Barclays 2014 Annual Report Download - page 199

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PCB, Barclaycard, Non-Core (retail) and Africa Banking activities are largely funded with customer deposits. As at 31 December 2014, the loan to
deposit ratio for these businesses was 89% (2013: 91%). The Group loan to deposit ratio as at 31 December 2014 was 100% (2013: 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 PCB.
As at 31 December 2014, £128bn (2013: £122bn) 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 £4bn (2013: £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. The Group models the behaviour of both assets and liabilities to assess balance sheet funding gaps. The
behavioural modelling approach reflects the forward-looking macroeconomic outlook and captures customer roll-over and optionality behaviour
within a given asset or liability product. 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 BAGL)
Behavioural maturity profile cash outflow/(inflow)
As at 31 December 2014
Loans and
advances to
customers
£bn
Customer
deposits
£bn
Customer
funding
surplus/
(deficit)
£bn
Not more
than one
year
£bn
Over one
year but
not more
than five
years
£bn
More than
five years
£bn
Total
£bn
Personal and Corporate Banking 217 299 82 19 3 60 82
Barclaycard 37 7 (30) (10) (10) (10) (30)
Africa Banking 35 35 – 2 (2) – –
Non-Core (Retail) 20 8 (12) – (2) (10) (12)
Total 309 349 40 11 (11) 40 40
As at 31 December 2013
Personal and Corporate Banking 213 296 83 28 (10) 65 83
Barclaycard 32 5 (27) (8) (8) (11) (27)
Africa Banking 31 28 (3) (1) (2) – (3)
Non-Core (Retail) 42 17 (25) 1 (9) (17) (25)
Total 318 346 28 20 (29) 37 28
Each product has an associated behavioural profile, used in funds transfer pricing. These behavioural profiles represent our forward-looking
expectation of the run-off profile of the given product based upon historical experience, current customer composition, and macroeconomic
projections. The relatively low cash outflow within one year demonstrates that customer funding remains broadly matched from a behavioural
perspective.
Wholesale funding
Wholesale funding relationships are summarised below:
Assets 2014
£bn
2013
£bn Liabilities 2014 £bn
2013
£bn
Trading portfolio assets 37 63 Repurchase agreements 124 196
Reverse repurchase agreements 87 133
Reverse repurchase agreements 45 53 Trading portfolio liabilities 45 53
Derivative financial instruments 440 350 Derivative financial instruments 439 347
Liquidity pool 109 96 Less than 1 year wholesale debt 75 82
Other assetsa122 146 Greater than 1 year wholesale debt and equity 157 164
Repurchase agreements fund reverse repurchase agreements and trading portfolio assets. Trading portfolio liabilities are settled by the remainder
of reverse repurchase agreements (see Note 19 Offsetting financial assets and financial liabilities for further detail on netting).
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.
Wholesale debt, along with the surplus of customer deposits to loans and advances to customers, is used to fund the liquidity pool. Term
wholesale debt and equity largely fund other assets.
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.
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