Barclays - 20-F annual report 2020

UNITED

STATES

SECURITIES

AND

EXCHANGE

COMMISSION

WASHINGTON,

DC

20549

FORM

20-F

(Mark

One)

☐

REGISTRATION

STATEMENT

PURSUANT

TO

SECTION

12(b)

OR

12(g)

OF

THE

SECURITIES

EXCHANGE

ACT

OF

1934

OR

☑

ANNUAL

REPORT

PURSUANT

TO

SECTION

13

OR

15(d)

OF

THE

SECURITIES

EXCHANGE

ACT

OF

1934

For

the

fiscal

year

ended

December

31,

2020

OR

☐

TRANSITION

REPORT

PURSUANT

TO

SECTION

13

OR

15(d)

OF

THE

SECURITIES

EXCHANGE

ACT

OF

1934

For

the

transition

period

from

to

OR

☐

SHELL

COMPANY

REPORT

PURSUANT

TO

SECTION

13

OR

15(d)

OF

THE

SECURITIES

EXCHANGE

ACT

OF

1934

Date

of

event

requiring

this

shell

company

report

Commission

file

number

Barclays

PLC

1-09246

BARCLAYS

PLC

(Exact

Name

of

Registrant

as

Specified

in

its

Charter)

ENGLAND

(Jurisdiction

of

Incorporation

or

Organization)

1

CHURCHILL

PLACE,

LONDON

E14

5HP,

ENGLAND

(Address

of

Principal

Executive

Offices)

GARTH

WRIGHT,

+44

(0)20

7116

3170,

GARTH.WRIGHT@BARCLAYS.COM

1

CHURCHILL

PLACE,

LONDON

E14

5HP,

ENGLAND

(Name,

Telephone,

E-mail

and/or

Facsimile

number

and

Address

of

Company

Contact

Person)

Securities

registered

or

to

be

registered

pursuant

to

Section

12(b)

of

the

Act:

Title

of

each

class

Trading

symbol(s)

Name

of

each

exchange

on

which

registered

25p

ordinary

shares*

Not

applicable*

New

York

Stock

Exchange*

American

Depositary

Shares,

each

representing

four

25p

ordinary

shares

BCS

New

York

Stock

Exchange

4.338%

Fixed-to-Floating

Rate

Senior

Notes

due

2024

BCS24A

New

York

Stock

Exchange

Floating

Rate

Senior

Notes

due

2024

BCS24B

New

York

Stock

Exchange

4.972%

Fixed-to-Floating

Rate

Senior

Notes

due

2029

BCS29

New

York

Stock

Exchange

4.610%

Fixed-to-Floating

Rate

Senior

Notes

due

2023

BCS23B

New

York

Stock

Exchange

Floating

Rate

Senior

Notes

due

2023

BCS23C

New

York

Stock

Exchange

4.375%

Fixed

Rate

Subordinated

Notes

due

2024

BCS24

New

York

Stock

Exchange

3.65%

Fixed

Rate

Senior

Notes

due

2025

BCS25

New

York

Stock

Exchange

5.25%

Fixed

Rate

Senior

Notes

due

2045

BCS45

New

York

Stock

Exchange

3.25%

Fixed

Rate

Senior

Notes

due

2021

BCS21B

New

York

Stock

Exchange

4.375%

Fixed

Rate

Senior

Notes

due

2026

BCS26

New

York

Stock

Exchange

5.20%

Fixed

Rate

Subordinated

Notes

due

2026

BCS26A

New

York

Stock

Exchange

3.20%

Fixed

Rate

Senior

Notes

due

2021

BCS21

New

York

Stock

Exchange

Floating

Rate

Senior

Notes

due

2021

BCS21A

New

York

Stock

Exchange

Floating

Rate

Senior

Notes

due

2023

BCS23

New

York

Stock

Exchange

3.684%

Fixed

Rate

Senior

Notes

due

2023

BCS23A

New

York

Stock

Exchange

4.337%

Fixed

Rate

Senior

Notes

due

2028

BCS28

New

York

Stock

Exchange

4.950%

Fixed

Rate

Senior

Notes

due

2047

BCS47

New

York

Stock

Exchange

4.836%

Fixed

Rate

Subordinated

Callable

Notes

due

2028

BCS28A

New

York

Stock

Exchange

3.250%

Fixed

Rate

Senior

Notes

due

2033

BCS33

New

York

Stock

Exchange

3.932%

Fixed-to-Floating

Rate

Senior

Notes

due

2025

BCS25A

New

York

Stock

Exchange

5.088%

Fixed-to-Floating

Rate

Subordinated

Notes

due

2030

BCS30

New

York

Stock

Exchange

2.852%

Fixed-to-Floating

Rate

Senior

Notes

due

2026

BCS26B

New

York

Stock

Exchange

2.645%

Fixed

Rate

Resetting

Senior

Callable

Notes

due

2031

BCS31

New

York

Stock

Exchange

3.564%

Fixed

Rate

Resetting

Subordinated

Callable

Notes

due

2035

BCS35

New

York

Stock

Exchange

1.007%

Fixed

Rate

Resetting

Senior

Callable

Notes

due

2024

BCS24C

New

York

Stock

Exchange

*

Not

for

trading,

but

in

connection

with

the

registration

of

American

Depository

Shares,

pursuant

to

the

requirements

to

the

Securities

and

Exchange

Commission.

Securities

registered

or

to

be

registered

pursuant

to

Section

12(g)

of

the

Act:

None

Securities

for

which

there

is

a

reporting

obligation

pursuant

to

Section

15(d)

of

the

Act:

None

Indicate

the

number

of

outstanding

shares

of

each

of

the

issuer’s

classes

of

capital

or

common

stock

as

of

the

close

of

the

period

covered

by

the

annual

report.

25p

ordinary

shares

17,359,296,032

Indicate

by

check

mark

if

the

registrant

is

a

well-known

seasoned

issuer,

as

defined

in

Rule

405

of

the

Securities

Act.

Yes

☑

No

☐

If

this

report

is

an

annual

or

transition

report,

indicate

by

check

mark

if

the

registrant

is

not

required

to

file

reports

pursuant

to

Section

13

or

15(d)

of

the

Securities

Exchange

Act

1934.

Yes

☐

No

☑

Note

–

Checking

the

box

above

will

not

relieve

any

registrant

required

to

file

reports

pursuant

to

Section

13

or

15(d)

of

the

Securities

Exchange

Act

of

1934

from

their

obligations

under

those

Sections.

Indicate

by

check

mark

whether

the

registrant

(1)

has

filed

all

reports

required

to

be

filed

by

Section

13

or

15(d)

of

the

Securities

Exchange

Act

of

1934

during

the

preceding

12

months

(or

for

such

shorter

period

that

the

registrant

was

required

to

file

such

reports),

and

(2)

has

been

subject

to

such

filing

requirements

for

the

past

90

days.

Yes

☑

No

☐

Indicate

by

check

mark

whether

the

registrant

has

submitted

electronically

every

Interactive

Data

File

required

to

be

submitted

pursuant

to

Rule

405

of

Regulation

S-T

(§

232.405

of

this

chapter)

during

the

preceding

12

months

(or

for

such

shorter

period

that

the

registrant

was

required

to

submit

and

submit

such

files).

Yes

☑

No

☐

Indicate

by

check

mark

whether

the

registrant

is

a

large

accelerated

filer,

an

accelerated

filer,

a

non-accelerated

filer,

or

an

emerging

growth

company.

See

definition

of

“large

accelerated

filer”,

“accelerated

filer”

and

“emerging

growth

company”

in

Rule

12b-2

of

the

Exchange

Act:

Large

Accelerated

Filer

☑

Accelerated

Filer

☐

Non-Accelerated

Filer

☐

Emerging

growth

company

☐

If

an

emerging

growth

company

that

prepares

its

financial

statements

in

accordance

with

U.S.

GAAP,

indicate

by

check

mark

if

the

registrant

has

elected

not

to

use

the

extended

transition

period

for

complying

with

any

new

or

revised

financial

accounting

standards†

provided

pursuant

to

Section

13(a)

of

the

Exchange

Act.

☐

†

The

term

“new

or

revised

financial

accounting

standard”

refers

to

any

update

issued

by

the

Financial

Accounting

Standards

Board

to

its

Accounting

Standards

Codification

after

April

5,

2012.

Indicate

by

check

mark

whether

the

registrant

has

filed

a

report

on

and

attestation

to

its

management’s

assessment

of

the

effectiveness

of

its

internal

control

over

financial

reporting

under

Section

404(b)

of

the

Sarbanes-Oxley

Act

(15

U.S.C.

7262(b))

by

the

registered

public

accounting

firm

that

prepared

or

issued

its

audit

report.

☑

*Indicate

by

check

mark

which

basis

of

accounting

the

registrant

has

used

to

prepare

the

financial

statements

included

in

this

filing:

U.S.

GAAP

☐

International

Financial

Reporting

Standards

as

issued

by

the

International

Accounting

Standards

Board

☑

Other

☐

*If

“Other”

has

been

checked

in

response

to

the

indicate

by

check

mark

which

financial

statement

item

the

registrant

has

elected

to

follow:

Item

17

☐

Item

18

☐

If

this

is

an

annual

report,

indicate

by

check

mark

whether

the

registrant

is

a

shell

company

(as

defined

in

Rule

12b-2

of

the

Exchange

Act).

Yes

☐

No

☑

(APPLICABLE

ONLY

TO

ISSUERS

INVOLVED

IN

BANKRUPTCY

PROCEEDINGS

DURING

THE

PAST

FIVE

YEARS)

Indicate

by

check

mark

whether

the

registrant

has

filed

all

documents

and

reports

required

to

be

filed

by

Section

12,

13

or

15(d)

of

the

Securities

Exchange

Act

of

1934

subsequent

to

the

distribution

of

securities

under

a

plan

confirmed

by

a

court.

Yes

☐

No

☐

SEC

Form

20-F

Cross

reference

information

Form

20-F

item

number

Page

and

caption

references

in

this

document*

1

Identity

of

Directors,

Senior

Management

and

Advisers

Not

applicable

2

Offer

Statistics

and

Expected

Timetable

Not

applicable

3

Key

Information

A.

Selected

financial

data

187,

189,

308

B.

Capitalization

and

indebtedness

Not

applicable

C.

Reason

for

the

offer

and

use

of

proceeds

Not

applicable

D.

Risk

factors

91-101

4

Information

on

the

Company

A.

History

and

development

of

the

company

i

(Notes),

184-205,

271-274

(Note

26),

299-301

(Note

41),

305,

313

B.

Business

overview

ii

(Market

and

other

data),

152,

162,

178-183,

191-197,

224-225

(Note

2)

C.

Organizational

structure

289-292

(Notes

34

and

35),

324-327

D.

Property,

plants

and

equipment

261-

265

(Notes

20

and

21)

4A

Unresolved

staff

comments

Not

applicable

5

Operating

and

Financial

Review

and

Prospects

A.

Operating

results

88-109,

145,

168,

173-177,

184-205,

239-247

(Note

14)

B.

Liquidity

and

capital

resources

145,

150-162,

163-164,

171-172,

216,

219,

239-

247

(Note

14),

275-278

(Notes

27

and

28),

289-

290

(Note

34),

293-294

(Note

37),

328-338

C.

Research

and

development,

patents

and

licenses,

etc.

43

D.

Trend

information

91-101,

150-175,

184-205

E.

Off

-balance

sheet

arrangements

112

-115,

133-134,

160,

270

(Note

25),

290-292

(Note

35)

F.

Tabular

disclosure

of

contractual

obligations

330

G.

Safe

harbor

ii

(Forward-looking

statements)

6

Directors,

Senior

Management

and

Employees

A.

Directors

and

senior

management

3-6,

317-319

B.

Compensation

47-50,

57,

68-73,

77,

169-170,

282-288

(Notes

32

and

33),

296-298

(Note

39),

322-323

C.

Board

practices

3-6,

14-22,

40,

54-90

D.

Employees

81-85,

191,

193,

197,

224-225

(Note

2)

E.

Share

ownership

77,

282-283

(Note

32),

296-298

(Note

39),

322-

323

7

Major

Shareholders

and

Transactions

A.

Major

shareholders

44,

316

B.

transactions

C.

Interests

of

experts

and

counsel

296-298

(Note

39),

347

Not

applicable

8

Financial

Information

A.

Consolidated

statements

and

other

financial

information

207-302,

306

B.

Significant

changes

Not

applicable

9

The

Offer

and

Listing

A.

Offer

and

listing

details

308,

315

B.

Plan

of

distribution

Not

applicable

C.

Markets

308,

315

D.

Selling

shareholders

Not

applicable

E.

Dilution

Not

applicable

F.

Expenses

of

the

issue

Not

applicable

10

Additional

Information

A.

Share

capital

Not

applicable

B.

Memorandum

and

Articles

of

Association

43-45,

305-307

C.

Material

contracts

54-56,

78

D.

Exchange

controls

313

E.

Taxation

309-312

F.

Dividends

and

paying

agents

Not

applicable

G.

Statement

by

experts

Not

applicable

H.

Documents

on

display

313

I.

Subsidiary

information

289-290

(Note

34),

324-327

11

Quantitative

and

Qualitative

Disclosure

about

Market

Risk

86-183,

239-259

(Notes

14-17)

12

Description

of

Securities

Other

than

Equity

Securities

A.

Debt

Securities

Not

applicable

B.

Warrants

and

Rights

Not

applicable

C.

Other

Securities

Not

applicable

D.

American

Depositary

Shares

308,

314

13

Defaults,

Dividends

Arrearages

and

Delinquencies

Not

applicable

14

Material

Modifications

to

the

Rights

of

Security

Holders

and

Use

of

Proceeds

Not

applicable

15

Controls

and

Procedures

A.

Disclosure

controls

and

procedures

317

B.

Management’s

annual

report

on

internal

control

over

financial

reporting

39-40

C.

Attestation

report

of

the

registered

public

accounting

firm

207-210

D.

Changes

in

internal

control

over

financial

reporting

40

16A

Audit

Committee

Financial

Expert

14-15

16B

Code

of

Ethics

315

16C

Principal

Accountant

Fees

and

Services

21-22,

298

(Note

40)

16D

Exemptions

from

the

Listing

Standards

for

Audit

Committees

Not

applicable

16E

Purchases

of

Equity

Securities

by

the

Issuer

and

Affiliated

Purchasers

44

16F

Change

in

Registrant’s

Certifying

Accountant

Not

applicable

16G

Corporate

Governance

315

16H

Mine

Safety

Disclosure

Not

applicable

17

Financial

Statements

Not

applicable

(See

Item

8)

18

Financial

Statements

Not

applicable

(See

Item

8)

19

Exhibits

Exhibit

Index

*

Captions

have

been

included

only

in

respect

of

pages

with

multiple

sections

on

the

same

page

in

order

to

identify

the

relevant

caption

on

that

page

covered

by

the

corresponding

Form

20-F

item

number.

Making

a

difference

Barclays

PLC

2020

Annual

Report

on

Form

20

-F

Notes

The

terms

Barclays

or

Group

refer

to

Barclays

PLC

together

with

its

subsidiaries.

Unless

otherwise

stated,

the

income

statement

analysis

compares

the

year

ended

31

December

2020

to

the

corresponding

twelve

months

of

2019

and

balance

sheet

analysis

as

at

31

December

2020

with

comparatives

relating

to

31

December

2019.

The

abbreviations

‘£m’

and

‘£bn’

represent

millions

and

thousands

of

millions

of

Pounds

Sterling

respectively;

the

abbreviations

‘$m’

and

‘$bn’

represent

millions

and

thousands

of

millions

of

US

Dollars

respectively;

and

the

abbreviations

‘€m’

and

‘€bn’

represent

millions

and

thousands

of

millions

of

Euros

respectively.

There

are

a

number

of

key

judgement

areas,

for

example

impairment

calculations,

which

are

based

on

models

and

which

are

subject

to

ongoing

adjustment

and

modifications.

Reported

numbers

reflect

best

estimates

and

judgements

at

the

given

point

in

time.

Relevant

terms

that

are

used

in

this

document

but

are

not

defined

under

applicable

regulatory

guidance

or

International

Financial

Reporting

Standards

(IFRS)

are

explained

in

the

results

glossary

that

can

be

accessed

at

home.barclays/investor-relations/reports-and-events/latest-financial-

results.

The

information

in

this

announcement,

which

was

approved

by

the

Board

of

Directors

on

17

February

2021,

does

not

comprise

statutory

accounts

within

the

meaning

of

Section

434

of

the

Companies

Act

2006.

Statutory

accounts

for

the

year

ended

31

December

2020,

which

contain

an

unmodified

audit

report

under

Section

495

of

the

Companies

Act

2006

(which

does

not

make

any

statements

under

Section

498

of

the

Companies

Act

2006),

will

be

delivered

to

the

Registrar

of

Companies

in

accordance

with

Section

441

of

the

Companies

Act

2006.

Barclays

is

a

frequent

issuer

in

the

debt

capital

markets

and

regularly

meets

with

investors

via

formal

road-shows

and

other

ad

hoc

meetings.

Consistent

with

its

usual

practice,

Barclays

expects

that

from

time

to

time

over

the

coming

quarter

it

will

meet

with

investors

globally

to

discuss

these

results

and

other

matters

relating

to

the

Group.

Non-IFRS

performance

measures

Barclays

management

believes

that

the

non-IFRS

performance

measures

included

in

this

document

provide

valuable

information

to

the

readers

of

the

financial

statements

as

they

enable

the

reader

to

identify

a

more

consistent

basis

for

comparing

the

businesses’

performance

between

financial

periods

and

provide

more

detail

concerning

the

elements

of

performance

which

the

managers

of

these

businesses

are

most

directly

able

to

influence

or

are

relevant

for

an

assessment

of

the

Group.

They

also

reflect

an

important

aspect

of

the

way

in

which

operating

targets

are

defined

and

performance

is

monitored

by

Barclays

management.

However,

any

non-IFRS

performance

measures

in

this

document

are

not

a

substitute

for

IFRS

measures

and

readers

should

consider

the

IFRS

measures

as

well.

Refer

to

the

appendix

on

pages

198

to

205

for

further

information

and

calculations

of

non-IFRS

performance

measures

included

throughout

this

document,

and

the

most

directly

comparable

IFRS

measures.

Key

non-IFRS

measures

included

in

this

document,

and

the

most

directly

comparable

IFRS

measures,

are:

–

Attributable

profit/(loss)

excluding

litigation

and

conduct

represents

attributable

profit/(loss)

excluding

litigation

and

conduct

charges.

The

comparable

IFRS

measure

is

attributable

profit/(loss).

A

reconciliation

is

provided

on

pages

202

to

205;

–

Average

allocated

equity

represents

the

average

shareholders’

equity

that

is

allocated

to

the

businesses.

The

comparable

IFRS

measure

is

average

equity.

A

reconciliation

is

provided

on

pages

202

to

205;

–

Average

allocated

tangible

equity

is

calculated

as

the

average

of

the

period

end

allocated

tangible

equity

and

the

current

month’s

period

end

allocated

tangible

equity.

The

average

allocated

tangible

equity

for

the

period

is

the

average

of

the

monthly

averages

within

that

period.

Period

end

allocated

tangible

equity

is

calculated

as

13.0%

(2019:

13.0%)

of

RWAs

for

each

business,

adjusted

for

capital

deductions,

excluding

goodwill

and

intangible

assets,

reflecting

the

assumptions

the

Group

uses

for

capital

planning

purposes.

Head

Office

allocated

tangible

equity

represents

the

difference

between

the

Group’s

tangible

shareholders’

equity

and

the

amounts

allocated

to

businesses.

The

comparable

IFRS

measure

is

average

equity.

A

reconciliation

is

provided

on

pages

202

to

205;

–

Average

tangible

shareholders’

equity

is

calculated

as

the

average

of

the

period

end

tangible

equity

and

the

current

month’s

period

end

tangible

equity.

The

average

tangible

shareholders’

equity

for

the

period

is

the

average

of

the

monthly

averages

within

that

period.

The

comparable

IFRS

measure

is

average

equity.

A

reconciliation

is

provided

on

pages

202

to

205;

–

Basic

earnings

per

share

excluding

litigation

and

conduct

is

calculated

by

dividing

statutory

profit

after

tax

attributable

to

ordinary

shareholders

excluding

litigation

and

conduct

charges,

by

the

basic

weighted

average

number

of

shares.

The

comparable

IFRS

measure

is

basic

earnings

per

share.

A

reconciliation

is

provided

on

pages

202

to

205;

–

Cost:

income

ratio

excluding

litigation

and

conduct

represents

operating

expenses

excluding

litigation

and

conduct

charges,

divided

by

total

income.

The

comparable

IFRS

measure

is

cost:

income

ratio.

A

reconciliation

is

provided

on

pages

202

to

205;

–

Operating

expenses

excluding

litigation

and

conduct

represents

operating

expenses

excluding

litigation

and

conduct

charges.

The

comparable

IFRS

measure

is

operating

expenses.

A

reconciliation

is

provided

on

pages

202

to

205;

–

Operating

expenses

excluding

litigation

and

conduct,

and

a

Guaranteed

Minimum

Payments

(GMP)

charge

of

£140m

for

2018

represents

operating

expenses

excluding

litigation

and

conduct

charges,

and

a

GMP

charge

of

£140m

for

2018.

The

comparable

IFRS

measure

is

operating

expenses.

A

reconciliation

is

provided

on

page

187;

–

Pre-provision

profits

is

calculated

by

excluding

credit

impairment

charges

from

profit

before

tax.

The

comparable

IFRS

measure

is

profit

before

tax.

A

reconciliation

is

provided

on

pages

202

to

205;

–

Pre-provision

profits

excluding

litigation

and

conduct

is

calculated

by

excluding

litigation

and

conduct,

and

credit

impairment

charges

from

profit

before

tax.

The

comparable

IFRS

measure

is

profit

before

tax.

A

reconciliation

is

provided

on

pages

202

to

205;

–

Profit/(loss)

before

tax

excluding

litigation

and

conduct

represents

profit/(loss)

before

tax

excluding

litigation

and

conduct

charges.

The

comparable

IFRS

measure

is

profit/(loss)

before

tax.

A

reconciliation

is

provided

on

pages

202

to

205;

–

Return

on

average

allocated

equity

represents

the

return

on

shareholders’

equity

that

is

allocated

to

the

businesses.

The

comparable

IFRS

measure

is

return

on

equity.

A

reconciliation

is

provided

on

page

200;

–

Return

on

average

allocated

tangible

equity

is

calculated

as

the

annualised

profit

after

tax

attributable

to

ordinary

equity

holders

of

the

parent,

as

a

proportion

of

average

allocated

tangible

equity.

The

comparable

IFRS

measure

is

return

on

equity.

A

reconciliation

is

provided

on

page

201;

–

Return

on

average

allocated

tangible

equity

excluding

litigation

and

conduct

is

calculated

as

the

annualised

profit

after

tax

attributable

to

ordinary

equity

holders

of

the

parent

excluding

litigation

and

conduct

charges,

as

a

proportion

of

average

allocated

tangible

equity.

The

comparable

IFRS

measure

is

return

on

equity.

A

reconciliation

is

provided

on

page

202;

–

Return

on

average

tangible

shareholders’

equity

is

calculated

as

the

annualised

profit

after

tax

attributable

to

ordinary

equity

holders

of

the

parent,

as

a

proportion

of

average

shareholders’

equity

excluding

non-controlling

interests

and

other

equity

instruments

adjusted

for

the

deduction

of

intangible

assets

and

goodwill.

The

comparable

IFRS

measure

is

return

on

equity.

A

reconciliation

is

provided

on

page

204;

and

–

Tangible

net

asset

value

per

share

is

calculated

by

dividing

shareholders’

equity,

excluding

non-controlling

interests

and

other

equity

instruments,

less

goodwill

and

intangible

assets,

by

the

number

of

issued

ordinary

shares.

A

reconciliation

is

provided

on

page

205.

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

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.

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.

Market

and

other

data

This

document

contains

information,

including

statistical

data,

about

certain

Barclays

markets

and

its

competitive

position.

Except

as

otherwise

indicated,

this

information

is

taken

or

derived

from

Datastream

and

other

external

sources.

Barclays

cannot

guarantee

the

accuracy

of

information

taken

from

external

sources,

or

that,

in

respect

of

internal

estimates,

a

third

party

using

different

methods

would

obtain

the

same

estimates

as

Barclays.

Uses

of

Internet

addresses

This

document

contains

inactive

textual

addresses

to

internet

websites

operated

by

us

and

third

parties.

Reference

to

such

websites

is

made

for

information

purposes

only,

and

information

found

at

such

websites

is

not

incorporated

by

reference

into

this

document.

References

to

Strategic

Report,

Pillar

3

Report

and

TCFD

Report

This

document

contains

references

throughout

to

the

Barclays

PLC

Strategic

Report,

Pillar

3

Report

and

TCFD

Report.

References

to

the

aforementioned

reports

are

made

for

information

purposes

only,

and

information

found

in

said

reports

is

not

incorporated

by

reference

into

this

document.

1

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Contents

What’s

inside

this

report

Governance

◾

Governance

contents

2

◾

Directors’

report

11

◾

Remuneration

report

47

◾

Our

people

and

culture

81

Risk

review

◾

Risk

review

contents

86

◾

Risk

management

88

◾

Material

existing

and

emerging

risks

91

◾

Climate

change

risk

management

102

◾

Principal

risk

management

104

◾

Risk

performance

110

◾

Supervision

and

regulation

178

Financial

review

◾

Financial

review

contents

184

◾

Key

performance

indicators

185

◾

Consolidated

summary

income

statement

187

◾

Income

statement

commentary

188

◾

Consolidated

summary

balance

sheet

189

◾

Balance

sheet

commentary

190

◾

Analysis

of

results

by

business

191

◾

Non-IFRS

performance

measures

196

Financial

statements

◾

Financial

statements

contents

206

◾

Consolidated

financial

statements

212

◾

Notes

to

the

financial

statements

220

Shareholder

information

◾

Key

dates,

Annual

General

Meeting,

Dividends,

and

other

useful

information

303

Our

Governance

2

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Welcome

to

our

Governance

report.

This

report

explains

the

composition

of

our

Board

and

Executive

Committee,

how

our

governance

framework

operates

and

our

key

areas

of

focus

in

2020.

Aim

of

our

governance

The

primary

aim

of

our

governance

is

that

it:

◾

seeks

to

ensure

that

our

decision-making

is

aligned

to

our

purpose

and

values

◾

creates

long

-term

sustainable

value

for

our

shareholders,

having

regard

to

the

interests

of

all

our

stakeholders

◾

is

effective

in

providing

constructive

challenge,

advice

and

support

to

management

◾

provides

checks

and

balances

and

drives

informed,

collaborative

and

accountable

decision-making.

Compliance

with

the

Code

and

Regulations

Our

Governance

report

reflects

the

requirements

of

the

2018

UK

Corporate

Governance

Code

(the

‘Code’)

and

the

Companies

(Miscellaneous

Reporting)

Regulations

2018

(the

‘Regulations’).

To

view

our

specific

compliance

as

against

the

Code,

please

see

pages

35

to

40.

Certain

additional

information,

signposted

throughout

this

report,

is

available

at

home.barclays/corporategovernance.

Directors’

report

Board

of

Directors

3

Executive

Committee

7

Directors’

report

8

Our

key

areas

of

focus

in

202

11

Key

priorities

12

Board

Audit

Committee

report

14

Board

Nominations

Committee

report

23

Board

Risk

Committee

report

29

How

we

comply

35

Other

statutory

information

41

Remuneration

report

47

Directors’

report:

Board

of

Directors

3

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Overview

of

key

developments

in

2020

The

challenges

presented

by

the

COVID-19

pandemic

reinforced

the

importance

for

the

Board

of

our

purpose

in

everything

we

do

and,

in

particular,

embedding

it

in

our

response

to

the

pandemic.

We

want

to

reinforce

that

clarity

and

conviction

about

our

purpose

and

our

values,

and

stay

true

to

that

way

of

thinking

about

how

we

take

action

at

pace.

Accordingly,

during

2020,

the

Board

approved

the

introduction

of

a

new,

extended

narrative

of

the

Group’s

purpose

and

the

refreshed

descriptions

of

our

values

to

make

sure

they

are

still

relevant

for

the

challenges

ahead.

You

can

read

more

about

how

the

Board

oversaw

the

evolution

of

our

purpose

and

values

on

page

12.

Throughout

the

COVID-19

pandemic,

the

Board

has

been

keenly

focussed

on

protecting

the

health

and

well-being

of

our

colleagues

and

supporting

our

customers,

clients

and

other

stakeholders,

whilst

at

the

same

time

maintaining

the

financial

and

operational

integrity

of

the

Barclays

Group.

Nigel

Higgins

Group

Chairman

Appointed:

2

May

2019

Relevant

skills

and

experience

Nigel

is

the

Group

Chairman.

He

is

also

Chairman

of

Barclays

Bank

PLC.

Nigel

has

extensive

experience

in,

and

understanding

of,

banking

and

financial

services,

gained

through

a

36-year

career

at

Rothschild

&

Co.

where

he

was

most

recently

Deputy

Chairman.

Prior

to

that

he

was

Chairman

of

the

Group

Executive

Committee

and

Managing

Partner

of

Rothschild

&

Co.

He

is

a

seasoned

business

leader

with

a

strong

track

record

in

leading

and

chairing

a

range

of

organisations

and

in

acting

as

a

strategic

adviser

to

multiple

major

international

corporations

and

governments.

The

breadth

of

Nigel’s

knowledge

and

operational

experience

with

international

banking

groups,

building

teams

and

culture

and

growing

businesses

are

all

hugely

beneficial

to

Barclays,

and

enables

Nigel

to

contribute

to

the

strategic

direction

and

long-term

sustainable

success

of

Barclays.

Key

current

appointments

Chairman,

Sadler’s

Wells;

Non-Executive

Director,

Tetra

Laval

Group

Board

Committee

membership

Board

Nominations

Committee

(Chair)

Jes

Staley

Group

Chief

Executive

Appointed:

1

December

2015

Relevant

skills

and

experience

Jes

has

nearly

four

decades

of

extensive

experience

in

banking

and

financial

services.

He

brings

a

wealth

of

investment

banking

knowledge

to

the

Board

as

well

as

strong

executive

leadership,

and

this

contribution

is

reflected

in

Barclays’

strategy

and

long-term

sustainable

success

of

the

business.

He

previously

worked

for

more

than

30

years

at

JP

Morgan

where

he

initially

trained

as

a

commercial

banker,

later

advancing

to

the

leadership

of

major

businesses

involving

equities,

private

banking

and

asset

management,

and

ultimately

heading

JP

Morgan’s

Global

Investment

Bank.

Key

current

appointments

Board

Member,

Bank

Policy

Institute;

Board

Member,

Institute

of

International

Finance

Board

Committee

membership

None

Brian

Gilvary

Senior

Independent

Director

Appointed:

1

February

2020

Relevant

skills

and

experience

Brian

was

appointed

to

the

Board

with

effect

from

1

February

2020

and

took

on

the

role

of

Senior

Independent

Director

on

1

January

2021.

He

is

an

experienced

executive

having

served

on

the

Board

of

BP

p.l.c.

as

Chief

Financial

Officer

from

2012

to

2020.

Brian’s

BP

career

spanned

Upstream,

Downstream

and

Trading

based

in

the

UK,

USA

and

Europe.

Previously,

he

held

several

senior

financial

and

commercial

roles,

including

member

of

the

Board

of

TNK-BP

(a

BP

Russian

JV),

Chief

Executive

of

BP’s

commodity

trading

division

and

Commercial

Director

of

the

downstream

division.

His

other

senior

level

experience

includes

serving

on

the

Boards

of

various

commercial

and

charitable

organisations.

Brian

was

also

Chairman

of

the

FTSE

100

Group

of

Finance

Directors

from

2018

to

2020,

a

member

of

the

UK

Treasury

Financial

Management

Review

Board

from

2014-2017

and

has

served

on

various

HRH

Prince

of

Wales’

Business

in

the

Community

Leadership

Teams

from

2007-2009.

Brian

brings

to

the

Board

his

extensive

experience

of

management,

finance

and

strategy

gained

at

BP

and

other

public

and

private

Boards,

along

with

deep

experience

of

US

and

UK

shareholder

engagement.

His

experience

with,

and

understanding

of,

the

challenges

and

opportunities

inherent

in

advancing

a

sustainable

energy

future

will

be

invaluable

as

Barclays

considers

how

it

can

help

to

accelerate

the

transition

to

a

low-carbon

world.

Key

current

appointments

Non-Executive

Director,

Air

Liquide

S.A.;

Executive

Chairman,

INEOS

Energy,

an

INEOS

group

company

Board

Committee

membership

Board

Remuneration

Committee,

Board

Nominations

Committee

(from

1

January

2021),

Board

Risk

Committee

(from

1

January

2021)

Directors’

report:

Board

of

Directors

4

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Crawford

Gillies

Non-Executive

(prior

to

1

January

2021

Senior

Independent

Director)

Appointed:

1

May

2014

Relevant

skills

and

experience

Crawford

is

a

senior

member

of

the

Board

having

held

the

role

of

Senior

Independent

Director

prior

to

1

January

2021.

He

is

also

Chair

of

Barclays

Bank

UK

PLC

(subject

to

regulatory

approval).

He

has

extensive

business

transformation

and

management

experience

at

executive

and

board

level

spanning

over

30

years.

Beneficial

to

the

Board

and

to

Barclays’

strategy

and

long-term

sustainable

success

is

his

key

understanding

of

stakeholder

needs

and

his

experience

in

international

and

cross-sector

organisations,

strong

leadership

and

strategic

decision-making.

Key

current

appointments

Chairman,

Edrington

Group

Board

Committee

membership

Board

Audit

Committee,

(until

31

December

2020),

Board

Nominations

Committee

Board,

Remuneration

Committee

(Chair)

Mike

Ashley

Non-Executive

Appointed:

18

September

2013

Relevant

skills

and

experience

Mike

has

deep

knowledge

of

accounting,

auditing

and

associated

regulatory

issues,

having

previously

worked

at

KPMG

for

over

20

years.

Mike’s

former

roles

include

acting

as

the

lead

engagement

partner

on

the

audits

of

large

financial

services

groups

including

HSBC,

Standard

Chartered

and

the

Bank

of

England,

as

Head

of

Quality

and

Risk

Management

for

KPMG

Europe

LLP

and

as

KPMG

UK’s

Ethics

Partner.

The

Board

benefits

from

his

extensive

experience

in

accounting,

auditing

and

financial

reporting

and

therefore

Mike

continues

to

contribute

to

the

long-term

sustainable

success

of

the

business.

Key

current

appointments

Member,

Cabinet

Office

Board;

Member,

International

Ethics

Standards

Board

for

Accountants;

Member,

ICAEW

Ethics

Standards

Committee;

Treasurer,

The

Scout

Association

Board

Committee

membership

Board

Audit

Committee

(Chair),

Board

Nominations

Committee,

Board

Risk

Committee

Tim

Breedon

CBE

Non-Executive

Appointed:

1

November

2012

Relevant

skills

and

experience

Tim’s

continued

contribution

to

Barclays’

strategy

and

long-term

sustainable

success

comes

from

his

extensive

financial

services

experience,

knowledge

of

risk

management

and

UK

and

EU

regulation,

as

well

as

an

understanding

of

key

investor

issues.

He

had

a

distinguished

career

with

Legal

&

General,

where,

among

other

roles,

he

was

the

Group

CEO

until

June

2012;

this

experience

enables

Tim

to

provide

challenge,

advice

and

support

to

management

on

business

performance

and

decision-making.

Key

current

appointments

Chairman,

Apax

Global

Alpha

Limited;

Non-Executive

Director,

Quilter

PLC

Board

Committee

membership

Board

Audit

Committee,

Board

Nominations

Committee,

Board

Remuneration

Committee,

Board

Risk

Committee

(Chair)

Sir

Ian

Cheshire

Non-Executive

Appointed:

3

April

2017

Relevant

skills

and

experience

Sir

Ian

is

a

member

of

the

Board

and

until

31

December

2020

was

Chair

of

Barclays

Bank

UK

PLC.

He

contributes

to

the

Board

substantial

business

experience,

particularly

in

the

international

retail

sector

from

his

lengthy

executive

career

at

the

Kingfisher

Group,

as

well

as

experience

in

sustainability

and

environmental

matters

which

are

important

to

the

Group’s

strategy

and

long-term

sustainable

success.

Sir

Ian

holds

strong

credentials

in

leadership,

is

involved

with

many

charitable

organisations,

such

as

The

Prince

of

Wales’s

Charitable

Foundation,

and

is

highly

regarded

by

the

Government

for

his

work

with

various

Government

departments.

Key

current

appointments

Chairman,

Menhaden

plc;

Trustee,

Institute

for

Government;

Non-Executive

Director,

British

Telecommunications

plc

Board

Committee

membership

Board

Nominations

Committee

(until

31

December

2020)

Directors’

report:

Board

of

Directors

5

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Mohamed

A.

El-Erian

Non-Executive

Appointed:

1

January

2020

Relevant

skills

and

experience

Mohamed

is

a

highly

respected

economist

and

investor,

with

considerable

experience

in

the

asset

management

industry

and

multilateral

institutions.

He

is

the

President

of

Queens’

College

Cambridge

and

a

part-time

advisor

to

Allianz,

the

corporate

parent

of

Pacific

Investment

Management

Company

(PIMCO

LLC),

where

he

formerly

served

as

Chief

Executive

and

Co-Chief

Investment

Officer.

As

well

as

serving

on

several

advisory

committees

and

boards,

Mohamed

is

a

regular

columnist

for

Bloomberg

Opinion

and

a

contributing

editor

at

the

Financial

Times.

He

has

also

published

widely

on

international

economic

and

financial

topics.

He

spent

15

years

at

the

IMF,

where

he

served

as

Deputy

Director

before

moving

to

the

private

sector

and

financial

services.

Mohamed’s

acute

knowledge

and

understanding

of

international

economics

and

the

financial

services

sector

strengthens

the

Board’s

capacity

for

overseeing

the

strategic

direction

and

development

of

the

Group.

Mohamed’s

knowledge

and

experience

enable

him

to

contribute

to

the

long-term

sustainable

success

and

strategy

of

the

business.

Key

current

appointments

Lead

Independent

Director,

Under

Armour

Inc.;

Chief

Economic

Advisor,

Allianz

SE;

Chairman,

Gramercy

Funds

Management;

Senior

Advisor,

Investcorp

Bank

BSC;

President,

Queens’

College,

Cambridge

University

Board

Committee

membership

Board

Risk

Committee

Dawn

Fitzpatrick

Non-Executive

Appointed:

25

September

2019

Relevant

skills

and

experience

Dawn

is

a

highly

experienced

financial

executive

who

holds

the

role

of

Chief

Investment

Officer

at

Soros

Fund

Management

LLC.

Her

includes

25

years

with

UBS

and

its

predecessor

organisations,

most

recently

as

Head

of

Investments

for

UBS

Asset

Management.

Her

knowledge

of

the

businesses

and

markets

in

which

the

Group

operates

further

strengthens

the

depth

and

range

of

relevant

sector

skills

and

experience

across

the

Board.

This

enables

Dawn

to

challenge

and

contribute

effectively

to

the

Group’s

operations

and

the

long-term

sustainable

success

of

the

business.

Key

current

appointments

Chief

Investment

Officer,

Soros

Fund

Management

LLC;

Member,

The

New

York

Federal

Reserve’s

Investor

Advisory

Committee

on

Financial

Markets;

Member,

Advisory

Board

and

Investment

Committee

of

the

Open

Society

Foundations’

Economic

Justice

Programme

Board

Committee

membership

Board

Risk

Committee

Mary

Francis

CBE

Non-Executive

Appointed:1

October

2016

Relevant

skills

and

experience

Mary

has

extensive

and

diverse

board-level

experience

across

a

range

of

industries,

including

her

Executive

Directorships

of

the

Bank

of

England,

Alliance

&

Leicester,

Aviva,

Centrica

and

Swiss

Re

Group.

Through

her

former

senior

executive

positions

with

HM

Treasury,

the

Prime

Minister’s

Office,

and

as

Director

General

of

the

Association

of

British

Insurers,

she

brings

to

the

Board

a

strong

understanding

of

the

interaction

between

public

and

private

sectors,

skills

in

strategic

decision-making

and

reputation

management

and

promotes

strong

board

governance

values,

which

enables

her

to

continue

to

contribute

effectively

to

the

long-term

sustainable

success

of

the

Group.

Key

current

appointments

Non-Executive

Director,

Valaris

PLC;

Senior

Independent

Director,

PensionBee

Ltd;

Member

of

Advisory

Panel,

The

Institute

of

Business

Ethics;

Member,

UK

Takeover

Appeal

Board

Committee

membership

Board

Remuneration

Committee

Tushar

Morzaria

Group

Finance

Director

Appointed:

15

October

2013

Relevant

skills

and

experience

Tushar

is

a

chartered

accountant

and

joined

the

Barclays

Board

and

Executive

Committee

as

Group

Finance

Director

in

October

2013.

As

part

of

his

role

he

is

responsible

for

Finance,

Tax,

Treasury,

Investor

Relations

and

Strategy.

His

extensive

knowledge

of

strategic

financial

management,

investment

banking

and

operational

and

regulatory

relations

enable

him

to

contribute

effectively

to

Barclays

long-term

sustainable

success.

He

has

worked

in

investment

banking

for

most

of

his

career

and

held

various

roles

at

SG

Warburg,

Credit

Suisse

and

JPMorgan.

Immediately

prior

to

joining

Barclays

he

was

CFO

of

the

Corporate

and

Investment

Bank

at

JPMorgan

Chase.

Tushar

is

currently

Chair

of

the

Working

Group

on

Sterling

Risk

Free

Reference

Rates

and

a

non-executive

director

on

the

BP

p.l.c.

board

and

a

member

of

its

Audit

and

Remuneration

Committees.

Key

current

appointments

Non-Executive

Director,

BP

p.l.c.;

Member,

100

Group

Main

Committee;

Chair,

Sterling

Risk

Free

Reference

Rates

Working

Group

Board

Committee

membership

None

Directors’

report:

Board

of

Directors

6

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Diane

Schueneman

Non-Executive

Appointed:

25

June

2015

Relevant

skills

and

experience

Diane

is

a

member

of

the

Board,

Chair

of

Barclays

Execution

Services

Limited

and

a

member

of

the

Board

of

Barclays

US

LLC.

She

brings

to

Barclays

a

wealth

of

experience

in

managing

global,

cross-discipline

business

operations,

client

services

and

technology

in

the

financial

services

industry,

which

enables

her

to

robustly

challenge

the

Group’s

strategy

and

support

the

long-term

sustainable

success

of

Barclays.

Diane

had

an

extensive

career

at

Merrill

Lynch,

holding

a

variety

of

senior

roles,

including

responsibility

for

banking,

brokerage

services

and

technology

provided

to

the

company’s

retail

and

middle

market

clients.

Key

current

appointments

None

Board

Committee

membership

Board

Audit

Committee,

Board

Nominations

Committee,

Board

Risk

Committee

Stephen

Shapiro

Group

General

Counsel

and

Group

Company

Secretary

Appointed:

1

November

2017

Relevant

skills

and

experience

Stephen

joined

Barclays

in

November

2017

as

Group

Company

Secretary

and

was

subsequently

appointed

Group

General

Counsel

in

August

2020,

in

addition

to

his

role

as

Group

Company

Secretary.

Before

joining

Barclays

Stephen

served

as

the

Group

Company

Secretary

and

Deputy

General

Counsel

of

SABMiller

plc,

and

prior

to

this,

he

practised

law

as

a

partner

in

a

law

firm

in

South

Africa,

and

subsequently

in

corporate

law

and

M&A

at

Hogan

Lovells

in

the

UK.

Stephen

has

extensive

experience

in

corporate

governance,

legal,

regulatory

and

compliance

matters.

Stephen

serves

as

Vice

Chair

of

the

GC100,

the

association

of

General

Counsel

and

Company

Secretaries

working

in

FTSE

100

companies,

and

has

previously

served

as

Chairman

of

the

ICC

UK’s

Committee

on

Anti-Corruption.

Directors’

report:

Executive

Committee

7

Barclays

PLC

2020

Annual

Report

on

Form

20-F

In

2020

we

further

refreshed

the

composition

of

the

Executive

Committee

(ExCo)

to

ensure,

as

our

most

senior

management

forum

for

the

Group,

it

continues

to

have

the

right

balance

of

skills

and

experience

that

we

need

to

deliver

our

strategic

ambitions.

Through

the

appointments

made

during

the

year,

we

have

sought

to

strengthen

the

senior

management

of

the

Group,

bringing

fresh

perspectives

and

talents

to

bear

on

important

areas

of

our

business.

We

have

created

a

new

role

on

the

ExCo

to

ensure

that

societal

engagement

and

our

climate

change

ambitions

are

at

the

heart

of

our

decision-

making.

We

have

also

created

the

roles

of

Co-President

of

Barclays

Bank

PLC,

so

that

our

Corporate

Bank,

Banking

and

Markets

businesses

work

more

closely

together,

driving

stronger

collaboration

across

the

CIB

and

delivering

the

Power

of

One

Barclays

for

the

benefit

of

our

customers

and

clients:

New

roles

Head

of

Public

Policy

and

Corporate

Responsibility

Sasha

Wiggins

Global

Head

of

Banking

and

Co-President

of

Barclays

Bank

PLC

Paul

Compton

Global

Head

of

Markets

and

Co-President

of

Barclays

Bank

PLC

C.S.

Venkatakrishnan

Paul

and

Venkat

were

previously

members

of

the

ExCo

in

their

respective

capacities

as

President

of

Barclays

Bank

PLC

and

Group

Chief

Risk

Officer.

Joe

McGrath

stepped

down

from

the

ExCo

on

31

December

2020

and

we

are

immensely

grateful

for

his

continued

contribution

as

Chairman

of

Investment

Banking.

New

Appointments

to

the

ExCo

Group

Chief

Risk

Officer

Taalib

Shah

Group

General

Counsel

Stephen

Shapiro

Bob

Hoyt

stepped

down

as

Group

General

Counsel

in

July

2020.

Directors’

report

8

Barclays

PLC

2020

Annual

Report

on

Form

20-F

The

Board

remains

committed,

through

our

governance

framework,

to

driving

purpose-led

decision-

making

and

to

delivering

accountability

to

our

stakeholders

Our

governance

framework

The

Board

views

governance

as

how

it

makes

decisions

and

provides

oversight

in

order

to

promote

Barclays’

success

for

the

long-term

benefit

of

its

shareholders

having

regard

to

the

interests

of

its

other

key

stakeholders

–

our

clients,

customers,

colleagues

and

the

communities

in

which

we

operate.

Effective

governance

facilitates

the

delivery

of

Barclays’

purpose

and

strategy,

particularly

in

challenging

times.

Barclays

is

a

large,

diversified

organisation.

The

Board

is

committed,

through

our

governance

framework,

to

driving

purpose-led

decision-

making

and

to

delivering

accountability

to

our

stakeholders.

Our

Group-wide

governance

framework

has

been

designed

to

facilitate

the

effective

management

of

the

Group

across

its

diverse

businesses

by

our

Group

CEO

and

his

ExCo,

whilst

preserving

the

constructive

challenge,

support

and

oversight

of

the

Group’s

major

subsidiary

boards

in

the

UK,

Ireland

and

the

US,

consistent

with

their

respective

legal

and

regulatory

responsibilities

and

in

compliance

with

UK

ring-fencing

requirements.

The

Barclays

PLC

(BPLC)

Board

is

responsible

for

setting

the

strategic

direction

and

risk

appetite

of

the

Group

and

is

the

ultimate

decision-

making

body

for

matters

of

Group-wide

strategic,

financial,

regulatory

or

reputational

significance.

BPLC

is

the

Group

parent

company

and

has

a

premium

listing

on

the

London

Stock

Exchange.

Each

of

its

main

operating

entities,

Barclays

Bank

PLC

(BBPLC),

Barclays

Bank

UK

PLC

(BBUKPLC),

Barclays

Bank

Ireland

PLC,

Barclays

US

LLC

and

Barclays

Bank

Delaware,

has

its

own

board

comprising

Executive

and

Non-Executive

Directors.

Each

also

has

its

own

board

committees.

These

main

operating

companies

are

supported

by

BX,

the

Group-wide

service

company

providing

technology,

operations

and

functional

services

to

businesses

across

the

Group.

Membership

of

the

BPLC

and

BBPLC

Boards

was

consolidated

and

streamlined

in

2019,

and

this

has

led

to

significantly

improved

coordination

and

efficiency

and

reduced

complexity

and

duplication.

Membership

of

the

BBPLC

Board

became

a

subset

of

the

BPLC

Board,

with

all

members

of

the

BPLC

Board,

except

the

Senior

Independent

Director

(SID),

the

Chairman

of

BBUKPLC

and

one

other

Non-Executive

Director,

also

serving

on

the

board

of

BBPLC.

In

2020,

the

Nominations

Committee

reviewed

the

effectiveness

of

the

consolidated

structure

and

considered

that

this

partial

consolidation

had

continued

to

deliver

its

intended

benefits

and

was

operating

effectively,

giving

due

regard

to

matters

relevant

to

each

individual

entity.

You

can

read

more

about

the

Nominations

Committee’s

role

in

driving

and

reviewing

the

effectiveness

of

our

governance

framework

on

pages

23

to

28.

Board

composition

In

2020,

the

Board

welcomed

the

addition

of

two

new

Non-Executive

Directors:

◾

Mohamed

A.

El-Erian,

who

was

appointed

on

1

January

2020;

and

◾

Brian

Gilvary,

who

was

appointed

on

1

February

2020.

Both

appointments

have

brought

valuable

insight

and

experience

to

the

Board,

relevant

to

the

markets

and

geographies

in

which

Barclays

operates.

In

December

2020,

the

Board

was

very

pleased

to

announce

that

Julia

Wilson

will

join

the

Board

as

a

Non-Executive

Director

with

effect

from

1

April

2021.

She

will

also

join

the

Audit

Committee.

Julia’s

appointment

reflects

our

commitment

to

strengthening

our

Board

through

the

addition

of

further

highly

respected

individuals

with

strong

financial

services

expertise.

She

will

bring

significant

corporate

finance,

tax

and

accounting

experience

to

the

Board

and

we

look

forward

to

welcoming

her

ahead

of

our

AGM.

As

reported

in

our

2019

Annual

Report,

Matthew

Lester

stepped

down

from

the

Board

on

1

January

2020.

Mary

Anne

Citrino

stepped

down

from

the

Board

on

30

September

2020

in

order

to

dedicate

more

time

to

her

other

board

commitments.

We

are

grateful

to

them

both

for

their

service

to

Barclays.

In

line

with

the

Group’s

plans

for

orderly

succession,

Sir

Ian

Cheshire

stepped

down

as

a

Non-Executive

Director

and

Chair

of

BBUKPLC

on

31

December

2020

and

was

succeeded

by

Crawford

Gillies

with

effect

from

1

January

2021

(subject

to

regulatory

approval).

Crawford’s

track

record

and

deep

knowledge

of

the

Group,

including

BBUKPLC,

position

him

well

for

this

role.

He

remains

on

the

BPLC

Board

alongside

his

role

on

the

BBUKPLC

Board

and

we

consider

that

the

ongoing

benefits

of

having

the

Chair

of

one

of

our

principal

subsidiaries

as

a

member

of

the

BPLC

Board

to

be

significant.

Upon

his

appointment

to

the

BBUKPLC

Board,

Crawford

ceased

to

be

the

SID

of

BPLC

and

was

succeeded

in

that

role

by

Brian

Gilvary

with

effect

from

1

January

2021.

Sir

Ian

has

agreed

to

remain

on

the

BPLC

Board

until

the

AGM

in

May

2021

to

help

ensure

a

smooth

transition.

The

Board

is

enormously

grateful

to

Sir

Ian

for

the

tremendous

work

that

he

has

undertaken

on

behalf

of

the

Group

and

BBUKPLC

in

particular.

Crawford

will

continue

to

chair

the

Remuneration

Committee

until

1

March

2021,

when

he

will

be

succeeded

in

that

role

by

Brian

Gilvary

(subject

to

regulatory

approval).

At

that

time,

Brian

will

have

served

as

a

member

of

the

Remuneration

Committee

for

12

months

as

recommended

by

the

Code.

Brian

also

joined

the

Risk

and

Nominations

Committees

with

effect

from

1

January

2021.

You

can

read

more

about

the

membership

of

each

of

our

Board

Committees

on

pages

14

to

34

and

79

to

80.

Efforts

are

ongoing

to

further

complement

the

current

range

of

skills

on

the

Board

through

the

recruitment

of

an

additional

Non-Executive

Director

with

technology

experience.

The

benefits

of

increased

diversity

remain

at

the

forefront

of

this

search.

We

continue

to

believe

that

a

board

with

the

right

balance

of

skills,

experience

and

diversity

–

of

gender,

ethnicity,

cognitive

and

personal

strengths

and

social

backgrounds

-

is

critical

to

the

sustainable

delivery

of

value

to

our

shareholders.

Tim

Breedon

will

have

been

on

the

Board

for

nine

years

in

November

2021

and

Mike

Ashley

will

have

been

on

the

Board

for

nine

years

in

September

2022

and,

therefore,

the

Board

is

currently

focussed

on

identifying

and

developing

potential

successors

for

their

roles

as

Risk

Committee

Chair

and

Audit

Committee

Chair

respectively.

You

can

read

more

about

the

Board’s

composition,

diversity

and

succession

planning,

including

recent

changes

and

the

appointment

of

Julia

Wilson

in

the

report

of

the

Nominations

Committee

on

pages

23

to

28.

Directors’

report

9

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Board

Governance

Framework

Barclays

PLC

Responsible

for

the

overall

leadership

of

the

Group

(with

direct

oversight

of

matters

relating

to

reputation,

environment

and

culture)

Audit

Committee

Assesses

the

integrity

of

the

Group’s

financial

statements

Evaluates

the

effectiveness

of

the

Group’s

internal

controls

Scrutinises

the

activities

and

performance

of

internal

and

external

auditors

Reviews

and

monitors

the

Group’s

whistleblowing

policies

Nominations

Committee

Reviews

the

composition

of

the

Board

Recommends

the

appointment

of

new

Directors

Considers

succession

plans

for

key

Board

and

ExCo

positions

Oversees

the

annual

Board

effectiveness

review

Risk

Committee

Monitors

and

recommends

the

Group’s

financial,

operational

and

legal

risk

appetite

Monitors

the

Group’s

financial,

operational,

conduct

and

legal

risk

profile

Considers

and

reports

on

key

financial

and

non-financial

risk

issues

Oversees

conduct

and

compliance

and

the

leadership

of

the

Risk

and

Compliance

functions

Remuneration

Committee

Sets

overarching

principles

and

parameters

of

remuneration

across

the

Group

Considers

and

approves

remuneration

for

the

Chair,

Executive

Directors,

other

senior

executives

and

certain

Group

employees

Oversees

remuneration

issues

For

more

information

see

page

14

For

more

information

see

page

23

For

more

information

see

page

29

For

more

information

see

page

47

Principal

committees

The

principal

Committees

of

the

Board,

and

the

core

responsibilities

of

each

Committee,

are

described

in

the

‘Board

Governance

Framework’

table

above.

The

remit

of

each

Committee

is

set

out

in

brief

in

the

table,

and

you

can

read

more

about

the

Committees

and

their

work

on

pages

14

to

34

and

79

to

80.

Measuring

our

effectiveness

We

believe

that

an

effective

board

is

one

which

delivers

value

for

its

stakeholders

–

our

shareholders,

clients,

customers,

communities

and

colleagues.

We

assess

the

effectiveness

of

our

Board,

its

Committees

and

Board

members

each

year.

In

respect

of

2020,

the

Board

effectiveness

review

was

conducted

internally,

in

line

with

the

Code,

by

the

Group

Company

Secretary,

overseen

by

the

SID.

The

SID

and

Group

Company

Secretary

were

well

placed

to

do

this,

having

previously

conducted

the

2019

review

using

broadly

similar

methodology.

As

the

Code

requires

an

externally

facilitated

evaluation

to

be

undertaken

every

three

years,

in

2021

our

effectiveness

review

will

be

undertaken

by

an

external

evaluator.

You

can

read

more

about

the

2020

process

and

progress

against

the

2019

review

on

pages

23

to

24.

Directors’

report

10

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Directors’

report

11

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Key

areas

of

focus

in

2020

Effective

governance

facilitates

the

delivery

of

Barclays’

purpose

and

strategy,

particularly

in

challenging

times.

We

believe

that

effective

governance

facilitates

the

delivery

of

Barclays’

purpose

and

strategy,

particularly

in

challenging

times.

Throughout

the

COVID-19

pandemic,

our

Board

has

been

keenly

focussed

on

protecting

the

health

and

well-being

of

our

workforce

and

supporting

our

customers,

clients

and

other

stakeholders,

whilst

ensuring

that

Barclays

remains

secure

and

resilient,

both

financially

and

operationally.

The

challenges

created

by

the

COVID-19

pandemic,

provided

the

Board

with

a

unique

opportunity

to

consider

how

to

balance

decisions

in

a

way

that

optimises

our

purpose

and

takes

into

account

the

interests

of

all

our

stakeholders.

As

highlighted

in

our

Chairman’s

introduction,

this

requires

a

Board

in

which

constructive

challenge,

openness

and

diversity

of

background

and

opinion

are

prized,

along

with

a

commitment

to

act

fairly

and

in

the

interests

of

all

our

stakeholders.

The

Board

is

well

placed

to

help

Barclays

stay

true

to

its

purpose.

You

can

read

more

about

the

key

areas

of

focus

for

the

Board

in

2020

on

pages

11

to

13.

The

Board

discharged

its

responsibilities

in

2020

as

described

in

the

high-level

flow

diagram

on

this

page.

Directors’

report

12

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Key

priorities

Reviewing

our

Purpose

and

Values

In

2019,

the

Board

considered,

together

with

management,

the

extent

to

which

our

purpose

had

been

fully

embedded

across

the

Group.

Whilst

concluding

that

our

purpose

was

integrated

into

many

of

our

key

processes

and

decision-making

forums,

the

Board

was

of

the

view

that

there

was

potential

for

our

purpose

to

be

reinvigorated

such

that

it

is

better

connected

with

our

stakeholders

and

what

we

do

on

a

day

to

day

basis

as

a

bank

and

is

deeply

embedded

in

our

decision-making.

The

last

12

months

have

been

immensely

challenging

for

the

firm

and

our

colleagues,

but

they

have

also

shown

Barclays

at

its

best:

who

we

are,

what

we

stand

for,

and

how

quickly

we

can

move

to

get

things

done.

We

want

to

reinforce

that

clarity

and

conviction

about

our

purpose

and

our

values,

and

stay

true

to

that

way

of

thinking

about

how

we

take

action

at

pace.

Accordingly,

during

2020,

the

Board

approved

the

introduction

of

a

new,

extended

narrative

of

the

Group’s

purpose

and

the

refreshed

descriptions

of

our

values

to

make

sure

they

are

still

relevant

for

the

challenges

ahead.

Our

reinvigorated

purpose

to

‘deploy

finance

responsibly

to

support

people

and

businesses,

acting

with

empathy

and

integrity,

championing

innovation

and

sustainability,

for

the

common

good

and

the

long

term’

is

intended

to

serve

as

an

expression

of

purpose

which

encapsulates

our

position

as

a

universal

bank

providing

global

financial

services

and

resonates

with

colleagues

and

all

of

our

stakeholders.

We

updated

and

refreshed

the

language

in

the

descriptors

for

each

Value

to

better

reflect

who

we

are

today,

modern

societal

expectations,

and

things

we

should

explicitly

prioritise

–

such

as

inclusion

and

sustainability.

Our

values

remain

core

to

how

we

individually

‘show

up’

in

the

organisation;

they

are

our

moral

compass

and

will

continue

to

be

used

as

a

mandatory

measure

of

individual

performance.

We

believe

that

positive

culture,

supported

by

effective

leadership

and

a

consistent

‘tone

from

the

top’,

is

crucial

to

our

success.

As

such,

culture

remains

a

core

focus

for

the

Board

and

it

is

reviewed

in

a

number

of

ways

including:

◾

analysis

of

colleague

survey

results,

reviewing

and

discussing

colleague

sentiment

and

feedback

on

areas

including

colleague

wellbeing

and

engagement

◾

direct

engagement

with

colleagues

locally

to

hear

their

views

through

channels

such

as

town

hall

meetings,

talent

sessions

and

office

visits

◾

review

of

our

people

policies,

which

are

designed

to

provide

equal

opportunities

and

create

an

inclusive

culture,

in

line

with

our

values

and

in

support

of

our

long-term

success.

The

Board

reviewed

Barclays’

method

of

workforce

engagement

during

2020

and

concluded

that

it

had

been

effective,

with

many

direct

engagement

mechanisms

moving

to

digital

channels.

Our

workforce

policies

and

practices

were

also

reviewed

and

the

Board

agreed

they

were

consistent

with

our

values

and

supported

the

long-term

sustainable

success

of

the

Group.

Feedback

from

our

colleagues

indicated

that

the

COVID-19

pandemic

had

accentuated

many

aspects

of

our

culture,

manifesting

itself

in

improved

execution

speeds,

higher

levels

of

colleague

engagement

and

a

belief

among

a

majority

of

colleagues

that

our

culture

had

improved.

The

Board

has

also

carefully

reviewed

and

endorsed

how

we

define

the

way

in

which

we

want

to

get

things

done

at

Barclays

–

what

we

will

call

our

mindset:

‘Empower.

Challenge.

Drive.’

Alongside

our

strategy,

and

our

strong

commercial

positioning,

our

purpose,

values

and

mindset

will

provide

the

foundations

to

move

to

the

of

our

cultural

and

commercial

journey,

supporting

us

in

fulfilling

our

obligations

to

our

shareholders,

colleagues,

customers,

clients

and

wider

society,

in

the

spirit

of

the

common

good.

How

the

Board

thinks

about

strategy

The

current

COVID-19

are

unprecedented

in

nature

and,

as

the

Board

has

discussed

at

length,

the

macro-economic

environment

brings

a

significant

degree

of

uncertainty.

This

has

far-reaching

impacts

across

the

Group,

raising

significant

matters

for

consideration

by

the

Board

in

the

context

of

the

Board’s

responsibility

for

the

long-term

sustainable

success

of

Barclays,

generating

value

for

shareholders

and

contributing

to

wider

society,

as

well

as

for

the

culture

of

the

Group

more

broadly.

It

has

also

required

the

Board

to

focus

on

how

best

to

try

to

protect

the

health

and

well-being

of

colleagues

and

customers

and,

particularly

in

the

context

of

the

AGM

arrangements,

that

of

shareholders

as

well.

Updates

presented

to

the

Board

through

the

pandemic

have

reported

on

a

range

of

stakeholder

interests

including

matters

which

are

key

to

the

Group’s

reputation,

such

as

business

model

impacts,

colleague

considerations,

support

for

customers,

clients

and

the

communities

in

which

Barclays

operates,

engagement

with

regulators,

and

the

Group’s

support

for

customers

and

communities

through

the

pandemic.

You

can

find

further

details

of

this

in

our

Section

172

statement

in

the

Strategic

Report

available

at

home.barclays/annualreport

.

To

clearly

establish

and

implement

the

Group’s

strategy,

and

be

effective,

with

management,

in

addressing

the

challenges

arising

from

the

pandemic,

the

Board

has

continued

to

deepen

its

understanding

of

the

Group’s

business

and

the

risks

and

opportunities

it

faces.

As

such,

a

prioritised

series

of

‘deep

dives’

forms

an

important

part

of

each

Board

meeting,

enabling

the

Board

to

spend

a

good

proportion

of

its

time

considering

longer-term

and

strategic

issues

and

the

Group’s

operational

resilience,

with

strategy

considered

at

every

Board

meeting,

rather

than

in

a

set

piece

event

once

a

year.

This

has

been

particularly

beneficial

in

the

context

of

the

dynamic

and

evolving

environment

during

2020,

and

has

allowed

the

Board

to

discuss

the

impact

of

the

pandemic

on

the

different

businesses

within

the

Group

and

to

provide

support

and

constructive

challenge

to

management

in

addressing

diverse

challenges

by

business

and

geography.

The

approval

of

the

Group’s

Medium

Term

Plan,

in

which

our

strategy

is

embedded,

was

reviewed

by

the

Board

at

its

September,

November

and

December

meetings.

Deep

dive

topics

were

informed

by

discussions

with

our

shareholders

and

other

stakeholders,

as

well

as

formal

and

informal

Board

discussions.

In

response

to

the

growing

pandemic,

during

2020

our

deep

dives

programme

was

kept

under

review

to

give

time

to

the

discussion

of

new

topics

flowing

directly

from

the

COVID-19

pandemic.

Deep

dive

topics

discussed

by

the

Board

during

the

year

covered

a

wide

range

of

topics,

including

our

purpose

and

values,

the

Group’s

operational

mind-set

during

the

COVID-19

pandemic,

the

unwinding

of

crisis

measures,

and

our

climate

change

strategy,

alongside

updates

from

selected

individual

businesses

and

from

key

Group

functions

including

Compliance,

Legal,

Risk

and

HR.

As

in

we

gave

considerable

focus

to

developments

in

the

regulatory

environment,

to

our

key

correspondence

with

regulators

during

the

year

in

the

context

of

their

annual

assessments

and

reviews,

and

to

our

engagement

with

our

principal

regulators

in

the

UK

and

the

US

in

particular.

The

oversight

of

risk

profile

and

of

our

control

environment

is

also

a

core

Board

responsibility

and,

in

addition

to

the

detailed

oversight

of

these

matters

by

the

relevant

Board

Committees,

has

been

addressed

at

Board

meetings

throughout

the

year.

Governance

through

the

pandemic

Given

the

dynamic

environment

brought

about

by

the

COVID-19

pandemic,

the

Board

needed

to

operate

in

“crisis”

mode

and

shift

its

focus

from

long

term

value

creation

to

addressing

the

short

and

medium-term

implications

of

the

pandemic.

As

part

of

the

Board’s

direct

oversight

of

matters

relating

to

reputation,

updates

were

presented

to

the

Board

throughout

the

COVID-19

pandemic

reporting

on

a

range

of

stakeholder

interests

and

matters

key

to

our

reputation.

Directors’

report

13

Barclays

PLC

2020

Annual

Report

on

Form

20-F

You

can

read

more

about

the

Board’s

response

to

the

COVID-19

pandemic,

including

the

difficult

decision

to

cancel

our

ordinary

share

full

year

2019

dividend,

the

establishment

of

a

Board

COVID-19

Response

Committee

and

the

need

to

revise

our

2020

AGM

arrangements

in

order

to

comply

with

UK

Government

guidance

and

to

protect

the

health

and

wellbeing

of

our

shareholders,

colleagues

and

other

stakeholders

in

our

Section

172

Statement

in

the

Strategic

Report

available

at

home.barclays/annualreport

.

The

Board

will

keep

the

considerable

benefits

of

shareholder

engagement

in

the

AGM

at

the

forefront

of

its

planning

for

the

2021

AGM.

This

is

an

evolving

situation

and

we

will

keep

shareholders

apprised

of

our

plans

as

they

develop.

Further

information

will

be

made

available

in

our

2021

Notice

of

Meeting

and

on

our

website

in

due

course.

Climate

change

The

Board

has

direct

oversight

of

social

and

environmental

matters,

including

climate

change.

The

Board

recognised

that

Barclays

can,

and

should,

make

a

real

contribution

to

tackling

climate

change,

and

help

to

accelerate

the

transition

to

a

low-carbon

economy.

In

the

first

quarter

of

2020

the

Board

established

a

Board

Climate

Committee,

to

oversee

our

activities

in

this

critically

important

area.

You

can

read

more

about

our

climate

change

strategy

and

stakeholder

engagement

in

our

Section

172

Statement

and

in

the

Society

and

environment

section

of

our

Strategic

Report

available

at

home.barclays/annualreport

.

You

can

also

find

out

more

about

our

climate

change

plans

on

our

website

at

home.barclays/climatechange.

Our

investor

and

stakeholder

engagement

Despite

the

impact

of

the

COVID-19

pandemic

limiting

the

scope

for

‘in-person’

meetings

due

to

restrictions

introduced

during

the

course

of

the

year,

we

were

able

to

continue

our

extensive

engagement

programme

with

institutional

equity

and

fixed

income

investors

through

a

range

of

‘virtual’

formats.

Our

Executive

Directors,

as

well

as

other

senior

management

representatives,

supported

by

our

Investor

Relations

team,

engaged

regularly

with

existing

shareholders

and

target

investors

throughout

the

year.

Our

engagement

programme

also

included

a

series

of

video

conference

calls

with

our

major

shareholders

and

other

stakeholders

(including

proxy

advisory

agencies

and

investor

associations)

on

our

climate

change

ambition

and

commitments.

In

addition,

throughout

the

year

our

Chairman,

Nigel

Higgins,

frequently

spoke

with

our

shareholders

and

other

stakeholders.

You

can

read

more

about

our

continued

engagement

with

our

investors,

in

our

Strategic

Report

available

at

home.barclays/annualreport

.

Meaningful

engagement

with

our

colleagues

has

long

been

a

key

priority

of

the

Board

and

you

can

read

about

our

workforce

engagement

model

in

the

People

and

culture

section

on

pages

81

to

85.

More

information

about

our

broader

stakeholder

engagement

is

described

in

the

Strategic

Report

available

at

home.barclays/annualreport

.

Directors’

report:

Board

Audit

Committee

report

14

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Maintaining

robust

internal

controls

throughout

the

pandemic

Dear

Fellow

Shareholders

2020

was

a

challenging

year

in

terms

of

monitoring

the

internal

and

business

controls

environment

alongside

reviewing

the

Group’s

financial

performance

in

light

of

the

COVID-19

pandemic.

The

calculation

of

expected

credit

loss

(ECL)

in

accordance

with

IFRS

9

was

a

major

focus

for

the

Committee

during

the

year

as

the

calculation

of

credit

impairment

charges

proved

challenging

due

to

ongoing

macroeconomic

uncertainty

and

evolving

consensus.

The

ECL

models

are

based

on

historical

relationships

between

macroeconomic

variables

and

credit

impairment

outcomes

that

pre-dated

the

impact

of

the

COVID-19

pandemic,

in

particular

the

unprecedented

level

of

government

support

provided

to

businesses

and

consumers

in

both

the

UK

and

in

the

US.

Given

the

forward

looking

nature

of

IFRS

9

provisioning,

the

ECL

models

showed,

as

expected,

a

significant

degree

of

sensitivity

to

the

current

economic

uncertainty.

Whilst,

as

noted

below,

the

Committee

is

satisfied

that

the

overall

ECL

provision

level

is

appropriate,

it

must

be

recognised

that

the

profit

and

loss

impact

reflects

the

difference

between

the

opening

and

closing

stock

of

provisions

after

accounting

for

write-

offs

in

the

period.

The

lack

of

significant

increases

in

the

latter

at

present,

due

to

government

support

measures,

magnifies

the

sensitivity

of

the

provision

charge

to

changes

in

assumptions.

To

date

the

impact

of

climate

change

on

the

Group’s

financial

statements

has

been

very

limited.

However,

the

Committee

expects

that

to

change

over

time

and

will

continue

to

keep

under

review

both

this

and

the

extent

and

accuracy

of

disclosures

regarding

the

Group’s

environmental

impact.

In

relation

to

Barclays’

internal

control

environment,

the

Committee

noted

that

the

Barclays

Internal

Control

Environment

Programme

(BICEP)

which

commenced

in

January

2017

and

was

focussed

on

strengthening

the

internal

control

environment

across

the

Group,

successfully

completed

in

March

2020.

The

Group’s

control

environment

is

now

in

a

much

stronger

position,

which

helped

to

deal

with

the

operational

challenges

which

the

COVID-19

pandemic

has

presented.

Management

has

operated

within

a

robust

framework

for

identifying

and

responding

to

control

issues

with

appropriate

reporting

to

the

Committee

and

other

Board

Committees.

The

Committee

was

pleased

to

note

that,

effective

25

June

2020,

the

Federal

Reserve

Board

(FRB)

announced

the

termination

of

its

enforcement

action

initiated

against

Barclays

Bank

PLC

in

May

2015

with

regard

to

business

practices

relating

to

its

US

FX,

Rates,

Commodities,

Government

Bonds

and

Credit

Derivatives

activities;

the

FRB

was

satisfied

with

the

remediation

actions

taken

by

the

Group

to

enhance

its

firm-wide

compliance

systems

and

controls

relating

to

those

activities.

Termination

of

the

action

was

contingent

upon

completion

by

the

Group

of

a

review

of

relevant

policies

and

procedures,

which

has

now

been

achieved.

In

assessing

general

control

issues

for

disclosure

in

this

Annual

Report,

the

Committee

continued

to

apply

similar

concepts

to

those

used

for

assessing

internal

financial

controls

for

the

purposes

of

the

US

Sarbanes-Oxley

Act

(SOx).

The

Committee

remained

of

the

view

that

there

are

no

control

issues

that

are

considered

to

be

a

material

weakness

and

which

merit

specific

disclosure.

During

2020,

I

held

regular

meetings

with

the

Chair

of

the

BBUKPLC

Board

Audit

Committee

and

with

the

Chair

of

the

Barclays

US

LLC

audit

committee.

I

also

attended

the

meetings

of

the

Barclays

Bank

Ireland

PLC

audit

committee

and

BBUKPLC

audit

committee

which

considered

the

main

year-end

accounting

issues,

and

I

will

be

attending

the

Barclays

US

LLC

audit

committee

meeting

in

March

2021.

The

Chair

of

the

BBUKPLC

Board

Audit

Committee

attended

the

meeting

of

the

Committee

at

which

the

control

environment

of

BBUKPLC

was

considered

as

part

of

the

Committee’s

year-end

evaluation.

I

also

continued

to

meet

frequently

with

members

of

senior

management,

including

the

Group

Finance

Director

and

Chief

Internal

Auditor.

Barclays

Internal

Audit

(BIA)

is

a

key

component

in

supporting

the

Committee’s

work.

I

am

pleased

with

the

way

that

the

function

has

performed

throughout

the

year,

particularly

in

scoping,

performing

and

reporting

the

outcomes

of

its

work

both

to

management

and

the

Committee

in

an

environment

where

the

scope

of

its

audit

plan,

as

approved

in

December

2019,

has

had

to

change

owing

to

the

operational

and

risk

challenges

brought

on

by

the

COVID-19

pandemic.

As

the

pandemic

took

hold,

I

spoke

weekly

with

the

Chief

Internal

Auditor

and

her

key

management

team.

A

BIA

Contingency

Plan

was

established

and

invoked

in

response

to

the

pandemic,

outlining

heightened

management,

reporting

and

escalation

protocols

for

BIA,

both

as

a

Third

Line

of

Defence

and

a

function

within

the

Group.

I

have

also

continued

my

regular

engagement

with

the

Group’s

regulators,

both

in

the

UK

and

US.

This

has

encompassed

not

only

my

work

as

the

Chair

of

the

Committee,

but

also

my

role

as

the

Group’s

Whistleblowing

Champion.

In

that

respect,

I

oversaw

the

production

of

the

second

of

three

annual

reports

which

we

agreed

to

submit

to

the

FCA

and

PRA

in

the

UK

and

to

the

New

York

Department

of

Financial

Services

regarding

our

whistleblowing

programme.

Committee

effectiveness

The

2020

Committee

effectiveness

review

was

conducted

in

accordance

with

the

Code.

This

internal

review

involved

completion

of

a

tailored

questionnaire

by

Committee

members

and

standing

attendees

(which

included

our

external

lead

audit

engagement

partner),

in

line

with

the

approach

adopted

for

all

Board

Committees

in

2020.

The

review

is

an

important

part

of

the

way

Barclays

monitors

and

improves

Committee

performance

and

effectiveness,

maximising

strengths

and

highlighting

areas

for

further

development.

The

results

confirm

that

the

Committee

is

operating

effectively.

It

is

considered

well-constituted

and

provides

an

effective

and

appropriately

broad

level

of

challenge

and

oversight

of

the

areas

within

its

remit.

It

was

suggested

that

the

Committee

may

benefit

from

an

additional

member

with

specialist

financial

reporting

and

management

expertise,

with

feedback

noting

that

this

would

be

addressed

following

the

appointment

of

Julia

Wilson

as

a

new

member

of

the

Committee

when

she

joins

the

BPLC

Board

in

April

2021.

In

particular,

the

review

indicates

that

the

Committee

has

continued

to

operate

effectively

in

the

context

of

the

COVID-19

pandemic.

My

role

as

Chair

in

balancing

a

demanding

agenda

efficiently

so

that

time

is

allocated

to

the

most

significant

items

for

discussion

was

recognised.

The

Committee

has

a

broad

remit

and

has

taken

on

additional

responsibilities

during

recent

years,

for

example

the

oversight

of

tax

matters,

so

continued

focus

on

this

area

will

be

beneficial.

The

review

commented

that

the

Committee’s

interaction

with

the

Board,

Board

Committees

and

senior

management

is

considered

effective,

noting

in

particular

that

the

Committee’s

interaction

with

the

Board

Risk

Committee

works

well.

The

review

highlighted

that

reporting

to

the

Committee

on

issues

relevant

to

the

Committee’s

remit

relating

to

BBUKPLC

had

been

streamlined

and

effective.

Following

the

consolidation

of

the

membership

of

the

Committee

with

the

BBPLC

Board

Audit

Committee,

coverage

of

BBPLC

matters

within

concurrent

meetings

was

considered

adequate.

Changes

to

Committee

composition

Having

taken

on

the

role

of

Chair

of

BBUKPLC

at

the

end

of

December

2020,

Crawford

Gillies

left

the

Committee.

I

look

forward

to

welcoming

Julia

Wilson

as

a

new

member

of

the

Committee

when

she

joins

the

BPLC

Board

in

April

2021.

Looking

ahead

In

2021,

the

Committee

will

continue

to

monitor

the

key

IFRS

9

processes,

particularly

in

light

of

the

development

of

the

COVID-19

pandemic,

the

uncertain

economic

environment

and

upon

the

Group.

There

is

always

a

balance

to

be

struck

between

the

sophistication

of

models

and

the

ability

to

adapt

them

to

changing

circumstances

and

run

them

on

a

timely

basis

using

different

assumptions

and

scenarios.

In

implementing

IFRS

9,

the

Group

developed

a

number

of

highly

complex

and

sophisticated

models

for

ECL

which

have

been

particularly

Directors’

report:

Board

Audit

Committee

report

15

Barclays

PLC

2020

Annual

Report

on

Form

20-F

challenged

in

the

pandemic,

which

is

a

situation

also

impacting

a

number

of

the

Group’s

peers.

Going

forward,

therefore,

management

is

looking

to

simplify

the

model

environment

significantly,

whilst

at

the

same

time

making

it

more

readily

responsive

to

major

changes

in

the

economic

environment.

These

changes

will

also

provide

increased

flexibility

to

perform

sensitivity

analysis.

The

Committee

is

fully

supportive

of

this

effort

and

will

be

monitoring

this

development

closely.

The

Committee

will

also

seek

to

monitor

the

sustainability

of

the

continuing

evolution

of

the

internal

control

environment,

notwithstanding

so

many

Group

processes

having

“returned

to

Satisfactory”

as

part

of

the

now

successfully

completed

BICEP

initiative;

and

to

continue

the

scrutiny

of

the

control

issues

and

new

working

arrangements

resulting

from,

or

associated

with,

the

impact

of

the

COVID-19

pandemic.

We

will

also

be

looking

to

assess

the

reporting

of

control

issues

–

with

increasing

focus

on

the

remaining

key

areas

of

focus

as

well

as

to

monitor

the

satisfactory

completion

of

various

ongoing

remediation

programmes.

Mike

Ashley

Chair,

Board

Audit

Committee

17

February

2021

Directors’

report:

Board

Audit

Committee

report

16

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Committee

composition

and

meetings

The

Committee

is

composed

solely

of

independent

Non-Executive

Directors,

with

membership

designed

to

provide

the

breadth

of

financial

expertise

and

commercial

acumen

it

needs

to

fulfil

its

responsibilities.

Its

members

as

a

whole

have

recent

and

relevant

experience

of

the

banking

and

financial

services

sector,

in

addition

to

general

management

and

commercial

experience;

and

are

financially

literate.

In

particular,

Mike

Ashley,

who

is

the

designated

financial

expert

on

the

Committee

for

the

purposes

of

SOx,

is

a

former

audit

partner

who,

during

his

executive

career,

acted

as

lead

engagement

partner

on

the

audits

of

a

number

of

large

financial

services

groups.

When

she

joins

the

Committee

in

April

2021,

Julia

Wilson

will

also

bring

deep

technical

experience

to

the

Committee,

including

corporate

finance,

tax

and

accounting

expertise.

You

can

find

more

details

of

the

experience

of

the

current

Committee

members

in

their

biographies

on

pages

3

to

6.

During

2020,

the

Committee

met

10

times

(2019:

10

times)

and

the

chart

below

shows

how

it

allocated

its

time.

Attendance

by

members

at

Committee

meetings

is

also

shown

below.

Committee

meetings

were

attended

by

representatives

from

management,

including

the

Group

CEO,

Group

FD,

Chief

Internal

Auditor,

Chief

Controls

Officer,

Chief

Risk

Officer,

Chief

Operating

Officer,

Group

General

Counsel

and

Group

Chief

Compliance

Officer,

as

well

as

representatives

from

the

businesses

and

other

functions,

and

from

BBPLC

senior

management

reflecting

the

streamlined

operation

of

the

BPLC

and

BBPLC

Committee

meetings.

The

lead

audit

engagement

partner

of

KPMG,

Michelle

Hinchliffe,

also

attended

Committee

meetings.

The

Committee

held

a

number

of

separate

private

sessions

with

each

of

the

Chief

Internal

Auditor

and

the

lead

audit

engagement

partner

during

2020,

which

were

not

attended

by

management.

Role

of

the

Committee

The

role

of

the

Committee

is

to

review

and

monitor,

among

other

things:

◾

the

integrity

of

the

Group’s

financial

statements

and

◾

the

effectiveness

of

the

Group’s

internal

controls

◾

the

independence

and

effectiveness

of

the

internal

and

external

audit

process

◾

the

Group’s

relationship

with

the

external

auditors

◾

the

effectiveness

of

the

Group’s

whistleblowing

policies

and

procedures.

The

Committee’s

terms

of

reference

are

available

at

home.barclays/who-we-are/our-governance/board-committees

Directors’

report:

Board

Audit

Committee

report

17

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Ensuring

reporting

integrity

and

an

effective

controls

environment

Area

of

focus

Reporting

issue

Role

of

the

Committee

Conclusion

/

action

taken

Fair,

balanced

and

understandable

reporting

(including

Country-

by-Country

Reporting

and

Modern

Slavery

Statement)

In

light

of

the

Board’s

obligation

under

the

Code,

the

Committee

assesses

external

reporting

to

ensure

it

is

fair,

balanced

and

understandable.

In

addition

to

this

Annual

Report

and

associated

year-end

reports,

the

Committee

also

reviewed

the

Group’s

quarterly

reports

and

the

presentations

to

analysts.

The

Committee

informed

these

reviews

by:

◾

consideration

of

reports

of

the

Disclosure

Committee

which

included

views

on

content,

accuracy

and

tone

◾

direct

questioning

of

management,

including

the

Group

CEO

and

Group

FD,

on

the

transparency

and

accuracy

of

disclosures

◾

consideration

of

management’s

response

to

letters

issued

by

the

Financial

Reporting

Council

(FRC)

and

other

industry

reporting

guidance

◾

evaluation

of

the

output

of

the

Group’s

internal

control

assessments

and

SOx

s404

internal

control

process

◾

consideration

of

the

results

of

management’s

processes

relating

to

financial

reporting

matters

and

evidencing

the

representations

provided

to

the

external

auditors.

The

Committee

considered

the

extensive

disclosures

regarding

the

COVID-19

pandemic

relating

not

just

to

the

impact

on

the

financial

statements,

but

also

the

actions

taken

and

support

provided

by

the

Group

to

ensure

they

met

the

required

standard.

In

relation

to

the

former,

the

Committee

considered

in

particular

the

ECL

judgements

and

disclosures

from

a

IFRS9

perspective

in

light

of

guidance

issued

by

regulators

as

part

of

their

response

to

the

COVID-19

pandemic,

including

(among

other

things)

capital

measures

in

relation

to

IFRS9

transitional

relief

and

impact

of

government

support

schemes

and

other

support

measures

from

central

banks

and

regulators.

Having

evaluated

all

of

the

available

information,

the

assurances

by

management

and

underlying

processes

used

to

prepare

the

published

financial

information,

the

Committee

concluded

and

advised

the

Board

that

the

2020

Annual

Report

and

financial

statements

are

fair,

balanced

and

understandable.

Going

concern

and

long-term

viability

(refer

to

the

Viability

Statement

on

pages

50

and

51)

Barclays

is

required

to

assess

whether

it

is

appropriate

to

prepare

the

financial

statements

on

a

going

concern

basis

and

also,

in

accordance

with

the

Code,

Barclays

must

provide

a

statement

of

its

viability.

The

Committee

considered

both

the

going

concern

assumption

and

the

form

and

content

of

the

Viability

Statement

having

regard

to:

◾

the

MTP

and

WCR

◾

the

forecasted

liquidity

and

funding

profile

◾

the

results

of

stress

tests

based

on

internal

assumptions

as

reviewed

by

the

Board

Risk

Committee

◾

current

risk

and

strategy

disclosures

◾

changes

to

capital

ratios.

The

Committee

recommended

to

the

Board

that

the

financial

statements

should

be

prepared

on

a

going

concern

basis

and

that

there

were

no

material

uncertainties

that

may

cast

significant

doubt

on

the

Group’s

ability

to

continue

as

a

going

concern;

and

noted

that

capital

ratios

remained

above

minimum

mandatory

requirements.

The

Committee

also

agreed

that

the

appropriate

time

frame

for

the

Viability

Statement

continued

to

be

three

years

and

recommended

the

Viability

Statement

to

the

Board

for

approval.

Impairment

of

Financial

Instruments

(refer

to

Note

7

to

the

financial

statements)

ECLs

are

modelled

using

a

range

of

forecast

economic

scenarios.

They

use

forward

looking

models

which

require

judgements

to

be

made

over

modelling

assumptions,

including:

-

the

determination

of

macroeconomic

scenarios

to

be

used

-

the

methodology

for

weighting

scenarios

-

the

establishment

of

criteria

to

determine

significant

deterioration

in

credit

quality

-

the

application

of

management

adjustments

to

the

modelled

output.

The

latter

has

been

particularly

relevant

in

2020

as

the

models

were

not

designed

to

take

account

of

the

unprecedented

level

of

government

support

for

both

businesses

and

consumers

during

the

pandemic.

As

part

of

its

monitoring,

the

Committee

considered

a

number

of

reports

from

management

on:

◾

the

economic

impact

of

the

COVID-19

pandemic

◾

the

impact

of

the

uncertain

macroeconomic

environment

and

effectiveness

of

government

support

measures

◾

the

continued

development

and

embedding

of

controls

over

the

internal

processes

supporting

the

ECL

calculation

and

of

SOx

compliance

(including

by

the

external

auditors)

◾

model

changes

◾

regeneration

of

the

macro-

economic

variables

and

associated

weighting

◾

adjustments

made

to

the

modelled

output

to

reflect

updated

data

and

known

model

deficiencies,

including

in

relation

to

the

impact

of

government

support

◾

comparisons

between

actual

Having

considered

and

scrutinised

the

reports,

the

Committee

agreed

with

management’s

conclusion

that

the

impairment

provision

(including

specifically

the

£4,838m

for

credit

impairment

charges)

was

appropriate.

In

particular,

the

Committee

agreed

with

the

judgement

exercised

by

management

in

determining

post-

model

adjustments

on

the

assumption

that

government

support

is

likely

largely

to

defer,

rather

than

eliminate,

the

impact

of

the

current

economic

stresses.

The

Committee

also

agreed

with

management

that

it

was

important

to

develop

the

ECL

models

so

that

they

are

more

responsive

to

changing

economic

scenarios.

In

light

of

the

increased

inherent

uncertainty

of

the

ECL

calculation,

the

Committee

Directors’

report:

Board

Audit

Committee

report

18

Barclays

PLC

2020

Annual

Report

on

Form

20-F

experience

and

forecast

losses

encouraged

management

to

continue

increasing

disclosures

relating

to

the

provision

and

its

sensitivity

to

key

variables.

Goodwill

and

Intangible

Impairments

(refer

to

Note

22

to

the

financial

statements)

The

valuations

of

goodwill

and

intangible

assets

are

assessed

on

the

basis

of

discounted

forecast

future

earnings,

which

in

the

current

economic

circumstances

are

significantly

reduced.

In

addition,

given

the

nature

of

the

Group’s

business

and

the

significant

component

of

earnings

attributable

to

net

interest

income,

such

forecasts

are

particularly

sensitive

to

the

level

of

long

term

interest

rates

and

the

shape

of

the

yield

curve.

The

Committee

considered

the

allocation

of

goodwill

and

intangibles

to

the

cash

generating

units,

ensuring

consistency

with

the

treatment

adopted

in

prior

years.

The

Committee

also

discussed

with

management

methodology

for

assessing

value

in

use

given

the

reduction

in

headroom

which

required

a

more

detailed

review

than

in

earlier

years.

In

particular,

the

Committee

reviewed

the

basis

for

allocating

net

tangible

equity

to

the

relevant

cash

generating

units.

The

Committee

also

considered

management’s

forecast

future

earnings

(as

shown

by

the

MTP

after

taking

account

of

subsequent

key

changes

in

the

macro-economic

environment

which

might

be

expected

to

impact

the

impairment

assessment)

and

the

extrapolation

of

those

earnings

out

beyond

that

time.

Finally

the

Committee

considered

the

sensitivity

analyses

prepared

by

management,

which

indicated

what

changes

to

assumptions

would

trigger

the

need

for

impairment.

The

Committee

was

satisfied

that

the

forecasts

supported

the

recoverability

of

the

goodwill

and

intangibles

and

no

impairment

was

required.

As

expected,

however,

the

headroom

was

significantly

decreased

from

prior

years

and

the

sensitivity

analyses

illustrated

that

comparatively

small

changes

in

key

assumptions

could

lead

to

impairment.

The

Committee

therefore

carefully

reviewed

the

disclosures

made

to

ensure

that

the

key

sensitivities

and

the

potential

impacts

were

appropriately

highlighted

Conduct

provisions

(refer

to

Note

24

to

the

financial

statements)

Barclays

makes

certain

assumptions

and

estimates,

analysis

of

which

underpins

provisions

made

for

the

costs

of

customer

redress.

With

a

view

to

evaluating

adequacy

of

the

provisions,

the

Committee

analysed:

◾

the

judgements

and

estimates

made

with

regard

to

Barclays’

provisioning

for

the

remaining

PPI

claims

◾

the

estimated

extent

of

compensation

payable

to

customers

in

respect

of

non-

delivery

of

certain

expected

benefits

◾

the

possibility

of

conduct

issue

claims

arising

as

a

result

of

the

changed

working

environment

in

the

context

of

the

COVID-19

pandemic

◾

the

possibility

of

claims

arising

from

the

Group’s

participation

in

government

loan

schemes

to

support

customers

against

the

impact

of

the

pandemic,

taking

account

of

work

carried

out

by

the

Risk

Committee

on

the

underlying

risks

and

management’s

mitigating

actions.

The

Committee

noted

that,

following

the

imposition

of

the

deadline

in

relation

to

PPI

claims,

the

significance

of

conduct

provisions

has

considerably

declined.

The

Committee

agreed

with

management

that

the

overall

level

of

provision

in

relation

to

the

various

conduct

matters

was

adequate

and

appropriate

at

£497m

as

at

the

end

of

the

year.

Legal,

competition

and

regulatory

provisions

(refer

to

Notes

24

and

26

to

the

financial

statements)

Barclays

is

engaged

in

various

legal,

competition

and

regulatory

matters

which

may

give

rise

to

provisioning

based

on

the

facts.

The

level

of

provisioning

is

subject

to

management

judgement

on

the

basis

of

legal

advice

and

is,

therefore,

an

area

of

focus

for

the

Committee.

The

Committee

evaluated

advice

on

the

status

of

current

legal,

competition

and

regulatory

matters.

It

considered

management’s

judgements

on

the

level

of

provision

to

be

taken

and

accompanying

disclosure.

The

Committee

discussed

provisions

and

utilisation

and,

having

reviewed

the

information

available

to

determine

what

was

both

probable

and

could

be

reliably

estimated,

the

Committee

agreed

that

the

level

of

provision

at

the

year-end

was

appropriate.

The

Committee

also

considered

that

the

disclosures

made

provided

the

appropriate

information

for

investors.

Valuations

(refer

to

Notes

13

to

17

to

the

financial

statements)

Barclays

exercises

judgement

in

the

valuation

and

disclosure

of

financial

instruments,

derivative

assets

and

certain

portfolios,

particularly

where

quoted

market

prices

are

not

available.

The

Committee:

◾

evaluated

reports

outlining

the

Group’s

material

valuation

judgements

◾

monitored

the

valuation

methods

applied,

including

changes

in

light

of

the

COVID-

The

Committee

noted

that

there

were

no

new

significant

valuation

judgements

at

the

end

of

the

year.

The

Committee

was

satisfied

with

the

accounting

treatment

in

Directors’

report:

Board

Audit

Committee

report

19

Barclays

PLC

2020

Annual

Report

on

Form

20-F

19

pandemic

◾

considered

pensions

liability

valuations.

respect

of

the

various

matters.

Tax

(refer

to

Note

9

to

the

financial

statements)

Barclays

is

subject

to

taxation

in

a

number

of

jurisdictions

globally

and

makes

judgements

with

regard

to

provisioning

for

tax

at

risk

and

to

the

recognition

and

measurement

of

deferred

tax

assets.

The

Committee

is

responsible

for

considering

the

Group’s

tax

strategy

and

overseeing

compliance

with

the

Group’s

Tax

Code

of

Conduct.

In

this

regard

the

Committee

received

reports

from

the

Tax

Management

Oversight

Committee

and,

in

particular,

considered

the

upward

revaluation

of

UK

deferred

tax

assets

due

to

cancellation

of

a

scheduled

2%

UK

corporation

tax

cut

which

had

been

due

to

take

place

in

April

2020

and

additional

tax

considerations

arising

from

the

COVID-19

pandemic.

The

Committee

reviewed

the

appropriateness

of

provisions

made

for

uncertain

tax

positions.

The

Committee

also

confirmed

that

the

estimates

and

assumptions

used

in

assessing

the

recoverability

of

deferred

tax

assets

were

supported

by

the

MTP.

The

Committee

was

satisfied

that

specific

strategies

were

in

line

with

the

Group’s

Tax

Code

of

Conduct

and

on

behalf

of

the

Board

approved

the

UK

Tax

Strategy

statement

published

as

part

of

the

Country-by-Country

Report.

The

Committee

noted

that

the

uncertain

tax

positions

covered

a

diverse

range

of

issues

and,

as

a

consequence,

agreed

with

management’s

view

that

there

was

not

a

significant

risk

of

a

material

adjustment

during

the

The

Committee

was

also

satisfied

that

deferred

tax

assets

recognition

was

appropriate.

Internal

controls

and

business

control

environment

(read

more

about

Barclays’

internal

control

and

risk

management

processes

on

pages

39

to

40).

The

effectiveness

of

the

overall

control

environment,

including

the

status

of

any

significant

control

issues

and

the

progress

of

specific

remediation

plans.

The

Committee:

◾

monitored

finalisation

of

BICEP

which

completed

at

the

end

of

March

2020

as

well

as

ongoing

sustainability

of

the

enhanced

control

environment

◾

evaluated

and

tracked

the

status

of

the

most

significant

control

issues

through

regular

reports

from

the

Chief

Controls

Officer,

including

updates

on

lessons

learned

and

progress

relating

to

remediation

areas,

as

well

as

priorities

looking

forward

to

sustain

and

strengthen

the

control

environment

◾

focussed

on

reports

relating

to

individual

businesses

and

functions

on

the

control

aspects

of

key

matters

such

as

IBOR

transition

and

post-

Brexit

transition

period

control

preparedness,

operational

resilience

and

controls,

particularly

in

the

context

of

the

impact

of

the

COVID-19

pandemic,

cyber

security

and

data

management

controls

◾

received

independent

evaluations

from

BIA

and

external

auditors.

