Barclays 2014 Annual Report Download - page 198

196 I Barclays PLC Annual Report 2014 barclays.com/annualreport
Risk performance
Funding risk – Liquidity
Risk review
Contingent liquidity
In addition to the Group liquidity pool, the Group has access to other unencumbered assets which provide a source of contingent liquidity. While
these are not relied on in the Group’s LRA, 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.
In either a Barclays-specific or market-wide liquidity stress, liquidity available via market sources could be severely disrupted. In circumstances
where market liquidity is unavailable or available only at heavily discounted prices, the Group could generate liquidity via central bank facilities.
The Group maintains a significant amount of collateral pre-positioned at central banks and available to raise funding.
For more detail on the Group’s other unencumbered assets see page 200.
Funding structure and funding relationships
The basis for sound liquidity risk management is a solid funding structure that reduces the probability of a liquidity stress leading to an inability to
meet funding obligations as they fall due. The Group’s overall funding strategy is to develop a diversified funding base (both geographically and by
type) and maintain access to a variety of alternative funding sources, to provide protection against unexpected fluctuations, while minimising the
cost of funding.
Within this, the Group aims to align the sources and uses of funding. As such, retail and commercial customer loans and advances are largely
funded by customer deposits, with the surplus funding the liquidity pool. Other assets, together with other loans and advances, and
unencumbered assets are funded by long-term wholesale debt and equity.
The majority of reverse repurchase agreements are matched by repurchase agreements. The liquidity pool is predominantly funded through
wholesale markets. These funding relationships are summarised below:
Funding relationships
Assetsa2014
£bn
2013
£bn
Loans and advances
to customersb346 358
Group liquidity pool 149 127
Other assets 153 170
Reverse repurchase agreements and
other similar secured lendingc271 340
Derivative financial instruments 439 349
Total assets 1,358 1,344
Liabilitiesa2014
£bn
2013
£bn
Customer accountsb366 368
< 1 Year wholesale funding 75 82
> 1 Year wholesale funding 96 103
Equity and other liabilities 112 106
Repurchase agreements and other similar
secured borrowingc271 340
Derivative financial instruments 438 345
Total liabilities and equity 1,358 1,344
Deposit funding (including BAGL) (audited)
2014 2013
Funding of loans and advances to customers
As at 31 December 2014
Loans and
advances to
customers
£bn
Customer
deposits
£bn
Loan to
deposit ratio
%
Loan to
deposit ratio
%
Personal and Corporate Banking 217 299
Barclaycard 37 7
Africa Banking 35 35
Non-Core retail 20 8
Total retail funding 309 349 89 91
Investment Bank, Non-Core wholesale and Other 119 79
Total 428 428 100 101
Notes
a BAGL Group balances other than customer loans and advances of £35bn and customer deposits of £35bn are included in other assets and liabilities.
b Excluding cash collateral and settlement balances.
c Comprised of reverse repurchase agreements that provide financing to customers collateralised by liquid securities on a short-term basis or are used to settle short-term
inventory positions; repo financing of trading portfolio assets and matched cash collateral and settlement balances.