__________________________________________________________________________________
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
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BARCLAYS
PLC
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(Registrant)
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Date:
February 18, 2021
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By: /s/
Garth Wright
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Garth
Wright
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Assistant
Secretary
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18
February 2021
Barclays PLC
Annual Report and Accounts 2020
UK Listing Authority submissions
In
compliance with Disclosure Guidance & Transparency Rule (DTR)
4.1, Barclays PLC announces that the following documents will today
be submitted to the National Storage Mechanism and will shortly be
available for inspection at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism
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Barclays
PLC Annual Report 2020
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Barclays
PLC Strategic Report 2020; and
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Pillar
3 Report for 2020.
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These
documents may also be accessed via Barclays PLC’s website at
home.barclays/annualreport
The
Barclays PLC Strategic Report 2020 (or the full Annual Report 2020
for those shareholders who have requested it) will be posted to
shareholders with mailing of the Barclays PLC 2021 Notice of Annual General
Meeting in due course.
Additional information
The
following information is extracted from the Barclays PLC Annual
Report 2020 (page references are to pages in the Annual Report) and
should be read in conjunction with Barclays PLC’s Final
Results announcement issued on 18 February 2021. Both documents can
be found at home.barclays/annualreport and
together constitute the material required by DTR 6.3.5 to be
communicated to the media in unedited full text through a
Regulatory Information Service. This material is not a substitute
for reading the Barclays PLC Annual Report 2020 in
full.
Risk review
Material existing and emerging risks
Material existing and emerging risks to the Group’s future
performance
The
Group has identified a broad range of risks to which its businesses
are exposed. Material risks are those to which senior management
pay particular attention and which could cause the delivery of the
Group’s strategy, results of operations, financial condition
and/or prospects to differ materially from expectations. Emerging
risks are those which have unknown components, the impact of which
could crystallise over a longer time period. In addition, certain
other factors beyond the Group’s control, including
escalation of terrorism or global conflicts, natural disasters,
pandemics and similar events, although not detailed below, could
have a similar impact on the Group.
Material existing and emerging risks potentially impacting more
than one principal risk
i) Risks relating to the impact of COVID-19
The
COVID-19 pandemic has had, and continues to have, a material impact
on businesses around the world and the economic environments in
which they operate. There are a number of factors associated with
the pandemic and its impact on global economies that could have a
material adverse effect on (among other things) the profitability,
capital and liquidity of financial institutions such as
Barclays.
The
COVID-19 pandemic has caused disruption to the Group’s
customers, suppliers and staff globally. Most jurisdictions in
which the Group operates have implemented severe restrictions on
the movement of their respective populations, with a resultant
significant impact on economic activity in those jurisdictions.
These restrictions are being determined by the governments of
individual jurisdictions (including through the implementation of
emergency powers) and impacts (including the timing of
implementation and any subsequent lifting or extension of
restrictions) may vary from jurisdiction to jurisdiction and/or
within jurisdictions. It remains unclear how the COVID-19 pandemic
will evolve through 2021 (including whether there will be further
waves of the COVID-19 pandemic, whether COVID-19 vaccines approved
for use by regulatory authorities will be deployed successfully
with desired results, whether further new strains of COVID-19 will
emerge and whether, and in what manner, additional restrictions
will be imposed and/or existing restrictions extended) and the
Group continues to monitor the situation closely. However, despite
the COVID-19 contingency plans established by the Group, the
ability to conduct business may be adversely affected by
disruptions to infrastructure, business processes and technology
services, resulting from the unavailability of staff due to illness
or the failure of third parties to supply services. This may cause
significant customer detriment, costs to reimburse losses incurred
by the Group’s customers, potential litigation costs
(including regulatory fines, penalties and other sanctions), and
reputational damage.
In many
of the jurisdictions in which the Group operates, schemes have been
initiated by central banks, national governments and regulators to
provide financial support to parts of the economy most impacted by
the COVID-19 pandemic. These schemes have been designed and
implemented at pace, meaning lenders (including Barclays) continue
to address operational issues which have arisen in connection with
the implementation of the schemes, including resolving the
interaction between the schemes and existing law and regulation. In
addition, the full extent of how these schemes will impact the
Group’s customers and therefore the impact on the Group
remains uncertain at this stage. However, certain actions (such as
the introduction of payment holidays for various consumer lending
products or the cancellation or waiver of fees associated with
certain products) may negatively impact the effective interest rate
earned on the Group’s portfolios and may reduce fee income
being earned on certain products and negatively impact the
Group’s profitability. Furthermore, the introduction of, and
participation in, central-bank supported loan and other financing
schemes introduced as a result of the COVID-19 pandemic may
negatively impact the Group’s RWAs, level of impairment and,
in turn, capital position (particularly when any transitional
relief applied to the calculation of RWAs and impairment expires).
This may be exacerbated if the Group is required by any government
or regulator to offer forbearance or additional financial relief to
borrowers or if the Group is unable to rely on guarantees provided
by governments in connection with financial support schemes as a
result of the Group’s failure to comply with scheme
requirements or otherwise.
As
these schemes and other financial support schemes provided by
national governments (such as job retention and furlough schemes)
expire, are withdrawn or are no longer supported, economic growth
may be negatively impacted which may impact the Group’s
results of operations and profitability. In addition, the Group may
experience a higher volume of defaults and delinquencies in certain
portfolios and may initiate collection and enforcement actions to
recover defaulted debts. Where defaulting borrowers are harmed by
the Group’s conduct, this may give rise to civil legal
proceedings, including class actions, regulatory censure,
potentially significant fines and other sanctions, and reputational
damage. Other legal disputes may also arise between the Group and
defaulting borrowers relating to matters such as breaches or
enforcement of legal rights or obligations arising under loan and
other credit agreements. Adverse findings in any such matters may
result in the Group’s rights not being enforced as intended.
For further details, refer to “viii) Legal risk and legal,
competition and regulatory matters” below.
The
actions taken by various governments and central banks, in
particular in the United Kingdom and the United States, may
indicate a view on the potential severity of any economic downturn
and post recovery environment, which from a commercial, regulatory
and risk perspective could be significantly different to past
crises and persist for a prolonged period. The COVID-19 pandemic
has led to a weakening in gross domestic product (GDP) in most
jurisdictions in which the Group operates and an expectation of
higher unemployment in those same jurisdictions. These factors all
have a significant impact on the modelling of expected credit
losses (ECLs) by the Group. As a result, the Group experienced
higher ECLs in 2020 compared to prior periods and this trend may
continue in 2021. The economic environment remains uncertain and
future impairment charges may be subject to further volatility
(including from changes to macroeconomic variable forecasts)
depending on the longevity of the COVID-19 pandemic and related
containment measures and the efficacy of any COVID-19 vaccines, as
well as the longer term effectiveness of central bank, government
and other support measures. For further details on macroeconomic
variables used in the calculation of ECLs, refer to the credit risk
performance section. In addition, ECLs may be adversely impacted by
increased levels of default for single name exposures in certain
sectors directly impacted by the COVID-19 pandemic (such as the oil
and gas, retail, airline, and hospitality and leisure
sectors).
Furthermore,
the Group relies on models to support a broad range of business and
risk management activities, including informing business decisions
and strategies, measuring and limiting risk, valuing exposures
(including the calculation of impairment), conducting stress
testing and assessing capital adequacy. Models are, by their
nature, imperfect and incomplete representations of reality because
they rely on assumptions and inputs, and so they may be subject to
errors affecting the accuracy of their outputs and/or misused. This
may be exacerbated when dealing with unprecedented scenarios, such
as the COVID-19 pandemic, due to the lack of reliable historical
reference points and data. For further details on model risk, refer
to “v) Model risk” below.
The
disruption to economic activity globally caused by the COVID-19
pandemic could adversely impact the Group’s other assets such
as goodwill and intangibles, and the value of Barclays PLC’s
investments in subsidiaries. It could also impact the Group’s
income due to lower lending and transaction volumes due to
volatility or weakness in the capital markets. Other potential
risks include credit rating migration which could negatively impact
the Group’s RWAs and capital position, and potential
liquidity stress due to (among other things) increased customer
drawdowns, notwithstanding the significant initiatives that
governments and central banks have put in place to support funding
and liquidity. Furthermore, a significant increase in the
utilisation of credit cards by Barclaycard customers could have a
negative impact on the Group’s RWAs and capital
position.
Furthermore,
in order to support lending activity to promote economic growth,
governments and/or regulators may limit management’s
flexibility in managing its business, require the deployment of
capital in particular business lines or otherwise restrict or limit
capital distributions and capital allocation.
Any and
all such events mentioned above could have a material adverse
effect on the Group’s business, financial condition, results
of operations, prospects, liquidity, capital position and credit
ratings (including potential credit rating agency changes of
outlooks or ratings), as well as on the Group’s customers,
employees and suppliers.
ii) Business conditions, general economy and geopolitical
issues
The
Group’s operations are subject to potentially unfavourable
global and local economic and market conditions, as well as
geopolitical developments, which may have a material effect on the
Group’s business, results of operations, financial condition
and prospects.
A
deterioration in global or local economic and market conditions may
lead to (among other things): (i) deteriorating business, consumer
or investor confidence and lower levels of fixed asset investment
and productivity growth, which in turn may lead to lower client
activity, including lower demand for borrowing from creditworthy
customers; (ii) higher default rates, delinquencies, write-offs and
impairment charges as borrowers struggle with the burden of
additional debt; (iii) subdued asset prices and payment patterns,
including the value of any collateral held by the Group; (iv)
mark-to-market losses in trading portfolios resulting from changes
in factors such as credit ratings, share prices and solvency of
counterparties; and (v) revisions to calculated ECLs leading to
increases in impairment allowances. In addition, the Group’s
ability to borrow from other financial institutions or raise
funding from external investors may be affected by deteriorating
economic conditions and market disruption.