The

Committee

has

focussed

on

the

ability

of

the

Group

to

maintain

strong

internal

controls

in

the

context

of

the

challenges

brought

about

by

the

COVID-19

pandemic,

the

huge

increase

in

number

of

staff

working

remotely

and

the

pressure

on

systems,

branch

facilities

and

customer

service

levels

generally.

Raising

concerns

The

adequacy

of

the

Group’s

arrangements

to

allow

employees

to

raise

concerns

in

confidence

and

anonymously

without

fear

of

retaliation;

and

the

outcomes

of

any

substantiated

cases.

The

Committee

has

received

reports

from

management

and

monitored

whistleblowing

metrics

and

retaliation

reports.

During

2020

the

Committee

received

reports,

including

a

year-end

annual

report,

on

whistleblowing

from

management

and

noted

that

the

whistleblowing

programme

continued

to

operate

satisfactorily

during

the

Covid-19

pandemic.

Internal

audit

The

performance

of

BIA

and

delivery

of

the

internal

audit

plan,

including

scope

of

work

performed,

the

level

of

resources,

and

the

methodology

and

coverage

of

the

internal

audit

plan.

The

Committee

has

during

the

year

◾

monitored

BIA’s

implementation

of

the

first

year

of

its

three-year

internal

audit

plan

ending

December

2022

◾

approved

the

establishment

of

the

Internal

Audit

Contingency

Plan,

in

response

to

the

The

Committee

received

BIA’s

annual

review

of

its

charter

and

reviewed

BIA’s

performance

report,

including

quality

assurance.

The

Committee

also

agreed

BIA’s

proposed

2021

Audit

Plan,

noting

the

Directors’

report:

Board

Audit

Committee

report

20

Barclays

PLC

2020

Annual

Report

on

Form

20-F

COVID-19

pandemic

◾

reviewed

BIA’s

audit

reports

in

relation

to

specific

audits,

noting

that

any

planned

audits

cancelled

in

2020

owing

to

the

COVID-19

pandemic

would

be

rescheduled

for

2021,

as

appropriate

◾

tracked

the

levels

of

adverse

audits

and

issues

raised

by

BIA

and

monitored

plans

◾

discussed

BIA’s

assessment

of

the

management

control

approach

and

control

environment

in

the

Group

companies

and

functions.

deliverables

and

level

of

resources

to

be

allocated

in

respect

of

internal

audit

execution

and

delivery,

data

analytics,

people,

diversity

and

leadership

as

well

as

governance

and

management

information.

External

audit

The

work

and

performance

of

KPMG.

The

Committee:

◾

met

with

key

members

of

the

KPMG

audit

team

to

discuss

the

2020

Audit

Plan

and

KPMG’s

areas

of

focus

◾

assessed

regular

reports

from

KPMG

on

the

progress

of

the

2020

audit

and

any

material

accounting

and

control

issues

identified

◾

discussed

KPMG’s

feedback

on

Barclays’

critical

accounting

estimates

and

judgements

◾

discussed

KPMG’s

draft

report

on

certain

control

areas

and

the

control

environment

ahead

of

the

2020

year-end

◾

considered

the

draft

SOx

control

report

and

the

draft

audit

opinion.

The

Committee

approved

the

2020

Audit

Plan

and

the

main

areas

of

focus

for

the

year.

Read

more

about

the

Committee’s

role

in

assessing

the

performance,

effectiveness

and

independence

of

the

external

auditor

on

the

Directors’

report:

Board

Audit

Committee

report

21

Barclays

PLC

2020

Annual

Report

on

Form

20-F

External

auditor

Following

an

external

audit

tender

in

2015,

KPMG

was

appointed

as

Barclays’

Statutory

Auditor

with

effect

from

the

2017

financial

year.

Michelle

Hinchliffe

of

KPMG

is

Barclays’

lead

audit

engagement

partner

and

was

appointed

to

this

role

with

effect

from

the

2018

financial

year.

Assessing

external

auditor

effectiveness,

objectivity

and

independence

and

non-audit

services

The

Board

Audit

Committee

is

responsible

for

assessing

the

effectiveness,

objectivity

and

independence

of

the

Group’s

auditor,

KPMG.

This

responsibility

was

discharged

throughout

the

year

at

formal

Committee

meetings,

during

private

meetings

with

KPMG

and

through

discussions

with

key

Group

executives.

In

addition

to

the

matters

noted

above,

the

Committee

also:

◾

approved

the

terms

of

the

audit

engagement

letter

and

associated

fees,

on

behalf

of

the

Board

◾

discussed

and

agreed

revisions

to

the

Group

policy

on

the

Provision

of

Services

by

the

Group

Statutory

Auditor

and

regularly

analysed

reports

from

management

on

the

non-audit

services

provided

to

Barclays

◾

evaluated

and

approved

revisions

to

the

Group

policy

on

Employment

of

Employees

or

Workers

from

the

Statutory

Auditor

and

ensured

compliance

with

the

policy

by

regularly

assessing

reports

from

management

detailing

any

appointments

made

◾

was

briefed

by

KPMG

on

critical

accounting

judgements

and

estimates

and

internal

controls

over

financial

reporting

◾

assessed

any

potential

threats

to

independence

that

were

self-identified

and

reported

by

KPMG

◾

considered

and

discussed

the

audit

quality

inspection

report

on

KPMG

issued

by

the

FRC’s

Audit

Quality

Review

(AQR)

team

in

relation

to

its

review

of

KPMG’s

audit

of

the

financial

statements

for

the

period

ended

31

December

2018.

As

well

as

receiving

the

AQR

team’s

formal

report

the

Committee

benefited,

as

on

a

from

a

presentation

by

the

AQR

team

which

was

greatly

appreciated.

This

presentation,

which

was

also

attended

by

the

Chair

of

the

BBUKPLC

Audit

Committee,

allowed

the

Committee

to

discuss

the

main

findings

of

the

AQR

in

some

detail.

As

foreshadowed

last

year,

the

AQR

team

had

identified

certain

areas

for

improvement

in

KPMG’s

audit

work,

particularly

in

relation

to

the

depth

of

substantive

testing

of

financial

derivative

instruments

and

both

controls

and

substantive

work

in

relation

to

ECL

estimates

under

IFRS9.

Again,

as

noted

last

year,

KPMG

had

already

increased

its

coverage

of

these

areas

both

in

the

2019

audit

and

in

planning

for

its

2020

audit.

It

became

apparent,

however,

during

the

Committee’s

discussions

with

the

AQR

team

and

subsequent

interaction

with

KPMG,

that

the

expectations

continue

to

evolve

particularly

in

relation

to

the

substantive

testing

of

IFRS

ECL

models,

requiring

some

element

of

code

review

and

reperformance

of

nearly

all

of

the

Group’s

models

by

KPMG.

The

Committee

acknowledges

that

the

level

of

audit

work

required

is

a

matter

of

auditor

judgement

and

more

work

can

always

be

carried

out,

and

the

AQR

team’s

comments

can

be

helpful

in

this

respect.

However,

we

do

have

some

concern

over

the

level

of

incremental

audit

evidence

obtained

from

these

procedures,

particularly

in

the

current

year

when

the

models

themselves

are

more

than

usually

supportive

of

the

judgement

necessarily

exercised

by

management,

rather

than

determinative

of

the

level

of

impairment

provision

required.

We

are

also

conscious

of

the

need

to

balance

the

sufficiency

of

audit

evidence

needed

with

the

time

required,

by

both

auditors

and

the

Group’s

own

employees,

to

execute

on

this

expanded

level

of

work.

The

Committee

encouraged

KPMG

to

continue

its

dialogue

with

the

AQR

team

on

addressing

the

feedback

and

to

amend

its

approach

to

the

audit

work

as

required,

but

at

the

same

time

to

seek

to

arrive

at

a

more

general

consensus

with

both

the

other

major

firms

and

audit

regulators

on

an

appropriate

approach

for

the

future.

KPMG’s

performance,

independence

and

objectivity

during

2020

were

also

formally

assessed

at

the

beginning

of

2021

by

way

of

a

questionnaire

completed

by

key

stakeholders

across

the

Group,

including

the

chairs

of

the

audit

committees

of

the

Group’s

main

operating

companies

(BBUKPLC,

Barclays

US

LLC

and

Barclays

Bank

Ireland

PLC).

The

questionnaire

was

designed

to

evaluate

KPMG’s

audit

process

and

addressed

matters

such

as

the

quality

of

planning

and

communication,

technical

knowledge,

the

level

of

scrutiny

and

challenge

applied

and

KPMG’s

understanding

of

the

business,

as

well

as

key

issues

relevant

to

the

COVID-19

pandemic.

In

addition,

as

in

the

prior

year,

KPMG

nominated

a

senior

partner

of

the

audit

team

reporting

to

the

lead

audit

engagement

partner

to

have

specific

responsibility

for

ensuring

audit

quality.

The

Committee

therefore

met

with

the

partner

concerned,

without

the

lead

audit

engagement

partner

present,

to

receive

a

report

on

his

assessment

of

audit

quality

bearing

in

mind

particularly

the

comments

received

from

the

AQR

team.

Taking

into

account

the

result

of

all

of

the

above,

the

Committee

considered

that

KPMG

maintained

its

independence

and

objectivity

and

that

the

audit

process

was

effective.

Non-audit

services

In

order

to

safeguard

the

auditor’s

independence

and

objectivity,

Barclays

has

in

place

a

policy

setting

out

the

circumstances

in

which

the

auditor

may

be

engaged

to

provide

services

other

than

those

covered

by

the

Group

audit.

The

Policy

applies

to

all

Barclays

subsidiaries

and

other

material

entities

over

which

Barclays

has

significant

influence.

The

core

principle

of

the

Policy

is

that

non-audit

services

(other

than

those

legally

required

to

be

carried

out

by

the

Group’s

auditor)

should

be

performed

by

the

auditor

only

in

certain

controlled

circumstances.

The

Policy

sets

out

those

types

of

services

that

are

permitted

(‘Permitted’

services).

A

summary

of

the

Policy

can

be

found

at

home.barclays/who–we-

are/our-governance/auditor-independence

.

The

Policy

is

reviewed

on

an

annual

basis

to

ensure

that

it

is

fit

for

purpose

and

that

it

reflects

applicable

rules

and

guidelines.

The

Policy

is

aligned

both

with

the

FRC’s

requirements

and

with

KPMG’s

own

internal

policy

on

non-audit

services

for

FTSE

350

companies

which

broadly

restricts

non-audit

work

to

services

that

are

‘closely

related’

to

the

audit.

The

Committee

approved

an

updated

Policy

in

2020

which

reflected

the

revised

FRC

Ethical

Standard

“white

list”

of

permitted

non-audit/

additional

services.

Any

changes

to

the

Policy

are

approved

at

a

Group

level

by

the

Committee.

This

is

in

accordance

with

laws

applicable

in

the

UK

and

FRC

guidance,

pursuant

to

which

audit

committees

of

Public

Interest

Entities

(such

as

Barclays)

are

required

to

approve

non-audit

services

provided

by

their

auditors

to

such

entities;

and

subsidiary

Public

Interest

Entities

in

the

UK

–

such

as

BBUKPLC

and

BBPLC

–

can

rely

on

the

approval

of

non-audit

services

by

the

ultimate

parent’s

audit

committee.

Pursuant

to

the

Policy,

audit

services

and

the

fee

cap,

are

monitored

by

the

relevant

audit

committee,

as

appropriate.

Under

the

Policy,

except

for

specific

categories

of

‘Permitted’

services

that

require

explicit

Committee

approval,

the

Committee

has

pre-

approved

all

‘Permitted’

services

for

which

fees

are

less

than

£100,000.

However,

all

proposed

work,

regardless

of

the

amount

of

the

fees,

must

be

sponsored

by

a

senior

executive

and

recorded

on

a

centralised

online

system,

with

a

detailed

explanation

of

the

clear

commercial

benefit

arising

from

engaging

the

auditor

over

other

potential

service

providers.

The

lead

audit

engagement

partner

must

also

confirm

that

the

engagement

has

been

approved

in

accordance

with

the

auditor’s

own

internal

ethical

standards

and

does

not

pose

any

threat

to

the

auditor’s

independence

or

objectivity.

All

requests

to

engage

the

auditor

are

assessed

by

independent

management

(who

are

not

involved

in

any

work

to

which

the

proposed

engagement

relates)

before

work

can

commence.

Requests

for

‘Permitted’

service

types

in

respect

of

which

the

fees

are

expected

to

meet

or

exceed

the

above

threshold

but

expected

to

be

less

than

£250,000

must

be

approved

by

the

Chair

of

the

Committee

before

work

is

permitted

to

begin.

Services

where

the

fees

are

expected

to

be

£250,000

or

higher

must

be

approved

by

the

Committee

as

a

whole.

All

expenses

and

disbursements

must

be

included

in

the

fees

calculation.

During

2020,

all

engagements

for

which

expected

fees

met

or

exceeded

the

above

thresholds

were

evaluated

by

either

the

Committee

Chair

or

the

Committee

members

as

a

whole,

who,

before

confirming

any

approval,

assured

themselves

that

there

was

justifiable

reason

for

engaging

Directors’

report:

Board

Audit

Committee

report

22

Barclays

PLC

2020

Annual

Report

on

Form

20-F

the

auditor

and

that

its

independence

and

objectivity

would

not

be

threatened.

No

requests

to

use

KPMG

were

declined

by

the

Committee

in

2020

(2019:

none).

On

a

quarterly

basis,

the

Committee

scrutinised

details

of

individually

approved

and

pre-approved

services

undertaken

by

KPMG

in

order

to

satisfy

itself

that

they

posed

no

risk

to

independence,

either

in

isolation

or

on

an

aggregated

basis.

For

the

purposes

of

the

Policy,

the

Committee

has

determined

that

any

pre-approved

service

of

a

value

of

under

£50,000

is

to

be

regarded

as

trivial

in

terms

of

its

impact

on

Barclays’

financial

statements

and

has

required

the

Group

Financial

Controller

to

specifically

review

and

confirm

to

the

Committee

that

any

pre-approved

service

with

a

value

of

between

£50,000

and

£100,000

may

be

regarded

as

such.

The

Committee

undertook

a

review

of

pre-approved

services

at

its

meeting

in

December

2020.

The

fees

payable

to

KPMG

for

the

year

ended

31

December

2020

amounted

to

£60m

(2019:

£56m),

of

which

£12m

(2019:

£11m)

was

payable

in

respect

of

non-audit

services.

A

breakdown

of

the

fees

payable

to

the

auditor

for

statutory

audit

and

non-audit

work

can

be

found

in

Note

40

of

the

financial

statements.

Of

the

£12m

of

non-audit

services

provided

by

KPMG

during

2020,

the

significant

categories

of

engagement,

i.e.

services

where

the

fees

amounted

to

more

than

£500,000,

included:

◾

audit-related

services:

services

in

connection

with

Client

Assets

Sourcebook

(CASS)

audits

(while

the

CASS

audit

fell

within

the

auditor’s

scope

of

services,

the

fees

for

such

services

did

not

form

part

of

the

global

fee

arrangements

and

therefore

required

separate

Committee

approval

pursuant

to

the

Policy);

◾

audit-related

services:

services

in

connection

with

regulatory,

compliance

and

internal

control

reports

and

audit

procedures,

required

by

law

or

regulation

to

be

provided

by

the

Statutory

Auditor;

and

◾

other

attest

and

assurance

services:

ongoing

attestation

and

assurance

services

for

treasury

and

capital

markets

transactions

to

meet

regulatory

requirements,

including

regular

reporting

obligations

and

verification

reports.

The

Statutory

Audit

Services

for

Large

Companies

Market

Investigation

(Mandatory

Use

of

Competitive

Tender

Processes

and

Audit

Committee

Responsibilities)

Order

2014

An

external

audit

tender

was

conducted

in

2015

and

the

decision

was

made

to

appoint

KPMG

as

Barclays’

external

auditor

with

effect

from

the

2017

financial

year,

with

PwC

resigning

as

the

Group’s

Statutory

Auditor

at

the

conclusion

of

the

2016

audit.

Barclays

is

in

compliance

with

the

requirements

of

The

Statutory

Audit

Services

for

Large

Companies

Market

Investigation

(Mandatory

Use

of

Competitive

Tender

Processes

and

Audit

Committee

Responsibilities)

Order

2014,

which

relates

to

the

frequency

and

governance

of

tenders

for

the

appointment

of

the

external

auditor

and

the

setting

of

a

policy

on

the

provision

of

non-audit

services.

Provided

that

KPMG

continues

to

maintain

its

independence

and

objectivity,

and

the

Committee

remains

satisfied

with

its

performance,

the

Group

has

no

intention

of

tendering

for

an

alternative

external

auditor

before

the

end

of

the

current

required

period

of

10

years.

Directors’

report:

Board

Nominations

Committee

report

23

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Delivering

effectiveness

and

diversity

Balancing

decisions

in

a

way

that

optimises

our

purpose

requires

a

Board

in

which

constructive

challenge,

openness

and

diversity

of

background

and

opinion

are

prized,

along

with

a

commitment

to

act

fairly

and

in

the

interests

of

all

stakeholders.

Achieving

this

-

through

its

focus

on

the

composition

of

the

Board,

its

Committees

and

the

ExCo

and

ensuring

that

each

has

the

right

balance

of

skills,

experience

and

diversity

of

background

and

opinion

and

by

creating

a

pipeline

of

succession

to

these

and

other

senior

management

key

roles

-

is

the

main

role

of

the

Nominations

Committee.

Key

to

the

Board’s

effectiveness

is

how

the

Board

operates

in

practice

–

we

continue

to

focus

on

simplification

in

the

context

of

our

agendas,

papers

and

presentations.

As

part

of

our

drive

for

simplification,

the

Board

and

Committee

membership

of

BPLC

and

BBPLC

was

consolidated

and

streamlined

in

2019

to

increase

effectiveness

and

reduce

duplication

whilst

still

enabling

the

appropriate

focus

on

matters

relevant

to

each

entity.

You

can

read

more

about

this

partial

consolidation

on

page

18.

The

Committee

reviewed

the

effectiveness

of

the

consolidated

Board

and

Committee

structure

in

2020

and

remains

confident

that

the

consolidated

structure

delivers

its

intended

benefits

in

our

governance

processes

while

ensuring

that

the

spirit

of

the

ring-fencing

legislation

is

respected

in

any

decision-making

affecting

BBUKPLC.

In

discharging

its

responsibilities,

the

Committee

takes

into

account

feedback

from

key

stakeholders

(including

our

regulators

and

shareholders)

and

Board

discussions

more

widely.

The

Committee

considered

the

effectiveness

of

the

Board

during

the

COVID-19

pandemic

and

concluded

that

the

Board

had

performed

well

through

the

pandemic,

with

the

establishment

of

a

COVID-19

Crisis

Response

Committee

and

its

very

regular

cadence

of

meetings.

As

a

practical

matter,

the

Board

was

required

to

convene

remotely

in

order

to

comply

with

government

guidance.

Informal

Board

discussions

also

took

place

during

this

period,

the

objective

of

which

was

to

operate

as

a

virtual

alternative

for

the

sort

of

conversations

the

Board

would

generally

have

informally

when

meeting

together

in

person.

These

informal

discussions

also

had

the

aim

of

maintaining

the

Board’s

connectivity

and

collegiality,

and

of

helping

to

draw

out

some

of

the

questions

on

the

Board’s

mind

during

this

period

for

discussion

during

the

Board

meetings.

The

Committee

concluded

that

collaboration

between

the

Board

and

senior

management

had

helped

ensure

an

effective

and

robust

response

to

the

pandemic.

You

can

read

more

about

our

Board

governance

during

the

pandemic

on

pages

12

and

13.

Committee

membership

The

Committee

is

composed

solely

of

Non-Executive

Directors

and

is

chaired

by

our

Group

Chairman.

Details

on

Committee

membership

and

meeting

attendance

are

set

out

on

page

13.

Directors’

report:

Board

Nominations

Committee

report

24

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Directors’

report:

Board

Nominations

Committee

report

25

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Principal

activities

The

Committee’s

allocation

of

time

during

2020

is

set

out

on

page

82

and

the

Committee’s

principal

activities

during

2020

are

set

out

below.

Committee

responsibilities

1.

Ensuring

the

right

individuals

are

appointed

–

in

line

with

suitability

criteria

–

who

can

discharge

the

duties

and

responsibilities

of

Directors.

2.

Effective

ExCo,

Board

and

Committee

composition,

through

focus

on

appointment

and

succession

based

on

merit

and

skill,

through

a

diversity

lens.

3.

Leading

candidate

search

and

identification.

4.

Regular

review

of

succession

planning

and

recommendations

for

key

executive

and

non-executive

roles.

5.

Monitoring

of

time

commitments

for

incoming

and

existing

Directors

to

ensure

sufficient

time

for

effective

discharge

of

duties.

6.

Monitoring

compliance

against

corporate

governance

guidelines

and

the

Diversity

Policy,

including

yearly

review

and

any

recommendations

for

enhancements.

7.

Ensuring

compliance

by

the

Board

with

legal

and

regulatory

requirements.

8.

Individual

Director,

Board

and

Committee

effectiveness

reviews

and

implementing

any

required

actions.

9.

Considering

and

authorising,

subject

to

ratification

by

the

Board,

any

conflicts

of

interest.

Principal

activities

Committee

responsibilities

Approval

of

changes

to

ExCo

roles

and

remits.

1,

2,

3,

4

Approval

of

key

executive

appointments

including

Group

Head

of

Corporate,

Public

and

Regulatory

Affairs,

Group

General

Counsel,

Group

Chief

Risk

Officer

and

Heads

of

Banking

and

Markets.

1,2,3,4

Consideration

and

approval

of

changes

in

the

composition

of

the

Group’s

main

subsidiary

boards.

1,2,3,4

Candidate

evaluation

for

both

executive

and

non-executive

current

and

future

roles

including

review

of

core

skills

and

(for

internal

candidates)

scrutiny

of

internal

feedback.

1,2,3,4

Review

of

the

balance

of

skills

and

diversity

on

the

Board,

and

leading

the

search

and

recruitment

process

(including

conflict

analysis)

for

potential

candidates.

The

Committee

utilised

external

search

consultants

Egon

Zehnder

and

Spencer

Stuart

to

facilitate

the

targeted

external

mapping

and

search

processes

based

on

agreed

and

reviewed

criteria.

1,2,3,4,6,9

Directors’

tenure

and

effectiveness

review,

and

identifying

candidates

for

re-election.

1,2,4,6,7,8

Approval

of

the

appointment

of

Brian

Gilvary

as

Senior

Independent

Director

and

to

the

Nominations

and

Risk

Committees.

1,2,3,4,5

Approval

of

appointment

of

Julia

Wilson

as

an

additional

Non-Executive

Director,

effective

1

April

2021,

and

approval

of

changes

in

Board

Committee

composition

during

the

year.

1,2,3,5

Review

of

ExCo

composition

and

succession

planning

for

strengths

and

diversity,

focusing

on

the

development

of

ExCo

members

and

key

successors.

2,3,4,6

Review

recommendations

and

suggested

improvements

arising

from

the

2019

Board

effec

tiveness

review.

1,2,7,8

Approved

that

the

2020

effectiveness

review

be

conducted

internally,

led

by

the

Group

Company

Secretary

with

support

from

the

SID

and

Nominations

Committee

oversight.

8

Consideration

of

Director

training

and

development,

including

revision

of

deep

dive

schedule

in

response

to

COVID-19

pandemic.

7,8

Review

and

approval

of

size,

composition

and

succession

planning

for

Board

and

the

Board

committees.

1,2,5

Board

effectiveness

through

the

COVID-19

pandemic,

including

COVID-19

emergency

cover

plan

for

key

executive

roles.

7,8

Changes

to

the

Board

in

2020

We

welcomed

two

new

Non-Executive

Directors

to

the

Board

in

2020

-

Mohamed

A.

El-Erian

(appointed

1

January

2020)

and

Brian

Gilvary

(appointed

1

February

2020).

Their

respective

skills

and

experience

are

set

out

in

their

biographies

on

pages

3

to

5.

The

Board

was

also

very

pleased

to

announce

that

Julia

Wilson

(currently

the

Finance

Director

of

3i

Group

PLC

and

Senior

Independent

Director

of

Legal

&

General

Group

PLC)

will

join

the

Board

as

a

Non-Executive

Director

and

a

member

of

the

Board

Audit

Committee

with

effect

from

1

April

2021.

Julia

will

be

retiring

as

Senior

Independent

Director

of

Legal

&

General

Group

PLC

in

March

2021,

before

taking

up

her

role

on

the

Board.

Julia’s

appointment

reflects

Barclays’

commitment

to

strengthening

the

Board

through

the

addition

of

further

highly

respected

individuals

with

strong

financial

services

expertise.

As

reported

in

our

2019

Annual

Report,

Matthew

Lester

stepped

down

from

the

Board

on

1

January

2020.

Mary

Anne

Citrino

stepped

down

from

the

Board

on

30

September

2020.

Further

details

regarding

changes

to

our

Board

composition

during

2020

are

provided

in

the

Directors’

Report

on

pages

8

to

13.

Board

composition

The

appointment

of

Julia

Wilson,

effective

1

April

2021,

will

temporarily

increase

the

size

of

the

Board

from

12

to

13

before

it

reduces

to

12

following

the

resignation

of

Sir

Ian

Cheshire

at

the

conclusion

of

the

2021

AGM.

Whilst

we

are

keen

to

bring

a

further

Director

with

technology

experience

on

board,

we

have

not

yet

identified

a

suitable

candidate.

We

intend

to

carry

on

our

search,

with

the

primary

aim

of

finding

a

candidate

with

sufficient

board

experience

and

the

relevant

skills

to

make

a

meaningful

contribution

to

Board

deliberations.

We

strongly

believe

that

the

Board

remains

effective

taking

into

account

the

need

to

be

small

enough

to

operate

in

an

effective,

efficient

and

collaborative

manner,

the

need

to

be

large

enough

to

have

an

appropriate

mix

of

skills

and

diversity

and

to

support

succession

planning

and

the

additional

roles

and

responsibilities

of

some

of

our

Directors

on

the

boards

of

BBPLC,

BBUKPLC,

Barclays

US

LLC

and

BX.

Directors’

report:

Board

Nominations

Committee

report

26

Barclays

PLC

2020

Annual

Report

on

Form

20-F

As

mentioned

above,

the

Committee

is

keen

to

complement

the

current

range

of

skills

on

the

Board

with

additional

technology

experience

to

enhance

the

Board’s

ability

to

provide

informed

and

constructive

challenge

to

management

and

therefore

its

effectiveness.

Independent

external

search

firm

Spencer

Stuart

is

undertaking

a

full

search

against

this

brief

following

searches

previously

undertaken

by

Egon

Zehnder.

Capturing

the

clear

benefits

of

diversity

of

background

and

opinion

is

at

the

forefront

of

that

search.

Spencer

Stuart

and

Egon

Zehnder

do

not

have

any

connection

to

Barclays

or

any

of

the

Directors

other

than

to

assist

with

searches

for

executive

and

non-executive

talent.

Working

alongside

Spencer

Stuart,

the

Committee

has

set

rigorous

criteria

for

the

role

it

is

seeking

to

fill,

both

in

terms

of

experience

and

personal

qualities,

and

has

conducted

an

extensive

search

and

selection

process.

The

Committee

continues

to

review

the

search

remit

and

give

further

consideration

to

the

desired

skills

and

experience,

in

order

to

ensure

due

consideration

is

given

to

strong

potential

candidates.

Open

advertising

for

Board

positions

was

not

used

this

year.

The

Committee

reviewed

the

Non-Executive

Director

selection

and

appointment

process

in

2020,

which

was

refreshed

in

2019,

and

concluded

that

no

changes

were

required

to

the

current

process.

Diversity

We

believe

that

diversity

at

Board,

ExCo

and

senior

management

level

-

of

gender,

ethnicity,

cognitive

and

personal

strengths

and

social

backgrounds

-

is

an

essential

element

in

maintaining

a

competitive

advantage

and

effective

governance,

as

well

as

mitigating

the

risk

of

“group

think”.

The

Board

Diversity

Policy,

which

has

been

adopted

by

the

Board

,

confirms

that

the

Committee

will

consider

candidates

on

merit

against

objective

criteria

with

due

regard

to

the

benefits

of

diversity

when

identifying

suitable

candidates

for

appointment

to

the

Board.

At

the

end

of

2019

we

had

met

our

Board

gender

diversity

target

of

33%.

Following

changes

in

Board

composition

in

2020,

as

at

31

December

2020

the

Board’s

gender

diversity

was

25%.

With

the

appointment

of

Julia

Wilson

(effective

1

April

2021)

and

Sir

Ian

Cheshire

stepping

down

from

the

Board

at

the

conclusion

of

the

2021

AGM,

this

will

increase

to

33%,

in

line

with

both

the

Board

Diversity

Policy

and

the

Hampton

Alexander

Review

target.

In

2020,

the

Committee

reviewed

whether

the

level

of

the

Board

gender

diversity

target

was

still

appropriate,

given

that

it

was

set

in

2018

and

concluded

that

it

should

remain

at

33%.

Group-wide,

Barclays

has

set

a

number

of

targets

focused

on

creating

more

gender

diversity

in

its

wider

workforce,

including

its

ambition

to

achieve

28%

female

Managing

Directors

and

Directors

by

the

end

of

2021.

You

can

read

more

about

gender

diversity

at

Barclays,

including

data

on

the

percentage

of

females

at

Managing

Director

and

Director

level,

on

Group

ExCo

and

within

ExCo

direct

reports

and

in

Barclays’

wider

workforce

in

our

People

and

culture

section

on

pages

81

to

82.

As

at

31

December

2020,

17%

of

the

Board

was

from

an

ethnically

diverse

background,

meeting

the

recommendations

contained

within

the

Parker

Review

Committee

Report

into

the

Ethnic

Diversity

of

UK

Boards.

Alongside

the

Board,

the

Committee

continues

to

champion

the

Group’s

Global

Race

at

Work

agenda,

designed

to

reinforce

Barclays’

zero

tolerance

stance

on

racism

and

improve

opportunities

and

representation

for

ethnically

diverse

colleagues.

In

October,

Barclays

implemented

a

12-point

Race

at

Work

action

plan

focused

on

opening

up

opportunities

to

attract,

develop

and

add

to

our

Black

talent.

The

plan

comprises

a

thorough

set

of

actions,

using

data

to

set

goals

and

measure

success,

and

will

be

expanded

in

2021

to

include

other

ethnically

diverse

colleagues,

as

well

as

customers,

clients

and

communities.

You

can

find

more

information

on

diversity

and

inclusion,

including

Barclays’

Global

Race

at

Work

agenda

and

latest

Ethnicity

data

within

our

wider

workforce

in

our

‘People

and

culture’

section

on

pages

81

to

85

and

in

our

Diversity

and

Inclusion

Report

published

which,

will

be

made

available

on

our

website.

Succession

Robust

succession

planning

for

both

the

Board

and

the

ExCo

takes

into

account

current

and

future

business

needs

and

ensures

a

good

balance

of

skills,

experience

and

effectiveness

whilst

recognising

the

benefits

of

diversity.

Effective

succession

planning

should

take

into

account

contingency

planning

(for

any

unforeseen

departures

or

unexpected

absences),

medium

term

planning

(orderly

refreshing

of

the

Board,

Committees

and

the

ExCo)

and

long-term

planning

(looking

ahead

to

the

skills

that

may

be

required

on

the

Board

and

the

ExCo

in

the

future).

A

number

of

changes

have

been

made

this

year

to

the

composition

of

our

ExCo

in

order

to

ensure

that

it

continues

to

have

the

depth

of

skills

and

experience

that

we

need

to

deliver

our

strategic

ambitions.

The

Committee

reviews

and

discusses

all

ExCo

changes

prior

to

announcement,

taking

into

account

executive

succession

plans,

and

considers

all

the

changes

to

the

ExCo

composition

during

the

year.

You

can

find

more

information

about

the

changes

made

to

the

composition

of

our

ExCo

on

page

7.

With

regard

to

Board

succession

planning,

Tim

Breedon

will

have

been

on

the

Board

for

nine

years

in

November

2021

and

Mike

Ashley

will

have

been

on

the

Board

for

nine

years

in

September

2022,

and

the

Committee

is

giving

further

consideration

to

potential

successors

for

their

respective

roles

of

Board

Risk

Committee

Chair

and

Board

Audit

Committee

Chair.

Director

training

and

development

In

accordance

with

its

Terms

of

Reference

(available

at

home.barclays/who-we-are/our-governance/board-committee

),

the

Committee

supports

the

Group

Chairman

in

developing

and

monitoring

effective

induction,

training

and

development

for

the

Board.

Opportunities

for

in-person

Director

training

were

more

limited

in

2020

as

a

result

of

social

distancing

guidance

and

as

the

Board

and

senior

management

focussed

on

the

Group’s

response

to

the

COVID-19

pandemic.

However,

Director

training

and

development

was

supported

through

Board

deep

dives

and

through

Risk

deep

dives

and

Function

reviews

described

on

pages

12

to

13.

Risk

deep

dive

topics

covered

in

2020

had

a

strategic

focus

and

areas

covered

included

Interest

Rate

Risk

in

the

Banking

Book

and

the

implications

of

a

low

rate

environment

for

the

Group’s

financial

operating

model.

The

Board

also

received

an

annual

briefing

on

regulatory

responsibilities,

including

the

Senior

Managers

Regime

and

on

Barclays’

conduct

and

financial

crime

policies

and

standards.

Board

induction

schedules

for

incoming

Non-Executive

Directors

were

reviewed

and

refined,

with

sessions

covering

Board

engagement,

strategy,

culture

and

people,

finance,

specific

business

areas,

risk

and

controls,

internal

audit,

governance

matters

and

additional

meetings

with

the

business.

Review

of

Board,

Committee

and

individual

Director

effectiveness

Progress

against

2019

Board

Effectiveness

Review

The

2019

review

outlined

the

following

key

recommendations:

◾

That

consideration

be

given

to

facilitating

deeper

discussion

of

complex

issues

without

significantly

increasing

demands

on

the

Board’s

time.

◾

That

consideration

be

given

to

adding

greater

technology

expertise

to

the

Board,

through

greater

external

input

or

by

looking

to

expand

or

adjust

Board

membership.

◾

That

consideration

be

given

to

increasing

input

to

the

Board

from

outside

Barclays

on

a

wider

range

of

issues.

Directors’

report:

Board

Nominations

Committee

report

27

Barclays

PLC

2020

Annual

Report

on

Form

20-F

◾

That

the

Barclays’

ongoing

structured

approach

to

workforce

engagement

should

include

appropriate

opportunities

for

Board

members

to

engage

directly

with

employees.

In

2020,

progress

was

planned,

and

in

some

respects

made,

on

each

of

these

matters,

but

disruption

due

to

the

demands

of

the

pandemic

has

made

it

difficult

to

achieve

all

the

progress

we

would

have

liked.

For

example,

we

experienced

increased

pressure

on

the

Board’s

time

and

agendas,

which

often

had

to

be

revised

at

short

notice

to

deal

with

urgent

pandemic-related

matters.

The

effect

of

this

was

that,

first,

it

was

often

not

possible

to

achieve

the

extent

of

debate

and

depth

of

discussion

that

had

been

planned

before

the

pandemic;

secondly,

the

scope

for

accommodating

external

input

in

addition

to

the

considerable

expertise

on

the

Board

was

limited

and,

thirdly,

opportunities

for

Board

members

to

increase

their

direct

engagement

with

the

workforce

were

restricted.

Notwithstanding

this,

we

continued

with

searches

for

suitably

qualified

and

experienced

non-executive

directors

with

technology

expertise,

although

these

have

not

yet

yielded

suitable

candidates.

In

addition,

whilst

direct

physical

engagement

with

the

workforce

has

been

restricted,

Board

members

did

undertake

virtual

engagement

where

possible

throughout

the

year,

for

example

by

way

of

virtual

“town

hall”

meeting.

We

are

committed

to

building

on

the

progress

made

this

year

and,

to

the

extent

not

fully

addressed,

we

will

carry

these

recommendations

forward

to

2021

and

will

take

action

to

address

them

with

the

Board

as

appropriate.

2020

Board

Effectiveness

Review

The

2020

Board

effectiveness

review

was

conducted

internally,

in

line

with

the

Code,

and

was

led

by

the

Group

Company

Secretary,

overseen

by

the

SID.

The

review

followed

a

structured

interview

process

with

Board

members,

senior

management

and

other

stakeholders,

including

our

auditors.

The

full

and

frank

feedback

of

interviewees

provides

an

important

input

into

the

further

development

of

the

performance

and

effectiveness

of

the

Board,

in

particular

in

identifying

areas

in

which

the

Board

could

be

more

effective.

This

feedback

is

shared

with

the

Chairman

and

the

other

members

of

the

Board

by

reference

to

the

key

themes

and

recommendations

that

have

been

identified.

Feedback

from

this

review

indicated

that

the

composition

of

the

Board

is

considered

to

be

strong,

with

the

latest

additions

to

the

Board,

Brian

Gilvary,

Dawn

Fitzpatrick

and

Mohamed

El-Erian

each

having

settled

in

well,

contributing

meaningfully

to

the

quality

of

discussion.

Board

members

commented

particularly

favourably

on

the

“tone

from

the

top”

set

by

the

Chairman

and

the

other

members

of

the

Board,

the

strength

and

diversity

of

views

of

Board

members

contributing

to

a

complete

absence

of

“group

think”

in

discussions,

the

inclusive

style

of

the

Chairman

and

the

healthy

relationship

developed

with

management.

Challenge

by

the

Board

was

considered

to

be

strong

yet

constructive

and

collegiate.

The

Board

is

considered

to

have

performed

well

through

the

pandemic,

with

the

establishment

of

a

COVID-19

Crisis

Response

Committee

and

its

very

regular

cadence

of

meetings

having

enabled

the

Board

to

exercise

close

and

effective

oversight

of

the

bank’s

role

in

supporting

customers,

clients

and

colleagues

whilst

remaining

secure

and

resilient,

both

operationally

and

financially,

in

a

rapidly

evolving

and

dynamic

environment.

2020

Board

Effectiveness

Review:

Recommendations

◾

The

inevitable

challenges

of

conducting

Board

meetings

virtually

and

being

unable

to

get

together

in

person

made

it

more

challenging

for

the

recently

appointed

non-executive

directors,

in

particular,

and

the

Board

as

a

whole,

to

build

and

deepen

relationships

both

with

each

other

and

with

management

to

the

extent

they

would

have

liked.

This

was

also

perceived

to

have

made

it

more

difficult

for

those

more

recently

appointed

directors

to

quickly

gain

an

in-depth

understanding

of

the

bank

and

the

key

challenges

facing

it

than

would

have

been

the

case

had

travel

and

physical

meetings

been

possible

to

a

greater

extent

than

they

were

in

the

last

year.

Consideration

will

be

given

to

how

best

to

address

this

both

whilst

the

pandemic-related

restrictions

continue

and

once

a

degree

of

normalcy

has

been

restored.

◾

Whilst

good

progress

has

been

made

in

holding

more

in-depth

discussions

at

the

Board

on

strategic

matters,

significant

disruption

to

the

Board’s

agenda

and

increased

pressure

on

the

Board’s

time

due

to

the

pandemic

has

meant

that

not

all

deep

dive

topics

have

benefitted

from

as

much

debate

and

discussion

as

would

have

been

optimal.

This

is

being

addressed

in

2021

by

scheduling

fewer

deep

dives

and

allocating

more

time

to

each

of

them.

◾

Once

pandemic-related

restrictions

have

been

lifted,

consideration

should

be

given

to

providing

more

opportunities

for

Board

members

to

visit

parts

of

the

business

in

person

in

order

both

to

gain

a

broader

understanding

of

the

business

and

to

help

facilitate

direct

engagement

with

the

workforce

in

those

locations.

◾

There

would

be

benefit

in

working

with

management

to

access

opportunities

to

learn

from,

and

to

escalate

more

quickly,

the

insights

gained

from

the

handling

of

past

issues

and

the

reviews

conducted

of

the

root

causes,

and

to

embed

those

learnings

into

the

business.

The

review

concluded

that

the

Board

operated

effectively

throughout

2020,

and

continues

to

do

so.

Review

of

Nominations

Committee

effectiveness

The

2020

Committee

effectiveness

review

was

conducted

in

accordance

with

the

Code.

This

internal

review

involved

completion

of

a

tailored

questionnaire

by

Committee

members

and

senior

management,

in

line

with

the

approach

adopted

for

all

Board

Committees

in

2020.

The

review

is

an

important

part

of

the

way

Barclays

monitors

and

improves

Committee

performance

and

effectiveness,

maximising

strengths

and

highlighting

areas

for

further

development.

The

results

confirm

that

the

Committee

is

operating

effectively.

This

year’s

review

highlights

that

the

Committee

continues

to

be

well

constituted

and

that

the

role

and

responsibilities

of

the

Committee

are

clear

and

well

understood.

The

Committee’s

interaction

with

the

Board,

Board

Committees

and

senior

management

is

considered

effective.

This

year’s

review

noted

that

the

Committee

continued

to

operate

effectively

in

the

context

of

the

COVID-19

pandemic.

The

review

noted

that

the

Committee

may

benefit

from

a

more

formalised

meeting

schedule.

Due

to

the

nature

of

the

Committee’s

roles

and

responsibilities

this

may

not

always

be

possible,

but

further

consideration

will

be

given

to

this

during

the

year.

In

response

to

a

request

to

provide

feedback

on

interaction

with

subsidiary

committees,

the

review

noted

that

the

Committee’s

interaction

with

the

BBUKPLC

Board

Nominations

Committee

had

been

effective.

Following

the

consolidation

of

the

membership

of

the

Committee

with

the

BBPLC

Board

Nominations

Committee,

coverage

of

BBPLC

within

concurrent

meetings

was

considered

effec

tive.

Review

of

the

effectiveness

of

the

other

Committees

In

addition

to

reviewing

its

own

effectiveness,

the

Committee

also

reviewed

the

outcomes

of

the

effectiveness

reviews

conducted

by

the

Audit,

Remuneration

and

Risk

Committees,

which

had

also

been

conducted

by

way

of

tailored

questionnaire.

You

can

read

about

those

reviews

in

the

individual

Committee

reports

elsewhere

in

this

Governance

Report.

Following

consideration

of

the

findings

of

the

2020

Board

and

Board

Committee

effectiveness

reviews,

the

Committee

remains

satisfied

that

the

Board

and

each

of

the

Board

Committees

are

operating

effectively.

Directors’

report:

Board

Nominations

Committee

report

28

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Individual

Director

effectiveness

All

Directors

in

office

at

the

end

of

2020

were

subject

to

an

individual

effectiveness

review

which

was

conducted

in

early

2021.

The

Chairman

considered

each

Director’s

individual

contribution

to

the

Board

as

well

as

any

feedback

received

as

part

of

the

broader

Board

and

Committee

effectiveness

review.

The

reviews

were

conducted

by

the

Chairman

and

the

Chairman’s

review

was

conducted

by

the

SID.

The

Committee

reviewed

the

independence

of

the

Non-Executive

Directors

and,

in

the

cases

of

Tim

Breedon,

Mike

Ashley

and

Crawford

Gillies,

all

of

whom

have

served

on

the

Board

for

more

than

six

years,

their

independence

was

subjected

to

a

more

rigorous

review.

Based

on

these

reviews,

the

Board

accepted

the

view

of

the

Committee

that

each

Director

to

be

proposed

for

re-election

at

the

2021

AGM

continues

to

be

effective

and

contributes

to

Barclays’

long-term

sustainable

success.

In

accordance

with

the

Code,

all

of

the

current

Directors

of

the

Company,

other

than

Sir

Ian

Cheshire

who

is

stepping

down

from

the

Board

at

the

end

of

the

AGM,

will

be

submitting

themselves

for

election

or

re-election

at

the

2021

AGM

to

be

held

on

5

May

2021

and

will

be

unanimously

recommended

by

the

Board

for

election

or

re-election

as

appropriate.

As

part

of

its

decision

in

respect

of

Mr

Staley,

the

Board

has

had

regard

to

the

conclusions

it

reached

last

year,

which

conclusions

remain

unchanged,

in

relation

to

the

investigation

by

the

PRA

and

the

FCA,

details

of

which

were

disclosed

in

our

2019

Annual

Report

and

which

remain

ongoing.

Directors’

report:

Board

Risk

Committee

report

29

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Effective

risk

management

in

challenging

times

Dear

Fellow

Shareholders

2020

was

a

particularly

challenging

year

for

risk

management,

as

the

COVID-19

pandemic

introduced

new

risks

to

the

Group,

as

well

as

increasing

the

severity

and

correlation

of

those

risks

already

being

monitored

and

managed.

During

the

first

half

of

the

year,

the

Committee

focused

on

the

emerging

economic,

market

and

operational

impacts

of

the

measures

put

in

place

by

governments

to

slow

the

spread

of

the

pandemic,

as

well

as

the

effectiveness

of

the

various

extraordinary

fiscal

and

monetary

measures

taken

to

mitigate

the

financial

impact

on

companies

and

individuals.

Whilst

the

situation

stabilised

to

some

extent

in

the

second

half

of

the

year

as

lockdowns

proved

reasonably

effective

in

containing

the

virus

and

there

were

positive

developments

with

respect

to

potential

vaccines,

the

global

economic,

market

and

political

situation

remains

difficult

and

the

Committee

continues

to

work

with

management

to

position

the

Group

conservatively

in

response

to

the

heightened

risk

environment.

Financial

risk

The

Committee

m

onitored

developments

the

COVID-19

pandemic

closely,

including

transmission

of

the

virus

and

associated

operational

and

economic

impacts.

The

mandatory

lockdown

measures

imposed

by

governments

globally

resulted

in

sudden

and

severe

GDP

contractions

in

most

major

economies.

However,

government

support

measures

and

significant

central

bank

policy

easing

acted

to

soften

the

negative

effects

to

a

degree.

The

Committee

concentrated

initially

on

the

capital

and

liquidity

stress

on

the

Group,

as

precautionary

drawing

by

clients

on

revolving

credit

facilities

reduced

cash

holdings

and

inflated

risk-weighted

assets,

which

were

also

being

pushed

higher

by

general

market

volatility.

As

the

stress

continued,

focus

moved

to

assessing

the

short

and

medium

term

credit

risk

implications

of

rising

unemployment

and

exposure

to

corporates

in

certain

sectors,

including,

travel,

leisure

and

consumer

discretionary.

Credit

risk

positioning

was

already

conservative

before

the

pandemic

took

hold,

so

the

Committee

reviewed

any

additional

actions

taken

by

management,

comparing

them

with

those

envisaged

under

test

scenarios.

The

economic

shock

also

triggered

a

requirement

to

refresh

the

Group’s

ICAAP

and

ILAAP

and

this

exercise

confirmed

that

the

Bank

continued

to

operate

within

its

risk

appetite.

The

Committee

continued

to

review

the

performance

of

the

UK

and

US

consumer

credit

exposure

portfolios

and

the

impact

which

government

support

schemes

and

other

support

measures

from

central

banks

and

regulators

have

had

on

these

exposures.

Whilst

performance

has

remained

robust,

the

Committee

noted

the

risk

of

rising

delinquencies

and

further

credit

impairment

as

support

schemes

expire.

In

response

to

the

economic

and

market

impacts

of

the

COVID-19

pandemic,

central

banks

materially

eased

monetary

policy,

including

cutting

interest

rates

to

record

lows.

This

supported

asset

markets

but

increased

margin

pressure

on

banks

resulting

from

very

low

or

negative

interest

rates,

whilst

also

presenting

operational

challenges.

The

Committee

has

reviewed

the

impact

of

low

or

negative

interest

rates

on

the

Group

on

a

number

of

occasions

in

recent

years

and

impressed

upon

management

the

need

to

be

prepared

both

operationally

and

financially

for

such

an

eventuality.

Policy

tools

available

to

central

banks

to

deal

with

further

economic

weakness

have

been

limited;

and

the

abundance

of

liquidity

has

influenced

risk-pricing

in

financial

markets.

These

factors

have

contributed

to

the

potential

for

extreme

market

moves

to

occur.

These

risks

have

been

actively

managed

by

the

Group’s

Risk

function,

and

the

Committee

has

maintained

regular

oversight

of

the

overall

risk

profile

of

the

Group’s

balance

sheet

and

actions

taken.

The

Committee

also

reviewed

geopolitical

risks,

in

particular

deteriorating

relations

between

the

US

and

China.

These

risks

present

a

threat

to

global

growth

recovery

efforts.

UK

risks

remained

a

focus

for

the

Committee

due

to

the

economic

uncertainty

arising

as

the

UK

formally

left

the

EU

at

the

end

of

January

2020

and

the

transition

period

began.

As

negotiations

regarding

the

future

trading

relationship

with

the

EU

remained

ongoing

throughout

most

of

the

year

leading

up

to

the

eventual

conclusion

of

the

free

trade

agreement

just

before

the

end

of

the

transition

period

on

31

December

2020,

the

Committee

focused

on

the

operational

resilience

of

the

Group

in

the

face

of

the

risk

of

the

macro-economic

impact

of

a

failure

to

negotiate

such

an

agreement.

During

the

year

the

Committee

monitored

developments

in

Oil

&

Gas

markets,

notably

the

severe

stress

in

Q2

2020.

The

Committee

reviewed

in

detail

exposures

in

the

Oil

&

Gas

portfolio

and

potential

losses

from

a

sustained

price

stress.

The

Committee

continues

to

manage

Conduct

risk

following

the

dissolution

of

the

Board

Reputation

Committee

in

2019.

In

addition

to

focusing

on

the

Conduct

risk

profile

of

the

Group’s

core

businesses,

the

Committee

has

identified

a

number

of

key

conduct

themes

requiring

active

management.

Notable

amongst

these

is

the

risk

that,

in

response

to

the

COVID-19

pandemic,

rapid

introduction

of

new

products

(such

as

Bounce

Back

Loans

in

the

UK)

or

changes

to

existing

products

and

practices

(such

as

the

granting

of

payment

holidays)

will

be

reviewed

subsequently

and

found

by

regulators

or

other

stakeholders

to

be

inadequate

in

some

way.

The

Committee

has

encouraged

management

to

maintain

focus

on

the

Group’s

established

Conduct

risk

controls

to

minimise

this

risk,

despite

the

rapidly

changing

environment.

Finally,

the

Committee

reviewed

the

significant

enhancements

the

Group

has

made

in

its

approach

to

the

management

of

Climate

change

risk.

The

climate

change

stress

test,

which

was

first

executed

in

2019,

was

further

developed

in

2020

with

enhancements

to

several

climate

change

stress

approaches.

This

exercise

will

support

the

Group’s

response

to

the

forthcoming

Bank

of

England

(BoE)

industry-wide

stress

test.

Operational

risk

Operational

risk

was

heightened

in

2020

due

to

the

impact

of

the

COVID-19

pandemic

and,

in

particular,

the

Committee

considered

closely

operational

resilience,

as

the

workforce

largely

switched

to

remote

working.

The

operation

of

contact

centres

was

particularly

impacted

by

mandatory

lockdown

measures.

The

Committee

focused,

in

particular,

on

efforts

to

restore

capacity

in

call

centres

in

order

to

support

customers

in

financial

difficulty.

During

the

year,

the

Committee

continued

to

monitor

and

challenge

the

progress

being

made

in

the

identification,

assessment

and

management

of

Operational

risk.

Two

complementary

risk

management

tools

used

by

management

are

the

Risk

and

Control

Self

Assessments

(RCSAs)

and

Structured

Scenario

Assessments

(SSAs).

The

RCSAs

give

‘day-to-day’

coverage

of

the

risk

and

control

environment

of

the

Group.

They

are

built

on

a

foundation

of

the

actual

processes

the

Group

employs

and

the

risks

it

faces

from

its

activities.

This

approach

enables

management

to

improve

identification

and

management

of

Operational

risks

going

forward

and

also

to

review

in

detail

risk

events

that

have

occurred

in

order

to

identify

root

causes.

The

SSAs

are

used

to

evaluate

Operational

risk

arising

from

more

extreme

but

plausible

situations

and

so

complement

the

RCSA

approach;

in

combination

they

enable

the

Committee

to

oversee

the

risk

the

Group

faces

at

both

ends

of

the

risk

likelihood

spectrum.

The

SSAs

are

also

an

important

input

to

the

Group’s

Operational

risk

stress

testing

and

capital

frameworks.

During

the

course

of

the

year

the

Committee’s

SSA

focus

was

on

reviewing

the

specific

risk

scenario

of

data

privacy

and

mis-use

(a

Conduct

risk

theme).

Directors’

report:

Board

Risk

Committee

report

30

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Risk

appetite

and

risk

models

One

of

the

most

important

roles

of

the

Committee

is

to

recommend

to

the

Board

an

appropriate

risk

appetite

for

the

Group.

This

represents

the

amount

of

risk

the

Group

is

able

to

take

to

earn

an

appropriate

return

whilst

meeting

minimum

internal

and

regulatory

capital

requirements

in

a

severe

but

plausible

stress

environment.

The

Committee

analyses

Barclays

performance

in

both

its

internally-generated

stress

tests

and

those

run

externally

by

such

bodies

as

the

BoE,

the

European

Banking

Authority

and

the

FRB

and,

following

such

analysis,

will

recommend

adjustments

to

the

Group’s

overall

risk

profile.

For

the

Group’s

internal

stress

test,

the

Committee

received

a

detailed

briefing

on

the

process

being

applied

and

was

satisfied

that

the

internally-generated

scenario

was

appropriately

calibrated,

and

stressed

particular

vulnerabilities

of

the

Group.

The

Committee

was

further

satisfied

that

the

Group

would

meet

internal

and

regulatory

requirements

for

capital

and

liquidity

in

such

a

scenario.

The

Committee

continued

to

oversee

the

improvement

of

model

risk

management

in

the

Group

and

the

ongoing

validation

of

the

Group’s

models,

with

specific

progress

and

methodology

enhancements

in

the

model

outputs

supporting

the

Group’s

stress

tests,

including

the

Internal

Capital

Adequacy

Assessment

Process

(ICAAP)

and

Internal

Liquidity

Adequacy

Assessment

Process

(ILAAP).

The

Group’s

models

are

the

core

foundation

upon

which

the

majority

of

its

internal

assessment

processes

run.

The

Committee

is

pleased

to

report

that

progress

has

continued

during

2020

to

embed

the

Model

risk

management

framework

as

evidenced

by

an

increasingly

stable

model

inventory

and

further

improvements

in

documentation

and

control.

However,

models

remain

a

key

risk

area

for

the

Group

and

the

Committee

is

closely

monitoring

the

development

of

the

Group’s

approach

whilst

noting

that

the

extreme

market

and

economic

conditions

experienced

during

2020

will

have

affected

the

performance

of

many

of

the

existing

models

in

use.

Risk

function

The

Committee

is

responsible

for

ensuring

the

independence

and

effectiveness

of

the

Risk

function,

whose

primary

role

is

the

oversight

and

challenge

of

risk-taking

as

the

Second

Line

of

Defence.

It

accomplishes

this

by

establishing

the

policies,

limits,

rules

and

constraints

under

which

first

line

activities

shall

be

performed,

consistent

with

the

Group’s

risk

appetite

and

through

monitoring

the

performance

of

the

first

line

of

defence

against

these

policies,

limits

and

constraints.

The

Committee’s

responsibilities

include

designing

a

consistent

classification

of

the

risks

faced

by

the

Group

in

order

to

organise

their

management

and

reporting;

designing

and

operating

the

process

of

setting

risk

appetite

and

material

limits

for

the

Group

as

a

whole

and

its

main

entities;

setting

or

approving

strategies

for

approvals

of

transactions,

and

indeed

approving

significant

individual

agreements;

and

establishing

key

controls

requirements

to

which

customer-facing

areas

of

Barclays

must

adhere

in

the

conduct

of

their

businesses.

The

Committee

reviewed

the

Risk

function’s

own

assessment

of

its

capability

in

late

2020

which

showed

that

the

function

continues

to

meet

expectations

in

providing

effective

and

independent

oversight

with

strong

stewardship

and

technical

competency.

The

Committee

also

oversaw

a

number

of

changes

to

the

senior

management

of

the

Risk

function,

including

and

consequent

upon

the

appointment

of

the

Group’s

new

Chief

Risk

Officer,

Taalib

Shaah.

It

was

encouraging

that

these

changes

were

achieved

through

internal

succession,

supporting

the

stability

of

the

function.

Compliance

function

The

purpose

of

the

Compliance

function

is

to

provide

oversight

of

Conduct

risk

management

practices

as

part

of

Barclays’

second

line

of

defence.

Compliance

participates

in

the

prevention,

detection

and

management

of

breaches

of

applicable

laws,

rules,

regulations

and

relevant

procedures

and

has

a

key

role

in

helping

to

strengthen

the

culture

of

Barclays

and

achieve

the

right

conduct

outcomes.

The

Committee

supports

the

independence

of

the

Compliance

function

from

the

operational

functions

so

that

it

has

sufficient

authority,

stature,

resources

and

access

to

the

management

body.

The

Committee

monitored

the

delivery

of

the

Compliance

function’s

Annual

Plan

for

2020

and

approved

the

Compliance

Annual

Plan

for

2021.

Committee

effectiveness

The

2020

Committee

effectiveness

review

was

conducted

in

accordance

with

the

Code.

This

internal

review

involved

completion

of

a

tailored

questionnaire

by

Committee

members

and

senior

management,

in

line

with

the

approach

adopted

for

all

Board

Committees

in

2020.

The

review

is

an

important

part

of

the

way

Barclays

monitors

and

improves

Committee

performance

and

effectiveness,

maximising

strengths

and

highlighting

areas

for

further

development.

The

results

of

the

review

were

positive

and

indicated

that

the

Committee

is

operating

effectively;

and

that

it

is

well

constituted

and

provides

an

effective

and

broad

level

of

challenge

and

oversight

of

the

areas

within

its

remit.

The

Committee

was

considered

to

be

both

challenging

and

influential,

providing

strong

support

to

the

new

Group

Chief

Risk

Officer.

The

review

noted

that

the

Committee

has

a

broad

remit

having

taken

on

oversight

of

Conduct

and

Compliance

matters

in

2019

following

the

disbanding

of

the

Reputation

Committee

and

that

a

continued

focus

on

these

areas

was

considered

to

be

beneficial.

The

review

concluded

that

the

Committee’s

interaction

with

the

Board,

Board

Committees

and

senior

management

is

considered

effective.

Following

the

consolidation

of

the

membership

of

the

Committee

with

the

BBPLC

risk

committee,

coverage

of

BBPLC

matters

within

concurrent

meetings

was

considered

appropriate.

In

particular,

this

year’s

review

noted

that

the

Committee

continued

to

operate

effectively

in

the

context

of

the

COVID-19

pandemic

and

that

recent

appointments

to

the

Committee

had

strengthened

its

depth

of

experience.

Changes

to

Committee

composition

I

am

pleased

to

have

been

able

to

welcome

to

the

Committee

Dawn

Fitzpatrick

and

Mohamed

A.

El-Erian

during

2020

and

Brian

Gilvary

at

the

beginning

of

2021,

who

together

will

add

considerable

relevant

experience

and

expertise

to

the

Committee.

Looking

ahead

In

2021,

the

Committee

will

continue

to

focus

on

the

impact

of

the

external

environment

on

the

Group’s

risk

profile,

particularly

with

regard

to

the

ongoing

impact

of

the

COVID-19

pandemic,

the

consequences

of

the

UK’s

withdrawal

from

the

EU,

broader

geopolitical

developments

following

the

US

presidential

election

in

November

2020

and

the

impact

of

initiatives

to

limit

the

extent

of

climate

change.

Tim

Breedon

Chair,

Board

Risk

Committee

17

February

2021

Directors’

report:

Board

Risk

Committee

report

31

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Committee

meetings

During

2020,

the

Committee

met

11

times

and

the

chart

below

shows

how

it

allocated

its

time

during

those

meetings.

Given

the

COVID-19

pandemic,

meetings

were

primarily

held

by

video

and

audio

conference.

Attendance

by

members

at

Committee

meetings

is

shown

on

this

page.

Committee

meetings

were

attended

by

representatives

from

management,

including

the

Group

Chief

Executive

Officer,

Group

Finance

Director,

Group

Chief

Internal

Auditor,

Group

Chief

Risk

Officer,

Group

Treasurer,

Group

Chief

Compliance

Officer

and

Group

General

Counsel,

as

well

as

representatives

from

the

businesses

and

other

representatives

from

the

Risk

function.

The

lead

audit

engagement

partner

of

KPMG,

Michelle

Hinchliffe,

also

attended

Committee

meetings.

The

Committee

held

a

number

of

separate

private

sessions

with

the

Group

Chief

Risk

Officer

and

the

Group

Chief

Compliance

Officer,

which

were

not

attended

by

management.

Committee

roles

and

responsibilities

The

Committee

is

responsible

for

reviewing

on

behalf

of

the

Board

management’s

recommendations

on

the

principal

risks

as

set

out

in

the

Group’s

ERMF

with

the

exception

of

Reputation

risk,

which

is

a

matter

reserved

to

the

Board,

and

in

particular:

◾

reviewing,

on

behalf

of

the

Board,

the

management

of

those

principal

risks

in

the

ERMF

◾

considering

and

recommending

to

the

Board

the

Group’s

risk

appetite

and

tolerances

for

those

principal

risks

◾

reviewing,

on

behalf

of

the

Board,

the

Group’s

risk

profile

for

those

principal

risks

◾

commissioning,

receiving

and

considering

reports

on

key

risk

issues

◾

safeguarding

the

independence,

and

overseeing

the

performance,

of

Barclays’

Risk

and

Compliance

functions.

The

Committee’s

terms

of

reference

are

available

at

home.barclays/corporategovernance.

Primary

activities

The

Committee

has

discharged

its

responsibilities

diligently

in

2020,

reviewing

Group

exposures

in

the

context

of

the

current

and

emerging

risks

facing

Barclays.

It

has

sought

to

promote

a

strong

culture

of

disciplined

risk

management.

Directors’

report:

Board

Risk

Committee

report

32

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Areas

of

focus

Matters

addressed

Role

of

Committee

Conclusion/action

taken

Risk

appetite

and

stress

testing

i.e.

the

level

of

risk

the

Group

chooses

to

take

in

pursuit

of

its

business

objectives,

including

testing

whether

the

Group’s

financial

position

and

risk

profile

provide

sufficient

resilience

to

withstand

the

impact

of

severe

economic

scenarios.

The

risk

context

to

the

MTP,

the

financial

parameters

and

constraints

and

mandate

and

scale

limits

for

specific

business

risk

exposures;

the

Group’s

internal

stress

testing

exercises,

including

scenario

selection

and

financial

constraints,

stress

testing

themes

and

the

results

and

implications

of

stress

tests,

including

those

run

by

the

BoE.

◾

To

advise

the

Board

on

the

appropriate

risk

appetite

and

tolerance

for

the

Principal

risks,

including

the

proposed

overall

Group

risk

appetite

and

limits.

◾

To

discuss

and

agree

stress

loss

and

mandate

and

scale

limits

for

Credit

risk,

Market

risk

and

Treasury

and

Capital

risk.

◾

To

consider

and

approve

internal

stress

test

themes

and

the

financial

constraints

and

scenarios

for

stress

testing

risk

appetite

for

the

MTP.

◾

To

evaluate

the

results

of

the

BoE’s

annual

cyclical

stress

(ACS)

test

and

the

BoE’s

Biennial

Exploratory

Scenario.

◾

To

consider

the

feedback

from

the

FRB

on

the

Barclays

US

LLC’s

Comprehensive

Capital

Analysis

and

Review

(CCAR)

following

the

submission

of

the

CCAR

stress

test

results.

Early

in

the

year

the

Committee

reviewed

and

recommended

the

proposed

risk

appetite

to

the

Board

for

approval,

and

discussed

and

approved

the

mandate

and

scale

limits

for

the

Group

for

2020,

which

included

changes

to

A-level

stress

loss

limits.

Subsequent

changes

were

approved

during

the

course

of

the

year.

The

Committee

reviewed

proposed

enhancements

to

the

Group’s

stress

testing

processes

and

models

such

as

taking

into

account

structural

projections.

The

Group

was

not

required

to

conduct

an

ACS

test

during

the

period

under

review,

although,

later

in

2020

in

the

context

of

the

consideration

of

the

MTP

and

risk

appetite

for

2021,

the

Committee

considered

and

approved

the

stress

scenarios

for

an

Internal

Stress

Test,

a

Reverse

Stress

Test

and

a

climate

change

stress

test.

The

Committee

received

updates

on

the

positive

qualitative

and

quantitative

results

of

the

2020

CCAR

submission

to

the

FRB,

which

for

the

first

time

had

been

run

during

a

period

of

stress,

demonstrating

significant

progress

on

remediation

of

certain

areas

following

regulatory

feedback

from

the

FRB.

Subsequently,

the

FRB

required

US

banks,

including

Barclays

US

LLC,

to

resubmit

capital

plans

using

new

supervisory

and

internal

baseline

stress

scenarios,

which

were

reviewed

by

the

Committee.

In

the

context

of

the

Company’s

strategic

planning

process,

the

Committee

continued

periodically

throughout

the

year

to

review

and/or

approve

the

risk

appetite

statement

consisting

of

both

quantitative

constraints

and

qualitative

risk

appetite

statements

by

various

Principal

risks.

Capital

and

funding

i.e.

having

sufficient

capital

and

financial

resources

to

meet

the

Group’s

regulatory

requirements

and

its

obligations

as

they

fall

due,

to

maintain

its

credit

rating,

to

support

growth

and

strategic

options.

The

trajectory

to

achieving

required

regulatory

and

internal

targets

and

capital

and

leverage

ratios.

◾

To

review,

on

a

regular

basis,

capital

performance

against

plan,

tracking

the

capital

trajectory,

any

challenges

and

opportunities

and

regulatory

policy

developments.

◾

To

assess,

on

a

regular

basis,

liquidity

performance

against

both

internal

and

regulatory

requirements.

◾

To

monitor

capital

and

funding

requirements.

The

Committee

considered

and

approved

the

Group’s

2020

ICAAP

and

the

Group’s

2020

ILAAP.

During

the

course

of

the

year

the

Committee

noted

regulatory

feedback

on

the

ICAAP

and

ILAAP,

reviewed

updates

to

the

ICAAP

and

ILAAP

to

reflect

the

impact

of

the

COVID-

19

pandemic,

overseeing

a

continued

improvement

in

processes

and

a

refresh

of

both

ICAAP

and

ILAAP

in

the

fourth

quarter.

The

Committee

examined

and

supported

the

forecast

capital

and

funding

trajectory

and

the

actions

identified

by

management

to

manage

the

Group’s

capital

position,

taking

into

account

the

impact

of

the

COVID-19

pandemic,

uncertainties

relating

to

the

end

of

the

post-

Brexit

transition

period

and

other

macro-economic

factors.

Following

the

outbreak

of

the

COVID-19

pandemic,

the

Committee

reviewed

and

scrutinised

the

Group

COVID-

19

stress

scenarios,

reflecting

the

adoption

of

more

prudent

assumptions

given

the

Company’s

assessment

of

the

economic

impact

of

the

pandemic.

The

extent

of

the

economic

shock

triggered

a

requirement

to

re-run

key

aspects

of

the

ICAAP

and

ILAAP.

The

Committee

noted

amendments

to

the

individual

allocation

of

risk

appetite

by

business

and

risk

type

in

light

of

the

pandemic

and

acknowledged

that

at

all

times

the

Company

had

remained

within

its

overall

Risk

Appetite.

The

Committee

has

also

received

and

considered

regular

updates

on

the

potential

risk

impacts

of

LIBOR

transition

and

negative

interest

rates.

Directors’

report:

Board

Risk

Committee

report

33

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Political

and

economic

risk

i.e.

the

impact

on

the

Group’s

risk

profile

of

political

and

economic

developments

and

macroeconomic

conditions.

The

potential

impact

on

the

Group’s

risk

profile

of

geopolitical

developments,

as

well

as

continuing

to

monitor

the

political

and

economic

impact

of

post-Brexit

transition

period

scenarios.

◾

To

consider

the

impact

of

COVID-19

on

the

business

directly

and

indirectly.

◾

To

review

and

discuss

plans

for

the

impacts

of

Brexit

under

various

post-transition

period

scenarios.

◾

To

consider

trends

in

the

UK

and

US

economies.

◾

To

assess

the

geopolitical

tensions

in

both

the

Eurozone

and

China

◾

To

review

potential

consequences

of

the

BoE

statement

regarding

negative

interest.

The

Committee

monitored

the

Group’s

performance

throughout

the

year

in

light

of

the

COVID-19

pandemic,

including

considering

the

impact

of

government

support

schemes

and

other

support

measures

from

central

banks

and

regulators.

The

Committee

monitored

potential

post-Brexit

risk

impacts

and,

in

particular,

considered

the

risk

of

there

being

no

free

trade

agreement

between

the

EU

and

the

UK

in

place

at

the

end

of

the

transition

period.

The

Committee

also

considered

the

possibility

of

negative

interest

rates

being

introduced

by

the

BoE

following

a

post-Brexit

shock

or

as

part

of

its

COVID-19

support

measures

to

the

UK

economy,

reviewing

in

particular

any

potential

impact

to

the

Group’s

capital

and

liquidity

positions.

The

Committee

monitored

the

Group’s

performance

in

light

of

a

backdrop

of

uncertain

global

political

and

economic

conditions,

with

particular

focus

on

tensions

in

the

Eurozone

and

also

in

China,

following

the

introduction

of

new

security

laws

in

Hong

Kong.

Credit

risk

i.e.

the

potential

for

financial

loss

if

customers

fail

to

fulfil

their

contractual

obligations.

Conditions

in

the

UK

housing

market;

levels

of

UK

consumer

indebtedness;

unemployment

levels

in

the

US

and

UK;

and

the

performance

of

the

UK

and

US

cards

businesses,

including

levels

of

impairment.

◾

To

assess

conditions

in

the

UK

property

market

and

monitor

signs

of

stress.

◾

To

monitor

management’s

tracking

and

responding

to

persistent

rising

levels

of

consumer

indebtedness,

particularly

unsecured

credit

in

both

the

UK

and

US.

◾

To

monitor

unemployment

trends

and

COVID-19

pandemic

financial

support

incentives,

particularly

in

both

the

UK

and

US.

◾

To

review

leveraged

finance

portfolios

in

order

to

assess

maintenance

within

risk

appetite

and

manageable

limits.

◾

To

review

business

development

activities

in

the

CIB.

The

Committee

reviewed

the

risk

aspects

associated

with

the

Group’s

support

of

customers

through

the

COVID-19

pandemic

in

line

with

the

UK

government’s

expectations,

including

(among

other

things)

payment

holidays

and

forbearance

for

customers

in

financial

difficulty.

The

Committee

considered

the

appropriate

capital

and

impairment

treatment

for

customers

exiting

payment

holidays

and

the

risk

of

more

severe

economic

stress.

The

Committee

considered

the

risks

arising

from

the

participation

of

BBUKPLC

in

the

CBILS

and

BBLS

government

loan

schemes,

in

particular

the

potential

default

rate

arising

from

conduct,

legal,

operational,

fraud,

AML/KYC

and

look-back

risks

associated

with

exposures

under

such

schemes.

The

Committee

noted

that

the

deteriorating

economic

outlook

was

expected

to

lead

to

delinquencies

and

impairment.

The

Committee

assessed

the

risks

associated

with

mortgage

collateralisation

of

loans

relating

to

the

UK

housing

market,

given

the

increase

in

Barclays’

market

share,

noting

that

exposure

to

high

LTV

loans

was

low.

The

Committee

received

updates

on

the

risks

from

the

CIB.

The

Committee

noted

that

the

equities

business

and

the

structured

hedging

programmes

had

held

up

well

during

the

pandemic,

as

had

leveraged

finance.

Operational

risk

i.e.

costs

arising

from

human

factors,

inadequate

processes

and

systems

or

external

events.

The

Group’s

operational

risk

capital

requirements

and

any

material

changes

to

the

Group’s

operational

risk

profile

and

performance

of

specific

operational

risks

against

agreed

risk

appetite.

◾

To

track

operational

risk

key

indicators.

◾

To

consider

specific

areas

of

operational

risks,

including

fraud,

conduct

risk,

cyber

risk,

execution

risk,

technology

and

data,

including

the

controls

that

had

been

put

in

place

for

managing

and

avoiding

such

risks.

◾

To

review

Barclays’

approach

to

scenario

analyses

as

a

risk

management

tool

and

assess

a

range

of

SSAs

which

had

been

created

to

support

assessments

and

management

of

tail

risk

within

the

business,

stress

testing

and

risk

tolerance.

The

Committee

focussed

attention

on

the

financial

and

capital

implications

of

operational

risk

throughout

the

year,

particularly

in

light

of

the

impact

of

the

COVID-19

pandemic

as

the

workforce

largely

switched

to

remote

working.

The

Committee

approved

and

recommended

the

2020

Operational

Risk

Appetite

Statement

to

the

Board,

which

included

increased

financial

loss

limits

for

fraud

and

transaction

operations.

Due

to

the

COVID-19

pandemic,

the

Operational

risk

profile

of

the

Group

increased

to

a

material

extent.

The

Committee

focussed

on

ensuring

that

the

technology

systems

remained

stable

and

that

heightened

fraud

monitoring

and

cyber-security

was

in

place.

The

Committee

was

briefed

by

management

as

part

of

a

specific

Operational

risk

deep

dive

on

various

key

risks,

including

those

relating

to

settlements,

erroneous

payments,

suppliers,

cyber-security

and

wellbeing

(the

Committee

being

concerned

for

colleague

wellbeing

within

the

Group

in

light

of

the

pandemic

and

the

risks

arising

from

any

adverse

impact

on

levels

of

colleague

engagement).

The

Committee

reviewed

updates

to

practices

in

relation

to

the

new

and

amended

products

approval

process,

which

were

of

particular

interest

to

regulators

in

light

of

the

pandemic.

Directors’

report:

Board

Risk

Committee

report

34

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Model

risk

i.e.

the

risk

of

the

potential

adverse

consequences

from

financial

assessments

or

decisions

based

on

incorrect

or

misused

model

outputs

and

reports.

Model

risk

governance.

◾

To

evaluate

the

appropriateness

of

the

Model

risk

management

framework

and

monitor

progress

on

the

implementation

of

an

enhanced

modelling

framework,

including

receiving

updates

on

findings

in

relation

to

specific

modelling

processes.

The

Committee

scrutinised

management’s

proposals

in

relation

to

managing

Model

risk,

which

increased

during

the

year

as

a

result

of

the

consequences

of

the

COVID-

19

pandemic,

given

that

models

needed

to

be

adjusted,

re-built

and/or

re-calibrated

given

the

unprecedented

nature

and

impact

of

the

COVID-19

pandemic.

The

Committee

noted

the

importance

of

Post-Model

Adjustment

and

scrutiny

by

the

Independent

Valuat

ion

Unit,

particularly

in

the

context

of

provisioning

against

impairment.

Risk

framework

and

governance

The

frameworks,

policies

and

tools

in

place

to

support

effective

risk

management

and

oversight.

◾

To

track

the

progress

of

significant

risk

management

projects,

achieving

compliance

with

the

Basel

Committee

for

Banking

Supervision

(BCBS239)

risk

data

aggregation

principles

and

the

RCSA

process

across

the

Group.

◾

To

assess

risk

management

matters

raised

by

Barclays’

regulators

and

the

actions

being

taken

by

management

to

respond.

◾

To

review

the

design

of

the

ERMF.

The

Committee

monitored

the

delivery

of

projects

susceptible

to

the

impact

of

significant

risks,

notably

the

COVID-19

pandemic,

macro-economic

developments,

post-Brexit

trade

deal

uncertainties,

climate

change,

stress

testing

and

cyber-attacks.

The

Committee

discussed

and

approved

an

annual

refresh

of

the

Principal

Risks

Framework,

which

was

supported

by

the

ERMF

and

included

climate

change

references

within

each

Principal

risk,

it

being

decided

that

Climate

risk

would

become

one

of

the

Principal

risks

within

the

ERMF

from

2022.

The

Committee

reviewed

reports

from

management

prepared

in

light

of

the

current

macro-economic

environment,

which

showed

that

management

had

created

various

“watchlist”

categories

based

on

particular

sectors

and

the

severity

of

their

credit

deterioration,

which

were

aligned

to

the

IFRS

9

staging

approach.

The

Committee

reviewed

the

performance

of

the

Group’s

activities

as

against

its

RCSAs,

noting

that

the

overall

residual

risk

continued

to

decrease,

driven

by

the

continued

focus

on

controls

remediation,

the

RCSA

process

being

key

to

supporting

a

robust

and

effective

risk

and

control

culture

within

Barclays.

The

Committee

continued

to

monitor

management’s

progress

in

achieving

compliance

with

all

aspects

of

BCBS239,

receiving

updates

on

the

level

of

implementation

during

the

year

and

progress

made

towards

achieving

full

compliance

by

early

2021.

The

risk-related

guidance

or

review

reports

received

from

regulators

and

responses

were

reported

to,

and

reviewed

by,

the

Committee

in

a

timely

manner

during

the

year.

The

Committee

also

received

updates

during

the

year

from

BIA

in

relation

to

its

assessments

following

audits

in

relation

to

the

Risk,

as

well

as

the

Compliance,

functions.

Remuneration

The

scope

of

any

risk

adjustments

to

be

taken

into

account

by

the

Board

Remuneration

Committee

when

making

remuneration

decisions

for

2020.

◾

To

debate

the

Risk

function’s

view

of

performance,

making

a

recommendation

to

the

Board

Remuneration

Committee

on

the

financial

and

operational

risk

factors

to

be

taken

into

account

in

remuneration

decisions

for

2020.

The

Committee

discussed

the

report

of

the

Group

Chief

Risk

Officer

and

considered

the

2020

ex-ante

risk

adjustment

methodology,

which

had

been

updated

to

address

feedback

from

the

Board’s

Remuneration

Committee

and,

in

particular,

in

relation

to

‘Conduct’

measures.

The

Committee

noted

the

impact

of

the

COVID-19

pandemic

on

Conduct

risk

which

would

in

turn

impact

remuneration

decisions.

Conduct

Risk

i.e.

the

risk

of

detriment

to

customers

from

the

inappropriate

supply

of

financial

services.

Conduct

robust

reviews

of

any

current

and

emerging

risks

arising

from

the

inappropriate

provision

of

financial

services,

including

instances

of

wilful

negligent

misconduct.

◾

To

receive

updates

from

management

on

Conduct

risk

and

consider

performance

against

key

Conduct

risk

indicators

and

the

status

of

initiatives

in

place

to

address

those

risks

to

further

strengthen

the

culture

of

the

business.

◾

To

review

the

effectiveness

of

the

Conduct

risk

framework

and

approve

any

amendments

to

it.

◾

To

review

the

Compliance

function’s

Annual

Compliance

Plan.

The

Committee

reviewed

Compliance’s

contribution

in

supporting

Barclays’

response

to

the

COVID-19

pandemic

through

the

monitoring

of

areas

of

heightened

Conduct

risk

and

overseeing

the

implementation

of

additional

controls,

particularly

in

the

context

of

ongoing

remediation

activities

and

monitoring

working

from

home

arrangements,

new

products

and

reprioritisation

of

risks.

During

the

year

the

Committee

assessed

the

Conduct

themes

in

the

context

of

Conduct

risk.

Towards

year

end

the

Committee

approved

the

revised

Conduct

risk

management

framework.

During

the

year

the

Committee

reviewed

the

Compliance

function’s

performance

of

activities

against

its

Compliance

Plan

for

2020;

and

towards

year

end

approved

the

Annual

Compliance

Plan

for

2021.

Directors’

report:

How

we

comply

35

Barclays

PLC

2020

Annual

Report

on

Form

20-F

How

we

comply

The

UK

Corporate

Governance

Code

As

Barclays

PLC

is

listed

on

the

London

Stock

Exchange,

we

apply

the

principles

and

provisions

of

the

Code,

as

set

out

below.

Barclays

PLC

is

reporting

against

the

requirements

of

the

latest

version

of

the

Code

in

this

Annual

Report,

which

was

published

in

2018.

A

copy

of

the

Code

can

be

found

at

frc.org.uk.

For

the

year

ended

31

December

2020,

and

as

at

the

date

of

this

report,

we

are

pleased

to

confirm

that

Barclays

PLC

has

complied

in

full

with

the

Code’s

principles

and

provisions.

Disclosure

Guidance

and

Transparency

Rules

By

virtue

of

the

information

included

in

this

Governance

section

of

the

Annual

eport,

we

comply

with

the

corporate

governance

statement

requirements

of

the

FCA’s

Disclosure

Guidance

and

Transparency

Rules.

Certain

additional

information

that

is

required

to

be

disclosed

pursuant

to

DTR7.2.6

can

be

found

on

pages

41

to

46.

New

York

Stock

Exchange

(NYSE)

Barclays

is

permitted

by

NYSE

rules

to

follow

UK

corporate

governance

practices

instead

of

those

applied

in

the

US

and

any

significant

variations

are

explained

on

page

315.

Board

leadership

and

company

purpose

Role

of

the

Board

As

highlighted

earlier

in

this

report,

our

governance

is

structured

to

deliver

an

effective

and

entrepreneurial

Board

which:

◾

is

effective

in

providing

challenge,

advice

and

support

to

management

◾

provides

checks

and

balances

and

encourages

constructive

challenge

◾

drives

informed,

collaborative

and

accountable

decision-making

◾

creates

long-term

sustainable

value

for

our

shareholders,

having

regard

to

our

other

stakeholders.

Culture

The

Barclays

Way

sets

the

framework

for

achieving

a

dynamic

and

positive

culture.

The

Board

supports

The

Barclays

Way

and

the

Barclays

Purpose

and

Values.

It

promotes

personal

accountability

and

leadership

and

monitors

our

culture

to

satisfy

itself

as

to

the

alignment

of

Barclays’

culture

to

its

purpose,

values

and

strategy.

See

pages

11

and

13

for

more

details.

Our

whistleblowing

policy

enables

employees

to

raise

any

matters

of

concern

anonymously

and

is

embedded

into

our

business.

For

more

detail

please

refer

to

page

19

of

the

Board

Audit

Committee

report.

Relations

with

shareholders

and

stakeholders

The

Board

recognises

the

importance

of

listening

to,

and

understanding

the

views

of

stakeholders

in

order

to

inform

the

Board’s

decision-

making.

You

can

read

more

about

how

we

engage

with

our

stakeholders,

including

what

they

told

us

in

2020

and

how

we

responded,

including

in

relation

to

the

Group’s

climate

change

strategy

and

responding

to

challenges

arising

from

the

COVID-19

pandemic,

in

our

Strategic

Report

available

at

home.barclays/annualreport

.

Our

comprehensive

Investor

Relations

engagement

helps

the

Board

to

understand

investor

views

about

Barclays,

which

are

communicated

regularly

to

the

Board;

and

our

Group

Chairman

engages

with

shareholders

on

governance

and

Our

Investor

Relations

programme

was

adjusted

to

a

virtual

format

for

2020

which

ensured

we

enjoyed

a

high

level

of

activity

with

existing

and

target

investors

despite

restrictions

on

face

to

face

meetings.

Our

shareholder

communication

guidelines

are

available

on

our

website

at

home.barclays/investorrelations

.

Institutional

investors

In

2020,

the

Directors,

in

conjunction

with

the

senior

executive

team

and

Investor

Relations

colleagues,

participated

in

a

number

of

virtual

investor

meetings,

seminars

and

conferences

across

many

locations,

given

‘in

person’

meetings

were

limited

due

to

the

COVID-19

pandemic.

We

held

conference

calls/webcasts

for

our

quarterly

results

briefings

and

an

in-person

presentation

of

our

2019

full

year

results

for

both

our

equity

and

fixed

income

investors.

During

2020,

discussions

with

investors

included,

but

were

not

limited

to:

◾

Credit

conditions

and

our

ability

to

manage

risk

appropriately

through

the

COVID-19

pandemic

◾

The

impact

of

low

interest

rates

and

reduced

levels

of

consumer

spending

on

our

income

generation

◾

Regulatory

restriction

on

dividends

across

all

UK

banks,

to

allow

continued

support

for

the

economy

◾

Barclays’

commitment

to

tackling

climate

change.

Private

shareholders

During

2020,

we

continued

to

communicate

with

our

private

shareholders

through

shareholder

mailings

and

through

the

information

available

on

our

website

and

through

our

AGM.

Although

shareholders

were

unable

to

attend

in

person

due

the

COVID-19

pandemic,

shareholders

were

able

to

submit

questions

ahead

of

the

AGM

and

all

questions

were

responded

to

individually

and

answers

to

frequently

asked

questions

were

published

on

our

website.

Shareholders

can

also

choose

to

sign

up

to

Shareview

so

that

they

receive

information

about

Barclays

PLC

and

their

shareholding

directly

by

email.

We

continue

to

endeavour

to

trace

shareholders

who

did

not

take

up

their

share

entitlement

following

the

Rights

Issue

in

September

2013,

and

offered

a

Share

Dealing

Service

aimed

at

shareholders

with

relatively

small

shareholdings

for

whom

it

might

otherwise

be

uneconomical

to

deal

in

Barclays

shares.

For

more

detail,

please

see

pages

303

to

304.

The

2020

AGM

The

Board

was

disappointed

that

the

2020

AGM

was

impacted

by

the

COVID-19

pandemic

and

shareholders

were

unable

to

attend

in

person.

The

Board

and

the

senior

executive

team

consider

our

AGM

to

be

a

key

opportunity

for

shareholder

engagement,

particularly

with

our

private

shareholders

and

for

shareholders

to

ask

questions

of

the

Board.

A

number

of

Directors,

including

the

Group

Chairman,

are

normally

available

for

informal

discussion

before

or

after

an

AGM.

Given

that

shareholders

were

unable

to

attend

in

person,

they

were

strongly

encouraged

to

submit

questions

to

the

Board

in

advance

of

the

meeting.

All

questions

received

were

answered

individually

and

answers

to

frequently

asked

questions

were

published

on

our

website.

Directors’

report:

How

we

comply

36

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Voting

in

respect

of

all

of

the

resolutions

proposed

by

the

Board

at

the

2020

AGM

was

conducted

by

way

of

a

poll,

thereby

giving

weight

to

the

number

of

shares

held

by

shareholders

rather

than

simply

attributing

a

notional

one

vote

to

each

shareholder

voting.

With

the

exception

of

the

shareholder

requisitioned

Resolution

30,

all

resolutions

were

passed

with

votes

‘For’

ranging

from

90.60%

to

99.93%

of

the

total

votes

cast.

A

climate

change

resolution

(Resolution

30)

was

requisitioned

by

a

group

of

shareholders

co-ordinated

by

ShareAction.

The

resolution

was

not

supported

by

the

Board,

which

proposed

its

own

climate

change

resolution

(Resolution

29)

and

recommended

that

shareholders

vote

in

favour

of

Resolution

29

and

not

Resolution

30.

After

dialogue,

ShareAction

and

many

of

the

co-filers

of

Resolution

30

recommended

that

shareholders

vote

in

favour

of

both

Resolution

29

and

Resolution

30.

Resolution

29

(the

resolution

recommended

by

the

Board)

was

duly

passed

with

overwhelming

shareholder

support

(with

99.93%

of

votes

cast,

representing

68.8%

of

the

register,

being

in

favour

of

that

resolution).

Resolution

30,

which

was

not

supported

by

the

Board,

was

not

passed,

and

the

level

of

shareholder

support

for

it

fell

well

short

of

the

75%

majority

required

for

it

to

pass.

23.95%

of

the

votes

cast

were

cast

"for"

Resolution

30,

representing

14.35%

of

the

register.

Based

on

its

extensive

engagement

with

shareholders

prior

to

the

AGM,

which

involved

discussions

with

shareholders

holding

a

very

significant

percentage

of

Barclays’

share

capital,

Barclays

understands

from

those

shareholders

spoken

to

who

voted

in

favour

of

Resolution

30

why

they

did

so.

Those

shareholders

represent

a

very

large

proportion

of

the

votes

cast

"For"

Resolution

30

and

they

explained

to

Barclays,

either

in

writing

or

orally,

in

the

course

of

that

engagement

their

reasons

for

supporting

Resolution

30.

Barclays

has

thus

gained

a

clear

understanding

of

the

reasons

behind

the

voting

outcome

in

respect

of

Resolution

30.

Following

the

2020

AGM,

to

begin

the

process

of

embedding

into

the

business

the

changes

required

by

Resolution

29,

the

Board

approved

the

creation

of

a

new

ExCo

role

focussed

on

driving

the

execution

and

evolution

of

Barclays’

climate

strategy.

On

30

November

2020,

Barclays

published

an

update

on

its

climate

strategy,

detailing

the

methodology

it

will

follow,

the

metrics

for

measuring

its

progress

and

the

targets

against

which

it

will

report,

all

of

which

were

developed

with

the

help

of

a

range

of

stakeholders.

For

more

information

on

Barclays’

climate

strategy,

please

see

our

Strategic

Report

available

at

home.barclays/annualreport

and

the

Barclays

ESG

Report.

Looking

ahead

to

the

2021

AGM,

the

Board

currently

intends

to

hold

the

AGM

on

5

May

2021

at

11:00am,

subject

to

the

ongoing

COVID-19

pandemic

and

any

UK

Government

guidance

on

social

distancing,

non-essential

travel

and/or

public

gatherings.

Guidance

on

whether

physical

attendance

by

shareholders

will

be

possible

will

be

determined

nearer

the

time

of

the

AGM.

We

will

keep

the

considerable

benefits

of

shareholder

engagement

in

the

AGM

at

the

forefront

of

our

planning

for

the

2021

AGM.

Further

details

will

be

provided

in

the

Notice

of

AGM.

In

the

future,

and

when

circumstances

permit,

the

Board

expects

to

alternate

AGM

venues

between

London

and

a

venue

other

than

London

where

the

Company

has

a

significant

business

or

customer

presence.

Stakeholder

engagement

The

Board

continues

to

seek

to

understand

all

stakeholders’

views,

and

the

impact

of

our

behaviour

and

business

on

customers

and

clients,

colleagues,

suppliers,

communities

and

society

more

broadly.

Accordingly,

the

Board

monitors

key

indicators

across

areas

such

as

culture,

citizenship,

conduct,

and

customer

and

client

satisfaction

on

an

ongoing

basis.

In

2020,

we

engaged

extensively

with

shareholders

and

other

stakeholders

(including

proxy

advisory

agencies

and

investor

associations)

on

key

topics

including

our

commitment

to

tackle

climate

change

and

our

response

to

the

COVID-19

pandemic.

We

will

publish

the

Barclays

ESG

Report

at

the

same

time

as

this

Report,

which

will

be

made

available

on

our

website

at

home.barclays/annualreport.

Throughout

2020,

we

have

engaged

with

our

stakeholders

through

a

variety

of

means

including

surveys,

participation

in

forums

and

global

and

regional

industry

initiatives.

As

a

result

of

COVID-19,

many

of

our

events

this

year

have

been

web

based,

although

where

possible

we

have

supported

key

workers

with

site

visits.

This

will

continue

in

2021,

subject

again

to

the

constraints

arising

from

the

pandemic.

For

further

detail

about

how

we

engaged

with

our

customers

and

clients,

colleagues,

society

and

investors

in

2020,

including

what

they

told

us

and

how

we

responded,

please

see

our

Strategic

Report

available

at

home.barclays/annualreport

.

Colleague

engagement

The

Group

has

a

long-standing

commitment

to

the

importance

and

value

of

colleague

engagement.

Our

colleagues

make

a

critical

difference

to

our

success,

and

our

investment

in

them

protects

and

strengthens

our

culture.

In

addition

to

our

annual

employee

survey,

in

2020

we

ran

regular

‘Here

to

Listen’

surveys

to

understand

how

colleagues

were

feeling

during

the

COVID-19

pandemic

with

a

specific

focus

on

wellbeing,

working

remotely

and

work/life

balance.

You

can

read

more

about

our

commitment

to

our

colleagues

and

our

workforce

engagement,

including

survey

results

and

our

support

of

colleagues

during

the

COVID-19

pandemic,

in

our

People

and

culture

section

on

pages

81

to

85

and

in

our

Strategic

Report

available

at

home.barclays/annualreport

.

Conflicts

of

interest

In

accordance

with

the

Companies

Act

2006

and

Barclays

PLC

Articles

of

Association

(the

Articles),

the

Board

has

the

authority

to

authorise

conflicts

of

interest

and

this

ensures

that

the

influence

of

third

parties

does

not

compromise

the

independent

judgement

of

the

Board.

Directors

are

required

to

declare

any

potential

or

actual

conflicts

of

interest

that

could

interfere

with

their

ability

to

act

in

the

best

interests

of

the

Group.

The

Group

Company

Secretary

maintains

a

conflicts

register,

which

is

a

record

of

actual

and

potential

conflicts,

together

with

any

Board

authorisation

of

the

conflicts.

The

authorisations

are

for

an

indefinite

period

but

are

reviewed

annually

by

the

Nominations

Committee,

which

also

considers

the

effectiveness

of

the

process

for

authorising

Directors’

conflicts

of

interest.

The

Board

retains

the

power

to

vary

or

terminate

these

authorisations

at

any

time.

Division

of

responsibilities

Roles

on

the

Board

Executive

and

Non-Executive

Directors

share

the

same

duties.

However,

in

line

with

the

principles

of

the

Code,

a

clear

division

of

responsibilities

has

been

established.

The

Group

Chairman

is

responsible

for:

◾

leading

the

Board

and

its

overall

effectiveness

◾

demonstrating

objective

judgement

◾

promoting

a

culture

of

openness

and

constructive

challenge

and

debate

between

all

Directors

◾

facilitating

constructive

board

relations

and

the

effective

contribution

of

all

Non-Executive

Directors

◾

ensuring

Directors

receive

accurate,

clear

and

timely

information.

Directors’

report:

How

we

comply

37

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Responsibility

for

the

day-to-day

management

of

the

Group

is

delegated

to

the

Group

Chief

Executive

Officer

who

is

supported

in

this

role

by

the

ExCo.

Further

information

on

the

membership

of

the

ExCo

can

be

found

on

page

7.

As

a

Board

we

have

set

out

our

expectations

of

each

Director

in

Barclays’

Charter

of

Expectations

.

This

includes

role

profiles

and

the

behaviours

and

competencies

required

for

each

role

on

the

Board,

namely

the

Group

Chairman,

Group

Deputy

Chairman

(to

the

extent

one

is

required),

the

SID,

Non-Executive

Directors,

Executive

Directors

and

Committee

Chairs.

Consistent

with

our

Charter

of

Expectations,

the

Non-Executive

Directors

provide

effective

oversight

and

scrutiny,

strategic

guidance

and

constructive

challenge,

whilst

holding

the

Executive

Directors

to

account

against

their

agreed

performance

objectives.

The

Non-Executive

Directors,

led

by

the

Nominations

Committee,

have

primary

responsibility

for

the

appointment

and

removal

of

the

Executive

Directors.

The

SID

provides

a

sounding

board

for

the

Group

Chairman,

acts

as

an

intermediary

for

the

other

Directors

when

necessary

and

is

available

to

shareholders

if

they

have

concerns

that

have

not

been

addressed

through

the

normal

channels.

The

Charter

of

Expectations

is

reviewed

annually

to

ensure

it

remains

relevant

and

accurately

reflects

the

requirements

of

the

Code,

the

Regulations

and

industry

best

practice.

A

copy

of

the

Charter

of

Expectations

can

be

found

at

home.barclays/who-we-are/our-

governance/board-responsibilities

.

Information

provided

to

the

Board

It

is

the

responsibility

of

the

Group

Chairman,

to

ensure

that

Board

agendas

are

focused

on

key

strategy,

risk,

performance

and

other

value

creation

issues,

and

that

members

of

the

Board

receive

timely

and

high-quality

information

to

enable

them

to

make

sound

decisions

and

promote

the

success

of

the

Company.

Working

in

collaboration

with

the

Group

Chairman,

the

Group

Company

Secretary

is

responsible

for

ensuring

good

governance

and

information

flow,

to

ensure

an

effective

Board.

Throughout

the

year,

both

the

Executive

Directors

and

senior

executives

kept

the

Board

informed

of

key

business

developments

through

regular

updates.

