 Limited Partnership
CPIA England No.2 Limited Partnership
B
B
Dorset Home Loans Limited
Durlacher Nominees Limited
Eagle Financial and Leasing Services (UK)
Limited
Finpart Nominees Limited
FIRSTPLUS Financial Group Limited
A, E,
H
A
Barclays Capital Asia Holdings Limited
Foltus Investments Limited
Barclays Capital Nominees (No.2) Limited
Barclays Capital Nominees (No.3) Limited
Barclays Capital Nominees Limited
Barclays Capital Securities Client Nominee
Limited
Global Dynasty Natural Resource Private Equity
Limited Partnership
B
Globe Nominees Limited
Hawkins Funding Limited
Heraldglen Limited
Barclays Capital Securities Limited
Barclays CCP Funding LLP
E, H
B
Isle of Wight Home Loans Limited
J.V. Estates Limited
Barclays Converted Investments (No.2) Limited
Kirsche Investments Limited
Barclays Direct Investing Nominees Limited
Barclays Directors Limited
Barclays Equity Holdings Limited
Leonis Investments LLP
Long Island Assets Limited
Maloney Investments Limited
Barclays Execution Services Limited
A
Menlo Investments Limited
Barclays Executive Schemes Trustees Limited
Mercantile Credit Company Limited
Barclays Financial Planning Nominee Company
Limited
Barclays Funds Investments 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
Mercantile Leasing Company (No.132) Limited
MK Opportunities LP
Naxos Investments Limited
North Colonnade Investments Limited
Northwharf Investments Limited
Northwharf Nominees Limited
Oak Pension Asset Management Limited
Radbroke Mortgages UK Limited
Real Estate Participation Management Limited
Real Estate Participation Services Limited
Relative Value Investments UK Limited Liability
Partnership
Barclays Nominees (George Yard) Limited
U
Relative Value Trading Limited
Barclays OCIO Services Limited
Barclays Pension Funds Trustees Limited
Roder Investments No. 1 Limited
Roder Investments No. 2 Limited
Barclays Principal Investments Limited
A, I, J
RVT CLO Investments LLP
Barclays Private Bank
Surety Trust Limited
H, M
B
B
U
B
H, BB
H, BB
B
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 505
Notes to the financial statements (continued)
Other disclosure matters
Wholly owned subsidiaries
Note
Wholly owned subsidiaries
Note
Wholly owned subsidiaries
Note
Argentina
France
Barclays Capital Canada Inc.
Hong Kong
Water Street Investments Limited
U
Brazil
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
C/O Teneo Financial Advisory Limited, 3rd
Floor, The Colmore Building, 20 Colmore Circus
Queensway, Birmingham, West Midlands, B4
6AT
Barclays Capital Finance Limited (In Liquidation)
Barclays Capital Japan Securities Holdings
Limited (In Liquidation)
Barclays Global Shareplans Nominee Limited (In
Liquidation)
Barclays Nominees (Branches) Limited (In
Liquidation)
Barclays Singapore Global Shareplans Nominee
Limited (In Liquidation)
Cobalt Investments Limited (In Liquidation)
DMW Realty Limited (In Liquidation)
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.