Geopolitical
events may lead to further financial instability and affect
economic growth. In particular:
●
Global GDP growth
weakened sharply in the first half of 2020 as a result of the
COVID-19 pandemic. Whilst a number of central banks and governments
implemented financial stimulus packages to counter the economic
impact of the pandemic, recovery has been slower than anticipated
and concerns remain as to whether (a) there will be subsequent
waves of the COVID-19 pandemic, (b) further financial stimulus will
be required and/or (c) governments will be required to
significantly increase taxation to fund these commitments. All of
these factors could adversely affect economic growth, affect
specific industries or countries or affect the Group’s
employees and business operations in affected countries. See
“i) Risks relating to the impact of COVID-19” above for
further details.
●
In the UK, the
decision to leave the European Union (EU) may give rise to further
economic and political consequences including for investment and
market confidence in the UK and the remainder of EU. See
“(iii)The UK’s withdrawal from the European
Union” below for further details.
●
A significant
proportion of the Group’s portfolio is located in the US,
including a major credit card portfolio and a range of corporate
and investment banking exposures. The possibility of significant
continued changes in US policy in certain sectors (including trade,
healthcare and commodities) may have an impact on the Group’s
associated portfolios. Stress in the US economy, weakening GDP and
the associated exchange rate fluctuations, heightened trade
tensions (such as the current dispute between the US and China), an
unexpected rise in unemployment and/or an increase in interest
rates could lead to increased levels of impairment, resulting in a
negative impact on the Group’s profitability.
●
An escalation in
geopolitical tensions or increased use of protectionist measures
may negatively impact the Group’s business in the affected
regions.
●
In China the pace
of credit growth remains a concern, given the high level of
leverage and despite government and regulatory action. A stronger
than expected slowdown could result if authorities fail to
appropriately manage growth during the transition from
manufacturing towards services and the end of the investment and
credit-led boom. Deterioration in emerging markets could affect the
Group if it results in higher impairment charges via sovereign or
counterparty defaults.
iii) The UK’s withdrawal from the European Union
There
are a number of factors associated with the UK’s withdrawal
from the EU, which could have a material adverse effect on the
Group’s business, results of operations, financial condition
and prospects.
Trade and economic activity between the EU and UK
The
EU-UK Trade and Cooperation Agreement (TCA), which provides a new
economic and social partnership between the EU and UK (including
zero tariffs and zero quotas on all goods that comply with the
appropriate rules of origin) came into force provisionally on 1
January 2021.
The TCA
is a new, unprecedented arrangement between the EU and the UK, and
there is some uncertainty as to its operation and the manner in
which trading arrangements will be enforced by both the EU and the
UK. Furthermore, the EU and/or the UK can invoke trade remedies
(such as tariffs and non-tariff barriers) against each other in
certain circumstances under the TCA. Resultant trading disruption
may have a significant impact on economic activity in the EU and
the UK which (in turn) could have a material adverse effect on the
Group’s business, results of operations, financial condition
and prospects. Unstable economic conditions could result in (among
other things):
●
a recession in the
UK and/or one or more member states of the EEA in which it
operates, with lower growth, higher unemployment and falling
property prices, which could lead to increased impairments in
relation to a number of the Group’s portfolios (including,
but not limited to, its UK mortgage portfolio, unsecured lending
portfolio (including credit cards) and commercial real estate
exposures);
●
increased market
volatility (in particular in currencies and interest rates), which
could impact the Group’s trading book positions and affect
the underlying value of assets in the banking book and securities
held by the Group for liquidity purposes;
●
a credit rating
downgrade for one or more members of the Group (either directly or
indirectly as a result of a downgrade in the UK sovereign credit
ratings), which could significantly increase the Group’s cost
of and/or reduce its access to funding, widen credit spreads and
materially adversely affect the Group’s interest margins and
liquidity position; and/or
●
a widening of
credit spreads more generally or reduced investor appetite for the
Group’s debt securities, which could negatively impact the
Group’s cost of and/or access to funding.
Current provision of financial services
The TCA
does not cover financial services regulation. Accordingly, UK-based
entities within the Group (such as Barclays Bank PLC and Barclays
Bank UK PLC) are no longer able to rely on the European passporting
framework for financial services. Barclays Bank PLC and Barclays
Capital Securities Limited have put in place new arrangements in
the provision of cross-border banking and investment services to
customers and counterparties in the EEA (including by servicing EEA
clients through the Group’s EEA hub (Barclays Bank Ireland
PLC), whilst Barclays Bank UK PLC remains focused on UK
customers.
The TCA
was accompanied by a Joint Declaration on Financial Services,
requiring the parties to agree a Memorandum of Understanding (MoU),
by March 2021, establishing the framework for cooperation in
financial services. The MoU will also cover how to move forward on
equivalence determinations between the EU and the UK.
There
can be no assurance that the EU and the UK will reach further
agreement on equivalence decisions. As a result, equivalence
decisions which would enable UK firms to access EEA clients on a
cross border basis for certain markets products, cannot be relied
upon to allow UK-based entities within the Group to meet all of the
needs of customers and clients based in the EEA. However, there are
certain other types of equivalence decisions which are material to
the operations of the Group. To date, the EU and the UK have only
agreed a temporary position on mutual equivalence in relation to
clearing and settlement (CCP equivalence). If the current mutual,
temporary equivalence decision in relation to CCP equivalence
expires and is not replaced, this could have a material adverse
effect on the Group’s business as well as its clients. In
addition, HM Treasury has made certain unilateral equivalence
decisions, (including under the Capital Requirements Regulation
(CRR) and the removal of such decisions could have a material
impact on the operations of the Group.
The
Group provides the majority of its cross-border banking and
investment services to EEA clients via Barclays Bank Ireland PLC.
Additionally, in certain EEA Member States, Barclays Bank PLC and
Barclays Capital Securities Limited (BCSL) have applied for and
received cross border licences to enable them to continue to
conduct a limited range of activities, including accessing EEA
trading venues and interdealer trading. As a result of the
onshoring of EU legislation in the UK and the exercise of the UK
regulators’ Temporary Transitional Powers, UK-based entities
within the Group are currently subject to substantially the same
rules and regulations as prior to the UK’s withdrawal from
the EU. It is the UK’s intention eventually to recast
onshored EU legislation as part of UK legislation and PRA and FCA
rules, which could result in changes to regulatory requirements in
the UK.
If the
regulatory regimes for EU and UK financial services change further,
or if temporary permissions and equivalence decisions expire, and
are not replaced, the provision of cross-border banking and
investment services across the Group may become more complex and
costly which could have a material adverse effect on the
Group’s business and results of operations and could result
in the Group modifying its legal entity, capital and funding
structures and business mix, exiting certain business activities
altogether or not expanding in areas despite otherwise attractive
potential returns. This may also be exacerbated if, Barclays Bank
Ireland PLC expands further and, as a result of its growth and
importance to the Group and the EEA banking system as a whole,
Barclays Bank Ireland PLC is made subject to higher capital
requirements or restrictions are imposed by regulators on capital
allocation and capital distributions by Barclays Bank Ireland
PLC.
iv) The impact of interest rate changes on the Group’s
profitability
Changes
to interest rates are significant for the Group, especially given
the uncertainty as to the direction of interest rates and the pace
at which they may change particularly in the Group’s main
markets of the UK and the US.
A
continued period of low interest rates and flat yield curves,
including any further rate cuts and/or negative interest rates, may
affect and continue to put pressure on the Group’s net
interest margins (the difference between its lending income and
borrowing costs) and could adversely affect the profitability and
prospects of the Group.
Interest
rate rises could positively impact the Group’s profitability
as retail and corporate business income increases due to margin
de-compression. However, further increases in interest rates, if
larger or more frequent than expected, could lead to generally
weaker than expected growth, reduced business confidence and higher
unemployment. This, in turn, could cause stress in the lending
portfolio and underwriting activity of the Group with resultant
higher credit losses driving an increased impairment charge which
would most notably impact retail unsecured portfolios and wholesale
non-investment grade lending and could have a material effect on
the Group’s business, results of operations, financial
condition and prospects.
In
addition, changes in interest rates could have an adverse impact on
the value of the securities held in the Group’s liquid asset
portfolio. Consequently, this could create more volatility than
expected through the Group’s Fair Value through Other
Comprehensive Income (FVOCI) reserves.
v) Competition in the banking and financial services
industry
The
Group operates in a highly competitive environment (in particular,
in the UK and US) in which it must evolve and adapt to the
significant changes as a result of financial regulatory reform,
technological advances, increased public scrutiny and current
economic conditions. The Group expects that competition in the
financial services industry will continue to be intense and may
have a material adverse effect on the Group’s future
business, results of operations and prospects.
New
competitors in the financial services industry continue to emerge.
For example, technological advances and the growth of e-commerce
have made it possible for non-banks to offer products and services
that traditionally were banking products. This has allowed
financial institutions and other companies to provide electronic
and internet-based financial solutions, including electronic
securities trading, payments processing and online automated
algorithmic-based investment advice. Furthermore, both financial
institutions and their non-banking competitors face the risk that
payments processing and other services could be significantly
disrupted by technologies, such as cryptocurrencies, that require
no intermediation. New technologies have required and could require
the Group to spend more to modify or adapt its products or make
additional capital investments in its businesses to attract and
retain clients and customers or to match products and services
offered by its competitors, including technology
companies.
Ongoing
or increased competition may put pressure on the pricing for the
Group’s products and services, which could reduce the Group's
revenues and profitability, or may cause the Group to lose market
share, particularly with respect to traditional banking products
such as deposits, bank accounts and mortgage lending. This
competition may be on the basis of quality and variety of products
and services offered, transaction execution, innovation, reputation
and price. The failure of any of the Group’s businesses to
meet the expectations of clients and customers, whether due to
general market conditions, under-performance, a decision not to
offer a particular product or service, changes in client and
customer expectations or other factors, could affect the
Group’s ability to attract or retain clients and customers.