These

are

in

addition

to

the

presentations

that

the

Board

and

Board

Committees

receive

as

part

of

their

formal

meetings.

Directors

are

able

to

seek

independent

and

professional

advice

at

Barclays’

expense,

if

required,

to

enable

them

to

fulfil

their

obligations

as

members

of

the

Board.

Attendance

Directors

are

expected

to

attend

every

Board

meeting.

In

2020,

attendance

was

very

strong

both

at

scheduled

and

additional

meetings

(including

those

called

at

short

notice),

as

reflected

in

the

table

below.

The

Group

Chairman

met

privately

with

the

Non-Executive

Directors

on

at

least

three

occasions.

If,

owing

to

exceptional

circumstances,

a

Director

was

not

able

to

attend

a

Board

meeting,

he

or

she

ensured

that

his

or

her

views

were

made

known

to

the

Group

Chairman

in

advance

of

the

meeting.

In

addition,

the

SID

met

the

other

Non-Executive

Directors

individually,

without

the

Group

Chairman,

to

appraise

the

Group

Chairman’s

performance,

the

details

of

which

are

included

on

page

28

.

Due

to

the

circumstances

of

the

pandemic,

the

Board

met

an

additional

six

times

during

the

course

of

the

year.

The

high

level

of

attendance

at

these

additional

meetings,

many

of

which

were

scheduled

at

short

notice,

is

a

testament

to

the

commitment

of

each

of

our

current

Directors.

Board

attendance

in

2020

Independent/Executive

Scheduled

meetings

eligible

to

attend

Scheduled

meetings

attended

%

attendance

Additional

meetings

eligible

to

attend

Additional

meetings

attended

Chairman

Nigel

Higgins

On

appointment

1

7

100%

6

Executive

Directors

Jes

Staley

Executive

Director

7

100%

4

Tushar

Morzaria

Executive

Director

7

100%

4

Non-Executive

Directors

Mike

Ashley

Independent

7

100%

6

Tim

Breedon

Independent

7

100%

6

5

Sir

Ian

Cheshire

Independent

7

100%

6

Mohamed

El-Erian

Independent

7

100%

6

Dawn

Fitzpatrick

Independent

7

100%

6

Mary

Francis

Independent

7

100%

6

Crawford

Gillies

Senior

Independent

Director

2

7

100%

6

Brian

Gilvary

Independent

3

7

100%

6

Diane

Schueneman

Independent

7

100%

6

Former

Directors

Mary

Anne

Citrino

Independent

7

5

71%

6

5

Board

Committee

cross-membership

The

table

below

shows

the

number

of

cross-memberships

of

the

Non-Executive

Directors

across

the

Board

Committees

as

at

31

December

2020.

Board

Audit

Committee

Board

Nominations

Committee

Board

Remuneration

Committee

Board

Risk

Committee

3

1

Board

Remuneration

Committee

1

2

Board

Nominations

Committee

4

Composition

of

the

Board

In

line

with

the

requirements

of

the

Code,

a

majority

of

the

Board

is

comprised

of

independent

Non-Executive

Directors.

Our

Nominations

Committee

considers

the

independence

of

our

Non-Executive

Directors

annually,

having

regard

to

the

independence

criteria

set

out

in

the

Code.

As

part

of

this

process,

our

Nominations

Committee

keeps

under

review

the

length

of

tenure

of

all

Directors,

which

can

affect

independence,

and

makes

any

recommendations

to

the

Board

accordingly.

1

As

required

by

the

Code,

the

Chairman

was

independent

on

appointment.

2

Brian

Gilvary

did

not

succeed

Crawford

Gillies

as

Senior

Independent

Director

until

1

January

2021.

3

As

above.

Directors’

report:

How

we

comply

38

Barclays

PLC

2020

Annual

Report

on

Form

20-F

The

independence

of

Tim

Breedon,

Mike

Ashley

and

Crawford

Gillies,

all

of

whom

have

served

on

the

Board

for

more

than

six

years,

was

subjected

to

a

more

rigorous

review.

The

Nominations

Committee

remains

satisfied

that

the

lengths

of

their

tenure

have

no

impact

on

their

respective

levels

of

independence

or

the

effectiveness

of

their

contributions.

The

Board

considers

all

of

the

Non-Executive

Directors

to

be

independent.

During

2020,

both

Matthew

Lester

and

Mary

Anne

Citrino

stepped

down

from

the

Board.

Neither

raised

raise

any

concerns

about

the

operation

of

the

Board

or

management.

You

can

read

more

about

the

changes

to

Board

composition

in

2020

and

steps

taken

to

further

strengthen

the

Board

in

the

report

of

our

Nominations

Committee

on

pages

23

to

28.

Time

commitment

All

potential

new

Directors

are

asked

to

disclose

their

other

significant

commitments.

The

Nominations

Committee

then

takes

this

into

account

when

considering

a

proposed

appointment

to

ensure

that

Directors

can

discharge

their

responsibilities

to

Barclays

effectively.

This

means

not

only

attending

and

preparing

for

formal

Board

and

Board

Committee

meetings,

but

also

making

time

to

understand

the

business

and

to

undertake

training.

As

stated

in

our

Charter

of

Expectations

,

the

time

commitment

is

agreed

with

each

Non-Executive

Director

on

an

individual

basis.

In

addition,

all

Directors

must

seek

approval

before

accepting

any

significant

new

commitment.

Set

out

below

is

the

average

time

commitment

expected

for

the

role

of

Non-Executive

Directors

and

the

other

Non-Executive

positions

on

the

Board.

Time

Commitment

Role

Expected

time

commitment

Chairman

Equivalent

to

up

to

80%

of

full-time

position.

Senior

Independent

Director

As

required

to

fulfil

the

role.

Non-Executive

Director

35-40

days

per

year

(membership

of

one

Board

Committee

included,

increasing

to

50

days

a

year

if

member

of

two

Board

Committees).

Committee

Chairs

At

least

80

days

per

year

(including

Non-Executive

Director

time

commitment)

for

Audit

and

Risk

Committee

Chairs

and

at

least

60

days

for

the

Remuneration

Committee

Chair.

Where

circumstances

require

it,

all

Directors

are

expected

to

commit

additional

time

as

necessary

to

their

work

on

the

Board.

The

Group

Company

Secretary

maintains

a

record

of

each

Director’s

commitments.

For

the

year

ended

31

December

2020

and

as

at

the

date

of

publication,

the

Board

is

satisfied

that

none

of

the

Directors

is

over-committed

and

that

each

of

the

Directors

allocates

sufficient

time

to

his

or

her

role

in

order

to

discharge

their

responsibilities

effectively.

Composition,

succession

and

evaluation

We

have

a

Nominations

Committee,

the

purpose

and

activities

of

which

are

contained

in

the

Nominations

Committee

Report

on

pages

23

to

28.

Board

appointments

All

appointments

to

the

Board

and

senior

management

are

viewed

through

a

diversity

lens

and

are

based

on

merit

and

objective

criteria,

which

focus

on

the

skills

and

experience

required

for

the

Board’s

effectiveness

and

the

delivery

of

the

Group

strategy.

Board

appointments

are

made

following

a

rigorous

and

transparent

process

facilitated

by

the

Nominations

Committee,

with

the

aid

of

an

external

search

consultancy

firm.

You

can

read

more

about

the

work

of

the

Nominations

Committee

on

pages

23

to

28.

Diversity

across

the

Group

remains

a

key

area

of

focus.

For

more

detail

on

our

actions

to

increase

diversity

please

see

pages

83

to

85.

The

Nominations

Committee

regularly

reviews

the

composition

of

the

Board,

Board

Committees

and

the

ExCo.

It

frequently

considers

the

skills

required

for

the

Board,

its

Board

Committees

and

the

ExCo,

identifying

the

core

competencies,

diversity

and

experience

required.

This,

along

with

the

annual

evaluation,

helps

to

refresh

the

thinking

on

Board,

Board

Committee

and

ExCo

composition

and

to

determine

a

timeline

for

proposed

new

appointments.

For

the

Board,

it

is

standard

practice

to

appoint

any

new

Non-Executive

Director,

or

Chair

for

an

initial

three-year

term,

subject

to

annual

re-election

at

the

AGM,

which

may

be

extended

for

up

to

a

further

three-year

term.

As

such,

Non-Executive

Directors

typically

serve

up

to

a

total

of

six

years.

All

Directors

are

subject

to

election

or

re-election

each

year

by

shareholders

at

the

AGM.

Each

year

we

carry

out

an

effectiveness

review

in

order

to

evaluate

our

performance,

as

a

Board

as

well

as

the

performance

of

each

of

the

Board

Committees

and

individual

Directors.

More

information

on

the

2020

Board

evaluation

and

effectiveness

review

can

be

found

on

pages

26

to

28.

Our

Board

member’s

biographies

showing

their

relevant

skills

and

experience,

Board

Committee

m

emberships

and

other

principal

appointments

can

be

found

on

pages

3

to

6.

Details

of

changes

to

the

Board

in

2020

and

up

to

the

date

of

this

Report

are

disclosed

on

pages

7

to

8.

The

service

contracts

for

the

Executive

Directors

and

the

letters

of

appointment

for

the

Group

Chairman

and

Non-Executive

Directors

are

available

for

inspection

at

our

registered

office

and

at

the

AGM.

Induction

On

appointment

to

the

Board,

all

Directors

receive

a

comprehensive

induction

that

is

tailored

to

the

new

Director’s

individual

requirements.

The

induction

schedule

is

designed

to

provide

the

new

Director

with

an

understanding

of

how

the

Group

works

and

the

key

issues

that

it

faces.

The

Group

Company

Secretary

consults

the

Chairman

when

designing

an

induction

schedule

giving

consideration

to

the

particular

needs

of

a

new

Director.

When

a

Director

is

joining

a

Board

Committee,

the

schedule

includes

an

induction

to

the

operation

of

that

committee.

Following

their

appointment,

Mohamed

A.

El-Erian

and

Brian

Gilvary

have

received

such

inductions.

They

have

each

met

with

the

Group

Company

Secretary,

the

current

Non-Executive

Directors,

members

of

the

ExCo

and

certain

other

senior

executives,

as

part

of

that

process.

Training

and

development

In

order

to

continue

to

contribute

effectiv

ely

to

Board

and

Board

Committee

meetings,

Directors

are

regularly

provided

with

the

opportunity

to

take

part

in

ongoing

training

and

development

and

can

also

request

specific

training

as

required.

Opportunities

for

Director

training

were

more

limited

in

2020

as

a

result

of

social

distancing

guidance

and

as

the

Board

and

senior

management

focussed

on

the

Group’s

response

to

the

COVID-19

pandemic.

However,

training

and

development

was

also

supported

through

the

Board

deep

dives,

Risk

deep

dives

and

Function

reviews

described

on

page

12.

In

addition,

the

Board

received

its

annual

briefing

on

regulatory

responsibilities,

including

the

Senior

Managers

Regime.

Directors’

report:

How

we

comply

39

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Audit,

Risk

and

Internal

Control

Accountability

Internal

governance

processes

have

been

developed

to

ensure

the

effective

operation

of

the

individual

boards

and

board

committees

of

each

of

BPLC,

BBUKPLC

and

BBPLC

respectively,

in

recognition

of

the

fact

that

this

is

key

to

the

development

and

execution

of

the

Group’s

strategy.

Generally,

there

is

one

set

of

rules

for

the

Group,

Group-wide

frameworks,

policies

and

standards

are

adopted

throughout

the

Group

unless

local

laws

or

regulations

(for

example,

the

ring-fencing

obligations

applicable

to

BBUKPLC)

require

otherwise,

or

the

ExCo

decides

otherwise

in

a

particular

instance.

The

Board

has

a

Board

Audit

Committee

and

a

Board

Risk

Committee.

The

purposes

and

activities

of

the

Board

Audit

and

Board

Risk

Committees

are

contained

within

their

respective

reports

on

pages

14

and

29

respectively.

Internal

and

external

audit

functions

The

Board,

together

with

the

Board

Audit

Committee,

is

responsible

for

ensuring

the

independence

and

effectiveness

of

the

internal

and

external

audit

functions.

For

this

reason,

the

Board

Audit

Committee

members

met

regularly

with

the

Group

Chief

Internal

Auditor

and

the

KPMG

lead

audit

engagement

partner,

without

management

present.

The

appointment

and

removal

of

the

Group

Chief

Internal

Auditor

is

a

matter

reserved

to

the

Board

Audit

Committee

and

the

appointment,

and

removal,

of

the

external

auditor,

is

a

matter

reserved

to

the

Board.

Neither

task

is

delegated

to

management.

This

is

explained

in

detail

on

pages

14

to

22

of

the

Board

Audit

Committee

report.

Company’s

position

and

prospects

The

Board,

together

with

the

Board

Audit

Committee,

is

responsible

for

ensuring

the

integrity

of

this

Annual

Report

and

that

the

financial

statements

as

a

whole

present

a

fair,

balanced

and

understandable

assessment

of

our

performance,

position

and

prospects.

This

is

explained

in

detail

on

pages

14

to

20

of

the

Board

Audit

Committee

report.

Risk

management

and

internal

control

The

Directors

are

responsible

for

ensuring

that

management

maintains

an

effective

system

of

risk

management

and

internal

control

and

for

assessing

its

effectiveness.

Such

a

system

is

designed

to

identify,

evaluate

and

manage,

rather

than

eliminate,

the

risk

of

failure

to

achieve

business

objectives

and

can

only

provide

reasonable,

and

not

absolute,

assurance

against

material

misstatement

or

loss.

The

Group

is

committed

to

operating

within

a

strong

system

of

internal

control.

Barclays

has

an

overarching

framework

that

sets

out

the

approach

of

the

Group

to

internal

governance,

The

Barclays

Guide

.

This

establishes

the

mechanisms,

principles

and

processes

through

which

management

implements

the

strategy

set

by

the

Board.

Processes

are

in

place

for

identifying,

evaluating

and

managing

the

Principal

Risks

facing

the

Group

in

accordance

with

the

‘Guidance

on

Risk

Management,

Internal

Control

and

Business

Reporting’,

published

by

the

FRC.

A

key

component

of

The

Barclays

Guide

is

the

ERMF.

The

purpose

of

the

ERMF

is

to

identify

and

set

minimum

requirements

in

respect

of

the

main

risks

to

the

strategic

objectives

of

the

Group.

There

are

eight

Principal

Risks

under

the

ERMF:

Credit

risk,

Market

risk,

Treasury

and

Capital

risk,

Operational

risk,

Model

risk,

Reputation

risk,

Conduct

risk

and

Legal

risk.

The

system

of

risk

management

and

internal

control

is

set

out

in

the

risk

frameworks

relating

to

each

of

our

eight

Principal

Risks

and

the

Barclays

Control

Framework,

which

details

requirements

for

the

delivery

of

control

responsibilities.

Group-wide

frameworks,

policies

and

standards

enable

Barclays

to

meet

regulators’

expectations

relating

to

internal

control

and

assurance.

Effectiveness

of

internal

controls

Key

controls

are

assessed

on

a

regular

basis

for

both

design

and

operating

effectiveness.

Issues

arising

out

of

these

assessments,

where

appropriate,

are

reported

to

the

Board

Audit

Committee.

The

Board

Audit

Committee

oversees

the

control

environment

(and

remediation

of

and

you

can

read

more

about

the

work

of

the

Board

Audit

Committee

on

pages

14

to

22.

The

Board

Audit

Committee

also

reviews

annually

the

risk

management

and

internal

control

system,

which

includes

the

ERMF.

It

has

concluded

that,

throughout

the

year

ended

31

December

2020

and

to

date,

the

Group

has

operated

a

sound

system

of

internal

control

that

provides

reasonable

assurance

of

financial

and

operational

controls

and

compliance

with

laws

and

regulations.

For

more

details

on

that

evaluation

and

its

conclusions

please

see

pages

14

to

22.

The

review

of

the

effectiveness

of

the

system

of

risk

management

and

internal

control

is

achieved

through

reviewing

the

effectiveness

of

the

frameworks,

principles

and

processes

contained

within

The

Barclays

Guide

,

the

ERMF

and

the

Barclays

Control

Framework.

Regular

reports

are

made

by

management

to

the

Board

Risk

Committee

and

the

Board

covering

significant

risks,

measurement

methodologies

and

appropriate

risk

appetite

for

the

Group.

Further

details

of

risk

management

procedures

and

material

existing

and

emerging

risks

are

given

in

the

Risk

review

and

Risk

management

sections

on

pages

86

to

177.

Controls

over

financial

reporting

A

framework

of

disclosure

controls

and

procedures

is

in

place

to

support

the

approval

of

the

financial

statements

of

the

Group.

Specific

governance

committees

are

responsible

for

examining

the

financial

reports

and

disclosures

to

ensure

that

they

have

been

subject

to

adequate

verification

and

comply

with

applicable

standards

and

legislation.

Where

appropriate,

these

committees

report

their

conclusions

to

the

Board

Audit

Committee,

which

debates

such

conclusions

and

provides

further

challenge.

Finally,

the

Board

scrutinises

and

approves

results

announcements

and

the

Annual

Report

and

ensures

that

appropriate

disclosures

have

been

made.

This

governance

process

ensures

that

both

management

and

the

Board

are

given

sufficient

opportunity

to

debate

and

challenge

the

financial

statements

of

the

Group

and

other

significant

disclosures

before

they

are

made

public.

Management’s

report

on

internal

control

over

financial

reporting

Management

is

responsible

for

establishing

and

maintaining

adequate

internal

control

over

financial

reporting

under

the

supervision

of

the

principal

executive

and

financial

officers,

to

provide

reasonable

assurance

regarding

the

reliability

of

financial

reporting

and

the

preparation

of

financial

statements,

in

accordance

with

international

accounting

standards

in

conformity

with

the

requirements

of

the

Companies

Act

2006

and

prepared

in

accordance

with

international

financial

reporting

standards

as

issued

by

the

IASB

and

adopted

pursuant

to

Regulation

(EC)

No

1606/2002

as

it

applies

in

the

European

Union

(‘IFRSs

as

adopted

by

the

EU’).

Internal

control

over

financial

reporting

includes

policies

and

procedures

that

pertain

to

the

maintenance

of

records

that,

in

reasonable

detail:

◾

accurately

and

fairly

reflect

transactions

and

dispositions

of

assets

◾

provide

reasonable

assurances

that

transactions

are

recorded

as

necessary

to

permit

preparation

of

financial

statements

in

accordance

with

IFRS

and

that

receipts

and

expenditures

are

being

made

only

in

accordance

with

authorisations

of

management

and

the

respective

Directors

◾

provide

reasonable

assurance

regarding

prevention

or

timely

detection

of

unauthorised

acquisition,

use

or

disposition

of

assets

that

could

have

a

material

effect

on

the

financial

statements.

Directors’

report:

How

we

comply

40

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Internal

control

systems,

no

matter

how

well

designed,

have

inherent

limitations

and

may

not

prevent

or

detect

misstatements.

Also,

projections

of

any

evaluation

of

effectiveness

to

future

periods

are

subject

to

the

risk

that

internal

controls

may

become

inadequate

because

of

changes

in

conditions

or

that

the

degree

of

compliance

with

the

policies

or

procedures

may

deteriorate.

Management

has

assessed

the

internal

control

over

financial

reporting

as

of

31

December

2020.

In

making

its

assessment,

management

utilised

the

criteria

set

out

in

the

2013

COSO

framework

and

concluded

that,

based

on

its

assessment,

the

internal

control

over

financial

reporting

was

effective

as

of

31

December

2020.

Our

independent

registered

public

accounting

firm

has

issued

a

report

on

the

Group’s

internal

control

over

financial

reporting,

which

is

set

out

on

pages

207

to

210.

The

system

of

internal

financial

and

operational

controls

is

also

subject

to

regulatory

oversight

in

the

UK

and

overseas.

Further

information

on

supervision

by

the

financial

services

regulators

is

provided

under

Supervision

and

Regulation

in

the

Risk

review

section

on

pages

178

to

183.

Changes

in

internal

control

over

financial

reporting

There

have

been

no

changes

that

occurred

during

the

period

covered

by

this

Report,

which

have

materially

affected

or

are

reasonably

likely

to

materially

affect

the

Group’s

internal

control

over

financial

reporting.

Remuneration

The

Company

has

a

Board

Remuneration

Committee,

the

purpose

and

activities

of

which

are

described

in

the

Board

Remuneration

Committee

reports

on

pages

47

to

80.

The

Board

has

delegated

responsibility

for

the

consideration

and

approval

of

the

remuneration

arrangements

of

the

Group

Chairman,

the

Executive

Directors,

other

senior

executives

and

certain

Group

employees

to

the

Board

Remuneration

Committee.

The

Board

Remuneration

Committee,

when

considering

the

remuneration

policies

and

practices,

seeks

to

ensure

that

they

support

our

strategy

and

promote

the

long-

term

success

of

the

business

and

that

they

are

aligned

to

the

successful

delivery

of

the

Group’s

strategy.

All

executive

and

senior

management

remuneration

policies

are

developed

in

accordance

with

the

Group’s

formal

and

transparent

procedures

(ensuring

that

no

Director

is

involved

in

deciding

his/her

own

remuneration

outcome)

and

having

regard

to

workforce

remuneration

and

the

alignment

of

incentives

and

rewards

with

culture.

All

Board

Remuneration

Committee

members

demonstrate

independent

judgement

and

discretion

when

determining

and

approving

remuneration

outcomes.

The

Board

as

a

whole,

with

the

Non-Executive

Directors

abstaining,

considers

annually

the

fees

paid

to

Non-Executive

Directors.

Information

on

the

purpose

of

the

Board

Remuneration

Committee

and

its

activities

in

2020

can

be

found

in

the

Remuneration

report

on

pages

47

to

80.

Directors’

report:

Other

statutory

information

41

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Other

statutory

information

The

Directors

present

their

report

together

with

the

audited

accounts

for

the

year

ended

31

December

2020.

Other

information

that

is

relevant

to

the

Directors’

report,

and

which

is

incorporated

by

reference

into

this

report,

can

be

located

as

follows:

Remuneration

policy,

including

details

of

the

remuneration

of

each

Director

and

Directors’

interests

in

shares

57

Governance

Statement

2

Risk

review

86

Disclosures

required

pursuant

to

Large

and

Medium-sized

Companies

and

Groups

(Accounts

and

Reports)

Regulations

2008

as

updated

by

Companies

(Miscellaneous

Reporting)

Regulations

2018

can

be

found

on

the

following

pages:

Engagement

with

employees

(Sch.

7,

Para

11

and

11A

Regs

2008/2018)

81-85

Policy

concerning

the

employment

of

disabled

persons

(Sch.

7,

para

10

Regs

2008)

81

Engagement

with

Suppliers,

customers

and

others

in

a

business

relationship

(Sch.

7,

Para

11B

Regs

2008/2018)

42

Financial

instruments

(Sch.

7,

para

6

Regs

2008)

238-261

Hedge

accounting

policy

(Sch.

7,

para

6

Regs

2008)

239

Disclosures

required

pursuant

to

Listing

Rule

9.8.4R

can

be

found

on

the

following

pages:

Long-term

incentive

schemes

73

Waiver

of

Director

emoluments

297

Allotment

for

cash

of

equity

securities

288

Waiver

of

dividends

41

Profit

and

dividends

Statutory

profit

after

tax

for

2020

was

£2,461m

(2019:

£3,354m).

The

2020

full

year

dividend

of

1.0p

per

share

will

be

paid

on

1

April

2021

to

shareholders

whose

names

are

on

the

Register

of

Members

at

the

close

of

business

on

26

February

2021.

With

no

half

year

dividend

paid

in

2020,

the

total

distribution

for

2020

is

1.0p

(2019:

3,0p)

per

ordinary

share.

As

a

result

of

the

cancellation

of

the

2019

full

year

dividend

in

April

2020,

no

dividends

were

paid

in

2020

(2019:

£1,201m).

Barclays

has

decided

to

cease

to

offer

the

scrip

dividend

programme

and

will

no

longer

offer

a

scrip

alternative

for

dividends.

For

those

shareholders

who

wish

to

elect

to

use

their

cash

dividends

to

purchase

additional

ordinary

shares

in

the

market,

rather

than

receive

a

cash

payment,

Barclays

has

arranged

for

its

registrar,

Equiniti,

to

provide

and

administer

a

dividend

re-investment

plan

(DRIP).

Further

details

regarding

the

DRIP

can

be

found

at

www.barclays.com

The

nominee

company

of

certain

Barclays’

employee

benefit

trusts

holding

shares

in

Barclays

in

connection

with

the

operation

of

our

share

plans

has

lodged

evergreen

dividend

waivers

on

shares

held

by

it

that

have

not

been

allocated

to

employees.

As

no

dividends

were

paid

in

2020,

the

total

amount

of

dividends

waived

during

the

year

ended

31

December

2020

was

£nil

(2019:

£1.58m).

The

Board

notes

that

in

determining

any

proposed

distributions

to

shareholders,

the

Board

will

consider

the

expectation

of

servicing

more

senior

securities.

Board

of

Directors

The

names

of

the

current

Directors

of

Barclays

PLC,

along

with

their

biographical

details,

are

set

out

on

pages

3

and

6

and

are

incorporated

into

this

Directors’

report

by

reference.

Changes

to

Directors

during

the

year

are

set

out

below.

Name

Role

Effective

date

of

appointment

/

resignation

Mohamed

A.

El-Erian

Non-Executive

Director

Appointed

1

January

2020

Brian

Gilvary

Non-Executive

Director

Appointed

1

February

2020

Matthew

Lester

Non-Executive

Director

Resigned

1

January

2020

Mary

Anne

Citrino

Non-Executive

Director

Resigned

30

September

2020

Appointment

and

retirement

of

Directors

The

appointment

and

retirement

of

Directors

is

governed

by

our

Articles,

the

Code,

the

Companies

Act

2006

and

The

Articles

may

be

amended

only

by

a

special

resolution

of

the

shareholders.

The

Board

has

the

power

to

appoint

additional

Directors

or

to

fill

a

casual

vacancy

amongst

the

Directors

and

any

Director

so

appointed

holds

office

only

until

the

and

m

ay

offer

himself/herself

for

re-

election.

The

Code

recommends

that

all

directors

of

FTSE

350

companies

should

be

subject

to

annual

re-election.

Other

that

Sir

Ian

Cheshire

who

is

stepping

down

from

the

Board

at

the

2021

AGM,

all

Directors

(including

Julia

Wilson

who

joins

the

Board

on

1

April

2021)

will

stand

for

election

or

re-election

at

the

2021

AGM.

Directors’

indemnities

Qualifying

third

party

indemnity

provisions

(as

defined

by

section

234

of

the

Companies

Act

2006)

were

in

force

during

the

course

of

the

financial

year

ended

31

December

2020

for

the

benefit

of

the

then

Directors

and,

at

the

date

of

this

report,

are

in

force

for

the

benefit

of

the

Directors

in

relation

to

certain

losses

and

liabilities

which

they

may

incur

(or

have

incurred)

in

connection

with

their

duties,

powers

or

office.

In

addition,

the

Group

maintains

Directors’

&

Officers’

Liability

Insurance

which

gives

appropriate

cover

for

legal

action

brought

against

its

Directors.

Directors’

report:

Other

statutory

information

42

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Qualifying

pension

scheme

indemnity

provisions

(as

defined

by

section

235

of

the

Companies

Act

2006)

were

in

force

during

the

course

of

the

financial

year

ended

31

December

2020

for

the

benefit

of

the

then

directors;

and

at

the

date

of

this

report

are

in

force

for

the

benefit

of

directors

of

Barclays

Pension

Funds

Trustees

Limited

as

trustee

of

the

Barclays

Bank

UK

Retirement

Fund,

Barclays

Capital

International

Pension

Scheme

(No.1)

and

Barclays

PLC

Funded

Unapproved

Retirement

Benefits

Scheme.

The

directors

of

the

trustee

are

indemnified

against

liability

incurred

in

connection

with

the

trustee’s

activities

in

relation

to

the

Barclays

Bank

UK

Retirement

Fund,

Barclays

Capital

International

Pension

Scheme

(No.1)

and

Barclays

PLC

Funded

Unapproved

Retirement

Benefits

Scheme.

Political

donations

The

Group

did

not

give

any

money

for

political

purposes

in

the

UK,

the

EU

or

outside

the

EU,

nor

did

it

make

any

political

donations

to

political

parties

or

other

political

organisations

or

to

any

independent

election

candidates,

nor

did

it

incur

any

political

expenditure

during

the

year.

In

accordance

with

the

US

Federal

Election

Campaign

Act,

Barclays

provides

administrative

support

to

a

federal

Political

Action

Committee

(PAC)

in

the

US,

funded

by

the

voluntary

political

contributions

of

eligible

employees.

The

PAC

is

not

controlled

by

Barclays

and

all

decisions

regarding

the

amounts

and

recipients

of

contributions

are

directed

by

a

steering

committee

comprising

employees

eligible

to

contribute

to

the

PAC.

Contributions

to

political

organisations

reported

by

the

PAC

during

the

calendar

year

2020

totalled

$113,500

(2019:

$46,000).

Country-by-Country

reporting

The

Capital

Requirements

(Country-by-Country

reporting)

Regulations

2013

require

the

Company

to

publish

additional

information

in

respect

of

the

year

ended

31

December

2020.

This

information

is

available

on

the

Barclays

website:

home.barclays/annualreport

.

Supporting

our

suppliers

Our

engagement

with

suppliers

is

important.

The

Directors

have

regard,

via

management

oversight,

to

the

need

to

foster

business

relationships

with

suppliers

and,

as

such,

engage

with

them

to

ensure

adherence

to

the

Barclays’

Supplier

Code

of

Conduct

and

Supply

Control

obligations

which

cover

our

expectations

of

suppliers.

Adherence

is

confirmed

through

pre-contract

attestation.

Further,

Barclays

PLC

is

a

signatory

to

the

Prompt

Payment

Code

in

the

UK,

committing

to

pay

our

suppliers

within

clearly

defined

terms.

In

2019,

we

achieved

88%

(2018:

85%)

on-time

payment

by

value

to

our

suppliers,

meeting

our

public

commitment

to

the

suppliers

of

85%.

Environment

Barclays

focuses

on

addressing

environmental

issues

where

we

believe

we

have

the

greatest

potential

to

make

a

difference.

As

part

of

our

ambition

to

be

a

net

zero

bank

by

2050,

we

continue

to

work

towards

aligning

our

financing

with

the

Paris

Agreement

(see

Strategic

Report)

and

continue

to

reduce

our

operational

carbon

footprint.

2020

performance

update

In

line

with

Barclays’

ambition

to

be

a

net

zero

bank,

Barclays

remains

committed

to

managing

our

own

operational

footprint

and

transitioning

to

a

low-carbon

economy.

In

2020,

we

achieved

a

71%

scope

1

and

2

emission

reduction

against

our

2018

baseline,

and

we

continue

to

offset

our

residual

emissions

from

our

operations

and

business

travel.

This

reduction

was

principally

achieved

through

the

expansion

of

our

renewable

electricity

purchasing

programme

across

Continental

Europe,

United

Kingdom

Hong

Kong,

Japan,

Singapore

and

the

United

States.

Our

current

renewable

electricity

consumption

currently

stands

at

74%

against

our

interim

target

of

procuring

90%

of

our

electricity

from

renewable

sources

by

2021.

We

have

disclosed

global

greenhouse

gas

(GHG)

emissions

and

energy

use

data

as

required

by

the

Large

and

Medium-sized

Companies

and

Groups

(Accounts

and

Reports)

Regulations

2008.

Additional

disclosures

on

(i)

financing

solutions

for

the

lower

carbon

economy,

(ii)

environmental

risk

management

and

(iii)

management

of

our

carbon

and

environmental

footprint

are

set

out

in

our

Strategic

Report,

Environmental,

Social

and

Governance

(ESG)

Report

and

TCFD

Report,

available

on

our

website

at

home.barclays/annualreport

.

Directors’

report:

Other

statutory

information

43

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Current

Reporting

Year

a

2020

Year

2019

UK

&

Offshore

Area

Global

GHG

Emissions

UK

&

Offshore

Area

Global

GHG

Emissions

Group

GHG

Emissions

b

Total

CO

2

e

(tonnes)

104,476

197,504

146,050

273,954

Scope

1

CO2e

emissions

(tonnes)

c

12,605

18,839

17,284

23,835

Scope

2

CO2e

emissions

(tonnes)

d

83,303

159,532

98,929

181,983

Scope

3

CO2e

emissions

(tonnes)

e

8,569

19,133

29,837

68,137

Energy

consumption

used

to

calculate

above

Scope

1

and

2

emissions

(kWh)

395,742,619

621,694,988

436,114,042

679,310,592

Intensity

Ratio

Total

Full

Time

Employees

(FTE)

47,700

83,000

47,800

80,800

Total

CO2e

per

FTE

(tonnes)

f

2.19

2.38

3.06

3.39

Market

based

emissions

Scope

2

CO2e

market

based

emissions

(tonnes)

d

7,172

64,233

7,226

89,528

Total

gross

Scope

1

&

2

(market

based)

emissions

(tonnes)

19,777

83,071

24,509

113,363

Notes

a

The

carbon

reporting

year

for

our

GHG

emissions

is

1

October

to

30

September.

The

carbon

reporting

year

is

not

fully

aligned

to

the

financial

reporting

year

covered

by

this

Directors’

Report.

Details

of

our

approach

to

assurance

over

the

data

is

set

out

in

the

2020

Barclays

ESG

Report.

b

The

methodology

used

to

calculate

our

GHG

emissions

is

the

‘Greenhouse

Gas

Protocol

(GHG):

A

Corporate

Accounting

and

Reporting

Standard

(Revised

Edition)’,

defined

by

the

World

Resources

Institute/World

Business

Council

for

Sustainable

Development

(ERI/WBCSD).

We

have

adopted

the

operational

control

approach

on

reporting

boundaries

to

define

our

reporting

boundary.

Where

properties

are

covered

by

Barclays’

consolidated

financial

statements

but

are

leased

to

tenants

and

Barcla

ys

is

not

responsible

for

utility

costs,

these

emissions

are

not

included

in

the

Group

GHG

emission

calculations.

Where

Barclays

is

responsible

for

the

utility

costs,

these

emissions

are

included.

We

continuously

review

and

update

our

performance

data

base

d

on

updated

carbon

emission

factors,

improvements

in

data

quality

and

updates

to

estimates

previously

applied.

For

2020

we

have

applied

the

latest

emission

factors

available

at

the

time

of

reporting.

Where

our

performance

has

changed

by

more

than

1%

we

have

restated

these

figures.

This

year

2019

scope

2

emissions

have

been

updated

to

reflect

additional

consumption

data

which

was

not

available

at

the

time

of

reporting

and

updates

to

residual

mix

factors

specifically

in

the

US

which

is

the

material

contributor

to

the

scope

2

market

based

emissions

restatement.

The

previously

reported

figure

was

110,017tCO2e

(scope

2

market

based)

&

185,743tCO2e

(location

based).

c

Scope

1

covers

GHG

emissions

from

activities

for

which

the

Group

is

responsible,

including

emis

sions

from

the

direct

combustion

of

fuels

and

the

operation

of

facilities.

In

the

case

of

company

owned

vehicles,

emissions

are

limited

to

UK

vehicles

only

as

this

is

the

only

country

in

which

the

Group

owns

vehicles.

d

Scope

2

covers

GHG

emissions

from

electricity,

heat,

cooling

and

steam

purchased

for

own

use.

Market

based

emissions

have

been

reported

for

2019

and

2020.

We

have

used

a

zero

emission

factor

where

we

have

renewable

contracts

already

in

place

in

the

UK,

US,

Hong

Kong,

Japan,

Singapore

and

Continental

Europe.

e

Scope

3

covers

indirect

emissions

from

business

travel.

Business

travel

for

these

purposes

comprises

of:

global

flights

and

ground

transport

within

the

UK,

US

and

India,

however

in

the

case

of

the

US

and

India

ground

transport

covers

onwards

car

hire

only

which

has

been

provided

directly

by

the

supplier).

Ground

transportation

data

(excluding

scope

1

emissions

from

company

owned

vehicles)

covers

only

countries

where

robust

data

is

available

directly

from

the

supplier.

f

Intensity

ratio

calculations

have

been

calculated

using

location

based

emission

factors

only.

g

Energy

consumption

data

i

s

captured

through

utility

billing;

meter

reads

or

estimates.

Principal

measures

we

have

undertaken

in

2020

to

improve

energy

efficiency

include

the

following:

◾

We

have

reduced

our

Group

energy

consumption

by

8%

versus

2019

as

a

result

of

reduced

operating

hours

of

our

property

portfolio

as

our

global

workforce

transitioned

to

remote

working

as

a

result

of

COVID-19

pandemic

.

◾

We

continue

to

work

on

improving

the

operational

efficiency

of

our

property

portfolio

and

in

2020

conducted

energy

efficiency

projects

globally

which

have

achieved

a

total

energy

reduction

of

8GWhs

since

implementation.

The

achieved

reductions

can

be

broken

down

by

principal

categories

such

as

building

optimisation

projects

saving

3,600

MW

h:

a

3,100

MWh

saving

from

adjusting

our

HVAC

systems

to

align

with

reduced

operational

hours

of

our

buildings

globally;

power

optimisation

improvements

in

our

APAC

portfolio

saving

1,170

MWh;

and

end

of

life

asset

replacements

together

with

the

installati

on

of

LED

lighting

in

our

buildings

which

have

achieved

a

combined

450MWh

saving.

Research

and

development

In

the

ordinary

course

of

business,

the

Group

develops

new

products

and

services

in

each

of

its

business

divisions.

Share

capital

Share

capital

structure

The

Company

has

ordinary

shares

in

issue.

The

Company’s

Articles

also

allow

for

the

issuance

of

sterling,

US

dollar,

euro

and

yen

preference

shares

(“preference

shares”).

No

preference

shares

have

been

issued

as

at

16

February

2021

(the

latest

practicable

date

for

inclusion

in

this

report).

Ordinary

shares

therefore

represent

100%

of

the

total

issued

share

capital

as

at

31

December

2020

and

as

at

16

February

2021

(the

latest

practicable

date

for

inclusion

in

this

report)

.

Details

of

the

movement

in

ordinary

share

capital

during

the

year

can

be

found

in

Note

28

on

page

277.

Voting

Every

member

who

is

present

in

person

or

represented

at

any

general

meeting

of

the

Company,

and

who

is

entitled

to

vote,

has

one

vote

on

a

show

of

hands.

Every

proxy

present

has

one

vote.

The

proxy

will

have

one

vote

for,

and

one

vote

against,

a

resolution

if

he/she

has

been

instructed

to

vote

for,

or

against,

the

resolution

by

different

members

or

in

one

direction

by

a

member

while

another

member

has

permitted

the

proxy

discretion

as

to

how

to

vote.

On

a

poll,

every

member

who

is

present

or

represented

and

who

is

entitled

to

vote

has

one

vote

for

every

share

held.

In

the

case

of

joint

holders,

only

the

vote

of

the

senior

holder

(as

determined

by

order

in

the

share

register)

or

his/her

proxy

may

be

counted.

If

any

sum

payable

remains

unpaid

in

relation

to

a

member’s

shareholding,

that

member

is

not

entitled

to

vote

that

share

or

exercise

any

other

right

in

relation

to

a

meeting

of

the

Company

unless

the

Board

otherwise

determines.

If

any

member,

or

any

other

person

appearing

to

be

interested

in

any

of

the

Company’s

ordinary

shares,

is

served

with

a

notice

under

section

793

of

the

Companies

Act

2006

and

does

not

supply

the

Company

with

the

information

required

in

the

notice,

then

the

Board,

in

its

absolute

discretion,

may

direct

that

member

shall

not

be

entitled

to

attend

or

vote

at

any

meeting

of

the

Company.

The

Board

may

further

direct

that,

if

the

shares

of

the

defaulting

member

represent

0.25%

or

more

of

the

issued

shares

of

the

relevant

class,

dividends

or

other

monies

payable

on

those

shares

shall

be

retained

by

the

Company

until

the

direction

ceases

to

have

effect

and

no

transfer

of

those

shares

shall

be

registered

(other

than

certain

specified

‘excepted

transfers’).

A

direction

ceases

to

have

effect

seven

days

after

the

Company

has

received

the

information

Directors’

report:

Other

statutory

information

44

Barclays

PLC

2020

Annual

Report

on

Form

20-F

requested,

or

when

the

Company

is

notified

that

an

excepted

transfer

of

all

of

the

relevant

shares

to

a

third

party

has

occurred,

or

as

the

Board

otherwise

determines.

Transfers

Ordinary

shares

may

be

held

in

either

certificated

or

uncertificated

form.

Certificated

ordinary

shares

may

be

transferred

in

writing

in

any

usual

or

other

form

approved

by

the

Group

Company

Secretary

and

executed

by

or

on

behalf

of

the

transferor.

Transfers

of

uncertificated

ordinary

shares

must

be

made

in

accordance

with

the

Companies

Act

2006

and

the

CREST

Regulations.

The

Board

is

not

bound

to

register

a

transfer

of

partly-paid

ordinary

shares

or

fully-paid

shares

in

exceptional

circumstances

approved

by

the

FCA.

The

Board

may

also

decline

to

register

an

instrument

of

transfer

of

certificated

ordinary

shares

unless

it

is

(i)

duly

stamped,

deposited

at

the

prescribed

place

and

accompanied

by

the

share

certificate(s)

and

such

other

evidence

as

reasonably

required

by

the

Board

to

evidence

right

to

transfer,

(ii)

it

is

in

respect

of

one

class

of

shares

only,

and

(iii)

it

is

in

favour

of

a

single

transferee

or

not

more

than

four

joint

transferees

(except

in

the

case

of

executors

or

trustees

of

a

member).

In

accordance

with

the

provisions

of

section

84

of

the

Small

Business,

Enterprise

and

Employment

Act

2015,

preference

shares

may

be

issued

only

in

registered

form.

Preference

shares

shall

be

transferred

in

writing

in

any

usual

or

other

form

approved

by

the

Group

Company

Secretary

and

executed

by

or

on

behalf

of

the

transferor.

The

Company’s

registrar

shall

register

such

transfers

of

preference

shares

by

making

the

appropriate

entries

in

the

register

of

preference

shares.

Each

preference

share

shall

confer,

in

the

event

of

a

winding

up

or

any

return

of

capital

by

reduction

of

capital

(other

than,

unless

otherwise

provided

by

their

terms

of

issue,

a

redemption

or

purchase

by

the

Company

of

any

of

its

issued

shares,

or

a

reduction

of

share

capital),

the

right

to

receive

out

of

the

surplus

assets

of

the

Company

available

for

distribution

amongst

the

members

and

in

priority

to

the

holders

of

the

ordinary

shares

and

any

other

shares

in

the

Company

ranking

junior

to

the

relevant

series

of

preference

shares

and

pari

passu

with

any

other

class

of

preference

shares

(other

than

any

class

of

shares

then

in

issue

ranking

in

priority

to

the

relevant

series

of

preference

shares),

repayment

of

the

amount

paid

up

or

treated

as

paid

up

in

respect

of

the

nominal

value

of

the

preference

share

together

with

any

premium

which

was

paid

or

treated

as

paid

when

the

preference

share

was

issued

in

addition

to

an

amount

equal

to

accrued

and

unpaid

dividends.

Variation

of

rights

The

rights

attached

to

any

class

of

shares

may

be

varied

either

with

the

consent

in

writing

of

the

holders

of

at

least

75%

in

nominal

value

of

the

issued

shares

of

that

class,

or

with

the

sanction

of

a

special

resolution

passed

at

a

separate

meeting

of

the

holders

of

the

shares

of

that

class.

The

rights

of

shares

shall

not

(unless

expressly

provided

by

the

rights

attached

to

such

shares)

be

deemed

varied

by

the

creation

of

further

shares

ranking

equally

with

them

or

subsequent

to

them.

Limitations

on

foreign

shareholders

There

are

no

restrictions

imposed

by

the

Articles

or

(subject

to

the

effect

of

any

economic

sanctions

that

may

be

in

force

from

time

to

time)

by

current

UK

laws

which

relate

only

to

non-residents

of

the

UK

and

which

limit

the

rights

of

such

non-residents

to

hold

or

(when

entitled

to

do

so)

vote

the

ordinary

shares.

Exercisability

of

rights

under

an

employee

share

scheme

Employee

Benefit

Trusts

(EBTs)

operate

in

connection

with

certain

of

the

Group’s

Employee

Share

Plans

(“Plans”).

The

trustees

of

the

EBTs

may

exercise

all

rights

attached

to

the

shares

in

accordance

with

their

fiduciary

duties

other

than

as

specifically

restricted

in

the

documents

governing

the

Plans.

The

trustees

of

the

EBTs

have

informed

the

Company

that

their

normal

policy

is

to

abstain

from

voting

in

respect

of

the

Barclays

shares

held

in

trust.

The

trustees

of

the

Global

Sharepurchase

EBT

and

UK

Sharepurchase

EBT

may

vote

in

respect

of

Barclays

shares

held

in

the

EBTs,

but

only

as

instructed

by

participants

in

those

Plans

in

respect

of

their

partnership

shares

and

(when

vested)

matching

and

dividend

shares.

The

trustees

will

not

otherwise

vote

in

respect

of

shares

held

in

the

Sharepurchase

EBTs.

Special

rights

There

are

no

persons

holding

securities

that

carry

special

rights

with

regard

to

the

control

of

the

company.

Major

shareholders

Major

shareholders

do

not

have

different

voting

rights

from

those

of

other

shareholders.

Information

provided

to

the

Company

by

substantial

shareholders

pursuant

to

the

FCA’s

Disclosure

Guidance

and

Transparency

Rules

is

published

via

a

Regulatory

Information

Service

and

is

available

on

the

Company’s

website.

As

at

31

December

2020,

the

Company

had

been

notified

under

Rule

5

of

the

Disclosure

Guidance

and

Transparency

Rules

of

the

following

holdings

of

voting

rights

in

its

shares.

Person

interested

Number

of

Barclays

Shares

%

of

total

voting

rights

attaching

to

issued

share

capital

a

Nature

of

holding

(direct

or

indirect)

BlackRock

Inc

b

944,022,209

5.78

indirect

Qatar

Holding

LLC

c

1,017,455,690

5.86

direct

Sherborne

Investors

d

943,949,089

5.48

indirect

The

Capital

Group

Companies

Inc

e

843,819,487

4.87

indirect

Norges

Bank

521,031,852

3.00

direct

Notes

a

The

percentage

of

voting

rights

detailed

above

was

calculated

at

the

time

of

the

relevant

disclosures

made

in

accordance

with

Rule

5

of

the

Disclosure

Guidance

and

Transparency

Rules,

with

the

exception

of

Qatar

Holding

which

has

been

rebased

against

the

issued

share

capital

as

at

31

December

2020,

because

its

last

disclosure

was

made

on

1

December

2016.

b

Total

shown

includes

6,687,206

contracts

for

difference

to

which

voting

rights

are

attached.

Part

of

the

holding

is

held

as

America

n

Depositary

Receipts.

On

28

January

2021,

BlackRock,

Inc.

disclosed

by

way

of

a

Schedule

13G

filed

with

the

SEC

beneficial

ownership

of

1,303,744,297

ordinary

shares

of

the

Company

as

of

31

December

2020,

representing

7.5%

of

that

class

of

shares.

c

Qatar

Holding

LLC

is

wholly

-owned

by

Qatar

Investment

Authority.

d

We

understand

from

disclosures

that

the

Sherborne

shares

are

held

via

three

funds

ultimately

controlled

by

Edward

Bramson

and

Stephen

Welker

in

their

capacity

as

managing

directors

of

Sherborn

e

Investors

Management

GP,

LLC

(Sherborne

Management

GP),

an

d

Sherborne

Investors

GP,

LLC.

Sherborne

Management

GP

is

the

general

partner

of

Sherborne

Investors

Management

LP

(Sherborne

Investors)

which

is

the

investment

manager

of

each

of

the

three

funds

beneficially

interested

in

the

Sherborne

shares,

being

Whistle

Investors

LLC,

Whistle

Investors

II

LLC

and

Whistle

Investors

III

LLC.

Amendment

No.2

to

a

Schedule

13D

filing,

filed

on

7

November

2019,

also

disclosed

that

certain

funded

derivative

transacti

ons,

which

were

used

to

purchase

505,086,254

of

such

shares,

have

been

extended

to

expire

on

various

dates

during

the

period

beginning

14

December

2021

(previously

21

October

2019)

and

ending

22

July

2022

(previously

16

March

2021).

e

The

Capital

Group

Companies

Inc

(CG)

holds

its

shares

via

CG

Management

companies.

Part

of

the

CG

holding

is

held

as

American

Depositary

Receipts.

Between

31

December

2020

and

16

February

2021

(the

latest

practicable

date

for

inclusion

in

this

report),

the

Company

has

not

received

any

additional

notifications

pursuant

to

Rule

5

of

the

Disclosure

Guidance

and

Transparency

Rules.

Directors’

report:

Other

statutory

information

45

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Powers

of

Directors

to

issue

or

buy

back

the

Company’s

shares

The

powers

of

the

Directors

are

determined

by

the

Companies

Act

2006

and

the

Company’s

Articles.

The

Directors

are

authorised

to

issue

and

allot

shares

and

to

buy

back

shares

subject

to

annual

shareholder

approval

at

the

AGM.

Such

authorities

were

granted

by

shareholders

at

the

2020

AGM.

It

will

be

proposed

at

the

2021

AGM

that

the

Directors

be

granted

new

authorities

to

allot

and

buy

back

shares.

Repurchase

of

shares

The

Company

did

not

repurchase

any

of

its

ordinary

shares

during

2020

(2019:

none).

As

at

16

February

2021

(the

latest

practicable

date

for

inclusion

in

this

report)

the

Company

had

an

unexpired

authority

to

repurchase

ordinary

shares

up

to

a

maximum

of

1,733m

ordinary

shares.

Distributable

Reserves

As

at

31

December

2020,

the

distributable

reserves

of

the

Company

were

£24,386m

(2019:

£22,457m).

Change

of

control

There

are

no

significant

agreements

to

which

the

Company

is

a

party

that

are

affected

by

a

change

of

control

of

the

Company

following

a

takeover

bid.

There

are

no

agreements

between

the

Company

and

its

Directors

or

employees

providing

for

compensation

for

loss

of

office

or

employment

that

occurs

because

of

a

takeover

bid.

Disclosure

of

Information

to

the

auditor

Each

Director

confirms

that,

so

far

as

he/she

is

aware,

there

is

no

relevant

audit

information

of

which

our

auditor

is

unaware

and

that

each

of

the

Directors

has

taken

all

the

steps

that

he/she

ought

to

have

taken

as

a

Director

to

make

himself/herself

aware

of

any

relevant

audit

information

and

to

establish

that

our

auditor

is

aware

of

that

information.

This

confirmation

is

given

pursuant

to

section

418

of

the

Companies

Act

2006

and

should

be

interpreted

in

accordance

with,

and

subject

to,

those

provisions.

Directors’

responsibilities

The

following

statement,

which

should

be

read

in

conjunction

with

the

Auditor’s

report

set

out

on

page

207

to

210,

is

made

with

a

view

to

distinguishing

for

shareholders

the

respective

responsibilities

of

the

Directors

and

of

the

auditor

in

relation

to

the

accounts.

Going

concern

The

Group’s

business

activities

and

factors

likely

to

affect

its

future

development

and

performance

are

disclosed

in

the

Strategic

Report

available

at

home.barclays/annualreport

and

Risk

Review

section

of

this

document.

The

financial

performance

is

disclosed

within

the

financial

review

with

funding,

liquidity

and

capital

details

contained

within

the

risk

performance

section.

The

Group’s

objectives

and

policies

in

managing

the

financial

risks

to

which

it

is

exposed

are

discussed

in

the

Risk

management

section.

The

Directors

considered

it

appropriate

to

prepare

the

financial

statements

on

a

going

concern

basis.

In

preparing

each

of

the

Group

and

Parent

company

financial

statements,

the

Directors

are

required

to:

◾

assess

the

Group

and

Parent

company’s

ability

to

continue

as

a

going

concern,

disclosing,

as

applicable,

matters

going

concern;

◾

use

the

going

concern

basis

of

accounting

unless

they

either

intend

to

liquidate

the

Group

or

the

Parent

company

or

to

cease

operations,

or

have

no

realistic

alternative

but

to

do

so.

Preparation

of

accounts

The

Directors

are

required

by

the

Companies

Act

2006

to

prepare

Group

and

Company

accounts

for

each

financial

year

and,

with

regard

to

Group

accounts,

in

accordance

with

Article

4

of

the

IAS

Regulation.

The

Directors

have

prepared

Group

and

Company

accounts:

a)

in

accordance

with

international

accounting

standards

in

conformity

with

the

requirements

of

the

Companies

Act

2006;

and

b)

international

financial

reporting

standards

as

issued

by

the

IASB

and

adopted

pursuant

to

Regulation

(EC)

No.

1606/2002

as

it

applies

in

the

European

Union.

Pursuant

to

the

Companies

Act

2006,

the

Directors

must

not

approve

the

accounts

unless

they

are

satisfied

that

they

give

a

true

and

fair

view

of

the

state

of

affairs

of

the

Barclays

Group

and

the

Company

and

of

their

profit

or

loss

for

that

period.

The

Directors

consider

that,

in

preparing

the

financial

statements,

the

Group

and

the

Company

have

used

appropriate

accounting

policies,

supported

by

reasonable

judgements

and

estimates,

and

that

all

accounting

standards

which

they

consider

to

be

applicable

have

been

followed.

The

Directors

are

satisfied

that

the

Annual

Report

and

Financial

Statements,

taken

as

a

whole,

are

fair,

balanced

and

understandable,

and

provide

the

information

necessary

for

shareholders

to

assess

the

Group’s

and

Company’s

position

and

performance,

business

model

and

strategy.

The

Directors

are

responsible

for

such

internal

control

as

they

determine

is

necessary

to

enable

the

preparation

of

financial

statements

that

are

free

from

material

misstatement,

whether

due

to

fraud

or

error.

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

3

to

6,

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

8

to

13,

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.

Directors’

report:

Other

statutory

information

46

Barclays

PLC

2020

Annual

Report

on

Form

20-F

By

order

of

the

Board

Stephen

Shapiro

Group

Company

Secretary

17

February

2021

Registered

in

England.

Company

No.

48839

Remuneration

report

47

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Annual

Statement

from

the

Chair

of

the

Board

Remuneration

Committee

Contents

Page

Annual

statement

47

Remuneration

philosophy

52

Fair

Pay

53

Employee

remuneration

policy

54

Directors’

remuneration

policy

55

Annual

report

on

Directors’

remuneration

57

Remuneration

committee

Meetings

attended

Crawford

Gillies

10/10

Tim

Breedon

9/10

Mary

Francis

10/10

Brian

Gilvary

(from

1

March

2020)

6/7

Dear

Fellow

Shareholders

I

am

pleased

to

present

the

Directors’

Remuneration

Report

for

2020,

and

my

last

statement

to

you

as

Chair

of

the

Remuneration

Committee.

I

know

that

my

successor,

Brian

Gilvary,

will

be

an

excellent

replacement

and

I

wish

him

all

the

very

best

when

he

assumes

the

chair

in

March.

It

has

been

an

exceptionally

challenging

year

for

a

great

many

of

us,

and

one

with

far

reaching

consequences

for

our

economy

and

our

society.

In

this

context,

the

Committee

has

faced

some

extremely

difficult

decisions

about

the

most

appropriate

way

to

remunerate

colleagues

for

some

outstanding

work

over

the

last

12

months.

We

have

taken

a

number

of

important

considerations

into

account,

including

our

financial

and

non-

financial

performance

in

both

relative

and

absolute

terms,

the

views

and

expectations

of

our

stakeholders,

and

the

differing

contributions

of

our

businesses

to

the

Group’s

financial

resilience,

which

has

in

turn

enabled

us

to

support

customers,

clients

and

the

communities

that

we

serve.

Our

deliberations

have

been

extensive,

and

I

want

to

use

this

statement

to

be

transparent

with

you

about

our

decision-making.

As

ever,

we

have

been

guided

by

the

principles

of

our

Fair

Pay

agenda

and,

in

particular,

the

importance

of

properly

recognising

the

contribution

of

our

junior

colleagues.

You

can

read

more

about

our

approach

to

fairness

in

our

third

annual

Fair

Pay

Report,

published

alongside

this

document.

Consistent

with

we

have

also

published

our

UK

pay

gap

figures

and

a

narrative

explaining

them.

Performance

Rewarding

sustainable

performance

remains

a

crucial

aspect

of

the

way

the

Committee

considers

its

decisions.

We

recognise

the

pandemic’s

impact

on

our

financial

performance,

with

reductions

in

PBT

and

RoTE

following

a

number

of

years

of

sustained

annual

improvements

a

.

We

are

however

proud

of

what

we

have

achieved

as

an

organisation

in

a

truly

difficult

year.

Not

only

have

we

remained

fully

open

for

business,

supporting

our

customers

and

clients

as

they

navigate

the

pandemic,

we

have

demonstrated

ourselves

to

be

extremely

resilient,

remaining

profitable

in

each

quarter

despite

the

challenging

macroeconomic

environment,

while

continuing

to

demonstrate

a

capacity

for

strong

capital

generation.

Consequently,

we

have

today

announced

a

total

payout

equivalent

to

c.5p

per

share,

comprising

a

1.0p

2020

full

year

dividend

and

the

intention

to

initiate

a

share

buyback

of

up

to

£700m

which

I

know

will

be

welcome.

We

have

entered

2021

in

a

position

of

strength

and

stability

for

the

future;

well

capitalised

and

importantly

well-positioned

to

support

an

economic

recovery.

Our

business

diversification

has

meant

that

our

investment

banking

businesses

have

been

able

to

benefit

from

the

increased

volatility

and

wider

trading

margins

observed

during

2020.

This,

together

with

strong

relative

performance

as

evidenced

particularly

by

the

continued

improvement

in

Markets

market

share

b

,

has

meant

that

these

businesses

have

significantly

outperformed

expectations.

Income

in

our

Markets

businesses

is

up

45%

year

on

year

and

in

Banking,

income

is

up

8%

year

on

year

–

the

biggest

annual

improvements

since

the

reconfiguration

of

those

businesses.

As

a

result,

Group

income

was

up

on

2019

despite

an

incredibly

challenging

year

for

our

Corporate

Bank

and

consumer

businesses,

impacted

as

they

were

by

lower

income

and

materially

higher

impairment

charges

in

the

wake

of

the

COVID-19

pandemic.

This

capacity

for

one

part

of

the

Group’s

performance

to

offset

another

is

an

illustration

of

the

benefits

of

the

diversification

that

is

inherent

in

our

universal

banking

model.

This

has

helped

our

ability

to

support

the

economy

and

society

at

a

time

of

acute

need.

As

set

out

in

Nigel

Higgins’

and

Jes

Staley’s

letters

to

shareholders,

we

have

delivered

an

enormous

amount

of

financial

support

for

our

customers

and

clients

this

year,

including

facilitating

c.

£27bn

of

finance

to

British

businesses,

waiving

millions

of

pounds

in

fees

for

customers

and

helping

corporate

clients

and

governments

raise

billions

to

strengthen

their

balance

sheets

(underwriting

c.

£1.5

trillion

of

new

issuance

c

).

We

have

been

able

to

do

a

significant

amount

for

wider

society

too,

whether

through

the

launch

of

our

£100m

COVID-19

Community

Aid

Package,

or

in

the

steps

we

have

taken

on

the

road

to

becoming

a

net

zero

bank

by

2050.

Notes

a

Ex

L&C.

b

Source:

Coalition

Greenwich,

Preliminary

FY20

Competitor

Analysis.

Market

share

represents

Barclays

share

of

the

Global

Industry

Revenue

Pool.

Analysis

is

based

on

Barclays

internal

business

structure

and

internal

revenues.

c

Across

Equity

and

Debt

Cap

ital

Markets

in

Q220-Q420.

Remuneration

report

48

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Group

income

£21,766m

2019:

£21,632m

2018:

£21,136m

Group

profit

before

tax

(excluding

L&C)

£3,218m

2019:

£6,206m

2018:

£5,701m

Group

RoTE

(excluding

L&C)

3.4%

2019:

9.0%

2018:

8.5%

Cost:

income

ratio

(excluding

L&C)

61%

a

2019:

62%

a

2018:

66%

CET1

ratio

15.1%

2019:

13.8%

2018:

13.2%

Group

compensation

to

income

ratio

b

34.2%

2019:

33.9%

2018:

34.1%

Group

incentive

pool

£1,580m

2019:

£1,490m

2018:

£1,649m

Notes

a

Excludes

£368m

of

structural

cost

actions

(2019:

£150m)

and

£95m

spend

to

date

of

Barclays’

Community

Aid

Package.

b

2018

Group

compensation

to

income

ratio

excludes

£140m

relating

to

GMP

charge

post-retirement

benefits.

Colleague

remuneration

Throughout

the

pandemic,

our

colleagues

–

many

of

whom

were

on

the

frontline

supporting

customers

–

have

worked

incredibly

hard

to

keep

things

running.

Our

financial

resilience

has

allowed

us

to

help

them

too,

for

instance

by

offering

full

pay

to

those

unable

to

work

because

they

were

isolating

or

caring

for

dependants.

We

increased

overtime

rates

to

support

colleagues

given

their

need

to

work

significantly

extended

hours,

to

both

manage

the

unprecedented

demands

from

customers

and

clients

as

well

as

the

temporary

loss

of

some

geographical

locations

dues

to

local

lockdowns.

Additionally,

we

enhanced

our

benefits

where

needed,

including

improving

medical

benefit

provision

in

India

and

meeting

additional

childcare

needs

where

required.

We

did

not

put

any

staff

on

furlough

(indeed

hiring

additional

colleagues,

with

overall

headcount

up

slightly

on

2019),

and

implemented

a

temporary

moratorium

on

redundancies.

The

Committee’s

determination

of

the

annual

incentive

pool

includes

consideration

of

a

number

of

factors,

such

as

financial

performance,

delivery

of

our

strategy,

risk

and

conduct.

We

consider

Barclays’

performance

as

a

Group,

but

also

take

into

account

the

performance

of

individual

businesses

within

that

Group,

as

well

as

those

businesses’

contributions

to

our

strategic

targets

and

vision,

and

their

importance

to

our

future

success.

Assessing

and

rewarding

performance

in

this

way

also

means

that

the

Group

incentive

pool

does

not

always

move

directly

in

line

with

the

Group’s

overall

financial

performance.

In

2019,

while

financial

performance

was

up

and

non-financial

performance

was

also

very

strong,

the

incentive

pool

was

reduced

to

support

our

continued

progression

towards

our

strategic

targets

in

terms

of

delivering

greater

returns

to

shareholders.

This

year,

we

have

had

to

consider

how

we

balance

the

need

to

maintain

our

successful

universal

banking

model,

with

the

financial

challenges

that

we

and

others

have

faced.

For

many

businesses,

such

as

our

Corporate

Bank

and

consumer

businesses

(including

Barclays

UK

–

our

ring-fenced

bank)

profit

before

tax

is

down,

driven

by

lower

income

and

higher

impairment

costs.

At

the

same

time,

strategic

delivery

has

been

very

strong,

continuing

to

make

progress

on

our

digital

agenda

and

focussing

on

our

customer

and

client

experiences.

Balancing

these

different

considerations,

the

incentive

pools

for

all

of

these

businesses

are

down

this

year,

reflecting

the

lower

financial

performance

outcomes.

However,

consistent

with

our

Fair

Pay

agenda,

we

have

chosen

to

protect

outcomes

for

our

junior

colleagues

and,

as

a

result,

the

greatest

reductions

in

incentives

will

be

observed

for

more

senior

colleagues

in

these

businesses.

It

has

been

junior

colleagues

in

many

businesses

who

have

been

on

the

front

line

directly

supporting

customers

and

clients

during

the

pandemic

and

the

Committee

felt

it

appropriate

to

reward

those

efforts.

Additionally,

the

Committee

believes

it

is

right

to

recognise

the

outstanding

work

of

our

investment

banking

colleagues

this

year,

particularly

given

the

continued

financial

performance

improvements

of

those

businesses

and

their

significant

contribution

to

the

Group’s

overall

financial

resilience.

Since

2018,

the

profitability

a

of

the

Corporate

and

Investment

Bank

has

increased

by

51%

(2020

up

31%

on

2019),

with

the

associated

improvement

in

returns.

This

strong

performance

has

been

driven

by

increases

in

investment

banking

revenues,

specifically

in

FICC

and

equities,

where

we

have

continued

to

grow

market

share

b

.

We

are

the

only

scale

British

investment

bank;

we

operate

globally

and,

importantly,

we

have

a

leading

presence

in

the

US

(correspondingly,

almost

three-quarters

of

the

incentive

pool

for

the

investment

bank

businesses

relates

to

populations

outside

the

UK).

Our

investment

banking

businesses

provide

us

with

a

point

of

strategic

advantage

as

we

move

into

2021

and

beyond,

providing

an

important

diversification

of

income

stream,

particularly

at

a

time

of

so

much

transformation

and

challenge

in

the

retail

banking

sector.

It

is

appropriate

that

we

reward

the

exceptional

collective

effort

of

these

colleagues,

albeit

with

the

appropriate

restraint.

Taking

all

of

this

into

account,

the

Committee

has

approved

a

Group

incentive

pool

of

£1,580m.

This

represents

a

relatively

modest

increase

across

the

investment

banking

businesses,

reductions

for

all

other

businesses

and

appropriate

recognition

for

the

contributions

of

our

more

junior

colleagues.

The

unusual

dynamic

for

2020

is

the

significantly

lower

contribution

to

the

Group

financial

results

from

our

Corporate

banking

and

consumer

businesses,

driven

principally

by

impairment.

While

the

incentive

pools

in

those

areas

have

been

reduced

as

noted

above,

they

are

relatively

small

in

relation

to

the

overall

incentive

pool.

The

result

is

that

significant

reductions

in

financial

contributions

originating

from

those

business

areas

cannot

be

directly

reflected

in

proportionate

reductions

to

the

overall

incentive

pool.

We

believe

that

this

outcome

is

appropriate

given

the

performance

delivered,

and

that

it

is

consistent

with

our

philosophy

of

rewarding

sustainable

performance,

which

in

turn

supports

our

long-term

strategy

of

delivering

improved

returns

to

shareholders.

As

always,

a

significant

portion

of

the

pool

is

delivered

in

shares,

most

of

which

will

be

deferred

over

a

number

of

years.

Note

a

Excluding

L&C

b

Source:

Coalition

Greenwich,

Preliminary

FY20

Competitor

Analysis.

Market

share

represents

Barclays

share

of

the

Global

Industry

Revenue

Pool.

Analysis

is

based

on

Barclays

internal

business

structure

and

internal

revenues.

Remuneration

report

49

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Executive

Director

remuneration

The

Executive

Directors

responded

quickly

to

the

pandemic,

agreeing

to

postpone

increases

to

their

Fixed

Pay

which

had

been

proposed

as

part

of

the

new

Directors’

Remuneration

Policy

introduced

last

year.

They

also

took

the

decision

to

donate

one-third

of

their

Fixed

Pay

for

six

months

to

our

COVID-19

Community

Aid

Package.

The

Committee

also

decided

to

postpone

the

first

instalment

of

their

2017-2019

LTIP

awards,

which

had

been

due

to

be

released

in

June

2020,

until

2021.

The

Executive

Directors

requested,

and

the

Committee

accepted,

that

their

2020

Fixed

Pay

increases

(now

approved)

be

postponed

again,

until

at

least

the

second

half

of

this

year

when

the

Committee

will

reconsider

the

implementation

with

them,

in

light

of

the

prevailing

external

environment.

The

Committee

has

considered

at

length

the

appropriateness

of

bonus

and

LTIP

outcomes

for

the

Executive

Directors

for

2020.

Annual

bonuses

were

assessed

against

the

financial,

strategic

and

personal

measures

that

were

set

out

in

the

Directors’

Remuneration

Report

for

2019.

While

Group

income

was

up

slightly

year

on

year

and

costs

well

controlled,

the

impact

of

the

pandemic

on

impairment

resulted

in

significantly

reduced

2020

bonus

outcomes,

38.6%

of

max

for

the

CEO

and

GFD,

down

materially

from

the

outcomes

for

2019

(75.0%

and

75.9%

respectively).

Similarly,

the

outcome

for

the

2018-2020

LTIP

was

also

materially

impacted

by

impairment,

with

an

outcome

of

23%

of

maximum,

down

from

48.5%

for

the

2017-2019

LTIP.

While

the

Committee

did

review

the

continued

appropriateness

of

the

respective

plan

measures

and

targets

given

the

exogenous

nature

of

the

pandemic,

it

prioritised

the

need

to

ensure

appropriate

alignment

between

the

outcomes

for

the

Executive

Directors

with

the

experience

of

investors.

In

particular,

this

included

the

sector-wide

cancellation

of

the

2019

dividend

in

line

with

UK

regulatory

expectations

and

the

associated

delay

in

the

benefit

of

that

distribution

experienced

by

our

shareholders.

While

this

benefit

will

likely

be

realised

in

the

future,

given

the

additional

capital

retained

and

the

recommencement

of

distributions,

the

delay

was

considered

by

the

Committee,

alongside

the

broader

challenges

facing

society

as

a

whole.

We

believe

the

outcomes

on

both

bonus

and

LTIP

align

appropriately

with

stakeholder

considerations.

They

take

into

account

financial

performance

outcomes,

very

strong

non-financial

delivery

and

the

exceptional

contributions

of

the

Executive

Directors-

both

the

outstanding

leadership

provided

during

the

year,

and

the

positive

impact

of

a

multiyear

strategy

and

transformation

that

has

enabled

us

to

continue

to

deliver

so

effectively

for

stakeholders

during

a

time

of

such

challenge.

Total

variable

pay

(annual

bonus

and

LTIP)

will

be

primarily

delivered

in

shares

for

the

Executive

Directors,

aligning

more

closely

to

the

shareholder

experience

during

this

particularly

difficult

period.

The

Executive

Directors

continue

to

build

substantial

shareholdings,

and

neither

have

sold

any

shares

since

their

appointments.

We

have

not

changed

in-flight

bonus

and

LTIP

arrangements

and

have

not

altered

the

performance

measures

or

targets

for

these

plans.

The

Committee

has

also

considered

the

performance

measures

for

the

2021

bonus

and

2021-2023

LTIP

very

carefully.

The

bonus

measures

are

unchanged,

as

they

continue

to

represent

relevant

building

blocks

towards

our

key

longer–term

financial

goals.

For

the

2021-2023

LTIP,

we

have

decided

to

broaden

the

measures

on

which

the

financial

assessment

will

be

based.

As

we

continue

to

navigate

through

a

more

volatile

macroeconomic

environment,

this

will

better

balance

our

long

term

assessment

of

the

Executive

Directors’

financial

performance.

RoTE

and

CIR

will

be

maintained

as

measures,

though

RoTE

will

be

tested

at

the

end

of

the

cycle,

helping

to

determine

how

effectively

the

Executive

Directors

navigate

the

financial

recovery

and

steer

Barclays

back

towards

our

targets

over

the

medium

term.

In

addition

to

RoTE,

we

will

be

adding

CET1

and

relative

Total

Shareholder

Return

(TSR)

measures.

The

addition

of

a

CET1

measure

reflects

the

continued

importance

of

our

prudential

stability

and

balance

sheet

strength,

particularly

in

the

coming

potentially

difficult

years.

Adding

a

relative

TSR

measure

acknowledges

the

challenges

associated

with

calibrating

absolute

performance

targets

in

the

current

uncertain

environment,

providing

instead

a

relative

performance

lens

that

is

not

subject

to

the

same

difficulties,

while

maintaining

a

50%

total

weighting

on

returns

measures.

In

addition,

we

are

adding

a

specific

Climate

measure

with

a

weighting

of

10%

to

the

non-financial

assessment

of

the

2021-2023

LTIP,

reflecting

our

ambition

to

be

net

zero

by

2050,

including

our

commitment

to

align

our

financing

with

the

goals

of

the

Paris

Climate

Agreement.

Further

details

on

Executive

Director

remuneration,

including

the

consideration

of

windfall

gains

on

the

2020-2022

LTIP,

and

the

full

details

of

the

new

LTIP

to

be

granted

for

2021-2023

are

set

out

in

this

report.

Looking

ahead

As

we

move

into

2021,

the

Committee

will

be

ensuring

that

the

new

Purpose,

Values

and

Mindset

are

reflected

in

our

remuneration

policies

and

approaches,

as

we

work

to

embed

them

throughout

the

organisation.

I

would

like

to

thank

my

fellow

Committee

members

for

their

guidance

and

expertise

during

my

tenure,

as

well

as

all

of

the

stakeholders

with

whom

I

have

been

fortunate

enough

to

engage.

I

look

forward

to

continuing

to

serve

Barclays

as

the

Chair

of

the

Board

of

Barclays

Bank

UK

PLC.

Crawford

Gillies

Chair,

Board

Remuneration

Committee

February

2021

Remuneration

report

50

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Remuneration

report

51

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Remuneration

philosophy

To

attract

and

retain

the

people

who

can

best

deliver

for

our

customers

and

clients,

we

must

pay

fairly

and

appropriately

–

balancing

the

interests

of

all

our

stakeholders.

Our

policies

and

practices

reward

sustainable

performance

in

line

with

our

values

and

risk

expectations.

They

are

fair,

transparent

and

as

simple

as

possible.

This

is

our

remuneration

philosophy.

It’s

how

we

have

continued

to

make

remuneration

decisions

and

set

remuneration

policies

during

2020,

and

it

applies

to

all

of

our

employees

globally,

as

well

as

our

Executive

Directors.

Philosophy

Attract

and

retain

talent

needed

to

deliver

Barclays’

strategy

Long-term

success

depends

on

the

talent

of

our

employees.

This

means

attracting

and

retaining

an

appropriate

range

of

talent

to

deliver

against

our

strategy,

and

paying

the

right

amount

for

that

talent

Align

pay

with

investor

and

other

stakeholder

interests

Remuneration

should

be

designed

with

appropriate

consideration

of

the

views,

rights

and

interests

of

stakeholders.

This

means

listening

to

our

shareholders,

other

investors,

regulators,

government,

customers

and

employees

and

ensuring

their

views

are

appropriately

considered

in

remuneration

decision-making

Reward

sustainable

performance

Sustainable

performance

means

making

a

positive

contribution

to

stakeholders,

in

both

the

short

and

longer

term,

playing

a

valuable

role

in

society

Support

Barclays’

Values

and

culture

Results

must

be

achieved

in

a

manner

consistent

with

our

Values.

Our

Values

and

culture

should

drive

the

way

that

business

is

conducted

Align

with

risk

appetite,

risk

exposure

and

conduct

expectations

Designed

to

reward

employees

for

achieving

results

in

line

with

the

Group’s

risk

appetite

and

conduct

expectations

Be

fair,

transparent

and

as

simple

as

possible

We

are

committed

to

ensuring

pay

is

fair,

simple

and

transparent

for

all

our

stakeholders.

This

means

all

employees

and

stakeholders

should

understand

how

we

reward

our

employees

and

fairness

should

be

a

lens

through

which

we

make

remuneration

decisions

Our

philosophy

in

action

The

pay

decisions

set

out

in

this

report

are

a

result

of

the

application

of

our

remuneration

philosophy

during

2020.

Our

philosophy

and

the

way

that

we

approach

remuneration

is

designed

to

be

as

simple

and

clear

as

possible,

while

ensuring

strong

alignment

with

risk,

conduct

and

our

Values.

It

is

closely

aligned

with

Provision

40

of

the

FRC’s

UK

Corporate

Governance

Code,

and

we

have

continued

to

be

transparent

on

the

resulting

outcomes

in

this

report.

Specifically

relating

to

our

Executive

Directors,

we

have

reviewed

the

performance

measures

for

the

forward-looking

incentives,

and

in

particular

have

updated

the

financial

performance

measures

for

the

2021-2023

Long

Term

Incentive

Plan

(LTIP)

to

ensure

that

they

remain

appropriate

in

light

of

current

circumstances

and

challenges.

Alongside

our

strategic

non-financial

performance

objectives,

this

will

ensure

that

the

link

between

the

delivery

of

our

strategy

(and

long-term

performance)

and

individual

awards

continues

to

be

reinforced.

The

report

sets

out

minimum

and

maximum

potential

outcomes

under

each

plan

for

reference.

Furthermore,

the

alignment

of

executive

pay

to

culture

is

enhanced

by

the

inclusion

of

the

responsibility

to

embed

our

updated

Purpose,

Values

and

Mindset

throughout

the

organisation

in

the

personal

objectives

for

our

Group

CEO.

We

consider

the

views

of

all

of

our

stakeholders

in

remuneration

decision-making.

In

2020,

we

have

achieved

this

by

meeting

with

institutional

shareholders

to

understand

their

views

on

our

new

policy

(including

how

it

should

be

implemented),

engaging

extensively

with

our

regulators

to

support

their

actions

as

a

result

of

the

pandemic,

and

continuing

our

partnership

with

Unite

in

the

UK

to

understand

the

views

of

their

members

and

negotiate

a

new

pay

deal,

delivering

an

above

inflation

increase.

We

used

our

2019

Fair

Pay

report

to

share

information

on

our

approach

to

pay

with

colleagues,

including

how

executive

remuneration

aligns

with

wider

company

pay

policy,

and

are

now

publishing

our

third

report

to

help

do

the

same

for

2020.

Remuneration

report

52

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Fair

Pay

Paying

fairly

and

transparently

is

a

priority

at

Barclays.

The

Fair

Pay

agenda

brings

together

the

five

themes

which

explain

how

we

think

about

fair

pay

at

Barclays.

We

use

our

Fair

Pay

Report

to

engage

our

employees

on

pay,

explaining

our

approach

to

fair

pay,

including

the

alignment

of

the

Executive

Directors’

and

employee

pay.

We

encourage

you

to

read

the

full

Fair

Pay

Report

which

can

be

found

on

home.barclays/annualreport.

Our

approach

to

fair

pay

helped

guide

our

remuneration

decision-making

in

2020.

In

turn,

this

enhanced

the

support

we

were

able

to

provide

to

our

customers

and

clients,

colleagues

and

society

throughout

the

COVID-19

pandemic.

Customers

and

Clients

●

Our

focus

was

on

ensuring

that

we

were

available

for

our

Customers

and

Clients

despite

the

challenges

of

COVID-related

absences

and

the

temporary

loss

of

some

geographical

locations

due

to

local

lockdowns.

We

supported

this

effort

by

providing

Colleagues

with

additional

overtime

rates

where

needed

●

A

number

of

actions

were

taken

for

Customers

and

Clients

who

needed

additional

financial

support,

as

well

as

facilitating

the

delivery

of

c.

£27bn

of

lending

to

British

businesses

under

the

UK

Government’s

schemes.

Our

Colleagues

took

on

significant

extra

work

during

the

pandemic

to

make

this

happen

Colleagues

●

Enhanced

flexibility

was

introduced

for

all

colleagues

with

other

commitments

e.g.

the

need

to

care

for

dependants,

including

children,

and

where

it

was

not

possible

for

them

to

complete

their

full

hours,

we

continued

to

pay

them

their

full

salary

and

benefits

●

Separate

reporting

was

implemented

for

COVID-related

sickness

absence,

extending

our

existing

sick

pay

provisions

●

We

did

not

put

any

staff

on

furlough,

and

placed

a

moratorium

on

redundancies

in

the

early

months

of

the

pandemic

Society

●

We

have

matched

donations

through

our

Community

Aid

Package

from

our

colleagues

and

our

Directors,

supporting

the

communities

most

impacted

by

the

pandemic

●

Our

Executive

Directors

and

Chairman

contributed

one

third

of

their

fixed

pay

for

six

months

to

charities

delivering

COVID-

19

relief

●

In

the

UK,

we

supported

colleagues

who

volunteered

to

support

health

or

social

care,

with

up

to

four

weeks

of

paid

leave

Our

approach

to

fair

pay

enhanced

our

support

for

customers

and

clients,

colleagues

and

society

during

COVID-19.

As

well

as

using

the

Fair

Pay

agenda

to

guide

our

approach

to

remuneration

in

relation

to

the

pandemic,

we

have

also

continued

to

focus

on

advancing

the

agenda

as

it

relates

to

each

of

the

themes.

The

key

highlights

for

2020

are

shown

below.

Fair

Pay

for

the

lowest

paid:

●

Continued

to

progress

our

work

on

global

living

wages,

reviewing

more

locations

than

in

2019

●

Worked

with

Unite

to

agree

a

new

pay

deal,

ensuring

that

it

was

consistent

with

our

Fair

Pay

agenda

●

Enhanced

medical

provision

for

all

colleagues

in

the

UK

and

India,

providing

access

to

a

range

of

online

services

and

appointments

Equal

opportunities

to

progress:

●

Implemented

a

detailed

action

plan

on

Race

at

Work

that

will

open

up

opportunities

to

attract,

develop

and

add

to

our

great

Black

talent

.

●

Further

developed

our

diversity

dashboards

for

senior

leaders

which

now

reflect

both

gender

and

ethnic

diversity

●

Our

female

senior

leadership

continued

to

increase

and

is

now

26%,

up

from

25%

at

the

end

of

2019

Listening

to

employees:

●

We

launched

our

Inclusion

Index

for

the

first

time

to

measure

our

objective

to

be

a

truly

inclusive

organisation

●

We

engaged

with

Unite

throughout

the

pandemic,

focusing

on

the

physical

and

mental

wellbeing

of

our

colleagues

Equal

pay:

●

We

are

explicit

that

pay

decisions

must

not

take

into

account

gender,

age,

ethnicity,

disability,

sexual

orientation

or

any

other

protected

characteristic

●

All

grievances

raised

by

employees,

including

any

issues

relating

to

pay

are

investigated

as

appropriate

Alignment

of

employee

and

executive

remuneration:

●

Our

pay

policies

are

strongly

aligned

across

the

wider

workforce,

senior

employees

and

Executive

Directors

●

The

Directors’

remuneration

policy

has

been

refreshed,

aligning

Executive

Director

pension

contributions

with

the

wider

workforce

Remuneration

report

53

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Employee

remuneration

policy

As

outlined

earlier,

Barclays

has

a

clearly

articulated

remuneration

philosophy.

This

continues

to

drive

our

thinking

in

how

we

structure

and

determine

remuneration

for

all

employees

from

the

most

senior

(as

well

as

our

Executive

Directors)

to

our

new

apprentices

and

graduates.

As

part

of

our

annual

review

we

assessed

our

remuneration

policies

and

practices

for

alignment

with

Barclays’

Purpose

and

Value,

our

remuneration

philosophy

and

our

Fair

Pay

agenda,

including

ensuring

appropriate

alignment

between

the

Directors’

remuneration

policy

and

remuneration

approaches

for

senior

management

and

the

wider

workforce.

We

continue

to

ensure

that

we

comply

with

all

prevailing

regulation.

We

identify

individuals

whose

roles

may

expose

Barclays

to

material

risk,

and

assess

and

structure

their

pay

in

a

way

which

encourages

alignment

of

their

interests

and

Barclays.

Further

information

in

relation

to

Material

Risk

Takers

(“MRTs”)

is

set

out

in

Appendix

E

of

the

Barclays

PLC

Pillar

3

Report.

The

table

below

provides

a

summary

of

the

remuneration

approach

for

employees

below

Board

level.

Element

Operation

Salary

Salaries

reflect

individuals’

skills

and

experience

and

are

reviewed

annually.

They

are

increased

where

justified

by

role

change,

increased

responsibility

or

a

change

in

the

appropriate

market

rate.

Salaries

may

also

be

increased

in

line

with

local

statutory

requirements

and

in

line

with

union

and

works

council

commitments.

We

have

been

a

real

living

wage

employer

in

the

UK

since

2013,

and

continue

to

work

with

the

Fair

Wage

Network

to

complete

an

annual

review

of

our

pay

levels

against

living

wage

benchmarks

across

locations

globally.

Role

Based

Pay

(RBP)

A

small

number

of

senior

employees

(c.1%

UK

employees)

receive

a

class

of

fixed

pay

called

RBP

to

recognise

the

seniority,

scale

and

complexity

of

their

role.

This

may

change

where

justified

by

role

or

responsibility

change

or

a

change

in

the

appropriate

m

arket

rate.

Pension

and

benefits

The

provision

of

a

competitive

package

of

benefits

is

important

to

attracting

and

retaining

the

talent

needed

to

deliver

Barclays’

strategy.

Employees

have

access

to

a

range

of

country-specific

company-funded

benefits,

including

pension

schemes,

healthcare,

life

assurance

and

other

voluntary

employee

funded

benefits.

Employer

pension

contributions

for

the

UK

workforce

are

at

least

at

the

level

of

those

for

the

Executive

Directors,

and

are

set

at

a

minimum

of

10%

of

salary

(a

minimum

of

12%

for

more

junior

colleagues).

Annual

bonus

Annual

bonuses

incentivise

and

reward

the

achievement

of

Group,

business

and

individual

objectives,

and

reward

employees

for

demonstrating

individual

behaviours

in

line

with

Barclays’

Values.

All

employees

are

considered,

subject

to

eligibility

criteria.

For

senior

employees,

an

appropriate

proportion

of

their

annual

bonus

is

deferred

to

future

years.

Deferred

bonuses

are

generally

delivered

in

equal

portions

as

deferred

cash

and

shares.

They

are

subject

to

either

a

3,

5

or

7-year

deferral

period

(and

further

holding

periods

of

six

or

12

months

for

deferrals

in

shares)

in

line

with

regulatory

requirements.

Consistent

with

regulation,

the

remuneration

of

MRTs

is

subject

to

the

2:1

maximum

ratio

of

variable

to

fixed

remuneration.

Share

plans

We

encourage

wider

employee

share

ownership

through

the

all-employee

share

plans,

with

plans

available

to

99%

of

colleagues

globally.

Performance

management

Performance

assessment

is

based

on

“what”

is

achieved

in

relation

to

individual,

team

and

business

objectives,

as

well

as

“how”

this

is

achieved

in

the

context

of

Barclays’

Values.

Both

elements

are

assessed

independently

of

each

other

with

no

requirement

to

have

an

overall

rating.

This

reinforces

the

equal

importance

of

the

“what”

and

“how”.

Risk

and

conduct

Risk

and

conduct

is

taken

seriously

at

Barclays

and

the

Committee

ensures

that

there

are

in

year

adjustments,

malus

or

clawback

applied

to

individual

remuneration,

where

appropriate.

In

addition

to

individual

adjustments,

the

Committee

considers

collective

adjustments

to

the

incentive

pool

for

risk

and

conduct.

For

2020,

the

total

impact

of

risk

and

conduct

adjustments

is

a

reduction

of

c.

£80m.

More

information

on

our

approach

to

Performance

Management,

and

Risk

and

Conduct

are

set

out

in

Appendix

E

of

the

Barclays

PLC

2020

Pillar

3

Report,

which

can

be

found

on

home.barclays/annualreport.

Remuneration

report

54

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Directors’

remuneration

policy

The

forward-looking

remuneration

policy

for

Executive

Directors

and

Non-Executive

Directors

was

approved

at

the

AGM

held

on

7

May

2020

and

applies

for

three

years

from

that

date.

A

summary

of

the

policy,

including

key

remuneration

elements,

is

set

out

below

and

is

provided

for

information

only.

The

full

policy,

including

recruitment

and

leaver

provisions,

can

be

found

on

pages

93

to

103

of

the

2019

Annual

Report.

Summary

remuneration

policy

–

Executive

Directors

Element

and

purpose

Operation

Fixed

Pay

To

reward

skills

and

experience

appropriate

for

the

scale,

complexity

and

responsibilities

of

the

role

and

to

provide

the

basis

for

a

competitive

remuneration

package

Fixed

Pay

is

determined

based

on

the

individual’s

role,

skills

and

experience

with

reference

to

market

practice

and

market

data

(on

which

the

Committee

receives

independent

advice).

Delivered

50%

in

cash

(paid

monthly)

and

50%

in

shares.

The

shares

are

delivered

quarterly

and

are

subject

to

a

holding

period

with

restrictions

lifting

over

five

years

(20%

each

year).

As

the

Executive

Directors

beneficially

own

the

shares,

they

will

be

entitled

to

any

dividends

paid

on

those

shares.

Increases

will

normally

be

aligned

to

the

annual

increase

for

UK

employees,

and

will

take

into

account

changes

in

responsibilities

and

market

conditions.

Pension

To

enable

Executive

Directors

to

build

long-term

retirement

savings

Delivered

as

an

annual

cash

allowance

in

lieu

of

participation

in

a

pension

arrangement.

The

maximum

annual

cash

allowance

is

5%

of

Fixed

Pay

(equivalent

to

10%

of

fixed

cash).

Benefits

To

provide

a

competitive

and

cost

effective

benefits

package

appropriate

to

the

role

and

location

A

number

of

benefits

are

provided

including,

but

not

restricted

to,

private

medical

cover,

annual

health

check,

life

and

ill

health

income

protection,

and

use

of

a

Company

vehicle

and

driver

when

required

for

business

purposes

(including

any

tax

liabilities

that

may

arise

from

this

benefit).

The

maximum

value

of

benefits

is

determined

by

the

nature

of

the

benefit

itself

and

costs

of

provision

may

depend

on

external

factors,

e.g.

insurance

costs.

Annual

bonus

To

reward

delivery

of

short-term

financial

targets

set

each

year,

the

individual

performance

of

the

Executive

Directors

in

achieving

those

targets,

and

their

contribution

to

delivering

Barclays’

strategic

objectives.

Delivery

in

part

in

shares

with

holding

period

increases

alignment

with

shareholders.

Deferred

bonuses

encourage

longer

term

focus

and

retention

The

maximum

annual

bonus

opportunity

is

93%

of

Fixed

Pay

(cash

and

shares)

for

the

CEO

and

90%

of

Fixed

Pay

(cash

and

shares)

for

the

GFD.

Individual

bonuses

are

entirely

discretionary

(any

amount

may

be

awarded

from

zero

to

the

maximum

value)

and

decisions

are

based

on

the

Committee’s

judgement

of

Executive

Directors’

performance

in

the

year,

measured

against

Group

and

personal

objectives.

Delivered

as

a

combination

of

cash

and

shares,

a

proportion

of

which

may

be

deferred

and/or

subject

to

a

holding

period.

Deferral

proportions

and

vesting

profiles

will

be

structured

so

that,

in

combination

with

any

LTIP

award,

the

proportion

of

variable

pay

that

is

deferred

is

no

less

than

that

required

by

regulations

(currently

60%).

Non-deferred

cash

components

of

any

bonus

are

paid

following

the

performance

year

to

which

they

relate,

normally

in

March.

Non-deferred

share

bonuses

are

subject

to

a

holding

period

(after

the

payment

of

tax)

in

line

with

regulations

and

with

release

no

faster

than

permitted

by

regulations

(currently

one

year).

Deferred

share

bonuses

are

structured

so

that

no

deferred

shares

vest

faster

than

permitted

by

regulations.

Vesting

is

also

subject

to

the

provisions

of

the

plan

rules

including

employment

and

the

malus

and

clawback

provisions.

Any

shares

that

vest

are

subject

to

an

additional

holding

period

(after

payment

of

tax)

in

line

with

regulations

and

release

no

faster

than

permitted

by

regulations

(currently

one

year).

The

Committee

will

consider

the

previously

disclosed

financial

and

non-financial

(including

personal

objectives)

measures

in

determining

the

annual

bonus

for

the

Executive

Directors.

Financial

factors

will

guide

at

least

60%

of

the

bonus

opportunity.

The

Committee

has

the

discretion

to

vary

the

measures

and

their

respective

weightings

within

each

category.

The

measures

and

weightings

will

be

disclosed

annually

as

part

of

the

annual

report

on

Directors’

remuneration,

at

the

beginning

of

the

performance

year

(typically

February).

Long

Term

Incentive

Plan

(LTIP)

award

To

incentivise

execution

of

Barclays’

strategy

over

a

multi-year

period.

Long-term

performance

measurement,

deferral

and

holding

periods

encourage

a

long-term

view

and

align

Executive

Directors’

interests

with

those

of

shareholders

The

maximum

annual

LTIP

award

for

the

CEO

is

140%

of

Fixed

Pay

(cash

and

shares)

and

134%

of

Fixed

Pay

(cash

and

shares)

for

the

GFD.

LTIP

awards

are

made

by

the

Committee

following

discussion

of

recommendations

made

by

the

Chairman

(for

the

Group

Chief

Executive’s

LTIP

award)

and

by

the

Group

Chief

Executive

(for

other

Executive

Directors’

LTIP

awards)

based

on

satisfactory

performance

over

the

prior

year.

LTIP

awards

are

structured

so

that

when

combined

with

the

annual

bonus

the

proportion

of

variable

pay

that

is

deferred

is

no

less

than

that

required

by

regulations

(currently

60%).

No

award

vests

before

the

third

anniversary

of

grant

and

an

award

vests

no

faster

than

permitted

by

regulations

(currently

in

five

equal

tranches

with

the

first

tranche

vesting

on

or

around

the

third

anniversary

of

grant

and

the

last

tranche

vesting

on

or

around

the

seventh

anniversary

of

the

grant

date).

Any

shares

that

vest

are

subject

to

an

additional

holding

period

(after

payment

of

tax)

in

line

with

regulations,

with

restrictions

lifting

no

faster

than

permitted

by

regulations

(currently

1

year).

Vesting

is

dependent

on

performance

measures

and

service.

Forward-looking

performance

measures

will

be

based

on

financial

performance

and

other

long-term

strategic

measures.

Measures

and

weightings

will

be

set

in

advance

of

each

grant.

Remuneration

report

55

Barclays

PLC

2020

Annual

Report

on

Form

20-F

The

Committee

has

discretion

to

change

the

weightings

but

financial

measures

will

be

at

least

70%

of

the

total

opportunity.

The

Committee

has

discretion,

and

in

line

with

the

plan

rules

approved

by

shareholders,

in

exceptional

circumstances

to

amend

targets,

measures,

or

the

number

of

awards

if

an

event

happens

(for

example,

a

major

transaction)

that,

in

the

opinion

of

the

Committee,

causes

the

original

targets

or

measures

to

be

no

longer

appropriate

or

such

adjustment

to

be

reasonable.

The

Committee

also

has

the

discretion

to

reduce

the

vesting

of

any

award,

including

to

nil,

if

it

deems

that

the

outcome

is

not

consistent

with

performance

delivered.

All

employee

share

plans

To

provide

an

opportunity

for

Executive

Directors

to

voluntarily

invest

in

the

Company

through

UK

HMRC

employee

tax

advantaged

share

schemes

Executive

Directors

are

entitled

to

participate

in:

(i)

Barclays

Sharesave

under

which

they

can

make

monthly

savings

out

of

post-tax

pay

over

a

period

of

three

or

five

years

linked

to

the

grant

of

an

option

over

Barclays’

shares

which

can

be

at

a

discount

of

up

to

20%

on

the

share

price

set

at

the

start.

(ii)

Barclays

Sharepurchase

under

which

they

can

make

contributions

(monthly

or

lump

sum)

out

of

pre-tax

pay

(if

based

in

the

UK)

which

are

used

to

acquire

Barclays’

shares.

Risk

and

conduct

adjustment,

malus

and

clawback

Malus

and

clawback

provisions

discourage

excessive

risk-taking

and

inappropriate

behaviours

Any

bonus

or

LTIP

awarded

is

subject

to

malus

and

clawback

provisions.

The

malus

provisions

enable

the

Committee

to

reduce

the

amount

of

unvested

bonus

or

LTIP

(including

to

nil)

prior

to

vesting

in

specified

circumstances,

including,

but

not

limited

to:

■

a

participant

deliberately

misleading

Barclays,

the

market

and/or

shareholders

in

relation

to

the

financial

performance

of

the

Barclays

Group

■

a

participant

causing

harm

to

Barclays’

reputation

or

where

his/her

actions

have

amounted

to

misconduct,

incompetence

or

negligence

■

a

material

restatement

of

the

financial

statements

of

the

Barclays

Group

or

any

subsidiary,

or

the

Group

or

any

business

unit

suffering

a

material

downturn

in

its

financial

performance

■

a

material

failure

of

risk

management

in

the

Barclays

Group

■

a

significant

deterioration

in

the

financial

health

of

the

Barclays

Group.