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
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
Cayman Islands
PO Box 309, Ugland House, George Town,
Grand Cayman, KY1-1104
Solution Personal Finance Limited (In Liquidation)
Alymere Investments Limited
Ascot House, Maidenhead Office Park,
Maidenhead, SL6 3QQ
Kensington Mortgage Company Limited
Kensington Mortgage Services Limited
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
B
B, U
Logic House, Waterfront Business Park, Park,
Fleet Road, Fleet, GU51 3SB
The Logic Group Enterprises Limited
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 (In Liquidation)
Mintaka Investments No. 4 Limited
Palomino Limited
Pelleas Investments Limited
Pippin Island Investments Limited
Razzoli Investments Limited
The Logic Group Holdings Limited
I
RVH Limited
9, allée Scheffer, L-2520, Luxembourg
Barclays Claudas Investments Partnership
B, N
Barclays Pelleas Investments Limited Partnership B, N
Barclays Blossom Finance Limited Partnership
B, N
Wessex Investments Limited (In Liquidation)
Hornbeam Limited
Walkers Corporate Limited, Cayman Corporate
Centre, 27 Hospital Road, George Town, KY1-
9008
Long Island Holding B Limited (In Liquidation)
F, G,
H
F,
G ,H
E, I
H, Y,
Z
U
E, H
E, H
U
34-36 avenue de Friedland, 75008, Paris
Barclays ADF
Germany
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
Barclays UKRF No.1 IC Limited
Barclays UKRF ICC Limited
Barclays UKRF No.2 IC Ltd
O
U
U
U
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
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
Barclays Bank Ireland Public Limited Company
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
Erimon Home Loans Ireland Limited
70 Sir John Rogerson’s Quay, Dublin 2
Barclays Finance Ireland Limited
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 506
Notes to the financial statements (continued)
Other disclosure matters
Wholly owned subsidiaries
Note
Wholly owned subsidiaries
Note
Wholly owned subsidiaries
Corporation Service Company, 251 Little Falls
Drive, Wilmington, DE 19808
Barclays Ireland Investments LP
B, N
Isle of Man
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)
Eagle Court, Circular Road, Douglas, IM1 1AD
Barclays Capital Securities Mauritius Limited
Barclays Nominees (Manx) Limited
I, J
Barclays Private Clients International Limited
2nd Floor, St Georges Court, Upper Church
Street, Douglas, IM1 1EE
Barclays Holdings (Isle of Man) Limited (In
Liquidation)
Japan
Fifth Floor Ebene Esplanade,
24 Bank Street, Cybercity
72201 Ebene
Barclays Mauritius Overseas Holdings Limited
Mexico
Paseo de la Reforma 505, 41 Floor, Torre
Mayor, Col. Cuauhtemoc, CP 06500
10-1, Roppongi 6-chome, Minato-ku, Tokyo
Barclays Bank Mexico, S.A.
Barclays Funds and Advisory Japan Limited
Barclays Capital Casa de Bolsa, S.A. de C.V.
Barclays Securities Japan Limited
F, H
Grupo Financiero Barclays Mexico, S.A. de C.V.
Barclays Wealth Services Limited
Servicios Barclays, S.A. de C.V. (In Liquidation)
J, L
J, L
J, L
Jersey
Monaco
Gaspé House, 66-72 Esplanade, St. Helier, JE1
1GH
Barclays Services Jersey Limited
31 Avenue de la Costa, Monte Carlo BP 339
Barclays Private Asset Management (Monaco)
S.A.M
5 Espalanade, St Helier, JE2 3QA
Barclays Wealth Management Jersey Limited
13 Library Place, St Helier, JE4 8NE
Barclays Nominees (Jersey) Limited
Barclaytrust Channel Islands Limited
Estera Trust (Jersey) Limited, 13-14
Esplanade, St Helier, JE1 1EE, Jersey
MK Opportunities GP Ltd
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 Merchant Bank (Singapore) Ltd.
Luxembourg
9, allée Scheffer, L-2520
Spain
Calle Jose, Abascal 51, 28003, Madrid
Barclays Bedivere Investments S.à r.l.
Barclays Tenedora De Inmuebles SL.
Barclays Capital Energy Inc.
Barclays Capital Equities Trading GP
Barclays Capital Holdings Inc.
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
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
100 Bank Street, Suite 630, Burlington,
Vermont 05401
Barclays Insurance U.S. Inc.
Corporation Service Company, 80 State
Street, Albany, NY, 12207-2543
Note
B
F, G,
H
C
C
C
C
C
C
C
C
I
C
C
C
X
C
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.
Barclays International Luxembourg Dollar
Holdings S.à r.l.
Barclays Luxembourg EUR Holdings 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
BNRI Limehouse No.1 S.à r.l.