Any such impact could, in turn, reduce the Group’s
revenues.
vi) Regulatory change agenda and impact on business
model
The
Group remains subject to ongoing significant levels of regulatory
change and scrutiny in many of the countries in which it operates
(including, in particular, the UK and the US). As a result,
regulatory risk will remain a focus for senior management.
Furthermore, a more intensive regulatory approach and enhanced
requirements together with the potential lack of international
regulatory co-ordination as enhanced supervisory standards are
developed and implemented may adversely affect the Group’s
business, capital and risk management strategies and/or may result
in the Group deciding to modify its legal entity, capital and
funding structures and business mix, or to exit certain business
activities altogether or not to expand in areas despite otherwise
attractive potential.
There
are several significant pieces of legislation and areas of focus
which will require significant management attention, cost and
resource, including:
●
Changes in
prudential requirements may impact minimum requirements for own
funds and eligible liabilities (MREL) (including requirements for
internal MREL), leverage, liquidity or funding requirements,
applicable buffers and/or add-ons to such minimum requirements and
risk weighted assets calculation methodologies all as may be set by
international, EU or national authorities. Such or similar changes
to prudential requirements or additional supervisory and prudential
expectations, either individually or in aggregate, may result in,
among other things, a need for further management actions to meet
the changed requirements, such as:
-
increasing capital,
MREL or liquidity resources, reducing leverage and risk weighted
assets;
-
restricting
distributions on capital instruments;
-
modifying the terms
of outstanding capital instruments;
-
modifying legal
entity structure (including with regard to issuance and deployment
of capital, MREL and funding);
-
changing the
Group’s business mix or exiting other businesses;
and/or
-
undertaking other
actions to strengthen the Group’s position.
●
The derivatives
market has been the subject of particular focus for regulators in
recent years across the G20 countries and beyond, with regulations
introduced which require the reporting and clearing of standardised
over the counter (OTC) derivatives and the mandatory margining of
non-cleared OTC derivatives. These regulations may increase costs
for market participants, as well as reduce liquidity in the
derivatives markets, in particular if there are areas of
overlapping or conflicting regulation. More broadly, changes to the
regulatory framework (in particular, the review of the second
Markets in Financial Instruments Directive and the implementation
of the Benchmarks Regulation) could entail significant costs for
market participants and may have a significant impact on certain
markets in which the Group operates.
●
The Group and
certain of its members are subject to supervisory stress testing
exercises in a number of jurisdictions. These exercises currently
include the programmes of the Bank of England, the European Banking
Authority (EBA), the Federal Deposit Insurance Corporation (FDIC)
and the Federal Reserve Board (FRB). Failure to meet the
requirements of regulatory stress tests, or the failure by
regulators to approve the stress test results and capital plans of
the Group, could result in the Group or certain of its members
being required to enhance their capital position, limit capital
distributions or position additional capital in specific
subsidiaries.
For
further details on the regulatory supervision of, and regulations
applicable to, the Group, see the Supervision and regulation
section.
vii) The impact of climate change on the Group’s
business
The
risks associated with climate change are subject to rapidly
increasing societal, regulatory and political focus, both in the UK
and internationally. Embedding climate risk into the Group’s
risk framework in line with regulatory expectations, and adapting
the Group’s operations and business strategy to address the
financial risks resulting from both: (i) the physical risk of
climate change; and (ii) the risk from the transition to a low
carbon economy, could have a significant impact on the
Group’s business.
Physical
risks from climate change arise from a number of factors and relate
to specific weather events and longer-term shifts in the climate.
The nature and timing of extreme weather events are uncertain but
they are increasing in frequency and their impact on the economy is
predicted to be more acute in the future. The potential impact on
the economy includes, but is not limited to, lower GDP growth,
higher unemployment and significant changes in asset prices and
profitability of industries. Damage to the properties and
operations of borrowers could impair asset values and the
creditworthiness of customers leading to increased default rates,
delinquencies, write-offs and impairment charges in the
Group’s portfolios. In addition, the Group’s premises
and resilience may also suffer physical damage due to weather
events leading to increased costs for the Group.
As the
economy transitions to a low-carbon economy, financial institutions
such as the Group may face significant and rapid developments in
stakeholder expectations, policy, law and regulation which could
impact the lending activities the Group undertakes, as well as the
risks associated with its lending portfolios, and the value of the
Group’s financial assets. As sentiment towards climate change
shifts and societal preferences change, the Group may face greater
scrutiny of the type of business it conducts, adverse media
coverage and reputational damage, which may in turn impact customer
demand for the Group's products, returns on certain business
activities and the value of certain assets and trading positions
resulting in impairment charges.
In
addition, the impacts of physical and transition climate risks can
lead to second order connected risks, which have the potential to
affect the Group’s retail and wholesale portfolios. The
impacts of climate change may increase losses for those sectors
sensitive to the effects of physical and transition risks. Any
subsequent increase in defaults and rising unemployment could
create recessionary pressures, which may lead to wider
deterioration in the creditworthiness of the Group’s clients,
higher ECLs, and increased charge-offs and defaults among retail
customers.
If the
Group does not adequately embed risks associated with climate
change into its risk framework to appropriately measure, manage and
disclose the various financial and operational risks it faces as a
result of climate change, or fails to adapt its strategy and
business model to the changing regulatory requirements and market
expectations on a timely basis, it may have a material and adverse
impact on the Group’s level of business growth,
competitiveness, profitability, capital requirements, cost of
funding, and financial condition.
For
further details on the Group’s approach to climate change,
see the climate change risk management section.
viii) Impact of benchmark interest rate reforms on the
Group
For
several years, global regulators and central banks have been
driving international efforts to reform key benchmark interest
rates and indices, such as the London Interbank Offered Rate
(LIBOR), which are used to determine the amounts payable under a
wide range of transactions and make them more reliable and robust.
This has resulted in significant changes to the methodology and
operation of certain benchmarks and indices, the adoption of
alternative “risk-free” reference rates and the
proposed discontinuation of certain reference rates (including
LIBOR), with further changes anticipated, including UK, EU and US
legislative proposals to deal with ‘tough legacy’
contracts that cannot convert into or cannot add fall-back
risk-free reference rates. The consequences of reform are
unpredictable and may have an adverse impact on any financial
instruments linked to, or referencing, any of these benchmark
interest rates.
Uncertainty
as to the nature of such potential changes, the availability and/or
suitability of alternative “risk-free” reference rates
and other reforms may adversely affect a broad range of
transactions (including any securities, loans and derivatives which
use LIBOR to determine the amount of interest payable that are
included in the Group’s financial assets and liabilities)
that use these reference rates and indices and introduce a number
of risks for the Group, including, but not limited to:
●
Conduct risk: in undertaking actions to
transition away from using certain reference rates (such as LIBOR)
to new alternative, risk-free rates, the Group faces conduct risks.
These may lead to customer complaints, regulatory sanctions or
reputational impact if the Group is considered to be (among other
things) (i) undertaking market activities that are manipulative or
create a false or misleading impression, (ii) misusing sensitive
information or not identifying or appropriately managing or
mitigating conflicts of interest, (iii) providing customers with
inadequate advice, misleading information, unsuitable products or
unacceptable service, (iv) not taking a consistent approach to
remediation for customers in similar circumstances, (v) unduly
delaying the communication and migration activities in relation to
client exposure, leaving them insufficient time to prepare or (vi)
colluding or inappropriately sharing information with
competitors;
●
Financial risks: the valuation of
certain of the Group’s financial assets and liabilities may
change. Moreover, transitioning to alternative
“risk-free” reference rates may impact the ability of
members of the Group to calculate and model amounts receivable by
them on certain financial assets and determine the amounts payable
on certain financial liabilities (such as debt securities issued by
them) because currently alternative “risk-free”
reference rates (such as the Sterling Overnight Index Average
(SONIA) and the Secured Overnight Financing Rate (SOFR)) are
look-back rates whereas term rates (such as LIBOR) allow borrowers
to calculate at the start of any interest period exactly how much
is payable at the end of such interest period. This may have a
material adverse effect on the Group’s
cashflows;
●
Pricing risk: changes to existing
reference rates and indices, discontinuation of any reference rate
or indices and transition to alternative “risk-free”
reference rates may impact the pricing mechanisms used by the Group
on certain transactions;
●
Operational risk: changes to existing
reference rates and indices, discontinuation of any reference rate
or index and transition to alternative “risk-free”
reference rates may require changes to the Group’s IT
systems, trade reporting infrastructure, operational processes, and
controls. In addition, if any reference rate or index (such as
LIBOR) is no longer available to calculate amounts payable, the
Group may incur additional expenses in amending documentation for
new and existing transactions and/or effecting the transition from
the original reference rate or index to a new reference rate or
index; and
●
Accounting risk: an inability to apply
hedge accounting in accordance with IFRS could lead to increased
volatility in the Group’s financial results and
performance.
Any of
these factors may have a material adverse effect on the
Group’s business, results of operations, financial condition
and prospects.
For
further details on the impacts of benchmark interest rate reforms
on the Group, see Note 41.
ix) Holding company structure of Barclays PLC and its dependency on
distributions from its subsidiaries
Barclays
PLC is a holding company and its principal sources of income are,
and are expected to continue to be, distributions (in the form of
dividends and interest payments) from operating subsidiaries which
also hold the principal assets of the Group. As a separate legal
entity, Barclays PLC relies on such distributions in order to be
able to meet its obligations as they fall due (including its
payment obligations with respect to its debt securities) and to
create distributable reserves for payment of dividends to ordinary
shareholders.