The

clawback

provisions

enable

amounts

to

be

recovered

after

they

have

vested

(for

a

period

of

seven

years

from

grant/10

years

in

circumstances

where

a

relevant

investigation

is

ongoing

at

the

end

of

the

initial

seven

year

period)

where

(i)

a

participant’s

actions

or

omissions

have

amounted

to

misbehaviour

or

material

error

and/or

(ii)

Barclays

or

the

relevant

business

unit

has

suffered

a

material

failure

of

risk

management.

Outside

appointments

To

encourage

self-

development

Executive

Directors

may

accept

one

Non-Executive

Director

Board

appointment

in

another

listed

company.

The

Chairman’s

approval

must

be

sought

before

accepting

an

appointment.

Fees

may

be

retained

by

the

Executive

Director.

Shareholding

requirement

To

further

enhance

the

alignment

of

shareholders’

and

Executive

Directors’

interests

in

long-term

value

creation

Executive

Directors

have

a

contractual

obligation

to

build

up

a

shareholding

equivalent

to

the

maximum

variable

pay

opportunity

within

five

years

from

the

date

of

appointment

as

Executive

Director.

Executive

Directors

will

have

a

reasonable

period

to

build

up

to

this

requirement

again

if

it

is

not

met

because

of

a

significant

share

price

depreciation.

Executive

Directors

also

have

a

contractual

obligation

to

maintain

their

shareholding

for

two

years

following

the

last

day

of

active

service.

Shares

that

count

towards

the

requirement

are

beneficially

owned

shares

including

any

vested

share

awards

subject

only

to

holding

periods

(including

vested

LTIPs,

vested

deferred

share

bonuses,

Fixed

pay

shares,

and

any

legacy

RBP

shares).

Shares

from

unvested

deferred

share

bonuses

and

unvested

LTIPs

do

not

count

towards

the

requirement

during

employment,

but

will

count

towards

post-termination

requirements

(net

of

tax)

provided

that

there

are

no

remaining

untested

performance

conditions.

Shareholding

requirement

for

the

CEO

is

a

minimum

of

233%

of

Fixed

Pay

and

for

the

GFD

is

224%

of

Fixed

Pay.

Discretion

In

addition

to

the

various

operational

discretions

that

the

Committee

can

exercise

in

the

performance

of

its

duties

(including

those

discretions

set

out

in

the

Company’s

share

plans),

the

Committee

reserves

the

right

to

make

either

minor

or

administrative

amendments

to

the

policy

to

benefit

its

operation

or

to

make

more

material

amendments

in

order

to

comply

with

new

laws,

regulations

and/or

regulatory

guidance.

The

Committee

would

only

exercise

this

right

if

it

believed

it

was

in

the

best

interests

of

the

Company

to

do

so

and

where

it

is

not

possible,

practicable

or

proportionate

to

seek

or

await

shareholder

approval

in

a

General

Meeting.

Remuneration

report

56

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Summary

remuneration

policy

–

Non-Executive

Directors

Element

and

purpose

Operation

Fees

Reflect

individual

responsibilities

and

membership

of

Board

Committees

and

are

set

to

attract

Non-Executive

Directors

who

have

relevant

skills

and

experience

to

oversee

the

implementation

of

our

strategy

The

Chairman

is

paid

an

all-inclusive

fee

for

all

Board

responsibilities.

The

Chairman

has

a

time

commitment

equivalent

of

up

to

80%

of

a

full-time

role.

The

other

Non-Executive

Directors

receive

a

basic

Board

fee,

with

additional

fees

payable

where

individuals

serve

as

a

member

or

Chairman

of

a

Committee

of

the

Board

and

some

Non-Executive

Directors

may

also

receive

fees

as

directors

of

subsidiary

companies

of

Barclays

PLC.

Fees

are

periodically

reviewed

by

the

Board

against

those

for

Non-Executive

Directors

in

companies

of

similar

size

and

complexity.

Benefits

To

provide

a

competitive

and

cost

effective

benefits

package

appropriate

to

the

role

and

location

The

Chairman

is

provided

with

private

medical

cover

subject

to

the

terms

of

the

Barclays’

scheme

rules

from

time

to

time,

and

is

provided

with

the

use

of

a

Company

vehicle

and

driver

when

required

for

business

purposes

(including

settlement

of

any

tax

liabilities

that

may

arise

from

this

benefit).

Benefits

which

are

minor

in

nature

and

in

any

event

do

not

exceed

a

cost

of

£500

may

be

provided

to

Non-Executive

Directors

in

specific

circumstances.

Non-Executive

Directors

are

not

eligible

to

join

Barclays’

pension

plans.

Shareholding

requirements

Chairman:

£100,000

(Non-Executive

Directors:

£30,000)

gross

before

deduction

of

tax

and

other

statutory

deductions

per

annum

of

each

Non-Executive

Director’s

basic

fee

is

used

to

purchase

Barclays’

shares

which

are

retained

on

the

Non-Executive

Director’s

behalf

until

they

retire

from

the

Board.

Remuneration

report

57

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Annual

report

on

Directors’

remuneration

This

section

explains

how

our

Directors’

remuneration

policy

was

implemented

for

2020

Executive

Directors

Single

total

figure

for

2020

remuneration

(audited)

The

following

table

shows

a

single

total

figure

for

2020

remuneration

in

respect

of

qualifying

service

for

each

Executive

Director

together

with

comparative

figures

for

2019.

1

Fixed

Pay

£000

2

Pension

£000

3

Taxable

benefits

£000

Total

Fixed

Pay

£000

4

Annual

bonus

£000

5

LTIP

£000

Total

variable

pay

£000

Total

£000

Jes

Staley

2020

2,350

a

215

64

2,629

843

541

b

1,384

4,013

2019

2,350

396

58

2,804

1,647

1,478

c

3,125

5,929

Tushar

Morzaria

2020

1,650

a

123

58

1,831

573

364

b

937

2,768

2019

1,650

200

53

1,903

1,123

942

c

2,065

3,968

Notes

a

Fixed

Pay

is

reflected

before

contributions

made

by

the

Executive

Directors

to

COVID

-19

charitable

causes,

equal

to

one-third

of

Fixed

Pay

for

six

months.

b

The

LTIP

amounts

include

a

29%

share

price

depreciation

between

date

of

grant

and

vesting

date

(based

on

Q4

2020

average

share

price).

c

The

LTIP

amounts

include

a

14%

share

price

depreciation

between

date

of

grant

and

estimated

value

at

vest

based

on

Q4

2019

average

share

price.

The

release

of

the

first

tranche

of

the

LTIP

vest

was

delayed

from

June

2020

to

March

2021

and

as

such

the

amount

has

not

been

restated.

Additional

information

in

respect

of

each

element

of

pay

for

the

Executive

Directors

(audited)

1)

Fixed

Pay

Fixed

Pay

is

delivered

50%

in

cash

and

50%

in

shares

(subject

to

a

five-year

holding

period

lifting

pro

rata).

2)

Pension

Executive

Directors

are

paid

cash

in

lieu

of

pension

contributions.

The

pension

cash

allowance

in

2020

was

£396,000

per

annum

until

6

May

2020

and

£117,500

thereafter

for

Jes

Staley

and

£200,000

per

annum

until

6

May

2020

and

£82,500

per

annum

thereafter

for

Tushar

Morzaria.

No

other

benefits

were

received

by

the

Executive

Directors

from

any

Barclays’

pension

plan.

3)

Taxable

benefits

Taxable

benefits

include

private

medical

cover,

life

assurance,

income

protection,

tax

advice,

car

allowance

and

the

use

of

a

Company

vehicle

and

driver

when

required

for

business

purposes.

4)

Annual

bonus

The

bonus

amount

included

in

the

single

total

figure

is

the

value

awarded

or

scheduled

to

be

awarded

in

Q1

following

the

financial

year

to

which

it

relates.

The

Committee

considered

the

Executive

Directors’

performance

against

the

financial

(60%

weighting)

and

strategic

non-financial

(20%

weighting)

performance

measures

which

had

been

set

to

reflect

Company

priorities

for

2020.

Performance

against

their

individual

personal

objectives

(20%

weighting)

was

assessed

on

an

individual

basis.

The

approach

taken

to

assessing

financial

performance

against

each

of

the

financial

measures

was

based

on

a

straight-line

outcome

between

20%

for

threshold

performance

and

100%

applicable

to

each

measure

for

achievement

of

maximum

performance.

A

summary

of

the

assessment

is

provided

in

the

following

table:

2020

Outcome

Performance

measure

Weighting

Threshold

(20%)

Maximum

(100%)

2020

Actual

Jes

Staley

Tushar

Morzaria

Profit

before

tax

excluding

L&C

and

other

material

items

with

CET1

ratio

underpin

50%

£6.2bn

£7.1bn

£3.2bn

0%

Cost:

income

ratio

excluding

L&C

and

other

material

items

a

10%

62.5%

59.6%

61.0%

6.1%

Strategic

non-financial

20%

Performance

against

strategic

measures,

organized

around

three

main

categories:

Customers

and

Clients,

Colleagues

and

Society

15.5%

Personal

20%

Individual

performance

against

each

of

the

Executive

Directors’

personal

objectives

assessed

by

the

Committee

17%

Total

100%

38.6%

Final

outcome

following

Committee

discretion

38.6%

Note

a

£368m

of

structural

cost

actions

and

£95m

spend

to

date

of

Barclays’

Community

Aid

Package

are

treated

as

material

items

and

excluded

from

the

2020

CIR.

Remuneration

report

58

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Strategic

non-financial

(20%

weighting)

Progress

in

relation

to

each

of

the

strategic

non-financial

measures,

organised

around

three

main

categories,

was

assessed

by

the

Committee.

Within

each

of

the

three

categories,

the

overall

outcome

was

assessed

based

on

the

following

scale:

0%

to

1%

Behind

track

on

most

measures,

1.5%

to

3%

Slightly

behind

track

on

most

measures,

3.5%

to

5.5%

On

track

or

slightly

ahead

of

track

for

most

measures,

and

6%

or

7%

Ahead

of

track

on

most

measures.

On

this

basis,

the

Committee

agreed

an

overall

outcome

of

15.5%

out

of

a

maximum

of

20%.

The

detail

supporting

this

assessment

is

provided

in

the

table

below:

Customers

and

Clients

Measure

Criteria

Performance

Commentary

Outcome

Net

promoter

scores®

(NPS)

Improve

Barclays

UK:

+19

Barclaycard

UK:

+12

US

Consumer

Bank:

+35

Barclays

UK:

+15

(2019:

+18)

o

Relative

position

improved

to

5

th

(2019:

7

th

)

Barclaycard

UK:

+8

(2019:

+11)

o

Relative

position

improved

to

joint

3

rd

(2019:

4

th

)

US

Consumer

Bank:

+35

(2019:

+33)

(Source;

NICE

Satmetrix

Survey)

●

NPS

scores

across

the

UK

market

have

softened

during

the

pandemic

●

While

reduced,

Barclays

UK

NPS

is

less

impacted

than

for

the

majority

of

peers

with

relative

position

for

Barclays

UK

and

Barclaycard

UK

improving

●

The

NPS

for

the

US

Consumer

Bank

in

2020

was

+35,

demonstrating

an

increase

on

our

2019

score

On

track

Complaints

Reduce

UK

customer

complaints

Down

32%

excluding

PPI

in

Barclays

UK

Reduction

in

customer

complaints

observed

before

and

during

the

pandemic

–

driven

by

both

by

the

pandemic

itself

and

by

robust

management

actions

On

track

Digital

Increase

digital

engagement

Barclays

App

Users:

9.2m

(2019:

8.4m)

Consumer,

Cards

&

Payments

US

digital

engagement:

71.4%

(2019:

71.0%)

●

Made

significant

improvements

to

our

Barclays

apps,

including

enhanced

payment

alerts

and

the

ability

to

see

itemised

receipts

●

Designed

and

executed

a

digital

application

system

to

facilitate

delivery

of

UK

Government’s

business

support

schemes

within

days

●

Consumer,

Cards

&

Payments

US

digital

engagement

up

slightly

from

2019

On

track

Global

Markets

revenue

ranking

and

share

Maintain

client

rankings

and

increase

market

share

6

th

(maintained

since

2019)

Fee

share

increased

to

4.9%

(2019:

4.3%)

●

Global

revenue

ranking

maintained

at

6th

(Source:

Coalition

Greenwich

Preliminary

FY20

Competitor

Analysis.

Market

share

represents

Barclays

share

of

the

Global

Industry

Revenue

Pool.

Analysis

is

based

on

Barclays

internal

business

structure

and

internal

revenues)

●

Fee

share

increased

during

the

year

Ahead

of

track

Global

Banking

fee

ranking

and

share

Fee

share

3.6%

(down

from

4.2%

in

2019)

7

th

(down

from

6

th

in

2019)

●

Strongest

Banking

fees

since

2014

●

Decrease

in

Global

Fee

Rank

largely

attributable

to

decline

in

activity

in

historically

strong

sectors

for

Barclays

(Source:

Dealogic

for

the

period

covering

1

January

to

31

December

2020)

Slightly

behind

track

Supporting

customers

and

clients

during

COVID-19

Put

financial

resilience

to

use

in

supporting

customers

and

clients

Facilitated

c.

£27bn

in

lending

to

British

businesses

Over

650

branches

remained

open

throughout

the

pandemic

More

than

680,000

payment

holidays

provided

to

customers

●

Barclays

UK

lent

equivalent

of

four

years

of

traditional

lending

volumes

in

less

than

12

months

to

British

businesses

under

the

Bounce

Back

Loan

and

Coronavirus

Business

Interruption

Loan

Schemes

●

Helped

corporate

clients

in

Barclays

International

raise

in

excess

of

£15.1bn

under

the

UK

Government’s

lending

schemes

●

Helped

corporate

clients

and

governments

raise

billions

to

strengthen

their

balance

sheets

(underwriting

c.

£1.5

trillion

of

new

issuance

4

)

Ahead

of

track

Total

Customers

and

Clients:

5%

4

Across

Equity

and

Debt

Capital

Markets

in

Q220

-Q420.

Remuneration

report

59

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Colleagues

Measure

Criteria

Performance

Commentary

Outcome

Diversity

28%

females

at

Managing

Director

and

Director

level

by

2021

26.5%

a

in

2020,

increasing

slightly

more

than

1.5

percentage

points

from

2019

●

Strong

progress

towards

target

of

28%

●

For

the

UK,

the

equivalent

is

29%

at

the

end

of

2020

On

track

Inclusion

Improve

key

metrics

87%

of

respondents

in

our

Your

View

survey

would

recommend

Barclays

as

a

good

place

to

work

(2019:

80%)

●

Overall

Inclusion

Index

score

76%

(new

for

2020),

while

89%

of

colleagues

say

they

feel

included

in

their

team

(2019:

85%)

●

82%

of

colleagues

told

us

that

they

believe

leaders

are

committed

to

building

a

diverse

workforce

(2019:

76%)

Slightly

ahead

of

track

Engagement

Maintain

engagement

at

healthy

levels;

improve

scores

relating

to

tools

and

resources

Overall

engagement

score

from

Your

View

survey

83%

(2019:

77%)

77%

of

colleagues

believe

they

have

the

work

tools

and

resources

needed

to

achieve

excellent

performance,

up

21%

points

on

last

year

●

Significant

increases

in

engagement

and

scores

relating

to

tools

and

resources,

supported

by

a

successful

move

to

remote

working

for

over

70,000

colleagues

at

its

peak

●

83%

of

colleagues

said

that

Barclays

supports

employee

efforts

to

enhance

their

well-being

(2019:

74%)

Ahead

of

track

Conduct

and

Culture

Performance

assessed

in

light

of

broader

context

90%

of

colleagues

believe

strongly

in

the

goals

and

objectives

of

Barclays

(2019:

87%)

94%

of

employees

in

Your

View

survey

believe

that

they

and

their

teams

role-

model

the

Values

(2019:

92%)

●

Good

improvement

in

most

relevant

survey

scores,

though

“safe

to

speak

up

at

Barclays”

is

down

one

percentage

point

on

2019

●

84%

of

colleagues

believe

we

are

all

in

this

together

at

Barclays

(new

for

2020)

On

track

Supporting

Colleagues

during

COVID-

19

Put

financial

resilience

to

use

in

supporting

colleagues

Supported

colleagues

with

full

pay

for

COVID-

and

enhanced

overtime

rates

for

customer-facing

colleagues

early

in

the

pandemic

Announced

a

moratorium

on

restructuring

for

the

earlier

months

of

the

pandemic

●

Responded

quickly

at

the

onset

of

the

pandemic,

developing

principles

to

support

colleagues

●

Ensured

that

those

unable

to

work

as

a

result

of

COVID-related

illness,

self-isolation,

shielding

or

caring

responsibilities

continued

to

received

full

pay

●

Supported

UK

key

workers

with

their

additional

childcare

needs

in

the

height

of

the

pandemic

Ahead

of

track

Total

Colleagues:

5%

Note

a

Represented

to

1dp

for

the

purposes

of

the

assessment,

rounded

for

simplicity.

Actual

outcome

26.46%.

Remuneration

report

60

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Society

Measure

Criteria

Performance

Commentary

Outcome

Social

and

environmental

financing

Grow

social

and

environmental

financing

(£150bn

by

2025)

£60.9bn

(£34.8bn

in

2019)

●

Significant

increase,

up

75%

from

2019,

with

a

total

of

£124.2bn

of

environmental

&

social

financing

provided

since

2018

Ahead

of

track

Global

carbon

emissions

reduction

Reduce

carbon

footprint

(80%

reduction

by

2021,

accelerated

from

2025)

71%

reduction

against

the

2018

baseline

●

Further

progress

towards

the

80%

reduction

by

2021

●

In

2020,

we

continued

our

work

on

improving

the

operational

efficiency

of

our

property

portfolio,

achieving

a

total

of

8GWh

of

energy

savings

On

track

Renewable

electricity

90%

renewable

electricity

by

2021;

100%

by

2030

at

the

latest

74%

(2019:

60%)

●

On

track

to

meet

2021

target

●

74%

renewable

electricity

across

operations

in

the

UK,

continental

Europe,

Hong

Kong,

Japan,

Singapore

and

the

US

On

track

LifeSkills

10

million

people

upskilled

2018-

22

2.33

million

people

upskilled

●

Strong

progress

under

more

challenging

circumstances,

6.9m

people

upskilled

since

2018

Ahead

of

track

Connect

with

Work

250,000

people

placed

into

work

2019-2022

By

the

end

of

2020

more

than

116,000

people

helped

into

work

(2020:

49,700;

2019:

66,600)

●

Despite

a

very

challenging

environment,

good

progress

was

delivered

and

while

target

is

still

250,000

by

2022

there

is

some

catching

up

to

do

●

Successfully

adapted

programmes

to

more

effectively

support

job

seekers

and

our

partners

facing

a

new

employment

landscape

in

light

of

the

COVID-19

pandemic

Slightly

behind

track

Unreasonable

Impact

(partnership

with

the

Unreasonable

Group)

Support

250

businesses

solving

social

and

environmental

challenges

(2016-2022)

163

growth-stage

ventures

had

joined

the

programme

by

the

end

of

2020

●

Continued

to

make

good

progress

towards

the

2022

target

●

Barclays

and

Unreasonable

Group

launched

the

Unreasonable

Impact

COVID-19

Response

–

a

US$2m

fund

for

entrepreneurial

solutions

addressing

challenges

resulting

from

the

pandemic

On

track

Supporting

Society

during

COVID-19

Put

financial

resilience

to

use

in

supporting

society

Adapted

and

enhanced

programmes

throughout

the

year,

supporting

Society

through

the

pandemic

●

In

the

UK,

we

supported

colleagues

who

volunteered

to

support

health

or

social

care,

with

up

to

four

weeks

of

paid

leave

●

Nine

new

charity

partnerships

announced

for

LifeSkills

to

help

tackle

key

issues

facing

UK

labour

market

as

well

as

continued

support

for

groups

and

individuals

most

in

need

during

the

Covid-19

outbreak

Ahead

of

track

Total

Society:

5.5%

Overall

(out

of

a

maximum

possible

20%):

15.5%

Further

details

on

our

approach

to

Key

Performance

Indicators

are

included

in

the

Strategic

report

available

at

home.barclays/annualreport

.

Remuneration

report

61

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Individual

outcomes

including

assessment

of

personal

objectives

Individual

performance

against

each

of

the

Executive

Directors’

personal

objectives

(20%

weighting

overall)

was

assessed

by

the

Committee

(objectives

as

set

out

on

page

115

of

the

2019

Annual

Report).

The

below

summarises

their

performance

against

the

shared

personal

objectives.

Shared

objectives

for

Jes

Staley

and

Tushar

Morzaria

Outcomes

Continue

to

deliver

improving

shareholder

returns,

including

a

focus

on

delivering

a

RoTE

improvement

versus

2019

•

Benefits

of

the

diversification

inherent

in

universal

banking

model

provided

resilience

through

the

economic

cycle

•

Remained

profitable

in

every

quarter,

capital

accretive

overall

•

While

Group

RoTE

has

reduced,

returns

in

the

Corporate

and

Investment

Bank

have

continued

to

improve

year-on-year.

•

Overall

performance

has

enabled

us

to

continue

to

support

customers,

clients,

colleagues

and

society,

to

be

well-positioned

to

deliver

a

dividend

in

2020,

and

to

further

improve

shareholder

returns

going

forward

Maintain

robust

capital

ratios

across

the

Group

and

within

the

main

operating

entities

•

Strong

capital

position

has

been

maintained

throughout

the

pandemic

•

Group

CET1

is

strong

at

15.1%,

similarly,

strong

capital

ratios

prevail

in

all

main

operating

entities

Seek

opportunities

for

further

cost

efficiencies,

enabling

reinvestment

into

strategic

priorities

and

growth

initiatives

•

Operating

expenses

increased

1%

from

2019

as

a

result

of

structural

cost

actions

and

COVID-related

costs

•

Absent

structural

cost

actions

and

Barclays’

Community

Aid

Package,

cost:

income

ratio

would

have

been

61%

(down

1

percentage

point

on

the

equivalent

for

2019),

advancing

towards

the

target

of

below

60%

over

time

Continue

to

drive

our

technology

agenda

across

the

Group,

to

support

improving

customer

and

client

experience

•

Continued

focus

on

automation

to

enhance

customer

experience

and

reach

•

Continued

investment

in

iPortal,

our

digital

self-service

platform

in

Corporate

Banking

•

Scale

of

network

and

platforms

in

the

Markets

business

continues

to

increase,

including

BARX

and

options

offerings

•

Successfully

moved

70,000

colleagues

to

working

remotely

Continue

to

focus

on

external

societal

and

environmental

stewardship

•

Adopted

an

ambition

to

become

net

zero

by

2050

and

to

align

all

our

financing

activities

with

the

goals

of

the

Paris

Climate

Agreement

•

Developed

BlueTrack™

to

measure

financed

emissions

and

track

them

over

time

against

a

decreasing

‘carbon

limit’

on

the

activity

we

finance

•

Launched

Sustainable

Impact

Capital

Initiative

to

invest

£175m

over

the

years

in

the

equity

of

innovative

and

environmentally-focused

private

companies

•

Ensured

access

to

banking

for

those

who

wouldn’t

otherwise

qualify

for

accounts

with

614,000

Barclays

Basic

Current

accounts

•

Provided

free

banking

to

over

134,000

not-for-profit

organisations

through

our

Community

Accounts

•

Strong

focus

on

supporting

communities

throughout

the

pandemic

In

addition

to

the

shared

personal

objectives

described

above,

the

table

below

summarises

Jes

Staley’s

performance

against

the

objectives

specific

to

him.

Jes

Staley’s

objectives

Outcomes

Oversee

the

effective

management

of

the

risk

and

controls

agenda,

including

cyber

risks

•

Control

Environment

continues

to

strengthen,

with

an

increase

in

satisfactory

Control

Environment

ratings

across

the

Group

•

Continued

investment

in

Cyber

protection,

benchmarking

ourselves

using

the

NIST+

framework

(Industry

recognised

Framework

for

Cyber

Security).

•

Significantly

enhanced

cyber

control

profile

to

support

increased

remote

working

with

no

significant

risk

events

or

change

in

security

posture,

despite

the

expanded

attack

surface

rendering

colleagues

more

vulnerable

to

exploitation

Ensure

continued

focus

on

customer

and

client

outcomes,

in

particular

further

reductions

in

complaints

•

Strong

progress

in

relation

to

Barclays

UK

complaints

reduction,

and

while

some

reduction

relates

to

lower

volumes

and

more

favourable

customer

sentiment,

complaints

were

also

down

in

Q1

and

in

the

period

after

the

initial

lockdown

when

volumes

increased

•

Focus

on

supporting

customers

and

clients

through

the

pandemic,

including

more

than

680,000

payments

holidays

for

individuals,

and

facilitating

c.

£27bn

of

financing

through

the

UK

Government’s

schemes

•

Jes

has

enhanced

focus

on

personal

client

engagement

with

significant

increase

in

participation

in

client

meetings

and

events

Continue

to

develop

a

high-performing

culture

in

line

with

our

values,

with

a

focus

on

employee

engagement,

succession

planning,

talent

and

diversity

•

Employee

engagement

is

significantly

up

at

83%

(2019:

77%),

with

the

annual

YourView

survey

showing

many

positive

results

•

Jes

has

driven

continued

progress

towards

our

female

senior

leadership

target

of

28%

by

the

end

of

2021

(up

to

26.5%

a

),

driven

by

increased

focus

on

measurement

and

accountability

at

a

business

and

function

level

•

Put

in

place

a

Race

at

Work

Steering

Committee

and

supported

the

launch

of

a

detailed

action

plan

to

emphasise

our

commitment

to

attract,

develop

and

retain

Black

professionals

Remuneration

report

62

Barclays

PLC

2020

Annual

Report

on

Form

20-F

at

Barclays

•

Jes

has

strengthened

the

CIB

leadership

team,

laying

strong

foundations

for

future

talent

pipelines

Drive

growth

in

fee-based,

technology-

led

annuity

businesses

with

lower

capital

intensity

•

Launched

Plan

&

Invest,

a

new

digital

investment

service

that

provides

customers

with

a

simpler

way

to

invest

for

the

future

without

needing

to

be

an

expert.

•

New

value-added

services

introduced

around

core

payments

products

(including

digital

receipts)

•

Completion

of

pan-European

transaction

banking

capability

build

across

nine

key

EU

markets

Effectively

manage

relationships

with

all

external

stakeholders

•

Jes

has

collaborated

proactively

with

UK

regulators

throughout

the

year,

working

to

support

the

broader

UK

economy

•

High-level

of

engagement

with

UK

Government

throughout

the

year

in

support

of

the

UK

economy

•

Engaged

extensively

with

shareholders

Note

a

Represented

to

1dp

for

the

purposes

of

the

assessment,

rounded

for

simplicity.

Actual

outcome

26.46%.

Recognising

his

very

strong

performance

against

both

his

individual

and

shared

personal

objectives

during

2020,

and

his

exceptional

leadership

of

the

organisation

through

the

pandemic,

the

Committee

assessed

that

an

outcome

of

17%

out

of

a

maximum

of

20%

was

appropriate.

The

Committee

reflected

on

the

aggregate

outcome

for

Jes

Staley

under

the

formulaic

components

of

the

annual

bonus

framework

which

delivered

38.6%

of

the

maximum

opportunity,

being

£843,000,

of

which

53%

will

be

deferred

under

the

Share

Value

Plan.

The

Committee

believes

this

overall

bonus

outcome

for

Jes

is

aligned

appropriately

with

stakeholder

considerations.

It

takes

into

account

the

financial

outcomes,

the

very

strong

non-financial

delivery

and

Jes'

exceptional

contribution

and

outstanding

leadership

during

the

year,

and

appropriately

reflects

the

transformation

that

has

enabled

us

to

continue

to

deliver

for

stakeholders

during

these

challenging

times.

The

table

below

summarises

Tushar

Morzaria’s

performance

against

the

objectives

specific

to

him.

Tushar

Morzaria’s

objectives

Outcomes

Continue

to

optimise

financial

management

and

reporting

(particularly

through

technology)

to

drive

benefits

across

the

Group

•

Finance

technology

transformation

three-year

plan

is

on

track,

including

the

delivery

of

general

ledger

migration

to

centralise

global

financial

reporting,

driving

cost

savings

and

reducing

operational

risk

•

Technology

enhancements

accelerated

both

the

financial

and

regulatory

close

processes,

delivering

critical

management

information

more

quickly

and

allowing

senior

executives

to

focus

on

forward

looking

business

execution

Further

improve

capital

productivity

through

enhancing

capital

allocation

and

the

measurement

of

capital

returns

•

Prioritised

the

focus

on

robust

capitalisation

to

ensure

that

Barclays

could

continue

to

serve

customers

and

clients

whilst

maintaining

strong

capital

levels

to

ensure

the

bank

remained

secure

throughout

the

crisis

and

is

in

a

position

to

return

capital

to

shareholders

•

Capital

Returns

Forum

continued

to

review

business

returns

for

the

medium

term

to

ensure

appropriate

capital

allocation

and

productivity

across

the

group

Oversee

the

effective

management

of

the

risk

and

controls

agenda

in

Group

Finance,

Strategy,

Tax

and

Treasury

•

Control

Environment

and

Management

Control

Approach

rated

satisfactory

for

Finance

(including

Strategy,

Tax

and

Treasury)

as

part

of

the

annual

internal

audit

process

Continue

to

focus

on

employee

engagement,

talent

and

diversity

in

Group

Finance,

Strategy,

Tax

and

Treasury

•

Employee

engagement

across

Finance,

(including

Treasury,

Tax,

Strategy

and

Investor

Relations)

increased

from

76%

in

2019

to

82%

in

2020

•

Continued

improvement

in

gender

diversity

at

senior

levels

within

Finance

(including

Treasury,

Tax,

Strategy

and

Investor

Relations),

now

at

31%

compared

to

26%

at

the

end

of

2019

•

Ongoing

focus

on

talent

development

and

succession

planning

using

a

mix

of

external

recruitment

and

internal

mobility,

resulted

in

improved

bench

strength

and

experience

across

all

functions

Effectively

manage

relationships

with

key

stakeholders

including

regulators

and

investors

•

Strong

reputation

among

peers

and

regulators

has

led

to

appointment

and

continued

service

as

Chair

of

the

Sterling

Risk

Free

Reference

Rates

Working

Group

•

Continued

to

maintain

effective

and

open

relationships

with

regulators

and

the

investment

community

The

Committee

also

recognised

Tushar

Morzaria’s

very

strong

performance

against

both

his

individual

and

shared

personal

objectives

during

2020,

assessing

that

an

outcome

of

17%

out

of

a

maximum

of

20%

was

appropriate.

In

aggregate,

this

results

in

an

overall

formulaic

outcome

for

Tushar

of

38.6%

or

£573,000,

of

which

30%

will

be

deferred

under

the

Share

Value

Plan.

In

line

with

the

DRP,

and

due

to

the

regulations

prohibiting

dividend

equivalents

being

paid

on

unvested

deferred

share

awards,

the

number

of

shares

awarded

to

each

Executive

Director

under

the

Share

Value

Plan

will

be

calculated

using

a

share

price

at

the

date

of

award,

discounted

to

reflect

the

absence

of

dividend

equivalents

during

the

vesting

period.

The

valuation

will

be

aligned

to

IFRS

2,

with

the

market

expectations

of

dividends

during

the

deferral

period

being

assessed

by

an

independent

adviser.

These

shares

will

vest

in

two

equal

tranches

on

the

first

and

Remuneration

report

63

Barclays

PLC

2020

Annual

Report

on

Form

20-F

second

anniversary

(subject

to

the

rules

of

the

Share

Value

Plan

as

amended

from

time

to

time).

All

shares

(whether

deferred

or

not)

are

subject

to

a

further

one-year

holding

period

from

the

point

of

release.

2020

bonuses

are

subject

to

clawback

provisions

and,

additionally,

unvested

deferred

2020

bonuses

are

subject

to

malus

provisions

which

enable

the

Committee

to

reduce

the

vesting

level

of

deferred

bonuses

(including

to

nil).

5)

LTIP

The

LTIP

amount

included

in

the

single

total

figure

is

the

value

of

the

amount

scheduled

to

be

released

in

relation

to

the

LTIP

award

granted

in

2018

in

respect

of

the

performance

period

2018-2020

(by

reference

to

Q4

2020

average

share

price).

Release

is

dependent

on,

among

other

things,

performance

over

the

period

from

1

January

2018

to

31

December

2020

with

straight-line

vesting

applied

between

the

threshold

and

maximum

points

for

the

financial

measures.

The

performance

achieved

against

the

performance

targets

is

as

follows:

Performance

measure

Weighting

Threshold

Maximum

vesting

Actual

%

of

award

vesting

Average

return

on

tangible

equity

(RoTE)

excluding

material

items

a

b

50%

10%

of

award

vests

for

RoTE

of

7.75%

RoTE

of

10.25%

7.0%

0%

A

CET1

underpin

also

applied.

Average

cost:

income

ratio

excluding

material

items

b

c

20%

4%

of

award

vests

for

average

cost:

income

ratio

of

62.5%

Average

cost:

income

ratio

of

58%

63.4%

0%

Risk

Scorecard

(detailed

on

page

64)

15%

The

Risk

Scorecard

captures

a

range

of

risks

and

is

aligned

with

the

annual

incentive

risk

alignment

framework

reviewed

with

the

regulators.

The

current

framework

measures

performance

against

three

broad

categories

–

Capital

and

Liquidity,

Control

Environment

and

Conduct

–

using

a

combination

of

quantitative

and

qualitative

metrics.

12.0%

Strategic

non-financial

(detailed

on

pages

65

and

66)

15%

Performance

is

measured

against

the

strategic

non-financial

measures.

The

Committee

determined

the

percentage

of

the

award

that

may

vest

between

0%

and

15%.

The

measures

are

organised

around

three

equally

weighted

categories:

Customers

and

Clients,

Colleagues

and

Society.

11.0%

Total

100%

23.0%

Final

outcome

approved

by

the

Committee

23.0%

Notes

a

Based

on

an

assumed

CET1

ratio

of

c.13

-13.5%

b

Material

items

include

litigation

and

conduct

in

2018,

2019

and

2020

(including

PPI

and

settlement

with

regard

to

RMBS).

c

£368m

of

structural

cost

actions

and

£95m

spend

to

date

of

Barclays’

Community

Aid

Package

are

treated

as

material

items

and

excluded

from

the

2020

CIR.

Remuneration

report

64

Barclays

PLC

2020

Annual

Report

on

Form

20-F

A

summary

of

the

Committee’s

assessment

against

the

Risk

Scorecard

performance

measure

over

the

three-year

performance

period

is

provided

below.

Each

category

is

equally

weighted

at

5%.

category

is

equally

weighted

at

5%.

categories

–

Capital

and

Liquidity,

Control

Environment

and

Conduct

–

using

a

combination

of

quantitative

and

qualitative

metrics.

The

framework

may

be

updated

from

time

to

time

in

line

with

the

Group’s

risk

strategy.

Specific

targets

within

each

of

the

categories

are

deemed

to

be

commercially

sensitive.

Retrospective

disclosure

will

be

made

in

the

2022

Remuneration

Report,

subject

to

commercial

sensitivity

no

longer

remaining.

Strategic

non-financial

15%

The

evaluation

will

focus

on

key

performance

measures

from

the

Performance

Measurement

Framework,

with

a

detailed

retrospective

narrative

on

progress

throughout

the

period

against

each

category.

Performance

against

the

strategic

non-financial

measures

will

be

assessed

by

the

Committee

to

determine

the

percentage

of

the

award

that

may

vest

between

0%

and

15%.

The

measures

are

organised

around

three

main

categories:

Customer

and

Client,

Colleagues

and

Society.

Each

of

the

three

main

categories

has

equal

weighting.

Measures

will

likely

include,

but

not

be

limited

to,

the

following:

●

Customers

and

Clients:

Improve

Net

Promoter

Scores,

reduce

UK

customer

complaints,

increase

digital

engagement,

maintain

client

rankings

and

increase

market

shares

within

CIB

●

Colleagues:

Continue

to

increase

the

%

of

women

in

leadership

roles,

maintain

engagement

at

healthy

levels,

improve

key

metrics

from

2019,

including

Enable

scores

●

Society:

Grow

social

and

environmental

financing,

reduce

carbon

footprint

and

increase

use

of

renewable

energy,

continue

investing

in

our

communities.

Straight-line

vesting

applies

between

the

threshold

and

maximum

points

in

respect

of

the

financial

measures.

The

award

of

the

2020-2022

LTIP

was

made

in

March

2020

at

a

time

following

share

price

depreciation

following

the

onset

of

the

COVID-19

pandemic.

The

market

share

price

was

22%

down

on

the

market

share

price

at

the

prior

year

grant

due

to

various

global

factors,

which

we

believe

were

mostly

not

specific

to

Barclays.

Under

the

LTIP,

the

Committee

has

full

discretion

to

ensure

that

the

final

outcomes

are

warranted

based

on

the

performance

of

the

Group

in

light

of

all

relevant

factors

and

that

there

have

not

been

any

windfall

gains.

The

factors

considered

in

making

this

assessment

will

be

described

at

the

time

of

vest.

Remuneration

report

68

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Executive

Directors:

Statement

of

implementation

of

remuneration

policy

in

2021

An

overview

of

how

the

remuneration

policy

will

be

implemented

for

Executive

Directors

in

2021

is

set

out

in

the

subsequent

sections.

The

following

chart

provides

an

illustrative

indication

of

how

2021

remuneration

will

be

delivered

to

the

Executive

Directors.

1

Fixed

pay

increases

for

the

Executive

Directors

agreed

under

the

new

Directors’

remuneration

policy

in

2020

have

been

further

postponed

until

at

least

H2

2021.

Should

the

increases

take

effect

in

H2

2021,

the

Fixed

Pay

for

Jes

Staley

would

increase

to

£2,400,000

and

for

Tushar

Morzaria

it

would

increase

to

£1,725,000,

and

cash

in

lieu

of

pension

would

also

increase

to

£120,000

and

£86,250

respectively.

2021

Fixed

Pay

At

the

onset

of

the

pandemic,

the

Executive

Directors

requested

that

the

Fixed

Pay

increases

proposed

as

part

of

the

Directors’

remuneration

policy

be

postponed

until

at

least

2021.

Given

the

current

macroeconomic

environment,

the

Executive

Directors

have

asked

that

these

increases

continue

to

be

postponed

until

at

least

H2

2021.

The

increases

will

be

reviewed

again

with

the

Committee

towards

the

end

of

H1

2021.

Remuneration

report

69

Barclays

PLC

2020

Annual

Report

on

Form

20-F

2021

annual

bonus

performance

measures

Performance

measures

with

appropriately

stretching

targets

have

been

selected

to

cover

a

range

of

financial

and

non-financial

goals

that

support

the

key

strategic

objectives

of

the

Company.

The

performance

measures

and

weightings

are

shown

below.

Financial

(60%

weighting)

A

performance

target

range

has

been

set

for

each

financial

measure

Drive

a

profitable

diversified

banking

model

that

is

resilient

through

economic

cycles

Profit

before

tax

(excluding

material

items)

(50%

weighting)

Payout

of

this

element

will

depend

on

the

CET1

ratio

at

the

end

of

the

performance

year.

In

line

with

regulatory

requirements,

if

the

CET1

ratio

is

below

the

MDR

hurdle

at

the

end

of

the

performance

year,

the

Committee

will

consider

what

part

if

any

of

this

element

should

pay

out.

Cost:

income

ratio

(excluding

material

items)

(10%

weighting)

Strategic

non-financial

(20%

weighting)

The

evaluation

will

focus

on

a

range

of

key

metrics

across

stakeholder

groups,

with

a

detailed

retrospective

narrative

on

progress

throughout

the

period

against

each

category.

Performance

against

the

measures

will

be

assessed

by

the

Committee

to

determine

the

percentage

of

the

award

that

may

vest

between

0%

and

20%.

Each

of

the

three

main

categories

has

equal

weighting.

The

measures

are

organised

around

three

main

categories:

Customers

and

Clients,

Colleagues

and

Society.

Measures

will

likely

include,

but

not

be

limited

to:

Customers

and

Clients:

Drive

world

class

outcomes

for

customers

and

clients

and

continue

to

support

them

through

the

pandemic:

●

Improve

Net

Promoter

Scores

●

Reduce

BUK

customer

complaints

and

improve

resolution

time

●

Maintain

client

ranking

and

market

share

within

CIB

●

Increase

digital

engagement

Colleagues:

Protect

and

strengthen

our

culture

through

our

Purpose,

Values

and

Mindset

●

Continue

to

improve

diversity

in

leadership

roles

●

Improve

inclusion

indicators

●

Maintain

engagement

at

healthy

levels

●

Maintain

culture

and

conduct

indicators

Society:

Drive

a

focus

on

the

sustainable

impact

of

our

business

●

Progress

towards

our

2030

£100bn

green

financing

commitment

●

Deliver

against

our

near

term

financing

emissions

targets

(2025)

●

Reduce

carbon

footprint

and

increase

use

of

renewable

energy

●

Continue

investing

in

our

communities

Personal

(20%

weighting)

Joint

personal

objectives:

Lead

the

investment

proposition

for

Barclays

and

ensure

a

strong

balance

sheet

which

underpins

returns

potential

●

Deliver

improving

shareholder

returns,

with

a

focus

on

RoTE

●

Maintain

robust

capital

ratios

across

the

Group

and

within

the

main

operating

entities

●

Seek

opportunities

for

further

cost

efficiencies,

enabling

reinvestment

into

strategic

priorities

and

growth

initiatives

●

Optimise

partnerships

within

the

Group

to

deliver

the

whole

of

Barclays

to

our

clients

●

Continue

to

drive

our

technology

agenda

across

the

Group

to

support

improving

customer

and

client

experience

●

Drive

growth

in

fee-based,

technology-led

annuity

businesses

with

lower

capital

intensity

Jes

Staley:

●

Embed

the

new

Purpose,

updated

Values

and

Mindset

across

the

organisation

●

Continue

to

develop

a

high

performing

culture

in

line

with

our

values,

with

a

focus

on

employee

engagement,

succession

planning,

talent

and

diversity

●

Ensure

a

continued

focus

on

customer

and

client

outcomes

●

Empower

the

effective

management

of

the

risk

and

controls

agenda,

including

cyber

risks

●

Continue

to

focus

on

external

societal

and

environmental

stewardship

●

Effectively

manage

relationships

with

key

external

stakeholders

and

society

more

broadly

Tushar

Morzaria:

●

Continue

to

optimise

financial

management

and

reporting

(particularly

through

technology)

to

drive

benefits

across

the

Group

●

Further

improve

capital

productivity

through

enhancing

capital

allocation

and

the

measurement

of

capital

returns

●

Oversee

the

effective

management

of

the

risk

and

controls

agenda

across

Group

Finance,

Strategy,

Tax

and

Treasury

●

Retain

focus

on

colleague

agenda

across

Group

Finance,

Strategy,

Tax

and

Treasury

●

Effectively

manage

relationships

with

key

external

stakeholders

including

regulators

and

investors

Remuneration

report

70

Barclays

PLC

2020

Annual

Report

on

Form

20-F

2021-2023

LTIP

The

Committee

decided

to

make

an

award

under

the

2021-2023

LTIP

cycle

to

Jes

Staley

and

Tushar

Morzaria

with

a

face

value

at

grant

of

140%

of

Fixed

Pay

for

the

CEO

and

134%

of

Fixed

Pay

for

the

GFD.

This

maximum

award

was

determined

following

a

detailed

review

of

their

individual

performance

throughout

2020

and

significant

personal

contribution

to

the

resilience

of

the

Group,

and

the

Committee

was

comfortable

that

this

is

commensurate

with

performance

delivered.

This

share

based

award

ensures

alignment

with

future

performance

over

the

three-year

assessment

period,

as

well

as,

shareholder

alignment

over

the

long

release

period

(up

to

eight

years

from

initial

award).

The

objective

of

the

LTIP

is

to

incentivise

the

Executive

Directors

to

deliver

on

the

long-term

strategy,

without

encouraging

excessive

risk-

taking.

In

its

deliberations

on

the

appropriate

financial

performance

measures

for

the

2021-2023

LTIP

cycle,

the

Committee

reflected

on

the

significant

remaining

macroeconomic

uncertainty.

Given

the

challenges

that

such

uncertainty

introduces

to

the

calibration

of

absolute

financial

targets,

the

Committee

decided

to

introduce

a

relative

performance

measure,

in

the

form

of

25%

relative

Total

Shareholder

Return.

The

weighting

of

the

RoTE

measure

will

be

correspondingly

reduced

to

25%

(from

50%

in

the

to

retain

a

total

of

50%

on

returns-type

measures.

It

will

be

tested

in

2023,

the

final

year

of

the

performance

period,

to

help

in

determining

how

effectively

the

Executive

Directors

navigate

the

financial

recovery

and

steer

Barclays

back

towards

our

targets

over

the

medium

term.

An

additional

challenge

arising

from

such

uncertainty

going

into

2021

and

beyond

will

be

to

ensure

that

the

Group

remains

appropriately

focused

on

prudential

stability

and

balance

sheet

strength,

while

continuing

to

be

able

to

support

our

customers

and

clients,

and

the

economies

in

which

we

operate.

Given

this

focus,

the

Committee

decided

to

introduce

a

standalone

CET1

measure

for

10%

of

the

award.

CIR

is

also

maintained

as

an

average

measure

over

the

performance

period,

with

its

weighting

slightly

reduced

to

10%.

As

noted

above,

the

unique

societal

and

resulting

macroeconomic

circumstances

have

created

significant

challenges

in

calibrating

absolute

longer-term

plan

targets.

Given

the

inherent

uncertainty,

and

the

desire

to

avoid

setting

targets

that

in

retrospect

turn

out

to

be

much

more

challenging

or

simpler

than

intended,

the

Committee

wanted

to

ensure

that

the

performance

targets

for

RoTE

and

CIR

appropriately

reflect

the

full

range

of

potential

outcomes

around

the

current

forecasts

(acknowledging

that

the

various

potential

macroeconomic

risks

and

opportunities

are

largely

outside

the

direct

control

of

the

Executive

Directors).

This

will

ensure

that

the

LTIP

has

the

desired

effect

of

continuing

to

motivate

and

retain

the

executives

throughout

the

performance

period,

whilst

still

requiring

a

very

strong

performance

for

full

vesting.

Given

this

basis

for

the

calibration

of

the

ranges,

the

vesting

proportion

for

attaining

threshold

performance

has

been

correspondingly

reduced

from

the

to

0%.

This

does

not

impact

the

TSR

or

CET1

measures.

The

Committee

retains

ultimate

discretion

to

ensure

that

the

outcomes

are

appropriate

in

light

of

all

relevant

factors

at

the

end

of

the

performance

period.

The

Committee

also

considered

how

our

ambition

to

be

net

zero

by

2050

should

be

reflected

in

pay

for

the

Executive

Directors.

The

decision

was

to

include

a

standalone

Climate

measure

within

the

LTIP,

providing

clear

alignment

between

the

LTIP

outcome,

up

to

a

maximum

of

10%,

and

progress

towards

our

targets

which

will

help

us

to

become

net

zero

by

2050.

To

accommodate

the

addition

of

the

Climate

measure,

the

weighting

for

the

Risk

Scorecard

and

Strategic

non-financial

measures

(excluding

Climate)

will

be

reduced

to

10%

each.

Performance

against

the

Risk

Scorecard

has

improved

over

the

last

three

years,

giving

an

outcome

of

12%

out

of

15%

for

the

2018-2020

LTIP.

While

it

is

very

important

that

the

Executive

Directors

focus

on

maintaining

performance

in

this

area,

the

Committee

felt

comfortable

that

a

lower

weighting

could

be

applied.

The

2021-2023

LTIP

award

will

be

subject

to

the

following

forward-looking

performance

measures.

Performance

measure

Weighting

Threshold

Maximum

vesting

2023

return

on

tangible

equity

(RoTE)

ex

material

items

a

25%

0%

of

award

vests

for

RoTE

of

6.0%

rising

on

a

straight

line

basis

RoTE

of

12.0%

Average

cost:

income

ratio

ex

material

items

10%

0%

of

award

vests

for

average

cost:

income

ratio

of

65.0%

rising

on

a

straight

line

basis

Average

cost:

income

ratio

of

62.0%

Maintain

CET

1

ratio

within

the

target

range

10%

If

CET1

is

below

MDA

hurdle

b

+180bps

during

the

period,

the

Committee

will

consider

what

portion

of

this

element

should

vest,

based

on

the

causes

of

the

CET1

reduction.

If

CET1

is

above

MDA

hurdle

+280bps

but

does

not

make

progress

towards

the

range

over

the

period,

the

Committee

will

consider

what

portion

of

this

element

should

vest,

based

on

the

reasons

for

the

elevated

levels

of

CET1

versus

target

range

and

the

associated

impacts.

CET1

ratio

between

180bps

and

280bps

above

MDA

hurdle

throughout

the

period

Relative

Total

Shareholder

Return

(TSR)

25%

6.25%

vests

for

performance

c

at

median

of

the

peer

group

d

rising

on

a

straight-line

basis

Performance

at

the

upper

quartile

Risk

Scorecard

10%

The

Risk

Scorecard

captures

a

range

of

risks

and

is

aligned

with

the

annual

incentive

risk

alignment

framework

shared

with

the

regulators.

The

current

framework

measures

performance

against

three

broad

categories

–

Capital

and

Liquidity,

Control

Environment

and

Conduct

–

using

a

combination

of

quantitative

and

qualitative

metrics.

The

framework

may

be

updated

from

time

to

time

in

line

with

the

Group’s

risk

strategy.

Specific

targets

within

each

of

the

categories

are

deemed

to

be

commercially

sensitive.

Retrospective

disclosure

will

be

made

in

the

2023

Remuneration

Report,

subject

to

commercial

sensitivity

no

longer

remaining.

Climate

10%

The

evaluation

will

focus

on

progress

towards

our

ambition

to

be

a

net

zero

bank

by

2050

including:

●

our

commitment

to

align

our

financing

with

the

goals

of

the

Paris

Climate

Agreement;

and

●

our

commitment

to

£100bn

of

green

financing

by

2030.

There

will

be

detailed

retrospective

narrative

on

progress

over

the

period,

including

consideration

of

progress

towards

other

relevant

targets.

Performance

will

be

assessed

by

the

Committee

to

determine

the

percentage

of

the

award

that

may

vest

between

0%

and

10%.

Strategic

non-financial

10%

The

evaluation

will

focus

on

key

performance

measures

from

the

Performance

Measurement

Framework,

with

a

detailed

retrospective

narrative

on

progress

throughout

the

period

against

each

Remuneration

report

71

Barclays

PLC

2020

Annual

Report

on

Form

20-F

category.

Performance

against

the

strategic

non-financial

measures

will

be

assessed

by

the

Committee

to

determine

the

percentage

of

the

award

that

may

vest

between

0%

and

10%.

The

measures

are

organised

around

three

main

categories:

Customer

and

Client,

Colleagues

and

Society

(Citizenship).

Each

of

the

three

main

categories

has

equal

weighting.

Measures

will

likely

include,

but

not

be

limited

to,

the

following:

Customers

and

Clients:

Drive

world

class

outcomes

for

customers

and

clients

and

continue

to

support

them

through

the

pandemic:

improve

Net

Promoter

Scores,

reduce

BUK

customer

complaints

and

improve

resolution

time,

maintain

client

ranking

and

market

share

within

CIB,

increase

digital

engagement.

Colleagues:

Protect

and

strengthen

our

culture

through

our

Purpose,

Values

and

Mindset:

continue

to

improve

diversity

in

leadership

roles,

improve

inclusion

indicators,

maintain

engagement

at

healthy

levels

and

maintain

culture

and

conduct

indicators.

Society

(Citizenship):

Drive

a

focus

on

the

sustainable

impact

of

our

business:

continue

investing

in

our

communities,

including

LifeSkills,

Connect

with

Work

and

Unreasonable

Impact.

Notes

a

Based

on

an

assumed

CET1

ratio

at

the

mid

-point

of

the

Group

target

range,

13-

14%

b

Currently

11.2%

c

Performance

assessed

over

the

period

from

1

January

2021

to

31

December

2023.

Start

and

end

TSR

data

will

be

the

Q4

average

for

2020

and

2023

respectively

and

will

be

measured

in

GBP

for

each

company.

d

The

peer

group

is

comprised

of

multinational

banks

in

Europe

and

North

America

of

comparable

size

to

Barclays

and

whose

TSR

has

a

high

degree

of

correlation

with

Barclays’.

The

constituents

of

the

comparator

group

are

reviewed

annually,

prior

to

each

new

LTIP

grant.

The

peer

group

for

the

2021

-23

award

is:

Banco

Santander,

Bank

of

America,

BBVA,

BNP

Paribas,

Citigroup,

Credit

Agricole,

Credi

t

Suisse,

Deutsche

Bank,

HSBC,

ING

Groep,

Lloyds

Banking

Group,

Morgan

Stanley,

NatWest

Group,

Societe

Generale,

Standard

Chartered,

UBS,

Unicredit

Remuneration

report

72

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Illustrative

scenarios

for

Executive

Directors’

remuneration

The

charts

below

show

the

potential

value

of

the

current

Executive

Directors’

2021

total

remuneration

in

three

main

scenarios:

‘Minimum’

(i.e.

Fixed

Pay,

Pension

and

benefits),

‘Mid-point’

(i.e.

Fixed

Pay,

Pension,

benefits

and

50%

of

the

maximum

variable

pay

that

may

be

awarded)

and

‘Maximum’

(i.e.

Fixed

Pay,

Pension,

benefits

and

the

maximum

variable

pay

that

may

be

awarded).

For

the

purposes

of

these

charts,

the

value

of

benefits

is

based

on

an

estimated

annual

value

for

2021

regular

contractual

benefits.

Additional

ad

hoc

benefits

may

arise,

for

example,

overseas

relocation

of

Executive

Directors,

but

will

always

be

provided

in

line

with

the

DRP.

A

significant

proportion

of

the

potential

remuneration

of

the

Executive

Directors

is

variable

and

is

therefore

performance

related.

It

is

also

subject

to

deferral,

additional

holding

periods,

malus

and

clawback.

In

line

with

reporting

requirements,

we

have

provided

an

indication

of

the

maximum

remuneration

receivable,

assuming

share

price

appreciation

of

50%

on

the

LTIP.

Remuneration

report

73

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Additional

remuneration

disclosures

Group

performance

graph

and

Group

CEO

remuneration

The

performance

graph

below

illustrates

the

performance

of

Barclays

over

the

financial

years

from

2011

to

2020

in

terms

of

total

shareholder

return

compared

with

that

of

the

companies

comprising

the

FTSE

100

index.

The

index

has

been

selected

because

it

represents

a

cross-section

of

leading

UK

companies.

The

table

below

presents

the

single

figure

for

remuneration

and

annual

incentive

and

long-term

incentive

plan

outcomes

for

the

Group

Chief

Executive

over

the

past

10

years.

Year

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Group

Chief

Executive

Robert

Diamond

Robert

Diamond

Anthony

Jenkins

Anthony

Jenkins

Anthony

Jenkins

Anthony

Jenkins

John

McFarlane

Jes

Staley

Jes

Staley

Jes

Staley

Jes

Staley

Jes

Staley

Jes

Staley

Single

total

remuneration

figure

CEO

11,070

a

1,892

529

1,602

5,467

c

3,399

305

277

4,233

3,873

3,362

5,929

4,013

Annual

bonus

award

as

a

%

of

maximum

80%

0%

57%

48%

N/A

60%

48.5%

48.3%

75.0%

38.6%

Long-term

incentive

plan

vesting

as

a

%

of

maximum

N/A

b

0%

N/A

b

N/A

b

30%

39%

N/A

b

N/A

b

N/A

b

N/A

b

N/A

b

48.5%

23%

Notes

a

This

figure

includes

£5,745k

tax

equalisation

as

set

out

in

the

2011

Remuneration

Report.

Robert

Diamond

was

tax

equalised

on

tax

above

the

UK

rate

where

that

could

not

be

offset

by

a

double

tax

treaty.

b

Not

a

participant

in

a

long

-term

incentive

award

which

vested

in

the

period.

c

Antony

Jenkins’

2014

pay

is

higher

than

in

earlier

years

since

he

declined

a

bonus

in

2012

and

2013

and

did

not

have

LTIP

vesting

in

those

years.

Group

CEO

Pay

ratio

The

table

below

shows

the

ratios

of

the

Group

Chief

Executive’s

total

remuneration

to

the

remuneration

of

UK

employees

since

2018.

The

change

in

the

pay

ratios

for

2020

is

explained

in

more

detail

below.

Option

25

th

percentile

Median

75

th

percentile

2020

A

137

x

90

x

51

x

2019

A

213

x

140

x

77

x

2018

A

126

x

85

x

45

x

The

regulations

provide

three

options

which

may

be

used

to

calculate

total

pay

for

the

employees

at

the

25th

percentile,

median

and

75th

percentile.

Following

guidance

issued

by

some

proxy

advisers

and

institutional

shareholders,

we

have

selected

Option

A

to

calculate

total

pay

for

each

calendar

year

using

the

employee

population

on

the

31

st

of

December

of

each

respective

year.

Option

A

calculates

total

pay

for

all

employees

on

the

same

basis

as

the

single

figure

for

remuneration

is

calculated

for

Executive

Directors.

Total

pay

for

each

employee

includes

earned

fixed

pay,

which

is

made

up

of

salary,

Role

Based

Pay

(RBP)

and

relevant

allowances,

annual

incentives

awarded

for

the

2020

calendar

year,

and

an

estimate

of

pension

and

benefits

for

2020.

Other

elements

of

pay

such

as

overtime

and

shift

allowances

have

been

excluded

as

previously.

The

estimate

of

pension

for

each

employee

is

based

on

the

percentage

currently

available

to

new

hires

in

the

UK

(between

10%

for

the

more

senior

and

12%

for

the

more

junior

Corporate

Grades).

The

estimate

of

benefits

is

based

on

the

cost

of

core

benefits

available

at

each

Corporate

Grade,

including

private

medical

insurance,

income

protection

and

life

assurance.

Calculations

use

full-time

equivalent

pay

data

taken

from

our

HR

systems

for

all

employees.

Remuneration

report

74

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Total

pay

and

Fixed

Pay

for

the

employees

at

the

25th

percentile,

median

and

75th

percentile

are

set

out

in

the

table

below.

25

th

percentile

Median

75

th

percentile

Total

pay

Fixed

Pay

Total

pay

Fixed

Pay

Total

pay

Fixed

Pay

2020

£29,380

£24,706

£44,631

£37,460

£79,324

£64,272

2019

1

£27,875

£23,348

£42,362

£35,158

£77,488

£62,263

2018

1

£26,587

£21,899

£39,390

£32,202

£74,685

£60,000

1

Fixed

Pay

figures

for

2018

and

2019

have

been

restated

to

also

include

relevant

allowances

(such

as

the

London

mobility

allowance

and

legacy

supplementary

cash

allowances)

in

additional

to

earned

salary.

2020

fixed

pay

figures

include

earned

salary

and

the

London

mobility

allowance.

2020

total

pay

also

includes

increases

to

employer

funded

pension

contributions

(up

to

12%

for

junior

colleagues)

where

relevant.

The

pay

ratios

have

decreased

between

2019

and

2020,

largely

due

to

a

decrease

in

the

CEO

total

single

figure

of

remuneration,

although

employee

total

pay

has

also

increased

by

5%

at

the

LQ

and

median,

and

by

2%

at

the

UQ.

The

decrease

in

the

CEO

single

figure

of

remuneration

from

2019

to

2020

is

a

result

of

lower

outcomes

on

the

CEO’s

annual

bonus

and

LTIP

due

to

reduced

performance

against

financial

measures

during

the

COVID-19

pandemic,

as

well

as

the

decrease

in

Executive

Director

pension

contributions

which

were

reduced

as

part

of

the

new

DRP

in

May

2020.

The

impact

of

the

reduced

financial

performance

on

pay

for

the

median

employee

is

minimal,

given

the

comparatively

higher

proportion

of

fixed

pay,

and

the

Company’s

approach

to

protecting

annual

incentives

outcomes

for

the

more

junior

colleagues,

in

line

with

our

approach

to

fair

pay

and

to

reward

their

contributions

to

supporting

customers

and

clients

during

the

pandemic.

Barclays

remuneration

philosophy

is

set

out

earlier

in

this

report,

and

all

remuneration

decisions

for

Executive

Directors

and

the

wider

workforce

are

made

within

this

framework.

The

CEO

pay

ratio

is

one

of

the

outcomes

of

all

of

these

decisions,

which

are

explained

in

more

detail

in

the

Chairman’s

statement.

Total

remuneration

of

the

employees

in

the

Barclays

Group

The

table

shows

the

number

of

employees

in

the

Barclays

Group

as

at

31

December

2019

and

2020

in

bands

by

reference

to

total

remuneration.

Total

remuneration

comprises

salary,

RBP,

other

allowances,

bonus

and

the

value

at

award

of

LTIP

awards.

Barclays

is

a

global

business

and

particularly

within

the

investment

banking

businesses

a

large

proportion

of

our

business

and

employees

are

based

outside

of

the

UK,

with

a

strong

presence

in

the

US.

Of

those

employees

earning

above

£1m

in

total

remuneration

for

2020

in

the

table

below,

59%

are

based

in

the

US,

and

only

33%

in

the

UK

and

8%

in

the

rest

of

the

world.

Remuneration

band

Number

of

employees

2020

2019

£0

to

£25,000

27,446

26,706

£25,001

to

£50,000

27,815

26,989

£50,001

to

£100,000

18,799

18,266

£100,001

to

£250,000

11,534

11,428

£250,001

to

£500,000

2,217

2,259

£500,001

to

£1,000,000

882

884

£1,000,001

to

£2,000,000

325

290

£2,000,001

to

£3,000,000

71

68

£3,000,001

to

£4,000,000

31

23

£4,000,001

to

£5,000,000

10

5

£5,000,001

to

£6,000,000

8

11

Above

£6,000,000

3

2

Remuneration

report

75

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Annual

percentage

change

in

remuneration

of

Directors’

and

employees

The

table

below

shows

the

percentage

change

in

the

Executive

Directors’

Fixed

Pay,

benefits

and

bonus

between

2019

and

2020

compared

with

the

percentage

change

in

each

of

those

components

of

pay

for

UK

based

employees,

and

employees

of

the

Barclays

PLC

(BPLC),

the

parent

company

of

the

Group.

Fixed

Pay

Benefits

Annual

bonus

2019/

2020

Group

CEO

0%

10%

-49%

Group

FD

0%

9%

-49%

Median

UK

employee

7%

20%

-16%

Median

employee

of

BPLC

7%

26%

-16%

For

the

Executive

Directors,

percentage

change

figures

are

calculated

using

the

single

total

figure

for

2020

remuneration

table.

Their

increases

in

benefits

from

2019

to

2020

are

due

to

increased

costs

of

the

provision

of

private

medical

cover,

life

assurance

and

income

protection.

Similarly,

for

the

UK

employees

and

employees

of

BPLC,

the

increase

in

median

benefits

value

between

2019

and

2020

is

also

due

to

an

increase

in

the

costs

of

the

provision

of

private

medical

cover,

life

assurance

and

income

protection.

For

the

UK

employees,

in

addition

to

typical

salary

increases,

the

7%

increase

in

median

fixed

pay

also

reflects

the

impact

of

the

Barclays

UK

Reward

Strategy

changes

(effective

July

2019).

This

amended

how

pay

is

structured

for

c.19,500

employees

in

line

with

our

approach

to

fair

pay.

For

the

impacted

employees,

a

portion

of

opportunity

was

transferred

into

fixed

pay,

ensuring

a

larger

proportion

of

their

overall

pay

package

is

fixed,

pensionable

and

is

not

impacted

by

business

performance.

These

increases

in

fixed

pay

and

reductions

in

bonus

opportunity

are

reflected

in

pay

for

the

second

half

of

2019

and

full

year

for

2020,

also

contributing

to

the

16%

decrease

in

median

bonus.

BPLC

only

employs

a

very

small

number

of

Head

Office

employees

(56

for

2020).

Between

2019

and

2020,

BPLC

experienced

significant

headcount

movement

with

around

half

the

2019

BPLC

employees,

predominantly

at

more

junior

levels,

moving

to

other

Legal

employing

entities

in

2020.

In

order

to

make

a

meaningful

year

on

year

comparison,

the

figures

are

therefore

based

on

all

individuals

employed

by

BPLC

in

both

years.

The

table

below

shows

the

percentage

change

in

fees

for

the

Chairman

and

the

Non-Executive

Directors

between

2019

and

2020.

Non-

Executive

Directors

who

joined

on

or

after

1

January

2020

are

not

included.

As

set

out

in

the

2019

Directors’

Remuneration

Report,

all

Non-Executive

Directors

other

than

the

Chairman

received

an

increase

of

£10,000

to

their

basic

Board

fee

from

1

January

2020

–

the

first

increase

to

this

fee

since

2011.

The

Chairman

receives

an

all-inclusive

fee

which

was

not

increased.

Fees

were

also

increased

by

£10,000

for

the

Chairs

of

the

Audit

and

Risk

Committees

(the

first

increases

since

2011

and

2017

respectively)

and

by

£5,000

for

members

of

the

Risk

Committee

(last

increased

in

2011).

Other

increases

relate

to

set

fees

for

additional

responsibilities

taken

on

by

the

Non-Executive

Directors

in

2020.

Fees

2019/

2020

Nigel

Higgins

b

0%

Mike

Ashley

a

19%

24%

2%

0%

36%

-3%

4%

Tim

Breedon

a

24%

Sir

Ian

Cheshire

2%

Mary

Anne

Citrino

a,b

33%

Dawn

Fitzpatrick

b,c

36%

Mary

Francis

a

-3%

Crawford

Gillies

4%

Diane

Schueneman

a

3%

Notes

a

These

Non-Executive

Directors

joined

the

Board

of

BBPLC

in

September

2019

and

received

a

pro-rata

fee

for

that

year.

For

2020,

the

full

year

fee

of

£30,000

was

paid.

The

same

applies

to

the

Board

fees

for

BCSL

for

Mike

Ashley

and

Tim

Breedon,

for

which

an

annual

fee

of

£20,000

is

paid.

A

significant

portion

of

the

change

in

fees

relates

to

these

additional

responsibilities.

b

For

those

who

were

appointed

during

2019

or

who

stood

down

during

2020,

fees

are

pro-rated

up

for

the

purposes

of

this

comparison.

c

Dawn

Fitzpatrick

joined

the

Risk

Committee

on

1

January

2020

and

received

the

fee

of

£30,000

for

this

additional

responsibility

from

that

date.

This

accounts

for

27%

of

the

increase.

Relative

importance

of

spend

on

pay

A

year

on

year

comparison

of

Group

compensation

costs

and

distributions

to

shareholders

are

shown

below.

Remuneration

report

76

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Chairman

and

Non-Executive

Directors

Remuneration

for

Non-Executive

Directors

reflects

their

responsibilities,

time

commitment

and

the

level

of

fees

paid

to

Non-Executive

Directors

of

comparable

major

UK

companies.

Fees

are

pro-rated

for

periods

of

service.

Non-Executive

Directors

are

reimbursed

expenses

that

are

incurred

for

business

reasons.

Any

tax

that

arises

on

these

reimbursed

expenses

is

paid

by

Barclays.

Chairman

and

Non-Executive

Directors:

Single

total

figure

for

2020

fees

(audited)

Fees

Benefits

Total

2020

£000

2019

£000

2020

£000

2019

£000

2020

£000

2019

£000

Chairman

Nigel

Higgins

a

800

541

6

3

806

544

John

McFarlane

272

-

6

278

Non-Executive

Directors

Mike

Ashley

b,

c

265

222

-

265

222

Tim

Breedon

b,

c

295

238

-

295

238

Sir

Ian

Cheshire

d

490

480

-

490

480

Mary

Anne

Citrino

b

113

-

113

Mohamed

El-Erian

b

135

-

135

-

Dawn

Fitzpatrick

b

150

29

-

150

29

Mary

Francis

b

150

155

-

150

155

Crawford

Gillies

241

231

-

241

231

Brian

Gilvary

108

-

108

-

Sir

Gerry

Grimstone

80

-

80

Reuben

Jeffery

III

41

-

41

Matthew

Lester

143

-

143

Dambisa

Moyo

46

-

46

Diane

Schueneman

b,e

390

377

-

390

377

Mike

Turner

36

-

36

Total

3,137

3,004

6

9

3,143

3,013

Notes

a

Nigel

Higgins

does

not

receive

a

fee

in

respect

of

his

role

as

Chairman

of

Barclays

Bank

PLC.

During

2020,

Nigel

donated

one-third

of

his

fees

for

a

six

month

period

to

charitable

causes

supporting

the

response

to

COVID-19.

b

These

Non-Executive

Directors

are

appointed

to

the

Board

of

Barclays

Bank

PLC.

They

receive

an

additional

annual

fee

of

£30,000,

paid

by

Barclays

Bank

PLC

in

respect

of

this

appointment

(pro

rata

for

service

in

2019).

c

These

Non-Executive

Directors

received

an

additional

annual

fee

of

£20,000

for

their

services

to

Barclays

Capital

Securities

Limited

(pro-rata

for

service

in

2019).

d

Sir

Ian

Cheshire’s

figures

include

fees

of

£400,000

for

his

role

as

Chairman

of

Barclays

Bank

UK

PLC.

e

Diane

Schueneman

is

Chair

of

Barclays

Execution

Services

Limited

(the

Group

Service

Company)

and

is

a

member

of

the

Barclays

US

LLC

(the

US

Intermediate

Holding

Company)

Board.

The

2020

figure

includes

fees

of

£70,000

for

her

role

on

the

Barclays

Execution

Services

Limited

Board

and

$180k

(£140k)

for

her

role

on

the

Barclays

US

LLC

Board.

Chairman

and

Non-Executive

Directors:

Statement

of

implementation

of

remuneration

policy

in

2021

Fees

for

the

Chairman

and

Non-Executive

Directors

for

2021

are

shown

below.

The

fees

were

last

reviewed

in

2019

and

revised

for

2020,

there

have

been

no

subsequent

amendments.

1

January

2021

£000

1

January

2020

£000

Chairman

a

800

Board

member

90

Additional

responsibilities

Senior

Independent

Director

36

Chairman

of

Board

Audit

or

Risk

Committee

80

Chairman

of

the

Board

Remuneration

Committee

70

Membership

of

Board

Audit,

Remuneration

or

Risk

Committee

30

Membership

of

Board

Nominations

Committee

15

Notes

a

The

Chairman

does

not

receive

any

fees

in

addition

to

the

Chairman

fees.

Remuneration

report

77

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Directors’

shareholdings

and

share

interests

Interests

in

Barclays

PLC

shares

(audited)

The

table

below

shows

shares

owned

beneficially

by

all

the

Directors

(including

any

shares

owned

beneficially

by

their

connected

persons)

and

shares

over

which

Executive

Directors

hold

awards,

which

are

subject

to

either

deferral

terms

and/or

performance

measures.

The

shares

shown

below

that

are

subject

to

performance

measures

are

the

maximum

number

of

shares

that

may

be

released.

The

total

shares

at

16

February

2021

were

the

same

for

all

Directors

in

service

as

at

31

December

2020.

Owned

outright

as

at

31

December

2020

(or

date

of

retirement

from

the

board

if

earlier)

Unvested

Total

as

at

31

December

2020

(or

date

of

retirement

from

the

Board,

if

earlier)

Subject

to

performance

measures

Not

subject

to

performance

measures

Executive

Directors

Jes

Staley

5,733,176

9,470,652

1,901,952

17,105,780

Tushar

Morzaria

3,995,583

6,350,669

1,135,548

11,481,800

Chairman

Nigel

Higgins

1,550,900

-

1,550,900

Non-Executive

Directors

Mike

Ashley

360,527

-

360,527

Tim

Breedon

180,641

-

180,641

Sir

Ian

Cheshire

117,183

-

117,183

Mary

Anne

Citrino

27,696

-

27,696

Mohamed

A.

El-Erian

119,777

-

119,777

Dawn

Fitzpatrick

923,380

-

923,380

Mary

Francis

46,332

-

46,332

Crawford

Gillies

200,146

-

200,146

Brian

Gilvary

138,794

-

138,794

Diane

Schueneman

75,804

-

75,804

Executive

Directors’

shareholdings

and

share

interests

(audited)

The

chart

below

shows

the

value

of

Barclays’

shares

held

beneficially

by

Jes

Staley

and

Tushar

Morzaria

that

count

towards

the

shareholding

requirement

as

at

31

December

2020

using

the

Q4

2020

Barclays’

ordinary

share

price

of

£1.2677.

The

shareholding

requirement

is

233%

of

Fixed

Pay

for

Jes

Staley

and

224%

of

Fixed

Pay

for

Tushar

Morzaria.

The

current

Executive

Directors

have

five

years

from

their

respective

dates

of

appointment

to

meet

this

requirement.

Remuneration

report

78

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Service

contracts

and

letters

of

appointment

All

Executive

Directors

have

a

service

contract,

whereas

all

Non-Executive

Directors

have

a

letter

of

appointment.

Copies

of

the

service

contracts

and

letters

of

appointment

are

available

for

inspection

at

the

Company’s

registered

office.

The

effective

dates

of

the

current

Directors’

appointments

disclosed

in

their

service

contracts

or

letters

of

appointment

are

shown

in

the

table

below.

As

stated

in

the

letters

of

appointment,

the

Chairman

and

Non-Executive

Directors

are

appointed

for

an

initial

term

of

three

years

and

are

subject

to

annual

re-election

by

shareholders.

On

expiry

of

the

initial

term

and

subject

to

the

needs

of

the

Board,

Non-Executive

Directors

may

be

invited

to

serve

a

further

three

years.

Non-Executive

Directors

appointed

beyond

six

years

will

be

at

the

discretion

of

the

Board

Nominations

Committee.

Effective

date

of

appointment

Chairman

Nigel

Higgins

1

March

2019

(Non-Executive

Director)

2

May

2019

(Chairman)

Executive

Directors

Jes

Staley

1

December

2015

Tushar

Morzaria

15

October

2013

Non-Executive

Directors

Mike

Ashley

18

September

2013

Tim

Breedon

1

November

2012

Sir

Ian

Cheshire

3

April

2017

Mohamed

A.

El-Erian

1

January

2020

Dawn

Fitzpatrick

25

September

2019

Mary

Francis

1

October

2016

Crawford

Gillies

1

May

2014

Brian

Gilvary

1

February

2020

Diane

Schueneman

25

June

2015

Payments

to

former

Directors

(audited)

Former

Group

Finance

Director:

Chris

Lucas

In

2020,

Chris

Lucas

continued

to

be

eligible

to

receive

life

assurance

cover,

private

medical

cover

and

payments

under

the

Executive

Income

Protection

Plan

(EIPP).

Full

details

of

his

eligibility

under

the

EIPP

were

disclosed

in

the

2013

Directors’

Remuneration

Report

(page

115

of

the

2013

Annual

Report).

Chris

Lucas

did

not

receive

any

other

payment

or

benefit

in

2020.

Former

Non-Executive:

Reuben

Jeffery

III

Reuben

Jeffery

III

was

appointed

as

a

member

of

the

Barclays

US

LLC

(the

US

Intermediate

Holding

Company)

Board

until

28

August

2020.

He

received

fees

of

$150,000

per

annum

for

this

role

on

the

Barclays

US

LLC

Board,

pro-rated

for

his

period

of

service

in

line

with

policy.

voting

outcomes

The

table

below

shows

the

voting

result

in

respect

of

our

remuneration

report

and

Directors’

remuneration

policy

at

the

AGM

held

on

7

May

2020.

Shareholder

votes

on

remuneration

For

%

of

votes

cast

Number

Against

%

of

votes

cast

Number

Withheld

Number

Vote

on

the

2019

Remuneration

Report

at

the

2020

AGM

95.78%

11,354,434,198

4.22%

500,456,293

90,893,005

Vote

on

the

Directors’

remuneration

policy

at

the

2020

AGM

96.29%

11,308,670,932

3.71%

436,091,600

201,020,969

At

the

AGM

held

on

24

April

2014,

96.02%

(10,364,453,159

votes)

of

shareholders

of

Barclays

PLC

voted

for

the

resolution

in

respect

of

a

fixed

to

variable

remuneration

ratio

of

1:2

for

‘Remuneration

Code

Staff

’

(now

known

as

MRTs).

On

14

December

2017,

the

Board

of

Barclays

PLC

as

shareholder

of

Barclays

Bank

PLC

approved

the

resolution

that

Barclays

Bank

PLC

and

any

of

its

current

and

future

subsidiaries

be

authorised

to

apply

a

ratio

of

the

fixed

to

variable

components

of

total

remuneration

of

their

MRTs

that

exceeds

1:1,

provided

the

ratio

does

not

exceed

1:2.

On

15

November

2018,

the

Board

of

Barclays

PLC

as

shareholder

of

Barclays

Bank

UK

PLC

approved

an

equivalent

resolution

in

relation

to

MRTs

within

Barclays

Bank

UK

PLC

and

any

of

its

subsidiaries.

Remuneration

report

79

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Barclays

Board

Remuneration

Committee

The

Committee

is

responsible

for

overseeing

Barclays’

remuneration

as

described

in

more

detail

below.

Terms

of

Reference

The

role

of

the

Committee

is

to:

◾

set

the

overarching

principles

and

parameters

of

remuneration

policy

across

the

Group;

◾

consider

and

approve

the

remuneration

arrangements

of

(i)

the

Chairman,

(ii)

the

Executive

Directors,

(iii)

members

of

the

Barclays

Group

Executive

Committee

and

any

other

senior

executives

specified

by

the

Committee

from

time

to

time,

and

(iv)

all

other

Group

employees

whose

total

annual

compensation

exceeds

an

amount

determined

by

the

Committee

from

time

to

time

(currently

£2m);

and

◾

exercise

oversight

for

remuneration

issues.

The

Committee

considers

the

overarching

objectives,

principles

and

parameters

of

remuneration

policy

across

the

Group

to

ensure

it

is

adopting

a

coherent

approach

in

respect

of

all

employees.

In

discharging

this

responsibility,

the

Committee

seeks

to

ensure

that

the

policy

is

fair

and

transparent,

avoids

complexity

and

assesses,

among

other

things,

the

impact

of

pay

arrangements

in

supporting

the

Group’s

culture,

values

and

strategy

and

on

all

elements

of

risk

management.

The

Committee

also

approves

incentive

pools

for

each

of

the

Group,

Barclays

Bank

PLC,

Barclays

Bank

UK

PLC

and

BX,

periodically

reviews

(at

least

annually)

all

material

matters

of

retirement

benefit

design

and

governance,

and

exercises

judgement

in

the

application

of

remuneration

policies

to

promote

the

long-term

success

of

the

Group

for

the

benefit

of

shareholders.

The

Committee

and

its

members

work

as

necessary

with

other

Board

Committees,

and

is

authorised

to

select

and

appoint

its

own

advisers

as

required.

Committee

Effectiveness

in

2020

The

2020

Committee

effectiveness

review

was

conducted

in

accordance

with

the

Code.

This

internal

review

involved

completion

of

a

tailored

questionnaire

by

Committee

members

and

senior

management,

in

line

with

the

approach

adopted

for

all

Board

Committees

in

2020.

The

review

is

an

important

part

of

the

way

Barclays

monitors

and

improves

Committee

performance

and

effectiveness,

maximising

strengths

and

highlighting

areas

for

further

development.

The

results

confirm

that

the

Committee

is

operating

effectively.

The

Committee

continues

to

be

well

constituted

and

provides

an

effective

level

of

challenge

and

oversight

of

the

areas

within

its

remit.

In

particular,

feedback

indicates

that

the

Committee

continued

to

operate

effectively

during

the

year

in

the

context

of

the

COVID-19

pandemic,

notwithstanding

the

need

to

convene

remotely.

It

was

also

noted

that

the

Committee

spends

time

on

key

judgement

areas,

which

was

of

particular

importance

during

2020.

Consideration

will

be

given

to

adding

an

additional

member

of

the

Committee,

in

light

of

Crawford

Gillies

stepping

down

as

Committee

Chair

at

the

end

of

February

2021.

The

Committee’s

interaction

with

the

Board,

Board

Committees

and

senior

management

is

considered

effective,

with

continued

positive

engagement

and

dialogue

with

senior

management.

It

was

also

noted

that

the

natural

overlay

with

the

Board

Risk

Committee

had

been

reflected

formally

in

the

Committee’s

Terms

of

Reference

during

the

year.

In

response

to

a

request

to

provide

feedback

on

interaction

with

subsidiary

committees,

the

Committee’s

interaction

with

the

principal

subsidiary

remuneration

committees

was

also

considered

effective,

and

in

line

with

regulatory

requirements.

Following

the

consolidation

of

the

membership

of

the

Committee

with

the

BBPLC

Board

Remuneration

Committee

in

September

2019

(with

the

exception

of

the

Committee

Chair

and

Brian

Gilvary,

who

attend

as

observers

only

for

matters

relating

to

BBPLC),

coverage

of

BBPLC

matters

within

aligned

meetings

was

considered

adequate.

Advisers

to

the

Committee

The

Committee

appointed

PricewaterhouseCoopers

(PwC)

as

the

independent

adviser

in

October

2017.

The

Committee

considered

the

independence

and

objectivity

of

advice

provided

by

PwC

during

the

year

to

the

Committee

and

was

satisfied

that

it

is

independent

and

objective.

PwC

is

a

signatory

to

the

voluntary

UK

Code

of

Conduct

for

executive

remuneration

consultants.

PwC

was

paid

£121,000

(excluding

VAT)

in

fees

for

their

advice

to

the

Committee

in

2020

relating

to

the

Executive

Directors

(either

exclusively

or

along

with

other

employees

within

the

Committee’s

Terms

of

Reference).

In

addition

to

advising

the

Committee,

PwC

provided

unrelated

consulting

advice

to

the

Group

in

respect

of

strategic

advice

on

business,

operational

models

and

cost,

corporate

taxation,

climate-related

financial

disclosures,

data

strategy,

technology

consulting

and

internal

audit.

Throughout

2020,

Willis

Towers

Watson

(WTW)

continued

to

provide

the

Committee

with

market

data

on

compensation

when

considering

incentive

levels

and

remuneration

packages.

WTW

were

paid

£65,000

(excluding

VAT)

in

fees

for

their

services.

In

addition

to

the

services

provided

to

the

Committee,

WTW

also

provides

pensions

and

benefits

advice,

insurance

brokerage

and

pensions

advice

and

administration

services

to

the

Barclays

Bank

UK

Retirement

Fund.

In

the

course

of

its

deliberations,

the

Committee

also

considers

the

views

of

the

Group

Chief

Executive,

the

Group

Human

Resources

Director

and

the

Group

Reward

and

Performance

Director.

The

Group

Finance

Director

and

the

Group

Chief

Risk

Officer

provide

regular

updates

on

Group

and

business

financial

performance

and

risk

profiles

respectively.

No

Barclays’

employee

or

Director

participates

in

discussions

with,

or

decisions

of,

the

Committee

relating

to

his

or

her

own

remuneration.

No

other

advisers

provided

services

to

the

Committee

in

the

year.

Remuneration

report

80

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Remuneration

Committee

activity

in

2020

The

following

provides

a

summary

of

the

Committee’s

activity

during

2020

and

at

the

January

and

February

2021

meetings

at

which

2020

remuneration

decisions

were

finalised.

The

Committee

is

also

provided

with

updates

at

each

scheduled

meeting

on:

operation

of

the

Committee’s

Control

Framework

on

hiring,

retention

and

termination,

headcount

and

employee

attrition,

and

extant

LTIP

performance.

Remuneration

Committee

activity

in

2020

Jan

2020

Feb

2020

Jul

2020

Oct

2020

Dec

2020

Jan

2021

Feb

2021

Overall

remuneration

Incentive

funding

proposals

including

risk

adjustments

▪

2019

Remuneration

Report

▪

Group

Fixed

Pay

budgets

▪

Finance

and

Risk

updates

▪

Incentive

funding

approach

▪

Barclays’

Fair

Pay

agenda

and

Pay

Gaps

▪

2020

Remuneration

Report

▪

Wider

workforce

considerations

▪

Executive

Directors’

and

senior

executives’

remuneration

Executive

Directors’

and

senior

executives’

bonus

outcomes

▪

Review

of

Directors'

Remuneration

Policy

▪

Annual

bonus

and

LTIP

performance

measures

and

target

calibration

▪

Governance

Regulatory

and

stakeholder

matters

▪

Discussion

with

independent

adviser

▪

Remuneration

Review

Panel

update

▪

Review

of

Committee

effectiveness

▪

There

were

five

additional

Remuneration

Committee

meetings

during

the

course

of

2020.

The

Committee

met

in

February,

April

(2

meetings),

June

and

September

to

consider

regulatory

matters,

Executive

Directors’

remuneration

in

the

context

of

COVID-19

and

leadership

changes

across

the

organisation.

Our

people

and

culture

81

Barclays

PLC

2020

Annual

Report

on

Form

20-F

The

strength

and

success

of

Barclays

is

in

our

people.

We

want

to

support

their

health

and

wellbeing,

enable

them

to

build

their

career

and

empower

and

motivate

them

to

be

able

to

provide

excellent

service.

Supporting

our

colleagues

Events

over

the

last

12

months

have

affected

all

our

lives,

and

the

disruption

has

been

significant.

Nevertheless,

we

have

continued

to

invest

in

our

colleagues

in

order

to

strengthen

our

business

and

protect

our

culture.

Our

people

have

shown

extraordinary

adaptability

and

resilience,

and

thanks

to

them

so

has

Barclays.

As

ever,

our

approach

to

our

people

is

informed

by

the

latest

thinking

in

behavioural

and

data

science,

and

by

our

capacity

to

track

effectiveness

and

progress

over

time.

Measuring

success

Colleague

engagement

83%

2019:

77%

Females

at

Managing

Director

and

Director

level

26%

2019:

25%

“I

would

recommend

Barclays

as

a

good

place

to

work”

87%

2019:

80%

“I

believe

that

my

team

and

I

do

a

good

job

of

role

modelling

the

Values

every

day”

94%

2019:

92%

Adapting

to

challenge

Throughout

the

COVID-19

pandemic,

colleagues

around

the

world

have

been

working

incredibly

hard

to

continue

to

support

our

customers

and

clients.

Many

were

designated

as

frontline

or

critical

workers

in

the

countries

in

which

they

work.

70,000

colleagues

m

oved

to

remote

working.

At

all

times,

we

have

worked

tirelessly

to

prioritise

each

other’s

safety

and

wellbeing,

as

well

as

to

taking

all

necessary

steps

to

slow

the

spread

of

the

virus.

We

put

in

place

a

set

of

global

principles

to

ensure

we

were

doing

as

much

as

possible

to

support

our

people.

This

included

instigation

of

new

working

patterns

and

technology.

We

also

helped

colleagues

cope

with

some

of

the

personal

challenges

the

pandemic

created,

including

offering

paid

leave

to

support

self-quarantine,

sickness

or

care

for

dependants,

financial

help

with

childcare

and

advice

made

available

to

help

protect

physical

and

mental

health.

Through

our

colleague

surveys,

we

have

also

regularly

checked

in

with

our

people

to

better

understand

the

impact

that

working

through

the

pandemic

has

had.

Barclays

continues

to

believe

that

people

working

together

in

the

same

physical

location

reinforces

our

culture

and

helps

with

collaboration

and

inspiration.

Where

possible,

and

in

line

with

local

government

guidance,

we

have

instigated

gradual

returns

to

the

office

in

certain

parts

of

the

business

and

in

certain

parts

of

the

world.

In

time,

with

the

safety

and

wellbeing

of

colleagues

as

our

first

priority,

we

envisage

more

people

will

return

to

on-site

working.

In

advance

of

this,

we

have

already

put

in

place

additional

measures

to

ensure

we

are

COVID-secure,

including

risk

assessments

at

our

sites

and

Return

to

Office

Crews

to

support

social

distancing

and

minimise

risks.

Over

the

last

12

months,

we

have

learnt

an

enormous

amount

about

the

benefits

and

challenges

of

working

more

flexibly.

Ultimately,

we

believe

this

will

inform

our

ambitions

for

future

ways

of

working.

Hiring

the

best

people

We

continue

to

focus

on

hiring

people

with

skills

that

help

us

accelerate

our

digital

transformation,

as

well

as

the

fast-changing

needs

of

our

customers

and

clients.

Our

people

and

culture

82

Barclays

PLC

2020

Annual

Report

on

Form

20-F

We

are

investing

in

our

key

sites,

including

our

global

campuses,

strategically

placed

in

both

urban

and

rural

areas.

At

the

heart

of

our

hiring

strategy

is

our

ability

to

match

locations

to

the

local

talent

pool

in

that

area.

This

includes

reaching

out

to

local

communities

and

upskilling

local

students.

We

are

acting

swiftly

to

adapt

to

changes

in

hiring

demands

and

volumes

because

of

COVID-19,

particularly

in

customer-facing

areas

where

it

is

now,

more

than

ever,

key

that

we

are

providing

support.

We

retain

an

emphasis

on

hiring

from

within.

In

2020,

we

filled

around

36%

of

role

vacancies

internally

and

added

a

further

961

graduates

to

our

internal

pipeline

of

future

leaders.

This

was

one

of

our

most

gender

diverse

class

of

graduates

ever,

with

almost

40%

female.

COVID-19

has

meant

moving

all

candidates

to

a

virtual

experience,

including

for

over

2,500

graduates,

interns

and

apprentices.

To

ensure

individuals

feel

supported

and

connected

to

the

business,

we

have

appointed

talent

coaches

and

created

extra

opportunities

for

virtual

networking

and

collaboration

so

that

social

connections

are

formed.

We

also

continue

to

invest

in

our

flagship

career

development

programmes,

including

our

AFTER

programme

to

support

those

who

have

been

in

the

armed

forces.

People

with

different

perspectives

and

life

experiences

make

our

organisation

stronger.

We

are

committed

to

attracting,

developing

and

retaining

a

workforce

that

is

as

diverse

and

inclusive

as

possible.

We

are

an

equal

opportunities

employer

and

our

policies

require

us

to

give

full

and

fair

consideration

to

all

populations

based

on

their

competencies,

strengths

and

potential.

As

ever,

we

are

increasingly

relying

on

data

and

analytics

so

we

can

understand

how

to

improve

our

hiring

process.

We

also

know

the

importance

of

measuring

our

progress.

In

particular,

we

have

set

ourselves

a

number

of

targets

to

ensure

we

are

creating

a

more

gender

diverse

workforce.

Our

ambition

is

to

achieve

28%

female

Managing

Directors

and

Directors

by

the

end

of

2021.

Currently

26%

of

our

Managing

Directors

and

Directors

are

female,

and

29%

of

our

UK

Managing

Directors

and

Directors

are

female.

Developing

talent

for

the

future

In

response

to

the

pandemic,

all

development

content

went

virtual

in

2020,

and

we

invested

a

total

of

£23m

in

training.

We

launched

e-learning

programmes

to

help

people

working

from

home

during

the

COVID-19

pandemic,

as

well

as

online

training

to

provide

information

to

help

keep

everyone

safe.

Through

our

regular

Here

to

Listen

surveys,

we

have

listened

carefully

to

what

colleagues

have

told

us

about

the

realities

of

working

remotely,

and

tailored

our

training

and

support

materials

accordingly.

A

wide

range

of

development

opportunities

are

available

to

help

colleagues

build

their

careers,

delivered

through

our

digital

learning

platform,

Learning

Lab,

which

makes

development

more

available

than

ever.

We

also

continue

to

operate

our

two

flagship

leadership

development

programmes:

our

Enterprise

Leaders

Programme;

and

our

Strategic

Leaders

Programme,

driven

by

our

belief

that

quality

leadership

makes

a

difference

to

our

success.

We

track

the

progression

of

people

that

have

participated

in

these

programmes

to

see

how

effective

they

are.

We

have

invested

in

the

tools,

programmes

and

technology

needed

to

enable

colleagues

to

work

smarter,

collaborate

more

easily

and

so

that

we

can

unlock

the

power

of

the

connections

between

our

people.

In

our

latest

Your

View

survey,

77%

of

colleagues

told

us

they

have

the

work

tools

and

resources

needed

to

achieve

excellent

performance,

up

21%

on

last

year.

We

also

want

to

help

colleagues

balance

their

work

life

with

their

personal

commitments,

supporting

career

development

opportunities

at

each

life

stage.

We

offer

enhanced

maternity,

paternity,

adoption

and

shared

parental

entitlements

in

all

our

major

jurisdictions.

We

remain

committed

to

closing

pay

gaps

at

Barclays.

Our

UK

Pays

Gaps

for

2020

are

disclosed

here

at

home.barclays/diversity.

Note

a

With

the

appointment

of

Julia

Wilson

(effective

1

April

2021)

and

Sir

Ian

Cheshire

stepping

down

from

the

Board

at

the

conclusion

of

the

2021

AGM,

the

percentage

of

females

on

the

BPLC

Board

of

Directors

will

increase

to

33%.

You

can

read

more

about

gender

diversity

on

the

Board

in

the

report

of

the

Board

Nominations

Committee

on

page

82

of

Part

2

of

the

Report.

Our

people

and

culture

83

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Highlights

Graduate

hires

961

Average

training

hours

per

annum

per

employee

(payroll)

13

Voluntary

employee

turnover

6%

Employee

turnover

9%

Creating

an

inclusive

and

supportive

culture

Creating

an

inclusive

and

supportive

culture

is

not

only

the

right

thing

to

do,

but

also

best

for

our

business.

It

creates

a

sense

of

belonging

and

value

and

enables

colleagues

to

perform

at

their

best.

We

focus

on

five

areas:

disability,

gender,

LGBT+,

multicultural,

and

multigenerational.

Each

area

is

embedded

in

the

business

through

colleague

networks

to

provide

support

and

advice,

create

development

opportunities

and

raise

awareness

of

issues

and

challenges.

Membership

of

our

colleague

diversity

networks

is

at

an

all-time

high,

with

over

23,000

colleagues

now

involved

in

one

or

more

of

our

diversity

networks.

This

also

influences

our

people

policies,

teaching

us

how

we

need

to

adapt

to

give

our

people

the

support

they

need

to

succeed.

In

2020,

we

increased

our

focus

on

embedding

a

culture

of

inclusion

and

encouraged

colleagues

to

become

allies

in

the

workplace.

Through

a

new

toolkit

we

supported

them

to

take

conscious,

positive

steps

to

make

everyone

feel

that

they

belong,

and

develop

empathy

towards

another

group’s

challenges

or

issues.

In

our

Your

View

survey,

84%

of

colleagues

told

us

they

believe

we

are

all

in

this

together

at

Barclays,

while

82%

say

they

believe

leaders

are

committed

to

building

a

diverse

workforce.

We

also

closely

track

the

ever-changing

composition

of

our

people

through

online

dashboards,

to

make

sure

that

our

senior

leaders

understand

the

diverse

makeup

and

needs

of

the

organisation

they

lead.

In

2020,

we

launched

our

Inclusion

Index,

which

is

one

way

we

have

been

able

to

measure

how

included

our

colleagues

feel.

It

has

enabled

us

to

use

data

to

assess

the

impact

of

our

initiatives

and

lay

a

benchmark

for

monitoring

progress

year

on

year.

Our

overall

Inclusion

Index

score

for

2020

is

76%,

while

89%

of

colleagues

say

they

feel

included

in

their

team.

Events

last

year

rightly

prompted

organisations

like

ours

to

appraise

what

we

have

been

doing

to

aid

the

fight

against

racism,

and

to

ask

ourselves

whether

we

can

do

more.

Over

recent

months,

Barclays

has

worked

extensively

with

its

Black

colleague

forums

in

both

the

UK

and

the

US

to

produce

a

Race

at

Work

Action

Plan.

The

plan

comprises

a

thorough

set

of

actions

that

will

open

up

new

opportunities

to

attract,

develop,

and

add

to

our

great

Black

talent,

using

data

to

measure

success.

From

2021,

we

will

expand

our

plan

to

include

all

ethnically

diverse

groups

as

well

as

actions

to

enhance

our

long-standing

support

for

citizenship

programmes

dedicated

to

tackling

racial

inequalities

in

communities,

as

well

as

support

of

this

agenda

for

customers

and

clients.

