Barclays 2015 Annual Report Download - page 194

192 I Barclays PLC Annual Report 2015 home.barclays/annualreport
Risk review
Risk performance
Funding risk – liquidity
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 195.
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 (geographically, by type and
by counterparty) 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:
Assets 2015
£bn
2014
£bn Liabilities 2015 £bn
2014
£bn
Loans and advances to customersa336 346 Customer accountsa374 366
Group liquidity pool 145 149 < 1 Year wholesale funding 54 75
> 1 Year wholesale funding 88 96
Other assetsb135 153 Equity and other liabilitiesb104 112
Reverse repurchase agreements and other
similar secured lendingc178 271
Repurchase agreements and other similar
secured borrowingc178 271
Derivative financial instruments 326 439 Derivative financial instruments 322 438
Total assets 1,120 1,358 Total liabilities and equity 1,120 1,358
Deposit funding (Includes BAGL) (audited)
Funding of loans and advances to customers
As at 31 December 2015
2015 2014
Loans and
advances to
customers
£bn
Customer
deposits
£bn
Loan to
deposit
ratio
%
Loan to
deposit
ratio
%
Personal and Corporate Banking 218 305
Barclaycard 40 10
Africa Banking 30 31
Non-Core (retail) 12 2
Total retail and corporate funding 300 348 86 89
Investment Bank, Non-Core (wholesale) and Other 99 70
Total 399 418 95 100
Notes
a Excluding cash collateral and settlement balances.
b BAGL Group balances other than customer loans and advances of £29bn and customer deposits of £29bn are included in other assets and liabilities.
c Comprised of reverse repurchase that provide financing to customers collateralised by highly liquid securities on a short-term basis or are used to settle short-term inventory
positions and repo financing of trading portfolio assets.