The
ability of Barclays PLC’s subsidiaries to pay dividends and
interest and Barclays PLC’s ability to receive such
distributions from its investments in its subsidiaries and other
entities will be subject not only to such subsidiaries’ and
other entities' financial performance and macroeconomic conditions
but also to applicable local laws and other restrictions (including
restrictions imposed by governments and/or regulators, such as
those imposed as part of the UK Government’s response to the
COVID-19 pandemic, which limit management’s flexibility in
managing the business and taking action in relation to capital
distributions and capital allocation). These laws and restrictions
could limit the payment of dividends and distributions to Barclays
PLC by its subsidiaries and any other entities in which it holds an
investment from time to time, which could restrict Barclays
PLC’s ability to meet its obligations and/or to pay dividends
to ordinary shareholders.
x) Application of resolution measures and stabilisation powers
under the Banking Act
Under
the Banking Act 2009, as amended (Banking Act), substantial powers
are granted to the Bank of England (or, in certain circumstances,
HM Treasury), in consultation with the PRA, the FCA and HM
Treasury, as appropriate, as part of a special resolution regime
(SRR). These powers enable the relevant UK resolution authority to
implement resolution measures and stabilisation options with
respect to a UK bank or investment firm and certain of its
affiliates (currently including Barclays PLC) (each, a relevant
entity) in circumstances in which the relevant UK resolution
authority is satisfied that the resolution conditions are met. The
SRR consists of five stabilisation options: (i) private sector
transfer of all or part of the business or shares of the relevant
entity, (ii) transfer of all or part of the business of the
relevant entity to a “bridge bank” established by the
Bank of England, (iii) transfer to an asset management vehicle
wholly or partly owned by HM Treasury or the Bank of England, (iv)
the cancellation, transfer or dilution of the relevant entities'
equity (including Barclays PLC’s ordinary share capital) and
write-down or conversion of the relevant entity’s capital
instruments and liabilities (the bail-in tool) and (v) temporary
public ownership (i.e. nationalisation).
In
addition, the relevant UK resolution authority may, in certain
circumstances, in accordance with the Banking Act require the
permanent write-down or conversion into equity of any outstanding
tier 1 capital instruments, tier 2 capital instruments and internal
MREL prior to the exercise of any stabilisation option (including
the bail-in tool). Any such action could result in the dilution of
Barclays PLC’s ordinary share capital.
Shareholders
should assume that, in a resolution situation, public financial
support will only be available to a relevant entity as a last
resort after the relevant UK resolution authorities have assessed
and used, to the maximum extent practicable, the resolution tools,
including the bail-in tool (the Bank of England’s preferred
approach for the resolution of the Group is a bail-in strategy with
a single point of entry at Barclays PLC). The exercise of any of
such powers under the Banking Act or any suggestion of any such
exercise could materially adversely affect the value of Barclays
PLC ordinary shares and could lead to shareholders losing some or
all of their investment.
In
addition, any safeguards within the Banking Act (such as the
‘no creditor worse off' principle) may not result in
compensation to shareholders that is equivalent to the full losses
incurred by them in the resolution and there can be no assurance
that shareholders would recover such compensation
promptly.
Material existing and emerging risks impacting individual principal
risks
i) Credit risk
Credit
risk is the risk of loss to the Group from the failure of clients,
customers or counterparties, including sovereigns, to fully honour
their obligations to members of the Group, including the whole and
timely payment of principal, interest, collateral and other
receivables.
a) Impairment
The
introduction of the impairment requirements of IFRS 9 Financial
Instruments, resulted in impairment loss allowances that are
recognised earlier, on a more forward-looking basis and on a
broader scope of financial instruments, and may continue to have a
material impact on the Group’s business, results of
operations, financial condition and prospects.
Measurement
involves complex judgement and impairment charges could be
volatile, particularly under stressed conditions. Unsecured
products with longer expected lives, such as credit cards, are the
most impacted. Taking into account the transitional regime, the
capital treatment on the increased reserves has the potential to
adversely impact the Group’s regulatory capital
ratios.
In
addition, the move from incurred losses to ECLs has the potential
to impact the Group’s performance under stressed economic
conditions or regulatory stress tests. For more information, refer
to Note 1.
b) Specific sectors and concentrations
The
Group is subject to risks arising from changes in credit quality
and recovery rates of loans and advances due from borrowers and
counterparties in any specific portfolio. Any deterioration in
credit quality could lead to lower recoverability and higher
impairment in a specific sector. The following are areas of
uncertainties to the Group’s portfolio which could have a
material impact on performance:
●
UK retail, hospitality and leisure.
Softening demand, rising costs and a structural shift to online
shopping is fuelling pressure on the UK High Street and other
sectors heavily reliant on consumer discretionary spending. As
these sectors continue to reposition themselves, the trend
represents a potential risk in the Group’s UK corporate
portfolio from the perspective of its interactions with both
retailers and their landlords.
●
Consumer affordability has remained a
key area of focus, particularly in unsecured lending. Macroeconomic
factors, such as rising unemployment, that impact a
customer’s ability to service debt payments could lead to
increased arrears in both unsecured and secured
products.
●
UK real estate market. UK property
represents a significant portion of the overall Group retail credit
exposure. In 2020, property prices fluctuated significantly. In the
first half of 2020 the Group’s retail exposure experienced a
suppressed UK real estate market due to the impact of the COVID-19
pandemic, whilst the second half of 2020 saw increased activity as
financial support schemes and a temporary stamp duty cut took
effect. However, there can be no assurance that the recovery in the
UK real estate market will continue in 2021 especially as the
longer term macroeconomic effects of the COVID-19 pandemic are
felt, financial support schemes are withdrawn and stamp duty cuts
are reversed, and growth across the UK has slowed, particularly in
London and the South East where the Group has a high exposure. The
Group’s corporate exposure is vulnerable to the impacts of
the ongoing COVID-19 stress, with particular weakness in retail
property as a result of reduced rent collections and residential
development. The Group is at risk of increased impairment from a
material fall in property prices.
●
Leverage finance underwriting. The Group
takes on sub-investment grade underwriting exposure, including
single name risk, particularly in the US and Europe. The Group is
exposed to credit events and market volatility during the
underwriting period. Any adverse events during this period may
potentially result in loss for the Group, or an increased capital
requirement should there be a need to hold the exposure for an
extended period.
●
Italian mortgage and wholesale exposure.
The Group is exposed to a decline in the Italian economic
environment through a mortgage portfolio in run-off and positions
to wholesale customers. The Italian economy was severely impacted
by the COVID-19 pandemic in 2020 and recovery has been slower than
anticipated. Should the Italian economy deteriorate further or any
recovery take longer to materialise, there could be a material
adverse effect on the Group’s results of operations
including, but not limited to, increased credit losses and higher
impairment charges.
●
Oil & Gas sector. The Group’s
corporate credit exposure includes companies whose performance is
dependent on the oil and gas sector. Weaker demand for energy
products, in particular as a result of the COVID-19 pandemic,
combined with a sustained period of lower energy prices has led to
the erosion of balance sheet strength, particularly for higher cost
producers and those businesses who supply goods and services to the
oil and gas sector. Any recovery from the drop in demand is likely
to remain volatile and energy prices could remain subdued at low
levels for the foreseeable future, below the break-even point for
some companies. Furthermore, in the longer term, costs associated
with the transition towards renewable sources of energy may place
great demands on companies that the Group has exposure to globally.
These factors could have a material adverse effect on the
Group’s business, results of operations and financial
condition through increased impairment charges.
The
Group also has large individual exposures to single name
counterparties, both in its lending activities and in its financial
services and trading activities, including transactions in
derivatives and transactions with brokers, central clearing houses,
dealers, other banks, mutual and hedge funds and other
institutional clients. The default of such counterparties could
have a significant impact on the carrying value of these assets. In
addition, where such counterparty risk has been mitigated by taking
collateral, credit risk may remain high if the collateral held
cannot be realised, or has to be liquidated at prices which are
insufficient to recover the full amount of the loan or derivative
exposure. Any such defaults could have a material adverse effect on
the Group’s results due to, for example, increased credit
losses and higher impairment charges.
For
further details on the Group’s approach to credit risk, see
the credit risk management and credit risk performance
sections.
ii) Market risk
Market
risk is the risk of loss arising from potential adverse change in
the value of the Group’s assets and liabilities from
fluctuation in market variables including, but not limited to,
interest rates, foreign exchange, equity prices, commodity prices,
credit spreads, implied volatilities and asset
correlations.
Economic
and financial market uncertainties remain elevated, as the path of
the COVID-19 pandemic is inherently difficult to predict. Further
waves of the COVID-19 pandemic, deployment of COVID-19 vaccines not
being as successful as desired, intensifying social unrest that
weighs on market sentiment, and deteriorating trade and
geopolitical tensions are some of the factors that could heighten
market risks for the Group’s portfolios.
In
addition, the Group’s trading business is generally exposed
to a prolonged period of elevated asset price volatility,
particularly if it negatively affects the depth of marketplace
liquidity. Such a scenario could impact the Group’s ability
to execute client trades and may also result in lower client
flow-driven income and/or market-based losses on its existing
portfolio of market risks. These can include having to absorb
higher hedging costs from rebalancing risks that need to be managed
dynamically as market levels and their associated volatilities
change.
It is
difficult to predict changes in market conditions, and such changes
could have a material adverse effect on the Group’s business,
results of operations, financial condition and
prospects.
