Barclays 2012 Annual Report Download - page 179

The strategic report Governance Risk review Financial review Financial statements Risk management Shareholder information
The Group loan to deposit ratio as at 31 December 2012 was 110% (2011: 118%).
Retail and Business Banking, Corporate Banking and Wealth and Investment Management activities are largely funded with customer deposits. As
at 31 December 2012, the loan to deposit ratio for these businesses was 102% (2011: 111%). The funding gap for these businesses is met using
asset backed securities (ABS) and covered bonds secured primarily over customer loans and advances such as residential mortgages and credit
card receivables, resulting in a loan to deposit and secured funding ratio of 88% (2011: 101%).
The excess of the Investment Bank’s loans and advances over customer deposits is funded with long term debt and equity. The Investment Bank
does not rely on customer deposit funding from Retail and Business Banking, Corporate Banking and Wealth and Investment Management.
As at 31 December 2012, £112bn of total customer deposits were insured through the UK Financial Services Compensation Scheme (FSCS) and
other similar schemes. In addition to these customer deposits, there were £3bn of other liabilities insured by governments.
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 (including Absa Group; audited)
As at 31 December 2012
Loans and
advances to
customers
£bn
Customer
deposits
£bn
Customer
funding
surplus/
(deficit)
£bn
Behavioural maturity
profile cash outflow/
(inflow)
Less than
one year
£bn
Greater than
one year
£bn
Retail and Business Banking 232.8 158.4 (74.4) (16.8) (57.6)
Corporate Banking 62.9 97.1 34.2 11.3 22.9
Wealth and Investment Management 21.2 53.8 32.6 6.9 25.7
Total funding excluding secured 316.9 309.3 (7.6) 1.4 (9.0)
Secured funding – 48.8 48.8 14.5 34.3
Total Retail and Business Banking, Corporate Banking and
Wealth and Investment Management funding 316.9 358.1 41.2 15.9 25.3
The relatively low cash outflow within one year demonstrates that customer funding remains broadly matched from a behavioural perspective.
Wholesale funding (audited)
Wholesale funding relationships as at 31 December 2012:
Assets £bn Liabilities £bn
Trading portfolio assets and other securities 85 Repurchase agreements 217
Reverse repurchase agreements 132
Reverse repurchase agreements 44 Trading portfolio liabilities 44
Derivative financial instruments 466 Derivative financial instruments 460
Liquidity pool 150 Less than 1 year wholesale debt 101
Other assetsa 148 Greater than 1 year wholesale debt and equity 197
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,
the majority of which matures in less than one year. Other assets are largely matched by term wholesale debt and equity.
Note
a Predominantly 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.com/annualreport Barclays PLC Annual Report 2012 I 177