We

want

to

become

one

of

the

most

accessible

and

inclusive

FTSE

companies

for

all

our

customers,

clients

and

colleagues.

We

require

managers

to

give

full

and

fair

consideration

to

those

with

a

disability

on

the

basis

of

strengths,

potential

and

ability,

both

when

hiring

and

managing.

We

also

ensure

opportunities

for

training,

career

development

and

promotion

are

available

to

all.

As

part

of

the

UK

Government

Disability

Confident

scheme,

we

encourage

applications

from

people

with

a

disability,

or

a

physical

or

mental

health

condition.

In

response

to

feedback

at

the

end

of

2019,

we

undertook

a

review

of

workplace

adjustment

processes

in

order

to

improve

our

colleagues’

experience.

Through

our

BeWell

programme,

we

continue

to

provide

expert

advice

and

guidance

on

the

practical

steps

colleagues

can

take

to

look

after

their

physical

and

mental

health.

In

2020,

our

Mental

Health

Awareness

e-learning

became

mandatory,

and

we

regularly

check

in

with

managers

to

ensure

they

are

supporting

colleagues’

wellbeing.

We

were

also

one

of

the

first

businesses

to

sign

up

to

the

Mental

Health

at

Work

Commitment.

In

our

Your

View

survey,

83%

of

colleagues

told

us

that

Barclays

supports

their

efforts

to

enhance

their

wellbeing.

Note

Under

the

Companies

Act

2006,

Barclays

is

required

to

report

on

the

gender

breakdown

of

our

employees,

‘senior

managers’,

and

the

Board

of

Barclays

PLC’s

Directors.

The

Group’s

global

workforce

was

89,015

(48,447

male,

40,563

female,

5

unavailable),

with

495

senior

managers

(388

male,

107

female),

and

the

Board

of

Barclays

PLC

had

12

directors

(9

male,

3

female)

as

at

31

December

2020.

This

i

s

on

a

headcount

basis,

including

colleagues

on

long

term

leave.

Unavailable

refers

to

colleagues

who

do

not

record

their

gender

in

our

systems.

‘Senior

managers’

includes

Barclays

PLC

Group

Executive

Committee

members,

their

direct

reports

and

directors

o

n

the

boards

of

undertakings

of

the

Group,

but

excludes

Directors

on

the

Board

of

Barclays

PLC.

Where

such

persons

hold

multiple

directorships

across

the

Group

they

are

only

counted

once.

The

definition

of

‘senior

managers’

within

this

disclosure

has

a

narrower

scope

than

the

Managing

Director.

Our

people

and

culture

84

Barclays

PLC

2020

Annual

Report

on

Form

20-F

A

continuous

conversation

with

colleagues

We

think

colleague

engagement

should

be

a

two-way

exercise,

with

equal

weight

placed

on

listening

to

our

people

as

it

is

on

keeping

them

informed.

We

want

to

be

able

to

consider

our

colleagues’

perspective

when

we

make

decisions,

including

at

the

most

senior

level.

Our

regular

Here

to

Listen

and

Your

View

surveys

are

a

key

part

of

how

we

track

engagement.

In

2020,

in

part

in

response

to

the

challenge

of

the

COVID-19

pandemic,

we

improved

the

effectiveness

and

regularity

of

how

we

do

this.

We

saw

a

5

percentage

point

increase

in

the

response

rate

to

our

annual

Your

View

employee

engagement

survey

with

67%

of

colleagues

responding.

The

results

showed

an

increase

in

our

engagement

levels,

up

6

percentage

points,

to

83%,

and

an

increase

of

7

percentage

points,

to

87%,

of

colleagues

saying

they

would

recommend

Barclays

as

a

good

place

to

work.

We

were

also

very

pleased

to

see

that

our

colleagues

have

continued

their

focus

on

customer

and

client

feedback,

with

81%

responding

favourably

to

this

question.

In

addition,

94%

of

respondents

said

they

believe

they

and

their

teams

do

a

good

job

of

role

modelling

the

Values

every

day,

an

increase

of

2

percentage

points.

Overall,

we

are

encouraged

by

our

ability

to

work

remotely

in

many

more

roles

than

we

had

previously

thought

possible.

Our

colleagues

told

us

that

they

enjoyed

having

more

flexibility

in

their

lives,

with

78%

saying

they

have

been

able

to

balance

personal

and

work

demands,

and

76%

saying

there

is

effective

collaboration

between

teams.

With

that

said,

we

recognise

there

are

also

areas

where

we

need

to

do

more.

We

saw

a

1

percentage

point

drop

to

78%

this

year

in

the

number

of

colleagues

who

feel

it

is

safe

to

speak

up,

while

colleague

feedback

also

indicates

we

have

room

to

make

our

internal

processes

more

user

friendly,

with

only

65%

of

colleagues

saying

work

processes

make

it

easy

for

employees

to

be

productive.

Our

people

and

culture

85

Barclays

PLC

2020

Annual

Report

on

Form

20-F

We

maintain

an

engagement

approach

that

is

in

line

with

the

UK’s

Financial

Reporting

Council

(FRC)

governance

requirements.

This

extends

to

those

who

work

for

us

indirectly

as

well,

such

as

contractors,

although

in

a

more

limited

way.

As

of

2020,

our

supplier

Code

of

Conduct

requires

organisations

with

more

than

250

employees

to

demonstrate

that

they

have

an

effective

workforce

engagement

approach

of

their

own.

The

results

from

our

surveys

are

an

important

part

of

the

conversations

our

Executive

Committee

and

Board

have

about

our

culture

and

how

we

run

Barclays.

We

also

update

the

Board

and

its

relevant

sub-committees

throughout

the

year.

We

monitor

our

culture

across

the

organisation,

and

in

individual

business

areas,

through

culture

dashboards.

These

combine

colleague

survey

data

with

other

metrics

about

our

business,

so

leadership

can

identify

areas

of

continued

strength

of

our

culture

and

areas

of

focus

for

leaders.

In

addition

to

these

data

sources,

our

leaders

engage

regularly

with

colleagues

locally

to

hear

what

they

think.

Where

possible

this

year,

leaders

visited

branches

or

trading

floors

to

support

colleagues

during

the

COVID-19

pandemic.

However,

the

majority

of

engagement

activities

moved

to

virtual

forums,

with

opportunities

for

face-

to-face

engagement

being

more

limited

due

to

social

distancing

requirements,

including

large-scale

virtual

town

halls,

training

and

development

activity,

mentoring,

informal

breakfast

sessions,

committee

membership,

ex-officio

roles,

diversity

and

wellbeing

programmes,

focus

and

consultative

groups.

Direct

engagement,

a

comprehensive

reporting

approach

and

dedicated

time

at

Board

meetings,

helps

our

Board

take

the

issues

of

interest

to

our

colleagues

into

account

in

their

decision-making.

This

has

enabled

them

to

confirm

that

our

workforce

engagement

approach

is

effective.

We

make

sure

we

are

keeping

everyone

up

to

date

on

the

strategy,

performance

and

progress

of

the

organisation

through

a

strategic,

multichannel

approach.

This

combines

leader-led

engagement,

digital

and

print

communication,

blogs,

vlogs

and

podcasts.

In

response

to

the

COVID-19

pandemic,

this

year

we

also

provided

additional

regular

updates

to

colleagues

to

provide

practical

advice

and

support,

including

via

a

dedicated

COVID-19

intranet

page.

We

also

engage

with

our

people

collectively

through

a

strong

and

effective

partnership

with

Unite,

as

well

as

the

Barclays

Group

European

Forum,

which

represents

all

colleagues

within

the

European

Union,

and

other

colleague

forums.

In

2020

we

worked

together

closely

with

the

specific

goal

of

ensuring

the

safety

and

wellbeing

of

our

colleagues

throughout

the

COVID-19

pandemic.

Unite

strongly

supported

the

transition

of

many

colleagues

to

homeworking,

as

well

as

the

introduction

of

measures

to

protect

colleagues

working

in

our

branches

and

offices.

As

we

progress

to

return

more

colleagues

to

work,

our

union

partners

remain

centrally

involved.

We

regularly

brief

our

union

partners

on

the

strategy

and

progress

of

the

business,

seeking

their

input

on

ways

in

which

we

can

improve

the

colleague

experience

of

working

for

Barclays.

The

collective

bargaining

coverage

of

Unite

in

the

UK

represents

around

84%

of

our

UK

workforce

and

50%

of

our

global

workforce.

We

consult

in

detail

with

colleague

representatives

on

major

change

programmes

affecting

our

people.

We

do

this

to

help

us

minimise

compulsory

job

losses

wherever

possible,

including

through

voluntary

redundancy

and

redeployment.

Our

policies

Our

people

policies

are

designed

to

provide

equal

opportunities

and

create

an

inclusive

culture,

in

line

with

our

Values

and

in

support

of

our

long-term

success.

They

also

reflect

relevant

employment

law,

including

the

provisions

of

the

Universal

Declaration

of

Human

Rights

and

ILO

Declaration

on

Fundamental

Principles

and

Rights

at

Work.

We

expect

our

people

to

treat

each

other

with

dignity

and

respect,

and

do

not

tolerate

discrimination,

bullying,

harassment

or

victimisation

on

any

grounds.

We

are

committed

to

paying

our

people

fairly

and

equitably

relative

to

their

role,

skills,

experience

and

performance

–

in

a

way

that

balances

the

needs

of

all

our

stakeholders.

That

means

our

remuneration

policies

reward

sustainable

performance

that

is

in

line

with

our

Purpose

and

Values,

as

well

as

our

risk

expectations.

You

can

find

more

information

in

our

Fair

Pay

Report,

available

on

home.barclays/annualreport

We

encourage

our

people

to

benefit

from

Barclays’

performance

by

enrolling

in

our

share

ownership

plans,

further

strengthening

their

commitment

to

the

organisation.

The

Directors’

Remuneration

Report

sets

out

updates

on

remuneration

outcomes

and

developments

during

2020,

including

the

implementation

of

the

new

Directors’

Remuneration

Policy

approved

at

the

2020

AGM.

For

more

information

on

our

Fair

Pay

Report

go

online

at

home.barclays/annualreport

Risk

review

Content

86

Barclays

PLC

2020

Annual

Report

on

Form

20-F

The

management

of

risk

is

a

critical

underpinning

to

the

execution

of

Barclays’

strategy.

The

material

risks

and

uncertainties

the

Group

faces

across

its

business

and

portfolios

are

key

areas

of

management

focus.

Barclays’

risk

disclosures

are

provided

in

the

Annual

Report

and

in

the

Barclays

PLC

Pillar

3

Report

2020.

Annual

Report

Pillar

3

Report

Risk

management

strategy

Overview

of

Barclays’

approach

to

risk

management.

A

detailed

overview

together

with

more

specific

information

on

policies

that

the

Group

determines

to

be

of

particular

significance

in

the

current

operating

environment

can

be

found

in

the

Barclays

PLC

Pillar

3

Report

2020

or

at

barclays.com

◾

Enterprise

Risk

Management

Framework

(ERMF)

◾

Segregation

of

duties

–

the

“Three

Lines

of

Defence”

model

◾

Principal

risks

◾

Risk

appetite

for

the

principal

risks

◾

Risk

committees

◾

Frameworks,

policies

and

standards

◾

Assurance

◾

Effectiveness

of

risk

management

arrangements

◾

Learning

from

our

mistakes

◾

Barclays’

risk

culture

◾

Group-wide

risk

management

tools

◾

Risk

management

in

the

setting

of

strategy

88

89

n/a

89

n/a

150

151

152

153

154

158

Material

existing

and

emerging

risks

Insight

into

the

level

of

risk

across

our

business

and

portfolios,

the

material

existing

and

emerging

risks

and

uncertainties

we

face

and

the

key

areas

of

management

focus.

◾

Material

existing

and

emerging

risks

potentially

impacting

more

than

one

principal

risk

91

n/a

◾

Credit

risk

95

n/a

◾

Market

risk

96

n/a

◾

Treasury

and

capital

risk

96

n/a

◾

Operational

risk

97

n/a

◾

Model

risk

99

n/a

◾

Conduct

risk

99

n/a

◾

Reputation

risk

100

n/a

◾

Legal

risk

and

legal,

competition

and

regulatory

matters

100

n/a

Climate

change

risk

management

Overview

of

Barclays’

approach

to

managing

climate

change

risk.

◾

Overview,

organisation

and

structure

◾

Risk

management

policy

102

n/a

Principal

risk

management

Barclays’

approach

to

risk

management

for

each

principal

risk

with

focus

on

organisation

and

structure

and

roles

and

responsibilities.

◾

Credit

risk

management

104

159

◾

Management

of

credit

risk

mitigation

techniques

and

counterparty

credit

risk

n/a

160

◾

Market

risk

management

105

180

◾

Management

of

securitisation

exposures

n/a

189

◾

Treasury

and

capital

risk

management

106

193

◾

Operational

risk

management

107

201

◾

Model

risk

management

108

205

◾

Conduct

risk

management

108

208

◾

Reputation

risk

management

108

210

◾

Legal

risk

management

109

212

Risk

performance

Credit

risk:

The

risk

of

loss

to

the

Group

from

the

failure

of

clients,

customers

or

counterparties,

including

sovereigns,

to

fully

honour

their

obligations

to

the

Group,

including

the

whole

and

timely

payment

of

principal,

interest,

collateral

and

other

receivables.

◾

Credit

risk

overview

and

summary

of

performance

◾

Maximum

exposure

and

effects

of

netting,

collateral

and

risk

transfer

◾

Expected

Credit

Losses

◾

Movements

in

gross

exposure

and

impairment

allowance

including

provisions

for

loan

commitments

and

financial

guarantees

◾

Management

adjustments

to

models

for

impairment

◾

Measurement

uncertainty

and

sensitivity

analysis

◾

Analysis

of

the

concentration

of

credit

risk

◾

The

Group’s

approach

to

management

and

representation

of

credit

quality

◾

Analysis

of

specific

portfolios

and

asset

types

◾

Forbearance

◾

Analysis

of

debt

securities

◾

Analysis

of

derivatives

111

114

118

123

124

133

135

139

142

145

n/a

Risk

review

Content

87

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Annual

Report

Pillar

3

Report

Market

risk:

The

risk

of

a

loss

arising

from

potential

adverse

changes

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.

◾

Market

risk

overview

and

summary

of

performance

◾

Balance

sheet

view

of

trading

and

banking

books

◾

Review

of

management

measures

◾

Review

of

regulatory

measures

146

n/a

146

n/a

124

125

126

127

Treasury

and

capital

risk

–

Liquidity:

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.

◾

Liquidity

risk

overview

and

summary

of

performance

◾

Liquidity

risk

stress

testing

◾

Liquidity

pool

◾

Funding

structure

and

funding

relationships

◾

Contractual

maturity

of

financial

assets

and

liabilities

◾

Asset

encumbrance

150

153

154

157

n/a

221

Treasury

and

capital

risk

–

Capital:

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

testing

purposes).

This

also

includes

the

risk

from

the

Group’s

pension

plans.

◾

Capital

risk

overview

and

summary

of

performance

◾

Regulatory

minimum

capital

and

leverage

requirements

◾

Analysis

of

capital

resources

◾

Analysis

of

risk

weighted

assets

◾

Analysis

of

leverage

ratio

and

exposures

◾

Minimum

requirement

for

own

funds

and

eligible

liabilities

◾

Foreign

exchange

risk

◾

Pension

risk

review

161

163

165

166

167

168

169

n/a

8

17

25

30

n/a

40

41

Treasury

and

capital

risk

–

Interest

rate

risk

in

the

banking

book:

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.

◾

Interest

rate

risk

in

the

banking

book

overview

and

summary

of

performance

◾

Net

interest

income

sensitivity

◾

Analysis

of

equity

sensitivity

◾

Volat

ility

of

the

fair

value

through

other

comprehensive

income

(FVOCI)

portfolio

in

the

liquidity

pool

171

172

42

43

Operational

risk:

The

risk

of

loss

to

the

Group

from

inadequate

or

failed

processes

or

systems,

human

factors

or

due

to

external

events

(for

example

fraud)

where

the

root

cause

is

not

due

to

credit

or

market

risks.

◾

Operational

risk

overview

and

summary

of

performance

◾

Operational

risk

profile

173

145

147

Model

risk:

The

risk

of

the

potential

adverse

consequences

from

financial

assessments

or

decisions

based

on

incorrect

or

misused

model

outputs

and

reports.

◾

Model

risk

overview

and

summary

of

performance

176

n/a

Conduct

risk:

The

risk

of

detriment

to

customers,

clients,

market

integrity,

effective

competition

or

Barclays

from

the

inappropriate

supply

of

financial

services,

including

instances

of

wilful

or

negligent

misconduct.

◾

Conduct

risk

overview

and

summary

of

performance

176

n/a

Reputation

risk:

The

risk

that

an

action,

transaction,

investment,

event,

decision,

or

business

relationship

will

reduce

trust

in

the

Group’s

integrity

and/or

competence.

◾

Reputation

risk

overview

and

summary

of

performance

176

n/a

Legal

risk:

The

risk

of

loss

or

imposition

of

penalties,

damages

or

fines

from

the

failure

of

the

Group

to

meet

its

legal

obligations

including

regulatory

or

contractual

requirements.

◾

Legal

risk

overview

and

summary

of

performance

176

n/a

Supervision

and

regulation

The

Group’s

operations,

including

its

overseas

offices,

subsidiaries

and

associates,

are

subject

to

a

significant

body

of

rules

and

regulations.

◾

Supervision

of

the

Group

◾

Global

regulatory

developments

◾

Financial

regulatory

framework

178

180

n/a

Pillar

3

Report

Contains

extensive

information

on

risk

as

well

as

capital

management.

◾

Notes

on

basis

of

preparation

◾

Scope

of

application

of

Basel

rules

n/a

3

6

Risk

and

capital

position

review:

Provides

a

detailed

breakdown

of

Barclays’

regulatory

capital

adequacy

and

how

this

relates

to

Barclays’

risk

management

.

◾

Group

capital

resources,

requirements,

leverage

and

liquidity

◾

Analysis

of

credit

risk

◾

Analysis

of

counterparty

credit

risk

◾

Analysis

of

market

risk

◾

Analysis

of

securitisation

exposures

◾

Analysis

of

operational

risk

n/a

15

45

108

124

132

145

Risk

review

Risk

management

Barclays’

risk

management

strategy

88

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Barclays’

risk

management

strategy

This

section

introduces

the

Group’s

approach

to

managing

and

identifying

risks,

and

for

fostering

a

strong

risk

culture.

Enterprise

Risk

Management

Framework

(ERMF)

The

ERMF

sets

the

strategic

approach

for

risk

management

by

defining

standards,

objectives

and

responsibilities

for

all

areas

of

the

Group.

It

is

then

approved

by

the

Barclays

PLC

Board

on

recommendation

of

the

Group

Chief

Risk

Officer.

It

supports

senior

management

in

effective

risk

management

and

developing

a

strong

risk

culture.

The

ERMF

sets

out:

◾

Segregation

of

duties:

The

ERMF

defines

a

Three

Lines

of

Defence

mo

del.

◾

Principal

risks

faced

by

the

Group.

This

list

guides

the

organisation

of

the

risk

management

function,

and

the

identification,

management

and

reporting

of

risks.

◾

Risk

appetite

requirements.

This

helps

define

the

level

of

risk

we

are

willing

to

undertake

in

our

business.

◾

Roles

and

responsibilities

for

risk

management:

The

ERMF

sets

out

the

accountabilities

of

the

Group

CEO

and

other

senior

managers,

as

well

as

Barclays

PLC

committees.

The

ERMF

is

complemented

by

frameworks,

policies

and

standards

which

are

mainly

aligned

to

individual

principal

risks:

◾

Frameworks

cover

the

management

approach

for

a

collection

of

and

define

the

associated

policies

used

to

govern

them.

◾

Policies

set

out

principles

and

other

core

requirements

for

the

activities

of

the

Group.

Policies

describe

“what”

must

be

done.

◾

Standards

set

out

the

key

control

objectives

that

describe

how

the

requirements

set

out

in

the

policy

are

met,

and

who

needs

to

carry

them

out.

Standards

describe

“how”

controls

should

be

undertaken.

Segregation

of

duties

-

the

"Three

Lines

of

Defence"

model

The

ERMF

sets

out

a

clear

lines

of

defence

model.

All

colleagues

are

responsible

for

understanding

and

managing

risks

within

the

context

of

their

individual

roles

and

responsibilities,

as

set

out

below:

◾

First

line

comprises

all

employees

engaged

in

the

revenue

generating

and

client

facing

areas

of

the

Group

and

all

associated

support

functions,

including

Finance,

Treasury,

and

Human

Resources.

The

first

line

is

responsible

for

identifying

and

managing

the

risks

they

generate,

establishing

a

control

framework,

and

escalating

risk

events

to

Risk

and

Compliance.

◾

Second

line

is

comprised

of

the

Risk

and

Compliance

functions.

The

role

of

the

second

line

is

to

establish

the

limits,

rules

and

constraints

under

which

first

line

activities

shall

be

performed,

consistent

with

the

risk

appetite

of

the

Group,

and

to

monitor

the

performance

of

the

first

line

against

these

limits

and

constraints.

Note

that

limits

for

a

number

of

first

line

activities,

operational

risk,

will

be

set

by

the

first

line

and

overseen

by

the

Chief

Controls

Office.

These

will

remain

subject

to

supervision

by

the

second

line.

◾

Third

line

of

defence

is

Internal

Audit,

who

are

responsible

for

providing

independent

assurance

over

the

effectiveness

of

governance,

risk

management

and

control

over

current,

systemic

and

evolving

risks.

◾

The

Legal

function

provides

support

to

all

areas

of

the

bank

and

is

not

formally

part

of

any

of

the

three

lines.

However,

it

is

subject

to

second

line

oversight.

Principal

risks

The

ERMF

identifies

eight

principal

risks

and

sets

out

associated

responsibilities

and

expectations

around

risk

management

standards.

The

principal

risks

are:

credit

risk,

market

risk,

treasury

and

capital

risk,

operational

risk,

model

risk,

conduct

risk,

reputation

risk

and

legal

risk.

Each

of

the

principal

risks

is

overseen

by

an

accountable

executive

within

the

Group

who

is

responsible

for

the

framework,

policies

and

standards

that

detail

the

Risk

reports

to

executive

and

Board

committees

are

clearly

organised

by

principal

risk.

In

addition,

certain

risks

span

more

than

one

principal

risk;

these

are

also

subject

to

the

ERMF

and

are

reported

to

executive

and

Board

committees.

Risk

appetite

for

the

principal

risks

Risk

appetite

is

defined

as

the

level

of

risk

which

the

Group’s

businesses

are

prepared

to

accept

in

the

conduct

of

their

activities.

It

provides

a

basis

for

ongoing

dialogue

between

management

and

Board

with

respect

to

the

Group’s

current

and

evolving

risk

profile,

allowing

strategic

and

financial

decisions

to

be

made

on

an

informed

basis.

Risk

appetite

is

approved

by

the

Barclays

PLC

Board

and

disseminated

across

legal

entities.

Total

Group

risk

appetite

is

supported

by

limits

to

control

exposures

and

activities

that

have

material

concentration

risk

implications.

Risk

review

Risk

management

Barclays’

risk

management

strategy

89

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Risk

committees

Various

committees

also

fulfil

important

roles

and

responsibilities.

Barclays

business

level

product/risk

type

committees

consider

risk

matters

relevant

to

their

business,

and

escalate

as

required

to

the

Group

Risk

Committee

(GRC),

whose

Chairman,

in

turn,

escalates

to

the

Barclays

PLC

Board

Committees

and

the

Barclays

PLC

Board.

In

addition

to

setting

the

risk

appetite

of

the

Group,

the

Board

is

responsible

for

approving

the

ERMF,

and

reviewing

all

reputation

risk

matters.

It

receives

regular

information

on

the

risk

profile

of

the

bank,

and

has

ultimate

responsibility

for

risk

appetite

and

capital

plans.

Further,

there

are

two

Board-level

committees

which

oversee

the

application

of

the

ERMF

and

implementation

of

key

aspects,

the

Barclays

PLC

Board

Risk

Committee

(BRC)

and

the

Barclays

PLC

Board

Audit

Committee

(BAC).

Membership

of

these

committees

is

comprised

solely

of

non-executive

directors

providing

independent

oversight

and

challenge.

Additionally,

the

Barclays

PLC

Board

Remuneration

Committee

oversee

pay

practices

focusing

on

aligning

pay

to

sustainable

performance.

◾

The

Barclays

PLC

Board

Risk

Committee

(BRC):

The

BRC

monitors

the

Group’s

risk

profile

against

the

agreed

appetite.

Where

actual

performance

differs

from

expectations,

the

actions

taken

by

management

are

reviewed

to

ascertain

that

the

BRC

is

comfortable

with

them.

The

BRC

also

reviews

certain

key

risk

methodologies,

the

effectiveness

of

risk

management,

and

the

Group’s

risk

profile,

including

the

material

issues

affecting

each

business

portfolio

and

forward

risk

trends.

The

committee

also

commissions

in-depth

analyses

of

significant

risk

topics,

which

are

presented

by

the

Group

CRO

or

senior

risk

managers.

◾

The

Barclays

PLC

Board

Audit

Committee

(BAC):

The

BAC

receives

regular

reports

on

the

effectiveness

of

internal

control

systems,

quarterly

reports

on

material

control

issues

of

significance,

quarterly

papers

on

accounting

judgements

(including

impairment)

and

a

quarterly

review

of

the

adequacy

of

impairment

allowances,

relative

to

the

risk

inherent

in

the

portfolios,

the

business

environment,

and

Barclays

policies

and

methodologies.

◾

The

Barclays

PLC

Board

Remuneration

Committee

(RemCo):

The

RemCo

receives

a

report

on

risk

management

performance

and

risk

profile,

and

proposals

on

ex-ante

and

ex-post

risk

adjustments

to

variable

remuneration.

These

inputs

are

considered

in

the

setting

of

performance

incentives.

The

terms

of

reference

and

additional

details

on

membership

and

activities

for

each

of

the

principal

Board

committees

are

available

from

the

corporate

governance

section

of

the

Barclays

website

at:

home.barclays/about-barclays/barclays-corporate-governance.html.

The

GRC

is

the

most

senior

executive

body

responsible

for

reviewing

and

monitoring

the

risk

profile

of

the

Group.

This

includes

coverage

of

all

principal

risks,

and

any

other

material

risks,

to

which

the

Group

is

exposed.

The

GRC

reviews

and

recommends

the

proposed

risk

appetite

and

relative

limits

to

the

BRC.

The

committee

covers

all

business

units

and

legal

entities

with

the

Group

and

incorporates

specific

coverage

of

Barclays

Bank

Group.

Barclays’

risk

culture

Risk

culture

can

be

defined

as

the

norms,

attitudes

and

behaviours

risk

awareness,

risk

taking

and

risk

management.

This

is

reflected

in

how

the

Group

identifies,

escalates

and

manages

risk

matters.

Barclays

is

committed

to

maintaining

a

robust

risk

culture

in

which:

◾

management

expect,

model

and

reward

the

right

behaviours

from

a

risk

and

control

perspective;

◾

colleagues

identify,

manage

and

escalate

risk

and

control

matters,

and

meet

their

responsibilities

around

risk

management.

Risk

review

Risk

management

Barclays’

risk

management

strategy

90

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Specifically,

all

employees

regardless

of

their

positions,

functions

or

locations

must

play

their

part

in

the

Group’s

risk

management.

Employees

are

required

to

be

familiar

with

risk

management

policies

which

are

relevant

to

their

responsibilities,

know

how

to

escalate

actual

or

potential

risk

issues,

and

have

a

role-appropriate

level

of

awareness

of

the

risk

management

process

as

defined

by

the

ERMF.

Our

Code

of

Conduct

–

the

Barclays

Way

Globally,

all

colleagues

must

attest

to

the

“Barclays

Way”,

our

Code

of

Conduct,

and

comply

with

all

frameworks,

policies

and

standards

applicable

to

their

roles.

The

Code

of

Conduct

outlines

the

purpose

and

values

which

govern

our

“Barclays

Way”

of

working

across

our

business

globally.

It

constitutes

a

reference

point

covering

the

aspects

of

colleagues’

working

relationships,

with

other

Barclays

employees,

customers

and

clients,

governments

and

regulators,

business

partners,

suppliers,

competitors

and

the

broader

community.

Risk

review

Material

existing

and

emerging

risks

91

Barclays

PLC

2020

Annual

Report

on

Form

20-F

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

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.

Risk

review

Material

existing

and

emerging

risks

92

Barclays

PLC

2020

Annual

Report

on

Form

20-F

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.

Risk

review

Material

existing

and

emerging

risks

93

Barclays

PLC

2020

Annual

Report

on

Form

20-F

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:

Risk

review

Material

existing

and

emerging

risks

94

Barclays

PLC

2020

Annual

Report

on

Form

20-F

◾

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:

Risk

review

Material

existing

and

emerging

risks

95

Barclays

PLC

2020

Annual

Report

on

Form

20-F

◾

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.

Risk

review

Material

existing

and

emerging

risks

96

Barclays

PLC

2020

Annual

Report

on

Form

20-F

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

Risk

review

Material

existing

and

emerging

risks

97

Barclays

PLC

2020

Annual

Report

on

Form

20-F

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

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.

Risk

review

Material

existing

and

emerging

risks

98

Barclays

PLC

2020

Annual

Report

on

Form

20-F

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

Risk

review

Material

existing

and

emerging

risks

99

Barclays

PLC

2020

Annual

Report

on

Form

20-F

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:

Risk

review

Material

existing

and

emerging

risks

100

Barclays

PLC

2020

Annual

Report

on

Form

20-F

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.

Risk

review

Material

existing

and

emerging

risks

101

Barclays

PLC

2020

Annual

Report

on

Form

20-F

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.

Risk

review

Climate

change

risk

management

102

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PLC

2020

Annual

Report

on

Form

20-F

Climate

change

risk

management

Overview

The

Group

has

a

longstanding

commitment

to

Environmental

Risk

Management

(ERM)

and

its

approach,

aided

by

regulatory

initiatives,

has

continued

to

evolve,

incorporating

climate

change

in

recent

years

as

the

understanding

of

associated

risks

has

grown.

A

dedicated

Sustainability

team

considers

how

the

Group

approaches

wider

sustainability

and

environmental,

social

and

governance

(ESG)

matters,

working

closely

with

the

ERM

function.

In

2020

the

bank

has

implemented

a

Financial

and

Operational

Risks

of

Climate

Change

Plan

built

around

three

main

pillars:

1.

Embedding

climate

risk

into

Enterprise

Risk

Management

Framework

(ERMF),

via

the

Climate

Change

Financial

and

Operational

Risk

Policy

2.

Developing

methodologies

and

including

climate

in

stress

testing

(see

Barclays

PLC

Climate-related

financial

disclosures

2020,

Risk

management

section)

3.

Developing

a

carbon

methodology

to

assess

risk

within

high

emitting

sectors

(see

Barclays

PLC

Climate-related

financial

disclosures

2020,

Strategy

section).

For

more

detail

on

how

climate

change

risks

arise

and

their

impact

on

the

Group,

refer

to

the

‘material

existing

and

emerging

risks’

section.

Organisation

and

structure

On

behalf

of

the

Board,

the

BRC

reviews

and

approves

the

Group’s

approach

to

managing

the

financial

and

operational

risks

associated

with

climate

change.

Reputation

risk

is

the

responsibility

of

the

Board,

which

directly

handles

the

most

material

issues

facing

the

Group.

Broader

sustainability

matters

and

other

reputation

risk

issues

associated

with

climate

change

are

co-ordinated

by

the

Sustainability

team.

Two

new

roles

were

introduced

in

2020:

a

Group

Head

of

Public

Policy

and

Corporate

Responsibility,

reporting

to

the

CEO;

and

a

Group

Head

of

Climate

Risk

appointed

to

develop

Barclays’

climate

risk

methodologies

and

manage

climate

risk

in

the

portfolio.

W

orking

groups

have

been

established

to

support

management

of

climate

risk

at

Barclays

International

and

Barclays

Bank

UK

Group.

Risk

management

–

Policy

Financial

and

Operational

Risks:

The

Group’s

‘Climate

Change

Financial

Risk

and

Operational

Risk

Policy’

considers

climate

change

as

an

overarching

risk

impacting

certain

principal

risks:

credit

risk,

market

risk,

treasury

&

capital

risk

and

operational

risk.

The

policy

is

jointly

owned

by

the

relevant

Principal

Risk

Delegates

with

oversight

by

the

BRC.

The

policy

was

implemented

in

2020,

including

being

embedded

across

28

policies

and

standards.

Each

relevant

Principal

Risk

Delegate

has

developed

a

methodology

and

implementation

plan

for

quantifying

climate

change

risk.

Risk

review

Climate

change

risk

management

103

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Linking

with

ESG

and

Reputation

Risk:

The

Group

has

developed

an

internal

standard

to

reflect

its

net

zero

carbon

ambition

in

more

detail

and

together

with

other

climate-related

Standards

(such

as

the

Forestry

&

Palm

Oil

Standard),

these

now

determine

the

approach

to

climate

change

and

relevant

sensitive

sectors.

These

standards

sit

under

the

management

of

reputation

risk

within

the

ERMF

and

are

enforced

through

an

existing

transaction

origination,

review

and

approval

process.

Risk

review

Principal

risk

management

104

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PLC

2020

Annual

Report

on

Form

20-F

Credit

risk

management

(audited)

The

risk

of

loss

to

the

Group

from

the

failure

of

clients,

customers

or

counterparties,

including

sovereigns,

to

fully

honour

their

obligations

to

the

Group,

including

the

whole

and

timely

payment

of

principal,

interest,

collateral

and

other

receivables.

Overview

The

credit

risk

that

the

Group

faces

arises

from

wholesale

and

retail

loans

and

advances

together

with

the

counterparty

credit

risk

arising

from

derivative

contracts

with

clients;

trading

activities,

including:

debt

securities,

settlement

balances

with

market

counterparties,

FVOCI

(Fair

Value

through

Other

Comprehensive

Income)

assets

and

reverse

repurchase

loans.

Credit

risk

management

objectives

are

to:

◾

maintain

a

framework

of

controls

to

oversee

credit

risk;

◾

identify,

assess

and

measure

credit

risk

clearly

and

accurately

across

the

Group

and

within

each

separate

business,

from

the

level

of

individual

facilities

up

to

the

total

portfolio;

◾

control

and

plan

credit

risk

taking

in

line

with

external

stakeholder

expectations

and

avoiding

undesirable

concentrations;

◾

monitor

credit

risk

and

adherence

to

agreed

controls.

Organisation,

roles

and

responsibilities

The

first

line

of

defence

has

primary

responsibility

for

managing

credit

risk

within

the

risk

appetite

and

limits

set

by

the

Risk

function,

supported

by

a

defined

set

of

policies,

standards

and

controls.

In

the

entities,

business

risk

committees

(attended

by

the

first

line)

monitor

and

review

the

credit

risk

profile

of

each

business

unit

where

the

most

material

issues

are

escalated

to

the

Retail

Credit

Risk

Management

Committee,

Wholesale

Credit

Risk

Management

Committee

and

Group

Risk

Committee.

Wholesale

and

retail

portfolios

are

managed

separately

to

reflect

the

differing

nature

of

the

assets;

wholesale

balances

tend

to

be

larger

and

are

managed

on

an

individual

basis,

while

retail

balances

are

greater

in

number

but

lesser

in

value

and

are,

therefore,

managed

in

aggregated

segments.

The

responsibilities

of

the

credit

risk

management

teams

in

the

businesses,

the

sanctioning

team

and

other

shared

services

include:

sanctioning

new

credit

agreements

(principally

wholesale);

setting

strategies

for

approval

of

transactions

(principally

retail);

setting

risk

appetite;

monitoring

risk

against

limits

and

other

parameters;

maintaining

robust

processes,

data

gathering,

quality,

storage

and

reporting

methods

for

effective

credit

risk

management;

performing

effective

turnaround

and

workout

scenarios

for

wholesale

portfolios

via

dedicated

restructuring

and

recoveries

teams;

maintaining

robust

collections

and

recovery

processes/units

for

retail

portfolios;

and

review

and

validation

of

credit

risk

measurement

models.

The

credit

risk

management

teams

in

each

legal

entity

are

accountable

to

the

relevant

Legal

Entity

CRO,

who

reports

to

the

Group

CRO.

For

wholesale

portfolios,

credit

risk

managers

are

organised

in

sanctioning

teams

by

geography,

industry

and/or

product.

In

wholesale

portfolios,

credit

risk

approval

is

undertaken

by

experienced

credit

risk

professionals

operating

within

a

clearly

defined

delegated

authority

framework,

with

only

the

most

senior

credit

officers

assigned

the

higher

levels

of

delegated

authority.

The

largest

credit

exposures,

which

are

outside

the

Risk

Sanctioning

Unit

or

Risk

Distribution

Committee

authority,

require

the

support

of

a

legal

entity

Senior

Credit

Officer.

For

exposures

in

excess

of

the

legal

entity

Senior

Credit

Officer’s

authority,

approval

by

Group

Senior

Credit

Officer/Board

Risk

Committee

is

also

required.

The

Group

Credit

Risk

Committee,

attended

by

legal

entity

Senior

Credit

Officers,

provides

a

formal

mechanism

for

the

Group

Senior

Credit

Officer

to

exercise

the

highest

level

of

credit

authority

over

the

most

material

Group

single

name

exposures.

Credit

risk

mitigation

The

Group

employs

a

range

of

techniques

and

strategies

to

actively

mitigate

credit

risks.

These

can

broadly

be

divided

into

three

types:

◾

netting

and

set-off

◾

collateral

◾

risk

transfer.

Netting

and

set-off

Credit

risk

exposures

can

be

reduced

by

applying

netting

and

set-off.

For

derivative

transactions,

the

Group’s

normal

practice

is,

on

a

legal

entity

basis,

to

enter

into

standard

master

agreements

with

counterparties

(e.g.

ISDAs).

These

master

agreements

typically

allow

for

netting

of

credit

risk

exposure

to

a

counterparty

resulting

from

derivative

transactions

against

the

obligations

to

the

counterparty

in

the

event

of

default,

and

so

produce

a

lower

net

credit

exposure.

These

agreements

may

also

reduce

settlement

exposure

(e.g.

for

foreign

exchange

transactions)

by

allowing

payments

on

the

same

day

in

the

same

currency

to

be

set-off

against

one

another.

Collateral

The

Group

has

the

ability

to

call

on

collateral

in

the

event

of

default

of

the

counterparty,

comprising:

◾

home

loans:

a

fixed

charge

over

residential

property

in

the

form

of

houses,

flats

and

other

dwellings;

◾

wholesale

lending:

a

fixed

charge

over

commercial

property

and

other

physical

assets,

in

various

forms;

◾

other

retail

lending:

includes

charges

over

motor

vehicles

and

other

physical

assets;

second

lien

charges

over

residential

property;

and

finance

lease

receivables;

◾

derivatives:

the

Group

also

often

seeks

to

enter

into

a

margin

agreement

(e.g.

Credit

Support

Annex)

with

counterparties

with

which

the

Group

has

master

netting

agreements

in

place.

These

annexes

to

master

agreements

provide

a

mechanism

for

further

reducing

credit

risk,

whereby

collateral

(margin)

is

posted

on

a

regular

basis

(typically

daily)

to

collateralise

the

mark

to

market

exposure

of

a

derivative

portfolio

measured

on

a

net

basis;

◾

reverse

repurchase

agreements:

collateral

typically

comprises

highly

liquid

securities

which

have

been

legally

transferred

to

the

Group

subject

to

an

agreement

to

return

them

for

a

fixed

price;

and

◾

financial

guarantees

and

similar

off-balance

sheet

commitments:

cash

collateral

may

be

held

against

these

arrangements.

Risk

transfer

A

range

of

instruments

including

guarantees,

credit

insurance,

credit

derivatives

and

securitisation

can

be

used

to

transfer

credit

risk

from

one

counterparty

to

another.

These

mitigate

credit

risk

in

two

main

ways:

◾

if

the

risk

is

transferred

to

a

counterparty

which

is

more

creditworthy

than

the

original

counterparty,

then

overall

credit

risk

is

reduced

◾

where

recourse

to

the

first

counterparty

remains,

both

counterparties

must

default

before

a

loss

materialises.

This

is

less

likely

than

the

default

of

either

counterparty

individually

so

credit

risk

is

reduced.

Risk

review

Principal

risk

management

105

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Detailed

policies

are

in

place

to

appropriately

recognise

and

record

credit

risk

mitigation.

For

more

information,

refer

to

pages

177

to

179

of

the

Barclays

PLC

Pillar

3

Report

2020

(unaudited).

Governance

and

oversight

of

ECLs

under

IFRS

9

The

Group’s

organisational

structure

and

internal

governance

processes

oversee

the

estimation

of

ECL

across

several

areas,

including:

i)

setting

requirements

in

policy,

including

key

assumptions

and

the

application

of

key

judgements;

ii)

the

design

and

execution

of

models;

and

iii)

review

of

ECL

results.

i)

Impairment

policy

requirements

are

set

and

reviewed

regularly,

at

a

minimum

annually,

to

maintain

adherence

to

accounting

standards.

Key

judgements

inherent

in

policy,

including

the

estimated

life

of

revolving

credit

facilities

and

the

quantitative

criteria

for

assessing

the

significant

increase

in

credit

risk

(SICR),

are

separately

supported

by

analytical

study.

In

particular,

the

quantitative

thresholds

used

for

assessing

SICR

are

subject

to

a

number

of

internal

validation

criteria,

particularly

in

retail

portfolios

where

thresholds

decrease

as

the

origination

PD

of

each

facility

increases.

Key

policy

requirements

are

also

typically

aligned

to

the

Group’s

credit

risk

management

strategy

and

practices,

for

example,

wholesale

customers

that

are

risk

managed

on

an

individual

basis

are

assessed

for

ECL

on

an

individual

basis

upon

entering

Stage

3;

furthermore,

key

internal

risk

management

indicators

of

high

risk

are

used

to

set

SICR

policy,

for

example,

retail

customers

identified

as

High

Risk

Management

Accounts

are

automatically

deemed

to

have

met

the

SICR

criteria.

ii)

ECL

is

estimated

in

line

with

internal

policy

requirements

using

models

which

are

validated

by

a

qualified

independent

party

to

the

model

development

area,

the

Independent

Validation

Unit

(IVU),

before

first

use

and

at

a

minimum

annually

thereafter.

Each

m

odel

is

designated

an

owner

who

is

responsible

for:

◾

Model

maintenance:

monitoring

of

model

performance

including

backtesting

by

comparing

predicted

ECL

versus

flow

into

stage

3

and

coverage

ratios;

proposing

material

changes

for

independent

IVU

approval;

and

recalibrating

model

parameters

on

more

timely

data;

and

◾

Proposing

post-model

adjustments

(PMA)

to

address

model

weaknesses

or

to

account

for

situations

where

known

or

expected

risk

factors

and

information

have

not

been

considered

in

the

modelling

process.

Each

PMA

above

an

absolute

and

relative

threshold

is

approved

by

the

IVU

for

a

set

time

period

(usually

a

maximum

of

six

months)

together

with

a

plan

for

remediation

where

a

model

deficiency.

The

most

material

PMAs

are

also

approved

by

the

CRO.

Models

must

also

assess

ECL

across

a

range

of

future

economic

conditions.

These

economic

scenarios

are

generated

via

an

independent

model

and

ultimately

set

by

the

Senior

Scenario

Review

Committee.

Economic

scenarios

are

regenerated

at

a

minimum

annually,

to

align

with

the

Group’s

medium

term

planning

exercise,

but

also

if

the

external

consensus

of

the

UK

or

US

economy

materially

worsen.

Each

model

used

in

the

estimation

of

ECL,

including

key

inputs,

are

governed

by

a

series

of

internal

controls,

which

include

the

validation

of

completeness

and

accuracy

of

data

in

golden

source

systems,

documented

data

transformations

and

documented

lineage

of

data

transfers

between

systems.

iii)

The

Group

Impairment

Committee,

formed

of

members

from

both

Finance

and

Risk

and

attended

by

both

the

Group

Finance

Director

and

the

Group

CRO,

is

responsible

for

overseeing

impairment

policy

and

practice

across

the

Group

and

will

approve

impairment

results.

Reported

results

and

key

messages

are

communicated

to

the

BAC,

which

has

an

oversight

role

and

provides

challenge

of

key

assumptions,

including

the

basis

of

the

scenarios

adopted.

Impairment

results

are

then

factored

into

management

decision

making,

including

but

not

limited

to,

business

planning,

risk

appetite

setting

and

portfolio

management.

Market

risk

management

(audited)

The

risk

of

loss

arising

from

potential

adverse

changes

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.

Overview

Market

risk

arises

primarily

as

a

result

of

client

facilitation

in

wholesale

markets,

involving

market

making

activities,

risk

management

solutions

and

execution

of

syndications.

Upon

execution

of

a

trade

with

a

client,

the

Group

will

look

to

hedge

against

the

risk

of

the

trade

moving

in

an

adverse

direction.

Mismatches

between

client

transactions

and

hedges

result

in

market

risk

due

to

changes

in

asset

prices,

volatility

or

correlations.

Organisation,

roles

and

responsibilities

Market

risk

in

the

businesses

resides

primarily

in

Barclays

International

and

Treasury.

These

businesses

have

the

mandate

to

assume

market

risk.

The

front

office

and

Treasury

trading

desks

are

responsible

for

managing

market

risk

on

a

day-to-day

basis,

where

they

are

required

to

understand

and

adhere

to

all

limits

applicable

to

their

businesses.

The

Market

Risk

team

supports

the

trading

desks

with

the

day-to-day

limit

management

of

market

risk

exposures

through

governance

processes

which

are

outlined

in

supporting

market

risk

policies

and

standards.

Market

risk

oversight

and

challenge

is

provided

by

business

committees

and

Group

committees,

including

the

Market

Risk

Committee

(MRC).

The

objectives

of

market

risk

management

are

to:

◾

identify,

understand

and

control

market

risk

by

robust

measurement,

limit

setting,

reporting

and

oversight

◾

facilitate

business

growth

within

a

controlled

and

transparent

risk

management

framework

◾

control

market

risk

in

the

businesses

according

to

the

allocated

appetite.

To

meet

the

above

objectives,

a

governance

structure

is

in

place

to

manage

these

risks

consistent

with

the

ERMF.

The

BRC

recommends

market

risk

appetite

to

the

Board

for

their

approval.

The

Market

Risk

Principal

Risk

Lead

(PR

Lead)

is

responsible

for

the

Market

Risk

Control

Framework

and,

under

delegated

authority

from

the

Group

CRO,

agrees

with

the

business

CROs

a

limit

framework

within

the

context

of

the

approved

market

risk

appetite.

The

MRC

reviews

and

makes

recommendations

concerning

the

group-wide

market

risk

profile.

This

includes

overseeing

the

operation

of

the

Market

Risk

Framework

and

associated

standards

and

policies;

reviewing

market

or

regulatory

issues

and

limits

and

utilisation.

The

committee

is

chaired

by

the

PR

Lead

and

attendees

include

the

business

heads

of

market

risk

and

business

aligned

market

risk

managers.

In

addition

to

MRC,

the

Corporate

and

Investment

Bank

Risk

Committee

(‘CIBRC’)

is

the

main

forum

in

which

market

risk

exposures

are

discussed

and

reviewed

with

senior

business

heads.

The

Committee

is

chaired

by

the

CRO

of

Barclays

International

and

meets

weekly,

covering

current

market

events,

notable

market

risk

exposures,

and

key

risk

topics.

New

business

initiatives

are

generally

socialised

at

CIBRC

before

any

changes

to

risk

appetite

or

associated

limits

are

considered

in

other

governance

committees.

The

head

of

each

business

is

accountable

for

all

market

risks

associated

with

its

activities,

while

the

head

of

the

market

risk

team

covering

each

business

is

responsible

for

implementing

the

risk

control

framework

for

market

risk.

Risk

review

Principal

risk

management

106

Barclays

PLC

2020

Annual

Report

on

Form

20-F

For

m

ore

information

on

market

risk

management,

refer

to

the

Barclays

PLC

Pillar

3

Report

2020

(unaudited).

Management

value

at

risk

(VaR)

VaR

is

an

estimate

of

the

potential

loss

arising

from

unfavourable

market

movements

if

the

current

positions

were

to

be

held

unchanged

for

one

business

day.

For

internal

market

risk

management

purposes,

a

historical

simulation

methodology

with

a

two-year

equally

weighted

historical

period,

at

the

95%

confidence

level

is

used

for

all

trading

books

and

some

banking

books.

Limits

are

applied

at

the

total

level

as

well

as

by

risk

factor

type,

which

are

then

cascaded

down

to

particular

trading

desks

and

businesses

by

the

market

risk

management

function.

See

the

market

risk

performance

section

for

a

review

of

management

VaR

in

2020.

Treasury

and

capital

risk

management

This

comprises:

Liquidity

risk:

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.

Capital

risk:

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

testing

purposes).

This

also

includes

the

risk

from

the

Group’s

pension

plans.

Interest

rate

risk

in

the

banking

book:

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

Treasury

function

manages

treasury

and

capital

risk

exposure

on

a

day-to-day

basis

with

the

Group

Treasury

Committee

acting

as

the

principal

management

body.

The

Treasury

and

Capital

Risk

function

is

responsible

for

oversight

and

provide

insight

into

key

capital,

liquidity,

interest

rate

risk

in

the

banking

book

(IRRBB)

and

pension

risk

management

activities.

Liquidity

risk

management

(audited)

Overview

The

efficient

management

of

liquidity

is

essential

to

the

Group

in

order

to

retain

the

confidence

of

the

financial

markets

and

maintain

the

sustainability

of

the

business.

The

liquidity

risk

control

framework

is

used

to

manage

all

liquidity

risk

exposures

under

both

typical

and

stressed

conditions.

The

framework

is

designed

to

maintain

liquidity

resources

that

are

sufficient

in

amount,

quality

and

funding

tenor

profile

to

support

the

liquidity

risk

appetite

as

expressed

by

the

Barclays

PLC

Board.

The

liquidity

risk

appetite

is

monitored

against

both

internal

and

regulatory

liquidity

metrics.

Organisation,

roles

and

responsibilities

Treasury

has

the

primary

responsibility

for

managing

liquidity

risk

within

the

set

risk

appetite.

Both

Risk

and

Treasury

contribute

to

the

production

of

the

Internal

Liquidity

Adequacy

Assessment

Process

(ILAAP).

The

Treasury

and

Capital

Risk

function

is

responsible

for

the

management

and

governance

of

the

liquidity

risk

mandate,

as

defined

by

the

Board.

The

liquidity

risk

control

framework

is

designed

to

deliver

the

appropriate

term

and

structure

of

funding,

consistent

with

the

liquidity

risk

appetite

set

by

the

Board.

The

control

framework

incorporates

a

range

of

ongoing

business

management

tools

to

monitor,

limit

and

stress

test

the

Group’s

balance

sheet,

contingent

liabilities

and

the

recovery

plan.

Limit

setting

and

transfer

pricing

are

tools

that

are

designed

to

control

the

level

of

liquidity

risk

taken

and

drive

the

appropriate

mix

of

funds.

Together,

these

tools

reduce

the

likelihood

that

a

liquidity

stress

event

could

lead

to

an

inability

to

meet

Group’s

obligations

as

they

fall

due.

The

Board

approves

the

Group

funding

plan,

internal

stress

tests,

regulatory

stress

test

results,

recovery

plan

and

Liquidity

Risk

Appetite.

The

Group

Treasury

Committee

is

responsible

for

monitoring

and

managing

liquidity

risk

in

line

with

the

Group’s

funding

management

objectives,

funding

plan

and

risk

appetite.

The

Treasury

and

Capital

Risk

Committee

monitors

and

reviews

the

liquidity

risk

profile

and

control

environment,

providing

second

line

oversight

of

the

management

of

liquidity

risk.

The

Board

Risk

Committee

reviews

the

risk

profile,

and

annually

reviews

risk

appetite

and

the

impact

of

stress

scenarios

on

the

Group

funding

plan/forecast

in

order

to

agree

the

Group’s

projected

funding

abilities.

Capital

risk

management

(audited)

Overview

Capital

risk

is

managed

through

ongoing

monitoring

and

management

of

the

capital

position,

regular

stress

testing

and

a

robust

capital

governance

framework.

The

objectives

of

the

framework

are

to

maintain

adequate

capital

for

the

Group

and

legal

entities

to

withstand

the

impact

of

the

risks

that

may

arise

under

normal

and

stressed

conditions,

and

maintain

adequate

capital

to

cover

current

and

forecast

business

needs

and

associated

risks

to

provide

a

viable

and

sustainable

business

offering.

Organisation,

roles

and

responsibilities

Treasury

has

the

primary

responsibility

for

managing

and

monitoring

capital.

The

Treasury

and

Capital

Risk

function

provides

oversight

of

capital

risk

and

is

an

independent

risk

function

that

reports

to

the

Group

CRO.

Production

of

the

Barclays

PLC

Internal

Capital

Adequacy

Assessment

Process

(ICAAP)

is

the

responsibility

of

Treasury.

Capital

risk

management

is

underpinned

by

a

control

framework

and

policy.

The

capital

management

strategy,

outlined

in

the

Group

and

legal

entity

capital

plans,

is

developed

in

alignment

with

the

control

framework

and

policy

for

capital

risk,

and

is

implemented

consistently

in

order

to

deliver

on

the

Group’s

objectives.

The

Board

approves

the

Group

capital

plan,

internal

stress

tests

and

results

of

regulatory

stress

tests,

and

the

Group

recovery

plan.

The

Group

Treasury

Committee

is

responsible

for

monitoring

and

managing

capital

risk

in

line

with

the

Group’s

capital

management

objectives,

capital

plan

and

risk

frameworks.

The

Treasury

and

Capital

Risk

Committee

monitors

and

reviews

the

capital

risk

profile

and

control

environment,

providing

second

line

oversight

of

the

management

of

capital

risk.

The

BRC

reviews

the

risk

profile,

and

annually

reviews

risk

appetite

and

the

impact

of

stress

scenarios

on

the

Group

capital

plan/forecast

in

order

to

agree

the

Group’s

projected

capital

adequacy.

Local

man

agement

assures

compliance

with

an

entity’s

minimum

regulatory

capital

requirements

by

reporting

to

local

Asset

and

Liability

Committees

(ALCOs)

with

oversight

by

the

Group

Treasury

Committee,

as

required.

In

2020,

Barclays

complied

with

all

regulatory

minimum

capital

requirements.

Risk

review

Principal

risk

management

107

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Pension

risk

The

Group

maintains

a

number

of

defined

benefit

pension

schemes

for

past

and

current

employees.

The

ability

of

schemes

to

meet

pension

payments

is

achieved

with

investments

and

contributions.

Pension

risk

arises

because

the

market

value

of

pension

fund

assets

might

decline;

investment

returns

might

reduce;

or

the

estimated

value

of

pension

liabilities

might

increase.

The

Group

monitors

the

pension

risks

arising

from

its

defined

benefit

pension

schemes

and

works

with

Trustees

to

address

shortfalls.

In

these

circumstances,

the

Group

could

be

required

or

might

choose

to

make

extra

contributions

to

the

pension

fund.

The

Group’s

main

defined

benefit

scheme

was

closed

to

new

entrants

in

2012

.

Interest

rate

risk

in

the

banking

book

management

(IRRBB)

Overview

Interest

rate

risk

in

the

banking

book

is

driven

by

customer

deposit

taking

and

lending

activities,

investments

in

the

liquid

asset

portfolio

and

funding

activities.

As

per

the

Group’s

policy

to

remain

within

the

defined

risk

appetite,

hedging

strategies

are

executed

to

mitigate

the

risks.

However,

the

Group

remains

susceptible

to

interest

rate

risk

and

other

non-traded

market

risks

from

key

sources:

◾

Interest

rate

and

repricing

risk:

the

risk

that

net

interest

income

could

be

adversely

impacted

by

a

change

in

interest

rates,

differences

in

the

timing

of

interest

rate

changes

between

assets

and

liabilities,

and

other

constraints

on

interest

rate

changes

as

per

product

terms

and

conditions.

◾

Customer

behavioural

risk:

the

risk

that

net

interest

income

could

be

adversely

impacted

by

the

discretion

that

customers

and

counterparties

may

have

in

respect

of

being

able

to

vary

their

contractual

obligations

with

Barclays.

This

risk

is

often

referred

to

by

industry

regulators

as

‘embedded

option

risk’.

◾

Investment

risks

in

the

liquid

asset

portfolio:

the

risk

that

the

fair

value

of

assets

held

in

the

liquid

asset

portfolio

and

associated

risk

management

portfolios

could

be

adversely

impacted

by

market

volatility,

creating

volatility

in

capital

directly.

Organisation,

roles

and

responsibilities

The

entity

ALCOs,

together

with

the

Group

Treasury

Committee,

are

responsible

for

monitoring

and

managing

IRRBB

risk

in

line

with

the

Group’s

management

objectives

and

risk

frameworks.

The

GRC

and

Treasury

and

Capital

Risk

Committee

monitors

and

reviews

the

IRRBB

risk

profile

and

control

environment,

providing

second

line

oversight

of

the

management

of

IRRBB.

The

BRC

reviews

the

interest

rate

risk

profile,

including

annual

review

of

the

risk

appetite

and

the

impact

of

stress

scenarios

on

the

interest

rate

risk

of

the

Group’s

banking

books.

In

addition,

the

Group’s

IRRBB

policy

sets

out

the

processes

and

key

controls

required

to

identify

all

IRRBB

risks

arising

from

banking

book

operations,

to

monitor

the

risk

exposures

via

a

set

of

metrics

with

a

frequency

in

line

with

the

risk

management

horizon,

and

to

manage

these

risks

within

agreed

risk

appetite

and

limits.

Operational

risk

management

The

risk

of

loss

to

the

Group

from

inadequate

or

failed

processes

or

systems,

human

factors

or

due

to

external

events

(for

example

fraud)

where

the

root

cause

is

not

due

to

credit

or

market

risks.

Overview

The

management

of

operational

risk

has

three

key

objectives:

◾

deliver

an

operational

risk

capability

owned

and

used

by

business

leaders

to

enable

sound

risk

decisions

over

the

long

term;

◾

provide

the

frameworks,

policies

and

standards

to

enable

management

to

meet

their

risk

management

responsibilities

while

the

second

line

of

defence

provides

robust,

independent,

and

effective

oversight

and

challenge;

and

◾

deliver

a

consistent

and

aggregated

measurement

of

operational

risk

that

will

provide

clear

and

relevant

insights,

so

that

the

right

management

actions

can

be

taken

to

keep

the

operational

risk

profile

consistent

with

the

Group’s

strategy,

the

stated

risk

appetite

and

stakeholder

needs.

The

Group

operates

within

a

system

of

internal

controls

that

enables

business

to

be

transacted

and

risk

taken

without

exposing

it

to

unacceptable

potential

losses

or

reputational

damages.

Organisation,

roles

and

responsibilities

The

prime

responsibility

for

the

management

of

operational

risk

and

the

compliance

with

control

requirements

rests

within

the

business

and

functional

units

where

the

risk

arises.

The

operational

risk

profile

and

control

environment

is

reviewed

by

management

through

business

risk

committees

and

control

committees.

Operational

risk

issues

escalated

from

these

meetings

are

considered

through

the

second

line

of

defence

review

meetings.

Depending

on

their

nature,

the

outputs

of

these

meetings

are

presented

to

the

Operational

Risk

Profile

Forum,

the

Operational

Risk

Committee,

the

BRC

or

the

BAC.

In

addition,

specific

reports

are

prepared

by

Operational

Risk

on

a

regular

basis

for

the

GRC

and

the

BRC.

Legal

entities,

businesses

and

functions

are

required

to

report

their

operational

risks

on

both

a

regular

and

an

event-driven

basis.

The

reports

include

a

profile

of

the

material

risks

that

may

threaten

the

achievement

of

their

objectives

and

the

effectiveness

of

key

controls,

operational

risk

events

and

a

review

of

scenarios.

The

Group

Head

of

Operational

Risk

is

responsible

for

establishing,

owning

and

maintaining

an

appropriate

group-wide

Operational

Risk

Framework

and

for

overseeing

the

portfolio

of

operational

risk

across

the

Group.

The

Operational

Risk

function

acts

in

a

second

line

of

defence

capacity,

and

is

responsible

for

defining

and

overseeing

the

implementation

of

the

framework

and

monitoring

the

Group’s

operational

risk

profile.

The

Operational

Risk

function

alerts

management

when

risk

levels

exceed

acceptable

tolerance

in

order

to

drive

timely

decision

making

and

actions

by

the

first

line

of

defence.

Operational

risk

categories

Operational

risks

are

grouped

into

risk

categories

to

support

effective

risk

management,

measurement

and

reporting.

These

comprise:

Data

Management

Risk;

Financial

Reporting

Risk;

Fraud

Risk;

Information

Security

Risk;

Operational

Resilience

Planning

Risk;

Payments

Process

Risk;

People

Risk;

Premises

Risk;

Physical

Security

Risk;

Strategic

Investment

Change

Management

Risk;

Supplier

Risk;

Tax

Risk;

Technology

Risk;

and

Transaction

Operations

Risk.

In

addition

to

the

above,

operational

risk

encompasses

risks

associated

with

prudential

regulation.

This

includes

the

risk

of

failing

to:

adhere

to

prudential

regulatory

requirements,

provide

regulatory

submissions;

or

monitor

and

manage

adherence

to

new

prudential

regulatory

requirements.

Risk

themes

Barclays

also

recognises

that

there

are

certain

threats/risk

drivers

that

are

more

thematic

and

have

the

potential

to

impact

the

Group’s

strategic

Risk

review

Principal

risk

management

108

Barclays

PLC

2020

Annual

Report

on

Form

20-F

objectives.

These

are

risk

themes

which

require

an

overarching

and

integrated

risk

management

approach.

The

Group’s

risk

themes

include

Cyber,

Data,

and

Resilience.

For

definitions

of

the

Group’s

operational

risk

categories

and

risk

themes,

refer

to

the

management

of

operational

risk

section

in

the

Barclays

PLC

Pillar

3

Report

2020.

Model

risk

management

The

risk

of

the

potential

adverse

consequences

from

financial

assessments

or

decisions

based

on

incorrect

or

misused

model

outputs

and

reports.

Overview

The

Group

uses

models

to

support

a

broad

range

of

activities,

including

informing

business

decisions

and

strategies,

measuring

and

limiting

risk,

valuing

exposures,

conducting

stress

testing,

assessing

capital

adequacy,

managing

client

assets,

and

meeting

reporting

requirements.

Since

models

are

imperfect

and

incomplete

representations

of

reality,

they

may

be

subject

to

errors

affecting

the

accuracy

of

their

output.

Model

errors

and

misuse

are

the

primary

sources

of

model

risk.

Organisation,

roles

and

responsibilities

The

Group

has

a

dedicated

Model

Risk

Management

(MRM)

function

that

consists

of

four

teams:

(i)

Independent

Validation

Unit

(IVU),

responsible

for

model

validation

and

approval;

(ii)

Model

Governance

and

Controls

(MGC),

responsible

for

regulatory,

audit,

policy,

standards,

conformance

and

controls;

(iii)

Strategy

and

Transformation

responsible

for

inventory,

strategy,

communications

and

business

management

and

(iv)

Model

Risk

Measurement

and

Quantification

(MRMQ),

responsible

for

the

design

of

the

framework

and

methodology

to

accurately

measure

and

quantify

model

risk.

The

model

risk

management

framework

consists

of

the

model

risk

policy

and

standards.

The

policy

prescribes

Group-wide,

end-to-end

requirements

for

the

identification,

measurement

and

management

of

model

risk,

covering

model

documentation,

development,

implementation,

monitoring,

annual

review,

independent

validation

and

approval,

change

and

reporting

processes.

The

policy

is

supported

by

global

standards

covering

model

inventory,

documentation,

validation,

complexity

and

materiality,

testing

and

monitoring,

overlays,

risk

appetite,

as

well

as

vendor

models

and

stress

testing

challenger

models.

The

function

reports

to

the

Group

CRO

and

operates

a

global

framework.

Implementation

of

best

practice

standards

is

a

central

objective

of

the

Group.

The

key

model

risk

management

activities

include:

◾

Correctly

identifying

models

across

all

relevant

areas

of

the

Group,

and

recording

models

in

the

Group

Models

Database

(GMD),

the

Group-

wide

model

inventory.

◾

Enforcing

that

every

model

has

a

model

owner

who

is

accountable

for

the

model.

The

model

owner

must

sign

off

models

prior

to

submission

to

IVU

for

validation

and

maintain

that

the

model

presented

to

IVU

is

and

remains

fit

for

purpose.

◾

Overseeing

that

every

model

is

subject

to

validation

and

approval

by

IVU,

prior

to

being

implemented

and

on

a

continual

basis.

◾

Defining

model

risk

appetite

in

terms

of

risk

tolerance,

and

qualitative

metrics

which

are

used

to

track

and

report

model

risk.

Conduct

risk

management

The

risk

of

detriment

to

customers,

clients,

market

integrity,

effective

competition

or

Barclays

from

the

inappropriate

supply

of

financial

services,

including

instances

of

wilful

or

negligent

misconduct.

Overview

The

Group

defines,

manages

and

mitigates

conduct

risk

with

the

objective

of

providing

good

customer

and

client

outcomes,

protecting

market

integrity

and

promoting

effective

competition.

Conduct

risk

incorporates

risks

associated

with

the

maintenance

of

Market

Integrity,

Customer

Protection

and

Product

and

Services

Lifecycle

Governance

and

the

prevention

of

Financial

Crime.

Organisation,

roles

and

responsibilities

The

Conduct

Risk

Management

Framework

(CRMF)

outlines

how

the

Group

manages

and

measures

its

conduct

risk

profile.

The

Group

Chief

Compliance

Officer

is

accountable

for

developing,

maintaining

and

overseeing

a

group-wide

CRMF.

This

includes

defining

and

owning

the

relevant

conduct

risk

policies

which

detail

the

control

objectives,

principles

and

other

core

requirements

for

the

activities

of

the

Group.

It

is

the

responsibility

of

the

first

line

of

defence

to

establish

controls

to

manage

its

performance

and

assess

conformance

to

these

policies

and

controls.

Senior

managers

are

accountable

within

their

areas

of

responsibility

for

owning

and

managing

conduct

risk

in

accordance

with

the

CRMF,

as

defined

within

their

regulatory

Statement

of

Responsibilities.

Compliance

as

an

independent

second

line

function

is

designed

to

help

prevent,

detect

and

manage

breaches

of

applicable

laws,

rules,

regulations

and

procedures

and

has

a

key

role

in

helping

Barclays

achieve

the

right

conduct

outcomes

and

evolve

a

conduct-focused

culture.

The

governance

of

conduct

risk

within

the

Group

is

fulfilled

through

management

committees

and

forums

operated

by

the

first

and

second

lines

of

defence

with

clear

escalation

and

reporting

lines

to

the

Board.

The

Barclays

Group

and

Barclays

Bank

Group

Risk

Committee

and

the

Barclays

Bank

UK

Group

Risk

Committee

are

the

primary

second

line

governance

committees

for

the

oversight

of

the

Conduct

Risk

Profile.

The

risk

committees’

responsibilities

include

the

identification

and

discussion

of

any

emerging

conduct

risks

exposures

in

their

respective

entities.

Reputation

risk

management

The

risk

that

an

action,

transaction,

investment,

event,

decision,

or

business

relationship

will

reduce

trust

in

the

Group’s

integrity

and/or

competence.

Overview

A

reduction

of

trust

in

the

Group’s

integrity

and

competence

may

reduce

the

attractiveness

of

the

Group

to

stakeholders

and

could

lead

to

negative

publicity,

loss

of

revenue,

regulatory

or

legislative

action,

loss

of

existing

and

potential

client

business,

reduced

workforce

morale

and

difficulties

in

recruiting

talent.

Ultimately

it

may

destroy

shareholder

value.

Organisation,

roles

and

responsibilities

Barclays

Group

ExCo

is

the

most

senior

executive

body

responsible

for

reviewing

and

monitoring

the

effectiveness

of

the

Group’s

management

of

reputation

risk.

Risk

review

Principal

risk

management

109

Barclays

PLC

2020

Annual

Report

on

Form

20-F

The

Group

Chief

Compliance

Officer

is

accountable

for

developing

a

Reputation

Risk

Management

Framework

(RRMF),

and

the

Group

Head

of

Corporate

Relations

is

responsible

for

developing

a

reputation

risk

policy

and

associated

standards,

including

tolerances

against

which

data

is

monitored,

reported

on

and

escalated,

as

required.

The

RRMF

sets

out

what

is

required

to

manage

reputation

risk

across

the

Group.

The

primary

responsibility

for

identifying

and

managing

reputation

risk

and

adherence

to

the

control

requirements

sits

with

the

business

and

support

functions

where

the

risk

arises.

Barclays

Bank

Group

and

Barclays

Bank

UK

Group

are

required

to

operate

within

established

reputation

risk

appetite,

and

their

component

businesses

prepare

reports

for

their

respective

Risk

and

Board

Risk

Committees

highlighting

their

most

significant

current

and

potential

reputation

risks

and

issues

and

how

they

are

being

managed.

These

reports

are

a

key

internal

source

of

information

for

the

quarterly

reputation

risk

reports

which

are

prepared

for

Barclays

Group

ExCo

and

the

Board.

Legal

risk

management

The

risk

of

loss

or

imposition

of

penalties,

damages

or

fines

from

the

failure

of

the

Group

to

meet

its

legal

obligations

including

regulatory

or

contractual

requirements.

Overview

The

Group

has

no

tolerance

for

wilful

breaches

of

laws,

regulations

or

other

legal

obligations.

However,

the

multitude

of

laws

and

regulations

across

the

globe

are

highly

dynamic

and

their

application

to

particular

circumstances

is

often

unclear.

This

results

in

a

high

level

of

inherent

legal

risk

which

the

Group

seeks

to

mitigate

through

the

operation

of

a

Group-wide

legal

risk

management

framework,

including

the

implementation

of

Group-wide

legal

risk

policies

requiring

the

engagement

of

legal

professionals

in

situations

that

have

the

potential

for

legal

risk.

Notwithstanding

these

mitigating

actions,

the

Group

operates

with

a

level

of

residual

legal

risk,

for

which

the

Group

has

limited

tolerance.

Organisation,

roles

and

responsibilities

The

Group’s

businesses

and

functions

have

primary

responsibility

for

identifying

and

escalating

legal

risk

in

their

area

as

well

as

responsibility

for

adherence

to

minimum

control

requirements.

The

Legal

Function

organisation

and

coverage

model

aligns

legal

expertise

to

businesses,

functions,

products,

activities

and

geographic

locations

so

that

the

Group

receives

support

from

appropriate

legal

professionals,

working

in

partnership

to

manage

legal

risk.

The

senior

management

of

the

Legal

Function

oversees,

challenges

and

monitors

the

legal

risk

profile

and

effectiveness

of

the

legal

risk

control

environment

across

the

Group.

The

Legal

Function

does

not

sit

in

any

of

the

Three

Lines

of

Defence

but

supports

them

all.

The

Group

General

Counsel

is

responsible

for

maintaining

a

Group-wide

legal

risk

management

framework.

This

includes

defining

the

relevant

legal

risk

policies

and

oversight

of

the

implementation

of

controls

to

manage

and

escalate

legal

risk.

The

legal

risk

profile

and

control

environment

is

reviewed

by

management

through

business

risk

committees

and

control

committees.

The

Group

Risk

Committee

is

the

most

senior

executive

body

responsible

for

reviewing

and

monitoring

the

effectiveness

of

risk

management

across

the

Group.

Escalation

paths

from

this

committee

exist

to

the

Barclays

PLC

Board

Risk

Committee.

Risk

review

Risk

performance

Credit

risk

110

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Credit

risk:

summary

of

contents

Page

Credit

risk

represents

a

significant

risk

and

mainly

arises

from

exposure

to

wholesale

and

retail

loans

and

advances

together

with

the

counterparty

credit

risk

arising

from

derivative

contracts

entered

into

with

clients.

◾

Credit

risk

overview

and

summary

of

performance

◾

Maximum

exposure

and

effects

of

netting,

collateral

and

risk

transfer

111

This

section

outlines

the

expected

credit

loss

allowances,

the

movements

in

allowances

during

the

period,

material

management

adjustments

to

model

output

and

measurement

uncertainty

and

sensitivity

analysis.

◾

Expected

Credit

Losses

-

Loans

and

advances

at

amortised

cost

by

stage

-

Loans

and

advances

at

amortised

cost

by

product

-

Movement

in

gross

exposure

and

impairment

allowance

for

loans

and

advances

at

amortised

cost

-

Stage

2

decomposition

-

Stage

3

decomposition

◾

Management

adjustments

to

models

for

impairment

◾

Measurement

uncertainty

and

sensitivity

analysis

114

116

118

122

123

124

The

Group

reviews

and

monitors

risk

concentrations

in

a

variety

of

ways.

This

section

outlines

performance

against

key

concentration

risks.

◾

Analysis

of

the

concentration

of

credit

risk

-

Geographic

concentrations

-

Industry

concentrations

◾

Approach

to

management

and

representation

of

credit

quality

-

Asset

credit

quality

-

Debt

securities

-

Balance

sheet

credit

quality

-

Credit

exposures

by

internal

PD

grade

133

134

135

137

Credit

risk

monitors

exposure

performance

across

a

range

of

significant

portfolios.

◾

Analysis

of

specific

portfolios

and

asset

types

-

Secured

home

loans

-

Credit

cards,

unsecured

loans

and

other

retail

lending

-

Exposure

to

UK

commercial

real

estate

139

140

141

The

Group

monitors

exposures

to

assets

where

there

is

a

heightened

likelihood

of

default

and

assets

where

an

actual

default

has

occurred.

From

time

to

time,

suspension

of

certain

aspects

of

client

credit

agreements

are

agreed,

generally

during

temporary

periods

of

financial

difficulties

where

the

Group

is

confident

that

the

client

will

be

able

to

remedy

the

suspension.

This

section

outlines

the

current

exposure

to

assets

with

this

treatment.

◾

Forbearance

-

Retail

forbearance

programmes

-

Wholesale

forbearance

programmes

142

143

144

This

section

provides

an

analysis

of

credit

risk

on

debt

securities

and

derivatives.

◾

Analysis

of

debt

securities

◾

Analysis

of

derivatives

144

145

Risk

review

Risk

performance

Credit

risk

111

Barclays

PLC

2020

Annual

Report

on

Form

20-F

All

disclosures

in

this

section

are

unaudited

unless

otherwise

stated.

Overview

Credit

risk

represents

a

significant

risk

to

the

Group

and

mainly

arises

from

exposure

to

wholesale

and

retail

loans

and

advances

together

with

the

counterparty

credit

risk

arising

from

derivative

contracts

entered

into

with

clients.

Credit

risk

disclosures

include

many

of

the

recommendations

of

the

Taskforce

on

Disclosures

about

Expected

Credit

Losses

(DECL)

and

it

is

expected

that

relevant

disclosures

will

continue

to

be

developed

in

future

periods.

The

impact

of

the

COVID-19

pandemic

has

increased

the

level

of

judgement

that

management

have

been

required

to

exercise

over

the

course

of

2020.

Customer

and

client

default

rates

have

remained

relatively

stable

despite

the

impact

of

the

pandemic

and

volatile

macroeconomic

environment.

In

retail

cards,

credit

profiles

improved

or

were

stable

versus

pre-pandemic

levels

as

a

result

of

government

support

measures

and

customer

deleveraging.

In

wholesale,

furlough

and

liquidity

funding

schemes

are

supporting

businesses

through

the

pandemic,

with

limited

credit

deterioration.

This

lack

of

deterioration,

combined

in

some

cases

with

improving

economics,

is

leading

to

large

scale

credit

loss

stock

releases

on

a

modelled

basis

in

pockets

of

the

portfolio.

Given

this

backdrop,

management

has

applied

COVID-19

specific

adjustments

to

modelled

outputs

to

ensure

the

full

potential

impacts

of

stress

are

provided

for.

These

adjustments

address

the

temporary

nature

of

ongoing

government

support,

the

uncertainty

in

relation

to

the

timing

of

stress

and

the

degree

to

which

economic

consensus

has

yet

captured

the

range

of

economic

uncertainty,

particularly

in

the

UK.

Refer

to

the

Management

adjustment

to

models

for

impairment

section

on

page

123

for

further

details.

Further

detail

can

be

found

in

the

Financial

statements

section

in

Note

7

Credit

impairment

charges.

Descriptions

of

terminology

can

be

found

in

the

glossary,

available

at

home.barclays/annualreport.

Summary

of

performance

in

the

period

Credit

impairment

charges

increased

to

£4,838m

(2019

£1,912m)

due

to

the

deterioration

in

economic

outlook

driven

by

the

COVID-19

global

pandemic.

The

current

year

charge

is

broadly

driven

by

£2,323m

of

non-default

provision

for

potential

future

customer

and

client

stress

and

£800m

of

single

name

deterioration.

The

Expected

Credit

Loss

(ECL)

provision

remains

highly

uncertain

as

the

economic

impact

of

the

global

pandemic

continues

to

evolve.

The

Group

loan

loss

rate

was

138bps

(2019:

55bps).

Refer

to

the

credit

risk

management

section

for

details

of

governance,

policies

and

procedures.

Key

metrics

Increase

in

impairment

allowances

of

£2,769m

Impairment

allowances

on

loans

and

advances

at

amortised

cost,

including

off-balance

sheet

elements

of

the

allowance,

increased

by

£2,769m

to

£9,399m

(2019:

£6,630m).

The

increase

is

driven

by

Barclays

International

£1,828m,

Barclays

UK

£855m,

and

Head

Office

£86m.

Refer

to

the

Expected

Credit

Losses

section

for

further

details.

M

aximum

exposure

and

effects

of

netting,

collateral

and

risk

transfer

Basis

of

preparation

The

following

tables

present

a

reconciliation

between

the

maximum

exposure

and

its

net

exposure

to

credit

risk,

reflecting

the

financial

effects

of

risk

mitigation

reducing

the

exposure.

For

financial

assets

recognised

on

the

balance

sheet,

maximum

exposure

to

credit

risk

represents

the

balance

sheet

carrying

value

after

allowance

for

impairment.

For

off-balance

sheet

guarantees,

the

maximum

exposure

is

the

maximum

amount

that

the

Group

would

have

to

pay

if

the

guarantees

were

to

be

called

upon.

For

loan

commitments

and

other

credit

that

are

irrevocable

over

the

life

of

the

respective

facilities,

the

maximum

exposure

is

the

full

amount

of

the

committed

facilities.

This

and

subsequent

analyses

of

credit

risk

exclude

other

financial

assets

not

subject

to

credit

risk,

mainly

equity

securities.

The

Group

mitigates

the

credit

risk

to

which

it

is

exposed

through

netting

and

set-off,

collateral

and

risk

transfer.

Further

detail

on

the

Group’s

policies

to

each

of

these

forms

of

credit

enhancement

is

presented

on

pages

177

to

179

of

the

Barclays

PLC

Pillar

3

Report

2020

(unaudited).

Overview

As

at

31

December

2020,

the

Group’s

net

exposure

to

credit

risk,

after

taking

into

account

credit

risk

mitigation,

increased

by

10%

to

£876.8bn.

Overall,

the

extent

to

which

the

Group

holds

mitigation

against

its

total

exposure

increased

to

46%

(2019:

43%).

Of

the

unmitigated

on

balance

sheet

exposure,

a

significant

portion

relates

to

cash

held

at

central

banks,

cash

collateral

and

settlement

balances,

and

debt

securities

issued

by

governments

all

of

which

are

considered

to

be

lower

risk.

The

increase

in

the

Group’s

net

exposure

to

credit

risk

is

driven

by

increases

in

cash

held

at

central

banks,

cash

collateral

and

settlement

balances,

trading

portfolio

assets,

derivative

financial

instruments,

financial

assets

at

fair

value

through

other

comprehensive

income,

and

off

-balance

sheet

loan

commitments.

Trading

portfolio

liability

positions,

which

to

a

significant

extent

economically

hedge

trading

portfolio

assets

but

which

are

not

held

specifically

for

risk

management

purposes,

are

excluded

from

the

analysis.

The

credit

quality

of

counterparties

to

derivatives,

financial

investments

and

wholesale

loan

assets

are

predominantly

investment

grade.

Further

analysis

on

the

credit

quality

of

assets

is

presented

in

the

approach

to

management

and

representation

of

credit

quality

section.

Collateral

obtained

Where

collateral

has

been

obtained

in

the

event

of

default,

the

Group

does

not,

ordinarily,

use

such

assets

for

its

own

operations

and

they

are

usually

sold

on

a

timely

basis.

The

carrying

value

of

assets

held

by

the

Group

as

at

31

December

2020,

as

a

result

of

the

enforcement

of

collateral,

was

£6m

(2019:

£6m).

Risk

review

Risk

performance

Credit

risk

112

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Maximum

exposure

and

effects

of

netting,

collateral

and

risk

transfer

(audited)

Maximum

exposure

Netting

and

set-off

Cash

collateral

Non-cash

collateral

Risk

transfer

Net

exposure

As

at

31

December

2020

£m

On-balance

sheet:

Cash

and

balances

at

central

banks

191,127

-

191,127

Cash

collateral

and

settlement

balances

101,367

-

101,367

Loans

and

advances

at

amortised

cost:

Home

loans

159,647

-

(284)

(159,203)

(85)

75

Credit

cards,

unsecured

loans

and

other

retail

lending

40,813

-

(967)

(3,825)

(195)

35,826

Wholesale

loans

142,172

(6,988)

(62)

(37,103)

(23,963)

74,056

Total

loans

and

advances

at

amortised

cost

342,632

(6,988)

(1,313)

(200,131)

(24,243)

109,957

Of

which

credit-impaired

(Stage

3):

Home

loans

1,813

-

(14)

(1,796)

-

3

Credit

cards,

unsecured

loans

and

other

retail

lending

921

-

(14)

(237)

(2)

668

Wholesale

loans

2,525

-

(4)

(872)

(232)

1,417

Total

credit-impaired

loans

and

advances

at

amortised

cost

5,259

-

(32)

(2,905)

(234)

2,088

Reverse

repurchase

agreements

and

other

similar

secured

lending

9,031

-

(9,031)

-

Trading

portfolio

assets:

Debt

securities

56,482

-

(391)

-

56,091

Traded

loans

8,348

-

(374)

-

7,974

Total

trading

portfolio

assets

64,830

-

(765)

-

64,065

Financial

assets

at

fair

value

through

the

income

statement:

Loans

and

advances

30,879

-

(9)

(23,677)

-

7,193

Debt

securities

1,693

-

(292)

-

1,401

Reverse

repurchase

agreements

137,616

-

(672)

(136,537)

-

407

Other

financial

assets

343

-

343

Total

financial

assets

at

fair

value

through

the

income

statement

170,531

-

(681)

(160,506)

-

9,344

Derivative

financial

instruments

302,446

(233,080)

(43,291)

(4,773)

(6,409)

14,893

Financial

assets

at

fair

value

through

other

comprehensive

income

77,927

-

(106)

(1,385)

76,436

Other

assets

850

-

850

Total

on-balance

sheet

1,260,741

(240,068)

(45,285)

(375,312)

(32,037)

568,039

Off-balance

sheet:

Contingent

liabilities

21,609

-

(1,095)

(2,135)

(282)

18,097

Loan

commitments

333,049

-

(128)

(40,714)

(1,520)

290,687

Total

off-balance

sheet

354,658

-

(1,223)

(42,849)

(1,802)

308,784

Total

1,615,399

(240,068)

(46,508)

(418,161)

(33,839)

876,823

Off

-balance

sheet

exposures

are

shown

gross

of

provisions

of

£1,064m

(2019:

£322m).

See

Note

25

for

further

details.

In

addition

to

the

above,

the

Group

holds

forward

starting

reverse

repos

with

notional

contract

amounts

of

£34.6bn

(2019:

£31.1bn).

The

balances

are

fully

collateralised.

Wholesale

loans

and

advances

at

amortised

cost

include

£12.1bn

of

BBLs,

CBILs

and

CLBILs

extended

in

2020

and

supported

by

UK

government

guarantees

£11.5

bn,

which

are

included

within

the

Risk

transfer

column

in

the

table.

For

further

information

on

credit

risk

mitigation

techniques,

refer

to

the

Credit

risk

management

section.

Risk

review

Risk

performance

Credit

risk

113

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Maximum

exposure

and

effects

of

netting,

collateral

and

risk

transfer

(audited)

Maximum

exposure

Netting

and

set-off

Cash

collateral

Non-cash

collateral

Risk

transfer

Net

exposure

As

at

31

December

2019

£m

On-balance

sheet:

Cash

and

balances

at

central

banks

150,258

-

150,258

Cash

collateral

and

settlement

balances

83,256

-

83,256

Loans

and

advances

at

amortised

cost:

Home

loans

154,479

-

(294)

(153,939)

(70)

176

Credit

cards,

unsecured

loans

and

other

retail

lending

55,296

-

(778)

(5,283)

(258)

48,977

Wholesale

loans

129,340

(7,636)

(148)

(39,981)

(12,071)

69,504

Total

loans

and

advances

at

amortised

cost

339,115

(7,636)

(1,220)

(199,203)

(12,399)

118,657

Of

which

credit-impaired

(Stage

3):

Home

loans

1,809

-

(2)

(1,785)

(14)

8

Credit

cards,

unsecured

loans

and

other

retail

lending

1,074

-

(12)

(250)

(2)

810

Wholesale

loans

1,812

-

(9)

(909)

(20)

874

Total

credit-impaired

loans

and

advances

at

amortised

cost

4,695

-

(23)

(2,944)

(36)

1,692

Reverse

repurchase

agreements

and

other

similar

secured

lending

3,379

-

(3,379)

-

Trading

portfolio

assets:

Debt

securities

52,739

-

(423)

-

52,316

Traded

loans

5,378

-

(134)

-

5,244

Total

trading

portfolio

assets

58,117

-

(557)

-

57,560

Financial

assets

at

fair

value

through

the

income

statement:

Loans

and

advances

22,692

-

(14)

(16,580)

(57)

6,041

Debt

securities

5,249

-

5,249

Reverse

repurchase

agreements

96,887

-

(1,132)

(95,736)

-

19

Other

financial

assets

763

-

763

Total

financial

assets

at

fair

value

through

the

income

statement

125,591

-

(1,146)

(112,316)

(57)

12,072

Derivative

financial

instruments

229,236

(175,998)

(33,411)

(5,511)

(5,564)

8,752

Financial

assets

at

fair

value

through

other

comprehensive

income

64,727

-

(305)

(1,051)

63,371

Other

assets

1,375

-

1,375

Total

on-balance

sheet

1,055,054

(183,634)

(35,777)

(321,271)

(19,071)

495,301

Off-balance

sheet:

Contingent

liabilities

24,527

-

(400)

(4,412)

(159)

19,556

Loan

commitments

334,455

-

(84)

(47,008)

(1,950)

285,413

Total

off-balance

sheet

358,982

-

(484)

(51,420)

(2,109)

304,969

Total

1,414,036

(183,634)

(36,261)

(372,691)

(21,180)

800,270

Risk

review

Risk

performance

Credit

risk

114

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Expected

Credit

Losses

Loans

and

advances

at

amortised

cost

by

stage

The

table

below

presents

an

analysis

of

loans

and

advances

at

amortised

cost

by

gross

exposure,

impairment

allowance,

impairment

charge

and

coverage

ratio

by

stage

allocation

and

business

segment

as

at

31

December

2020.

Also

included

are

off

-balance

sheet

loan

commitments

and

financial

guarantee

contracts

by

gross

exposure

and

impairment

allowance

and

coverage

ratio

by

stage

allocation

as

at

31

December

2020.

Impairment

allowance

under

IFRS

9

considers

both

the

drawn

and

the

undrawn

counterparty

exposure.

For

retail

portfolios,

the

total

impairment

allowance

is

allocated

to

the

drawn

exposure

to

the

extent

that

the

allowance

does

not

exceed

the

exposure

as

ECL

is

not

reported

separately.

Any

excess

is

reported

on

the

liability

side

of

the

balance

sheet

as

a

provision.

For

wholesale

portfolios,

the

impairment

allowance

on

the

undrawn

exposure

is

reported

on

the

liability

side

of

the

balance

sheet

as

a

provision.

Loans

and

advances

at

amortised

cost

by

stage

(audited)

Gross

exposure

Impairment

allowance

Net

exposure

Stage

1

Stage

2

Stage

3

Total

Stage

1

Stage

2

Stage

3

Total

As

at

31

December

2020

£m

Barclays

UK

153,250

23,896

2,732

179,878

332

1,509

1,147

2,988

176,890

Barclays

International

a

21,048

5,500

1,992

28,540

396

1,329

1,205

2,930

25,610

Head

Office

4,267

720

844

5,831

4

51

380

435

5,396

Total

Barclays

Group

retail

178,565

30,116

5,568

214,249

732

2,889

2,732

6,353

207,896

Barclays

UK

31,918

4,325

1,126

37,369

13

129

116

258

37,111

Barclays

International

a

79,911

16,565

2,270

98,746

288

546

859

1,693

97,053

Head

Office

570

-

33

603

-

31

572

Total

Barclays

Group

wholesale

b

112,399

20,890

3,429

136,718

301

675

1,006

1,982

134,736

Total

loans

and

advances

at

amortised

cost

290,964

51,006

8,997

350,967

1,033

3,564

3,738

8,335

342,632

Off

-balance

sheet

loan

commitments

and

financial

guarantee

contracts

c

289,939

52,891

2,330

345,160

256

758

50

1,064

344,096

Total

d

580,903

103,897

11,327

696,127

1,289

4,322

3,788

9,399

686,728

Loan

impairment

charge

and

loan

loss

rate

Coverage

ratio

Loan

impairment

charge

Loan

loss

rate

Stage

1

Stage

2

Stage

3

Total

As

at

31

December

2020

%

£m

bps

Barclays

UK

0.2

6.3

42.0

1.7

1,070

59

Barclays

International

a

1.9

24.2

60.5

10.3

1,680

589

Head

Office

0.1

7.1

45.0

7.5

91

156

Total

Barclays

Group

retail

0.4

9.6

49.1

3.0

2,841

133

Barclays

UK

-

3.0

10.3

0.7

154

41

Barclays

International

a

0.4

3.3

37.8

1.7

914

93

Head

Office

-

93.9

5.1

-

Total

Barclays

Group

wholesale

b

0.3

3.2

29.3

1.4

1,068

78

Total

loans

and

advances

at

amortised

cost

0.4

7.0

41.5

2.4

3,909

111

Off

-balance

sheet

loan

commitments

and

financial

guarantee

contracts

c

0.1

1.4

2.1

0.3

776

Other

financial

assets

subject

to

impairment

d

153

Total

e

0.2

4.2

33.4

1.4

4,838

Notes

a

Private

Banking

have

refined

the

methodology

to

classify

£5bn

of

their

exposure

between

Wholesale

and

Retail

during

the

year.

b

Includes

Wealth

and

Private

Banking

exposures

measured

on

an

individual

customer

exposure

basis,

and

excludes

Business

Banking

exposures

that

are

managed

on

a

collective

basis.

The

net

impact

is

a

difference

in

total

exposure

of

£7,551

m

of

balances

reported

as

wholesale

loans

i

n

the

Loans

and

advances

at

amortised

cost

by

product

disclosure.

c

Excludes

loan

commitments

and

fi

nancial

guarantees

of

£9.5bn

carried

at

fair

value.

d

Other

financial

assets

subject

to

impairment

not

included

in

the

table

above

include

cash

collateral

and

settlement

balances,

financial

assets

at

fair

value

through

other

comprehensive

income

and

other

assets.

These

have

a

total

gross

exposure

of

£180.3

b

n

and

impairment

allowance

of

£165

m

.

This

comprises

£11m

ECL

on

£175.7bn

Stage

1

assets,

£9m

on

£4.4bn

Stage

2

fair

value

through

other

comprehensive

income

assets

,

other

assets,

cash

collateral

and

settlement

assets

and

£145m

on

£154m

Stage

3

other

assets.

e

The

loan

loss

rate

is

138bps

after

applying

th

e

total

impairment

charge

of

£4,838

m.

Risk

review

Risk

performance

Credit

risk

115

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Loans

and

advances

at

amortised

cost

by

stage

(audited)

Gross

exposure

Impairment

allowance

Net

exposure

Stage

1

Stage

2

Stage

3

Total

Stage

1

Stage

2

Stage

3

Total

As

at

31

December

2019

£m

Barclays

UK

143,097

23,198

2,446

168,741

198

1,277

974

2,449

166,292

Barclays

International

27,886

4,026

1,875

33,787

352

774

1,359

2,485

31,302

Head

Office

4,803

500

826

6,129

5

36

305

346

5,783

Total

Barclays

Group

retail

175,786

27,724

5,147

208,657

555

2,087

2,638

5,280

203,377

Barclays

UK

27,891

2,397

1,124

31,412

16

38

108

162

31,250

Barclays

International

92,615

8,113

1,615

102,343

136

248

447

831

101,512

Head

Office

2,974

-

37

3,011

-

35

2,976

Total

Barclays

Group

wholesale

a

123,480

10,510

2,776

136,766

152

286

590

1,028

135,738

Total

loans

and

advances

at

amortised

cost

299,266

38,234

7,923

345,423

707

2,373

3,228

6,308

339,115

Off

-balance

sheet

loan

commitments

and

financial

guarantee

contracts

b

321,140

19,185

935

341,260

97

170

55

322

340,938

Total

c

620,406

57,419

8,858

686,683

804

2,543

3,283

6,630

680,053

Loan

impairment

charge

and

loan

loss

rate

Coverage

ratio

Loan

impairment

charge

Loan

loss

rate

Stage

1

Stage

2

Stage

3

Total

As

at

31

December

2019

%

£m

bps

Barclays

UK

0.1

5.5

39.8

1.5

661

39

Barclays

International

1.3

19.2

72.5

7.4

999

296

Head

Office

0.1

7.2

36.9

5.6

27

44

Total

Barclays

Group

retail

0.3

7.5

51.3

2.5

1,687

81

Barclays

UK

0.1

1.6

9.6

0.5

33

11

Barclays

International

0.1

3.1

27.7

0.8

113

11

Head

Office

-

94.6

1.2

-

Total

Barclays

Group

wholesale

a

0.1

2.7

21.3

0.8

146

11

Total

loans

and

advances

at

amortised

cost

0.2

6.2

40.7

1.8

1,833

53

Off

-balance

sheet

loan

commitments

and

financial

guarantee

contracts

b

-

0.9

5.9

0.1

71

Other

financial

assets

subject

to

impairment

c

8

Total

d

0.1

4.4

37.1

1.0

1,912

Notes

a

Included

in

the

above

analysis

are

Wealth

and

Private

Banking

exposures

measured

on

an

indi

vidual

customer

exposure

basis,

and

excludes

Business

Banking

exposures

that

are

managed

on

a

collective

basis.

The

net

impact

is

a

difference

in

total

exposure

of

£6,434m

of

balances

reported

as

wholesale

loans

in

the

Loans

and

advances

at

amortised

cost

by

product

disclosure.

b

Excludes

loan

commitments

a

nd

financial

guarantees

of

£17.7bn

carried

at

fair

value.

c

Other

financial

assets

subject

to

impairment

not

included

in

the

table

above

include

cash

collateral

and

settlement

balances,

financial

assets

at

fair

value

through

other

comprehensive

income

and

other

assets.

These

have

a

total

gross

exposure

of

£149.3

bn

and

im

pairment

allowance

of

£24

m.

This

comprises

£12m

ECL

on

£148.5bn

Stage

1

assets

£2m

on

£0.8bn

Stage

2

fair

value

through

other

comprehensive

income

assets,

cash

collateral

and

settlement

balances

and

£10m

on

£10m

Stage

3

other

assets.

d

The

loan

loss

rate

is

55bps

after

applying

the

total

impairment

charge

of

£1,912

m.

Risk

review

Risk

performance

Credit

risk

116

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Loans

and

advances

at

amortised

cost

by

product

(audited)

The

table

below

presents

a

breakdown

of

loans

and

advances

at

amortised

cost

and

the

impairment

allowance

with

stage

allocation

by

asset

classification.

