Barclays 2011 Annual Report Download - page 147

Included within RBB and Barclays Capital are Absa Group related balances totalling £38.0bn of loans and advances to customers funded by £33.0bn
of customer deposits and the gap of £5.0bn is funded with wholesale borrowings. This is managed separately by the Absa Group due to local currency
and funding requirements. During 2011, the Absa Group has issued additional senior unsecured debt to further extend its funding term and diversify
its funding base, reducing its reliance on wholesale money market funding.
Although, contractually, current accounts are repayable on demand and savings accounts at short notice, the Group’s broad base of customers –
numerically and by depositor type – helps protect against unexpected fluctuations in balances. Such accounts form a stable funding base for the
Group’s operations and liquidity needs. Barclays models the behaviour of both assets and liabilities on a net cash flow basis using our experience of
customer behaviour to assess balance sheet behaviouralised funding gaps under business as usual conditions. These behavioural maturities are used
to determine funds transfer pricing interest rates at which businesses are rewarded and charged for sources and uses of funds.
Behavioural Maturity Profile (audited) Behavioural Maturity Profile
Cash Inflow (Outflow)
As at 31 December 2011
Loans and
Advances to
Customers
£bn
Customer
Deposits
£bn
Customer
Funding
Surplus/
(Deficit)
£bn
Less than
One Year
£bn
Greater than
One Year
£bn
RBB 231.6 158.7 (72.9) 13.8 59.1
Barclays Corporate 64.6 77.7 13.1 (1.1) (12.0)
Barclays Wealth 18.8 46.5 27.7 (4.0) (23.7)
Total funding excluding secured 315.0 282.9 (32.1) 8.7 23.4
Secured funding – 28.7 28.7 (10.1) (18.6)
Total RBB, Corporate and Wealth funding 315.0 311.6 (3.4) (1.4) 4.8
The relatively low cash outflow within one year demonstrates that customer funding remains broadly matched from a behavioural perspective.
Wholesale funding (audited)
Funding of Other Assetsa as at 31 December 2011:
Assets £bn
Trading portfolio assets 104
Reverse repurchase agreements 103
Reverse repurchase agreements 45
Derivative financial instruments 536
Liquidity pool 152
Other unencumbered assetsb 175
Liabilities £bn
Repurchase agreements 207
Trading portfolio liabilities 45
Derivative financial instruments 525
Less than 1 year wholesale debt 130
Greater than 1 year wholesale debt and equity 196
Trading portfolio assets are largely funded by repurchase agreements. The majority of reverse repurchase agreements (i.e. secured lending)
are matched by repurchase agreements. The remainder of reverse repurchase agreements are used to settle trading portfolio liabilities.
Derivative assets and liabilities are largely matched. A substantial proportion of balance sheet derivative positions qualify for counterparty netting
and the remaining portions are largely offset once netted against cash collateral received and paid.
The liquidity pool is largely funded by wholesale debt maturing in less than one year, with a significant portion maturing in more than one year.
Other unencumbered assets (mainly being available for sale investments, trading portfolio assets and loans and advances to banks) are largely
matched by wholesale debt maturing over an average of 5 years and equity.
Repurchase agreements and other secured funding are largely collateralised by government issued bonds and other highly liquid securities.
The percentage of secured funding using each asset class as collateral is set out below:
Secured Funding by Asset Class (audited) Govt
%
Agency
%
MBS
%
ABS
%
Corporate
%
Equity
%
Other
%
As at 31 December 2011 66 6 9 3 7 7 2
As at 31 December 2010 64 7 9 3 7 7 3
Due to the high quality of collateral provided against secured sources of funds, the liquidity risk associated with these liabilities is significantly lower
than unsecured wholesale funds. Nonetheless, Barclays manages a range of secured mismatch limits to limit refinancing risk under a severe stress
scenario and a portion of the Group’s liquidity pool is held against stress outflows on these positions.
Notes
a Excludes balances relating to the Absa Group, which are managed separately due to local currency and funding requirements.
b Predominantly unencumbered available for sale investments, trading portfolio assets, financial assets designated at fair value and loans and advances to banks funded by greater than one
year wholesale debt and equity.
Barclays PLC Annual Report 2011 www.barclays.com/annualreport 145
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