For
further details on the Group’s approach to market risk, see
the market risk management and market risk performance
sections.
iii) Treasury and capital risk
There
are three primary types of treasury and capital risk faced by the
Group:
a) Liquidity risk
Liquidity
risk is the risk that the Group is unable to meet its contractual
or contingent obligations or that it does not have the appropriate
amount, tenor and composition of funding and liquidity to support
its assets. This could cause the Group to fail to meet regulatory
liquidity standards or be unable to support day-to-day banking
activities. Key liquidity risks that the Group faces
include:
●
The stability of the Group’s current
funding profile: In particular, that part which is based on
accounts and deposits payable on demand or at short notice, could
be affected by the Group failing to preserve the current level of
customer and investor confidence. The Group also regularly accesses
the money and capital markets to provide short-term and long-term
funding to support its operations. Several factors, including
adverse macroeconomic conditions, adverse outcomes in conduct and
legal, competition and regulatory matters and loss of confidence by
investors, counterparties and/or customers in the Group, can affect
the ability of the Group to access the capital markets and/or the
cost and other terms upon which the Group is able to obtain market
funding.
●
Credit rating changes and the impact on funding
costs: Rating agencies regularly review credit ratings given
to Barclays PLC and certain members of the Group. Credit ratings
are based on a number of factors, including some which are not
within the Group’s control (such as political and regulatory
developments, changes in rating methodologies, macroeconomic
conditions and the sovereign credit ratings of the countries in
which the Group operates).
Whilst
the impact of a credit rating change will depend on a number of
factors (including the type of issuance and prevailing market
conditions), any reductions in a credit rating (in particular, any
downgrade below investment grade) may affect the Group’s
access to the money or capital markets and/or terms on which the
Group is able to obtain market funding, increase costs of funding
and credit spreads, reduce the size of the Group’s deposit
base, trigger additional collateral or other requirements in
derivative contracts and other secured funding arrangements or
limit the range of counterparties who are willing to enter into
transactions with the Group. Any of these factors could have a
material adverse effect on the Group’s business, results of
operations, financial condition and prospects.
b) Capital risk
Capital
risk is the risk that the Group has an insufficient level or
composition of capital to support its normal business activities
and to meet its regulatory capital requirements under normal
operating environments or stressed conditions (both actual and as
defined for internal planning or regulatory stress testing
purposes). This includes the risk from the Group’s pension
plans. Key capital risks that the Group faces include:
●
Failure to meet prudential capital
requirements: This could lead to the Group being unable to
support some or all of its business activities, a failure to pass
regulatory stress tests, increased cost of funding due to
deterioration in investor appetite or credit ratings, restrictions
on distributions including the ability to meet dividend targets,
and/or the need to take additional measures to strengthen the
Group's capital or leverage position.
●
Adverse changes in FX rates impacting capital
ratios: The Group has capital resources, risk weighted
assets and leverage exposures denominated in foreign currencies.
Changes in foreign currency exchange rates may adversely impact the
Sterling equivalent value of these items. As a result, the
Group’s regulatory capital ratios are sensitive to foreign
currency movements. Failure to appropriately manage the
Group’s balance sheet to take account of foreign currency
movements could result in an adverse impact on the Group’s
regulatory capital and leverage ratios.
●
Adverse movements in the pension fund:
Adverse movements in pension assets and liabilities for defined
benefit pension schemes could result in deficits on a funding
and/or accounting basis. This could lead to the Group making
substantial additional contributions to its pension plans and/or a
deterioration in its capital position. Under IAS 19, the
liabilities discount rate is derived from the yields of high
quality corporate bonds. Therefore, the valuation of the
Group’s defined benefits schemes would be adversely affected
by a prolonged fall in the discount rate due to a persistent low
interest rate and/or credit spread environment. Inflation is
another significant risk driver to the pension fund as the
liabilities are adversely impacted by an increase in long-term
inflation expectations.
c) Interest rate risk in the banking book
Interest
rate risk in the banking book is the risk that the Group is exposed
to capital or income volatility because of a mismatch between the
interest rate exposures of its (non-traded) assets and liabilities.
The Group’s hedge programmes for interest rate risk in the
banking book rely on behavioural assumptions and, as a result, the
success of the hedging strategy cannot be guaranteed. A potential
mismatch in the balance or duration of the hedge assumptions could
lead to earnings deterioration. A decline in interest rates in G3
currencies may also compress net interest margin on retail
portfolios. In addition, the Group’s liquid asset portfolio
is exposed to potential capital and/or income volatility due to
movements in market rates and prices.
For
further details on the Group’s approach to treasury and
capital risk, see the treasury and capital risk management and
treasury and capital risk performance sections.
iv) Operational risk
Operational
risk is the risk of loss to the Group from inadequate or failed
processes or systems, human factors or due to external events where
the root cause is not due to credit or market risks. Examples
include:
a) Operational resilience
The
Group functions in a highly competitive market, with market
participants that expect consistent and smooth business processes.
The loss of or disruption to business processing is a material
inherent risk within the Group and across the financial services
industry, whether arising through impacts on the Group’s
technology systems, real estate services including its retail
branch network, or availability of personnel or services supplied
by third parties. Failure to build resilience and recovery
capabilities into business processes or into the services of
technology, real estate or suppliers on which the Group’s
business processes depend, may result in significant customer
detriment, costs to reimburse losses incurred by the Group’s
customers, and reputational damage.
b) Cyber-attacks
Cyber-attacks
continue to be a global threat that is inherent across all
industries, with a spike in both number and severity of attacks
observed recently. The financial sector remains a primary target
for cyber criminals, hostile nation states, opportunists and
hacktivists. The Group, like other financial institutions,
experiences numerous attempts to compromise its cyber
security.
The
Group dedicates significant resources to reducing cyber security
risks, but it cannot provide absolute security against
cyber-attacks. Malicious actors are increasingly sophisticated in
their methods, seeking to steal money, gain unauthorised access to,
destroy or manipulate data, and disrupt operations, and some of
their attacks may not be recognised until launched, such as
zero-day attacks that are launched before patches and defences can
be readied. Cyber-attacks can originate from a wide variety of
sources and target the Group in numerous ways, including attacks on
networks, systems, or devices used by the Group or parties such as
service providers and other suppliers, counterparties, employees,
contractors, customers or clients, presenting the Group with a vast
and complex defence perimeter. Moreover, the Group does not have
direct control over the cyber security of the systems of its
clients, customers, counterparties and third-party service
providers and suppliers, limiting the Group’s ability to
effectively defend against certain threats.
A
failure in the Group’s adherence to its cyber security
policies, procedures or controls, employee malfeasance, and human,
governance or technological error could also compromise the
Group’s ability to successfully defend against cyber-attacks.
Furthermore, certain legacy technologies that are at or approaching
end-of-life may not be able to be able to maintained to acceptable
levels of security. The Group has experienced cyber security
incidents and near-misses in the past, and it is inevitable that
additional incidents will occur in the future. Cyber security risks
will continue to increase, due to factors such as the increasing
demand across the industry and customer expectations for continued
expansion of services delivered over the Internet; increasing
reliance on Internet-based products, applications and data storage;
and changes in ways of working by the Group’s employees,
contractors, and third party service providers and suppliers and
their sub-contractors in response to the COVID-19 pandemic. Bad
actors have taken advantage of remote working practices and
modified customer behaviours during the COVID-19 pandemic,
exploiting the situation in novel ways that may elude
defences.
Common
types of cyber-attacks include deployment of malware, including
destructive ransomware; denial of service and distributed denial of
service (DDoS) attacks; infiltration via business email compromise,
including phishing, or via social engineering, including vishing
and smishing; automated attacks using botnets; and credential
validation or stuffing attacks using login and password pairs from
unrelated breaches. A successful cyber-attack of any type has the
potential to cause serious harm to the Group or its clients and
customers, including exposure to potential contractual liability,
litigation, regulatory or other government action, loss of existing
or potential customers, damage to the Group’s brand and
reputation, and other financial loss. The impact of a successful
cyber-attack also is likely to include operational consequences
(such as unavailability of services, networks, systems, devices or
data) remediation of which could come at significant
cost.
Regulators
worldwide continue to recognise cyber security as an increasing
systemic risk to the financial sector and have highlighted the need
for financial institutions to improve their monitoring and control
of, and resilience to cyber-attacks. A successful cyber-attack may,
therefore, result in significant regulatory fines on the
Group.
For
further details on the Group’s approach to cyber-attacks, see
the operational risk performance section.
c) New and emergent technology
Technology
is fundamental to the Group’s business and the financial
services industry. Technological advancements present opportunities
to develop new and innovative ways of doing business across the
Group, with new solutions being developed both in-house and in
association with third-party companies. For example, payment
services and securities, futures and options trading are
increasingly occurring electronically, both on the Group’s
own systems and through other alternative systems, and becoming
automated. Whilst increased use of electronic payment and trading
systems and direct electronic access to trading markets could
significantly reduce the Group’s cost base, it may,
conversely, reduce the commissions, fees and margins made by the
Group on these transactions which could have a material adverse
effect on the Group’s business, results of operations,
financial condition and prospects.