68-70 Boulevard de la Petrusse, L-2320
Adler Toy Holding Sarl
10 rue du Cha'teau d'Eau, Leudelange, Grand
Duchy of Luxembourg L-3364
BPM Management GP SARL
BVP Galvani Global, S.A.U.
Barclays Equity Holdings Inc.
Switzerland
Chemin de Grange Canal 18-20, PO Box 3941,
1211, Geneva
Barclays Bank (Suisse) SA
Barclays Switzerland Services SA
BPB Holdings SA
Taiwan
19F-1, No. 7, Xinyi Road, Sec. 5, Taipei,A322,
Taiwan
Q
Q
H, V
B
P
Corporation Service Company. Goodwin
Square, 225 Asylum Street, 20th Floor Hartford
CT 06103
Barclays Capital Inc.
Corporation Service Company, 2626,
Glenwood Ave, Suite 550, Raleigh, NC, 27608
Barclays US GPF Inc.
Equifirst Corporation (In Liquidation, Dissolved
with State of North Carolina)
Barclays Securities Taiwan Limited
125 S West Street, Wilmington, DE 19801
Curve Investments GP
B
Barclays Dryrock Issuance Trust
United States
Corporation Service Company, 251 Little Falls
Drive, Wilmington, DE 19808
Analytical Trade Holdings LLC
Barclays Asset Backed Depositor LLC
Barclays Bank Delaware
Barclays Capital Derivatives Funding LLC
C
C
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 507
Notes to the financial statements (continued)
Other disclosure matters
Other Related Undertakings
Other Related Undertakings
%
Note
Other Related Undertakings
%
Note
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
100.00
PSA Credit Company Limited
(In Liquidation)
Barclays Covered Bonds Limited
Liability Partnership
Barclays Secured Funding (LM)
Limited
St Helen’s, 1 Undershaft, London,
EC3P 3DQ
100.00
100.00
50.00
20.00
I
I
K
B
3rd Floor, 25 Soho
Square,London,W1D 3QR,
Female Innovators Lab LP
61.00
B
Sweden
c/o ForeningsSparbanken AB 105 34
Stockholm
1 America Square, Crosswall,
London, EC3N 2SG
BMC (UK) Ltd
47.30
E, I, U
C/O Cooley (Uk) Llp, 22
Bishopsgate, London, EC2N 4BQ
Barclays Black Formation Investments
I LP
100.00
Barclays Black Formation Investments
II LP
100.00
B
B
1-4 Clyde Place, Glasgow, G5 8DP
Buchanan Wharf (Glasgow)
Management Limited
78.00
D
Belgium
Klipperstraat 15 2030 Antwerp
EnterCard Group AB
100.00
J, U
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
50.00
C, U
C, U
1415 Louisiana Street, Suite 1600,
TX 77002-0000
Sabine Oil & Gas Holdings, Inc.(In
Liquidation)
22.12
U
Euphony Benelux NV (In Liquidation)
20.00
U
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
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 2023 and the average
number of monthly employees reported in
the accounts was 1,216.
.
Igloo Regeneration (General Partner)
Limited
25.00
K, U
Cayman Islands
3-5 London Road, Rainham, Kent,
ME8 7RG
Maples Corporate Services Limited,
PO Box 309GT, Ugland House, South
Church Street, Grand Cayman,
KY1-1104
Trade Ideas Limited
20.00
U
Cupric Canyon Capital GP Limited
50 Lothian Road, Festival Square,
Edinburgh, EH3 9WJ
Equistone Founder Partner II L.P.
Equistone Founder Partner III L.P.
20.00
20.00
B, U
B, U
Cupric Canyon Capital LP
Newman Holdings Limited (In
Liquidation)
Southern Peaks Mining LP
SPM GP Limited
50.00
42.17
80.60
54.40
90.00
U
I, U
I, U
B, U
U
Enigma, Wavendon Business Park
Milton Keynes, MK178LX
Intelligent Processing Solutions
Limited
19.50
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
Barclays Alzin Investments S.à r.l.