Loans

and

advances

at

amortised

cost

by

product

(audited)

Stage

2

As

at

31

December

2020

Stage

1

Not

past

due

<=30

days

past

due

>30

days

past

due

Total

Stage

3

Total

Gross

exposure

£m

Home

loans

138,639

16,651

1,785

876

19,312

2,234

160,185

Credit

cards,

unsecured

loans

and

other

retail

lending

33,021

9,470

544

306

10,320

3,172

46,513

Wholesale

loans

119,304

19,501

1,097

776

21,374

3,591

144,269

Total

290,964

45,622

3,426

1,958

51,006

8,997

350,967

Impairment

allowance

Home

loans

33

57

13

14

84

421

538

Credit

cards,

unsecured

loans

and

other

retail

lending

680

2,382

180

207

2,769

2,251

5,700

Wholesale

loans

320

650

50

11

711

1,066

2,097

Total

1,033

3,089

243

232

3,564

3,738

8,335

Net

exposure

Home

loans

138,606

16,594

1,772

862

19,228

1,813

159,647

Credit

cards,

unsecured

loans

and

other

retail

lending

32,341

7,088

364

99

7,551

921

40,813

Wholesale

loans

118,984

18,851

1,047

765

20,663

2,525

142,172

Total

289,931

42,533

3,183

1,726

47,442

5,259

342,632

Coverage

ratio

%

Home

loans

-

0.3

0.7

1.6

0.4

18.8

0.3

Credit

cards,

unsecured

loans

and

other

retail

lending

2.1

25.2

33.1

67.6

26.8

71.0

12.3

Wholesale

loans

0.3

3.3

4.6

1.4

3.3

29.7

1.5

Total

0.4

6.8

7.1

11.8

7.0

41.5

2.4

As

at

31

December

2019

Gross

exposure

£m

Home

loans

135,713

14,733

1,585

725

17,043

2,155

154,911

Credit

cards,

unsecured

loans

and

other

retail

lending

46,012

9,759

496

504

10,759

3,409

60,180

Wholesale

loans

117,541

9,374

374

684

10,432

2,359

130,332

Total

299,266

33,866

2,455

1,913

38,234

7,923

345,423

Impairment

allowance

Home

loans

22

37

14

13

64

346

432

Credit

cards,

unsecured

loans

and

other

retail

lending

542

1,597

159

251

2,007

2,335

4,884

Wholesale

loans

143

284

9

302

547

992

Total

707

1,918

182

273

2,373

3,228

6,308

Net

exposure

Home

loans

135,691

14,696

1,571

712

16,979

1,809

154,479

Credit

cards,

unsecured

loans

and

other

retail

lending

45,470

8,162

337

253

8,752

1,074

55,296

Wholesale

loans

117,398

9,090

365

675

10,130

1,812

129,340

Total

298,559

31,948

2,273

1,640

35,861

4,695

339,115

Coverage

ratio

%

Home

loans

-

0.3

0.9

1.8

0.4

16.1

0.3

Credit

cards,

unsecured

loans

and

other

retail

lending

1.2

16.4

32.1

49.8

18.7

68.5

8.1

Wholesale

loans

0.1

3.0

2.4

1.3

2.9

23.2

0.8

Total

0.2

5.7

7.4

14.3

6.2

40.7

1.8

Risk

review

Risk

performance

Credit

risk

117

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Loans

and

advances

at

amortised

cost

by

selected

sectors

The

table

below

presents

a

breakdown

of

loans

and

advances

at

amortised

cost

and

the

impairment

allowance,

with

gross

exposure

and

stage

allocation

for

selected

industry

sectors

within

the

wholesale

loans

portfolio.

The

industry

sectors

have

been

selected

based

upon

the

level

of

management

focus

they

have

received

following

the

onset

of

the

COVID-19

pandemic.

The

credit

risk

industry

concentration

disclosure

in

the

Analysis

of

the

concentration

of

credit

risk

section

represents

all

the

industry

categories

and

the

below

only

covers

a

subset

of

that

table.

The

gross

loans

and

advances

to

selected

sectors

have

increased

over

the

year

as

a

result

of

additional

drawdowns

on

committed

credit

lines

provided

by

the

bank.

Overall

limits

and

exposures

have

remained

broadly

stable

over

the

year

whilst

provisions

have

increased

in

light

of

the

heightened

stress.

The

wholesale

portfolio

also

benefits

from

a

hedge

protection

programme

that

enables

effective

risk

management

against

systemic

losses.

Loans

and

advances

at

amortised

cost

by

selected

sectors

Gross

exposure

Impairment

allowance

Stage

1

Stage

2

Stage

3

Total

Stage

1

Stage

2

Stage

3

Total

As

at

31

December

2020

£m

Air

travel

367

525

56

948

9

27

23

59

Hospitality

and

leisure

4,440

2,387

313

7,140

53

115

61

229

Oil

and

gas

1,754

854

465

3,073

31

27

140

198

Retail

3,907

1,153

283

5,343

78

51

108

237

Shipping

308

389

12

709

2

30

1

33

Transportation

1,148

253

125

1,526

19

10

57

86

Total

11,924

5,561

1,254

18,739

192

260

390

842

Total

of

Wholesale

exposures

10%

26%

35%

13%

60%

37%

40%

Gross

exposure

Impairment

allowance

Stage

1

Stage

2

Stage

3

Total

Stage

1

Stage

2

Stage

3

Total

As

at

31

December

2019

£m

Air

travel

194

31

26

251

-

24

Hospitality

and

leisure

4,321

851

199

5,371

8

18

29

55

Oil

and

gas

2,539

612

136

3,287

8

24

47

79

Retail

3,395

777

207

4,379

11

24

85

120

Shipping

357

52

7

416

1

-

3

4

Transportation

873

82

89

1,044

5

54

64

Total

11,679

2,405

664

14,748

33

71

242

346

Total

of

Wholesale

exposures

10%

23%

28%

11%

23%

24%

44%

35%

A

£0.2bn

adjustment

has

been

applied

to

selected

sectors

in

Stage

1

to

increase

the

ECL

coverage

on

these

names

in

line

with

the

average

Stage

2

coverage

of

the

respective

sector.

This

adjustment

is

materially

in

response

to

the

increased

stress

in

these

sectors

not

captured

through

the

ECL

models.

An

additional

£0.1bn

adjustment

is

held

against

undrawn

exposure

which

does

not

appear

in

the

table.

The

coverage

ratio

for

selected

sectors

has

increased

from

2.3%

as

at

31

December

2019

to

4.5%

as

at

31

December

2020.

Risk

review

Risk

performance

Credit

risk

118

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Movement

in

gross

exposures

and

impairment

allowance

including

provisions

for

loan

commitments

and

financial

guarantees

The

following

tables

present

a

reconciliation

of

the

opening

to

the

closing

balance

of

the

exposure

and

impairment

allowance.

An

explanation

of

the

terms:

12-month

ECL,

lifetime

ECL

and

credit-impaired

is

included

in

Note

7.

Transfers

between

stages

in

the

tables

have

been

reflected

as

if

they

had

taken

place

at

the

beginning

of

the

year.

The

movements

are

measured

over

a

12-month

period.

Loans

and

advances

at

amortised

cost

(audited)

Stage

1

Stage

2

Stage

3

Total

Gross

exposure

ECL

Gross

exposure

ECL

Gross

exposure

ECL

Gross

exposure

ECL

£m

Home

loans

As

at

1

January

2020

135,713

22

17,043

64

2,155

346

154,911

432

Transfers

from

Stage

1

to

Stage

2

(8,724)

(1)

8,724

1

-

Transfers

from

Stage

2

to

Stage

1

4,618

14

(4,618)

(14)

-

Transfers

to

Stage

3

(308)

-

(420)

(10)

728

10

-

Transfers

from

Stage

3

47

1

219

2

(266)

(3)

-

Business

activity

in

the

year

22,548

7

714

2

4

-

23,266

9

Changes

to

models

used

for

calculation

a

-

Net

drawdowns,

repayments,

net

re-

measurement

and

movements

due

to

exposure

and

risk

parameter

changes

(6,195)

(9)

(841)

42

(57)

105

(7,093)

138

Final

repayments

(9,060)

(1)

(1,509)

(3)

(308)

(15)

(10,877)

(19)

Disposals

c

-

Write

-offs

d

-

(22)

As

at

31

December

2020

e

138,639

33

19,312

84

2,234

421

160,185

538

Credit

cards,

unsecured

loans

and

other

retail

lending

As

at

1

January

2020

46,012

542

10,759

2,007

3,409

2,335

60,180

4,884

Transfers

from

Stage

1

to

Stage

2

(6,571)

(134)

6,571

134

-

Transfers

from

Stage

2

to

Stage

1

3,080

482

(3,080)

(482)

-

Transfers

to

Stage

3

(712)

(25)

(1,162)

(398)

1,874

423

-

Transfers

from

Stage

3

76

39

67

12

(143)

(51)

-

Business

activity

in

the

year

5,598

67

324

83

59

28

5,981

178

Changes

to

models

used

for

calculation

a

-

13

-

296

-

309

Net

drawdowns,

repayments,

net

re-

measurement

and

movements

due

to

exposure

and

risk

parameter

changes

b

(9,678)

(229)

(2,706)

1,174

(10)

1,353

(12,394)

2,298

Final

repayments

(3,291)

(67)

(270)

(37)

(204)

(84)

(3,765)

(188)

Disposals

c

(1,493)

(8)

(183)

(20)

(204)

(144)

(1,880)

(172)

Write

-offs

d

-

(1,609)

As

at

31

December

2020

e

33,021

680

10,320

2,769

3,172

2,251

46,513

5,700

Wholesale

loans

As

at

1

January

2020

117,541

143

10,432

302

2,359

547

130,332

992

Transfers

from

Stage

1

to

Stage

2

(12,531)

(35)

12,531

35

-

Transfers

from

Stage

2

to

Stage

1

4,121

40

(4,121)

(40)

-

Transfers

to

Stage

3

(1,137)

(4)

(875)

(58)

2,012

62

-

Transfers

from

Stage

3

471

22

247

13

(718)

(35)

-

Business

activity

in

the

year

27,863

46

2,336

149

634

85

30,833

280

Changes

to

models

used

for

calculation

a

-

Net

drawdowns,

repayments,

net

re-

measurement

and

movements

due

to

exposure

and

risk

parameter

changes

13,828

130

3,811

339

(64)

799

17,575

1,268

Final

repayments

(28,458)

(22)

(2,977)

(29)

(299)

(59)

(31,734)

(110)

Disposals

c

(2,394)

-

(10)

-

(2,404)

-

Write

-offs

d

-

(333)

As

at

31

December

2020

e

119,304

320

21,374

711

3,591

1,066

144,269

2,097

Notes

a

Changes

to

models

used

for

calculation

include

a

£309m

adjustment

which

largely

represents

model

remediation

to

correct

for

over

recovery

of

debt

in

UK

unsecured

lending.

Barclays

continually

review

the

output

of

models

to

determine

accuracy

of

the

ECL

calculation

including

review

of

model

monitoring,

external

benchmarking

and

experience

of

model

operation

over

an

extended

period

of

time.

This

ensures

that

the

models

used

continue

to

reflect

the

risks

inherent

across

the

businesses.

b

Transfers

and

risk

parameters

change

has

seen

an

ECL

increase

which

is

materially

driven

by

stage

migration

in

response

to

the

macroeconomic

scenario

updates,

partially

offset

by

a

net

release

in

ECL

of

£0.6bn

due

to

a

reclassification

of

£2bn

gross

loans

and

advances

from

Stage

2

to

Stage

1

in

credit

cards

and

unsecured

loans.

The

reclassification

followed

a

review

of

back-testing

of

results

which

indicated

that

origination

probability

of

default

characteristics

were

unnecessarily

moving

Sage

1

accounts

into

Stage

2.

c

The

£1.9bn

disposals

reported

within

Credit

cards,

unsecured

loans

and

other

retail

lending

portfolio

include

£1.7bn

sale

of

motor

financing

business

within

the

Barclays

Partner

Finance

business

and

£0.2bn

relate

to

debt

sales

undertaken

during

the

year.

The

£2.4bn

disposal

reported

within

W

holesale

loans

include

sale

of

debt

securities

as

part

of

Group

Treasury

Operations.

d

In

2020,

gross

write-offs

amounted

to

£1,964m

(2019:

£1,883m)

and

post

write-off

recoveries

amounted

to

£35m

(2019:

£124m).

Net

write-offs

represent

gross

write-offs

less

post

write-off

recoveries

and

amounted

to

£1,929m

(2019:

£1,759m).

e

Other

financial

assets

subject

to

impairment

not

included

in

the

table

above

include

cash

collateral

and

settlement

balances,

financial

assets

at

fair

value

through

other

comprehensive

income

and

other

assets.

These

have

a

total

gross

exposure

of

£180.3bn

(December

2019:

£149.3bn)

and

impairment

allowance

of

£165m

(December

2019:

£24m).

This

comprises

£11m

ECL

(December

2019:

£12m)

on

£175.7bn

Stage

1

assets

(December

2019:

£148.5bn),

£9m

(December

2019:

£2m)

on

£4.4bn

Stage

2

fair

value

through

other

comprehensive

income

assets,

cash

collateral

and

settlement

assets

(December

2019:

£0.8bn)

and

£145m

(December

2019:

£10m)

on

£154m

Stage

3

other

assets

(December

2019:

£10m).

Risk

review

Risk

performance

Credit

risk

119

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Reconciliation

of

ECL

movement

to

impairment

charge/(release)

for

the

period

£m

Home

loans

128

Credit

cards,

unsecured

loans

and

other

retail

lending

2,597

Wholesale

loans

1,438

ECL

movement

excluding

assets

derecognised

due

to

disposals

and

write-offs

4,163

Recoveries

and

reimbursements

a

(399)

Exchange

and

other

adjustments

b

145

Impairment

charge

on

loan

commitments

and

financial

guarantees

776

Impairment

charge

on

other

financial

assets

c

153

Income

statement

charge

for

the

period

4,838

Notes

a

Recoveries

and

reimbursements

includes

£364m

for

reimbursements

expected

to

be

received

under

the

arrangement

where

Group

has

entered

into

financial

guarantee

contracts

which

provide

credit

protection

over

certain

loans

assets

with

third

parties.

Cash

recoveries

of

previously

written

off

amounts

to

£35m

.

b

Includes

foreign

exchange

and

interest

and

fees

in

suspense.

c

Other

financial

assets

subject

to

impairment

not

included

in

the

table

above

include

cash

collateral

and

settlement

balances,

financial

assets

at

fair

value

through

other

comprehensive

income

and

other

assets.

These

have

a

total

gross

exposure

of

£180.3bn

(December

2019:

£149.3bn)

and

impairment

allowance

of

£165m

(December

2019:

£24m).

This

comprises

£11m

ECL

(December

2019:

£12m)

on

£175.7bn

Stage

1

assets

(December

2019:

£148.5bn),

£9m

(December

2019:

£2m)

on

£4.4bn

Stage

2

fair

value

through

other

comprehensive

income

assets,

cash

collateral

and

settlement

assets

(December

2019:

£0.8bn)

and

£145m

(December

2019:

£10m)

on

£154m

Stage

3

other

assets

(December

2019:

£10m).

Loan

commitments

and

financial

guarantees

(audited)

Stage

1

Stage

2

Stage

3

Total

Gross

exposure

ECL

Gross

exposure

ECL

Gross

exposure

ECL

Gross

exposure

ECL

£m

Home

loans

As

at

1

January

2020

9,542

-

500

-

4

-

10,046

-

Net

transfers

between

stages

(82)

-

78

-

4

-

Business

activity

in

the

year

7,975

-

7,975

-

Net

drawdowns,

repayments,

net

re-

measurement

and

movement

due

to

exposure

and

risk

parameter

changes

(5,332)

-

(27)

-

(2)

-

(5,361)

-

Limit

management

and

final

repayments

(242)

-

(35)

-

(1)

-

(278)

-

As

at

31

December

2020

11,861

-

516

-

5

-

12,382

-

Credit

cards,

unsecured

loans

and

other

retail

lending

As

at

1

January

2020

125,759

35

6,238

71

250

14

132,247

120

Net

transfers

between

stages

(5,477)

43

4,725

(40)

752

(3)

-

Business

activity

in

the

year

5,214

2

158

3

2

1

5,374

6

Net

drawdowns,

repayments,

net

re-

measurement

and

movement

due

to

exposure

and

risk

parameter

changes

1,298

(22)

1,636

272

(671)

15

2,263

265

Limit

management

and

final

repayments

(12,423)

(3)

(640)

(1)

(104)

(4)

(13,167)

(8)

As

at

31

December

2020

114,371

55

12,117

305

229

23

126,717

383

Wholesale

loans

As

at

1

January

2020

185,839

62

12,447

99

681

41

198,967

202

Net

transfers

between

stages

(28,325)

67

27,319

(72)

1,006

5

-

Business

activity

in

the

year

42,917

32

4,708

102

774

2

48,399

136

Net

drawdowns,

repayments,

net

re-

measurement

and

movement

due

to

exposure

and

risk

parameter

changes

13,637

47

(44)

338

(69)

(20)

13,524

365

Limit

management

and

final

repayments

(50,361)

(7)

(4,172)

(14)

(296)

(1)

(54,829)

(22)

As

at

31

December

2020

163,707

201

40,258

453

2,096

27

206,061

681

Risk

review

Risk

performance

Credit

risk

120

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Loans

and

advances

at

amortised

cost

(audited)

Stage

1

Stage

2

Stage

3

Total

Gross

exposure

ECL

Gross

exposure

ECL

Gross

exposure

ECL

Gross

exposure

ECL

£m

Home

loans

As

at

1

January

2019

130,066

31

18,206

82

2,476

351

150,748

464

Transfers

from

Stage

1

to

Stage

2

(9,051)

(1)

9,051

1

-

Transfers

from

Stage

2

to

Stage

1

8,000

28

(8,000)

(28)

-

Transfers

to

Stage

3

(199)

-

(510)

(15)

709

15

-

Transfers

from

Stage

3

43

2

294

3

(337)

(5)

-

Business

activity

in

the

year

24,935

3

734

2

3

-

25,672

5

Changes

to

models

used

for

calculation

a

-

Net

drawdowns,

repayments,

net

re-

measurement

and

movements

due

to

exposure

and

risk

parameter

changes

(6,931)

(38)

(843)

27

(214)

24

(7,988)

13

Final

repayments

(10,427)

(2)

(1,827)

(4)

(454)

(13)

(12,708)

(19)

Disposals

b

(723)

(1)

(62)

(4)

(2)

-

(787)

(5)

Write

-offs

c

-

(26)

As

at

31

December

2019

d

135,713

22

17,043

64

2,155

346

154,911

432

Credit

cards,

unsecured

loans

and

other

retail

lending

As

at

1

January

2019

45,785

528

12,229

2,304

3,760

2,511

61,774

5,343

Transfers

from

Stage

1

to

Stage

2

(3,604)

(72)

3,604

72

-

Transfers

from

Stage

2

to

Stage

1

4,522

701

(4,522)

(701)

-

Transfers

to

Stage

3

(857)

(21)

(1,264)

(448)

2,121

469

-

Transfers

from

Stage

3

144

103

28

14

(172)

(117)

-

Business

activity

in

the

year

9,664

120

704

123

89

39

10,457

282

Changes

to

models

used

for

calculation

a

-

16

-

(110)

-

(7)

-

(101)

Net

drawdowns,

repayments,

net

re-

measurement

and

movements

due

to

exposure

and

risk

parameter

changes

(5,975)

(779)

351

806

373

1,836

(5,251)

1,863

Final

repayments

(3,667)

(54)

(371)

(53)

(290)

(74)

(4,328)

(181)

Disposals

b

-

(777)

(627)

(777)

(627)

Write

-offs

c

-

(1,695)

As

at

31

December

2019

d

46,012

542

10,759

2,007

3,409

2,335

60,180

4,884

Wholesale

loans

As

at

1

January

2019

105,375

129

13,012

329

2,267

505

120,654

963

Transfers

from

Stage

1

to

Stage

2

(3,419)

(11)

3,419

11

-

Transfers

from

Stage

2

to

Stage

1

5,213

84

(5,213)

(84)

-

Transfers

to

Stage

3

(501)

(2)

(650)

(19)

1,151

21

-

Transfers

from

Stage

3

473

35

205

25

(678)

(60)

-

Business

activity

in

the

year

40,837

51

1,757

27

31

-

42,625

78

Changes

to

models

used

for

calculation

a

-

(9)

-

(19)

-

(28)

Net

drawdowns,

repayments,

net

re-

measurement

and

movements

due

to

exposure

and

risk

parameter

changes

5,929

(104)

321

85

122

334

6,372

315

Final

repayments

(34,081)

(30)

(2,419)

(53)

(372)

(91)

(36,872)

(174)

Disposals

b

(2,285)

-

(2,285)

-

Write

-offs

c

-

(162)

As

at

31

December

2019

d

117,541

143

10,432

302

2,359

547

130,332

992

Notes

a

Changes

to

models

used

for

calculation

include

a

£101m

movement

in

Credit

cards,

unsecured

loans

and

other

retail

lending

and

a

£28m

movement

in

Wholesale

loans.

These

reflect

methodology

changes

made

during

the

year.

Barclays

continually

review

the

output

of

models

to

determine

accuracy

of

the

ECL

calculation

including

review

of

model

monitoring,

external

benchmarking

and

experience

of

model

operation

over

an

extended

period

of

time.

This

ensures

that

the

models

used

continue

to

reflect

the

risks

inherent

across

the

businesses.

b

The

£787m

movement

of

gross

loans

and

advances

disposed

of

across

Home

loans

relates

to

the

sale

of

a

portfolio

of

mortgages

from

the

Italian

loan

book.

The

£777m

disposal

reported

within

Credit

cards,

unsecured

loans

and

other

retail

lending

portfolio

relates

to

debt

sales

undertaken

during

the

year.

Finally,

disposals

of

£2,285m

within

Wholesale

loans

relate

to

the

sale

of

debt

securities

as

part

of

the

Group’s

Treasury

operations.

c

In

2019,

gross

write-offs

amounted

to

£1,883m

(2018:

£1,891m)

and

post

write-off

recoveries

amounted

to

£124m

(2018:

£195m).

Net

write-offs

represent

gross

write-offs

less

post

write-off

recoveries

and

amounted

to

£1,759m

(2018:

£1,696m).

d

Other

financial

assets

subject

to

impairment

not

included

in

the

table

above

include

cash

collateral

and

settlement

balances,

financial

assets

at

fair

value

through

other

comprehensive

income

and

other

assets.

These

have

a

total

gross

exposure

of

£149.3bn

(December

2018:

£129.9bn)

and

impairment

allowance

of

£24m

(December

2018:

£12m).

This

comprises

£12m

ECL

(December

2018:

£10m)

on

£148.5bn

Stage

1

assets

(December

2018:

£129.3bn),

£2m

(December

2018:

£2m)

on

£0.8bn

Stage

2

fair

value

through

other

comprehensive

income

assets,

cash

collateral

and

settlement

assets

(December

2018:

£0.6bn)

and

£10m

(December

2018:

£nil)

on

£10m

Stage

3

other

assets

(December

2018:

£nil).

Risk

review

Risk

performance

Credit

risk

121

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Reconciliation

of

ECL

movement

to

impairment

charge/(release)

for

the

period

£m

Home

loans

(1)

Credit

cards,

unsecured

loans

and

other

retail

lending

1,863

Wholesale

loans

191

ECL

movement

excluding

assets

derecognised

due

to

disposals

and

write-offs

2,053

Recoveries

and

reimbursements

(124)

Exchange

and

other

adjustments

a

(96)

Impairment

charge

on

loan

commitments

and

financial

guarantees

71

Impairment

charge

on

other

financial

assets

b

8

Income

statement

charge

for

the

period

1,912

Notes

a

Includes

foreign

exchange

and

interest

and

fees

in

suspense.

b

Other

financial

assets

subject

to

impairment

not

included

in

the

table

above

include

cash

collateral

and

settlement

balances,

financial

assets

at

fair

value

through

other

comprehensive

income

and

other

assets.

These

have

a

total

gross

exposure

of

£149.3bn

(December

2018:

£129.9bn)

and

impairment

allowance

of

£24m

(December

2018:

£12m).

This

comprises

£12m

ECL

(December

2018:

£10m

)

on

£148.5bn

Stage

1

assets

(December

2018:

£129.3bn),

£2m

(December

2018:

£2m)

on

£0.8bn

Stage

2

fair

value

through

other

comprehensive

income

assets,

cash

collateral

and

settlement

assets

(December

2018:

£0.6bn)

and

£10m

(December

2018:

£nil)

on

£10m

Stage

3

other

assets

(December

2018:

£nil).

Loan

commitments

and

financial

guarantees

(audited)

Stage

1

Stage

2

Stage

3

Total

Gross

exposure

ECL

Gross

exposure

ECL

Gross

exposure

ECL

Gross

exposure

ECL

£m

Home

loans

As

at

1

January

2019

6,948

-

546

-

13

-

7,507

-

Net

transfers

between

stages

(39)

-

47

-

(8)

-

Business

activity

in

the

year

2,848

-

2,848

-

Net

drawdowns,

repayments,

net

re-

measurement

and

movement

due

to

exposure

and

risk

parameter

changes

1

-

(40)

-

(39)

-

Limit

management

and

final

repayments

(216)

-

(53)

-

(1)

-

(270)

-

As

at

31

December

2019

9,542

-

500

-

4

-

10,046

-

Credit

cards,

unsecured

loans

and

other

retail

lending

As

at

1

January

2019

124,611

41

9,016

65

267

20

133,894

126

Net

transfers

between

stages

117

44

(1,082)

(43)

965

(1)

-

Business

activity

in

the

year

14,619

2

218

1

6

14,843

9

Net

drawdowns,

repayments,

net

re-

measurement

and

movement

due

to

exposure

and

risk

parameter

changes

(1,151)

(48)

(1,172)

54

(874)

(9)

(3,197)

(3)

Limit

management

and

final

repayments

(12,437)

(4)

(742)

(6)

(114)

(2)

(13,293)

(12)

As

at

31

December

2019

125,759

35

6,238

71

250

14

132,247

120

Wholesale

loans

As

at

1

January

2019

178,430

58

12,564

85

404

2

191,398

145

Net

transfers

between

stages

(875)

7

580

(8)

295

1

-

Business

activity

in

the

year

53,685

22

2,779

22

16

-

56,480

44

Net

drawdowns,

repayments,

net

re-

measurement

and

movement

due

to

exposure

and

risk

parameter

changes

(487)

(1)

1,190

36

232

41

935

76

Limit

management

and

final

repayments

(44,914)

(24)

(4,666)

(36)

(266)

(3)

(49,846)

(63)

As

at

31

December

2019

185,839

62

12,447

99

681

41

198,967

202

Risk

review

Risk

performance

Credit

risk

122

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Stage

2

decomposition

Loans

and

advances

at

amortised

cost

a

2020

2019

Gross

exposure

Impairment

allowance

Gross

exposure

Impairment

allowance

As

at

31

December

£m

Quantitative

test

36,754

3,252

24,034

2,059

Qualitative

test

11,865

273

12,733

278

30

days

past

due

backstop

2,387

39

1,467

36

Total

Stage

2

51,006

3,564

38,234

2,373

Note

a

Where

balances

satisfy

more

than

one

of

the

above

three

criteria

for

determining

a

significant

increase

in

credit

risk,

the

corresponding

gross

exposure

and

ECL

has

been

assigned

in

order

of

categories

presented.

Stage

2

exposures

are

predominantly

identified

using

quantitative

tests

where

the

lifetime

PD

has

deteriorated

more

than

a

pre-determined

amount

since

origination

during

the

year

driven

by

changes

in

macroeconomic

variables.

This

is

augmented

by

inclusion

of

accounts

meeting

the

designated

high

risk

criteria

(including

watchlist)

for

the

portfolio

under

the

qualitative

test.

Qualitative

tests

predominantly

include

£8.5bn

(2019:

£9.3bn)

in

Barclays

UK

of

which

£7.1bn

(2019:

£7.4bn)

relates

to

UK

Home

Finance,

£1.0bn

(2019:

£1.1bn)

relates

to

Business

Banking

and

£0.1bn

(2019:

£0.4bn)

relates

to

Barclaycard

UK.

A

further

£3.3bn

(2019:

£3.4bn)

relates

to

Barclays

International

of

which

£2bn

(2019:

£1.7bn)

relates

to

Corporate

and

Investment

Bank,

£0.3bn

(2019:

£0.9bn)

relates

to

Barclaycard

International

and

£0.7bn

(2019:

£0.7bn)

relates

to

Private

Bank.

A

small

number

of

other

accounts

(1%

of

impairment

allowances

and

5%

of

gross

exposure)

are

included

in

Stage

2.

These

accounts

are

not

otherwise

identified

by

the

quantitative

or

qualitative

tests

but

are

more

than

30

days

past

due.

The

percentage

triggered

by

these

backstop

criteria

is

a

measure

of

the

effectiveness

of

the

Stage

2

criteria

in

identifying

deterioration

prior

to

delinquency.

These

balances

include

items

in

the

Corporate

and

Investment

Bank

for

reasons

such

as

outstanding

interest

and

fees

rather

than

principal

balances.

For

further

detail

on

the

three

criteria

for

determining

a

significant

increase

in

credit

risk

required

for

Stage

2

classification,

refer

to

Note

7.

Stage

3

decomposition

Loans

and

advances

at

amortised

cost

2020

2019

Gross

exposure

Impairment

allowance

Gross

exposure

Impairment

allowance

As

at

31

December

£m

Exposures

not

charged-off

including

within

cure

period

a

3,773

831

3,540

857

Exposures

individually

assessed

or

in

recovery

book

b

5,224

2,907

4,383

2,371

Total

Stage

3

8,997

3,738

7,923

3,228

Notes

a

Includes

£2.6bn

(2019:

£2.5bn)

of

gross

exposure

in

a

cure

period

that

must

remain

in

Stage

3

for

a

minimum

of

12

months

before

moving

to

Stage

2.

b

Exposures

individually

assessed

or

in

recovery

book

cannot

cure

out

of

Stage

3.

Risk

review

Risk

performance

Credit

risk

123

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Management

adjustments

to

models

for

impairment

(audited)

Management

adjustments

to

impairment

models

are

applied

in

order

to

factor

in

certain

conditions

or

changes

in

policy

that

are

not

fully

incorporated

into

the

impairment

models,

or

to

reflect

additional

facts

and

circumstances

at

the

period

end.

Management

adjustments

are

reviewed

and

incorporated

into

future

model

development

where

applicable.

Total

management

adjustments

to

impairment

allowance

are

presented

by

product

below.

Management

adjustments

to

models

for

impairment

(audited)

a

2020

2019

Management

adjustments

to

impairment

allowances

Proportion

of

total

impairment

allowances

Management

adjustments

to

impairment

allowances

Proportion

of

total

impairment

allowancesb

As

at

31

December

£m

%

£m

%

Home

loans

131

24.3

57

13.2

Credit

cards,

unsecured

loans

and

other

retail

lending

1,234

20.3

308

6.2

Wholesale

loans

23

0.8

(25)

(2.1)

Total

1,388

14.8

340

5.1

Management

adjustments

to

models

for

impairment

charges

(audited)

a

Impairment

allowance

pre

management

adjustments

c

Economic

uncertainty

adjustments

Other

adjustments

Total

impairment

allowance

As

at

31

December

2020

£m

Home

loans

407

21

110

538

Credit

cards,

unsecured

loans

and

other

retail

lending

4,849

1,625

(391)

6,083

Wholesale

loans

2,755

421

(398)

2,778

Total

8,011

2,067

(679)

9,399

Notes

a

Positive

values

relate

to

an

increase

in

impairment

allowance.

b

The

2019

comparative

figures

have

been

restated

to

impairment

allowance

on

both

drawn

and

undrawn

exposures.

c

Includes

£6.8

bn

of

modelled

ECL,

£0.9bn

of

individually

assessed

impairments

and

£0.3bn

ECL

fr

om

non-modelled

exposures.

Economic

uncertainty

adjustments

The

pandemic

impacted

the

global

economy

throughout

2020

and

macroeconomic

forecasts

indicate

longer

term

impacts

will

result

in

higher

unemployment

levels

and

customer

and

client

stress.

However,

to

date,

little

real

credit

deterioration

has

occurred,

largely

as

a

result

of

government

and

bank

support.

Observed

30

day

arrears

rates

in

consumer

loans

in

particular

have

remained

stable

in

both

US

cards

(2020:

2.5%;

2019:

2.7%)

and

UK

cards

(2020:

1.7%;

2019:

1.7%).

A

similar

phenomenon

is

observed

in

wholesale,

where

the

average

risk

profile

of

the

portfolio

has

broadly

remained

stable

during

the

year

and

has

not

deteriorated

in

line

with

the

macroeconomic

crisis.

Given

this

backdrop,

management

has

applied

COVID-19

specific

adjustments

to

modelled

outputs

to

ensure

the

full

potential

impacts

of

stress

are

provided

for.

These

adjustments

address

the

temporary

nature

of

ongoing

government

support,

the

uncertainty

in

relation

to

the

timing

of

stress

and

the

degree

to

which

economic

consensus

has

not

yet

captured

the

range

of

economic

uncertainty.

The

COVID-19

adjustments

of

£2.1bn

broadly

comprised

the

following:

◾

Use

of

expert

judgment

to

adjust

the

probability

of

default

£0.7bn

to

pre-COVID

levels

to

reflect

the

impact

of

temporary

support

measures

on

underlying

customer

behaviour,

partially

offset

by

government

guarantees

£(0.1)bn

which

are

materially

against

BBLs;

◾

Adjusting

macroeconomic

variables

deemed

temporarily

influenced

by

support

measures,

enabling

models

to

consume

the

expected

stress

£1.2bn;

◾

A

£0.3bn

adjustment

has

been

applied

to

selected

sectors

in

Stage

1

to

increase

the

ECL

coverage

on

these

names

in

line

with

the

average

Stage

2

coverage.

This

adjustment

is

materially

in

response

to

the

increased

stress

in

these

sectors

not

captured

through

the

ECL

models.

Other

adjustments

Home

loans:

The

low

average

LTV

nature

of

the

UK

Home

Loans

portfolio

means

that

modelled

ECL

estimates

are

low

in

all

but

the

most

severe

economic

scenarios.

An

adjustment

is

held

to

maintain

an

appropriate

level

of

ECL.

Credit

cards,

unsecured

loans

and

other

retail

lending:

Includes

a

net

release

in

ECL

of

£0.6bn

due

to

a

reclassification

of

£2bn

gross

loans

and

advances

from

Stage

2

to

Stage

1

in

credit

cards

and

unsecured

loans.

The

reclassification

followed

a

review

of

back-testing

of

results

which

indicated

that

origination

probability

of

default

characteristics

were

unnecessarily

moving

Stage

1

accounts

into

Stage

2.

Wholesale

loans:

Adjustments

include

a

release

in

the

Investment

Bank

to

limit

excessive

ECL

sensitivity

to

the

macroeconomic

variable

for

Federal

Tax

Receipts

and

a

correction

to

Corporate

and

Investment

Bank

ECL

to

adjust

for

model

inaccuracies

informed

by

back-testing.

Management

adjustments

of

£340m

in

2019

largely

comprises

a

£210m

PMA

to

compensate

for

over-recovery

of

debt

in

UK

unsecured

lending,

and

subsequently

fixed

within

the

underlying

model;

and

£150m

for

UK

economic

uncertainty,

now

subsumed

within

managements

broader

approach

to

economic

uncertainty.

Risk

review

Risk

performance

Credit

risk

124

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Measurement

uncertainty

and

sensitivity

analysis

The

measurement

of

ECL

involves

complexity

and

judgement,

including

estimation

of

probabilities

of

default

(PD),

loss

given

default

(LGD),

a

range

of

unbiased

future

economic

scenarios,

estimation

of

expected

lives,

estimation

of

exposures

at

default

(EAD)

and

assessing

significant

increases

in

credit

risk.

The

Group

uses

a

five-scenario

model

to

calculate

ECL.

An

external

consensus

forecast

is

assembled

from

key

sources,

including

HM

Treasury

(short

and

medium

term

forecasts),

Bloomberg

(based

on

median

of

economic

forecasts)

and

the

Urban

Land

Institute

(for

US

House

Prices),

which

forms

the

Baseline

scenario.

In

addition,

two

adverse

scenarios

(Downside

1

and

Downside

2)

and

two

favourable

scenarios

(Upside

1

and

Upside

2)

are

derived,

with

associated

probability

weightings.

The

adverse

scenarios

are

calibrated

to

a

broadly

similar

severity

to

Barclays’

internal

stress

tests

and

stress

scenarios

provided

by

regulators

whilst

also

considering

IFRS

9

specific

sensitivities

and

non-linearity.

Downside

2

is

benchmarked

to

the

Bank

of

England’s

stress

scenarios

and

to

the

most

severe

scenario

from

Moody’s

inventory,

but

is

not

designed

to

be

the

same.

The

favourable

scenarios

are

calibrated

to

reflect

upside

risks

to

the

Baseline

scenario

to

the

extent

that

is

broadly

consistent

with

recent

favourable

benchmark

scenarios.

All

scenarios

are

regenerated

at

a

minimum

semi-annually.

The

scenarios

include

eight

economic

variables,

(GDP,

unemployment,

House

Price

Index

(HPI)

and

base

rates

in

both

the

UK

and

US

markets),

and

expanded

variables

using

statistical

models

based

on

historical

correlations.

The

upside

and

downside

shocks

are

designed

to

evolve

over

a

five-year

stress

horizon,

with

all

five

scenarios

converging

to

a

steady

state

after

approximately

eight

years.

Scenarios

used

to

calculate

the

Group’s

ECL

charge

were

reviewed

and

updated

regularly

throughout

2020,

following

the

outbreak

of

the

COVID-19

pandemic

in

the

first

quarter.

The

current

Baseline

scenario

reflects

the

latest

consensus

economic

forecasts

with

a

steady

recovery

in

GDP

in

the

UK

and

the

US,

and

unemployment

continuing

to

decrease

in

the

US

and

peaking

at

Q221

in

the

UK

followed

by

a

steady

decline.

In

the

downside

scenarios,

an

economic

downturn

in

early

2021

in

the

UK

and

the

US

begins

to

recover

later

in

the

year,

with

unemployment

increasing

to

the

end

of

2021.

In

the

upside

scenarios,

the

strong

rebound

in

UK

and

US

GDP

continues

into

2021,

following

the

bounce-back

in

growth

in

Q320

and,

subsequently,

the

projections

stay

above

the

year

on

year

growth

rates

seen

in

the

Baseline

for

a

prolonged

period

of

time

before

finally

reverting

to

the

long

term

run

rate.

This

reflects

the

assumption

of

approved

vaccines

being

successfully

rolled

out

throughout

2021

and

pent

up

savings

being

deployed

into

a

more

certain

consumer

environment

to

drive

significant

growth.

Scenario

weights

have

been

updated

to

reflect

the

latest

economics.

As

a

result

of

government

and

bank

support

measures,

significant

credit

deterioration

has

not

yet

occurred.

This

delay

increases

uncertainty

on

the

timing

of

the

stress

and

the

realisation

of

defaults.

Management

has

applied

COVID-19

specific

adjustments

to

modelled

outputs

to

reflect

the

temporary

nature

of

ongoing

government

support,

the

uncertainty

in

relation

to

the

timing

of

stress

and

the

degree

to

which

economic

consensus

has

yet

captured

the

range

of

economic

uncertainty,

particularly

in

the

UK.

As

a

result,

ECL

is

higher

than

would

be

the

case

if

it

were

based

on

the

forecast

economic

scenarios

alone.

Scenario

weights

(audited)

The

methodology

for

estimating

probability

weights

for

each

of

the

scenarios

involves

a

comparison

of

the

distribution

of

key

historical

UK

and

US

macroeconomic

variables

against

the

forecast

paths

of

the

five

scenarios.

The

methodology

works

such

that

the

Baseline

(reflecting

current

consensus

outlook)

has

the

highest

weight

and

the

weights

of

adverse

and

favourable

scenarios

depend

on

the

deviation

from

the

Baseline;

the

further

from

the

Baseline,

the

smaller

the

weight.

This

is

reflected

in

the

table

below

where

the

probability

weights

of

the

scenarios

are

shown.

A

single

set

of

five

scenarios

is

used

across

all

portfolios

and

all

five

weights

are

normalised

to

equate

to

100%.

The

same

scenarios

and

weights

that

are

used

in

the

estimation

of

expected

credit

losses

are

also

used

for

Barclays

internal

planning

purposes.

The

impacts

across

the

portfolios

are

different

because

of

the

sensitivities

of

each

of

the

portfolios

to

specific

macroeconomic

variables,

for

example,

mortgages

are

highly

sensitive

to

house

prices,

credit

cards

and

unsecured

consumer

loans

are

highly

sensitive

to

unemployment.

The

range

of

forecast

paths

generated

in

the

calculation

of

the

weights

at

31

December

2020

is

much

wider

than

in

due

to

the

uncertainty

caused

by

COVID-19,

thus

the

Upside

and

Downside

scenarios

are

further

away

from

the

tails

of

the

distribution

than

previously,

resulting

in

a

more

even

spread

of

weights

than

at

31

December

2019.

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

measures,

as

well

as

the

longer

term

effectiveness

of

central

bank,

government

and

other

support

measures.

The

tables

below

show

the

key

consensus

macroeconomic

variables

used

in

the

five

scenarios

(3

year

annual

paths),

the

probability

weights

applied

to

each

scenario

and

the

macroeconomic

variables

by

scenario

using

‘specific

bases’

i.e.

the

most

extreme

position

of

each

variable

in

the

context

of

the

scenario,

for

example,

the

highest

unemployment

for

downside

scenarios

and

the

lowest

unemployment

for

upside

scenarios.

5-year

average

tables

and

movement

over

time

graphs

provide

additional

transparency.

Annual

paths

show

quarterly

averages

for

the

year

(unemployment

and

base

rate)

or

change

in

the

year

(GDP

and

HPI).

Expected

worst

point

is

the

most

negative

quarter

in

the

relevant

3

year

period,

which

is

calculated

relative

to

the

start

point

for

GDP

and

HPI.

Risk

review

Risk

performance

Credit

risk

125

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Baseline

average

macroeconomic

variables

used

in

the

calculation

of

ECL

2021

2022

2023

Expected

Worst

Point

As

at

31

December

2020

%

UK

GDP

a

6.3

3.3

2.6

1.2

UK

unemployment

b

6.7

6.4

5.8

7.4

UK

HPI

c

2.4

2.3

5.0

0.6

UK

bank

rate

-

(0.1)

-

(0.1)

US

GDP

a

3.9

3.1

2.9

1.0

US

unemployment

d

6.9

5.7

5.6

7.5

US

HPI

e

2.8

4.7

0.7

US

federal

funds

rate

0.3

2020

2021

2022

Expected

Worst

Point

As

at

31

December

2019

%

UK

GDP

a

1.3

1.5

1.6

0.3

UK

unemployment

b

4.1

4.2

UK

HPI

c

1.9

3.1

3.6

0.3

UK

bank

rate

0.6

0.5

0.8

0.5

US

GDP

a

2.1

1.9

0.5

US

unemployment

d

3.6

3.9

4.0

US

HPI

e

3.4

2.9

2.8

1.0

US

federal

funds

rate

1.7

1.5

1.7

1.5

Downside

2

average

macroeconomic

variables

used

in

the

calculation

of

ECL

2021

2022

2023

Expected

Worst

Point

As

at

31

December

2020

%

UK

GDP

a

(3.9)

6.5

2.6

(11.0)

UK

unemployment

b

8.0

9.3

7.8

10.1

UK

HPI

c

(13.6)

(10.8)

0.5

(23.0)

UK

bank

rate

(0.2)

(0.1)

(0.2)

US

GDP

a

(2.4)

3.6

2.1

(6.0)

US

unemployment

d

13.4

11.9

10.1

13.7

US

HPI

e

(17.2)

(0.7)

0.6

(17.8)

US

federal

funds

rate

0.3

2020

2021

2022

Expected

Worst

Point

As

at

31

December

2019

%

UK

GDP

a

1.3

1.5

1.6

0.3

UK

unemployment

b

4.1

4.2

UK

HPI

c

1.9

3.1

3.6

0.3

UK

bank

rate

0.6

0.5

0.8

0.5

US

GDP

a

2.1

1.9

0.5

US

unemployment

d

3.6

3.9

4.0

US

HPI

e

3.4

2.9

2.8

1.0

US

federal

funds

rate

1.7

1.5

1.7

1.5

Risk

review

Risk

performance

Credit

risk

126

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Downside

1

average

macroeconomic

variables

used

in

the

calculation

of

ECL

2021

2022

2023

Expected

Worst

Point

As

at

31

December

2020

%

UK

GDP

a

0.1

6.6

3.2

(7.0)

UK

unemployment

b

7.3

8.0

6.9

8.4

UK

HPI

c

(6.7)

(3.5)

1.7

(10.0)

UK

bank

rate

(0.1)

-

(0.1)

US

GDP

a

0.4

3.6

2.3

(3.0)

US

unemployment

d

11.0

8.9

6.9

11.5

US

HPI

e

(5.9)

1.8

2.6

(5.9)

US

federal

funds

rate

0.3

2020

2021

2022

Expected

Worst

Point

As

at

31

December

2019

%

UK

GDP

a

0.6

0.3

0.6

0.1

UK

unemployment

b

4.7

5.7

5.8

UK

HPI

c

(2.6)

(4.1)

(1.7)

(8.2)

UK

bank

rate

1.7

2.8

0.8

US

GDP

a

1.2

0.4

0.8

0.2

US

unemployment

d

4.0

5.1

5.3

5.4

US

HPI

e

1.2

0.5

0.8

0.5

US

federal

funds

rate

2.6

3.0

2.0

Upside

2

average

macroeconomic

variables

used

in

the

calculation

of

ECL

2021

2022

2023

Expected

Worst

Point

As

at

31

December

2020

%

UK

GDP

a

12.2

5.3

3.9

5.0

UK

unemployment

b

6.2

5.5

4.8

7.4

UK

HPI

c

6.6

10.4

10.8

1.1

UK

bank

rate

0.1

0.3

0.1

US

GDP

a

7.1

4.6

4.0

3.4

US

unemployment

d

5.5

4.3

4.1

6.1

US

HPI

e

8.8

9.1

8.9

1.7

US

federal

funds

rate

0.3

0.4

0.6

0.3

2020

2021

2022

Expected

Worst

Point

As

at

31

December

2019

%

UK

GDP

a

3.0

4.0

3.4

0.9

UK

unemployment

b

3.7

3.4

3.5

3.9

UK

HPI

c

6.8

10.8

9.9

1.0

UK

bank

rate

0.6

0.5

US

GDP

a

3.4

4.2

3.6

1.0

US

unemployment

d

3.3

3.0

3.5

US

HPI

e

7.4

7.6

7.2

1.6

US

federal

funds

rate

1.7

1.5

Risk

review

Risk

performance

Credit

risk

127

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Upside

1

average

macroeconomic

variables

used

in

the

calculation

of

ECL

2021

2022

2023

Expected

Worst

Point

As

at

31

December

2020

%

UK

GDP

a

9.3

3.9

3.4

3.5

UK

unemployment

b

6.4

6.0

5.2

7.4

UK

HPI

c

4.6

6.1

0.8

UK

bank

rate

0.1

0.3

0.1

US

GDP

a

5.5

4.0

3.7

2.1

US

unemployment

d

6.0

4.8

4.6

6.7

US

HPI

e

6.8

6.7

6.3

1.4

US

federal

funds

rate

0.3

0.5

0.3

2020

2021

2022

Expected

Worst

Point

As

at

31

December

2019

%

UK

GDP

a

2.2

2.8

2.5

0.6

UK

unemployment

b

3.9

3.8

3.9

4.0

UK

HPI

c

5.0

7.0

6.8

0.7

UK

bank

rate

0.6

0.5

US

GDP

a

2.8

3.3

2.9

0.8

US

unemployment

d

3.5

3.6

3.7

US

HPI

e

5.1

4.7

4.4

1.4

US

federal

funds

rate

1.7

1.5

Notes

a

Average

Real

GDP

seasonally

adjusted

change

in

year;

expected

worst

point

is

the

minimum

growth

relative

to

Q420

(2019:

Q419)

based

on

a

12

quarter

period.

b

Averag

e

UK

unemployment

rate

16-year+;

expected

worst

point

is

the

highest

rate

in

the

12

quarter

period

starting

Q121

(2019:

Q120).

c

Change

in

year

end

UK

HPI

=

Halifax

All

Houses,

All

Buyers

index,

relative

to

prior

year

end;

worst

point

is

based

on

minimum

growth

relative

to

Q420

(2019:

Q419)

based

on

a

12

quarter

period

.

d

Average

US

civi

lian

unemployment

rate

16

-year+;

expected

worst

point

is

the

highest

rate

in

the

12

quarter

period

starting

Q121

(2019:

Q120).

e

Change

in

year

end

US

HPI

=

FHFA

house

price

index,

relative

to

prior

year

end;

worst

point

is

based

on

minimum

growth

relative

to

Q420

(2019:

Q419)

based

on

a

12

quarter

period.

Scenario

probability

weighting

(audited)

Upside

2

Upside

1

Baseline

Downside

1

Downside

2

%

As

at

31

December

2020

Scenario

probability

weighting

20.2

24.2

24.7

15.5

15.4

As

at

31

December

2019

Scenario

probability

weighting

10.1

23.1

40.8

22.7

3.3

Specific

bases

shows

the

most

extreme

position

of

each

variable

in

the

context

of

the

scenario,

for

example,

the

highest

unemployment

for

downside

scenarios,

average

unemployment

for

baseline

scenarios

and

lowest

unemployment

for

upside

scenarios.

GDP

and

HPI

downside

and

upside

scenario

data

represents

the

lowest

and

highest

points

relative

to

the

start

point

in

the

20

quarter

period.

Risk

review

Risk

performance

Credit

risk

128

Barclays

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2020

Annual

Report

on

Form

20-F

Macroeconomic

variables

used

in

the

calculation

of

ECL

(specific

bases)

a

(audited)

Upside

2

Upside

1

Baseline

Downside

1

Downside

2

%

As

at

31

December

2020

UK

GDP

b

14.2

8.8

0.7

(22.1)

UK

unemployment

c

4.0

5.7

8.4

10.1

UK

HPI

d

48.2

30.8

3.6

(4.5)

(18.3)

UK

bank

rate

c

0.1

-

0.6

US

GDP

b

15.7

12.8

1.6

(10.6)

US

unemployment

c

3.8

6.4

13.0

13.7

US

HPI

d

42.2

30.9

3.8

(3.7)

(15.9)

US

federal

funds

rate

c

0.1

0.3

1.3

As

at

31

December

2019

UK

GDP

b

15.4

11.7

1.5

0.2

(4.6)

UK

unemployment

c

3.4

3.8

4.1

5.8

8.8

UK

HPI

d

41.1

28.8

2.8

(6.3)

(31.1)

UK

bank

rate

c

0.5

0.7

2.8

4.0

US

GDP

b

17.9

14.9

2.1

0.5

(3.0)

US

unemployment

c

3.0

3.5

3.9

5.4

8.5

US

HPI

d

35.8

23.7

3.2

0.3

(16.7)

US

federal

funds

rate

c

1.5

1.8

3.0

3.5

Average

basis

represents

the

average

quarterly

value

of

variables

in

the

20

quarter

period

with

GDP

and

HPI

based

on

yearly

average

and

quarterly

CAGRs

respectively.

Macroeconomic

variables

used

in

the

calculation

of

ECL

(5-year

averages)

a

(audited)

Upside

2

Upside

1

Baseline

Downside

1

Downside

2

%

As

at

31

December

2020

UK

GDP

e

2.5

1.6

0.7

0.1

(0.9)

UK

unemployment

f

5.0

5.3

5.7

6.5

7.2

UK

HPI

g

8.2

5.5

3.6

(0.2)

(3.6)

UK

bank

rate

f

0.3

0.2

-

(0.1)

US

GDP

e

2.9

2.4

1.6

0.8

0.1

US

unemployment

f

5.3

5.7

6.4

8.3

10.4

US

HPI

g

7.3

5.5

3.8

0.8

(3.0)

US

federal

funds

rate

f

0.5

0.3

As

at

31

December

2019

UK

GDP

e

2.9

2.2

1.5

0.8

(0.6)

UK

unemployment

f

3.6

3.9

4.1

5.1

7.0

UK

HPI

g

7.1

5.2

2.8

(1.1)

(6.9)

UK

bank

rate

f

0.6

0.7

2.1

3.1

US

GDP

e

3.4

2.9

2.1

1.3

(0.1)

US

unemployment

f

3.2

3.7

3.9

4.7

6.6

US

HPI

g

6.3

4.3

3.2

1.6

(3.4)

US

federal

funds

rate

f

1.7

1.8

2.8

3.2

Notes

a

UK

GDP

=

Real

GDP

growth

seasonally

adjusted;

UK

unemployment

=

UK

unemployment

rate

16-year+;

UK

HPI

=

Halifax

All

Houses,

All

Buyers

Index;

US

GDP

=

Real

GDP

growth

seasonally

adjusted;

US

unemployment

=

US

civilian

unemployment

rate

16-

year+;

US

HPI

=

FHFA

house

price

index.

b

Maximum

growth

relative

to

Q419

(2019:

Q418),

based

on

20

quarter

period

in

Upside

scenarios;

5-year

yearly

average

CAGR

in

Baseline;

minimum

growth

relative

to

Q419

(2019:

Q418),

based

on

20

quarter

period

in

Downside

scenarios.

c

Lowest

quarter

in

Upside

scenarios;

5-year

average

in

Baseline;

highest

quarter

in

Downside

scenarios.

Period

based

on

20

quarters

from

Q120

(2019:

Q119)

d

Maximum

growth

relative

to

Q419

(2019:

Q418),

based

on

20

quarter

period

in

Upside

scenarios;

5-year

quarter

end

CAGR

in

Baseline;

minimum

growth

relative

to

Q419

(2019:

Q418),

based

on

20

quarter

period

in

Downside

scenarios.

e

5-year

yearly

average

CAGR,

starting

2019

(2019:

2018)

f

5-year

average,

Period

based

on

20

quarters

from

Q120

(2019:

Q119

)

g

5-year

quarter

end

CAGR,

starting

Q419

(2019:

Q418)

2019

data

presented

on

a

revised,

simplified

basis

for

ease

of

comparison.

Risk

review

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Report

on

Form

20-F

The

graphs

below

plot

the

historical

data

for

GDP

growth

rate

and

unemployment

rate

in

the

UK

and

US

as

well

as

the

forecasted

data

under

each

of

the

five

scenarios.

GDP

growth

based

on

year

on

year

growth

each

quarter

(Q/(Q-4))

ECL

under

100%

weighted

scenarios

for

modelled

portfolios

(audited)

The

table

below

shows

the

ECL

assuming

scenarios

have

been

100%

weighted.

Model

exposures

are

allocated

to

a

stage

based

on

the

individual

scenario

rather

than

through

a

probability-weighted

approach

as

required

for

Barclays

reported

impairment

allowances.

As

a

result,

it

is

not

possible

to

back

solve

to

the

final

reported

weighted

ECL

from

the

individual

scenarios

as

a

balance

may

be

assigned

to

a

different

st

age

dependent

on

the

scenario.

Model

exposure

uses

exposure

at

default

(EAD)

values

and

is

not

directly

comparable

to

gross

exposure

used

in

prior

disclosures.

For

Credit

cards,

unsecured

loans

and

other

retail

lending,

an

average

EAD

measure

is

used

(12

month

or

lifetime,

depending

on

stage

allocation

in

each

scenario).

Therefore,

the

model

exposure

movement

into

Stage

2

is

higher

than

the

corresponding

Stage

1

reduction.

All

ECL

using

a

m

odel

is

included,

with

the

exception

of

Treasury

assets

(£13m

of

ECL),

providing

additional

coverage

as

compared

to

the

2019

year-end

disclosure.

Non-modelled

exposures

and

ma

nagement

adjustments

are

excluded.

Management

adjustments

can

be

found

in

the

Management

adjustments

to

models

for

impairment

section.

Model

exposures

allocated

to

Stage

3

do

not

change

in

any

of

the

scenarios

as

the

transition

criteria

relies

only

on

observable

evidence

of

default

as

at

31

December

2020

and

not

on

macroeconomic

scenarios.

The

Downside

2

scenario

represents

a

severe

global

recession

with

substantial

falls

in

both

UK

and

US

GDP.

Unemployment

in

UK

markets

rises

towards

10%

and

US

markets

rises

towards

14%

and

there

are

substantial

falls

in

asset

prices

including

housing.

Under

the

Downside

2

scenario,

model

exposure

moves

between

stages

as

the

economic

environment

weakens.

This

can

be

seen

in

the

movement

of

£27bn

of

model

exposure

into

Stage

2

between

the

Weighted

and

Downside

2

scenario.

ECL

increases

in

Stage

2

predominantly

due

to

unsecured

portfolios

as

economic

conditions

deteriorate.

Risk

review

Risk

performance

Credit

risk

130

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Scenarios

As

at

31

December

2020

Weighted

Upside

2

Upside

1

Baseline

Downside

1

Downside

2

Stage

1

Model

Exposure

(£m)

Home

loans

131,422

134,100

133,246

132,414

130,547

128,369

Credit

cards,

unsecured

loans

and

other

retail

lending

51,952

53,271

52,932

51,995

50,168

48,717

Wholesale

loans

149,099

155,812

154,578

152,141

144,646

131,415

Stage

1

Model

ECL

(£m)

Home

loans

6

4

5

6

14

42

Credit

cards,

unsecured

loans

and

other

retail

lending

392

316

340

372

415

Wholesale

loans

262

242

258

249

278

290

Stage

1

Coverage

(%)

Home

loans

-

Credit

cards,

unsecured

loans

and

other

retail

lending

0.8

0.6

0.7

0.8

0.9

Wholesale

loans

0.2

Stage

2

Model

Exposure

(£m)

Home

loans

19,180

16,502

17,356

18,188

20,055

22,233

Credit

cards,

unsecured

loans

and

other

retail

lending

13,399

10,572

11,579

13,176

16,477

19,322

Wholesale

loans

32,677

25,963

27,198

29,635

37,130

50,361

Stage

2

Model

ECL

(£m)

Home

loans

37

31

32

33

42

63

Credit

cards,

unsecured

loans

and

other

retail

lending

2,207

1,618

1,837

2,138

2,865

3,564

Wholesale

loans

1,410

952

1,047

1,223

1,771

2,911

Stage

2

Coverage

(%)

Home

loans

0.2

0.3

Credit

cards,

unsecured

loans

and

other

retail

lending

16.5

15.3

15.9

16.2

17.4

18.4

Wholesale

loans

4.3

3.7

3.8

4.1

4.8

5.8

Stage

3

Model

Exposure

(£m)

Home

loans

1,778

Credit

cards,

unsecured

loans

and

other

retail

lending

2,585

Wholesale

loans

a

2,211

Stage

3

Model

ECL

(£m)

Home

loans

307

282

286

290

318

386

Credit

cards,

unsecured

loans

and

other

retail

lending

2,003

1,947

1,972

2,001

2,055

2,078

Wholesale

loans

a

146

128

134

141

157

184

Stage

3

Coverage

(%)

Home

loans

17.3

15.9

16.1

16.3

17.9

21.7

Credit

cards,

unsecured

loans

and

other

retail

lending

77.5

75.3

76.3

77.4

79.5

80.4

Wholesale

loans

a

6.6

5.8

6.1

6.4

7.1

8.3

Total

Model

ECL

(£m)

Home

loans

350

317

323

329

374

491

Credit

cards,

unsecured

loans

and

other

retail

lending

4,602

3,881

4,149

4,511

5,335

6,057

Wholesale

loans

a

1,818

1,322

1,439

1,613

2,206

3,385

Total

ECL

6,770

5,520

5,911

6,453

7,915

9,933

Note

a

Material

wholesale

loan

defaults

are

individually

assessed

across

different

recovery

strategies.

As

a

result,

ECL

of

£902m

is

reported

as

individually

assessed

i

mpairments

in

the

table

below.

Reconciliation

to

total

ECL

£m

Total

model

ECL

6,770

ECL

from

individually

assessed

impairments

902

ECL

from

non-modelled

and

other

management

adjustments

a

1,727

Total

ECL

9,399

Note

a

Includes

£1.4bn

of

post

model

adjustments

and

£0.3bn

ECL

from

non-modelled

exposures.

The

dispersion

of

results

around

the

Baseline

is

an

indication

of

uncertainty

around

the

future

projections.

The

disclosure

highlights

the

results

of

the

alternative

scenarios

enabling

the

reader

to

understand

the

extent

of

the

impact

on

exposure

and

ECL

from

the

upside/downside

scenarios.

Consequently,

the

use

of

five

scenarios

with

associated

weightings

results

in

a

total

weighted

ECL

uplift

from

the

Baseline

ECL

of

5%,

largely

driven

by

credit

card

losses

which

have

more

linear

loss

profiles

than

UK

home

loans

and

wholesale

loan

positions.

Risk

review

Risk

performance

Credit

risk

131

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Home

loans:

Total

weighted

ECL

of

£350m

represents

a

6%

increase

over

the

Baseline

ECL

(£329m),

and

coverage

ratios

remain

steady

across

the

Upside

scenarios,

Baseline

and

Downside

1

scenario.

However,

total

ECL

increases

in

the

Downside

2

scenario

to

£491m,

driven

by

a

significant

fall

in

UK

HPI

(18.3%)

reflecting

the

non-linearity

of

the

UK

portfolio.

Credit

cards,

unsecured

loans

and

other

retail

lending:

Total

weighted

ECL

of

£4,602m

represents

a

2%

increase

over

the

Baseline

ECL

(£4,511

m)

reflecting

the

range

of

economic

scenarios

used,

mainly

impacted

by

Unemployment

and

other

key

retail

variables.

Total

ECL

increases

to

£6,057m

under

the

Downside

2

scenario,

mainly

driven

by

Stage

2,

where

coverage

rates

increase

to

18.4%

from

a

weighted

scenario

approach

of

16.5%

and

circa

£6bn

increase

in

model

exposure

that

meets

the

Significant

Increase

in

Credit

Risk

criteria

and

transitions

from

Stage

1

to

Stage

2.

Wholesale

loans:

Total

weighted

ECL

of

£1,818m

represents

a

13%

increase

over

the

Baseline

ECL

(£1,613m)

reflecting

the

range

of

economic

scenarios

used,

with

exposures

in

the

Investment

Bank

particularly

sensitive

to

the

Downside

2

scenario.

Scenarios

As

at

31

December

2019

Weighted

Upside

2

Upside

1

Baseline

Downside

1

Downside

2

Stage

1

Model

Exposure

(£m)

Home

loans

137,929

139,574

138,992

138,249

136,454

132,505

Credit

cards,

unsecured

loans

and

other

retail

lending

68,619

69,190

69,012

68,388

68,309

67,015

Wholesale

loans

160,544

162,717

162,058

161,111

157,720

143,323

Stage

1

Model

ECL

(£m)

Home

loans

6

4

5

7

19

Credit

cards,

unsecured

loans

and

other

retail

lending

505

490

495

511

528

Wholesale

loans

209

162

174

188

271

297

Stage

1

Coverage

(%)

Home

loans

-

Credit

cards,

unsecured

loans

and

other

retail

lending

0.7

0.8

Wholesale

loans

0.1

0.2

Stage

2

Model

Exposure

(£m)

Home

loans

16,889

15,245

15,826

16,570

18,364

22,314

Credit

cards,

unsecured

loans

and

other

retail

lending

13,406

11,449

12,108

13,075

15,663

19,615

Wholesale

loans

15,947

13,773

14,433

15,380

18,770

33,168

Stage

2

Model

ECL

(£m)

Home

loans

41

33

34

36

47

170

Credit

cards,

unsecured

loans

and

other

retail

lending

1,844

1,412

1,562

1,771

2,384

4,285

Wholesale

loans

414

285

323

374

579

1,427

Stage

2

Coverage

(%)

Home

loans

0.2

0.3

0.8

Credit

cards,

unsecured

loans

and

other

retail

lending

13.8

12.3

12.9

13.5

15.2

21.8

Wholesale

loans

2.6

2.1

2.2

2.4

3.1

4.3

Stage

3

Model

Exposure

(£m)

Home

loans

1,670

Credit

cards,

unsecured

loans

and

other

retail

lending

3,008

Wholesale

loans

a

1,489

Stage

3

Model

ECL

(£m)

Home

loans

268

262

264

266

272

316

Credit

cards,

unsecured

loans

and

other

retail

lending

2,198

2,154

2,174

2,195

2,235

2,292

Wholesale

loans

a

118

111

114

117

127

128

Stage

3

Coverage

(%)

Home

loans

16.0

15.7

15.8

15.9

16.3

18.9

Credit

cards,

unsecured

loans

and

other

retail

lending

73.1

71.6

72.3

73.0

74.3

76.2

Wholesale

loans

a

7.9

7.4

7.6

7.9

8.5

8.6

Total

Model

ECL

(£m)

Home

loans

315

299

303

307

326

505

Credit

cards,

unsecured

loans

and

other

retail

lending

4,547

4,056

4,231

4,461

5,130

7,105

Wholesale

loans

a

741

558

611

679

977

1,852

Total

ECL

5,603

4,913

5,145

5,447

6,433

9,462

Note

a

Material

wholesale

loan

defaults

are

individually

assessed

across

different

recovery

strategies.

As

a

result,

ECL

of

£419m

is

reported

as

individually

assessed

impairments

in

the

table

below.

Risk

review

Risk

performance

Credit

risk

132

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Reconciliation

to

total

ECL

a

£m

Total

model

ECL

5,603

ECL

from

individually

assessed

impairments

419

ECL

from

non-modelled

and

other

management

adjustments

608

Total

ECL

6,630

Note

a

The

table

has

been

re-presented

to

separately

show

the

impact

of

individually

assessed

impairments

of

£419m.

This

was

included

in

the

Barclays

PLC

Annual

Report

2019

with

non-modelled

and

other

adjustments

of

£268m.

Non-

modelled

and

other

adjustments

are

now

disclosed

within

the

other

management

adjustments

category

of

£608m.

Staging

sensitivity

(audited)

An

increase

of

1%

(£3,510m)

of

total

gross

exposure

into

Stage

2

(from

Stage

1),

would

result

in

an

increase

in

ECL

impairment

allowance

of

£232m

based

on

applying

the

difference

in

Stage

2

and

Stage

1

average

impairment

coverage

ratios

to

the

movement

in

gross

exposure

(refer

to

Loans

and

advances

at

amortised

cost

by

product).

Risk

review

Risk

performance

Credit

risk

133

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Analysis

of

the

concentration

of

credit

risk

A

concentration

of

credit

risk

exists

when

a

number

of

counterparties

are

located

in

a

common

geographical

region

or

are

engaged

in

similar

activities

and

have

similar

economic

characteristics

that

would

cause

their

ability

to

meet

contractual

obligations

to

be

similarly

affected

by

changes

in

economic

or

other

conditions.

The

Group

implements

limits

on

concentrations

in

order

to

mitigate

the

risk.

The

analyses

of

credit

risk

concentrations

presented

below

are

based

on

the

location

of

the

counterparty

or

customer

or

the

industry

in

which

they

are

engaged.

Further

detail

on

the

Group

policies

with

regard

to

managing

concentration

risk

is

presented

in

the

Barclays

PLC

Pillar

3

Report

2020

(unaudited).

Geographic

concentrations

As

at

31

December

2020,

the

geographic

concentration

of

the

Group’s

assets

remained

broadly

consistent

with

2019.

Exposure

is

concentrated

in

the

UK

39%

(2019:

40%),

in

the

Americas

33%

(2019:

34%)

and

Europe

21%

(2019:

20%).

Credit

risk

concentrations

by

geography

(audited)

United

Kingdom

Americas

Europe

Asia

Africa

and

Middle

East

Total

£m

As

at

31

December

2020

On-balance

sheet:

Cash

and

balances

at

central

banks

66,459

36,063

69,963

17,987

655

191,127

Cash

collateral

and

settlement

balances

33,893

27,287

30,121

9,558

508

101,367

Loans

and

advances

at

amortised

cost

262,231

41,094

24,949

10,728

3,630

342,632

Reverse

repurchase

agreements

and

other

similar

secured

lending

10

152

373

8,285

211

9,031

Trading

portfolio

assets

9,829

31,000

17,107

5,948

946

64,830

Financial

assets

at

fair

value

through

the

income

statement

34,229

88,327

25,709

14,742

7,524

170,531

Derivative

financial

instruments

93,430

90,801

101,102

14,532

2,581

302,446

Financial

assets

at

fair

value

through

other

comprehensive

income

10,672

27,504

28,607

11,006

138

77,927

Other

assets

608

185

57

-

850

Total

on-balance

sheet

511,361

342,413

297,988

92,786

16,193

1,260,741

Off-balance

sheet:

Contingent

liabilities

5,876

10,122

3,809

1,222

580

21,609

Loan

commitments

112,561

175,926

38,836

4,169

1,557

333,049

Total

off-balance

sheet

118,437

186,048

42,645

5,391

2,137

354,658

Total

629,798

528,461

340,633

98,177

18,330

1,615,399

As

at

31

December

2019

On-balance

sheet:

Cash

and

balances

at

central

banks

51,477

28,273

54,632

15,130

746

150,258

Cash

collateral

and

settlement

balances

27,431

23,595

26,008

5,385

837

83,256

Loans

and

advances

at

amortised

cost

257,459

46,569

25,599

6,275

3,213

339,115

Reverse

repurchase

agreements

and

other

similar

secured

lending

1,005

15

1,056

470

833

3,379

Trading

portfolio

assets

11,550

27,621

13,397

4,786

763

58,117

Financial

assets

at

fair

value

through

the

income

statement

29,001

70,849

11,286

12,534

1,921

125,591

Derivative

financial

instruments

69,844

63,344

83,165

11,189

1,694

229,236

Financial

assets

at

fair

value

through

other

comprehensive

income

9,444

23,052

24,443

7,665

123

64,727

Other

assets

1,170

126

79

-

1,375

Total

on-balance

sheet

458,595

283,267

239,628

63,434

10,130

1,055,054

Off-balance

sheet:

Contingent

liabilities

7,539

10,838

3,862

1,562

726

24,527

Loan

commitments

105,350

188,109

36,033

3,166

1,797

334,455

Total

off-balance

sheet

112,889

198,947

39,895

4,728

2,523

358,982

Total

571,484

482,214

279,523

68,162

12,653

1,414,036

Industry

concentrations

The

concentration

of

the

Group’s

assets

by

industry

remained

broadly

consistent

year

on

year.

As

at

31

December

2020,

total

assets

concentrated

in

banks

and

other

financial

institutions

was

40%

(2019:

36%),

predominantly

within

derivative

financial

instruments.

The

proportion

of

the

overall

balance

concentrated

in

governments

and

central

banks

was

21%

(2019:

19%),

cards,

unsecured

loans

and

other

personal

lending

was

10%

(2019:

10%)

and

in

home

loans

remained

stable

at

11

%

(2019:

12%).

Further

details

on

material

and

emerging

risks

can

be

found

on

pages

91

to

101.

Risk

review

Risk

performance

Credit

risk

134

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Credit

risk

concentrations

by

industry

(audited)

Banks

Other

financial

insti-

tutions

Manu-

facturing

Const-

ruction

and

property

Govern-

ment

and

central

bank

Energy

and

water

Whole-

sale

and

retail

distri-

bution

and

leisure

Business

and

other

services

Home

loans

Cards,

unsecured

loans

and

other

personal

lending

Other

Total

£m

As

at

31

December

2020

On-balance

sheet:

Cash

and

balances

at

central

banks

56

84

-

190,981

-

6

-

191,127

Cash

collateral

and

settlement

balances

17,986

67,305

375

35

13,946

871

30

575

-

244

101,367

Loans

and

advances

at

amortised

cost

8,133

22,062

8,142

26,125

28,445

4,722

12,569

19,538

159,647

41,312

11,937

342,632

Reverse

repurchase

agreements

and

other

similar

secured

lending

706

7,964

-

361

-

9,031

Trading

portfolio

assets

2,743

11,464

4,104

516

35,902

3,052

1,883

2,625

-

2,541

64,830

Financial

assets

at

fair

value

through

the

income

statement

21,824

131,943

608

5,668

5,530

13

64

3,712

971

-

198

170,531

Derivative

financial

instruments

155,767

116,526

4,126

2,725

11,649

3,288

1,235

2,361

-

4,769

302,446

Financial

assets

at

fair

value

through

other

comprehensive

income

18,829

5,843

1

425

51,955

-

733

-

141

77,927

Other

assets

439

224

6

12

1

10

18

98

-

34

8

850

Total

on-balance

sheet

226,483

363,415

17,362

35,506

338,770

11,956

15,799

29,648

160,618

41,346

19,838

1,260,741

Off-balance

sheet:

Contingent

liabilities

1,150

5,501

3,187

1,260

1,678

3,223

1,005

2,283

-

155

2,167

21,609

Loan

commitments

1,813

53,936

39,638

14,002

1,398

25,780

17,165

24,554

12,385

119,807

22,571

333,049

Total

off-balance

sheet

2,963

59,437

42,825

15,262

3,076

29,003

18,170

26,837

12,385

119,962

24,738

354,658

Total

229,446

422,852

60,187

50,768

341,846

40,959

33,969

56,485

173,003

161,308

44,576

1,615,399

As

at

31

December

2019

On-balance

sheet:

Cash

and

balances

at

central

banks

7

73

-

150,178

-

150,258

Cash

collateral

and

settlement

balances

16,599

55,262

516

64

9,251

536

51

642

-

335

83,256

Loans

and

advances

at

amortised

cost

8,788

20,473

8,323

24,403

23,847

5,346

10,031

17,125

154,479

55,232

11,068

339,115

Reverse

repurchase

agreements

and

other

similar

secured

lending

1,172

2,134

-

73

-

3,379

Trading

portfolio

assets

2,872

9,049

2,787

1,053

33,092

2,996

842

3,158

-

2,268

58,117

Financial

assets

at

fair

value

through

the

income

statement

10,747

97,849

634

6,909

5,353

45

-

3,569

358

-

127

125,591

Derivative

financial

instruments

125,323

83,285

2,049

2,273

7,811

3,077

562

1,520

-

2

3,334

229,236

Financial

assets

at

fair

value

through

other

comprehensive

income

18,596

4,370

-

286

40,763

-

430

-

282

64,727

Other

assets

897

322

1

5

2

7

2

109

-

18

12

1,375

Total

on-balance

sheet

185,001

272,817

14,310

34,993

270,370

12,007

11,488

26,553

154,837

55,252

17,426

1,055,054

Off-balance

sheet:

Contingent

liabilities

1,250

8,043

3,549

703

1,981

3,318

1,072

2,831

-

109

1,671

24,527

Loan

commitments

1,909

47,815

42,148

14,358

1,704

29,877

14,711

22,932

10,060

124,841

24,100

334,455

Total

off-balance

sheet

3,159

55,858

45,697

15,061

3,685

33,195

15,783

25,763

10,060

124,950

25,771

358,982

Total

188,160

328,675

60,007

50,054

274,055

45,202

27,271

52,316

164,897

180,202

43,197

1,414,036

Risk

review

Risk

performance

Credit

risk

135

Barclays

PLC

2020

Annual

Report

on

Form

20-F

The

approach

to

management

and

representation

of

credit

quality

Asset

credit

quality

The

credit

quality

distribution

is

based

on

the

IFRS

9

12-month

probability

of

default

(PD)

at

the

reporting

date

to

ensure

comparability

with

other

ECL

disclosures

in

the

Expected

Credit

Losses

section.

The

following

internal

measures

are

used

to

determine

credit

quality

for

loans:

Default

Grade

Retail

and

Wholesale

lending

Probability

of

default

Credit

Quality

Description

1-3

0.0

to

<0.05%

Strong

4-5

0.05

to

<0.15%

6-8

0.15

to

<0.30%

9-11

0.30

to

<0.60%

12-14

0.60

to

<2.15%

Satisfactory

15-19

19

2.15

to

<10%

10

to

<11.35%

20-21

11.35

to

<100%

Higher

Risk

22

100%

Credit

Impaired

For

retail

clients,

a

range

of

analytical

tools

is

used

to

derive

the

probability

of

default

of

clients

at

inception

and

on

an

ongoing

basis.

For

loans

that

are

not

past

due,

these

descriptions

can

be

summarised

as

follows:

Strong:

there

is

a

very

high

likelihood

of

the

asset

being

recovered

in

full.

Satisfactory:

while

there

is

a

high

likelihood

that

the

asset

will

be

recovered

and

therefore,

of

no

cause

for

concern

to

the

Group,

the

asset

may

not

be

collateralised,

or

may

relate

to

unsecured

retail

facilities.

At

the

lower

end

of

this

grade

there

are

customers

that

are

being

more

carefully

monitored,

for

example,

corporate

customers

which

are

indicating

some

evidence

of

deterioration,

mortgages

with

a

high

loan

to

value,

and

unsecured

retail

loans

operating

outside

normal

product

guidelines.

Higher

risk:

there

is

concern

over

the

obligor’s

ability

to

make

payments

when

due.

However,

these

have

not

yet

converted

to

actual

delinquency.

There

may

also

be

doubts

over

the

value

of

collateral

or

security

provided.

However,

the

borrower

or

counterparty

is

continuing

to

make

payments

when

due

and

is

expected

to

settle

all

outstanding

amounts

of

principal

and

interest.

Loans

that

are

past

due

are

monitored

closely,

with

impairment

allowances

raised

as

appropriate

and

in

line

with

the

Group’s

impairment

policies.

Debt

securities

For

assets

held

at

fair

value,

the

carrying

value

on

the

balance

sheet

will

include,

among

other

things,

the

credit

risk

of

the

issuer.

Most

listed

and

some

unlisted

securities

are

rated

by

external

rating

agencies.

The

Group

mainly

uses

external

credit

ratings

provided

by

Standard

&

Poor’s,

Fitch

or

Moody’s.

Where

such

ratings

are

not

available

or

are

not

current,

the

Group

will

use

its

own

internal

ratings

for

the

securities.

Balance

sheet

credit

quality

The

following

tables

present

the

credit

quality

of

the

Group’s

assets

exposed

to

credit

risk.

Overview

As

at

31

December

2020,

the

ratio

of

the

Group’s

on-balance

sheet

assets

classified

as

strong

(0.0

to

<0.60%)

remained

stable

at

87%

(2019:

86%)

of

total

assets

exposed

to

credit

risk.

Further

analysis

of

debt

securities

by

issuer

and

issuer

type

and

netting

and

collateral

arrangements

on

derivative

financial

instruments

is

presented

in

the

Analysis

of

debt

securities

section

and

Analysis

of

derivatives

section.

Risk

review

Risk

performance

Credit

risk

136

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Balance

sheet

credit

quality

(audited)

PD

range

Total

PD

range

Total

0.0

to

<0.60%

0.60

to

<11.35%

11.35

to

100%

0.0

to

<0.60%

0.60

to

<11.35%

11.35

to

100%

£m

%

As

at

31

December

2020

Cash

and

balances

at

central

banks

191,127

-

191,127

100

-

100

Cash

collateral

and

settlement

balances

90,633

10,725

9

101,367

89

11

-

100

Loans

and

advances

at

amortised

cost:

Home

loans

150,748

6,310

2,589

159,647

94

4

2

100

Credit

cards,

unsecured

and

other

retail

lending

15,870

22,427

2,516

40,813

39

55

6

100

Wholesale

loans

105,968

31,538

4,666

142,172

75

22

3

100

Total

loans

and

advances

at

amortised

cost

272,586

60,275

9,771

342,632

79

18

3

100

Reverse

repurchase

agreements

and

other

similar

secured

lending

9,019

12

-

9,031

100

-

100

Trading

portfolio

assets:

Debt

securities

51,395

4,871

216

56,482

91

9

-

100

Traded

loans

704

5,107

2,537

8,348

9

61

30

100

Total

trading

portfolio

assets

52,099

9,978

2,753

64,830

81

15

4

100

Financial

assets

at

fair

value

through

the

income

statement:

Loans

and

advances

16,467

14,369

43

30,879

53

47

-

100

Debt

securities

1,126

521

46

1,693

66

31

3

100

Reverse

repurchase

agreements

95,376

41,566

674

137,616

70

30

-

100

Other

financial

assets

330

13

-

343

96

4

-

100

Total

financial

assets

at

fair

value

through

the

income

statement

113,299

56,469

763

170,531

67

33

-

100

Derivative

financial

instruments

282,617

19,352

477

302,446

94

6

-

100

Financial

assets

at

fair

value

through

other

comprehensive

income

77,919

8

-

77,927

100

-

100

Other

assets

778

68

4

850

92

8

-

100

Total

on-balance

sheet

1,090,077

156,887

13,777

1,260,741

87

12

1

100

As

at

31

December

2019

Cash

and

balances

at

central

banks

150,258

-

150,258

100

-

100

Cash

collateral

and

settlement

balances

73,122

10,134

-

83,256

88

12

-

100

Loans

and

advances

at

amortised

cost:

Home

loans

146,269

5,775

2,435

154,479

94

4

2

100

Credit

cards,

unsecured

and

other

retail

lending

20,750

31,425

3,121

55,296

38

56

6

100

Wholesale

loans

97,854

28,150

3,336

129,340

75

22

3

100

Total

loans

and

advances

at

amortised

cost

264,873

65,350

8,892

339,115

78

19

3

100

Reverse

repurchase

agreements

and

other

similar

secured

lending

3,290

89

-

3,379

97

3

-

100

Trading

portfolio

assets:

Debt

securities

49,117

3,479

143

52,739

93

7

-

100

Traded

loans

864

3,219

1,295

5,378

16

60

24

100

Total

trading

portfolio

assets

49,981

6,698

1,438

58,117

86

12

2

100

Financial

assets

at

fair

value

through

the

income

statement:

Loans

and

advances

14,467

7,993

232

22,692

64

35

1

100

Debt

securities

4,806

413

30

5,249

91

8

1

100

Reverse

repurchase

agreements

62,475

34,232

180

96,887

65

35

-

100

Other

financial

assets

757

6

-

763

99

1

-

100

Total

financial

assets

at

fair

value

through

the

income

statement

82,505

42,644

442

125,591

66

34

-

100

Derivative

financial

instruments

216,103

13,012

121

229,236

94

6

-

100

Financial

assets

at

fair

value

through

other

comprehensive

income

64,727

-

64,727

100

-

100

Other

assets

1,242

133

-

1,375

90

10

-

100

Total

on-balance

sheet

906,101

138,060

10,893

1,055,054

86

13

1

100

Risk

review

Risk

performance

Credit

risk

137

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Credit

exposures

by

internal

PD

grade

The

below

tables

represents

credit

risk

profile

by

PD

grade

for

loans

and

advances

at

amortised

cost,

contingent

liabilities

and

loan

commitments.

Stage

1

higher

risk

assets,

presented

gross

of

associated

collateral

held,

are

of

weaker

credit

quality

but

have

not

significantly

deteriorated

since

origination.

Examples

would

include

leveraged

corporate

loans

or

non-prime

credit

cards.

IFRS

9

Stage

1

and

Stage

2

classification

is

not

dependent

solely

on

the

absolute

probability

of

default

but

on

elements

that

determine

a

Significant

Increase

in

Credit

Risk

(see

Note

7),

including

relative

movement

in

probability

of

default

since

initial

recognition.

There

is

therefore

no

direct

relationship

between

credit

quality

and

IFRS

9

stage

classification.

Credit

risk

profile

by

internal

PD

grade

for

loans

and

advances

at

amortised

cost

(audited)

Gross

carrying

amount

Allowance

for

ECL

Net

exposure

Coverage

ratio

Grading

PD

range

Credit

quality

description

Stage

1

Stage

2

Stage

3

Total

Stage

1

Stage

2

Stage

3

Total

%

£m

%

As

at

31

December

2020

1-3

0.0

to

<0.05%

Strong

82,312

3,095

-

85,407

6

35

-

41

85,366

-

4-5

0.05

to

<0.15%

Strong

101,309

9,715

-

111,024

34

25

-

59

110,965

0.1

6-8

0.15

to

<0.30%

Strong

30,697

6,263

-

36,960

47

64

-

111

36,849

0.3

9-11

0.30

to

<0.60%

Strong

34,601

5,093

-

39,694

120

168

-

288

39,406

0.7

12-14

0.60

to

<2.15%

Satisfactory

29,498

8,399

-

37,897

379

593

-

972

36,925

2.6

15-19

2.15

to

<10%

Satisfactory

8,125

9,136

-

17,261

302

1,283

-

1,585

15,676

9.2

19

10

to

<11.35%

Satisfactory

3,505

4,437

-

7,942

73

195

-

268

7,674

3.4

20-21

11.35

to

<100%

Higher

Risk

917

4,868

-

5,785

72

1,201

-

1,273

4,512

22.0

22

100%

Credit

Impaired

-

8,997

-

3,738

5,259

41.5

Total

290,964

51,006

8,997

350,967

1,033

3,564

3,738

8,335

342,632

2.4

As

at

31

December

2019

1-3

0.0

to

<0.05%

Strong

91,993

1,615

-

93,608

13

-

26

93,582

-

4-5

0.05

to

<0.15%

Strong

92,668

7,704

-

100,372

12

-

24

100,348

-

6-8

0.15

to

<0.30%

Strong

29,187

4,444

-

33,631

23

5

-

28

33,603

0.1

9-11

0.30

to

<0.60%

Strong

34,515

2,932

-

37,447

91

16

-

107

37,340

0.3

12-14

0.60

to

<2.15%

Satisfactory

35,690

4,341

-

40,031

210

187

-

397

39,634

1.0

15-19

2.15

to

<10%

Satisfactory

9,041

9,190

-

18,231

232

981

-

1,213

17,018

6.7

19

10

to

<11.35%

Satisfactory

5,235

3,629

-

8,864

62

104

-

166

8,698

1.9

20-21

11.35

to

<100%

Higher

Risk

937

4,379

-

5,316

64

1,055

-

1,119

4,197

21.0

22

100%

Credit

Impaired

-

7,923

-

3,228

4,695

40.7

Total

299,266

38,234

7,923

345,423

707

2,373

3,228

6,308

339,115

1.8

Risk

review

Risk

performance

Credit

risk

138

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Credit

risk

profile

by

internal

PD

grade

for

contingent

liabilities

(audited)

a

Gross

carrying

amount

Allowance

for

ECL

Net

exposure

Coverage

ratio

Grading

PD

range

Credit

quality

description

Stage

1

Stage

2

Stage

3

Total

Stage

1

Stage

2

Stage

3

Total

%

£m

%

As

at

31

December

2020

1-3

0.0

to

<0.05%

Strong

6,178

189

-

6,367

1

-

1

6,366

-

4-5

0.05

to

<0.15%

Strong

2,765

428

-

3,193

3

2

-

5

3,188

0.2

6-8

0.15

to

<0.30%

Strong

1,468

165

-

1,633

3

-

6

1,627

0.4

9-11

0.30

to

<0.60%

Strong

3,524

552

-

4,076

5

33

-

38

4,038

0.9

12-14

0.60

to

<2.15%

Satisfactory

2,712

546

-

3,258

8

25

-

33

3,225

1.0

15-19

2.15

to

<10%

Satisfactory

305

398

-

703

7

21

-

28

675

4.0

19

10

to

<11.35%

Satisfactory

264

423

-

687

17

83

-

100

587

14.6

20-21

11.35

to

<100%

Higher

Risk

40

769

-

809

-

61

-

61

748

7.5

22

100%

Credit

Impaired

-

654

-

10

644

1.5

Total

17,256

3,470

654

21,380

44

228

10

282

21,098

1.3

As

at

31

December

2019

1-3

0.0

to

<0.05%

Strong

6,947

118

-

7,065

3

-

3

7,062

-

4-5

0.05

to

<0.15%

Strong

4,199

40

-

4,239

1

-

1

4,238

-

6-8

0.15

to

<0.30%

Strong

2,953

103

-

3,056

1

-

1

3,055

-

9-11

0.30

to

<0.60%

Strong

4,551

136

-

4,687

2

-

4

4,683

0.1

12-14

0.60

to

<2.15%

Satisfactory

2,529

654

-

3,183

7

8

-

15

3,168

0.5

15-19

2.15

to

<10%

Satisfactory

663

244

-

907

4

8

-

12

895

1.3

19

10

to

<11.35%

Satisfactory

421

172

-

593

9

-

18

575

3.0

20-21

11.35

to

<100%

Higher

Risk

117

282

-

399

-

30

-

30

369

7.5

22

100%

Credit

Impaired

-

355

-

5

350

1.4

Total

22,380

1,749

355

24,484

27

57

5

89

24,395

0.4

Credit

risk

profile

by

internal

PD

grade

for

loan

commitments

(audited)

a

Gross

carrying

amount

Allowance

for

ECL

Net

exposure

Coverage

ratio

Grading

PD

range

Credit

quality

description

Stage

1

Stage

2

Stage

3

Total

Stage

1

Stage

2

Stage

3

Total

%

£m

%

As

at

31

December

2020

1-3

0.0

to

<0.05%

Strong

60,525

5,525

-

66,050

4

2

-

6

66,044

-

4-5

0.05

to

<0.15%

Strong

74,860

6,322

-

81,182

12

16

-

28

81,154

-

6-8

0.15

to

<0.30%

Strong

51,255

6,719

-

57,974

17

47

-

64

57,910

0.1

9-11

0.30

to

<0.60%

Strong

43,650

6,950

-

50,600

17

72

-

89

50,511

0.2

12-14

0.60

to

<2.15%

Satisfactory

30,994

9,908

-

40,902

119

131

-

250

40,652

0.6

15-19

2.15

to

<10%

Satisfactory

5,702

4,971

-

10,673

27

113

-

140

10,533

1.3

19

10

to

<11.35%

Satisfactory

4,886

5,129

-

10,015

11

25

-

36

9,979

0.4

20-21

11.35

to

<100%

Higher

Risk

811

3,897

-

4,708

5

124

-

129

4,579

2.7

22

100%

Credit

Impaired

-

1,676

-

40

1,636

2.4

Total

272,683

49,421

1,676

323,780

212

530

40

782

322,998

0.2

As

at

31

December

2019

1-3

0.0

to

<0.05%

Strong

85,908

1,025

-

86,933

2

1

-

3

86,930

-

4-5

0.05

to

<0.15%

Strong

70,112

1,889

-

72,001

5

1

-

6

71,995

-

6-8

0.15

to

<0.30%

Strong

53,340

1,019

-

54,359

8

1

-

9

54,350

-

9-11

0.30

to

<0.60%

Strong

44,097

1,592

-

45,689

13

1

-

14

45,675

-

12-14

0.60

to

<2.15%

Satisfactory

36,112

3,955

-

40,067

30

26

-

56

40,011

0.1

15-19

2.15

to

<10%

Satisfactory

4,913

3,857

-

8,770

8

55

-

63

8,707

0.7

19

10

to

<11.35%

Satisfactory

3,662

2,106

-

5,768

4

7

-

11

5,757

0.2

20-21

11.35

to

<100%

Higher

Risk

616

1,993

-

2,609

-

21

-

21

2,588

0.8

22

100%

Credit

Impaired

-

580

-

50

530

8.6

Total

298,760

17,436

580

316,776

70

113

50

233

316,543

0.1

Note

a

Excludes

loan

commitments

and

financial

guarantees

of

£9.5bn

(2019:

£17.7

bn)

carried

at

fair

value.

Risk

review

Risk

performance

Credit

risk

139

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Analysis

of

specific

portfolios

and

asset

types

This

section

provides

an

analysis

of

principal

portfolios

and

businesses,

in

particular,

home

loans,

credit

cards,

unsecured

loans

and

other

retail

lending.

Secured

home

loans

The

UK

home

loans

portfolio

comprises

first

lien

home

loans

and

accounts

for

93%

(2019:

92%)

of

the

Group’s

total

home

loan

balances.

Home

loans

principal

portfolios

Barclays

UK

As

at

31

December

2020

2019

Gross

loans

and

advances

(£m)

148,343

143,259

90

day

arrears

rate,

excluding

recovery

book

(%)

0.2

Annualised

gross

charge-off

rates

-

180

days

past

due

(%)

0.6

Recovery

book

proportion

of

outstanding

balances

(%)

0.6

0.5

Recovery

book

impairment

coverage

ratio

(%)

a

3.2

5.2

Note

a

2019

numbers

have

been

restated

to

factor

in

Wealth

accounts

to

align

with

2020

figures.

Within

the

UK

home

loans

portfolio:

◾

Gross

loans

and

advances

increased

by

£5.1bn

(3.6%)

following

increases

across

both

Residential

(3.1%)

and

Buy

to

Let

(BTL)

(6.6%)

books.

◾

Owner-occupied

interest-only

home

loans

comprised

22.1%

(2019:

23.4%)

of

total

balances.

◾

The

average

balance

weighted

LTV

on

owner

occupied

loans

dropped

to

49.9%

(2019:

50.2%).

The

primary

driver

of

the

decrease

in

the

LTV

of

the

portfolio

was

strong

UK

house

price

growth

through

2020

particularly

following

the

buoyant

purchase

market

in

Q3

and

Q4.

In

addition,

new

high

LTV

lending

was

greatly

reduced.

◾

BTL

home

loans

comprised

14.0%

(2019:

13.6%)

of

total

balances.

In

BTL,

the

average

balance

weighted

LTV

dropped

to

55.3%

(2019:

56.5%)

primarily

driven

by

positive

house

price

growth

in

2020.

Home

loans

principal

portfolios

-

distribution

of

balances

by

LTV

a

Distribution

of

balances

Distribution

of

impairment

allowance

Coverage

ratio

Stage

1

Stage

2

Stage

3

Total

Stage

1

Stage

2

Stage

3

Total

Stage

1

Stage

2

Stage

3

Total

Barclays

UK

%

As

at

31

December

2020

<=75%

75.7

11.6

0.6

87.9

17.9

15.0

19.0

51.9

-

0.1

1.8

-

>75%

and

<=90%

10.8

0.8

-

11.6

9.7

14.8

7.6

32.1

0.1

1.2

16.0

0.2

>90%

and

<=100%

0.4

-

0.4

0.8

1.5

2.2

4.5

0.1

2.6

35.7

0.7

>100%

0.1

-

0.1

0.7

3.4

7.4

11.5

0.7

10.3

69.1

8.0

As

at

31

December

2019

<=75%

76.0

10.7

0.7

87.4

4.2

15.4

28.5

48.1

-

0.1

2.2

-

>75%

and

<=90%

10.4

0.7

-

11.1

2.7

11.5

12.6

26.8

-

0.9

19.7

0.1

>90%

and

<=100%

1.3

0.1

-

1.4

0.8

2.5

4.9

8.2

-

1.8

54.4

0.3

>100%

0.1

-

0.1

0.2

4.1

12.6

16.9

0.2

8.7

107.4

9.0

Note

a

Portfolio

marked

to

market

based

on

the

most

updated

valuation

including

recovery

book

balances.

Updated

valuations

reflect

the

application

of

the

latest

HPI

available

as

at

31

December

2020.

Home

loans

principal

portfolios

-

average

LTV

Barclays

UK

As

at

31

December

2020

2019

Overall

portfolio

LTV(%):

Balance

weighted

50.7

51.1

Valuation

weighted

a

37.6

37.9

For

>100%

LTVs:

Balances

(£m)

129

160

Marked

to

market

collateral

(£m)

112

140

Average

LTV:

balance

weighted

(%)

138.2

133.5

Average

LTV:

valuation

weighted

(%)

120.6

119.7

Balances

in

recovery

book

(%)

10.8

10.0

Risk

review

Risk

performance

Credit

risk

140

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Home

loans

principal

portfolios

-

new

lending

Barclays

UK

As

at

31

December

2020

2019

New

bookings

(£m)

22,776

25,530

New

home

loan

proportion

above

>90%

LTV

(%)

2.6

4.2

Average

LTV

on

new

home

loans:

balance

weighted

(%)

67.5

67.9

Average

LTV

on

new

home

loans:

valuation

weighted

(%)

a

59.6

59.8

Note

a

2019

numbers

have

been

restated

to

factor

in

Wealth

accounts

to

align

with

2020

figures.

