Barclays 2015 Annual Report Download - page 181

home.barclays/annualreport Barclays PLC Annual Report 2015 I 179
Functional currency of operations (audited)
Foreign
currency
net
investments
£m
Borrowings
which hedge
the net
investments
£m
Derivatives
which hedge
the net
investments
£m
Structural
currency
exposures
pre-economic
hedges
£m
Economic
hedges
£m
Remaining
structural
currency
exposures
£m
As at 31 December 2015
USD 24,712 8,839 1,158 14,715 7,008 7,707
EUR 2,002 630 14 1,358 1,764 (406)
ZAR 3,201 4 99 3,098 – 3,098
JPY 383 168 205 10 – 10
Other 2,927 – 1,294 1,633 – 1,633
Total 33,225 9,641 2,770 20,814 8,772 12,042
As at 31 December 2014
USD 23,728 5,270 1,012 17,446 6,655 10,791
EUR 3,056 328 238 2,490 1,871 619
ZAR 3,863 – 103 3,760 – 3,760
JPY 364 164 208 (8) – (8)
Other 2,739 – 1,198 1,541 – 1,541
Total 33,750 5,762 2,759 25,229 8,526 16,703
During 2015, total structural currency exposure net of hedging instruments decreased by £4.7bn to £12.0bn (2014: £16.7bn). The decrease is broadly
in line with the overall RWA currency profile, with a reduction in USD RWAs in the year. Foreign currency net investments remained stable at £33.2bn
(2014: £33.8bn).
Pension risk review
The UK Retirement Fund (UKRF) represents approximately 92% (2014: 92%) of the Group’s total retirement benefit obligations globally. The other
material overseas schemes are in South Africa and in the US and they represent approximately 4% (2014: 4%) and 2% (2014: 2%) respectively of
the Group’s total retirement benefit obligations. As such, this risk review section focuses exclusively on the UKRF. Note that the scheme is closed
to new entrants.
Pension risk arises as the estimated market value of the pension fund assets might decline, or the investment returns might reduce; or the estimated
value of the pension liabilities might increase.
See page 137 of the Barclays PLC 2015 Pillar 3 Report for more information on how pension risk is managed.
Assets
The Board of Trustees defines an overall long term investment strategy for the UKRF, with investments across a broad range of asset classes. This
ensures an appropriate mix of return seeking assets to generate future returns as well as liability matching assets to better match the future pension
obligations. The main market risks within the asset portfolio are due to movements in interest rates and equities, as shown by the analysis of scheme
assets within Note 35 Pensions and retirement benefits.
The fair value of the UKRF plan assets was £26.8bn. See Note 35 Pensions and retirement benefits.
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