100.00
Barclays Bordang Investments S.à r.l.
100.00
R
S
Barclays Lamorak Investments S.à r.l.
100.00
F,Q
Preferred Funding S.à r.l.
100.00 W
Preferred Investments S.à r.l.
100.00 H, W
C/O Azets Holdings Limited 5th
Floor, 98 King Street, Manchester,
M2 4WU
Full House Holdings Limited (In
Liquidation)
67.42
I, U
13-15 York Buildings, London,
WC2N 6JU
BGF Group PLC
24.62
I, U
Unit 9 Westbrook Court,
Sharrowvale Road, Sheffield,
S11 8YZ
Palms Row Healthcare Holdings
Limited
5th Floor, 44 Great Marlborough
Street,London,W1F 7JL
Malta
99.00
U, CC
RS2 Buildings, Fort Road, Mosta MST
1859
RS2 Software PLC
18.14
U
AVFI TIDE I LP
37.60
B, U
Netherlands
41 Luke Street, London, EC2A 4DP
Fintech for International Development
Limited (In Liquidation)
26.37
I, U
100.00
J
Alexanderstraat 18, The Hague,
2514 JM, Zuid-Holland
Tulip Oil Holding BV
34.50
23.00
I, U
K
Strategic
report
Shareholder
information
Climate and
sustainability report
Governance
Risk
review
Financial
review
Financial
statements
Barclays PLC
Annual Report 2023 508
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
100% FSC® Rec ycled certified fibre sourced from de-inked
post-consumer waste. The printer and the manufacturing
mill are both credited with ISO 14001 Environmental
Management Systems Standard and both are FSC®
certified. The mill also holds EMAS, the EU Eco-label. Revive
100 Offset is a Carbon balanced paper which means that
the carbon emissions associated with its manufacture have
been measured and offset using the World Land Trust’s
Carbon Balanced scheme.
Notes to the financial statements (continued)
Other disclosure matters
Notes
Forward-looking statements
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 2023 to the corresponding twelve months of
2022 and balance sheet analysis as at 31 December 2023
with comparatives relating to 31 December 2022. 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.
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 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 387 to 393 for
further information and calculations of non-IFRS
performance measures included throughout this
document, and the most directly comparable IFRS
measures.
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, business strategy, income
levels, costs, assets and liabilities, impairment charges,
provisions, capital leverage and other regulatory ratios,
capital distributions (including policy on dividends 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),
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,
regulations, governmental and regulatory policies,
expectations and actions, voluntary codes of practices and
the interpretation thereof, changes in International
Financial Reporting Standards 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 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, pandemics and
similar events beyond the Group’s control; the impact of
competition in the banking and financial services industry;
capital, liquidity, leverage and other regulatory rules and
requirements 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; reforms to benchmark
interest rates and indices; 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 conflicts in Ukraine and the Middle
East on European and global macroeconomic conditions,
political stability and financial markets; political elections;
developments in the UK’s relationship with the European
Union (EU); the risk of cyberattacks, information or security
breaches, technology failures or other operational
disruptions and any subsequent impacts 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. In setting its targets and outlook for
the period 2024-2026, Barclays has made certain
assumptions about the macro-economic environment,
including, without limitation, inflation, interest and
unemployment rates, the different markets and
competitive conditions in which Barclays operates, and its
ability to grow certain businesses and achieve costs savings
and other structural actions. 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 beginning on page 258
of this Annual Report.
Our 2023 suite of Reports
Barclays PLC Annual Report 2023
Barclays PLC Pillar 3 Report 2023
Barclays PLC Country Snapshot 2023
A detailed review of Barclays’ 2023
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.
A summary of our risk profile, its interaction
with the Group’s risk appetite, and risk
management.
Barclays PLC Fair Pay Report 2023
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.
An overview of our approach to pay, including
the principles and policies of our Fair Pay
agenda.
© Barclays PLC 2024
Registered office: 1 Churchill Place, London E14 5HP
Registered in England. Registered No: 48839