Introducing
new forms of technology, however, has the potential to increase
inherent risk. Failure to evaluate, actively manage and closely
monitor risk exposure during all phases of business development
could introduce new vulnerabilities and security flaws and have a
material adverse effect on the Group’s business, results of
operations, financial condition and prospects.
d) External fraud
The
nature of fraud is wide-ranging and continues to evolve, as
criminals continually seek opportunities to target the
Group’s business activities and exploit changes to customer
behaviour and product and channel use (such as the increased use of
digital products and enhanced online services) or exploit new
products (such as loans provided under the UK Government’s
Bounce Back Loan Scheme and the Coronavirus Business Interruption
Loan Scheme, which have been designed to support customers and
clients during the COVID-19 pandemic). Fraud attacks can be very
sophisticated and are often orchestrated by highly organised crime
groups who use ever more sophisticated techniques to target
customers and clients directly to obtain confidential or personal
information that can be used to commit fraud. The UK market has
also seen significant growth in “scams” where the Group
takes increased levels of liability as part of a voluntary code to
provide additional safeguards to customers and clients who are
tricked into making payments to fraudsters. The impact from fraud
can lead to customer detriment, financial losses (including the
reimbursement of losses incurred by customers), loss of business,
missed business opportunities and reputational damage, all of which
could have a material adverse impact on the Group’s business,
results of operations, financial condition and
prospects.
e) Data management and information protection
The
Group holds and processes large volumes of data, including
personally identifiable information, intellectual property, and
financial data and the Group’s businesses are subject to
complex and evolving laws and regulations governing the privacy and
protection of personal information of individuals, including
Regulation (EU) 2016/679 (General Data Protection Regulation
(GDPR)). The protected parties can include: (i) the Group’s
clients and customers, and prospective clients and customers; (ii)
clients and customers of the Group’s clients and customers;
(iii) employees and prospective employees; and (iv) employees of
the Group’s suppliers, counterparties and other external
parties.
The
international nature of both the Group’s business and its IT
infrastructure also means that personal information may be
available in countries other than those from where it originated.
Accordingly, the Group needs to ensure that its collection, use,
transfer and storage of personal information complies with all
applicable laws and regulations in all relevant jurisdictions,
which could: (i) increase the Group’s compliance and
operating costs; (ii) impact the development of new products or
services, impact the offering of existing products or services, or
affect how products and services are offered to clients and
customers; (iii) demand significant oversight by the Group’s
management; and (iv) require the Group to review some elements of
the structure of its businesses, operations and systems in less
efficient ways.
Concerns
regarding the effectiveness of the Group’s measures to
safeguard personal information, or even the perception that those
measures are inadequate, could expose the Group to the risk of loss
or unavailability of data or data integrity issues and/or cause the
Group to lose existing or potential clients and customers, and
thereby reduce the Group’s revenues. Furthermore, any failure
or perceived failure by the Group to comply with applicable privacy
or data protection laws and regulations may subject it to potential
contractual liability, litigation, regulatory or other government
action (including significant regulatory fines) and require changes
to certain operations or practices which could also inhibit the
Group’s development or marketing of certain products or
services, or increase the costs of offering them to customers. Any
of these events could damage the Group’s reputation and
otherwise materially adversely affect its business, results of
operations, financial condition and prospects.
f) Algorithmic trading
In some
areas of the investment banking business, trading algorithms are
used to price and risk manage client and principal transactions. An
algorithmic error could result in erroneous or duplicated
transactions, a system outage, or impact the Group’s pricing
abilities, which could have a material adverse effect on the
Group’s business, results of operations, financial condition
and prospects and reputation.
g) Processing error
The
Group’s businesses are highly dependent on its ability to
process and monitor, on a daily basis, a very large number of
transactions, many of which are highly complex and occur at high
volumes and frequencies, across numerous and diverse markets in
many currencies. As the Group’s customer base and
geographical reach expand and the volume, speed, frequency and
complexity of transactions, especially electronic transactions (as
well as the requirements to report such transactions on a real-time
basis to clients, regulators and exchanges) increase, developing,
maintaining and upgrading operational systems and infrastructure
becomes more challenging, and the risk of systems or human error in
connection with such transactions increases, as well as the
potential consequences of such errors due to the speed and volume
of transactions involved and the potential difficulty associated
with discovering errors quickly enough to limit the resulting
consequences. Furthermore, events that are wholly or partially
beyond the Group’s control, such as a spike in transaction
volume, could adversely affect the Group’s ability to process
transactions or provide banking and payment services.
Processing
errors could result in the Group, among other things, (i) failing
to provide information, services and liquidity to clients and
counterparties in a timely manner; (ii) failing to settle and/or
confirm transactions; (iii) causing funds transfers, capital
markets trades and/or other transactions to be executed
erroneously, illegally or with unintended consequences; and (iv)
adversely affecting financial, trading or currency markets. Any of
these events could materially disadvantage the Group’s
customers, clients and counterparties (including them suffering
financial loss) and/or result in a loss of confidence in the Group
which, in turn, could have a material adverse effect on the
Group’s business, results of operations, financial condition
and prospects.
h) Supplier exposure
The
Group depends on suppliers for the provision of many of its
services and the development of technology. Whilst the Group
depends on suppliers, it remains fully accountable for any risk
arising from the actions of suppliers. The dependency on suppliers
and sub-contracting of outsourced services introduces concentration
risk where the failure of specific suppliers could have an impact
on the Group’s ability to continue to provide material
services to its customers. Failure to adequately manage supplier
risk could have a material adverse effect on the Group’s
business, results of operations, financial condition and
prospects.
i) Estimates and judgements relating to critical accounting
policies and capital disclosures
The
preparation of financial statements requires the application of
accounting policies and judgements to be made in accordance with
IFRS. Regulatory returns and capital disclosures are prepared in
accordance with the relevant capital reporting requirements and
also require assumptions and estimates to be made. The key areas
involving a higher degree of judgement or complexity, or areas
where assumptions are significant to the consolidated and
individual financial statements, include credit impairment charges,
taxes, fair value of financial instruments, goodwill and intangible
assets, pensions and post-retirement benefits, and provisions
including conduct and legal, competition and regulatory matters
(see the notes to the audited financial statements for further
details). There is a risk that if the judgement exercised, or the
estimates or assumptions used, subsequently turn out to be
incorrect, this could result in material losses to the Group,
beyond what was anticipated or provided for. Further development of
accounting standards and capital interpretations could also
materially impact the Group’s results of operations,
financial condition and prospects.
j) Tax risk
The
Group is required to comply with the domestic and international tax
laws and practice of all countries in which it has business
operations. There is a risk that the Group could suffer losses due
to additional tax charges, other financial costs or reputational
damage as a result of failing to comply with such laws and
practice, or by failing to manage its tax affairs in an appropriate
manner, with much of this risk attributable to the international
structure of the Group. In addition, increasing reporting and
disclosure requirements around the world and the digitisation of
the administration of tax has potential to increase the
Group’s tax compliance obligations further.
k) Ability to hire and retain appropriately qualified
employees
As a
regulated financial institution, the Group requires diversified and
specialist skilled colleagues. The Group’s ability to
attract, develop and retain a diverse mix of talent is key to the
delivery of its core business activity and strategy. This is
impacted by a range of external and internal factors, such as the
UK’s decision to leave the EU and the enhanced individual
accountability applicable to the banking industry. Failure to
attract or prevent the departure of appropriately qualified and
skilled employees could have a material adverse effect on the
Group’s business, results of operations, financial condition
and prospects. Additionally, this may result in disruption to
service which could in turn lead to disenfranchising certain
customer groups, customer detriment and reputational
damage.
For
further details on the Group’s approach to operational risk,
see the operational risk management and operational risk
performance sections.
v) Model risk
Model
risk is the risk of potential adverse consequences from financial
assessments or decisions based on incorrect or misused model
outputs and reports. The Group relies on models to support a broad
range of business and risk management activities, including
informing business decisions and strategies, measuring and limiting
risk, valuing exposures (including the calculation of impairment),
conducting stress testing, assessing capital adequacy, supporting
new business acceptance and risk and reward evaluation, managing
client assets, and meeting reporting requirements.
Models
are, by their nature, imperfect and incomplete representations of
reality because they rely on assumptions and inputs, and so they
may be subject to errors affecting the accuracy of their outputs
and/or misused. This may be exacerbated when dealing with
unprecedented scenarios, such as the COVID-19 pandemic, due to the
lack of reliable historical reference points and data. For
instance, the quality of the data used in models across the Group
has a material impact on the accuracy and completeness of its risk
and financial metrics. Model errors or misuse may result in (among
other things) the Group making inappropriate business decisions
and/or inaccuracies or errors being identified in the Group’s
risk management and regulatory reporting processes. This could
result in significant financial loss, imposition of additional
capital requirements, enhanced regulatory supervision and
reputational damage, all of which could have a material adverse
effect on the Group’s business, results of operations,
financial condition and prospects.
For
further details on the Group’s approach to model risk, see
the model risk management and model risk performance
sections.
vi) Conduct risk
Conduct
risk is the risk of detriment to customers, clients, market
integrity, effective competition or the Group from the
inappropriate supply of financial services, including instances of
wilful or negligent misconduct. This risk could manifest itself in
a variety of ways:
a) Employee misconduct
The
Group’s businesses are exposed to risk from potential
non-compliance with its policies and standards and instances of
wilful and negligent misconduct by employees, all of which could
result in potential customer and client detriment, enforcement
action (including regulatory fines and/or sanctions), increased
operation and compliance costs, redress or remediation or
reputational damage which in turn could have a material adverse
effect on the Group’s business, results of operations,
financial condition and prospects. Examples of employee misconduct
which could have a material adverse effect on the Group’s
business include (i) employees improperly selling or marketing the
Group’s products and services; (ii) employees engaging in
insider trading, market manipulation or unauthorised trading; or
(iii) employees misappropriating confidential or proprietary
information belonging to the Group, its customers or third parties.
