Barclays 2015 Annual Report Download - page 295

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19 Offsetting financial assets and financial liabilities
In accordance with IAS 32 Financial Instruments: Presentation, the Group reports financial assets and financial liabilities on a net basis on the
balance sheet only if there is a legally enforceable right to set off the recognised amounts and there is intention to settle on a net basis, or to realise
the asset and settle the liability simultaneously. The following table shows the impact of netting arrangements on:
 all financial assets and liabilities that are reported net on the balance sheet
 all derivative financial instruments and reverse repurchase and repurchase agreements and other similar secured lending and borrowing
agreements that are subject to enforceable master netting arrangements or similar agreements, but do not qualify for balance sheet netting.
The table identifies the amounts that have been offset in the balance sheet and also those amounts that are covered by enforceable netting
arrangements (offsetting arrangements and financial collateral) but do not qualify for netting under the requirements of IAS 32 described above.
The ‘Net amounts’ presented below are not intended to represent the Group’s actual exposure to credit risk, as a variety of credit mitigation
strategies are employed in addition to netting and collateral arrangements.
Amounts subject to enforceable netting arrangements
Amounts not
subject to
enforceable
netting
arrangementsc
£m
Balance sheet
totald
£m
Effects of offsetting on-balance sheet Related amounts not offseta
Gross
amounts
£m
Amounts
offsetb
£m
Net amounts
reported on
the balance
sheet
£m
Financial
instruments
£m
Financial
collateral
£m
Net amount
£m
As at 31 December 2015
Derivative financial assetse328,692 (7,685) 321,007 (259,582) (42,402) 19,023 6,702 327,709
Reverse repurchase agreements and other
similar secured lending 33,805 (11,220) 22,585 – (22,299) 286 5,602 28,187
Reverse repurchase agreements designated
at fair valuef135,792 (91,668) 44,124 – (44,101) 23 5,389 49,513
Total assets 498,289 (110,573) 387,716 (259,582) (108,802) 19,332 17,693 405,409
Derivative financial liabilitiese(325,984) 7,645 (318,339) 259,582 40,124 (18,633) (5,913) (324,252)
Repurchase agreements and other similar
secured borrowing (30,525) 10,687 (19,838) – 19,838 – (5,197) (25,035)
Repurchase agreements designated at fair
valuef(141,126) 92,201 (48,925) – 48,364 (561) (1,913) (50,838)
Total liabilities (497,635) 110,533 (387,102) 259,582 108,326 (19,194) (13,023) (400,125)
As at 31 December 2014
Derivative financial assets 617,981 (182,274) 435,707 (353,631) (52,278) 29,798 4,202 439,909
Reverse repurchase agreements and other
similar secured lending 204,895 (97,254) 107,641 – (106,436) 1,205 24,112 131,753
Reverse repurchase agreements designated
at fair value 4,119 – 4,119 – (3,918) 201 1,117 5,236
Total assets 826,995 (279,528) 547,467 (353,631) (162,632) 31,204 29,431 576,898
Derivative financial liabilities (617,161) 184,496 (432,665) 353,631 54,311 (24,723) (6,655) (439,320)
Repurchase agreements and other similar
secured borrowing (202,218) 97,254 (104,964) – 104,023 (941) (19,515) (124,479)
Repurchase agreements designated at fair
value (4,256) – (4,256) – 3,942 (314) (1,167) (5,423)
Total liabilities (823,635) 281,750 (541,885) 353,631 162,276 (25,978) (27,337) (569,222)
Notes
a Financial collateral of £42,402m (2014: £52,278m) was received in respect of derivative assets, including £34,918m (2014: £44,047m) of cash collateral and £7,484m (2014:
£8,231m) of non-cash collateral. Financial collateral of £40,124m (2014: £54,311m) was placed in respect of derivative liabilities, including £35,464m (2014: £43,768m) of cash
collateral and £4,660m (2014: £10,543m) of non-cash collateral. The collateral amounts are limited to net balance sheet exposure so as to not include over-collateralisation. Of the
£34,918m, (2014: £44,047m) cash collateral held, £27,732m, (2014: £33,769m) was included in deposits from banks and £7,186m (2014: £10,278m), was included in customer
accounts. Of the £35,464m, (2014: £43,768m) cash collateral placed, £13,238m (2014: £16,815m) was included in loans and advances to banks and £22,226m (2014: £26,953m)
was included in loans and advances to customers.
b Amounts offset for Derivative financial assets include cash collateral netted of £572m (2014: £1,052m). Amounts offset for Derivative liabilities include cash collateral netted of
£532m (2014: £3,274m). Settlements assets and liabilities have been offset amounting to £8,886m (2014: £13,258m). No other significant recognised financial assets and liabilities
were offset in the balance sheet. Therefore, the only balance sheet categories necessary for inclusion in the table are those shown above.
c This column includes contractual rights of set off that are subject to uncertainty under the laws of the relevant jurisdiction.
d The balance sheet total is the sum of ‘Net amounts reported on the balance sheet’ that are subject to enforceable netting arrangements and ‘Amounts not subject to enforceable
netting arrangements’.
e The decrease in amounts offset is due to the conversion of Barclays daily collateralised interest rate swaps with LCH Clearnet Ltd, for which the collateral was offset against the
derivative exposure, into daily settled interest rate swaps in December 2015. This led to a reduction in gross balances available to be offset. The derivative notional disclosure in
Note 15 includes the notional of the daily settled interest rate swaps.
f During 2015, new reverse repurchase agreements and repurchase agreements, other similar secured lending and borrowing in certain businesses have been designated at fair value
to better align to the way the business manages the portfolio’s risk and performance.
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