Barclays 2012 Annual Report Download - page 117

The strategic report Governance Risk review Financial review Financial statements Risk management Shareholder information
Furthermore, Barclays recognises the growing threat of attacks to its
systems, customers and Group’s information held on customers and
transactions processed through these systems from individuals or
groups via cyberspace (the interdependent network of information
technology infrastructures, and includes technology ‘tools’ such
as the internet, telecommunications networks, computer systems,
and embedded processors and controllers in critical industriesa).
The implementation of measures to manage the risk involves
continued investment and use of internal resources.
However, given the increasing sophistication and scope of potential
attacks via cyberspace, it is possible that in the future such attacks
may lead to significant breaches leading to associated costs and
reputational damage although these cannot be quantified to any
degree of accuracy at this time due to the uncertain nature and impact
of any such attack.
(vii) Transform Programme
In February 2013, we presented the results of our Strategic Review and
the elements of our Transform Programme which is the plan by which
Barclays will become the ‘Go-To’ bank for our stakeholders. See further
discussion in the Group Chief Executive’s review on pages 8-9 for more
information. As part of the Transform Programme, we will seek to,
among other initiatives, restructure Barclays European retail operations
to focus on the mass affluent customer segment, manage risk weighted
assets more efficiently through run-off of legacy assets in Europe and
the Investment Bank, and reduce total costs significantly across
the Group.
As a result of certain commitments made in the Review, Barclays
expects to incur a restructuring charge of approximately £500m
in the first quarter of 2013 and costs associated with implementing
the strategic plan of approximately £1bn in 2013, £1bn in 2014 and
£0.7bn in 2015.
The development and implementation of our Strategy Review requires
difficult, subjective and complex judgements, including forecasts of
economic conditions in various parts of the world. We may fail to
correctly identify the trends we seek to exploit and the relevant factors
in making decisions as to capital deployment and cost reduction. Our
ability to execute our strategy may also be limited by our operational
capacity and the increasing complexity of the regulatory environment
in which we operate. Moreover, there is a risk that the restructuring
costs associated with implementing the Transform Programme may be
higher than our current expectations. Failure to successfully implement
the Transform Programme could have a material adverse effect on the
expected benefits of the Transform Programme. In addition, factors
beyond our control, including but not limited to the market and economic
conditions such as the risk of an economic downturn and other
challenges discussed in detail above, could limit or delay our ability
to achieve all of the expected benefits of the Transform Programme.
(viii) Taxation risk
The Group is subject to the tax laws in all countries in which it
operates, including tax laws adopted at an EU level, and is impacted
by a number of double taxation agreements between countries.
There is potential risk that the Group could suffer losses due to
additional tax charges, other financial costs or reputational damage
due to: failure to comply with or correctly assess the application of,
relevant tax law; failure to deal with tax authorities in a timely,
transparent and effective manner; incorrect calculation of tax
estimates for reported and forecast tax numbers; or provision of
incorrect tax advice.
For further information see the Financial Review (pages 197-224) and
the Tax note (pages 247-250).
Note
a As defined by the World Economic Forum’s Partnership for Cyber Resilience, of which Barclays is a member.
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