These risks may be exacerbated in circumstances where the Group is
unable to rely on physical oversight and supervision of employees
(such as during the COVID-19 pandemic where employees have worked
remotely).
b) Customer engagement
The
Group must ensure that its customers, particularly those that are
vulnerable, are able to make well-informed decisions on how best to
use the Group’s financial services and understand that they
are appropriately protected if something goes wrong. Poor customer
outcomes can result from the failure to: (i) communicate fairly and
clearly with customers; (ii) provide services in a timely and fair
manner; and (iii) undertake appropriate activity to address
customer detriment, including the adherence to regulatory and legal
requirements on complaint handling. The Group is at risk of
financial loss and reputational damage as a result.
c) Product design and review risk
Products
and services must meet the needs of clients, customers, markets and
the Group throughout their lifecycle, However, there is a risk that
the design and review of the Group’s products and services
fail to reasonably consider and address potential or actual
negative outcomes, which may result in customer detriment,
enforcement action (including regulatory fines and/or sanctions),
redress and remediation and reputational damage. Both the design
and review of products and services are a key area of focus for
regulators and the Group, and this focus is set to continue in
2021.
d) Financial crime
The
Group may be adversely affected if it fails to effectively mitigate
the risk that third parties or its employees facilitate, or that
its products and services are used to facilitate, financial crime
(money laundering, terrorist financing, breaches of economic and
financial sanctions, bribery and corruption, and the facilitation
of tax evasion). UK and US regulations covering financial
institutions continue to focus on combating financial crime.
Failure to comply may lead to enforcement action by the
Group’s regulators, including severe penalties, which may
have a material adverse effect on the Group’s business,
financial condition and prospects.
e) Regulatory focus on culture and accountability
Regulators
around the world continue to emphasise the importance of culture
and personal accountability and enforce the adoption of adequate
internal reporting and whistleblowing procedures to help to promote
appropriate conduct and drive positive outcomes for customers,
colleagues, clients and markets. The requirements and expectations
of the UK Senior Managers Regime, Certification Regime and Conduct
Rules have reinforced additional accountabilities for individuals
across the Group with an increased focus on governance and rigour.
Failure to meet these requirements and expectations may lead to
regulatory sanctions, both for the individuals and the
Group.
For
further details on the Group’s approach to conduct risk, see
the conduct risk management and conduct risk performance
sections.
vii) Reputation risk
Reputation
risk is the risk that an action, transaction, investment, event,
decision or business relationship will reduce trust in the
Group’s integrity and/or competence.
Any
material lapse in standards of integrity, compliance, customer
service or operating efficiency may represent a potential
reputation risk. Stakeholder expectations constantly evolve, and so
reputation risk is dynamic and varies between geographical regions,
groups and individuals. A risk arising in one business area can
have an adverse effect upon the Group’s overall reputation
and any one transaction, investment or event (in the perception of
key stakeholders) can reduce trust in the Group’s integrity
and competence. The Group’s association with sensitive topics
and sectors has been, and in some instances continues to be, an
area of concern for stakeholders, including (i) the financing of,
and investments in, businesses which operate in sectors that are
sensitive because of their relative carbon intensity or local
environmental impact; (ii) potential association with human rights
violations (including combating modern slavery) in the
Group’s operations or supply chain and by clients and
customers; and (iii) the financing of businesses which manufacture
and export military and riot control goods and
services.
Reputation
risk could also arise from negative public opinion about the
actual, or perceived, manner in which the Group conducts its
business activities, or the Group’s financial performance, as
well as actual or perceived practices in banking and the financial
services industry generally. Modern technologies, in particular
online social media channels and other broadcast tools that
facilitate communication with large audiences in short time frames
and with minimal costs, may significantly enhance and accelerate
the distribution and effect of damaging information and
allegations. Negative public opinion may adversely affect the
Group’s ability to retain and attract customers, in
particular, corporate and retail depositors, and to retain and
motivate staff, and could have a material adverse effect on the
Group’s business, results of operations, financial condition
and prospects.
In
addition to the above, reputation risk has the potential to arise
from operational issues or conduct matters which cause detriment to
customers, clients, market integrity, effective competition or the
Group (see “iv) Operational risk” above).
For
further details on the Group’s approach to reputation risk,
see the reputation risk management and reputation risk performance
sections.
viii) Legal risk and legal, competition and regulatory
matters
The
Group conducts activities in a highly regulated global market which
exposes it and its employees to legal risk arising from (i) the
multitude of laws and regulations that apply to the businesses it
operates, which are highly dynamic, may vary between jurisdictions,
and are often unclear in their application to particular
circumstances especially in new and emerging areas; and (ii) the
diversified and evolving nature of the Group’s businesses and
business practices. In each case, this exposes the Group and its
employees to the risk of loss or the imposition of penalties,
damages or fines from the failure of members of the Group to meet
their respective legal obligations, including legal or contractual
requirements. Legal risk may arise in relation to any number of the
material existing and emerging risks identified above.
A
breach of applicable legislation and/or regulations by the Group or
its employees could result in criminal prosecution, regulatory
censure, potentially significant fines and other sanctions in the
jurisdictions in which the Group operates. Where clients, customers
or other third parties are harmed by the Group’s conduct,
this may also give rise to civil legal proceedings, including class
actions. Other legal disputes may also arise between the Group and
third parties relating to matters such as breaches or enforcement
of legal rights or obligations arising under contracts, statutes or
common law. Adverse findings in any such matters may result in the
Group being liable to third parties or may result in the
Group’s rights not being enforced as intended.
Details
of legal, competition and regulatory matters to which the Group is
currently exposed are set out in Note 26. In addition to matters
specifically described in Note 26, the Group is engaged in various
other legal proceedings which arise in the ordinary course of
business. The Group is also subject to requests for information,
investigations and other reviews by regulators, governmental and
other public bodies in connection with business activities in which
the Group is, or has been, engaged.
The
outcome of legal, competition and regulatory matters, both those to
which the Group is currently exposed and any others which may arise
in the future, is difficult to predict. In connection with such
matters, the Group may incur significant expense, regardless of the
ultimate outcome, and any such matters could expose the Group to
any of the following outcomes: substantial monetary damages,
settlements and/or fines; remediation of affected customers and
clients; other penalties and injunctive relief; additional
litigation; criminal prosecution; the loss of any existing agreed
protection from prosecution; regulatory restrictions on the
Group’s business operations including the withdrawal of
authorisations; increased regulatory compliance requirements or
changes to laws or regulations; suspension of operations; public
reprimands; loss of significant assets or business; a negative
effect on the Group’s reputation; loss of confidence by
investors, counterparties, clients and/or customers; risk of credit
rating agency downgrades; potential negative impact on the
availability and/or cost of funding and liquidity; and/or dismissal
or resignation of key individuals. In light of the uncertainties
involved in legal, competition and regulatory matters, there can be
no assurance that the outcome of a particular matter or matters
(including formerly active matters or those arising after the date
of this Annual Report) will not have a material adverse effect on
the Group’s business, results of operations, financial
condition and prospects.
39 Related party transactions and Directors’
remuneration
Related party transactions
Parties
are considered to be related if one party has the ability to
control the other party or exercise significant influence over the
other party in making financial or operational decisions, or one
other party controls both.
Subsidiaries
Transactions
between Barclays PLC and its subsidiaries meet the definition of
related party transactions. Where these are eliminated on
consolidation, they are not disclosed in the Group’s
financial statements. Transactions between Barclays PLC and its
subsidiaries are fully disclosed in Barclays PLC’s financial
statements. A list of the Group’s principal subsidiaries is
shown in Note 34.
Associates, joint ventures and other entities
The
Group provides banking services to its associates, joint ventures
and the Group pension funds (principally the UK Retirement Fund),
providing loans, overdrafts, interest and non-interest bearing
deposits and current accounts to these entities as well as other
services. Group companies also provide investment management and
custodian services to the Group pension schemes. All of these
transactions are conducted on the same terms as third party
transactions. Summarised financial information for the
Group’s investments in associates and joint ventures is set
out in Note 36.
Amounts
included in the Group’s financial statements, in aggregate,
by category of related party entity are as follows:
|
|
|
Associates
|
Joint ventures
|
Pension funds
|
|
|
|
£m
|
£m
|
£m
|
For the year ended and as at 31 December 2020
|
|
|
|
|
|
Total
income
|
|
|
-
|
10
|
5
|
Credit
impairment charges
|
|
|
-
|
-
|
-
|
Operating
expenses
|
|
|
(26)
|
-
|
(1)
|
Total
assets
|
|
|
-
|
1,388
|
4
|
Total
liabilities
|
|
|
66
|
-
|
69
|
For the year ended and as at 31 December 2019
|
|
|
|
|
|
Total
income
|
|
|
-
|
12
|
5
|
Credit
impairment charges
|
|
|
-
|
-
|
-
|
Operating
expenses
|
|
|
(46)
|
-
|
-
|
Total
assets
|
|
|
-
|
1,303
|
3
|
Total
liabilities
|
|
|
-
|
-
|
175
|
Total
liabilities includes derivatives transacted on behalf of the
pension funds of £13m (2019: £6m).
Key Management Personnel
Key
Management Personnel are defined as those persons having authority
and responsibility for planning, directing and controlling the
activities of Barclays PLC (directly or indirectly) and comprise
the Directors and Officers of Barclays PLC, certain direct reports
of the Group Chief Executive and the heads of major business units
and functions.
The
Group provides banking services to Key Management Personnel and
persons connected to them. Transactions during the year and the
balances outstanding were as follows:
Loans outstanding
|
|
|
|
2020
|
2019
|
|
£m
|
£m
|
As at 1 January
|
7.2
|
7.2
|
Loans
issued during the yeara
|
2.3
|
4.8
|
Loan
repayments during the yearb
|
(0.3)
|
(4.8)
|
As at 31 December
|
9.2
|
7.2
|
Notes
a
Includes loans issued to existing Key Management Personnel and new
or existing loans issued to newly appointed Key Management
Personnel.
b
Includes loan repayments by existing Key Management Personnel and
loans to former Key Management Personnel.
No
allowances for impairment were recognised in respect of loans to
Key Management Personnel (or any connected person).
Deposits outstanding
|
|
|
|
2019
|
2018
|
|
£m
|
£m
|
As at 1 January
|
12.1
|
6.9
|
Deposits
received during the yeara
|
41.6
|
36.0
|
Deposits
repaid during the yearb
|
(43.3)
|
(30.8)
|
As at 31 December
|
10.4
|
12.1
|
a
Includes deposits received from existing Key Management Personnel
and new or existing deposits received from newly appointed Key
Management Personnel.
b
Includes deposits repaid by existing Key Management Personnel and
deposits of former Key Management Personnel.
