Barclays 2014 Annual Report Download - page 201

barclays.com/annualreport Barclays PLC Annual Report 2014 I 199
Currency composition of wholesale debt
As at 31 December 2014, the proportion of wholesale funding by major currencies was as follows:
Currency composition of wholesale funding
USD
%
EUR
%
GBP
%
Other
%
Deposits from banks 20 28 46 6
Certificates of deposits and commercial paper 45 44 10 1
Asset backed commercial paper 89 8 3 –
Senior unsecured 39 30 12 19
Covered bonds/ABS 26 47 27 –
Subordinated liabilities 40 19 41 –
Total as at 31 December 2014 35 32 25 8
Total as at 31 December 2013 35 36 19 10
To manage cross-currency refinancing risk the Group manages to foreign exchange cash flow limits, which limit risk at specific maturities. Across
wholesale funding, the composition of wholesale funding is materially unchanged.
Term financing
The Group issued £15bn (2013: £1bn) of term funding net of early redemptions during 2014. In addition, the Group raised £6bn through
participation in the Bank of England’s Funding for Lending Scheme. The Group has £23bn of term debt maturing in 2015 and £13bn maturing in
2016a.
The Group expects to continue issuing public wholesale debt in 2015, in order to maintain a stable and diverse funding base by type, currency and
distribution channel.
Encumbrance
Asset encumbrance arises from collateral pledged against secured funding and other collateralised obligations. Barclays funds a portion of trading
portfolio assets and other securities via repurchase agreements and other similar borrowing, and pledges a portion of customer loans and
advances as collateral in securitisation, covered bond and other similar secured structures. Barclays monitors the mix of secured and unsecured
funding sources within the Group’s funding plan and seeks to efficiently utilise available collateral to raise secured funding and meet other
collateralised obligations.
As at 31 December 2014, £208bn (2013: £202bn) of the Group’s assets were encumbered, which primarily related to firm financing of trading
portfolio assets and other securities, cash collateral and secured funding against loans and advances to customers. Encumbered assets have been
identified in a manner consistent with the Group’s reporting requirements under European Capital Requirements Regulation (CRR). Securities and
commodities assets are considered encumbered when they have been pledged or used to secure, collateralise or credit enhance a transaction
which impacts their transferability and free use. The 2013 balances have been revised to align with the CRR reporting.
In addition, £313bn (2013: £356bn) of the total £396bn (2013: £428bn) securities accepted as collateral, and held off-balance sheet, were
on-pledged, the significant majority of which related to matched-book activity where reverse repurchase agreements and off balance sheet stock
borrows are matched by repurchase agreements and off balance sheet stock loans entered into to facilitate client activity. The remainder primarily
relates to reverse repurchases used to settle trading portfolio liabilities, stock lending or other similar secured borrowing as well as collateral
posted against derivatives margin requirements.
As at 31 December 2014, £333bn (2013: £331bn) of assets were identified as readily available. These consist of on and off-balance sheet assets
that have not been identified as encumbered and are in transferable form. They include cash and securities held in the Group liquidity pool as well
as additional unencumbered assets which provide a source of contingent liquidity. While these additional assets are not relied upon to meet the
Group’s liquidity stress testing requirements, a portion of these assets may be monetised in a stress to generate liquidity through use as collateral
for secured funding or through outright sale. Loans and advances to customers are only classified as readily available if they are already in a form
such that they can be used to raise funding without further management actions. This includes excess collateral already in secured funding
vehicles and collateral pre-positioned at central banks and available for use in secured financing transactions.
As at 31 December 2014, £212bn (2013: £217bn) of assets were identified as available as collateral. These assets are not subject to any restrictions
on their ability to secure funding, be offered as collateral, or sold to reduce potential future funding requirements, but are not immediately
available in the normal course of business in their current form. They primarily consist of loans and advances a proportion of which would be
suitable for use in secured funding structures but are conservatively classified as not readily available because they are not currently in transferable
form.
Not available collateral consist of assets that cannot be pledged or used as security for funding due to restrictions that prevent their pledge or use
as security for funding in the normal course of business.
Derivatives and reverse repurchase agreement assets relate specifically to reverse repurchase agreements, derivatives and other similar secured
lending. These are shown separately as these on-balance sheet assets cannot be pledged. However, these assets can give rise to the receipt of
non-cash assets which are not recognised on the balance sheet, but can be used to raise secured funding or meet additional funding requirements.
Note
a Includes £1bn of bilateral secured funding in 2015 and £1bn in 2016.
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