Barclays 2009 Annual Report Download - page 133

www.barclays.com/annualreport09 Barclays PLC Annual Report 2009 131
Term Financing
Raising term funding is important in meeting the risk appetite of the Barclays
Liquidity Framework. Barclays has continued to increase the term of issued
liabilities during 2009 by issuing:
– £15bn equivalent of public senior term funding;
– £1.8bn equivalent of public covered bonds; and
– £21bn equivalent of structured notes.
The Group has £4bn of publicly issued debt and £11bn of structured notes
maturing in 2010.
Intraday liquidity
The need to monitor, manage and control intraday liquidity in real time is
recognised by the Group as a critical process: any failure to meet specific
intraday commitments would have significant consequences, such as a
visible market disruption.
The Group policy is that each operation must ensure that it has access
to sufficient intraday liquidity to meet any obligations it may have to clearing
and settlement systems. Major currency payment flows and payment
system collateral are monitored and managed in real time to ensure that at
all times there is sufficient collateral to make payments. In practice, the
Group maintains a significant buffer of surplus intraday liquidity to ensure
that payments are made on a timely basis. The Group actively engages in
payment system development to help ensure that new payment systems
are robust.
Day to day funding
Day to day funding is managed through limits on wholesale borrowings,
secured borrowings and funding mismatches. These ensure that on any day
and over any period there is a limited amount of refinancing requirement.
These requirements include replenishment of funds as they mature or are
borrowed by customers.
In addition to cash flow management, Treasury also monitors term
mismatches between assets and liabilities, as well as the level and type of
undrawn lending commitments, the usage of overdraft facilities and the
impact of contingent liabilities such as standby letters of credit and
guarantees.
Diversification of liquidity sources
Sources of liquidity are regularly reviewed to maintain a wide diversification
by currency, geography, provider, product and term. In addition, to avoid
reliance on a particular group of customers or market sectors, the
distribution of sources and the maturity profile of deposits are also carefully
managed. Important factors in assuring liquidity are competitive rates and
the maintenance of depositors’ confidence. Such confidence is based on a
number of factors including the Group’s reputation and relationship with
those clients, the strength of earnings and the Group’s financial position.
Funding Structure
Global Retail and Commercial Banking, Barclays Wealth and Head Office
Functions are structured to be self-funded through customer deposits and
Barclays equity and other long-term capital. The Barclays Capital and Absa
businesses are funded through the wholesale secured and unsecured
funding markets.
The ratio of customer loans to customer deposits and long-term
funding has improved to 81% at 31st December 2009, from 93% at
31st December 2008.
Global Retail and Commercial Banking, Barclays Wealth
and Head Office Functions
An important source of structural liquidity is provided by our core retail
deposits in the UK, Europe and Africa; mainly current accounts and savings
accounts. 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 to protect against unexpected
fluctuations. Such accounts form a stable funding base for the Group’s
operations and liquidity needs.
Wholesale depositor split by counterparty type – Barclays Capital Other Other
central financial
Banks Corporates Governments banks institutions Total
%%%%%%
As at 31st December 2009 36 15 2 16 31 100
As at 31st December 2008 32 15 11 9 33 100
Wholesale depositor split by geography – Barclays Capital Rest of
US UK Other EU Japan Africa World Total
%%%%%%%
As at 31st December 2009 9 25 23 3 16 24 100
As at 31st December 2008 13 22 16 9 17 23 100
GRCB, Barclays Wealth and Head Officea
Behavioural maturity profile of assets and liabilities Cash inflow/(outflow)
Over Over Over Over
1 year 2 years 3 years 4 years
Not but not but not but not but not
Funding more than more than more than more than more than Over
surplus 1 year 2 years 3 years 4 years 5 years 5 years
£bn £bn £bn £bn £bn £bn £bn
As at 31st December 2009 94.5 (10.2) 17.8 21.2 7.8 1.8 (132.9)
Note
aPrior year figures have not been provided as these measures have not previously been
reported on a comparable basis.