Total commitments outstanding
Total
commitments outstanding refers to the total of any undrawn amounts
on credit cards and/or overdraft facilities provided to Key
Management Personnel. Total commitments outstanding as at 31
December 2020 were £0.9m (2019: £0.8m).
All
loans to Key Management Personnel (and persons connected to them)
were made in the ordinary course of business; were made on
substantially the same terms, including interest rates and
collateral, as those prevailing at the same time for comparable
transactions with other persons; and did not involve more than a
normal risk of collectability or present other unfavourable
features.
Remuneration of Key Management Personnel
Total
remuneration awarded to Key Management Personnel below represents
the awards made to individuals that have been approved by the Board
Remuneration Committee as part of the latest remuneration
decisions, and is consistent with the approach adopted for
disclosures set out in the Directors’ Remuneration Report.
Costs recognised in the income statement reflect the accounting
charge for the year included within operating expenses. The
difference between the values awarded and the recognised income
statement charge principally relates to the recognition of deferred
costs for prior year awards. Figures are provided for the period
that individuals met the definition of Key Management
Personnel.
|
2020
|
2019
|
|
£m
|
£m
|
Salaries
and other short-term benefits
|
41.6
|
38.5
|
Pension
costs
|
-
|
0.1
|
Other
long-term benefits
|
8.2
|
8.7
|
Share-based
payments
|
13.2
|
13.4
|
Employer
social security charges on emoluments
|
7.2
|
7.4
|
Costs recognised for accounting purposes
|
70.2
|
68.1
|
Employer
social security charges on emoluments
|
(7.2)
|
(7.4)
|
Other
long-term benefits – difference between awards granted and
costs recognised
|
-
|
(0.6)
|
Share-based
payments – difference between awards granted and costs
recognised
|
1.1
|
2.2
|
Total remuneration awarded
|
64.1
|
62.3
|
Disclosure required by the Companies Act 2006
The
following information regarding the Barclays PLC Board of Directors
is presented in accordance with the Companies Act
2006:
|
2020
|
2019
|
|
£m
|
£m
|
Aggregate
emolumentsa
|
8.4
|
8.5
|
Amounts
paid under LTIPsb
|
-
|
0.8
|
|
8.4
|
9.3
|
Notes
a The
aggregate emoluments include amounts paid for the 2020 year. In
addition, deferred share awards for 2020 with a total value at
grant of £0.6m (2019: £2m) will be made to James E Staley
and Tushar Morzaria which will only vest subject to meeting certain
conditions.
b No
LTIP amounts were received by the Executive Directors in 2020 as
the release of the first tranche of the 2017-2019 LTIP was delayed
from June 2020 to March 2021. The LTIP figure in the single total
figure table for Executive Directors’ 2020 remuneration in
the Directors’ Remuneration Report relates to the 2018
– 2020 LTIP cycle.
There
were no pension contributions paid to defined contribution schemes
on behalf of Directors (2019: £nil). There were no notional
pension contributions to defined contribution schemes.
As at
31 December 2020, there were no Directors accruing benefits under a
defined benefit scheme (2019: nil).
Directors’ and Officers’ shareholdings and
options
The
beneficial ownership of ordinary share capital of Barclays PLC by
all Directors and Officers of Barclays PLC (involving 26 persons)
at 31 December 2020 amounted to 27,470,067 (2019: 22,789,126)
ordinary shares of 25p each (0.16% of the ordinary share capital
outstanding).
As at
31 December 2020, Executive Directors and Officers of Barclays PLC
(involving 16 persons) held options to purchase a total of 78,495
(2019: 40,428) Barclays PLC ordinary shares of 25p each at a
weighted average price of 101p under Sharesave.
Advances and credit to Directors and guarantees on behalf of
Directors
In
accordance with Section 413 of the Companies Act 2006, the total
amount of advances and credits made available in 2020 to persons
who served as Directors during the year was £0.1m (2019:
£0.3m). The total value of guarantees entered into on behalf
of Directors during 2020 was £nil (2019:
£nil).
Directors’ responsibility statement
The
Directors have responsibility for ensuring that the Company and the
Group keep accounting records which disclose with reasonable
accuracy the financial position of the Company and the Group and
which enable them to ensure that the accounts comply with the
Companies Act 2006.
The
Directors are also responsible for preparing a Strategic Report,
Directors’ Report, Directors’ Remuneration Report and
Corporate Governance Statement in accordance with applicable law
and regulations.
The
Directors are responsible for the maintenance and integrity of the
Annual Report and Financial statements as they appear on our
website. Legislation in the UK governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.
The
Directors have a general responsibility for taking such steps as
are reasonably open to them to safeguard the assets of the Group
and to prevent and detect fraud and other
irregularities.
The
Directors, whose names and functions are set out on pages 60 to 63,
confirm to the best of their knowledge that:
(a) the
financial statements, prepared in accordance with the applicable
set of accounting standards, give a true and fair view of the
assets, liabilities, financial position and profit or loss of the
Company and the undertakings included in the consolidation taken as
a whole; and
(b) the
management report, on pages 6 to 43, which is incorporated in the
Directors’ Report, includes a fair review of the development
and performance of the business and the position of the Company and
the undertakings included in the consolidation taken as a whole,
together with a description of the Principal Risks and
uncertainties that they face.
By
order of the Board
Stephen Shapiro
Company
Secretary
17
February 2021
Barclays
PLC
Registered
in England.
Company
No. 48839
Forward-looking statements
This document contains certain forward-looking statements within
the meaning of Section 21E of the US Securities Exchange Act of
1934, as amended, and Section 27A of the US Securities Act of 1933,
as amended, with respect to the Group. Barclays cautions readers
that no forward-looking statement is a guarantee of future
performance and that actual results or other financial condition or
performance measures could differ materially from those contained
in the forward-looking statements. These forward-looking statements
can be identified by the fact that they do not relate only to
historical or current facts. Forward-looking statements sometimes
use words such as ‘may’, ‘will’,
‘seek’, ‘continue’, ‘aim’,
‘anticipate’, ‘target’,
‘projected’, ‘expect’,
‘estimate’, ‘intend’, ‘plan’,
‘goal’, ‘believe’, ‘achieve’ or
other words of similar meaning.
Forward-looking statements can be made in writing but also may be
made verbally by members of the management of the Group (including,
without limitation, during management presentations to financial
analysts) in connection with this document. Examples of
forward-looking statements include, among others, statements or
guidance regarding or relating to the Group’s future
financial position, income growth, assets, impairment charges,
provisions, business strategy, capital, leverage and other
regulatory ratios, capital distributions (including dividend payout
ratios and expected payment strategies), projected levels of growth
in the banking and financial markets, projected costs or savings,
any commitments and targets, estimates of capital expenditures,
plans and objectives for future operations, projected employee
numbers, IFRS impacts and other statements that are not historical
fact. By their nature, forward-looking statements involve risk and
uncertainty because they relate to future events and
circumstances.
The forward-looking statements speak only as at the date on which
they are made. Forward-looking statements may be affected by:
changes in legislation; the development of standards and
interpretations under IFRS, including evolving practices with
regard to the interpretation and application of accounting and
regulatory standards; the outcome of current and future legal
proceedings and regulatory investigations; future levels of conduct
provisions; the policies and actions of governmental and regulatory
authorities; the Group’s ability along with government and
other stakeholders to manage and mitigate the impacts of climate
change effectively; geopolitical risks; and the impact of
competition. In addition, factors including (but not limited to)
the following may have an effect: capital, leverage and other
regulatory rules applicable to past, current and future periods;
UK, US, Eurozone and global macroeconomic and business conditions;
the effects of any volatility in credit markets; market related
risks such as changes in interest rates and foreign exchange rates;
effects of changes in valuation of credit market exposures; changes
in valuation of issued securities; volatility in capital markets;
changes in credit ratings of any entity within the Group or any
securities issued by such entities; direct and indirect impacts of
the coronavirus (COVID-19) pandemic; instability as a result of the
UK’s exit from the European Union (EU), the effects of the
EU-UK Trade and Cooperation Agreement and the disruption that may
subsequently result in the UK and globally; the risk of
cyber-attacks, information or security breaches or technology
failures on the Group’s business or operations; and the
success of future acquisitions, disposals and other strategic
transactions. A number of these influences and factors are beyond
the Group’s control. As a result, the Group’s actual
financial position, future results, capital distributions, capital,
leverage or other regulatory ratios or other financial and
non-financial metrics or performance measures may differ materially
from the statements or guidance set forth in the Group’s
forward-looking statements. Additional risks and factors which may
impact the Group’s future financial condition and performance
are identified in our filings with the SEC (including, without
limitation, our Annual Report on Form 20-F for the fiscal year
ended 31 December 2020), which are available on the SEC’s
website at www.sec.gov.
Subject to our obligations under the applicable laws and
regulations of any relevant jurisdiction, (including, without
limitation, the UK and the US), in relation to disclosure and
ongoing information, we undertake no obligation to update publicly
or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.
- Ends –
For
further information, please contact:
Investor
Relations
|
Media
Relations
|
Chris
Manners
|
Tom
Hoskin
|
++44
(0) 20 7773 2136
|
+44 (0)
20 7116 4755
|
About Barclays
Barclays
is a British universal bank. We are diversified by business, by
different types of customer and client, and geography. Our
businesses include consumer banking and payments operations around
the world, as well as a top-tier, full service, global corporate
and investment bank, all of which are supported by our service
company which provides technology, operations and functional
services across the Group.
For
further information about Barclays, please visit our website
www.barclays.com