New

bookings

reduced

by

10.8%

with

a

decrease

in

new

flows

across

both

portfolios:

6.1%

decrease

in

owner

occupied

and

34.8%

decrease

in

the

BTL

portfolio.

This

decrease

was

driven

by

supply

and

demand

effects

of

the

COVID-19

pandemic.

Demand

was

impacted

by

a

significant

shrinking

of

the

market

in

Q2

although

this

was

partially

offset

by

a

resurgent

Q3

and

Q4.

High

LTV

supply

was

reduced

by

credit

management

actions.

During

2020,

a

total

of

128k

payment

holidays

were

provided

to

customers.

At

31

December

2020,

the

book

value

of

the

portfolio

where

payment

holidays

remain

in

place

was

£2.2bn,

representing

1.5%

of

the

portfolio.

Head

Office:

Italian

home

loans

and

advances

at

amortised

cost

reduced

to

£5.7bn

(2019:

£6.0bn)

and

continue

to

run-off

since

new

bookings

ceased

in

2016.

The

portfolio

is

secured

on

residential

property

with

an

average

balance

weighted

mark

to

market

LTV

of

62.1%

(2019:

64.4%).

90-day

arrears

remained

broadly

stable

at

1.7%

(2019:

1.8%)

and

gross

charge-off

rate

increased

to

1.0%

(2019:

0.8%).

At

31

December

2020,

the

book

value

of

the

portfolio

where

payment

holidays

remain

in

place

was

£181.7m,

representing

3.2%

of

the

portfolio

Credit

cards,

unsecured

loans

and

other

retail

lending

The

principal

portfolios

listed

below

accounted

for

84%

(2019:

87%)

of

the

Group’s

total

credit

cards,

unsecured

loans

and

other

retail

lending.

Credit

cards,

unsecured

loans

and

other

retail

lending

principal

portfolios

Gross

loans

and

advances

30

day

arrears,

excluding

recovery

book

90

day

arrears,

excluding

recovery

book

Annualised

gross

write

-off

rate

Annualised

net

write

-off

rate

£m

%

As

at

31

December

2020

Barclays

UK

cards

11,911

1.7

0.8

2.9

UK

personal

loans

4,591

2.3

1.2

3.4

3.1

Barclays

Partner

Finance

a

2,469

0.5

0.3

1.1

Barclays

International

US

cards

16,845

2.5

1.4

5.6

Germany

consumer

lending

3,458

1.9

0.8

1.2

1.1

As

at

31

December

2019

Barclays

UK

cards

16,457

1.7

0.8

1.6

UK

personal

loans

6,139

2.1

1.0

3.2

2.9

Barclays

International

US

cards

22,041

2.7

1.4

4.5

4.4

Barclays

Partner

Finance

a

4,134

0.9

0.3

1.7

Germany

consumer

lending

b

3,683

1.8

0.7

1.1

1.0

Notes

a

On

1

April

2020,

the

Barclays

Partner

Finance

business

moved

from

Barclays

International

to

Barclays

UK.

The

2019

comparative

figures

have

not

been

restated.

b

2019

Germany

consumer

lending

numbers

have

been

restated

to

include

the

Fundy

unsecured

portfolio

and

other

adjustments

to

write

off

rates.

UK

cards:

30

and

90

day

arrears

rates

remained

stable

at

1.7%

and

0.8%

respectively,

despite

balances

reducing

by

c.£4.5bn.

Delinquency

rates

initially

increased

as

some

customers

missed

payments

prior

to

payment

holidays

being

initiated.

Subsequently

payment

holidays

and

government

support

schemes

were

introduced

which,

coupled

with

significantly

lower

spend

and

balance

growth

activities,

resulted

in

suppressed

flows

into

delinquency

cycles.

Upon

exit

from

payment

holidays

the

majority

of

customers

were

able

to

resume

making

payments.

During

2020,

a

total

of

178k

payment

holidays

were

provided

to

customers.

At

31

December

2020,

the

book

value

of

the

portfolio

where

payment

holidays

remain

in

place

was

£93m,

representing

0.8%

of

the

portfolio.

UK

personal

loans:

30

and

90

day

arrears

rates

both

increased

by

0.2%

to

2.3%

and

1.2%

respectively

driven

by

a

25%

reduction

in

overall

balances,

coupled

with

a

higher

flow

in

to

delinquency

of

customers

previously

granted

a

payment

holiday.

During

2020,

a

total

of

84k

payment

holidays

were

provided

to

customers.

At

31

December

2020,

the

book

value

of

the

portfolio

where

payment

holidays

remain

in

place

was

£85.4m,

representing

1.9%

of

the

portfolio.

Barclays

Partner

Finance:

30

day

arrears

rate

reduced

to

0.5%

(2019:

0.9%)

due

to

the

sale

of

the

motor

financing

business

and

the

impact

of

payment

holidays

however

the

vast

majority

of

these

were

exited

and

customers

resumed

making

payments.

A

total

of

17k

payment

holidays

were

provided

to

customers

and

18k

payment

holidays

were

provided

to

motor

financing

business

customers

in

the

year.

At

31

December

2020,

the

book

value

of

the

portfolio

where

payment

holidays

remain

in

place

was

£6.6m,

representing

0.3%

of

the

portfolio.

Risk

review

Risk

performance

Credit

risk

141

Barclays

PLC

2020

Annual

Report

on

Form

20-F

US

cards:

30

days

arrears

rate

decreased

to

2.5%

(2019:

2.7%)

due

to

government

support

schemes

and

payment

holidays

resulting

in

fewer

accounts

entering

into

delinquency.

90

day

arrears

rate

remained

stable

at

1.4%.

Write

-off

rates

were

in

line

with

seasonal

trends.

A

total

of

251k

payment

holidays

were

provided

to

customers

in

the

year.

At

31

December

2020,

the

book

value

of

the

portfolio

where

payment

holidays

remain

in

place

was

£54.7m,

representing

0.3%

of

the

portfolio.

Germany

consumer

lending:

Increases

in

30

and

90

days

arrears

rates

were

primarily

driven

by

the

drop

in

the

overall

balances.

A

total

of

9k

payment

holidays

were

provided

to

customers

in

the

year.

At

31

December

2020,

the

book

value

of

the

portfolio

where

payment

holidays

remain

in

place

was

£0.24m,

representing

0.01%

of

the

portfolio.

Exposure

to

UK

commercial

real

estate

(CRE)

The

UK

CRE

portfolio

includes

property

investment,

development,

trading

and

house

builders

but

excludes

social

housing

and

contractors.

UK

CRE

summary

2020

2019

As

at

31

December

UK

CRE

loans

and

advances

(£m)

9,969

9,051

Stage

3

balances

(£m)

384

254

Stage

3

balances

as

%

of

UK

CRE

balances

(%)

3.9

2.8

Impairment

allowances

(£m)

99

52

Stage

3

coverage

ratio

(%)

19.7

7.5

Total

collateral

(£m)

a

26,240

26,876

Year

ended

31

December

Impairment

charge

(£m)

47

6

Note

a

Based

on

the

most

recent

valuation

assessment.

Maturity

analysis

of

exposure

to

UK

CRE

Contractual

maturity

of

UK

CRE

loans

and

advances

at

amortised

cost

Stage

3

balances

Not

more

than

six

months

Over

six

months

but

not

more

than

one

year

Over

one

year

but

not

more

than

two

years

Over

two

years

but

not

more

than

five

years

Over

five

years

but

not

more

than

ten

years

Over

ten

years

Total

loans

and

advances

As

at

31

December

£m

2020

384

171

132

398

3,227

4,357

1,299

9,969

2019

254

146

111

377

3,088

3,687

1,388

9,051

Risk

review

Risk

performance

Credit

risk

142

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Forbearance

measures

consist

of

concessions

towards

a

debtor

that

is

experiencing

or

about

to

experience

difficulties

in

meeting

their

financial

commitments

(‘financial

difficulties’).

Analysis

of

forbearance

programmes

a

Gross

balances

Impairment

allowances

Stage

1

Stage

2

Stage

3

Total

Stage

1

Stage

2

Stage

3

Total

£m

As

at

31

December

2020

Barclays

UK

59

144

374

577

3

77

106

186

Barclays

International

1

2

350

353

-

1

198

199

Head

Office

-

126

-

18

Total

retail

60

146

850

1,056

3

78

322

403

Barclays

UK

-

48

534

582

-

3

54

57

Barclays

International

-

1,373

1,460

2,833

-

86

564

650

Head

Office

-

Total

wholesale

-

1,421

1,994

3,415

-

89

618

707

Group

total

60

1,567

2,844

4,471

3

167

940

1,110

As

at

31

December

2019

Barclays

UK

-

147

298

445

-

35

92

127

Barclays

International

-

2

225

227

-

1

158

159

Head

Office

-

130

-

8

Total

retail

-

149

653

802

-

36

258

294

Barclays

UK

-

47

449

496

-

4

31

35

Barclays

International

-

918

1,016

1,934

-

37

226

263

Head

Office

-

Total

wholesale

-

965

1,465

2,430

-

41

257

298

Group

total

-

1,114

2,118

3,232

-

77

515

592

Note

a

For

2020

year

end,

there

has

been

a

standardisation

of

the

definition

of

forbearance

across

the

Group.

2019

balances

have

not

been

restated.

Balances

on

forbearance

programmes

increased

38%

as

a

limited

range

of

clients

across

Corporate

and

Investment

Bank,

some

impacted

by

the

COVID-19

pandemic,

proceeded

through

restructuring.

Retail

balances

on

forbearance

increased

32%,

reflecting

an

increase

in

Barclays

UK

and

Barclays

International.

Wholesale

balances

subject

to

forbearance

rose

to

£3.4bn

(2019:

£2.4bn)

with

higher

exposure

in

Corporate

Bank

and

Investment

Bank

of

£624m

and

£312m

respectively.

Impairment

allowances

rose

to

£707m

(2019:

£298m)

following

a

small

number

of

material

single

name

charges

in

the

year.

Barclays

International

accounted

for

83%

of

wholesale

forbearance

with

corporate

cases

representing

82%

of

all

forborne

balances.

Risk

review

Risk

performance

Credit

risk

143

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Retail

forbearance

programmes

Forbearance

on

the

Group’s

principal

retail

portfolios

is

presented

below.

The

principal

portfolios

account

for

100%

(2019:

100%)

of

total

retail

forbearance

balances.

Analysis

of

key

portfolios

in

forbearance

programmes

a

Gross

balances

on

forbearance

programmes

Marked

to

market

LTV

of

forbearance

balances:

balance

weighted

Marked

to

market

LTV

of

forbearance

balances:

valuation

weighted

Impairment

allowances

marked

against

balances

on

forbearance

programmes

Total

balances

on

forbearance

programmes

coverage

ratio

Total

%

of

gross

retail

loans

and

advances

£m

%

£m

%

As

at

31

December

2020

Barclays

UK

home

loans

135

0.1

40.2

29.0

2

1.4

UK

cards

384

3.2

n/a

151

39.3

UK

personal

loans

54

1.2

n/a

31

57.6

Barclays

partner

finance

b

4

0.1

n/a

2

49.0

Barclays

International

US

cards

286

1.7

n/a

155

54.2

Germany

consumer

lending

67

1.9

n/a

44

65.0

Head

Office

Italian

home

loans

126

2.2

59.2

43.2

18

14.5

As

at

31

December

2019

Barclays

UK

home

loans

137

0.1

42.7

31.0

-

UK

cards

254

1.5

n/a

97

38.2

UK

personal

loans

54

0.9

n/a

30

55.3

Barclays

International

US

cards

183

0.8

n/a

131

71.6

Barclays

partner

finance

b

3

0.1

n/a

2

66.7

Germany

consumer

lending

37

1.0

n/a

23

60.9

Head

Office

Italian

home

loans

130

2.2

60.6

44.9

8

5.9

Notes

a

For

2020

year

end,

there

has

been

a

standardisation

of

the

definition

of

forbearance

across

the

Group.

2019

balances

have

not

been

restated

b

On

1

April

2020,

the

Barclays

Partner

Finance

business

moved

from

Barclays

International

to

Barclays

UK.

The

2019

comparative

figures

have

not

been

restated.

UK

home

loans:

Forbearance

balances

reduced

to

£135m

(2019:

137m)

due

to

availability

of

payment

holidays

for

those

in

short

term

financial

difficulties

due

to

the

COVID-19

pandemic.

The

use

of

payment

holidays

does

not

necessitate

the

reclassification

of

assets

as

forborne.

UK

cards:

Gross

balances

on

forbearance

programmes

increased

to

£384m

(2019:

£254m)

due

to

increasing

numbers

of

customers

utilising

breathing

space

during

the

pandemic

and

£101m

due

to

the

impact

of

the

standardisation

of

the

definition

of

forbearance.

UK

personal

loans:

Gross

balances

on

forbearance

programmes

remained

stable

at

£54m

(2019:

£54m)

due

to

the

impact

of

customers

utilising

temporary

COVID-19

relief

instead

of

longer

term

forbearance

options

offset

by

£9m

due

to

the

impact

of

the

standardisation

of

the

definition

of

forbearance.

Barclays

Partner

Finance:

Gross

balances

on

forbearance

programmes

remained

broadly

stable.

US

cards:

Forbearance

balances

increased

to

£286m

(2019:

£183m)

due

to

the

impact

of

the

standardisation

of

the

definition

of

forbearance

of

£143m

partially

offset

by

the

impact

of

fewer

forbearance

enrolments.

Germany

consumer

lending:

Forbearance

balances

increased

to

£67m

(2019:

£37m)

due

to

the

impact

of

the

standardisation

of

the

definition

of

forbearance.

Italian

home

loans:

Forbearance

balances

reduced

to

£126m

(2019:

£130m)

due

to

a

natural

exit

from

forbearance

status

as

the

portfolio

is

in

run-off.

Risk

review

Risk

performance

Credit

risk

144

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Wholesale

forbearance

programmes

The

tables

below

detail

balance

information

for

wholesale

forbearance

cases.

Analysis

of

wholesale

balances

in

forbearance

programmes

a

Gross

balances

on

forbearance

programmes

Impairment

allowances

marked

against

balances

on

forbearance

programmes

Total

balances

on

forbearance

programmes

coverage

ratio

Total

balances

%

of

gross

wholesale

loans

and

advances

£m

%

£m

%

As

at

31

December

2020

Barclays

UK

582

1.6

57

9.8

Barclays

International

2,833

2.9

650

22.9

Total

3,415

2.5

707

20.7

As

at

31

December

2019

Barclays

UK

496

1.6

35

7.1

Barclays

International

1,934

1.9

263

13.6

Total

2,430

1.8

298

12.3

Note

a

For

2020

year

end,

there

has

been

a

standardisation

of

the

definition

of

forbearance

across

the

Group.

2019

balances

have

not

been

restated.

Analysis

of

debt

securities

Debt

securities

include

government

securities

held

as

part

of

the

Group’s

treasury

management

portfolio

for

liquidity

and

regulatory

purposes,

and

are

for

use

on

a

continuing

basis

in

the

activities

of

the

Group.

The

following

tables

provide

an

analysis

of

debt

securities

held

by

the

Group

for

trading

and

investment

purposes

by

issuer

type,

and

where

the

Group

held

government

securities

exceeding

10%

of

shareholders’

equity.

Further

information

on

the

credit

quality

of

debt

securities

is

presented

in

the

Balance

sheet

credit

quality

section.

Debt

securities

2020

2019

As

at

31

December

£m

%

£m

%

Of

which

issued

by:

Governments

and

other

public

bodies

105,496

66.0

91,058

65.1

Corporate

and

other

issuers

39,733

24.9

39,231

28.1

US

agency

8,742

5.5

4,480

3.2

Mortgage

and

asset

backed

securities

5,745

3.6

5,084

3.6

Total

159,716

100.0

139,853

100.0

Government

securities

Fair

value

2020

2019

As

at

31

December

£m

United

States

30,363

32,145

United

Kingdom

23,873

28,010

Japan

16,258

6,679

Risk

review

Risk

performance

Credit

risk

145

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Analysis

of

derivatives

The

tables

below

set

out

the

fair

values

of

the

derivative

assets

together

with

the

value

of

those

assets

subject

to

enforceable

counterparty

netting

arrangements

for

which

the

Group

holds

offsetting

liabilities

and

eligible

collateral.

Derivative

assets

(audited)

2020

2019

Balance

sheet

assets

Counterparty

netting

Net

exposure

Balance

sheet

assets

Counterparty

netting

Net

exposure

As

at

31

December

£m

Foreign

exchange

85,115

68,108

17,007

56,606

44,284

12,322

Interest

rate

172,334

128,072

44,262

142,468

106,589

35,879

Credit

derivatives

4,605

3,584

1,021

8,215

6,589

1,626

Equity

and

stock

index

38,972

32,183

6,789

20,806

17,517

3,289

Commodity

derivatives

1,420

1,133

287

1,141

1,019

122

Total

derivative

assets

302,446

233,080

69,366

229,236

175,998

53,238

Cash

collateral

held

43,291

33,411

Net

exposure

less

collateral

26,075

19,827

Derivative

asset

exposures

would

be

£276bn

(2019:

£209bn)

lower

than

reported

under

IFRS

if

netting

were

permitted

for

assets

and

liabilities

with

the

same

counterparty

or

for

which

the

Group

holds

cash

collateral.

Similarly,

derivative

liabilities

would

be

£276bn

(2019:

£212bn)

lower

reflecting

counterparty

netting

and

collateral

placed.

In

addition,

non-cash

collateral

of

£5bn

(2019:

£6bn)

was

held

in

respect

of

derivative

assets.

The

Group

received

collateral

from

clients

in

support

of

over

the

counter

derivative

transactions.

These

transactions

are

generally

undertaken

under

International

Swaps

and

Derivative

Association

(ISDA)

agreements

governed

by

either

UK

or

New

York

law.

The

table

below

sets

out

the

fair

value

and

notional

amounts

of

OTC

derivative

instruments

by

type

of

collateral

arrangement.

Derivatives

by

collateral

arrangement

2020

2019

Notional

contract

amount

Fair

value

Notional

contract

amount

Fair

value

Assets

Liabilities

Assets

Liabilities

£m

Unilateral

in

favour

of

Barclays

Foreign

exchange

28,431

618

(532)

32,441

398

(422)

Interest

rate

6,580

982

(10)

5,202

859

(13)

Credit

derivatives

227

2

-

338

3

(1)

Equity

and

stock

index

860

17

(77)

158

5

(27)

Total

unilateral

in

favour

of

Barclays

36,098

1,619

(619)

38,139

1,265

(463)

Unilateral

in

favour

of

counterparty

Foreign

exchange

16,420

545

(1,003)

11,230

424

(1,206)

Interest

rate

36,973

3,524

(4,543)

44,360

3,094

(4,210)

Credit

derivatives

287

-

116

-

(1)

Equity

and

stock

index

451

146

(22)

494

298

(40)

Total

unilateral

in

favour

of

counterparty

54,131

4,215

(5,568)

56,200

3,816

(5,457)

Bilateral

arrangement

Foreign

exchange

5,154,176

79,337

(77,919)

4,484,380

51,571

(51,001)

Interest

rate

13,267,129

161,909

(155,453)

12,303,652

131,700

(128,096)

Credit

derivatives

365,757

3,348

(3,490)

390,790

5,034

(4,923)

Equity

and

stock

index

453,990

15,376

(18,399)

210,267

8,925

(11,178)

Commodity

derivatives

4,235

89

(100)

7,269

294

(210)

Total

bilateral

arrangement

19,245,287

260,059

(255,361)

17,396,358

197,524

(195,408)

Uncollateralised

derivatives

Foreign

exchange

269,417

4,277

(4,589)

379,741

4,117

(4,216)

Interest

rate

250,857

4,583

(2,131)

284,168

4,697

(1,668)

Credit

derivatives

18,629

324

(419)

8,142

216

(474)

Equity

and

stock

index

10,850

3,268

(7,596)

21,131

1,400

(4,540)

Commodity

derivatives

9

-

(10)

58

9

(46)

Total

uncollateralised

derivatives

549,762

12,452

(14,745)

693,240

10,439

(10,944)

Total

OTC

derivative

assets/(liabilities)

19,885,278

278,345

(276,293)

18,183,937

213,044

(212,272)

Risk

review

Risk

performance

Market

risk

146

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Summary

of

contents

Page

Outlines

key

measures

used

to

summarise

the

market

risk

profile

of

the

bank

such

as

value

at

risk

(VaR).

◾

Market

risk

overview

and

summary

of

performance

146

The

Group

discloses

details

on

management

measures

of

market

risk.

Total

management

VaR

includes

all

trading

positions

and

is

presented

on

a

diversified

basis

by

risk

factor.

This

section

also

outlines

the

macroeconomic

conditions

modelled

as

part

of

the

Group’s

risk

management

framework.

◾

Traded

market

risk

◾

Review

of

management

measures

-

The

daily

average,

maximum

and

minimum

values

of

management

VaR

-

Business

scenario

stresses

146

147

All

disclosures

in

this

section

are

unaudited

unless

otherwise

stated.

Overview

This

section

contains

key

statistics

describing

the

market

risk

profile

of

the

Group.

The

market

risk

management

section

provides

a

description

of

management

VaR

.

Measures

of

market

risk

in

the

Group

and

accounting

measures

Traded

market

risk

measures

such

as

VaR

and

balance

sheet

exposure

measures

have

fundamental

differences:

◾

balance

sheet

measures

show

accruals-based

balances

or

marked

to

market

values

as

at

the

reporting

date;

◾

VaR

measures

also

take

account

of

current

marked

to

market

values,

but

in

addition

hedging

effects

between

positions

are

considered;

◾

market

risk

measures

are

expressed

in

terms

of

changes

in

value

or

volatilities

as

opposed

to

static

values.

For

these

reasons,

it

is

not

possible

to

present

direct

reconciliations

of

traded

market

risk

and

accounting

measures.

Summary

of

performance

in

the

period

Average

management

VaR

increased

to

£32m

in

2020

(2019:

£23m),

driven

by

an

increase

in

market

volatility

in

late

Q1

and

Q2

during

the

initial

phase

of

the

COVID-19

pandemic.

Management

VaR

stabilised

and

declined

in

the

second

half

of

the

year.

Traded

market

risk

review

Review

of

management

measures

The

following

disclosures

provide

details

on

management

measures

of

market

risk.

Refer

to

the

market

risk

management

section

of

the

Barclays

PLC

Pillar

3

Report

2020

(unaudited)

for

more

detail

on

management

measures

and

the

differences

when

compared

to

regulatory

measures.

The

table

below

shows

the

total

management

VaR

on

a

diversified

basis

by

risk

factor.

To

tal

management

VaR

includes

all

trading

positions

in

CIB

and

Treasury

and

it

is

calculated

with

a

one-day

holding

period.

Limits

are

applied

against

each

risk

factor

VaR

as

well

as

total

m

anagement

VaR,

which

are

then

cascaded

further

by

risk

managers

to

each

business.

The

daily

average,

maximum

and

minimum

values

of

management

VaR

Management

VaR

(95%,

one

day)

(audited)

2020

2019

Average

High

a

Low

a

Average

High

a

Low

a

For

the

year

ended

31

December

£m

Credit

risk

20

38

10

12

17

8

Interest

rate

risk

10

17

6

11

3

Equity

risk

13

35

6

10

22

5

Basis

risk

10

16

7

8

11

6

Spread

risk

5

9

3

4

5

3

Foreign

exchange

risk

5

7

2

3

5

2

Commodity

risk

1

-

1

2

-

Inflation

risk

2

3

1

2

3

1

Diversification

effect

a

(34)

n/a

(23)

n/a

Total

management

VaR

32

57

18

23

29

17

Note

a

Diversification

effects

recognise

that

forecast

losses

from

different

assets

or

businesses

are

unlikely

to

occur

concurrently,

hence

the

expected

aggregate

loss

is

lower

than

the

sum

of

the

expected

losses

from

each

area.

Historical

correlations

between

losses

are

taken

into

account

in

making

these

assessments.

The

high

and

low

VaR

figures

reported

for

each

category

did

not

necessarily

occur

on

the

same

day

as

the

high

and

low

VaR

reported

as

a

whole.

Consequently,

a

diversification

effect

balance

for

the

high

and

low

VaR

figures

would

not

be

meaningful

and

is

therefore

omitted

from

the

above

table.

Risk

review

Risk

performance

Market

risk

147

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Group

Management

VaR

(£m)

Business

scenario

stresses

As

part

of

the

Group’s

risk

management

framework,

on

a

regular

basis

the

performance

of

the

trading

business

in

hypothetical

scenarios

characterised

by

severe

macroeconomic

conditions

is

modelled.

Up

to

seven

global

scenarios

are

modelled

on

a

regular

basis,

for

example,

a

sharp

deterioration

in

liquidity,

a

slowdown

in

the

global

economy,

global

recession,

and

a

sharp

increase

in

economic

growth.

In

2020,

the

scenario

analyses

showed

that

the

largest

market

risk

would

be

due

to

a

severe

deterioration

in

financial

liquidity

and

an

associated

global

recession.

Risk

review

Risk

performance

Treasury

and

Capital

risk

148

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Treasury

and

Capital

risk:

summary

of

contents

Page

Liquidity

risk

performance

The

risk

that

the

firm

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

section

provides

an

overview

of

the

Group’s

liquidity

risk.

◾

Liquidity

overview

and

summary

of

performance

◾

Liquidity

risk

stress

testing

-

Liquidity

risk

appetite

-

Liquidity

regulation

-

Liquidity

coverage

ratio

150

152

The

liquidity

pool

is

held

unencumbered

and

is

intended

to

offset

stress

outflows.

◾

Liquidity

pool

-

Composition

of

the

liquidity

pool

-

Liquidity

pool

by

currency

-

Management

of

the

liquidity

pool

-

Contingent

liquidity

153

The

basis

for

sound

liquidity

risk

management

is

a

funding

structure

that

reduces

the

probability

of

a

liquidity

stress

leading

to

an

inability

to

meet

funding

obligations

as

they

fall

due.

◾

Funding

structure

and

funding

relationships

-

Deposit

funding

-

Wholesale

funding

154

Provides

details

on

the

contractual

maturity

of

all

financial

instruments

and

other

assets

and

liabilities.

◾

Contractual

maturity

of

financial

assets

and

liabilities

157

Capital

risk

performance

Capital

risk

is

the

risk

that

the

firm

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

testing

purposes).

This

also

includes

the

risk

from

the

firm’s

pension

plans.

This

section

details

the

Group’s

capital

position

providing

information

on

both

capital

resources

and

capital

requirements.

It

also

provides

details

of

the

leverage

ratios

and

exposures.

◾

Capital

risk

overview

and

summary

of

performance

◾

Regulatory

minimum

capital

and

leverage

requirements

-

Capital

-

Leverage

161

This

section

outlines

the

Group’s

capital

ratios,

capital

composition,

and

provides

information

on

significant

movements

in

CET1

capital

during

the

year.

◾

Analysis

of

capital

resources

-

Capital

ratios

-

Capital

resources

-

Movement

in

CET1

capital

163

164

This

section

outlines

risk

weighted

assets

by

risk

type,

business

and

macro

drivers.

◾

Analysis

of

risk

weighted

assets

-

Risk

weighted

assets

by

risk

type

and

business

-

Movement

analysis

of

risk

weighted

assets

165

This

section

outlines

the

Group’s

leverage

ratios,

leverage

exposure

composition,

and

provides

information

on

significant

movements

in

the

IFRS

and

leverage

balance

sheet.

◾

Analysis

of

leverage

ratios

and

exposures

-

Leverage

ratios

and

exposures

166

This

section

outlines

the

Group’s

Minimum

requirement

for

own

funds

and

Eligible

Liabilities

(MREL)

position

and

ratios.

◾

Minimum

Requirement

for

own

funds

and

Eligible

Liabilities

167

The

Group

discloses

the

two

sources

of

foreign

exchange

risk

that

it

is

exposed

to.

◾

Foreign

exchange

risk

-

Transactional

foreign

currency

exposure

-

Translational

foreign

exchange

exposure

-

Functional

currency

of

operations

168

A

review

focusing

on

the

UK

retirement

fund,

which

represents

the

majority

of

the

Group’s

total

retirement

benefit

obligation.

◾

Pension

risk

review

-

Assets

and

liabilities

-

IAS

19

position

-

Risk

measurement

169

Risk

review

Risk

performance

Treasury

and

Capital

risk

149

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Interest

rate

risk

in

the

banking

book

performance

A

description

of

the

non-traded

market

risk

framework

is

provided.

The

Group

discloses

a

sensitivity

analysis

on

pre-tax

net

interest

income

for

non-trading

financial

assets

and

liabilities.

The

analysis

is

carried

out

by

business

unit

and

currency.

The

Group

measures

some

non-traded

market

risks,

in

particular

prepayment,

recruitment,

and

residual

risk

using

an

economic

capital

methodology.

The

Group

discloses

the

overall

impact

of

a

parallel

shift

in

interest

rates

on

other

comprehensive

income

and

cash

flow

hedges.

The

Group

measures

the

volatility

of

the

value

of

the

FVOCI

instruments

in

the

liquidity

pool

through

non-

traded

market

risk

VaR.

◾

Interest

rate

risk

in

the

banking

book

overview

and

summary

of

performance

◾

Net

interest

income

sensitivity

-

by

business

unit

-

by

currency

◾

Analysis

of

equity

sensitivity

◾

Volatility

of

the

FVOCI

portfolio

in

the

liquidity

pool

171

172

Risk

review

Risk

performance

Treasury

and

Capital

risk

150

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Liquidity

risk

All

disclosures

in

this

section

are

unaudited

unless

otherwise

stated.

Overview

The

Group

has

a

comprehensive

key

risk

control

framework

for

managing

the

Group’s

liquidity

risk.

The

Liquidity

Framework

meets

the

PRA’s

standards

and

is

designed

to

maintain

liquidity

resources

that

are

sufficient

in

amount

and

quality,

and

a

funding

profile

that

is

appropriate

to

meet

the

liquidity

risk

appetite.

The

Liquidity

Framework

is

delivered

via

a

combination

of

policy

formation,

review

and

governance,

analysis,

stress

testing,

limit

setting

and

monitoring.

This

section

provides

an

analysis

of

the

Group’s:

(i)

summary

of

performance,

(ii)

liquidity

risk

stress

testing,

iii)

liquidity

pool,

(iv)

funding

structure

and

funding

relationships,

(v)

credit

ratings,

and

(vi)

contractual

maturity

of

financial

assets

and

liabilities.

For

further

detail

on

liquidity

risk

governance

and

framework,

refer

to

page

194

to

197

of

the

Barclays

PLC

Pillar

3

Report

2020

(unaudited).

Summary

of

performance

The

liquidity

pool

at

£266bn

(December

2019:

£211

bn)

reflects

the

Group’s

prudent

approach

to

liquidity

management.

The

Liquidity

Coverage

Ratio

(LCR)

remained

well

above

the

100%

regulatory

requirement

at

162%

(December

2019:

160%),

equivalent

to

a

surplus

of

£99bn

(December

2019:

£78bn).

The

increase

in

the

liquidity

pool,

LCR

and

surplus

over

the

year

was

driven

by

a

16%

growth

in

deposits,

which

was

largely

a

consequence

of

government

and

central

bank

policy

response

to

the

COVID-19

pandemic.

The

reduction

in

Q420

reflects

actions

taken

to

manage

down

surplus

liquidity

proactively

as

the

prevailing

uncertainty

from

earlier

in

the

year

abated.

During

the

year,

the

Group

issued

£7.9bn

of

minimum

requirement

for

own

funds

and

eligible

liabilities

(MREL)

instruments

in

a

range

of

tenors

and

currencies.

Barclays

Bank

PLC

continued

to

issue

in

the

shorter-term

and

medium-term

markets

and

Barclays

Bank

UK

PLC

continued

to

issue

in

the

shorter-term

markets

and

maintains

an

active

secured

funding

programme.

This

funding

capacity

enables

the

respective

entities

maintain

their

stable

and

diversified

funding

bases.

The

Group’s

reliance

on

short-term

wholesale

funding,

as

measured

by

the

proportion

of

wholesale

funding

maturing

in

less

than

one

year

was

broadly

flat

year-on-year.

At

31

December

2020,

it

was

29%

(December

2019:

28%).

Key

metrics

Liquidity

Coverage

Ratio

162%

Liquidity

risk

stress

testing

Under

the

Liquidity

Framework,

the

Group

has

established

a

liquidity

risk

appetite

(LRA)

together

with

the

appropriate

limits

for

the

management

of

the

liquidity

risk.

This

is

the

level

of

liquidity

risk

the

Group

chooses

to

take

in

pursuit

of

its

business

objectives

and

in

meeting

its

regulatory

obligations.

The

Group

sets

its

internal

liquidity

risk

appetite

based

on

internal

liquidity

risk

assessments

and,

external

regulatory

requirements

namely

the

Capital

Requirements

Regulation

(CRR)

LCR

as

amended

by

CRR

II.

Liquidity

risk

appetite

The

liquidity

risk

assessment

measures

the

potential

contractual

and

contingent

stress

outflows

under

a

range

of

stress

scenarios,

which

are

then

used

to

determine

the

size

of

the

liquidity

pool

that

is

immediately

available

to

meet

anticipated

outflows

should

a

stress

occur.

As

part

of

the

LRA,

the

Group

runs

three

short-term

liquidity

stress

scenarios,

aligned

to

the

PRA’s

prescribed

stresses:

◾

90

day

market-wide

stress

event

◾

30

day

Barclays-specific

stress

event

◾

combined

30

day

market-wide

and

Barclays-specific

stress

event

Risk

review

Risk

performance

Treasury

and

Capital

risk

151

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Key

LRA

assumptions

For

the

year

ended

31

December

2020

Drivers

of

Liquidity

Risk

LRA

Combined

stress

–

key

assumptions

Wholesale

Secured

and

Unsecured

Funding

Risk

-

Zero

rollover

of

maturing

wholesale

unsecured

funding

-

Loss

of

repo

capacity

on

non-extremely

liquid

repos

at

contractual

maturity

date

-

Roll

of

repo

for

extremely

liquid

repo

at

wider

haircut

at

contractual

maturity

date

-

Withdrawal

of

contractual

buyback

obligations,

excess

client

futures

margin,

Prime

Brokerage

(PB)

client

cash

and

overlifts

-

Haircuts

applied

to

the

market

value

of

marketable

assets

held

in

the

liquidity

buffer

Retail

and

Corporate

Funding

Risk

-

Retail

and

Corporate

deposit

outflows

as

counterparties

seek

to

diversify

their

deposit

balances

Intraday

Liquidity

Risk

-

Liquidity

held

to

meet

increased

intraday

liquidity

usage

due

to

payment

and

receipts

volatility,

loss

of

unsecured

credit

lines

and

haircuts

applied

to

collateral

values

used

to

back

secured

creditlines,

in

a

stress

Intra-Group

Liquidity

Risk

-

Liquidity

support

for

material

subsidiaries.

Surplus

liquidity

held

within

certain

subsidiaries

is

not

taken

as

a

benefit

to

the

wider

Group

Cross-Currency

Liquidity

Risk

-

Deterioration

in

FX

market

capacity

that

may

result

in

restriction

in

net

currency

positions

Off-Balance

Sheet

Liquidity

Risk

-

Drawdown

on

committed

facilities

based

on

facility

and

counterparty

type

-

Collateral

outflows

due

to

a

two-notch

credit

rating

downgrade

-

Increase

in

the

Group's

initial

margin

requirement

across

all

major

exchanges

-

Variation

margin

outflows

from

collateralised

risk

positions

-

Outflow

of

collateral

owing

but

not

called

-

Loss

of

internal

sources

of

funding

within

the

PB

synthetics

business

Franchise-Viability

Risk

-

Liquidity

held

to

enable

the

firm

to

meet

select

non-contractual

obligations

to

ensure

market

confidence

in

the

firm

is

maintained,

including

debt

buy-backs,

swap

tear-ups

and

incresed

prime

brokerage

margin

debits

Funding

Concentration

Risk

-

Liquidity

held

against

largest

wholesale

funding

counterparty

refusing

to

roll

As

at

31

December

2020,

the

Group

held

eligible

liquid

assets

well

in

excess

of

100%

of

net

stress

outflows

of

the

30

day

combined

scenario,

which

has

the

highest

net

outflows

of

the

three

short-term

liquidity

stress

scenarios.

The

Group

also

runs

a

long

term

liquidity

stress

test,

which

measures

the

anticipated

outflows

over

a

12-month

market-wide

scenario.

As

at

31

December

2020,

the

Group

remained

compliant

with

this

internal

metric.

Risk

review

Risk

performance

Treasury

and

Capital

risk

152

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Liquidity

regulation

The

Group

monitors

its

position

against

the

LCR,

and

the

Net

Stable

Funding

Ratio

(NSFR)

as

defined

in

the

CRR,

as

amended

by

CRR

II

b

.

The

LCR

is

designed

to

promote

short-term

resilience

of

a

bank’s

liquidity

risk

profile

by

holding

sufficient

High

Quality

Liquid

Assets

to

survive

an

acute

stress

scenario

lasting

for

30

days.

The

NSFR

has

been

developed

to

promote

a

sustainable

maturity

structure

of

assets

and

liabilities.

The

original

LCR

Delegated

Act

underwent

a

revision

in

April

2020

a

.

The

key

areas

which

were

updated

include

rules

around

the

recognition

of

securitisations

as

High

Quality

Liquid

Assets

(requiring

them

to

be

simple,

transparent

and

standardised)

as

well

as

an

update

to

the

stressed

inflow/outflow

rates

for

repurchase

agreements,

reverse

repurchase

agreements

and

collateral

swaps.

These

revisions

were

consistent

with

the

requirements

of

the

Basel

standards.

Detailed

NSFR

provisions

were

contained

in

CRR

II.

Barclays

expects

all

its

entities

in

scope

of

NSFR

requirements

to

be

compliant

at

their

respective

date

of

implementation.

Regulatory

developments

and

impact

of

the

UK’s

withdrawal

from

the

European

Union

LCR

The

European

Union

(Withdrawal)

Act

2018

c

ensures

“direct

EU

legislation”

operative

in

the

UK

immediately

before

“exit

day”

(31

December

2020)

continues

to

be

in

force

unless

otherwise

specified.

This

ensures

that

the

LCR

provisions

operative

in

the

UK

before

“exit

day”

contained

in

the

CRR

(as

amended

by

CRR

II)

and

LCR

Delegated

Act

continue

to

apply

in

the

UK

subject

to

the

temporary

transitional

powers

(TTP)

available

to

UK

regulators

to

delay

or

phase-in

on-shoring

changes.

The

relief

made

available

under

the

TTP

extends

to

the

recognition

of

EU

member

states’

sovereign

debt

as

Level

1

HQLA

d

up

to

31

March

2022

unless

the

relevant

equivalence

decision

is

made

earlier.

NSFR

The

NSFR

rules

were

not

operative

in

the

UK

prior

to

“exit

day”

and

therefore

they

were

not

automatically

on-shored

into

UK

domestic

law

and

the

UK

is

under

no

direct

obligation

to

align

to

the

requirements

contained

in

CRR

II.

Instead

the

NSFR

will

be

subject

to

implementation

by

the

UK’s

PRA.

In

November

2020

the

PRA

published

a

joint

statement

with

HM

Treasury

and

the

Financial

Conduct

Authority

e

that

the

implementation

of

the

outstanding

provisions

of

CRR

II

in

the

UK

would

be

moved

from

June

2021

to

January

2022.

The

PRA

intends

to

consult

during

the

course

of

2021

which

will

determine

how

closely

implementation

of

the

NSFR

in

the

UK

will

align

with

the

EU

requirements

of

CRR

II.

This

does

not

apply

to

Barclays

Bank

Ireland

(BBI)

which

remains

subject

to

the

NSFR

requirements

as

set

out

in

CRR

II

due

to

be

implemented

in

June

2021.

Notes

a

Commission

Delegated

Regulation

(EU)

2015/61

of

10

October

2014

to

supplement

Regulation

(EU)

No

575/2013

of

the

European

Parliament

and

Council

with

regard

to

liquidity

coverage

requirement

for

Credit

Institutions,

as

it

forms

part

of

domestic

law

by

virtue

of

section

3

of

the

European

Union

(Withdrawal)

Act

2018,

and

as

amended

from

time

to

time.

b

Capital

Requirements

Regulation

II

(CRRII

):

Regulation

(EU)

No

575/2013

as

amended

by

Regulation

(EU)

2019/87.

c

Section

3

of

the

European

Union

(Withdrawal)

Act

2018.

d

Part

15

of

“Capital

Requirements

Regulation:

Guidance

on

the

PRA’s

use

of

the

transitional

direction”.

e

Joint

statement

on

the

implementation

of

prudential

reforms

in

the

Financial

Services

Bill

.

Liquidity

coverage

ratio

The

external

LCR

requirement

is

prescribed

by

the

regulator

taking

into

account

the

relative

stability

of

different

sources

of

funding

and

potential

incremental

funding

requirements

in

a

stress.

2020

2019

As

at

31

December

£bn

Eligible

liquidity

buffer

258

206

Net

stress

outflows

(159)

(128)

Surplus

99

78

Liquidity

coverage

ratio

162%

160%

As

part

of

the

LRA,

Barclays

also

establishes

the

minimum

LCR

limit.

The

Group

plans

to

maintain

its

surplus

to

the

internal

and

regulatory

stress

requirements

at

an

efficient

level,

while

continuously

assessing

risks

to

market

funding

conditions

and

its

liquidity

position

and

taking

actions

to

manage

the

size

of

the

liquidity

pool

as

appropriate.

Risk

review

Risk

performance

Treasury

and

Capital

risk

153

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Liquidity

pool

The

Group

liquidity

pool

as

at

31

December

2020

was

£266bn

(2019:

£211

bn).

During

2020,

the

month-end

liquidity

pool

ranged

from

£218bn

to

£332bn

(2019:

£211

bn

to

£256bn),

and

the

mo

nth-end

average

balance

was

£287bn

(2019:

£235bn).

The

liquidity

pool

is

held

unencumbered

and

is

intended

to

offset

stress

outflows.

It

comprises

the

following

cash

and

unencumbered

assets.

Composition

of

the

Group

liquidity

pool

as

at

31

December

2020

Liquidity

pool

Liquidity

pool

of

which

CRR

LCR

eligible

c

2019

Cash

Level

1

Level

2A

Liquidity

pool

£bn

Cash

and

deposits

with

central

banks

a

197

192

-

153

Government

bonds

b

AAA

to

AA-

31

-

29

1

31

A+

to

A-

13

-

6

7

2

BBB+

to

BBB-

1

-

1

-

3

Total

government

bonds

45

-

36

8

36

Other

Government

guaranteed

issuers,

PSEs

and

GSEs

10

-

8

1

9

International

organisations

and

MDBs

6

-

5

-

7

Covered

bonds

8

-

6

2

6

Other

-

Total

other

24

-

19

3

22

Total

as

at

31

December

2020

266

192

55

11

211

Total

as

at

31

December

2019

211

150

50

3

Notes

a

Includes

cash

held

at

central

banks

and

surplus

cash

at

central

banks

payment

schemes.

Of

which

over

98%

(2019:

over

98%)

was

placed

with

the

Bank

of

England,

US

Federal

Reserve,

European

Central

Bank,

Bank

of

Japan

and

Swiss

National

Bank.

b

Of

which

over

78%

(2019:

over

79%)

comprised

UK,

US,

French,

German,

Japanese,

Swiss

and

Dutch

securities.

c

The

LCR

eligible

liquidity

pool

is

adjusted

for

trapped

liquidity

and

other

regulatory

deductions.

It

also

incorporates

other

CRR

(as

amended

by

CRR

II)

qualifying

assets

that

are

not

eligible

under

Barclays’

internal

risk

appetite.

The

Group

liquidity

pool

is

well

diversified

by

major

currency

and

the

Group

monitors

LRA

stress

scenarios

for

major

currencies.

Liquidity

pool

by

currency

USD

EUR

GBP

Other

Total

£bn

Liquidity

pool

as

at

31

December

2020

60

50

80

76

266

Liquidity

pool

as

at

31

December

2019

52

42

67

50

211

Management

of

the

liquidity

pool

The

composition

of

the

liquidity

pool

is

subject

to

limits

set

by

the

Board

and

the

independent

liquidity

risk,

credit

risk

and

market

risk

functions.

In

addition,

the

investment

of

the

liquidity

pool

is

monitored

for

concentration

risk

by

issuer,

currency

and

asset

type.

Given

the

returns

generated

by

these

highly

liquid

assets,

the

risk

and

reward

profile

is

continuously

managed.

As

at

31

December

2020,

64%

(2019:

67%)

of

the

liquidity

pool

was

located

in

Barclays

Bank

PLC,

23%

(2019:

20%)

in

Barclays

Bank

UK

PLC

and

7%

(2019:

6%)

in

Barclays

Bank

Ireland

PLC.

The

residual

portion

of

the

liquidity

pool

is

held

outside

of

these

entities,

predominantly

in

the

US

subsidiaries,

to

meet

entity-specific

stress

outflows

and

local

regulatory

requirements.

To

the

extent

the

use

of

this

portion

of

the

liquidity

pool

is

restricted

due

to

local

regulatory

requirements,

it

is

assumed

to

be

unavailable

to

the

rest

of

the

Group

in

calculating

the

LCR.

Contingent

liquidity

In

addition

to

the

Group

liquidity

pool,

the

Group

has

access

to

other

unencumbered

assets

which

provide

a

source

of

contingent

liquidity.

While

these

are

not

relied

on

in

the

Group’s

LRA,

a

portion

of

these

assets

may

be

monetised

in

a

stress

to

generate

liquidity

through

their

use

as

collateral

for

secured

funding

or

through

outright

sale.

In

a

Barclays-specific,

m

arket-wide

or

combined

liquidity

stress,

liquidity

available

via

market

sources

could

be

severely

disrupted.

In

circumstances

where

market

liquidity

is

unavailable

or

available

only

at

significantly

elevated

prices,

the

Group

could

generate

liquidity

via

central

bank

facilities.

To

this

end,

as

at

31

December

2020,

the

Group

had

£99.2bn

(December

2019:

79.7bn)

of

assets

prepositioned

at

various

central

banks.

For

more

detail

on

the

Group’s

other

unencumbered

assets,

see

pages

221

to

223

of

the

Barclays

PLC

Pillar

3

Report

2020

(unaudited).

Risk

review

Risk

performance

Treasury

and

Capital

risk

154

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Funding

structure

and

funding

relationships

The

basis

for

sound

liquidity

risk

management

is

a

funding

structure

that

reduces

the

probability

of

a

liquidity

stress

leading

to

an

inability

to

meet

funding

obligations

as

they

fall

due.

The

Group’s

overall

funding

strategy

is

to

develop

a

diversified

funding

base

(geographically,

by

type

and

by

counterparty)

and

maintain

access

to

a

variety

of

alternative

funding

sources,

to

provide

protection

against

unexpected

fluctuations,

while

minimising

the

cost

of

funding.

Within

this,

the

Group

aims

to

align

the

sources

and

uses

of

funding.

As

such,

retail

and

corporate

loans

and

advances

are

largely

funded

by

deposits

in

the

relevant

entities,

with

the

surplus

primarily

funding

the

liquidity

pool.

The

majority

of

reverse

repurchase

agreements

are

matched

by

repurchase

agreements.

Derivative

liabilities

and

assets

are

largely

matched.

A

substantial

proportion

of

balance

sheet

derivative

positions

qualify

for

counterparty

netting

and

the

remaining

portions

are

largely

offset

when

netted

against

cash

collateral

received

and

paid.

Wholesale

debt

and

equity

is

used

to

fund

residual

assets.

These

funding

relationships

are

summarised

below:

2020

2019

2020

2019

Assets

£bn

Liabilities

£bn

Loans

and

advances

at

amortised

cost

a

335

Deposits

at

amortised

cost

481

416

Group

liquidity

pool

266

211

<1

Year

wholesale

funding

43

41

>1

Year

wholesale

funding

102

106

Reverse

repurchase

agreements,

trading

portfolio

assets,

cash

collateral

and

settlement

balances

376

298

Repurchase

agreements,

trading

portfolio

liabilities,

cash

collateral

and

settlement

balances

324

247

Derivative

financial

instruments

302

229

Derivative

financial

instruments

301

229

Other

assets

b

71

67

Other

liabilities

32

35

Equity

67

66

Total

assets

1,350

1,140

Total

liabilities

1,350

1,140

Notes

a

Adjusted

for

liquidity

pool

debt

securities

reported

at

amortised

costs

of

£8bn

(December

2019:

£4bn).

b

Other

assets

include

fair

value

assets

that

are

not

part

of

reverse

repurchase

agreements

or

trading

portfolio

assets,

and

other

asset

categories.

Deposit

funding

(audited)

2020

2019

Funding

of

loans

and

advances

Loans

and

advances

at

amortised

cost

Deposits

at

amortised

cost

Loan:

deposit

ratio

a

Loan:

deposit

ratio

As

at

31

December

2020

£bn

%

Barclays

UK

214

240

89%

96%

Barclays

International

123

241

51%

63%

Head

Office

6

-

Barclays

Group

343

481

71%

82%

Note

a

The

loan:

deposit

ratio

is

calculated

as

loans

and

advances

at

amortised

cost

divided

by

deposits

at

amortised

cost.

As

at

31

December

2020,

£209bn

(2019:

£181bn)

of

total

customer

deposits

were

insured

through

the

UK

Financial

Services

Compensation

Scheme

(FSCS)

and

other

similar

schemes.

In

addition

to

these

customer

deposits

£2bn

(2019:

£4bn)

of

other

liabilities

are

insured

by

other

governments.

Contractually

current

accounts

are

repayable

on

demand

and

savings

accounts

at

short

notice.

In

practice,

their

observed

maturity

is

typically

longer

than

their

contractual

maturity.

Similarly,

repayment

profiles

of

certain

types

of

assets

e.g.

mortgages,

overdrafts

and

credit

card

lending,

differ

from

their

contractual

profiles.

The

Group

therefore

assesses

the

behavioural

maturity

of

both

customer

assets

and

liabilities

to

identify

structural

balance

sheet

funding

gaps.

In

doing

so,

it

applies

quantitative

modelling

and

qualitative

assessments

which

take

into

account

historical

experience,

current

customer

composition,

and

macroeconomic

projections.

The

Group’s

broad

base

of

customers,

numerically

and

by

depositor

type,

helps

protect

against

unexpected

fluctuations

in

balances

and

hence

provides

a

stable

funding

base

for

the

Group’s

operations

and

liquidity

needs.

Wholesale

funding

Barclays

Bank

Group

and

Barclays

Bank

UK

Group

maintain

access

to

a

variety

of

sources

of

wholesale

funds

in

major

currencies,

including

those

available

from

term

investors

across

a

variety

of

distribution

channels

and

geographies,

short-term

funding

markets

and

repo

markets.

Barclays

Bank

Group

has

direct

access

to

US,

European

and

Asian

capital

markets

through

its

global

investment

banking

operations

and

to

long-term

investors

through

its

clients

worldwide.

Key

sources

of

wholesale

funding

include

money

markets,

certificates

of

deposit,

commercial

paper,

medium

term

issuances

(including

structured

notes)

and

securitisations.

Key

sources

of

wholesale

funding

for

Barclays

Bank

UK

Group

include

money

markets,

certificates

of

deposit,

commercial

paper,

covered

bonds

and

other

securitisations.

Risk

review

Risk

performance

Treasury

and

Capital

risk

155

Barclays

PLC

2020

Annual

Report

on

Form

20-F

The

Group

expects

to

continue

issuing

public

wholesale

debt

from

Barclays

PLC

(the

Parent

company),

in

order

to

maintain

compliance

with

indicative

MREL

requirements

and

maintain

a

stable

and

diverse

funding

base

by

type,

currency

and

market.

During

the

year,

the

Group

issued

£7.9bn

of

MREL

instruments

from

Barclays

PLC

(the

Parent

company)

in

a

range

of

different

currencies

and

tenors.

Barclays

Bank

PLC

continued

to

issue

in

the

shorter-term

and

medium-term

notes

markets

including

a

$1.75bn

two

year

senior

bond

issuance

in

May,

and

repurchased

a

$1.5bn

7.625%

Contingent

Capital

Notes

in

December.

Barclays

Bank

UK

PLC

continued

to

issue

in

the

shorter-

term

markets

and

maintains

an

active

secured

funding

program.

This

funding

capacity

enables

the

respective

entities

maintain

their

stable

and

diversified

funding

bases.

As

at

31

December

2020,

the

Group’s

total

wholesale

funding

outstanding

(excluding

repurchase

agreements)

was

£145.0bn

(2019:

£147.1bn),

of

which

£17.1bn

(2019:

£19.6bn)

was

secured

funding

and

£127.9bn

(2019:

£127.5bn)

unsecured

funding.

Unsecured

funding

includes

£54.8bn

(2019:

£51.1bn)

of

privately

placed

senior

unsecured

notes

issued

through

a

variety

of

distribution

channels

including

intermediaries

and

private

banks.

Wholesale

funding

of

£42.7bn

(2019:

£40.6bn

matures

in

less

than

one

year,

representing

29%

(December

2019:

28%)

of

total

wholesale

funding

outstanding.

This

includes

£20.3bn

(2019:

£16.3bn)

term

funding

b

.

Although

not

a

requirement,

the

liquidity

pool

exceeded

the

wholesale

funding

maturing

in

less

than

one

year

by

£223bn

(2019:

£170bn).

Barclays

Bank

Group

and

Barclays

Bank

UK

Group

also

support

various

central

bank

monetary

initiatives,

such

as

the

Bank

of

England’s

Term

Funding

Scheme

(TFS)

and

Term

Funding

Scheme

with

additional

incentives

for

SMEs

(TFSME),

and

the

European

Central

Bank’s

Targeted

Long-Term

Refinancing

Operations

(TLTRO)

.

These

are

reported

under

‘repurchase

agreements

and

other

similar

secured

borrowing’

on

the

balance

sheet.

In

2020,

Barclays

repaid

£11.2bn

of

TFS

drawings

early,

reducing

the

outstanding

drawn

balance

under

TFS

to

£1.4bn

as

at

31

December

2020.

Additionally,

£6.6bn

of

TFSME

and

£2.2bn

of

TLTRO

drawings

during

the

year

were

outstanding

at

the

year-end.

Maturity

profile

of

wholesale

funding

a,b

<1

month

1-3

months

3-6

months

6-12

months

<1

year

1-2

years

2-3

years

3-4

years

4-5

years

>5

years

Total

£bn

Barclays

PLC

(the

Parent

company)

Senior

unsecured

(Public

benchmark)

1.1

-

1.2

3.4

1.4

7.7

5.6

5.1

13.5

36.7

Senior

unsecured

(Privately

placed)

0.1

-

0.1

0.2

-

0.2

-

0.7

1.3

Subordinated

liabilities

-

0.9

-

6.8

7.7

Barclays

Bank

PLC

(including

subsidiaries)

Certificates

of

deposit

and

commercial

paper

-

5.4

3.1

5.6

14.1

0.5

0.1

-

14.7

Asset

backed

commercial

paper

1.4

5.0

0.7

-

7.1

-

7.1

Senior

unsecured

(Public

benchmark)

-

0.5

0.1

0.7

1.3

0.1

1.1

-

0.9

4.1

Senior

unsecured

(Privately

placed)

c

0.8

2.3

2.2

4.2

9.5

7.1

6.4

3.9

4.9

21.7

53.5

Asset

backed

securities

-

0.5

0.8

0.4

0.5

0.2

1.4

3.8

Subordinated

liabilities

1.4

0.2

3.2

0.3

5.1

2.2

-

0.1

-

1.2

8.6

Barclays

Bank

UK

PLC

(including

subsidiaries)

Certificates

of

deposit

and

commercial

paper

-

0.9

0.2

0.1

1.2

-

1.2

Senior

unsecured

(Public

benchmark)

-

0.1

Covered

bonds

0.9

-

0.9

2.3

1.8

-

1.2

6.2

Total

as

at

31

December

2020

5.7

15.4

9.5

12.1

42.7

15.6

16.7

12.3

10.2

47.5

145.0

Of

which

secured

2.3

5.0

0.7

0.5

8.5

3.1

2.2

0.5

0.2

2.6

17.1

Of

which

unsecured

3.4

10.4

8.8

11.6

34.2

12.5

14.5

11.8

10.0

44.9

127.9

Total

as

at

31

December

2019

4.5

11.6

9.4

15.1

40.6

19.8

12.1

15.1

11.6

47.9

147.1

Of

which

secured

1.6

5.3

2.3

0.5

9.7

0.9

2.5

2.4

0.9

3.2

19.6

Of

which

unsecured

2.9

6.3

7.1

14.6

30.9

18.9

9.6

12.7

10.7

44.7

127.5

Notes

a

The

composition

of

wholesale

funds

comprises

the

balance

sheet

reported

financial

liabilities

at

fair

value,

debt

securities

in

issue

and

subordinated

liabilities.

It

does

not

include

participation

in

the

central

bank

facilities

reported

within

repurchase

agreements

and

other

similar

secured

borrowing.

b

Term

funding

comprises

public

benchmark

and

privately

placed

senior

unsecured

notes,

covered

bonds,

asset

-backed

securities

and

subordinated

debt

where

the

original

maturity

of

the

instrument

was

more

than

one

year.

c

Includes

structured

notes

of

£45.4bn,

of

which

£8.7bn

matures

within

one

year.

Risk

review

Risk

performance

Treasury

and

Capital

risk

156

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Currency

composition

of

wholesale

debt

As

at

31

December

2020,

the

proportion

of

wholesale

funding

by

major

currencies

was

as

follows:

Currency

composition

of

wholesale

funding

USD

EUR

GBP

Other

%

Certificates

of

deposit

and

commercial

paper

44

38

17

1

Asset

backed

commercial

paper

78

13

9

-

Senior

unsecured

(Public

benchmark)

57

21

15

7

Senior

unsecured

(Privately

placed)

71

12

7

10

Covered

bonds

/

Asset

backed

securities

34

29

37

-

Subordinated

liabilities

52

25

21

2

Total

as

at

31

December

2020

61

20

13

6

Total

as

at

31

December

2019

60

22

13

5

To

manage

cross

currency

refinancing

risk,

the

Group

manages

to

currency

mismatch

limits,

which

limit

risk

at

specific

maturities.

Risk

review

Risk

performance

Treasury

and

Capital

risk

157

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Contractual

maturity

of

financial

assets

and

liabilities

The

table

below

provides

detail

on

the

contractual

maturity

of

all

financial

instruments

and

other

assets

and

liabilities.

Derivatives

(other

than

those

designated

in

a

hedging

relationship)

and

trading

portfolio

assets

and

liabilities

are

included

in

the

‘on

demand’

column

at

their

fair

value.

Liquidity

risk

on

these

items

is

not

managed

on

the

basis

of

contractual

maturity

since

they

are

not

held

for

settlement

according

to

such

maturity

and

will

frequently

be

settled

before

contractual

maturity

at

fair

value.

Derivatives

designated

in

a

hedging

relationship

are

included

according

to

their

contractual

maturity.

Contractual

maturity

of

financial

assets

and

liabilities

(audited)

As

at

31

December

2020

On

demand

Not

more

than

three

months

Over

three

months

but

not

more

than

six

months

Over

six

months

but

not

more

than

nine

months

Over

nine

months

but

not

more

than

one

year

Over

one

year

but

not

more

than

two

years

Over

two

years

but

not

more

than

three

years

Over

three

years

but

not

more

than

five

years

Over

five

years

but

not

more

than

ten

years

Over

ten

years

Total

£m

Assets

Cash

and

balances

at

central

banks

190,347

182

598

-

191,127

Cash

collateral

and

settlement

balances

1,177

100,190

-

101,367

Loans

and

advances

at

amortised

cost

14,098

11,970

8,388

4,956

5,234

25,392

22,133

36,286

47,944

166,231

342,632

Reverse

repurchase

agreements

and

other

similar

secured

lending

150

8,698

-

183

-

9,031

Trading

portfolio

assets

127,950

-

127,950

Financial

assets

at

fair

value

through

the

income

statement

17,377

123,044

7,548

6,960

4,151

4,911

1,346

2,431

2,345

5,038

175,151

Derivative

financial

instruments

301,880

23

-

70

55

310

87

21

302,446

Financial

assets

at

fair

value

through

other

comprehensive

income

-

9,655

3,517

1,393

948

6,469

5,566

17,552

24,450

9,138

78,688

Other

financial

assets

357

451

19

22

-

1

-

850

Total

financial

assets

653,336

254,213

20,070

13,331

10,333

36,843

29,283

56,579

74,826

180,428

1,329,242

Other

assets

20,272

Total

assets

1,349,514

Liabilities

Deposits

at

amortised

cost

410,894

41,468

15,886

5,073

3,082

2,264

625

601

764

379

481,036

Cash

collateral

and

settlement

balances

1,900

83,523

-

85,423

Repurchase

agreements

and

other

similar

secured

borrowing

4

3,276

-

1,400

2,329

7,073

-

92

14,174

Debt

securities

in

issue

-

16,344

4,048

5,100

1,937

5,780

10,402

13,608

12,721

5,856

75,796

Subordinated

liabilities

-

1,589

3,209

294

-

2,192

14

989

6,915

1,139

16,341

Trading

portfolio

liabilities

47,405

-

47,405

Financial

liabilities

designated

at

fair

value

15,555

172,153

8,677

5,067

2,938

8,594

6,939

8,580

8,344

12,918

249,765

Derivative

financial

instruments

299,795

1

49

-

79

67

185

196

403

300,775

Other

financial

liabilities

101

2,915

49

46

45

738

156

273

436

210

4,969

Total

financial

liabilities

775,654

321,269

31,918

15,580

8,002

21,047

20,532

31,309

29,376

20,997

1,275,684

Other

liabilities

6,948

Total

liabilities

1,282,632

Cumulative

liquidity

gap

(122,318)

(189,374)

(201,222)

(203,471)

(201,140)

(185,344)

(176,593)

(151,323)

(105,873)

53,558

66,882

Risk

review

Risk

performance

Treasury

and

Capital

risk

158

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Contractual

maturity

of

financial

assets

and

liabilities

(audited)

As

at

31

December

2019

On

demand

Not

more

than

three

months

Over

three

months

but

not

more

than

six

months

Over

six

months

but

not

more

than

nine

months

Over

nine

months

but

not

more

than

one

year

Over

one

year

but

not

more

than

two

years

Over

two

years

but

not

more

than

three

years

Over

three

years

but

not

more

than

five

years

Over

five

years

but

not

more

than

ten

years

Over

ten

years

Total

£m

Assets

Cash

and

balances

at

central

banks

149,383

766

109

-

150,258

Cash

collateral

and

settlement

balances

2,022

81,231

3

-

83,256

Loans

and

advances

at

amortised

cost

14,824

10,944

13,108

7,738

7,031

21,771

22,478

37,408

40,702

163,111

339,115

Reverse

repurchase

agreements

and

other

similar

secured

lending

13

3,097

-

77

190

-

2

3,379

Trading

portfolio

assets

114,195

-

114,195

Financial

assets

at

fair

value

through

the

income

statement

14,279

89,355

13,979

3,443

1,317

1,664

512

953

2,302

5,282

133,086

Derivative

financial

instruments

229,063

30

-

7

24

9

79

24

229,236

Financial

assets

at

fair

value

through

other

comprehensive

income

-

6,694

3,241

1,164

1,159

7,711

6,521

11,896

21,195

6,169

65,750

Other

financial

assets

895

441

25

-

14

-

1,375

Total

financial

assets

524,674

192,558

30,465

12,345

9,521

31,230

29,725

50,266

64,278

174,588

1,119,650

Other

assets

20,579

Total

assets

1,140,229

Liabilities

Deposits

at

amortised

cost

348,337

42,357

10,671

3,861

4,067

3,935

930

530

545

554

415,787

Cash

collateral

and

settlement

balances

3,053

64,275

13

-

67,341

Repurchase

agreements

and

other

similar

secured

borrowing

7

2,755

10

-

10,007

1,201

470

-

67

14,517

Debt

securities

in

issue

-

12,795

6,560

4,147

3,123

8,387

3,325

18,189

14,342

5,501

76,369

Subordinated

liabilities

-

207

78

75

832

4,979

3,266

1,075

5,979

1,665

18,156

Trading

portfolio

liabilities

36,916

-

36,916

Financial

liabilities

designated

at

fair

value

13,952

127,939

10,890

6,519

3,798

6,981

6,235

7,706

7,127

13,179

204,326

Derivative

financial

instruments

228,617

1

-

8

-

36

42

88

370

229,204

Other

financial

liabilities

251

2,361

55

52

50

1,110

138

242

351

409

5,019

Total

financial

liabilities

631,133

252,690

28,277

14,662

11,870

35,435

15,137

28,254

28,432

21,745

1,067,635

Other

liabilities

6,934

Total

liabilities

1,074,569

Cumulative

liquidity

gap

(106,459)

(166,591)

(164,403)

(166,720)

(169,069)

(173,274)

(158,686)

(136,674)

(100,828)

52,015

65,660

Expected

maturity

date

may

differ

from

the

contractual

dates,

to

account

for:

◾

trading

portfolio

assets

and

liabilities

and

derivative

financial

instruments,

which

may

not

be

held

to

maturity

as

part

of

the

Group’s

trading

strategies

◾

corporate

and

retail

deposits,

reported

under

deposits

at

amortised

cost,

are

repayable

on

demand

or

at

short

notice

on

a

contractual

basis.

In

practice,

their

behavioural

maturity

is

typically

longer

than

their

contractual

maturity,

and

therefore

these

deposits

provide

stable

funding

for

the

Group’s

operations

and

liquidity

needs

because

of

the

broad

base

of

customers,

both

numerically

and

by

depositor

type

◾

loans

to

corporate

and

retail

customers,

which

are

included

within

loans

and

advances

at

amortised

cost

and

financial

assets

at

fair

value,

may

be

repaid

earlier

in

line

with

terms

and

conditions

of

the

contract

◾

debt

securities

in

issue,

subordinated

liabilities,

and

financial

liabilities

designated

at

fair

value,

may

include

early

redemption

features.

Risk

review

Risk

performance

Treasury

and

Capital

risk

159

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Contractual

maturity

of

financial

liabilities

on

an

undiscounted

basis

The

table

below

presents

the

cash

flows

payable

by

the

Group

under

financial

liabilities

by

remaining

contractual

maturities

at

the

balance

sheet

date.

The

amounts

disclosed

in

the

table

are

the

contractual

undiscounted

cash

flows

of

all

financial

liabilities

(i.e.

nominal

values).

The

balances

in

the

below

table

do

not

agree

directly

to

the

balances

in

the

consolidated

balance

sheet

as

the

table

incorporates

all

cash

flows,

on

an

undiscounted

basis,

both

principal

as

well

as

those

associated

with

all

future

coupon

payments.

Derivative

financial

instruments

held

for

trading

and

trading

portfolio

liabilities

are

included

in

the

on

demand

column

at

their

fair

value.

Contractual

maturity

of

financial

liabilities

-

undiscounted

(audited)

On

demand

Not

more

than

three

months

Over

three

months

but

not

more

than

six

months

Over

six

months

but

not

more

than

one

year

Over

one

year

but

not

more

than

three

years

Over

three

years

but

not

more

than

five

years

Over

five

years

but

not

more

than

ten

years

Over

ten

years

Total

£m

As

at

31

December

2020

Deposits

at

amortised

cost

410,894

41,468

15,886

8,156

2,893

599

768

385

481,049

Cash

collateral

and

settlement

balances

1,900

83,523

-

85,423

Repurchase

agreements

and

other

similar

secured

borrowing

4

3,276

-

3,729

7,089

-

154

14,252

Debt

securities

in

issue

-

16,368

4,058

7,061

16,684

14,715

14,882

9,852

83,620

Subordinated

liabilities

-

1,597

3,328

311

2,498

1,152

8,578

1,587

19,051

Trading

portfolio

liabilities

47,405

-

47,405

Financial

liabilities

designated

at

fair

value

15,555

172,186

8,683

8,007

15,604

8,586

8,369

20,835

257,825

Derivative

financial

instruments

299,795

1

49

-

147

187

204

443

300,826

Other

financial

liabilities

101

2,929

62

116

981

338

557

248

5,332

Total

financial

liabilities

775,654

321,348

32,066

23,651

42,536

32,666

33,358

33,504

1,294,783

As

at

31

December

2019

Deposits

at

amortised

cost

348,337

42,369

10,682

7,946

4,869

532

554

595

415,884

Cash

collateral

and

settlement

balances

3,053

64,297

13

-

67,363

Repurchase

agreements

and

other

similar

secured

borrowing

7

2,758

10

-

11,300

485

-

149

14,709

Debt

securities

in

issue

-

12,850

6,589

7,305

12,330

19,132

16,657

9,398

84,261

Subordinated

liabilities

-

207

78

950

9,822

1,286

7,192

3,025

22,560

Trading

portfolio

liabilities

36,916

-

36,916

Financial

liabilities

designated

at

fair

value

13,952

128,064

11,020

10,609

13,507

8,054

7,519

19,392

212,117

Derivative

financial

instruments

228,617

2

-

8

80

45

99

378

229,229

Other

financial

liabilities

251

2,372

65

126

1,337

351

565

448

5,515

Total

financial

liabilities

631,133

252,919

28,457

26,944

53,245

29,885

32,586

33,385

1,088,554

Risk

review

Risk

performance

Treasury

and

Capital

risk

160

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Maturity

of

off-balance

sheet

commitments

received

and

given

The

table

below

presents

the

maturity

split

of

the

Group’s

off-balance

sheet

commitments

received

and

given

at

the

balance

sheet

date.

The

amounts

disclosed

in

the

table

are

the

undiscounted

cash

flows

(i.e.

nominal

values)

on

the

basis

of

earliest

opportunity

at

which

they

are

available.

Maturity

analysis

of

off-balance

sheet

commitments

received

(audited)

On

demand

Not

more

than

three

months

Over

three

months

but

not

more

than

six

months

Over

six

months

but

not

more

than

nine

months

Over

nine

months

but

not

more

than

one

year

Over

one

year

but

not

more

than

two

years

Over

two

years

but

not

more

than

three

years

Over

three

years

but

not

more

than

five

years

Over

five

years

but

not

more

than

ten

years

Over

ten

years

Total

£m

As

at

31

December

2020

Guarantees,

letters

of

credit

and

credit

insurance

26,368

86

37

68

8

18

14

47

40

25

26,711

Other

commitments

received

92

-

92

Total

off-balance

sheet

commitments

received

26,460

86

37

68

8

18

14

47

40

25

26,803

As

at

31

December

2019

Guarantees,

letters

of

credit

and

credit

insurance

13,091

106

22

81

-

11

12

21

12

34

13,390

Other

commitments

received

91

-

91

Total

off-balance

sheet

commitments

received

13,182

106

22

81

-

11

12

21

12

34

13,481

Maturity

analysis

of

off-balance

sheet

commitments

given

(audited)

On

demand

Not

more

than

three

months

Over

three

months

but

not

more

than

six

months

Over

six

months

but

not

more

than

nine

months

Over

nine

months

but

not

more

than

one

year

Over

one

year

but

not

more

than

two

years

Over

two

years

but

not

more

than

three

years

Over

three

years

but

not

more

than

five

years

Over

five

years

but

not

more

than

ten

years

Over

ten

years

Total

£m

As

at

31

December

2020

Contingent

liabilities

21,307

213

57

6

1

25

-

21,609

Documentary

credits

and

other

short-term

trade

1,084

1

-

1,086

Standby

facilities,

credit

lines

and

other

commitments

330,499

564

93

123

95

160

199

202

21

7

331,963

Total

off-balance

sheet

commitments

given

352,890

778

151

129

96

185

199

202

21

7

354,658

As

at

31

December

2019

Contingent

liabilities

23,586

366

86

125

140

143

42

28

3

8

24,527

Documentary

credits

and

other

short-term

trade

1,287

3

1

-

1,291

Standby

facilities,

credit

lines

and

other

commitments

328,623

1,133

792

973

639

269

98

273

139

225

333,164

Total

off-balance

sheet

commitments

given

353,496

1,502

879

1,098

779

412

140

301

142

233

358,982

Risk

review

Risk

performance

Treasury

and

Capital

risk

161

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Capital

risk

All

disclosures

in

this

section

are

unaudited

unless

otherwise

stated.

Overvie

w

The

CET1

ratio,

among

other

metrics,

is

a

measure

of

the

capital

strength

and

resilience

of

Barclays.

Maintenance

of

our

capital

resources

is

vital

in

order

to

meet

the

overall

regulatory

capital

requirement,

to

withstand

the

impact

of

the

risks

that

may

arise

under

normal

and

stressed

conditions,

and

to

cover

current

and

forecast

business

needs

and

associated

risks

to

provide

a

viable

and

sustainable

business

offering.

This

section

provides

an

overview

of

the

Group’s:

(i)

CET1

capital,

leverage

and

own

funds

and

eligible

liabilities

requirements;

(ii)

capital

resources;

(iii)

risk

weighted

assets

(RWAs);

(iv)

leverage

ratios

and

exposures;

and

(v)

own

funds

and

eligible

liabilities.

More

details

on

monitoring

and

managing

capital

risk

may

be

found

in

the

risk

management

sections

of

the

Barclays

PLC

Pillar

3

Report

2020

(unaudited).

Summary

of

performance

in

the

period

The

Group

continues

to

be

in

excess

of

overall

capital

requirements,

minimum

leverage

requirements

and

MREL

requirements.

The

CET1

ratio

increased

to

15.1%

(December

2019:

13.8%).

CET1

capital

increased

by

£5.5bn

to

£46.3bn

reflecting

resilient

capital

generation

through

£7.9bn

of

profit

before

tax,

excluding

credit

impairment

charges

of

£4.8bn,

and

a

£1.0bn

increase

due

to

the

cancellation

of

the

full

year

2019

dividend.

These

increases

were

partially

offset

by

£0.9bn

of

AT1

coupons

paid

and

the

announced

1.0p

full

year

2020

dividend.

The

CET1

capital

increase

also

reflects

regulatory

measures

for

IFRS

9

transitional

relief,

prudent

valuation

and

qualifying

software

assets.

RWAs

increased

by

£11.1

bn

to

£306.2bn

primarily

due

to

higher

market

volatility,

increased

client

activity

and

a

reduction

in

credit

quality

within

CIB,

partially

offset

by

lower

consumer

lending.

The

average

UK

leverage

ratio

increased

to

5.0%

(December

2019:

4.5%)

primarily

driven

by

the

increase

in

T1

capital.

The

average

leverage

exposure

increased

to

£1,147bn

(December

2019:

£1,143bn)

primarily

driven

by

an

increase

in

Securities

Financing

Transactions

(SFTs)

and

Trading

Portfolio

Assets

(TPAs)

largely

driven

by

an

increase

in

secured

lending

and

client

activity

within

CIB,

partially

offset

by

the

PRA’s

early

adoption

of

CRR

II

settlement

netting.

Key

metrics

Common

Equity

Tier

1

ratio

15.1%

Average

UK

leverage

ratio

5.0%

UK

leverage

ratio

5.3%

Own

funds

and

eligible

liabilities

ratio

as

a

percentage

of

CRR

leverage

exposures

a

8.2%

Own

funds

and

eligible

liabilities

ratio

as

a

percentage

of

RWAs

33.6%

Note

a

Fully

loaded

CRR

leverage

exposure

is

calculated

without

applying

the

transitional

arrangements

of

the

CRR

as

amended

by

CRR

II.

Minimum

capital

requirement

s

The

Group’s

Overall

Capital

Requirement

for

CET1

is

11.2

%

comprising

a

4.5%

Pillar

1

minimum,

a

2.5%

Capital

Conservation

Buffer

(CCB),

a

1.5%

Global

Systemically

Important

Institution

(G-SII)

buffer,

a

2.7%

Pillar

2A

requirement

and

a

0.0%

Countercyclical

Capital

Buffer

(CCyB).

The

Group’s

CCyB

is

based

on

the

buffer

rate

applicable

for

each

jurisdiction

in

which

the

Group

has

exposures.

On

11

March

2020,

the

Financial

Policy

Committee

(FPC)

set

the

CCyB

rate

for

UK

exposures

at

0%

with

immediate

effect.

The

buffer

rates

set

by

other

national

authorities

for

non-UK

exposures

are

not

currently

material.

Overall,

this

results

in

a

0.0%

CCyB

for

the

Group.

The

Group’s

Pillar

2A

requirement

as

per

the

PRA’s

Individual

Capital

Requirement

is

4.8%

of

which

at

least

56.25%

needs

to

be

met

with

CET1

capital,

equating

to

approximately

2.7%

of

RWAs.

The

Pillar

2A

requirement

is

subject

to

at

least

annual

review

and

has

been

set

as

a

nominal

capital

amount.

This

is

based

on

a

point

in

time

assessment

and

the

requirement

(when

expressed

as

a

proportion

of

RWAs)

will

change

depending

on

the

total

RWAs

at

each

reporting

period.

Minimum

leverage

requirements

The

Group

is

subject

to

a

leverage

ratio

requirement

of

3.8%

as

at

31

December

2020.

This

comprises

the

3.25%

minimum

requirement,

a

G-SII

additional

leverage

ratio

buffer

(G-SII

ALRB)

of

0.53%

and

a

countercyclical

leverage

ratio

buffer

of

0.0%.

Although

the

leverage

ratio

is

expressed

in

terms

of

T1

capital,

75%

of

the

minimum

requirement,

equating

to

2.4375%,

needs

to

be

met

with

CET1

capital.

In

addition,

the

G-

SII

ALRB

must

be

covered

solely

with

CET1

capital.

The

CET1

capital

held

against

the

0.53%

G-SII

ALRB

was

£6.0bn.

Risk

review

Risk

performance

Treasury

and

Capital

risk

162

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Minimum

requirements

for

own

funds

and

eligible

liabilities

The

Group

is

required

to

meet

the

higher

of:

(i)

the

requirements

set

by

the

BoE

based

on

RWAs

and

the

higher

of

average

and

UK

leverage

exposures;

and

(ii)

the

requirements

in

CRR

as

amended

by

CRR

II

based

on

RWAs

and

CRR

leverage

exposures.

The

MREL

requirements

are

subject

to

phased

implementation

and

will

be

fully

implemented

by

1

January

2022.

On

19

January

2021

the

BoE

published

indicative

MREL

requirements

that

show

the

Group’s

highest

requirement

in

2022

will

be

7.70%

of

CRR

leverage

exposure,

based

on

30

September

2020

exposures.

The

BoE

is

currently

reviewing

the

MREL

calibration

and

intends

to

make

any

policy

changes

by

the

end

of

2021.

Separately,

the

FPC

intends

to

review

the

UK

leverage

framework

in

2021

and

this,

along

with

any

MREL

policy

changes,

may

result

in

a

different

MREL

requirement

from

1

January

2022

than

that

which

is

currently

proposed.

CET1

capital

cannot

be

counted

towards

both

MREL

and

the

capital

buffers,

meaning

that

the

buffers

will

effectively

be

applied

above

MREL

requirements.

Significant

regulatory

updates

in

the

period

Under

the

withdrawal

agreement

between

the

UK

and

the

EU,

the

11

-month

transition

period

expired

at

11pm

on

31

December

2020.

Any

references

to

CRR

as

amended

by

CRR

II

mean,

unless

otherwise

specified,

CRR

as

amended

by

CRR

II,

as

it

forms

part

of

UK

law

pursuant

to

the

European

Union

(Withdrawal)

Act

2018

and

subject

to

the

TTP

available

to

UK

regulators

to

delay

or

phase-in

on-shoring

changes

to

UK

regulatory

requirements

arising

at

the

end

of

the

transition

period

until

31

March

2022,

as

at

the

applicable

reporting

date.

Throughout

the

TTP

period,

the

BoE

and

PRA

are

expected

to

review

the

UK

legislation

framework

and

any

disclosures

made

by

the

Group

will

be

subject

to

any

resulting

guidance.

The

following

regulatory

updates

formed

part

of

CRR

as

amended

by

CRR

II

prior

to

31

December

2020

and

subsequently

form

part

of

UK

law

as

defined

above.

On

22

April

2020,

the

regulatory

technical

standards

on

prudent

valuation

were

amended

to

include

an

increase

to

diversification

factors

applied

to

certain

additional

valuation

adjustments.

The

amendments

temporarily

reduced

the

additional

value

adjustment

deduction

(PVA)

and

were

applied

until

31

December

2020

inclusive.

On

27

June

2020,

CRR

as

amended

by

CRR

II,

was

further

amended

to

accelerate

specific

CRR

II

measures

and

implement

a

new

IFRS

9

transitional

relief

calculation.

Previously

due

to

be

implemented

in

June

2021,

the

accelerated

measures

primarily

relate

to

non-deduction

of

prudently

valued

software

assets

from

CET1

capital,

the

CRR

leverage

calculation

to

include

additional

settlement

netting

and

limited

changes

to

the

calculation

of

RWAs.

For

UK

leverage

calculations,

the

PRA

early

adopted

the

CRR

II

settlement

netting

measure

in

April

2020.

The

IFRS

9

transitional

arrangements

have

been

extended

by

two

years

and

a

new

modified

calculation

has

been

introduced.

100%

relief

will

be

applied

to

increases

in

stage

1

and

stage

2

provisions

from

1

January

2020

throughout

2020

and

2021;

75%

in

2022;

50%

in

2023;

25%

in

2024

with

no

relief

applied

from

2025.

The

phasing

out

of

transitional

relief

on

the

“day

1”

impact

of

IFRS

9

as

well

as

increases

in

stage

1

and

stage

2

provisions

between

1

January

2018

and

31

December

2019

under

the

modified

calculation

remain

unchanged

and

continue

to

be

subject

to

70%

transitional

relief

throughout

2020;

50%

for

2021;

25%

for

2022

and

with

no

relief

applied

from

2023.

On

23

December

2020,

a

new

regulatory

technical

standard

on

the

prudential

treatment

of

qualifying

software

assets

was

adopted

into

EU

law

replacing

the

CET1

capital

deduction

with

prudential

amortisation

up

to

a

3-year

period.

Intangible

assets

that

are

no

longer

deducted

are

subject

to

100%

risk

weight

instead.

Following

its

stated

intention

to

consult,

on

12

February

2021

the

PRA

launched

a

consultation

on

certain

items

within

the

Basel

standards

that

remain

to

be

implemented

in

the

UK

as

well

as

setting

out

proposed

new

PRA

CRR

rules.

The

proposals

include

reverting

to

the

of

100%

CET1

capital

deduction

for

qualifying

software

assets

by

the

end

of

2021,

meaning

the

benefit

in

the

CET1

ratio

is

likely

to

be

reversed

in

future

periods.

Risk

review

Risk

performance

Treasury

and

Capital

risk

163

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Capital

resources

Capital

ratios

a,b,c

As

at

31

December

2020

2019

CET1

15.1%

13.8%

Tier

1

(T1)

19.0%

17.7%

Total

regulatory

capital

22.1%

21.6%

Capital

resources

(audited)

2020

2019

As

at

31

December

£m

Total

equity

excluding

non-controlling

interests

per

the

balance

sheet

65,797

64,429

Less:

other

equity

instruments

(recognised

as

AT1

capital)

(11,172)

(10,871)

Adjustment

to

retained

earnings

for

foreseeable

dividends

and

other

equity

coupons

(204)

(1,096)

Other

regulatory

adjustments

and

deductions

Additional

value

adjustments

(PVA)

(1,146)

(1,746)

Goodwill

and

intangible

assets

(6,914)

(8,109)

Deferred

tax

assets

that

rely

on

future

profitability

excluding

temporary

differences

(595)

(479)

Fair

value

reserves

gains

or

losses

on

cash

flow

hedges

(1,575)

(1,002)

Gains

or

losses

on

liabilities

at

fair

value

resulting

from

own

credit

870

260

Defined

benefit

pension

fund

assets

(1,326)

(1,594)

Direct

and

indirect

holdings

by

an

institution

of

own

CET1

instruments

(50)

Adjustment

under

IFRS

9

transitional

arrangements

2,556

1,126

Other

regulatory

adjustments

55

(55)

CET1

capital

46,296

40,813

AT1

capital

Capital

instruments

and

premium

accounts

11,172

10,871

Qualifying

AT1

capital

(including

minority

interests)

issued

by

subsidiaries

646

687

Other

regulatory

adjustments

and

deductions

(80)

(130)

AT1

capital

11,738

11,428

T1

capital

58,034

52,241

T2

capital

Capital

instruments

and

premium

accounts

7,836

7,650

Qualifying

T2

capital

(including

minority

interests)

issued

by

subsidiaries

1,893

3,984

Credit

risk

adjustments

(excess

of

impairment

over

expected

losses)

57

16

Other

regulatory

adjustments

and

deductions

(160)

(250)

Total

regulatory

capital

67,660

63,641

Notes

a

CET1,

T1

and

T2

capital,

and

RWAs

are

calculated

applying

the

transitional

arrangements

of

the

CRR

as

amended

by

CRR

II.

This

includes

IFRS

9

transitional

arrangements

and

the

grandfathering

of

CRR

and

CRR

II

non-compliant

capital

instruments.

b

The

fully

loaded

CET1

ratio,

as

is

relevant

for

assessing

against

the

conversion

trigger

in

Barclays

PLC

AT1

securities,

was

14.3%,

with

£43.7bn

of

CET1

capital

and

£305.3bn

of

RWAs

calculated

without

applying

the

transitional

arrangements

of

the

CRR

as

amended

by

CRR

II.

c

The

Group’s

CET1

ratio,

as

is

relevant

for

assessing

against

the

conversion

trigger

in

Barclays

Bank

PLC

7.625%

Contingent

Capital

Notes,

was

15.1%.

For

this

calculation

CET1

capital

and

RWAs

are

calculated

applying

the

transitional

arrangements

under

the

CRR

as

amended

by

CRR

II,

including

the

IFRS

9

transitional

arrangements.

The

benefit

of

the

Financial

Servi

ces

Authority

(FSA)

October

2012

interpretation

of

the

transitional

provisions,

relating

to

the

implementation

of

CRD

IV,

expired

in

December

2017.

Risk

review

Risk

performance

Treasury

and

Capital

risk

164

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Movement

in

CET1

capital

2020

£m

Opening

balance

as

at

1

January

40,813

Profit

for

the

period

attributable

to

equity

holders

2,383

Own

credit

relating

to

derivative

liabilities

29

Dividends

and

other

equity

coupons

paid

and

foreseen

35

Increase

in

retained

regulatory

capital

generated

from

earnings

2,447

Net

impact

of

share

schemes

115

Fair

value

through

other

comprehensive

income

reserve

192

Currency

translation

reserve

(473)

Other

reserves

(48)

Decrease

in

other

qualifying

reserves

(214)

Pension

remeasurements

within

reserves

(111)

Defined

benefit

pension

fund

asset

deduction

268

Net

impact

of

pensions

157

Additional

value

adjustments

(PVA)

600

Goodwill

and

intangible

assets

1,195

Deferred

tax

assets

that

rely

on

future

profitability

excluding

those

arising

from

temporary

differences

(116)

Adjustment

under

IFRS

9

transitional

arrangements

1,430

Other

regulatory

adjustments

(16)

Increase

in

regulatory

capital

due

to

adjustments

and

deductions

3,093

Closing

balance

as

at

31

December

46,296

CET1

capital

increased

£5.5bn

to

£46.3bn

(December

2019:

£40.8bn).

£2.4bn

of

capital

generated

from

profits,

and

a

£1.0bn

increase

due

to

the

cancellation

of

the

full

year

2019

dividend

were

partially

offset

by

£0.9bn

of

AT1

coupons

paid

and

£0.2bn

dividends

foreseen

for

the

announced

2020

full

year

dividend.

Other

significant

movements

in

the

period

were:

◾

A

£0.5bn

decrease

in

the

currency

translation

reserve

mainly

driven

by

the

depreciation

of

period

end

USD

against

GBP

◾

A

£0.6bn

increase

due

to

a

reduction

in

PVA

which

includes

the

temporary

increase

to

diversification

factors

applied

to

certain

additional

valuation

adjustments

◾

A

£1.2bn

increase

due

to

a

reduction

in

the

goodwill

and

intangible

assets

deduction

driven

by

a

new

regulatory

technical

standard

replacing

the

deduction

with

prudential

amortisation

up

to

a

3-year

period

on

qualifying

software

assets

◾

A

£1.4bn

increase

in

the

IFRS

9

transitional

relief

after

tax,

following

new

impairment

charges

and

the

implementation

of

new

regulatory

measures

which

allow

for

100%

relief

on

increases

in

stage

1

and

stage

2

impairment

throughout

2020

and

2021

Risk

review

Risk

performance

Treasury

and

Capital

risk

165

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Risk

weighted

assets

Risk

weighted

assets

(RWAs)

by

risk

type

and

business

Credit

risk

Counterparty

credit

risk

Market

risk

Operational

risk

Total

RWAs

Std

IRB

Std

IRB

Settlement

Risk

CVA

Std

IMA

As

at

31

December

2020

£m

Barclays

UK

7,360

54,340

394

-

136

72

-

11,359

73,661

Corporate

and

Investment

Bank

24,660

73,792

12,047

20,280

246

2,351

13,123

22,363

23,343

192,205

Consumer,

Cards

and

Payments

19,754

3,041

177

45

-

31

-

71

6,996

30,115

Barclays

International

44,414

76,833

12,224

20,325

246

2,382

13,123

22,434

30,339

222,320

Head

Office

4,153

6,869

-

(800)

10,222

Barclays

Group

55,927

138,042

12,618

20,325

246

2,518

13,195

22,434

40,898

306,203

As

at

31

December

2019

Barclays

UK

5,189

57,455

235

-

23

178

-

11,821

74,901

Corporate

and

Investment

Bank

25,749

62,177

12,051

16,875

276

2,470

12,854

17,626

21,475

171,553

Consumer,

Cards

and

Payments

27,209

2,706

92

37

-

11

-

103

7,532

37,690

Barclays

International

52,958

64,883

12,143

16,912

276

2,481

12,854

17,729

29,007

209,243

Head

Office

5,104

5,754

-

129

10,987

Barclays

Group

63,251

128,092

12,378

16,912

276

2,504

13,032

17,729

40,957

295,131

Movement

analysis

of

risk

weighted

assets

Credit

risk

Counterparty

credit

risk

Market

risk

Operational

risk

Total

RWAs

Risk

weighted

assets

£m

As

at

31

December

2019

191,343

32,070

30,761

40,957

295,131

Book

size

(6,573)

2,232

9,188

(59)

4,788

Acquisitions

and

disposals

(165)

-

(165)

Book

quality

9,081

1,365

-

10,446

Model

updates

2,796

150

-

2,946

Methodology

and

policy

(851)

(110)

(4,320)

-

(5,281)

Foreign

exchange

movement

a

(1,662)

-

(1,662)

Total

RWA

movements

2,626

3,637

4,868

(59)

11,072

As

at

31

December

2020

193,969

35,707

35,629

40,898

306,203

Note

a

Foreign

excha

nge

movement

does

not

include

foreign

exchange

for

counterparty

credit

risk

or

market

risk.

Overall

RWAs

increased

£11.1bn

to

£306.2bn

(December

2019:

£295.1bn).

Significant

movements

in

the

period

were:

Credit

risk

RWAs

increased

£2.6bn:

◾

A

£6.6bn

decrease

in

book

size

primarily

due

to

lower

consumer

lending

partially

offset

by

growth

in

mortgages

within

BUK

◾

A

£9.1bn

increase

in

book

quality

due

to

a

reduction

in

credit

quality

primarily

within

CIB

◾

A

£2.8bn

increase

in

model

updates

primarily

due

to

modelled

risk

weight

recalibrations

◾

A

£0.9bn

decrease

in

methodology

and

policy

primarily

due

the

application

of

revised

SME

discount

factors

under

CRR

II,

partially

offset

by

an

increase

due

to

the

risk

weighting

of

qualifying

software

assets

that

are

no

longer

deducted

from

CET1

capital

◾

A

£1.7bn

decrease

due

to

the

depreciation

of

period

end

USD

against

GBP

Counterparty

credit

risk

RWAs

increased

£3.6bn:

◾

A

£2.2bn

increase

in

book

size

primarily

due

to

an

increase

in

trading

activities

across

SFTs

and

derivatives

◾

A

£1.4bn

increase

in

book

quality

primarily

due

to

a

reduction

in

credit

quality

within

CIB

Market

risk

RWAs

increased

£4.9bn:

◾

A

£9.2bn

increase

in

book

size

primarily

due

to

an

increase

in

trading

activities

and

higher

market

volatility

◾

A

£4.3bn

decrease

in

methodology

and

policy

primarily

due

to

the

removal

of

a

Risk

Not

In

VaR

(RNIV)

and

a

reduction

in

pre

COVID-19

VaR

backtesting

exceptions

Risk

review

Risk

performance

Treasury

and

Capital

risk

166

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Leverage

ratios

and

exposures

The

Group

is

required

to

disclose

an

average

UK

leverage

ratio

which

is

based

on

capital

on

the

last

day

of

each

month

in

the

quarter

and

an

exposure

measure

for

each

day

in

the

quarter.

The

Group

is

also

required

to

disclose

a

UK

leverage

ratio

based

on

capital

and

exposure

on

the

last

day

of

the

quarter.

Both

approaches

exclude

qualifying

claims

on

central

banks

from

the

leverage

exposures

and

include

the

PRA’s

early

adoption

of

CRR

II

settlement

netting.

The

FPC

intends

to

review

the

UK

leverage

framework

in

2021.

Leverage

ratios

a,b

2020

2019

As

at

31

December

£m

Average

UK

leverage

ratio

5.0%

4.5%

Average

T1

capital

c

57,069

51,823

Average

UK

leverage

exposure

1,146,919

1,142,819

UK

leverage

ratio

5.3%

5.1%

CET1

capital

46,296

40,813

AT1

capital

11,092

10,741

T1

capital

c

57,388

51,554

UK

leverage

exposure

1,090,907

1,007,721

UK

leverage

exposure

2020

2019

As

at

31

December

£m

Accounting

assets

Derivative

financial

instruments

302,446

229,236

Derivative

cash

collateral

64,798

56,589

Securities

financing

transactions

(SFTs)

164,034

111,307

Loans

and

advances

and

other

assets

818,236

743,097

Total

IFRS

assets

1,349,514

1,140,229

Regulatory

consolidation

adjustments

(1,144)

(1,170)

Derivatives

adjustments

Derivatives

netting

(272,275)

(207,756)

Adjustments

to

cash

collateral

(57,414)

(48,464)

Net

written

credit

protection

14,986

13,784

Potential

future

exposure

(PFE)

on

derivatives

117,010

119,118

Total

derivatives

adjustments

(197,693)

(123,318)

SFTs

adjustments

21,114

18,339

Regulatory

deductions

and

other

adjustments

(17,469)

(11,984)

Weighted

off-balance

sheet

commitments

113,704

105,289

Qualifying

central

bank

claims

(155,890)

(119,664)

Settlement

netting

(21,229)

-

UK

leverage

exposure

1,090,907

1,007,721

Notes

a

Fully

loaded

average

UK

leverage

ratio

was

4.8%,

with

£54

.6bn

of

T1

capital

and

£1,144bn

of

leverage

exposure.

Fully

loaded

UK

leverage

ratio

was

5.0%,

with

£54.8

bn

of

T1

capital

and

£1,088bn

of

leverage

exposure.

Fully

loaded

UK

leverage

ratios

are

calculated

without

applying

the

transitional

arrangements

of

the

CRR

as

amended

by

CRR

II.

b

Capital

and

leverage

measures

are

calculated

applying

the

transitional

arrangements

of

the

CRR

as

amended

by

CRR

II.

c

The

T1

capital

is

calculated

in

line

with

the

PRA

Handbook

.

Risk

review

Risk

performance

Treasury

and

Capital

risk

167

Barclays

PLC

2020

Annual

Report

on

Form

20-F

The

average

UK

leverage

ratio

increased

to

5.0%

(December

2019:

4.5%)

primarily

driven

by

the

increase

in

T1

capital.

The

average

leverage

exposure

increased

to

£1,147bn

(December

2019:

£1,143bn)

primarily

driven

by

an

increase

in

SFTs

and

TPAs

largely

driven

by

an

increase

in

secured

lending

and

client

activity

within

CIB,

partially

offset

by

the

PRA’s

early

adoption

of

CRR

II

settlement

netting.

The

UK

leverage

ratio

increased

to

5.3%

(December

2019:

5.1%)

primarily

driven

by

an

increase

of

£5.8bn

in

Tier

1

capital

partially

offset

by

an

increase

in

the

UK

leverage

exposure

of

£83.2bn.

The

UK

leverage

exposure

increase

of

£83.2bn

was

primarily

driven

by:

◾

A

£52.7bn

increase

in

SFTs

and

£75.1bn

of

loans

advances

and

other;

partially

offset

by

◾

A

£36.2bn

decrease

due

to

the

exemption

of

qualifying

central

bank

claims;

and

◾

A

£21.2bn

decrease

due

to

the

PRA’s

adoption

of

CRR

II

settlement

netting

The

Group

also

discloses

a

CRR

leverage

ratio

a

within

its

additional

regulatory

disclosures

prepared

in

accordance

with

EBA

guidelines

on

disclosure

under

Part

Eight

of

the

CRR

(see

Barclays

PLC

Pillar

3

Report

2020,

due

to

be

published

on

18

February

2021

and

which

will

be

available

at

home.barclays/investor-relations/reports-and-events/latest-financial-results).

Note

a

CRR

leverage

ratio

as

amended

by

CRR

II.

Minimum

requirement

for

own

funds

and

eligible

liabilities

Own

funds

and

eligible

liabilities

ratios

a,b

As

a

percentage

of

RWAs

As

a

percentage

of

CRR

leverage

exposure

As

at

31

December

2020

2019

2020

2019

Total

Barclays

PLC

(the

Parent

company)

own

funds

and

eligible

liabilities

32.7%

31.2%

8.0%

8.2%

Total

own

funds

and

eligible

liabilities,

including

eligible

Barclays

Bank

PLC

instruments

c

33.6%

32.8%

8.2%

8.6%

Own

funds

and

eligible

liabilities

a,b

2020

2019

£m

CET1

capital

46,296

40,813

AT1

capital

instruments

and

premium

accounts

d

11,092

10,741

T2

capital

instruments

and

premium

accounts

d

7,733

7,416

Eligible

liabilities

35,086

33,025

Total

Barclays

PLC

(the

Parent

company)

own

funds

and

eligible

liabilities

100,207

91,995

Qualifying

AT1

capital

(including

minority

interests)

issued

by

subsidiaries

646

687

Qualifying

T2

capital

(including

minority

interests)

issued

by

subsidiaries

1,893

3,984

Total

own

funds

and

eligible

liabilities,

including

eligible

Barclays

Bank

PLC

instruments

c

102,746

96,666

Total

RWAs

306,203

295,131

Total

CRR

leverage

exposure

e

1,254,157

1,126,259

Notes

a

CET1,

T1

and

T2

capital,

and

RWAs

are

calculated

applying

the

transitional

arrangements

of

the

CRR

as

amended

by

CRR

II.

This

includes

IFRS

9

transitional

arrangements

and

the

grandfathering

of

CRR

and

CRR

II

non-compliant

capital

instruments.

b

The

BoE

has

set

external

MREL

bas

ed

on

the

higher

of

RWAs

and

CRR

or

UK

leverage

exposures

which

could

result

in

the

binding

measure

changing

in

future

periods.

The

31

December

2020

Barclays

PLC

(the

Parent

company)

own

funds

and

eligible

liabilities

ratio

as

a

percentage

of

the

UK

levera

ge

exposure

was

9.2%

and

as

a

percentage

of

the

average

UK

leverage

exposure

was

8.7%.

c

Own

funds

instruments

issued

by

subsidiaries

will

not

be

counted

towards

MREL

from

1

January

2022.

d

Includes

other

AT1

capital

regulatory

adjustments

and

deductions

of

£80m

(December

2019:

£130m

),

and

other

T2

credit

risk

adjustments

and

deductions

of

£103

m

(December

2019

:

£234m).

e

Fully

loaded

CRR

leverage

exposure

is

calculated

without

applying

the

transitional

arrangements

of

the

CRR

as

amended

by

CRR

II.

Risk

review

Risk

performance

Treasury

and

Capital

risk

168

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Foreign

exchange

risk

(audited)

The

Group

is

exposed

to

two

sources

of

foreign

exchange

risk.

a)

Transactional

foreign

currency

exposure

Transactional

foreign

currency

exposures

represent

exposure

on

banking

assets

and

liabilities,

denominated

in

currencies

other

than

the

functional

currency

of

the

transacting

entity.

The

Group’s

risk

management

policies

are

designed

to

prevent

the

holding

of

significant

open

positions

in

foreign

currencies

outside

the

trading

portfolio

managed

by

Barclays

International

which

is

monitored

through

VaR.

Banking

book

transactional

foreign

exchange

risk

outside

of

Barclays

International

is

monitored

on

a

daily

basis

by

the

market

risk

function

and

minimised

by

the

businesses.

b)

Translational

foreign

exchange

exposure

The

Group’s

investments

in

overseas

subsidiaries

and

branches

create

capital

resources

denominated

in

foreign

currencies,

principally

USD

and

EUR.

Changes

in

the

GBP

value

of

the

net

investments

due

to

foreign

currency

movements

are

captured

in

the

currency

translation

reserve,

resulting

in

a

movement

in

CET1

capital.

The

Group’s

strategy

is

to

minimise

the

volatility

of

the

capital

ratios

caused

by

foreign

exchange

movements,

by

matching

the

CET1

capital

movements

to

the

revaluation

of

the

Group’s

foreign

currency

RWA

exposures.

Functional

currency

of

operations

(audited)

Foreign

currency

net

investments

Borrowings

which

hedge

the

net

investments

Derivatives

which

hedge

the

net

investments

Structural

currency

exposures

pre-

economic

hedges

Economic

hedges

Remaining

structural

currency

exposures

£m

As

at

31

December

2020

USD

24,204

(7,666)

(764)

15,774

(6,193)

9,581

EUR

5,275

(952)

(3)

4,320

(286)

4,034

JPY

582

-

582

-

582

Other

currencies

2,020

(42)

(24)

1,954

-

1,954

Total

32,081

(8,660)

(791)

22,630

(6,479)

16,151

As

at

31

December

2019

USD

25,607

(10,048)

(1,111)

14,448

(5,339)

9,109

EUR

3,068

(3)

-

3,065

(1,122)

1,943

JPY

533

-

533

-

533

Other

currencies

2,001

-

(34)

1,967

-

1,967

Total

31,209

(10,051)

(1,145)

20,013

(6,461)

13,552

Economic

hedges

relate

to

exposures

arising

on

foreign

currency

denominated

preference

share

and

AT1

instruments.

These

are

accounted

for

at

historical

cost

under

IFRS

and

do

not

qualify

as

hedges

for

accounting

purposes.

The

gain

or

loss

arising

from

changes

in

the

GBP

value

of

these

instruments

is

recognised

on

redemption

in

retained

earnings.

During

2020,

total

structural

currency

exposure

net

of

hedging

instruments

increased

by

£2.6bn

to

£16.2bn

(2019:

£13.6bn).

Foreign

currency

net

investments

increased

by

£0.9bn

to

£32.1bn

(2019:

£31.2bn)

driven

predominantly

by

a

£2.2bn

increase

in

EUR,

£0.1bn

increase

in

other

currencies

offset

by

a

£1.4bn

decrease

in

USD.

The

hedges

associated

with

these

investments

decreased

by

£1.7bn

to

£9.5bn

(2019:

£11

.2bn).

Risk

review

Risk

performance

Treasury

and

Capital

risk

169

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Pension

risk

review

The

UK

Retirement

Fund

(UKRF)

represents

approximately

97%

(2019:

97%)

of

the

Group’s

total

retirement

benefit

obligations

globally.

As

such

this

risk

review

section

focuses

exclusively

on

the

UKRF.

The

UKRF

is

closed

to

new

entrants

and

there

is

no

new

final

salary

benefit

being

accrued.

Existing

active

members

accrue

a

combination

of

a

cash

balance

benefit

and

a

defined

contribution

element.

Pension

risk

arises

as

the

market

value

of

the

pension

fund

assets

may

decline,

investment

returns

may

reduce

or

the

estimated

value

of

the

pension

liabilities

may

increase.

Refer

to

the

Management

of

pension

risk

section

in

the

Barclays

PLC

Pillar

3

Report

2020

(unaudited)

for

more

information

on

how

pension

risk

is

managed.

Assets

The

Trustee

Board

of

the

UKRF

defines

its

overall

long-term

investment

strategy

with

investments

across

a

broad

range

of

asset

classes.

This

results

in

an

appropriate

mix

of

return

seeking

assets

as

well

as

liability

matching

assets

to

better

match

future

pension

obligations.

The

two

largest

market

risks

within

the

asset

portfolio

are

interest

rates

and

equities.

The

split

of

scheme

assets

is

shown

within

Note

33.

The

fair

value

of

the

UKRF

assets

was

£33.9bn

as

at

31

December

2020

(2019:

£31.4bn).

Liabilities

The

UKRF

retirement

benefit

obligations

are

a

series

of

future

cash

flows

with

relatively

long

duration.

On

an

IAS

19

basis

these

cash

flows

are

sensitive

to

changes

in

the

expected

long-term

price

inflation

rate

(RPI)

and

the

discount

rate

(GBP

AA

corporate

bond

yield):

◾

An

increase

in

long-term

expected

inflation

corresponds

to

an

increase

in

liabilities;

◾

A

decrease

in

the

discount

rate

corresponds

to

an

increase

in

liabilities.

Pension

risk

is

generated

through

the

Group’s

defined

benefit

schemes

and

this

risk

is

set

to

reduce

over

time

as

the

main

defined

benefit

scheme

is

closed

to

new

entrants.

The

chart

below

outlines

the

shape

of

the

UKRF’s

liability

cash

flow

profile

as

at

31

December

2020

that

takes

account

of

the

future

inflation

indexing

of

payments

to

beneficiaries.

The

majority

of

the

cash

flows

(approximately

95%)

fall

between

0

and

40

years,

peaking

between

11

and

20

years

and

reducing

thereafter.

The

shape

may

vary

depending

on

changes

to

inflation

and

longevity

expectations

and

any

members

who

elect

to

transfer

out.

Transfers

out

will

bring

forward

the

liability

cash

flows.

For

more

detail

on

the

UKRF’s

financial

and

demographic

assumptions,

see

Note

33

to

the

financial

statements.

Proportion

of

liability

cash

flows

The

graph

above

shows

the

evolution

of

the

UKRF’s

net

IAS

19

position

over

the

last

two

years.

During

2020

the

reduction

in

the

IAS

19

position

was

driven

by

the

net

effect

of

bank

contributions

and

a

structured

transaction

agreed

between

the

Bank

and

the

Trustee

which

deferred

the

regulatory

capital

impact

of

the

contributions

until

2023-2025.

Credit

spreads

tightening

during

the

year

had

a

negative

impact

which

was

broadly

offset

by

changes

in

other

market

levels,

in

particular

equity

prices

and

interest

rates,

and

updates

to

the

discount

rate

methodology

and

demographic

assumptions.

Refer

to

Note

33

for

the

sensitivity

of

the

UKRF

to

changes

in

key

assumptions

and

further

information

on

the

structured

transaction.

Risk

measurement

In

line

with

Barclays’

risk

management

framework

the

assets

and

liabilities

of

the

UKRF

are

modelled

within

a

VaR

framework

to

show

the

volatility

of

the

pension

position

at

a

total

portfolio

level.

This

enables

the

risks,

diversification

and

liability

matching

characteristics

of

the

UKRF

obligations

and

investments

to

be

adequately

captured.

VaR

is

measured

and

monitored

on

a

monthly

basis.

Risks

are

reviewed

and

reported

regularly

at

forums

including

the

Board

Risk

Committee,

the

Group

Risk

Committee,

the

Pensions

Management

Group

and

the

Pension

Executive

Board.

The

VaR

model

takes

into

account

the

valuation

of

the

liabilities

on

an

IAS

19

basis

(see

Note

33).

The

Trustee

receives

quarterly

VaR

measures

on

a

funding

basis.

The

pension

liability

is

also

sensitive

to

post-retirement

mortality

assumptions

which

are

reviewed

regularly

(See

Note

33

for

more

details).

To

mitigate

part

of

this

risk

the

UKRF

has

entered

into

a

longevity

swap

hedging

approximately

a

quarter

of

current

pensioner

liabilities.

In

addition,

the

impact

of

pension

risk

to

the

Group

is

taken

into

account

as

part

of

the

stress

testing

process.

Stress

testing

is

performed

internally

on

at

least

an

annual

basis.

The

UKRF

exposure

is

also

included

as

part

of

regulatory

stress

tests.

Barclays

defined

benefit

pension

schemes

affects

capital

in

two

ways:

◾

An

IAS

19

deficit

is

treated

as

a

liability

on

the

Group’s

balance

sheet.

Movement

in

a

deficit

due

to

remeasurements,

including

actuarial

losses,

are

recognised

immediately

through

Other

Comprehensive

Income

and

as

such

reduces

shareholders’

equity

and

CET1

capital.

An

IAS

19

surplus

is

treated

as

an

asset

on

the

balance

sheet

and

increases

shareholders’

equity;

however,

it

is

deducted

for

the

purposes

of

determining

CET1

capital.

Risk

review

Risk

performance

Treasury

and

Capital

risk

170

Barclays

PLC

2020

Annual

Report

on

Form

20-F

◾

In

the

Group’s

statutory

balance

sheet

an

IAS

19

surplus

or

deficit

is

partially

offset

by

a

deferred

tax

liability

or

asset

respectively.

These

may

or

may

not

be

recognised

for

calculating

CET1

capital

depending

on

the

overall

deferred

tax

position

of

the

Group

at

the

particular

time.

Pension

risk

is

taken

into

account

in

the

Pillar

2A

capital

assessment

undertaken

by

the

PRA

at

least

annually.

The

Pillar

2A

requirement

forms

part

of

the

Group’s

Overall

Capital

Requirement

for

CET1

capital,

Tier

1

capital

and

total

capital.

More

detail

on

minimum

regulatory

requirements

can

be

found

in

the

Overall

capital

requirements

section.

Risk

review

Risk

performance

Treasury

and

Capital

risk

171

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Interest

rate

risk

in

the

banking

book

All

disclosures

in

this

section

are

unaudited

unless

otherwise

stated.

Overview

The

treasury

and

capital

risk

framework

covers

interest

rate

sensitive

exposures

held

in

the

banking

book,

mostly

relating

to

accrual

accounted

and

FVOCI

instruments.

The

potential

volatility

of

net

interest

income

is

measured

by

an

Annual

Earnings

at

Risk

(AEaR)

metric

which

is

monitored

regularly

and

reported

to

senior

management

and

the

Barclays

PLC

Board

Risk

Committee

as

part

of

the

limit

monitoring

framework.

For

further

detail

on

the

interest

rate

risk

in

the

banking

book

governance

and

framework

refer

to

pages

199

to

200

of

the

Barclays

PLC

Pillar

3

Report

2020

(unaudited).

Summary

of

performance

in

the

period

NII

sensitivity

to

a

-25bp

shock

to

rates

has

increased

year

on

year

due

to

additional

margin

compression

exposure

driven

by

central

bank

rate

cuts

and

growth

in

customer

deposit

balances

through

the

year.

The

increased

margin

compression

exposure

is

partially

mitigated

by

hedging

and

potential

margin

decompression

benefit

on

variable

rate

loans.

Key

metrics

AEaR

-£408m

AEaR

across

the

Group

from

a

negative

25bps

shock

to

forward

interest

rate

curves.

Net

interest

income

sensitivity

The

table

below

shows

a

sensitivity

analysis

on

pre-tax

net

interest

income

for

non-traded

financial

assets

and

liabilities,

including

the

effect

of

any

hedging.

NII

sensitivity

uses

the

Annual

Earnings

at

Risk

(AEaR)

metric

as

described

on

page

200

of

the

Barclays

PLC

Pillar

3

Report

2020

(unaudited).

Note

that

this

metric

assumes

an

instantaneous

parallel

change

to

forward

interest

rate

curves.

The

model

does

not

apply

floors

to

shocked

market

rates,

but

does

recognize

contractual

product

specific

interest

rate

floors

where

relevant.

The

main

model

assumptions

are:

(i)

one-year

ahead

time

horizon;

(ii)

balance

sheet

is

held

constant;

(iii)

balances

are

adjusted

for

assumed

behavioural

profiles

(i.e.

considers

that

customers

may

prepay

the

mortgages

before

the

contractual

maturity);

and

(iv)

behavioural

assumptions

are

kept

unchanged

in

all

rate

scenarios.

Net

interest

income

sensitivity

(AEaR)

by

business

unit

a

(audited)

Barclays

UK

Barclays

International

Head

Office

Total

£m

As

at

31

December

2020

+25bps

10

86

4

100

-25bps

(141)

(263)

(4)

(408)

As

at

31

December

2019

+25bps

16

25

4

45

-25bps

(57)

(74)

(4)

(135)

Note

a

The

Group’s

customer

banking

book

hedging

activity

is

risk

reducing

from

an

NII

sensitivity

perspective.

The

hedges

in

place

remove

interest

rate

risk

and

smooth

income

over

the

medium

term.

The

NII

sensitivity

for

the

Group

at

31

December

2020

without

hedging

in

place

for

+/-25bp

rate

shocks

would

be

£177m/£(485)m

respectively.

NII

sensitivity

asymmetry

arises

due

to

the

current

low

level

of

interest

rates

as

some

customer

products

have

embedded

floors.

NII

sensitivity

to

a

-25bp

shock

to

rates

has

increased

year

on

year

due

to

additional

margin

compression

exposure

driven

by

central

bank

rate

cuts

and

growth

in

customer

deposit

balances

through

the

year.

NII

Sensitivity

to

a

+25bps

shock

has

increased

year

on

year

primarily

driven

by

the

growth

in

customer

deposit

balances.

Net

interest

income

sensitivity

(AEaR)

by

currency

(audited)

2020

2019

+25

basis

points

-25

basis

points

+25

basis

points

-25

basis

points

As

at

31

December

£m

GBP

48

(313)

38

(93)

USD

48

(63)

29

(32)

EUR

10

(34)

(10)

(20)

Other

currencies

(6)

2

(12)

10

Total

100

(408)

45

(135)

Risk

review

Risk

performance

Treasury

and

Capital

risk

172

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Analysis

of

equity

sensitivity

Equity

sensitivity

measures

the

overall

impact

of

a

+/-

25bps

movement

in

interest

rates

on

retained

earnings,

fair

value

through

other

comprehensive

income

(FVOCI),

cash

flow

hedge

reserves

and

pensions.

For

non-NII

items

a

DV01

metric

is

used,

which

is

an

indicator

of

the

shift

in

value

for

a

1

basis

point

movement

in

the

yield

curve.

Analysis

of

equity

sensitivity

(audited)

2020

2019

+25

basis

points

-25

basis

points

+25

basis

points

-25

basis

points

As

at

31

December

£m

Net

interest

income

100

(408)

45

(135)

Taxation

effects

on

the

above

(27)

110

(11)

34

Effect

on

profit

for

the

year

73

(298)

34

(101)

As

percentage

of

net

profit

after

tax

3.0%

(12.1%)

1.0%

(3.0%)

Effect

on

profit

for

the

year

(per

above)

73

(298)

34

(101)

Fair

value

through

other

comprehensive

income

reserve

(437)

453

(321)

329

Cash

flow

hedge

reserve

(570)

570

(534)

534

Taxation

effects

on

the

above

272

(276)

214

(216)

Effect

on

equity

(662)

449

(608)

546

As

percentage

of

equity

(1.0%)

0.7%

(0.9%)

0.8%

Movements

in

the

FVOCI

reserve

impact

CET1

capital.

However,

movements

in

the

pensions

remeasurement

reserve

recognised

in

FVOCI

only

affect

CET1

capital

if

there

is

an

IAS

19

pension

deficit.

Movements

in

the

cash

flow

hedge

reserve

do

not

affect

CET1

capital.

Volatility

of

the

FVOCI

portfolio

in

the

liquidity

pool

Changes

in

value

of

FVOCI

exposures

flow

directly

through

capital

via

the

FVOCI

reserve.

The

volatility

of

the

value

of

the

FVOCI

investments

in

the

liquidity

pool

is

captured

and

managed

through

a

value

measure

rather

than

an

earning

measure,

i.e.

non-traded

market

risk

VaR.

Although

the

underlying

methodology

to

calculate

the

non-traded

VaR

is

identical

to

the

one

used

in

traded

management

VaR,

the

two

measures

are

not

directly

comparable.

The

non-traded

VaR

represents

the

volatility

to

capital

driven

by

the

FVOCI

exposures.

These

exposures

are

in

the

banking

book

and

do

not

meet

the

criteria

for

trading

book

treatment.

Analysis

of

volatility

of

the

FVOCI

portfolio

in

the

liquidity

pool

2020

2019

Average

High

Low

Average

High

Low

For

the

year

ended

31

December

£m

Non-traded

market

value

at

risk

(daily,

95%)

52

68

36

45

53

35

DVaR

trended

upwards

in

H1

2020

due

to

an

increase

in

time

series

volatility

caused

by

the

COVID-19

pandemic

stress.

Risk

in

the

liquidity

pool

was

reduced

at

the

start

of

Q3,

which

caused

a

downward

trend

in

DVaR,

and

was

stable

in

Q4.

Risk

review

Risk

performance

Operational

risk

173

Barclays

PLC

2020

Annual

Report

on

Form

20-F

All

disclosures

in

this

section

are

unaudited

unless

otherwise

stated.

Overview

Operational

risks

are

inherent

in

the

Group’s

business

activities

and

it

is

not

cost

effective

or

possible

to

attempt

to

eliminate

all

operational

risks.

The

Operational

Risk

Framework

is

therefore

focused

on

identifying

operational

risks,

assessing

them

and

managing

them

within

the

Group’s

approved

risk

appetite.

The

Operational

Risk

principal

risk

comprises

the

following

risks:

Data

Management

Risk;

Financial

Reporting

Risk;

Fraud

Risk;

Information

Security

Risk,

Operational

Resilience

Planning

Risk,

Payments

Process

Risk;

People

Risk;

Physical

Security

Risk;

Premises

Risk;

Supplier

Risk;

Tax

Risk;

Technology

Risk

and

Transaction

Operations

Risk.

The

operational

risk

profile

is

also

informed

by

a

number

of

risk

themes:

Cyber,

Data,

and

Resilience.

These

represent

threats

to

the

Group

that

extend

across

multiple

risk

types,

and

therefore

require

an

integrated

risk

management

approach.

For

definitions

of

these

risks

refer

to

pages

202

to

203

of

the

Barclays

PLC

Pillar

3

Report

2020.

In

order

to

provide

complete

coverage

of

the

potential

adverse

impacts

on

the

Group

arising

from

operational

risk,

the

operational

risk

taxonomy

extends

beyond

the

risks

listed

above

to

cover

operational

risks

associated

with

other

principal

risks

too.

This

section

provides

an

analysis

of

the

Group’s

operational

risk

profile,

including

events

above

the

Group’s

reportable

threshold,

which

have

had

a

financial

impact

in

2020.

The

Group’s

operational

risk

profile

is

informed

by

bottom-up

risk

assessments

undertaken

by

each

business

unit

and

top-down

qualitative

review

by

the

Operational

Risk

specialists

for

each

risk

type.

Fraud,

Transaction

Operations,

Information

Security

and

Technology

continue

to

be

highlighted

as

key

operational

risk

exposures.

For

information

on

conduct

risk

events,

see

the

conduct

risk

section.

Summary

of

performance

in

the

period

During

2020,

total

operational

risk

losses

a

increased

to

£212m

(2019:

£184m)

while

the

number

of

recorded

events

for

2020

(2,381)

increased

slightly

from

the

level

for

2019

(2,165).

The

total

operational

risk

losses

for

the

year

were

mainly

driven

by

events

falling

within

the

Execution,

Delivery

&

Process

Management

and

External

Fraud

categories,

which

tend

to

be

high

volume

but

low

impact

events.

Key

metrics

79%

of

the

Group’s

net

reportable

operational

risk

events

had

a

loss

value

of

£50,000

or

less

72%

of

events

by

number

are

due

to

External

Fraud

68%

of

losses

are

from

events

aligned

to

Execution,

Delivery

and

Process

Management

Operational

risk

profile

Within

operational

risk,

there

are

a

large

number

of

smaller

value

risk

events.

In

2020,

79%

(2019:

83%)

of

the

Group’s

reportable

operational

risk

events

by

volume

had

a

value

of

less

than

£50,000

each.

Cumulatively,

events

under

this

£50,000

threshold

accounted

for

only

17%

(2019:

18%)

of

the

Group’s

total

net

operational

risk

losses.

A

small

proportion

of

operational

risk

events

have

a

material

impact

on

the

financial

results

of

the

Group.

The

analysis

below

presents

the

Group’s

operational

risk

events

by

Basel

event

category:

Risk

review

Risk

performance

Operational

risk

174

Barclays

PLC

2020

Annual

Report

on

Form

20-F

◾

Execution,

Delivery

and

Process

Management

impacts

remain

the

highest

contributor

to

total

losses

increasing

to

£144m

(2019:

£111m)

and

accounting

for

68%

(2019:

60%)

of

total

operational

risk

losses.

The

events

in

this

category

are

typical

of

the

banking

industry

as

a

whole

where

high

volumes

of

transactions

are

processed

on

a

daily

basis,

mapping

mainly

to

Barclays

Transaction

Operations

risk

type.

The

overall

frequency

of

events

in

this

category

remained

broadly

stable

year-on-year

at

24%

of

total

events

by

volume

(2019:

27%).

◾

External

Fraud

remains

the

category

with

the

highest

frequency

of

events

at

72%

of

total

events

in

2020

(2019:

68%).

In

this

category,

high

volume,

low

value

events

are

driven

by

transactional

fraud

often

debit

and

credit

card

usage.

Ratio

of

losses

in

this

category

remained

stable

at

26%

of

total

2020

losses

(2019:

30%).

◾

Business

Disruption

and

System

Failures

accounted

for

a

reduced

share

of

total

impacts

at

5%

(2019:

9%),

with

actual

losses

down

to

£10m

(2019:

£17m)

and

volume

of

events

fell

down

to

51

(2019:

93).

Investment

continues

to

be

made

in

improving

the

control

environment

across

the

Group.

Particular

areas

of

focus

include

new

and

enhanced

fraud

prevention

systems

and

tools

to

combat

the

increasing

level

of

fraud

attempts

being

made

and

to

minimise

any

disruption

to

genuine

transactions.

Fraud

remains

an

industry

wide

threat

and

the

Group

continues

to

work

closely

with

external

partners

on

various

prevention

initiatives.

Risk

review

Risk

performance

Operational

risk

175

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Operational

Resilience

is

and

has

been

a

key

area

of

focus

for

the

Group.

The

COVID-19

pandemic

is

the

most

severe

global

health

emergency

the

World

Health

Organization

(WHO)

has

ever

declared.

While

overall,

the

Group

proved

to

be

resilient,

the

COVID-19

pandemic

has

caused

disruption

to

the

Group’s

customers,

suppliers,

and

staff

globally.

The

COVID-19

pandemic

has

reinforced

our

continued

focus

on

resilience

risk.

Due

to

the

COVID-19

pandemic,

the

Group

experienced

operational

disruptions

primarily

during

the

Group’s

and

its

suppliers’

transition

to

a

Work

-from-Home

environment

and

in

response

to

high

market

volatility.

Further,

the

prolonged

nature

of

the

event

identified

the

need

to

enhance

our

resilience

planning

program

to

improve

our

response

to

similar

events

with

an

extreme

and

prolonged

impact.

Despite

these

issues,

the

early

activation

of

our

Crisis

Leadership

Team

facilitated

swift

and

decisive

actions

to

limit

and

manage

the

impacts

which

resulted

in

normal

risk

exposures

as

reported

above.

For

additional

information

on

the

risk

exposure

due

to

the

COVID-19

pandemic,

see

the

operational

risk

management

section.

Likewise,

operational

risk

associated

with

cyber-security

remains

a

top

focus

for

the

Group.

The

sophistication

of

threat

actors

continues

to

grow

as

noted

by

multiple

external

risk

events

observed

throughout

the

year.

Multiple

ransomware

attacks

across

the

global

Barclays

supplier

base

were

observed

and

we

worked

closely

with

the

affected

suppliers

to

manage

potential

impacts

to

the

Group

and

its

clients

and

customers.

The

Group’s

cyber-security

events

were

managed

within

its

risk

tolerances

and

there

were

limited

to

no

loss

events

associated

with

cyber-security

recorded

within

the

event

categories

above.

For

additional

information

on

the

Bank’s

cyber-security

risk

exposure,

see

the

operational

risk

management

section.

For

further

information,

refer

to

the

operational

risk

management

section.

Risk

review

Risk

performance

Model

risk,

Conduct

risk,

Reputation

risk

and

Legal

risk

176

Barclays

PLC

2020

Annual

Report

on

Form

20-F

All

disclosures

in

this

section

are

unaudited

unless

otherwise

stated.

Model

risk

Since

the

inception

of

model

risk

as

a

principal

risk,

key

achievements

to

date

include

creating

a

firm

wide

model

inventory,

design

and

roll

out

of

a

robust

Model

Risk

Management

(MRM)

framework

and

the

validation

of

high

materiality

models.

In

2020,

the

framework

and

governance

of

model

risk

was

further

improved

by:

◾

strengthening

the

model

inventory

management

infrastructure

by

moving

onto

a

new

strategic

technology

platform,

which

will

enable

future

enhancements

and

automation

of

controls;

◾

progressing

the

validation

of

low

materiality

models

to

achieve

95%

target

for

models

under

governance;

◾

enhancing

model

risk

management

oversight

with

the

establishment

of

dedicated

MRM

forums

which

bring

together

model

developers,

model

owners

and

model

validators.

In

2021,

MRM

will

continue

to

focus

on

the

validation

of

low

materiality

models,

further

embedding

of

validation

and

governance

activities

and

on

expanding

the

coverage

of

the

MRM

framework

to

new

model

types.

Conduct

risk

Barclays

is

committed

to

continuing

to

drive

the

right

culture

throughout

all

levels

of

the

organisation.

The

Group

will

continue

to

enhance

effective

management

of

conduct

risk

and

appropriately

consider

the

relevant

tools,

governance

and

management

information

in

decision-

making

processes.

Focus

on

management

of

Conduct

Risk

is

ongoing

and,

alongside

other

relevant

business

and

control

management

information,

the

Trading

Entity

Conduct

Risk

Dashboards

are

a

key

component

of

this.

The

Group

continues

to

review

the

role

and

impact

of

conduct

risk

events

and

issues

in

remuneration

decisions

at

both

the

individual

and

business

level.

During

2020,

the

coronavirus

pandemic

created

new

risks

and

heightened

existing

ones.

To

date,

the

Group

has

focused

on

managing

the

heightened

inherent

conduct

risks

and

continues

to

monitor

these

as

the

pandemic

continues.

Businesses

have

continued

to

assess

the

potential

customer,

client

and

market

impacts

of

strategic

change.

As

part

of

the

2020

medium-term

planning

process,

material

conduct

risks

associated

with

strategic

and

financial

plans

were

assessed.

Throughout

2020,

conduct

risks

were

raised

by

each

business

area

for

consideration

by

relevant

Board

level

committees.

These

committees

reviewed

the

risks

raised

and

whether

management’s

proposed

actions

were

appropriate

to

mitigate

the

risks

effectively.

The

Group

continued

to

incur

costs

in

relation

to

litigation

and

conduct

matters,

refer

to

Note

26

Legal,

competition

and

regulatory

matters

and

Note

24

Provisions

for

further

details.

Costs

include

customer

redress

and

remediation,

as

well

as

fines

and

settlements.

Resolution

of

these

matters

remains

a

necessary

and

important

part

of

delivering

the

Group’s

strategy

and

an

ongoing

commitment

to

improve

oversight

of

culture

and

conduct.

Trading

Entity

Conduct

Risk

Dashboards,

setting

out

key

indicators

in

relation

to

Conduct

and

Financial

Crime,

are

provided

to

the

respective

Board

Risk

Committees

and

senior

management.

These

continue

to

be

evolved

and

enhanced

to

allow

effective

oversight

and

decision-making.

Barclays

has

operated

at

the

overall

set

tolerance

for

conduct

risk

throughout

2020.

The

tolerance

adherence

is

assessed

by

the

business

areas

through

key

indicators,

which

are

aggregated

to

provide

an

overall

risk

profile

rating

and

reported

to

the

relevant

Trading

Entity

Board

level

Committees

as

part

of

the

Conduct

Risk

Dashboard.

The

Group

remains

focused

on

the

continuous

improvements

being

made

to

manage

risk

effectively

with

an

emphasis

on

enhancing

governance

and

management

information

to

identify

risk

at

earlier

stages.

Reputation

risk

Barclays

is

committed

to

identifying

reputation

risks

and

issues

as

early

as

possible

and

managing

them

appropriately.

At

a

Group

level

throughout

2020,

reputation

risks

and

issues

were

overseen

by

the

Board

which

reviews

the

processes

and

policies

by

which

Barclays

identifies

and

manages

reputation

risk.

Within

the

Barclays

Bank

UK

Group

and

the

Barclays

Bank

Group

reputation

risks

and

issues

were

overseen

by

the

respective

risk

and

board

risk

committees.

The

top

live

and

emerging

reputation

risks

and

issues

within

the

Barclays

Bank

UK

Group

and

the

Barclays

Bank

Group

are

included

within

an

over-arching

quarterly

report

at

the

respective

Board

level.

The

Board

reviewed

risks

escalated

by

the

businesses

and

considered

whether

management’s

proposed

actions,

for

example

attaching

conditions

to

proposed

client

transactions

or

increased

engagement

with

impacted

stakeholders,

were

appropriate

to

mitigate

the

risks

effectively.

The

Board

also

received

regular

updates

with

regard

to

key

reputation

risks

and

issues,

including:

Barclays’

response

to

the

pandemic;

Barclays’

association

with

sensitive

sectors;

access

to

banking;

lending

practices

and

the

resilience

of

key

Barclays

systems

and

processes.

The

Group

continued

to

incur

costs

in

relation

to

litigation

and

conduct

matters,

refer

to

Note

26

Legal,

competition

and

regulatory

matters

and

Note

24

Provisions

for

further

details.

Costs

include

customer

redress

and

remediation,

as

well

as

fines

and

settlements.

Resolution

of

these

matters

remains

an

ongoing

commitment

to

improve

oversight

of

culture

and

conduct

and

management

of

reputation.

In

2020,

Corporate

Relations

received

695

referrals

from

across

the

businesses

(498

referrals

in

2019)

for

consideration.

These

referrals

covered

a

variety

of

potentially

controversial

sectors

and

topics

including,

but

not

limited

to,

environmental

and

social

risks.

As

part

of

Barclays

2020

Medium

Term

Planning

process,

material

reputation

risks

associated

with

strategic

and

financial

plans

were

also

assessed.

Legal

risk

The

Group

remains

committed

to

continuous

improvements

to

manage

legal

risk

effectively.

A

number

of

enhancements

have

been

implemented

during

2020,

including

a

refresh

of

the

Group-wide

legal

risk

management

framework

and

a

review

and

update

of

the

supporting

legal

risk

policies,

legal

risk

tolerances

and

risk

appetite.

Legal

risk

reporting

has

been

enhanced

both

in

terms

of

format

and

content.

There

has

also

been

a

re-write

of

the

Group-wide

legal

risk

mandatory

training,

reinforced

by

ongoing

engagement

with

and

education

of

the

Group’s

businesses

and

functions

by

Legal

Function

colleagues.

Risk

review

Risk

performance

Model

risk,

Conduct

risk,

Reputation

risk

and

Legal

risk

177

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Throughout

2020,

the

Group

has

operated

within

set

tolerances

for

legal

risk.

Tolerance

adherence

is

assessed

through

key

indicators,

which

are

also

used

to

evaluate

the

legal

risk

profile

and

are

reviewed,

at

least

annually,

through

the

relevant

risk

and

control

committees.

Minimum

mandatory

controls

to

manage

legal

risks

are

set

out

in

the

legal

risk

standards

and

are

subject

to

ongoing

monitoring.

Risk

review

Supervision

and

regulation

178

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Supervision

of

the

Group

The

Group’s

operations,

including

its

overseas

branches,

subsidiaries

and

associates,

are

subject

to

a

large

number

of

rules

and

regulations

that

are

a

condition

for

authorisation

to

conduct

banking

and

financial

services

business

in

each

of

the

jurisdictions

in

which

the

Group

operates.

These

apply

to

business

operations,

impact

financial

returns

and

include

capital,

leverage

and

liquidity

requirements,

authorisation,

registration

and

reporting

requirements,

restrictions

on

certain

activities,

conduct

of

business

regulations

and

many

others.

Regulatory

developments

impact

the

Group

globally.

We

focus

particularly

on

UK,

US

and

EU

regulation

due

to

the

location

of

the

Group’s

principal

areas

of

business.

Regulations

elsewhere

may

also

have

a

significant

impact

on

the

Group

due

to

the

location

of

its

branches,

subsidiaries

and,

in

some

cases,

clients.

For

more

information

on

the

risks

the

supervision

and

regulation

of

the

Group,

including

regulatory

change,

see

the

material

existing

and

emerging

risk

entitled

‘Regulatory

Change

agenda

and

impact

on

Business

Model’

in

the

Material

existing

and

emerging

risks

section.

Supervision

in

the

UK

In

the

UK,

day-to-day

regulation

and

supervision

of

the

Group

is

divided

between

the

Prudential

Regulation

Authority

(PRA)

(a

division

of

the

Bank

of

England

(BoE))

and

the

Financial

Conduct

Authority

(FCA).

In

addition,

the

Financial

Policy

Committee

(FPC)

of

the

BoE

has

influence

on

the

prudential

requirements

that

may

be

imposed

on

the

banking

system

through

its

powers

of

direction

and

recommendation.

Barclays

Bank

PLC

and

Barclays

Bank

UK

PLC

are

authorised

credit

institutions

and

subject

to

prudential

supervision

by

the

PRA

and

subject

to

conduct

regulation

and

supervision

by

the

FCA.

The

Group

is

also

subject

to

prudential

supervision

by

the

PRA

on

a

group

consolidated

basis.

Barclays

Capital

Securities

Limited

is

authorised

and

supervised

by

the

PRA

as

a

PRA-designated

investment

firm

and

subject

to

conduct

regulation

and

supervision

by

the

FCA.

Barclays

Execution

Services

Limited

is

an

appointed

representative

of

Barclays

Bank

PLC,

Barclays

Bank

UK

PLC

and

Clydesdale

Financial

Services

Limited.

The

Group

is

also

subject

to

regulatory

initiatives

undertaken

by

the

UK

Payment

Systems

Regulator

(PSR),

as

a

participant

in

payment

systems

regulated

by

the

PSR.

The

PRA’s

supervision

of

the

Group

is

conducted

through

a

variety

of

regulatory

tools,

including

the

collection

of

information

by

way

of

prudential

returns

or

cross-firm

reviews,

reports

obtained

from

skilled

persons,

regular

supervisory

visits

to

firms

and

regular

meetings

with

management

and

directors

to

discuss

issues

such

as

strategy,

governance,

financial

resilience,

operational

resilience,

risk

management,

and

recovery

and

resolution.

Both

the

PRA

and

the

FCA

apply

standards

that

either

anticipate

or

go

beyond

requirements

established

by

global

or

EU

standards,

whether

in

relation

to

capital,

leverage

and

liquidity,

resolvability

and

resolution

or

matters

of

conduct.

The

FCA’s

supervision

of

the

UK

firms

in

the

Group

is

carried

out

through

a

combination

of

proactive

engagement,

regular

thematic

work

and

project

work

based

on

the

FCA’s

sector

assessments,

which

analyse

the

different

areas

of

the

market

and

the

risks

that

may

lie

ahead.

The

FCA

and

the

PRA

also

apply

the

Senior

Managers

and

Certification

Regime

(the

SMCR)

which

imposes

a

regulatory

approval,

individual

accountability

and

fitness

and

propriety

framework

in

respect

of

senior

or

key

individuals

within

relevant

firms.

FCA

supervision

has

focused

on

conduct

risk

and

customer/client

outcomes,

including

product

design,

customer

behaviour,

market

operations,

LIBOR

transition,

fair

pricing,

affordability,

access

to

cash,

and

fair

treatment

of

vulnerable

customers.

PRA

supervision

has

focused

on

capital

management,

credit

risk

management,

Board

effectiveness,

operational

resilience

and

resolvability.

Both

the

PRA

and

the

FCA

have

assessed

the

impact

of

COVID-19

and

Brexit

on

UK

financial

markets

and

customers.

Supervision

in

the

EU

The

Group’s

operations

in

Europe

are

authorised

and

regulated

by

a

combination

of

its

home

regulators

and

host

regulators

in

the

European

countries

where

the

Group

operates.

Barclays

Bank

Ireland

PLC

is

licensed

as

a

credit

institution

by

the

Central

Bank

of

Ireland

(CBI)

and

is

designated

as

a

significant

institution

falling

under

direct

supervision

on

a

solo

basis

by

the

European

Central

Bank

(ECB)

for

prudential

purposes.

Barclays

Bank

Ireland

PLC’s

EU

branches

are

supervised

by

the

ECB

and

are

also

subject

to

direct

supervision

for

local

conduct

purposes

by

national

supervisory

authorities

in

the

jurisdictions

where

they

are

established.

Barclays

Bank

Ireland

PLC

is

also

subject

to

supervision

by

the

CBI

as

home

state

or

competent

authority

under

various

EU

financial

services

directives

and

regulations.

Brexit

The

EU-UK

Trade

and

Cooperation

Agreement

(TCA),

which

provides

a

new

economic

and

social

partnership

between

the

EU

and

UK,

came

into

force

provisionally

on

1

January

2021.

The

TCA

does

not

cover

the

provision

of

financial

services

into

the

EU

and

there

is

no

agreement

on

passporting,

equivalence

or

regulatory

cooperation.

Therefore,

UK-based

entities

within

the

Group

(such

as

Barclays

Bank

PLC

and

Barclays

Bank

UK

PLC)

are

no

longer

able

to

rely

on

the

EU

passporting

framework

for

the

provision

of

financial

services

to

EU

clients.

Accordingly,

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).

As

a

ring-fenced

bank,

Barclays

Bank

UK

Group

products

are

designed

for

customers

within

the

UK.

In

light

of

the

UK

leaving

the

EU,

Barclays

Bank

UK

Group

has

continued

to

review

the

services

offered

to

customers

in

the

EEA,

taking

into

account

a

number

of

factors,

including

the

regulatory

landscape

across

the

EEA

and,

where

relevant,

feedback

from

EEA

regulators.

As

a

result,

it

has

made

the

decision

to

exit

certain

products

and

services

offered

to

EEA

customers

and

closure

processes

are

ongoing.

Barclays

Bank

UK

Group

continues

to

keep

its

strategy

under

review

for

its

remaining

EEA

customers.

The

EU

and

the

UK

have

agreed

to

establish

structured

regulatory

cooperation

on

financial

services,

with

the

aim

of

establishing

a

durable

and

stable

relationship,

based

on

a

shared

commitment

to

preserve

financial

stability,

market

integrity,

and

the

protection

of

investors

and

consumers.

The

EU

and

the

UK

have

committed

to

agreeing

a

Memorandum

of

Understanding

setting

out

a

“framework”

for

regulatory

cooperation

in

financial

services

by

March

2021.

We

anticipate

that

consideration

will

be

given

to

equivalence

determinations

as

part

of

the

discussions.

Mutual

equivalence

decisions

between

the

UK

and

EU

relating

to

market

access

would

allow

UK-based

entities

within

the

Group

to

offer

a

restricted

number

of

financial

products

and

services

to

customers

and

clients

based

in

the

EEA,

including

permanent

access

to

EU

trading

venues

as

well

as

allowing

EEA

based

clients

to

access

some

UK

originated

products

and

services,

including

permanent

access

to

UK

trading

venues.

However,

the

EU

equivalence

regime

is

very

different

to

benefiting

from

passporting

rights;

the

equivalence

regimes

that

facilitate

access

to

customers

and

clients

based

in

the

EEA

under

EU

law

differ

significantly

in

their

scope,

operation

and

impact.

Equivalence

decisions

do

not

cover

services

to

retail

customers,

for

example.

Under

the

current

framework,

equivalence

decisions

can

be

revoked

at

any

time.

To

Risk

review

Supervision

and

regulation

179

Barclays

PLC

2020

Annual

Report

on

Form

20-F

date,

the

EU

and

UK

have

only

agreed

a

temporary

position

on

mutual

equivalence

in

relation

to

clearing

and

settlement

(CCPs).

In

addition,

HM

Treasury

has

made

certain

unilateral

equivalence

decisions,

including

under

the

Capital

Requirements

Regulation

(CRR)

and

European

Market

Infrastructure

Regulation

(EMIR).

‘Onshoring’

was

the

process

of

amending

EU

legislation

and

regulatory

requirements

in

the

UK

so

that

they

work

in

a

UK-only

context,

including

directly

applicable

EU

legislation

such

as

EU

regulations

and

decisions

that

form

part

of

UK

law

by

virtue

of

the

European

Union

(Withdrawal)

Act

2018,

now

that

the

Brexit

transition

period

has

ended.

The

onshoring

process

means

that

there

are

some

areas

where

the

requirements

on

UK

firms

and

other

regulated

persons

have

changed.

To

help

UK

firms

adapt

to

their

new

requirements,

HM

Treasury

gave

UK

financial

regulators

the

power

to

make

transitional

provisions

to

financial

services

legislation

for

a

temporary

period.

This

is

known

as

the

Temporary

Transitional

Power

(TTP).

The

FCA

has

applied

the

TTP

on

a

broad

basis

from

the

end

of

the

transition

period

until

31

March

2022.

This

means

UK

firms

and

other

regulated

persons

do

not

generally

need

to

adjust

to

the

changes

to

their

UK

regulatory

obligations

brought

about

by

onshoring

straight

away,

although

there

are

some

exceptions

to

this

and

obligations

which

have

changed

and

which

took

effect

from

1

January

2021

include

reporting

obligations

under

various

EU

financial

services

directives

and

regulations,

certain

requirements

under

the

Market

Abuse

Regulation,

issuer

rules,

contractual

recognition

of

bail-in,

securitisation,

use

of

credit

ratings,

mortgage

lending

after

the

transition

period

against

land

in

the

EEA,

payments

services

and

certain

other

matters.

On

31

December,

the

FCA

published

a

statement

on

its

use

of

the

TTP

to

modify

the

UK’s

derivatives

trading

obligation

(the

UK

DTO).

Without

mutual

equivalence,

some

firms

and

EEA

clients

will

be

caught

by

a

conflict

of

law

between

the

EU

DTO

and

the

UK

DTO.

The

FCA

is

therefore

using

the

TTP

to

modify

the

application

of

the

UK

DTO.

Where

firms

that

are

subject

to

the

UK

DTO

trade

with,

or

on

behalf

of,

EU

clients

that

are

subject

to

the

EU

DTO,

they

will

be

able

to

transact

or

execute

those

trades

on

EU

venues

providing

that:

(i)

firms

take

reasonable

steps

to

be

satisfied

the

client

does

not

have

arrangements

in

place

to

execute

the

trade

on

a

trading

venue

to

which

both

the

UK

and

EU

have

granted

equivalence

(for

example,

a

US

venue

such

as

a

swap

execution

facility);

and

(ii)

the

EU

venue

has

the

necessary

regulatory

status

to

do

business

in

the

UK

(such

venues

include

those

that

are

a

Recognised

Overseas

Investment

Exchange,

have

been

granted

the

relevant

temporary

permission,

or

are

certain

that

they

benefit

from

the

Overseas

Person

Exclusion).

This

modification

of

the

application

of

the

UK

DTO

applies

to

UK

firms,

EU

firms

using

the

UK’s

temporary

permissions

regime,

and

branches

of

overseas

firms

in

the

UK.

Transactions

concluded

by

an

EEA

UCITS

fund

or

an

EEA

AIF

are

currently

outside

the

scope

of

the

UK

DTO.

The

relief

under

the

TTP

does

not

apply

to

trades

with

non-EU

clients,

proprietary

trading

conducted,

for

example,

to

hedge

a

firm’s

own

risk

exposure,

and

trades

between

UK

branches

of

EU

firms.

These

trades

remain

subject

to

the

UK

DTO

and

firms

are

required

to

take

reasonable

steps

to

ensure

compliance

during

Q1

2021.

The

FCA

will

consider

by

31

March

2021

whether

market

or

regulatory

developments

warrant

a

review

of

its

approach.

On

28

December

2020,

the

PRA

published

a

policy

statement

(PS30/20)

on

changes

to

its

rules,

as

well

as

the

use

of

temporary

transitional

directions.

The

PRA’s

transitional

direction

and

the

majority

of

the

provisions

in

the

rulebook

instrument

came

into

force

at

the

end

of

the

transition

period

on

31

December

2020.

The

transitional

direction

delays

onshoring

changes

that

fall

within

the

PRA's

remit.

The

PRA

TTP

will

apply

until

31

March

2022,

unless

otherwise

stated

in

the

direction

or

it

is

varied

or

revoked

before

then.

As

a

result

of

the

onshoring

of

EU

legislation

in

the

UK

and

the

exercise

of

the

TTPs,

UK

firms

in

the

Group

are

currently

subject

to

substantially

the

same

rules

and

regulations

as

before

Brexit.

The

UK

intends

to

recast

onshored

EU

legislation

into

PRA

and

FCA

rules

and

to

complete

UK

implementation

of

the

remaining

Basel

III

reforms.

The

regulatory

regimes

for

EU

and

UK

financial

services

may

change

further,

and

temporary

permissions

and

equivalence

decisions

may

expire,

and

not

be

replaced,

which

would

result

in

further

adjustments

to

the

UK

regulatory

landscape.

Supervision

in

the

US

Barclays

PLC,

Barclays

Bank

PLC

and

its

New

York

branch,

and

Barclays

Bank

PLC’s

US

subsidiaries

are

subject

to

a

comprehensive

regulatory

framework

involving

numerous

statutes,

rules

and

regulations

in

the

US.

For

example,

the

Group’s

US

activities

and

operations

are

subject

to

supervision

and

regulation

by

the

Board

of

Governors

of

the

Federal

Reserve

System

(FRB),

as

well

as

additional

supervision,

requirements

and

restrictions

imposed

by

other

federal

and

state

regulators

and

self-regulatory

organisations

(SROs).

In

some

cases,

US

requirements

may

impose

restrictions

on

the

Group’s

global

activities,

in

addition

to

its

activities

in

the

US.

Barclays

PLC,

Barclays

Bank

PLC,

Barclays

US

Holdings

Limited

(BUSHL),

Barclays

US

LLC

(BUSL),

and

Barclays

Group

US

Inc.

(BGUS)

are

regulated

as

bank

holding

companies

(BHCs)

by

the

FRB.

BUSL

is

the

Group’s

top-tier

US

holding

company

that

holds

substantially

all

of

the

Group’s

US

subsidiaries

(including

Barclays

Capital

Inc.

and

Barclays

Bank

Delaware).

BUSL

is

subject

to

requirements

in

respect

of

capital

adequacy,

capital

planning

and

stress

testing,

risk

management

and

governance,

liquidity,

leverage

limits,

large

exposure

limits,

activities

restrictions

and

financial

regulatory

reporting.

Barclays

Bank

PLC’s

New

York

branch

is

also

subject

to

enhanced

prudential

standards

relating

to,

among

other

things,

liquidity

and

risk

management.

Barclays

PLC,

Barclays

Bank

PLC,

BUSHL

and

BUSL

have

elected

to

be

treated

as

financial

holding

companies

(FHCs)

under

the

Bank

Holding

Company

Act

of

1956.

FHC

status

allows

these

entities

to

engage

in

a

variety

of

financial

and

directly

or

through

subsidiaries,

including

underwriting,

dealing

and

market

making

in

securities.

Failure

to

maintain

FHC

status

could

result

in

increasingly

stringent

penalties

and,

ultimately,

in

the

closure

or

cessation

of

certain

operations

in

the

US.

In

addition

to

oversight

by

the

FRB,

Barclays

Bank

PLC’s

New

Yor

k

branch

and

many

of

the

Group’s

subsidiaries

are

regulated

by

additional

authorities

based

on

the

location

or

activities

of

those

entities.

The

New

York

branch

of

Barclays

Bank

PLC

is

subject

to

supervision

and

regulation

by

the

New

York

State

Department

of

Financial

Services

(NYSDFS).

Barclays

Bank

Delaware,

a

Delaware

chartered

bank,

is

subject

to

supervision

and

regulation

by

the

Delaware

Office

of

the

State

Bank

Commissioner,

the

Federal

Deposit

Insurance

Corporation

(FDIC),

the

Federal

Reserve

Bank

of

New

York

and

the

Consumer

Financial

Protection

Bureau

(CFPB).

The

deposits

of

Barclays

Bank

Delaware

are

insured

by

the

FDIC.

Barclays

PLC,

Barclays

Bank

PLC,

BUSHL,

BUSL,

and

BGUS

are

required

to

act

as

a

source

of

strength

for

Barclays

Bank

Delaware.

This

could,

among

other

things,

require

these

entities

to

inject

capital

into

Barclays

Bank

Delaware

if

it

fails

to

meet

applicable

regulatory

capital

requirements.

The

Group’s

US

securities

broker/dealer

and

investment

banking

operations,

are

conducted

primarily

through

Barclays

Capital

Inc.,

and

are

also

subject

to

ongoing

supervision

and

regulation

by

the

Securities

and

Exchange

Commission

(SEC),

the

Financial

Industry

Regulatory

Authority

(FINRA)

and

other

government

agencies

and

SROs

under

US

federal

and

state

securities

laws.

The

Group’s

US

futures,

options

and

swaps-related

activities,

including

client

clearing

operations

are

subject

to

ongoing

supervision

and

regulation

by

the

Commodity

Futures

Trading

Commission

(CFTC),

the

National

Futures

Association

and

other

SROs.

Barclays

Bank

PLC

is

also

a

US

registered

swap

dealer

and

is

subject

to

the

FRB

swaps

rules

with

respect

to

margin

and

capital

requirements.

Supervision

in

Asia

Pacific

The

Group’s

operations

in

Asia

Pacific

are

supervised

and

regulated

by

a

broad

range

of

national

banking

and

financial

services

regulators.

Risk

review

Supervision

and

regulation

180

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Prudential

regulation

Certain

Basel

III

standards

were

implemented

in

EU

law

through

the

Capital

Requirements

Regulation

(CRR)

and

the

Capital

Requirements

Directive

IV

(CRD

IV),

as

amended

by

CRR

II

and

CRD

V.

Under

the

terms

of

the

EU-UK

Withdrawal

Agreement

of

24

January

2020,

the

Group

remained

subject

to

the

EU

regulatory

framework

until

the

end

of

the

transition

period

on

31

December

2020.

Beyond

the

minimum

standards

required

by

CRR,

the

PRA

has

expected

the

Group,

in

common

with

other

major

UK

banks

and

building

societies,

to

meet

a

7%

Common

Equity

Tier

1

(CET1)

ratio

at

the

level

of

the

consolidated

group

since

1

January

2016.

Global

systemically

important

banks

(G-SIBs),

such

as

the

Group,

are

subject

to

a

number

of

additional

prudential

requirements,

including

the

requirement

to

hold

additional

loss-absorbing

capacity

and

additional

capital

buffers

above

the

level

required

by

Basel

III

standards.

The

level

of

the

G-SIB

buffer

is

set

by

the

Financial

Stability

Board

(FSB)

according

to

a

bank’s

systemic

importance

and

can

range

from

1%

to

3.5%

of

risk-

weighted

assets

(RWAs).

The

G-SIB

buffer

must

be

met

with

CET1.

In

November

2020,

the

FSB

published

an

update

to

its

list

of

G-SIBs,

maintaining

the

1.5%

G-SIB

buffer

that

applies

to

the

Group.

The

Group

is

also

subject

to

a

‘combined

buffer

requirement’

consisting

of

(i)

a

capital

conservation

buffer,

and

(ii)

a

countercyclical

capital

buffer

(CCyB).

The

CCyB

is

based

on

rates

determined

by

the

regulatory

authorities

in

each

jurisdiction

in

which

the

Group

maintains

exposures.

In

March

2020,

the

FPC

cut

the

UK

CCyB

rate

to

0%

with

immediate

effect

in

order

to

support

the

supply

of

credit

expected

as

a

result

of

the

COVID-19

pandemic.

The

PRA

requires

UK

firms

to

hold

additional

capital

to

cover

risks

which

the

PRA

assesses

are

not

fully

captured

by

the

Pillar

1

capital

requirement.

The

PRA

sets

this

additional

capital

requirement

(Pillar

2A)

at

least

annually,

derived

from

each

firm’s

individual

capital

guidance.

Under

current

PRA

rules,

the

Pillar

2A

must

be

met

with

at

least

56%

CET1

capital

and

no

more

than

25%

tier

2

capital.

In

addition,

the

capital

that

firms

use

to

meet

their

minimum

requirements

(Pillar

1

and

Pillar

2A)

cannot

be

counted

towards

meeting

the

combined

buffer

requirement.

As

part

of

its

approach

to

ring

fencing,

the

FPC

established

a

framework

to

apply

a

firm-specific

systemic

risk

buffer

(SRB)

which

could

be

set

between

0%

and

3%

of

RWAs

and

which

must

be

met

solely

with

CET1

capital.

The

purpose

of

the

SRB

was

to

increase

the

capacity

of

ring-

fenced

bodies,

such

as

Barclays

Bank

UK

PLC,

to

absorb

stress.

The

buffer

rate

applicable

to

the

Group’s

ring-fenced

sub-group

was

set

at

1%

with

effect

from

August

2019.

In

response

to

the

economic

shock

from

COVID-19,

the

PRA

and

FPC

held

firms’

SRB

rates

at

their

existing

levels

until

December

2021.

With

the

implementation

of

CRD

V,

the

Other

Systemically

Important

Institutions

Buffer

(O-SII

buffer)

replaced

the

SRB.

As

part

of

the

implementation

of

CRD

V,

the

PRA

and

FPC

confirmed

that

the

Barclays

Bank

UK

PLC

O-SII

buffer

would

be

held

at

the

historic

SRB

rate

of

1%

until

reassessment

in

December

2021,

with

any

future

adjustment

to

the

O-SII

buffer

applicable

from

January

2023.

The

PRA

may

also

impose

a

'PRA

buffer'

to

cover

risks

over

a

forward

looking

planning

horizon,

including

with

regard

to

firm-specific

stresses

or

management

and

governance

weaknesses.

If

the

PRA

buffer

is

imposed

on

a

specific

firm,

it

must

be

met

separately

to

the

combined

buffer

requirement,

and

must

be

met

fully

with

CET1

capital.

In

the

US,

in

October

2019,

the

FRB

and

other

US

regulatory

agencies

released

final

rules

to

tailor

the

applicability

of

prudential

requirements

for

large

domestic

US

banking

organisations,

foreign

banking

organisations

and

their

intermediate

holding

companies

(IHCs),

including

BUSL.

BUSL

is

a

“Category

III”

IHC.

BUSL

(and

Barclays

Bank

Delaware)

is

therefore

subject

to

reduced

(calibrated

at

85%)

standardised

liquidity

requirements,

including

the

liquidity

coverage

ratio,

which

has

been

implemented

by

the

US

regulatory

agencies,

and

the

NSFR,

which

will

become

effective

on

1

July

2021.

In

June

2018

and

October

2019,

the

FRB

finalised

rules

regarding

single

counterparty

credit

limits

(SCCL).

The

SCCL

apply

to

the

largest

US

BHCs

and

foreign

banks’

(including

the

Group’s)

US

operations.

The

SCCL

creates

two

separate

limits

for

foreign

banks,

the

first

on

combined

US

operations

(CUSO)

and

the

second

on

the

US

IHC

(BUSL).

The

SCCL

for

US

BHCs,

including

BUSL,

requires

that

exposure

to

an

unaffiliated

counterparty

of

BUSL

not

exceed

25%

of

BUSL’s

tier

1

capital.

With

respect

to

the

CUSO,

the

SCCL

rule

allows

certification

to

the

FRB

that

a

foreign

bank

complies

with

comparable

home

country

regulation.

Barclays

Bank

PLC

is

not

required

to

comply

with

the

CUSO

requirement

until

1

July

2021.

Stress

testing

The

Group

and

certain

of

its

members

are

subject

to

supervisory

stress

testing

exercises

in

a

number

of

jurisdictions,

designed

to

assess

the

resilience

of

banks

to

adverse

economic

or

financial

developments

and

ensure

that

they

have

robust,

forward-looking

capital

planning

processes

that

account

for

the

risks

associated

with

their

business

profile.

Assessment

by

regulators

is

on

both

a

quantitative

and

qualitative

basis,

the

latter

focusing

on

such

elements

as

data

provision,

stress

testing

capability

including

model

risk

management

and

internal

management

processes

and

controls.

Recovery

and

Resolution

Stabilisation

and

resolution

framework

The

UK

framework

for

recovery

and

resolution

was

established

by

the

Banking

Act

2009,

as

amended.

The

EU

framework

was

established

by

the

2014

Bank

Recovery

and

Resolution

Directive

(BRRD),

as

amended

by

BRRD

II.

The

BoE,

as

the

UK

resolution

authority,

has

the

power

to

resolve

a

UK

financial

institution

that

is

failing

or

likely

to

fail

by

exercising

several

stabilisation

options,

including

transferring

such

institution’s

business

or

securities

to

a

commercial

purchaser

or

a

‘bridge

bank’

owned

by

the

BoE

or

transferring

the

institution

into

temporary

public

ownership.

When

exercising

any

of

its

stabilisation

powers,

the

BoE

must

generally

provide

that

shareholders

bear

first

losses,

followed

by

creditors

in

accordance

with

the

priority

of

their

claims

in

insolvency.

In

order

to

enable

the

exercise

of

its

stabilisation

powers,

the

BoE

may

impose

a

temporary

stay

on

the

rights

of

creditors

to

terminate,

accelerate

or

close

out

contracts,

or

override

events

of

default

or

termination

rights

that

might

otherwise

be

invoked

as

a

result

of

a

resolution

action

and

modify

contractual

arrangements

in

certain

circumstances

(including

a

variation

of

the

terms

of

any

securities).

HM

Treasury

may

also

amend

the

law

for

the

purpose

of

enabling

it

to

use

its

powers

under

this

regime

effectively,

potentially

with

retrospective

effect.

In

addition,

the

BoE

has

the

power

to

permanently

write-down,

or

convert

into

equity,

tier

1

capital

instruments,

tier

2

capital

instruments

and

eligible

liabilities

at

the

point

of

non-viability

of

the

bank.

The

BoE’s

preferred

approach

for

the

resolution

of

the

Group

is

a

bail-in

strategy

with

a

single

point

of

entry

at

Barclays

PLC.

Under

such

a

strategy,

Barclays

PLC’s

subsidiaries

would

remain

operational

while

Barclays

PLC’s

capital

instruments

and

eligible

liabilities

would

be

written

down

or

converted

to

equity

in

order

to

recapitalise

the

Group

and

allow

for

the

continued

provision

of

services

and

operations

throughout

the

resolution.

The

order

in

which

the

bail-in

tool

is

applied

reflects

the

hierarchy

of

capital

instruments

under

CRD

IV

and

otherwise

respecting

the

hierarchy

of

claims

in

an

ordinary

insolvency.

Accordingly,

the

more

subordinated

the

claim,

the

more

likely

losses

will

be

suffered

by

owners

of

the

claim.

Risk

review

Supervision

and

regulation

181

Barclays

PLC

2020

Annual

Report

on

Form

20-F

The

PRA

has

made

rules

that

require

authorised

firms

to

draw

up

recovery

plans

and

resolution

packs,

as

required

by

the

BRRD.

Recovery

plans

are

designed

to

outline

credible

actions

that

authorised

firms

could

implement

in

the

event

of

severe

stress

in

order

to

restore

their

business

to

a

stable

and

sustainable

condition.

Removal

of

potential

impediments

to

an

orderly

resolution

of

a

banking

group

or

one

or

more

of

its

subsidiaries

is

considered

as

part

of

the

BoE’s

and

PRA’s

supervisory

strategy

for

each

firm,

and

the

PRA

can

require

firms

to

make

significant

changes

in

order

to

enhance

resolvability.

The

Group

currently

provides

the

PRA

with

a

recovery

plan

annually

and

with

a

resolution

pack

as

requested.

In

July

2019,

the

BoE

and

PRA

published

final

policies

on

the

Resolvability

Assessment

Framework

(RAF),

designed

to

increase

transparency

and

accountability

and

clarify

the

responsibilities

on

firms

with

respect

to

resolution.

Firms

are

required

to

develop

capabilities

by

1

January

2022

covering

three

resolvability

outcomes:

(i)

adequate

financial

resources;

(ii)

being

able

to

continue

to

do

business

through

resolution

and

restructuring;

and

(iii)

being

able

to

communicate

and

co-ordinate

within

the

firm

and

with

authorities.

The

first

self-assessment

report

on

these

capabilities

is

expected

to

be

submitted

to

the

PRA/BoE

by

October

2021

with

public

disclosures

by

both

firms

and

the

PRA/BoE

in

June

2022

(and

every

two

years

thereafter).

While

regulators

in

many

jurisdictions

have

indicated

a

preference

for

single

point

of

entry

resolution

for

the

Group,

additional

resolution

or

bankruptcy

provisions

may

apply

to

certain

Group

entities

or

branches.

In

the

US,

BUSL

is

subject

to

the

Orderly

Liquidation

Authority

established

by

Title

II

of

the

Dodd-Frank

Act

(DFA),

a

regime

for

the

orderly

liquidation

of

systemically

important

financial

institutions

by

the

FDIC,

as

an

alternative

to

proceedings

under

the

US

Bankruptcy

Code.

In

addition,

the

licensing

authorities

of

Barclays

Bank

PLC

New

York

branch

and

of

Barclays

Bank

Delaware

have

the

authority

to

take

possession

of

the

business

and

property

of

the

applicable

branch

or

entity

they

license

and/or

to

revoke

or

suspend

such

licence.

In

the

US,

Title

I

of

the

DFA,

as

amended,

and

the

implementing

regulations

issued

by

the

FRB

and

the

FDIC

require

each

bank

holding

company

with

assets

of

$250bn

or

more,

including

those

within

the

Group,

to

prepare

and

submit

a

plan

for

the

orderly

resolution

of

subsidiaries

and

operations

in

the

event

of

future

material

financial

distress

or

failure.

The

Group’s

of

the

US

Resolution

Plan

in

respect

of

its

US

operations

will

be

a

“targeted

plan”

due

on

17

December

2021.

Barclays

Bank

Ireland

PLC,

as

a

significant

institution

under

the

Single

Resolution

Mechanism

Regulation

(SRMR),

is

subject

to

the

powers

of

the

Single

Resolution

Board

(SRB)

as

the

Eurozone

resolution

authority.

The

CBI

and

the

ECB

require

Barclays

Bank

Ireland

PLC

to

submit

a

standalone

BRRD-compliant

recovery

plan

on

an

annual

basis.

The

SRB

has

the

power

to

require

data

submissions

specific

to

Barclays

Bank

Ireland

PLC

under

powers

conferred

upon

it

by

the

BRRD

and

the

SRMR.

The

SRB

will

exercise

these

powers

to

determine

the

optimal

resolution

strategy

for

Barclays

Bank

Ireland

PLC

in

the

context

of

the

BoE’s

preferred

resolution

strategy

of

single

point

of

entry

with

bail-in

at

Barclays

PLC.

The

SRB

also

has

the

power

under

the

BRRD

and

the

SRMR

to

develop

a

resolution

plan

for

Barclays

Bank

Ireland

PLC.

TLAC

and

MREL

The

Group

is

subject

to

a

Minimum

Requirement

for

own

funds

and

Eligible

Liabilities

(MREL),

which

includes

a

component

reflecting

the

FSB’s

standards

on

total

loss

absorbency

capacity

(TLAC).

The

MREL

requirements

will

be

fully

implemented

by

1

January

2022,

at

which

time

G-SIBs

with

resolution

entities

incorporated

in

the

UK

will

be

required

to

meet

an

MREL

equivalent

to

the

higher

of:

(i)

two

times

the

sum

of

their

Pillar

1

and

Pillar

2A

requirements;

or

(ii)

the

higher

of

two

times

their

leverage

ratio

or

6.75%

of

leverage

exposures.

Internal

MREL

for

operating

subsidiaries

is

subject

to

a

scalar

in

the

75-90%

range

of

the

external

requirement

that

would

apply

to

the

subsidiary

if

it

were

a

resolution

entity.

The

starting

point

for

the

scalar

is

90%

for

ring-

fenced

bank

sub-groups.

Barclays

Bank

Ireland

PLC

is

subject

to

the

SRB’s

MREL

policy,

as

issued

in

May

2020,

in

respect

of

the

internal

MREL

that

it

will

be

required

to

issue

to

the

Group.

The

SRB’s

current

calibration

of

internal

MREL

for

non-resolution

entities

is

expressed

as

two

ratios

that

have

to

be

met

in

parallel:

(a)

two

times

the

sum

of:

(i)

the

firm’s

Pillar

1

requirement;

(ii)

its

Pillar

2

requirement;

and

(b)

two

times

the

leverage

ratio.

The

SRB’s

policy

does

not

envisage

the

application

of

any

scalar

in

respect

of

the

internal

MREL

requirement.

In

the

US,

the

FRB’s

TLAC

rule

includes

provisions

that

require

BUSL

to

have:

(i)

a

specified

outstanding

amount

of

eligible

long-term

debt;

(ii)

a

specified

outstanding

amount

of

TLAC

(consisting

of

common

and

preferred

equity

regulatory

capital

plus

eligible

long-term

debt);

and

(iii)

a

specified

common

equity

buffer.

In

addition,

the

FRB’s

TLAC

rule

prohibits

BUSL,

for

so

long

as

the

Group’s

overall

resolution

plan

treats

BUSL

as

a

non-resolution

entity,

from

issuing

TLAC

to

entities

other

than

those

within

the

Group.

Bank

Levy

and

FSCS

The

BRRD

established

a

requirement

for

EU

member

states

to

set

up

a

pre-funded

resolution

financing

arrangement

with

funding

equal

to

1%

of

covered

deposits

by

31

December

2024

to

cover

the

costs

of

bank

resolutions.

The

UK

has

implemented

this

requirement

by

way

of

a

tax

on

the

balance

sheets

of

banks

known

as

the

‘Bank

Levy’.

In

addition,

the

UK

has

a

statutory

compensation

fund

called

the

Financial

Services

Compensation

Scheme

(FSCS),

which

is

funded

by

way

of

annual

levies

on

most

authorised

financial

services

firms.

Structural

reform

In

the

UK,

the

Financial

Services

(Banking

Reform)

Act

2013

put

in

place

a

framework

for

ring-fencing

certain

operations

of

large

banks.

Ring-

fencing

requires,

among

other

things,

the

separation

of

the

retail

and

smaller

deposit-taking

business

activities

of

UK

banks

into

a

legally

distinct,

operationally

separate

and

economically

independent

entity,

which

is

not

permitted

to

undertake

a

range

of

activities.

US

regulation

places

further

substantive

limits

on

the

activities

that

may

be

conducted

by

banks

and

holding

companies,

including

foreign

banking

organisations

such

as

the

Group.

The

‘Volcker

Rule’,

which

was

part

of

the

DFA

and

which

came

into

effect

in

the

US

in

2015,

prohibits

banking

entities

from

undertaking

certain

proprietary

trading

activities

and

limits

such

entities’

ability

to

sponsor

or

invest

in

certain

private

equity

funds

and

hedge

funds

(in

each

case

broadly

defined).

As

required

by

the

rule,

the

Group

has

developed

and

implemented

an

extensive

compliance

and

monitoring

programme

addressing

proprietary

trading

and

covered

fund

activities

(both

inside

and

outside

of

the

US).

Market

infrastructure

regulation

In

recent

years,

regulators

as

well

as

global-standard

setting

bodies

such

as

the

International

Organisation

of

Securities

Commissions

(IOSCO)

have

focused

on

improving

transparency

and

reducing

risk

in

markets,

particularly

risks

over-the-counter

(OTC)

transactions.

This

focus

has

resulted

in

a

variety

of

new

regulations

across

the

G20

countries

and

beyond

that

require

or

encourage

on-venue

trading,

clearing,

posting

of

margin

and

disclosure

of

pre-trade

and

post-trade

information.

Risk

review

Supervision

and

regulation

182

Barclays

PLC

2020

Annual

Report

on

Form

20-F

The

European

Market

Infrastructure

Regulation

(EMIR)

has

introduced

requirements

designed

to

improve

transparency

and

reduce

the

risks

associated

with

the

derivatives

market.

EMIR

has

potential

operational

and

financial

impacts

on

the

Group,

including

by

imposing

new

collateral

requirements.

Over

the

coming

months

alterations

to

the

existing

derivative

margin

rules

are

expected

to

be

finalised.

The

Markets

in

Financial

Instruments

Directive

and

Markets

in

Financial

Instruments

Regulation

(collectively

referred

to

as

MiFID

II)

have

affected

many

of

the

markets

in

which

the

Group

operates,

the

instruments

in

which

it

trades

and

the

way

it

transacts

with

market

counterparties

and

other

customers.

MiFID

II

is

currently

undergoing

a

review

process,

including

as

part

of

the

EU’s

ongoing

focus

on

the

development

of

a

stronger

Capital

Markets

Union.

The

EU

Regulation

on

Sustainability-Related

Disclosures

introduces

disclosure

obligations

requiring

financial

institutions

to

explain

how

they

integrate

environmental,

social

and

governance

factors

in

their

investment

decisions

for

certain

financial

products.

In

addition,

the

EU

Taxonomy

Regulation

provides

for

a

general

framework

for

the

development

of

an

EU-wide

classification

system

for

environmentally

sustainable

economic

activities.

Finally,

the

UK

and

EU

regulators

are

consulting

on,

amongst

other

things,

proposals

for

regulatory

measures

to

enhance

climate

and

environmental

disclosures

and

climate

risk

assessments,

which

will

have

an

impact

on

the

Group’s

existing

practices

in

these

areas.

The

EU

Benchmarks

Regulation

applies

to

the

administration,

contribution

and

use

of

benchmarks

within

the

EU.

Financial

institutions

within

the

EU

are

prohibited

from

using

benchmarks

unless

their

administrators

are

authorised,

registered

or

otherwise

recognised

in

the

EU,

subject

to

transitional

provisions

expiring

on

1

January

2022

(or

31

December

2022

under

the

UK

onshored

Benchmarks

Regulation).

Amendments

to

extend

these

provisions

are

underway

for

both

the

EU

and

UK

Benchmarks

Regulations.

The

FCA

has

stated

that

it

does

not

intend

to

support

LIBOR

after

the

end

of

2021.

International

initiatives

in

conjunction

with

global

regulators

are

therefore

underway

to

develop

alternative

benchmarks

and

risk-free

rate

fallback

arrangements,

including

updates

to

existing,

as

well

as

new,

applicable

legislation.

US

regulators

have

imposed

similar

rules

as

the

EU

with

respect

to

the

mandatory

on-venue

trading

and

clearing

of

certain

derivatives,

and

post-trade

transparency,

as

well

as

in

relation

to

the

margining

of

OTC

derivatives.

US

regulators

have

finalised

certain

aspects

of

their

rules

with

respect

to

their

application

on

a

cross-border

basis,

including

with

respect

to

their

registration

requirements

in

relation

to

non-US

swap

dealers

and

security-based

swap

dealers.

The

regulators

may

adopt

further

rules,

or

provide

further

guidance,

regarding

cross-border

applicability.

In

December

2017,

the

CFTC

and

the

European

Commission

recognised

the

trading

venues

of

each

other’s

jurisdiction

to

allow

market

participants

to

comply

with

mandatory

on-venue

trading

requirements

while

trading

on

certain

venues

recognised

by

the

other

jurisdiction.

In

November

2020,

the

CFTC

extended

temporary

relief

that

would

permit

trading

venues

and

market

participants

located

in

the

UK

to

continue

to

rely

on

this

mutual

recognition

framework

following

the

withdrawal

of

the

UK

from

the

EU.

Certain

participants

in

US

swap

markets

are

required

to

register

with

the

CFTC

as

‘swap

dealers’

or

‘major

swap

participants’

and/or,

beginning

in

November

2021,

with

the

SEC

as

‘security-based

swap

dealers’

or

‘major

security-based

swap

participants’.

Such

registrants

are

subject

to

CFTC,

and

will

be

subject

to

SEC,

regulation

and

oversight.

Entities

required

to

register

as

swap

dealers

are

subject

to

business

conduct,

record-keeping

and

reporting

requirements

under

CFTC

rules.

Barclays

Bank

PLC

is

subject

to

regulation

by

the

FRB,

and

has

provisionally

registered

with

the

CFTC

as

a

swap

dealer.

Accordingly,

Barclays

Bank

PLC

is

subject

to

CFTC

rules

on

business

conduct,

record-keeping

and

reporting

and

to

FRB

rules

on

capital

and

margin.

The

CFTC

has

approved

certain

comparability

determinations

that

permit

substituted

compliance

with

non-US

regulatory

regimes

for

certain

swap

regulations.

Substituted

compliance

is

permitted

for

certain

transaction-level

requirements,

where

applicable,

only

with

respect

to

transactions

between

a

non-US

swap

dealer

and

a

non-US

counterparty,

whereas

entity-level

determinations

generally

apply

on

an

entity-wide

basis

regardless

of

counterparty

status.

In

November

2020,

the

CFTC

extended

temporary

relief

that

would

permit

swap

dealers

located

in

the

UK

to

continue

to

rely

on

existing

CFTC

substituted

compliance

determinations

with

respect

to

EU

requirements

in

the

event

of

a

withdrawal

of

the

UK

from

the

EU.

In

addition,

the

CFTC

has

issued

guidance

that

would

require

a

non-US

swap

dealer

to

comply

with

certain

CFTC

rules

in

connection

with

transactions

that

are

“arranged,

negotiated

or

executed”

from

the

US.

The

CFTC

has

provided

temporary

no-action

relief

from

application

of

the

guidance.

In

July

2020

the

CFTC

adopted

rules

that,

for

certain

CFTC

requirements,

codify

on

a

permanent

basis,

the

temporary

no-action

relief

for

transactions

that

are

arranged,

negotiated

or

executed

in

the

US.

The

final

rules

also

codify

certain

aspects

of

the

CFTC’s

current

cross-border

framework

with

respect

to

internal

and

external

business

conduct

requirements,

and

it

is

expected

that

the

CFTC

will

introduce

additional

rules

addressing

the

application

of

the

cross-border

framework

to

mandatory

clearing,

trading

and

reporting

requirements.

In

October

2017,

the

CFTC

issued

an

order

permitting

substituted

compliance

with

EU

margin

rules

for

certain

uncleared

derivatives.

However,

as

the

Group

is

subject

to

the

margin

rules

of

the

FRB,

it

will

not

benefit

from

the

CFTC’s

action

unless

the

FRB

takes

a

similar

approach.

The

SEC

has

finalised

the

rules

governing

security

based

swap

dealer

registration

in

2015,

and

registration

of

security-based

swap

dealers,

as

well

as

compliance

with

applicable

security

based

swap

dealer

requirements,

is

expected

to

begin

in

November

2021.

It

is

anticipated

that

Barclays

Bank

PLC

and/or

one

or

more

of

its

affiliates

will

be

required

to

register

as

a

security-based

swap

dealer

and

will

be

required

to

comply

with

the

SEC’s

rules

for

security-based

swap

dealers.

These

rules

may

impose

costs

and

other

requirements

or

restrictions

that

could

impact

our

business.

As

with

similar

CFTC

rules,

it

is

expected

that

substituted

compliance

will

be

available

for

certain

security-based

swap

dealer

requirements;

however,

the

SEC

is

currently

considering

applications

for

substituted

compliance

but

has

only

issued

a

final

comparability

determination

for

Germany,

and

the

ultimate

scope

and

applicability

of

other

determinations,

including

in

respect

of

the

UK,

remains

unclear.

Other

regulation

Culture

Our

regulators

have

enhanced

their

focus

on

the

promotion

of

cultural

values

as

a

key

area

for

banks,

although

they

generally

view

the

responsibility

for

reforming

culture

as

primarily

sitting

with

the

industry.

Data

protection

and

PSD2

Most

countries

where

the

Group

operates

have

comprehensive

laws

requiring

openness

and

transparency

about

the

collection

and

use

of

personal

information,

and

protection

against

loss

and

unauthorised

or

improper

access.

The

EU’s

General

Data

Protection

Regulation

(GDPR)

created

a

broadly

harmonised

privacy

regime

across

EU

member

states,

introducing

mandatory

breach

notification,

enhanced

individual

rights,

a

need

to

openly

demonstrate

compliance,

and

significant

penalties

for

breaches.

The

extraterritorial

effect

of

the

GDPR

means

entities

established

outside

the

EU

may

fall

within

the

Regulation’s

ambit

when

offering

goods

or

services

to

European

based

customers

or

clients.

Following

the

UK’s

withdrawal

from

the

EU,

the

UK

continues

to

apply

the

GDPR

framework

(as

onshored

into

UK

law

and

hence

now

referred

to

as

the

‘UK

GDPR’

-

this

sits

alongside

an

amended

version

of

the

UK

Data

Protection

Act

2018).

Two

years

after

its

introduction

the

GDPR

has

become

the

global

touchstone

as

countries

around

the

world

either

usher

in

or

contemplate

similar

data

privacy

laws,

or

align

their

existing

legislation.

During

2020

new

privacy

laws

have

been

passed

in

Switzerland,

took

effect

in

Brazil

and

Dubai,

and

were

proposed

in

India

and

China.

Risk

review

Supervision

and

regulation

183

Barclays

PLC

2020

Annual

Report

on

Form

20-F

In

the

US,

Barclays

US

Consumer

Bank

is

subject

to

the

US

Federal

Gramm-Leach-Bliley

Act

(GLBA)

and

the

California

Consumer

Privacy

Act

of

2018,

which

came

into

effect

on

1

January

2020

(CCPA).

The

GLBA

limits

the

use

and

disclosure

of

non-public

personal

information

to

non-

affiliated

third

parties

and

requires

financial

institutions

to

provide

written

notice

of

their

privacy

policies

and

practices.

Any

violations

of

the

GLBA

could

subject

the

US

Consumer

Bank

to

additional

reporting

requirements

or

regulatory

investigation

or

audits

by

the

financial

regulators.

The

CCPA

only

applies

to

personal

information

that

is

not

collected,

processed,

sold

or

disclosed

pursuant

to

the

GLBA,

and

it

requires

the

US

Consumer

Bank

to

provide

California

consumers

with

additional

disclosures

regarding

the

collection,

use

and

sharing

of

personal

information,

and

grants

California

consumers

access,

deletion,

and

other

rights

with

respect

to

their

personal

information.

The

CCPA

subjects

the

US

Consumer

Bank

to

enforcement

penalties

by

the

Attorney

General

of

the

State

of

California,

and

grants

a

private

right

of

action

with

respect

to

certain

data

breaches.

From

14

September

2019,

new

rules

apply

under

the

revised

Payment

Services

Directive

(PSD2)

that

affect

the

way

banks

and

other

payment

services

providers

check

that

the

person

requesting

access

to

an

account

or

trying

to

make

a

payment

is

permitted

to

do

so.

This

is

referred

to

as

strong

customer

authentication

(SCA).

In

April

2020,

the

FCA

provided

an

additional

six

months

(to

14

September

2021)

for

the

industry

to

implement

SCA

for

e-commerce.

Cyber

security

and

operational

resilience

Regulators

in

the

UK,

the

EU

and

the

US

continue

to

focus

on

cyber

security

risk

management,

organisational

operational

resilience

and

overall

soundness

across

all

financial

services

firms,

with

customer

and

market

expectations

of

continuous

access

to

financial

services

at

an

all-time

high.

This

is

evidenced

by

the

publication

of

a

number

of

proposed

laws

and

changes

to

regulatory

frameworks.

For

example,

the

UK

regulators

published

for

consultation

a

new

framework

for

operational

resilience

that

focuses

on

the

identification

of

important

business

services,

setting

impact

tolerances

for

them,

and

then

testing

against

them.

The

European

Commission

has

proposed

legislation

on

cyber

security

and

operational

resilience

for

the

financial

services

sector,

including

oversight

of

third

party

service

providers.

The

regulatory

focus

has

been

further

heightened

by

the

COVID-19

pandemic.

The

existing

and

anticipated

requirements

for

increased

controls

will

serve

to

improve

industry

standardisation

and

resilience

capabilities,

enhancing

our

ability

to

deliver

services

during

periods

of

potential

disruption.

However,

such

measures

are

likely

to

result

in

increased

technology

and

compliance

costs

for

the

Group.

Sanctions

and

financial

crime

The

UK

Bribery

Act

2010

introduced

a

new

form

of

corporate

criminal

liability

focused

broadly

on

a

company’s

failure

to

prevent

bribery

on

its

behalf.

The

Criminal

Finances

Act

2017

introduced

new

corporate

criminal

offences

of

failing

to

prevent

the

facilitation

of

UK

and

overseas

tax

evasion.

Both

pieces

of

legislation

have

broad

application

and

in

certain

circumstances

may

have

extraterritorial

impact

on

entities,

persons

or

activities

located

outside

the

UK,

including

Barclays

PLC’s

subsidiaries

outside

the

UK.

The

UK

Bribery

Act

requires

the

Group

to

have

adequate

procedures

to

prevent

bribery

which,

due

to

the

extraterritorial

nature

of

the

Act,

makes

this

both

complex

and

costly.

Additionally,

the

Criminal

Finances

Act

requires

the

Group

to

have

reasonable

prevention

procedures

in

place

to

prevent

the

criminal

facilitation

of

tax

evasion

by

persons

acting

for,

or

on

behalf

of,

the

Group.

In

May

2018,

the

Sanctions

and

Anti-Money

Laundering

Act

became

law

in

the

UK.

The

Act

allows

for

the

adoption

of

an

autonomous

UK

sanctions

regime,

as

well

as

a

more

flexible

licensing

regime

post-Brexit.

On

6

July

2020,

the

UK

Government

announced

the

first

sanctions

that

have

been

implemented

independently

by

the

UK

outside

the

auspices

of

the

UN

and

EU.

The

autonomous

UK

sanctions

regime

came

into

force

on

1

January

2021.

Those

sanctions

apply

within

the

UK

and

in

relation

to

the

conduct

of

all

UK

persons

wherever

they

are

in

the

world;

they

also

apply

to

overseas

branches

of

UK

companies.

In

the

US,

the

Bank

Secrecy

Act,

the

USA

PATRIOT

Act

2001,

the

Anti-Money

Laundering

Act

of

2020

and

regulations

thereunder

contain

numerous

anti-money

laundering

and

anti-terrorist

financing

requirements

for

financial

institutions.

In

addition,

the

Group

is

subject

to

the

US

Foreign

Corrupt

Practices

Act,

which

prohibits,

among

other

things,

corrupt

payments

to

foreign

government

officials.

It

is

also

subject

to

various

economic

sanctions

laws,

regulations

and

executive

orders

administered

by

the

US

government,

which

prohibit

or

restrict

some

or

all

business

activities

and

other

dealings

with

or

involving

certain

individuals,

entities,

groups,

countries

and

territories.

In

some

cases,

US

state

and

federal

regulations

addressing

sanctions,

money

laundering

and

other

financial

crimes

may

impact

entities,

persons

or

activities

located

or

undertaken

outside

the

US,

including

Barclays

PLC

and

its

subsidiaries.

US

government

authorities

have

aggressively

enforced

these

laws

against

financial

institutions

in

recent

years.

Failure

of

a

financial

institution

to

ensure

compliance

with

such

laws

could

have

serious

legal,

financial

and

reputational

consequences

for

the

institution.

Financial

review

Contents

184

Barclays

PLC

2020

Annual

Report

on

Form

20-F

A

review

of

the

Group’s

performance,

including

the

key

performance

indicators,

and

the

contribution

of

each

of

our

businesses

to

the

overall

performance

of

the

Group.

Page

Financial

review

◾

Key

performance

indicators

185

◾

Consolidated

summary

income

statement

187

◾

Income

statement

commentary

188

◾

Consolidated

summary

balance

sheet

189

◾

Balance

sheet

commentary

190

◾

Analysis

of

results

by

business

191

◾

Non-IFRS

performance

measures

198

Financial

review

Key

performance

indicators

185

Barclays

PLC

2020

Annual

Report

on

Form

20-F

In

assessing

the

financial

performance

of

the

Group,

management

uses

a

range

of

KPIs

which

focus

on

the

Group’s

financial

strength,

the

delivery

of

sustainable

returns

and

cost

management.

Barclays

continues

to

target

greater

than

10%

RoTE

over

time.

However,

given

the

COVID-19

pandemic

a

meaningful

improvement

in

returns

versus

2019

was

not

possible

due

to

the

challenging

operating

environment.

Cost

discipline

remains

a

priority

and

management

continues

to

target

a

cost:

income

ratio

lower

than

60%

over

time.

Non-IFRS

performance

measures

The

Group’s

management

believes

that

the

non-IFRS

performance

measures

included

in

this

document

provide

valuable

information

to

the

readers

of

the

financial

statements

as

they

enable

the

reader

to

identify

a

more

consistent

basis

for

comparing

the

businesses’

performance

between

financial

periods,

and

provide

more

detail

concerning

the

elements

of

performance

which

the

managers

of

these

businesses

are

most

directly

able

to

influence

or

are

relevant

for

an

assessment

of

the

Group.

They

also

reflect

an

important

aspect

of

the

way

in

which

operating

targets

are

defined

and

performance

is

monitored

by

management.

However,

any

non-IFRS

performance

measures

in

this

document

are

not

a

substitute

for

IFRS

measures

and

readers

should

consider

the

IFRS

measures

as

well.

Refer

to

the

non-IFRS

performance

measures

section

for

further

information

and

calculations

of

non-IFRS

performance

measures

included

throughout

this

section

and

the

most

directly

comparable

IFRS

measures.

Definition

Why

is

it

important

and

how

the

Group

performed

Common

Equity

Tier

1

(CET1)

ratio

Capital

requirements

are

part

of

the

regulatory

framework

governing

how

banks

and

depository

institutions

are

supervised.

Capital

ratios

express

a

bank’s

capital

as

a

percentage

of

its

RWAs

as

defined

by

the

PRA.

CET1

ratio

is

a

measure

of

capital

that

is

predominantly

common

equity

defined

by

the

CRR,

as

amended

by

CRR

II.

The

Group’s

capital

management

objective

is

to

maximise

shareholder

value

by

prudently

managing

the

level

and

mix

of

its

capital

to:

ensure

the

Group

and

all

of

its

subsidiaries

are

appropriately

capitalised

relative

to

their

regulatory

minimum

and

stressed

capital

requirements,

support

the

Group’s

risk

appetite,

growth

and

strategic

options,

while

seeking

to

maintain

a

robust

credit

proposition

for

the

Group

and

its

subsidiaries.

The

CET1

ratio

increased

to

15.1%

(2019:

13.8%),

reflecting

headroom

of

3.9%

above

the

MDA

hurdle

of

11.2%.

CET1

capital

increased

by

£5.5bn

to

£46.3bn

reflecting

resilient

capital

generation

through

£7.9bn

of

profit

before

tax,

excluding

credit

impairment

charges

of

£4.8bn

and

a

£1.0bn

increase

due

to

the

cancellation

of

the

full

year

2019

dividend.

These

increases

were

partially

offset

by

£0.9bn

of

AT1

coupons

paid

and

the

announced

1.0p

full

year

2020

dividend.

The

CET1

capital

increase

also

reflects

regulatory

measures

for

IFRS

9

transitional

relief,

prudent

valuation

and

qualifying

software

assets.

RWAs

increased

by

£11.1bn

to

£306.2bn

primarily

due

to

higher

market

volatility,

increased

client

activity

and

a

reduction

in

credit

quality

within

CIB,

partially

offset

by

lower

consumer

lending.

Group

target:

a

CET1

ratio

in

the

range

of

13-14%.

CET1

ratio

15.1%

2019:

13.8%

2018:

13.2%

Financial

review

Key

performance

indicators

186

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Definition

Why

is

it

important

and

how

the

Group

performed

Operating

expenses

Operating

expenses

excluding

litigation

and

conduct.

Barclays

views

operating

expenses

as

a

key

strategic

area

for

banks;

those

who

actively

manage

costs

and

control

them

effectively

will

gain

a

strong

competitive

advantage.

Group

total

operating

expenses

decreased

10%

to

£13.9bn.

The

reduction

reflected

the

non-recurrence

of

a

£1.4bn

PPI

provision

in

the

prior

year.

Group

operating

expenses

increased

1%

to

£13.7bn,

including

structural

cost

actions

and

additional

COVID-19

resulting

in

a

cost:

income

ratio,

excluding

litigation

and

conduct

of

63%

(2019:

63%).

Excluding

structural

cost

actions

of

£0.4bn

(2019:

£0.1bn)

and

£0.1bn

spend

to

date

of

Barclays’

Community

Aid

Package,

operating

expenses

would

have

been

£13.3bn

(2019:

£13.4bn),

reflecting

disciplined

cost

management

and

efficiencies,

resulting

in

a

cost:

income

ratio

of

61%

(2019:

62%).

Total

operating

expenses

£13.9bn

2019:

£15.4bn

2018:

£16.2bn

Operating

expenses

£13.7bn

2019:

£13.6bn

2018:

£13.9bn

a

Cost:

income

ratio

Operating

expenses

divided

by

total

income.

This

is

a

measure

management

uses

to

assess

the

productivity

of

the

business

operations.

Managing

the

cost

base

is

a

key

execution

priority

for

management

and

includes

a

review

of

all

categories

of

discretionary

spending

and

an

analysis

of

how

we

can

run

the

business

to

ensure

that

costs

increase

at

a

slower

rate

than

income.

The

Group

cost:

income

ratio,

including

litigation

and

conduct,

reduced

to

64%

(2019:

71%)

due

to

favourable

income

and

the

prior

year

including

a

PPI

provision

of

£1.4bn.

The

Group

cost:

income

ratio,

excluding

litigation

and

conduct,

was

stable

at

63%

(2019:

63%).

As

favourable

income

was

offset

by

£0.4bn

of

structural

cost

actions

and

additional

COVID-19

Group

target:

a

cost:

income

ratio

below

60%

over

time.

Cost:

income

ratio

64%

2019:

71%

2018:

77%

Cost:

income

ratio

excluding

litigation

and

conduct

63%

2019:

63%

2018:

66%

Return

on

average

shareholders’

equity

RoE

is

calculated

as

profit

after

tax

attributable

to

ordinary

shareholders,

as

a

proportion

of

average

shareholders’

equity

excluding

non-controlling

interests

and

other

equity

instruments.

This

measure

indicates

the

return

generated

by

the

management

of

the

business

based

on

shareholders’

equity.

RoE

for

the

Group

was

2.7%

(2019:

4.5%).

Group

RoE

2.7%

2019:

4.5%

2018:

3.1%

Return

on

average

tangible

shareholders’

equity

RoTE

is

calculated

as

profit

after

tax

attributable

to

ordinary

shareholders,

as

a

proportion

of

average

shareholders’

equity

excluding

non-controlling

interests

and

other

equity

instruments

adjusted

for

the

deduction

of

intangible

assets

and

goodwill.

This

measure

indicates

the

return

generated

by

the

management

of

the

business

based

on

shareholders’

tangible

equity.

Achieving

a

target

RoTE

demonstrates

the

organisation's

ability

to

execute

its

strategy

and

align

management's

interests

with

the

shareholders'.

RoTE

lies

at

the

heart

of

the

Group's

capital

allocation

and

performance

management

process.

RoTE

for

the

Group,

excluding

litigation

and

conduct,

was

3.4%

(2019:

9.0%)

due

to

lower

profit

before

tax

including

materially

higher

credit

impairment

charges

relating

to

the

COVID-19

pandemic

and

higher

operating

expenses,

partially

offset

by

favourable

income.

RoTE

for

the

Group

was

3.2%

(2019:

5.3%)

due

to

attributable

profit

of

£1.5bn

(2019:

£2.5bn).

The

prior

year

included

a

PPI

provision

of

£1.4bn.

Group

target:

RoTE

of

greater

than

10%

over

time.

Group

RoTE

excluding

litigation

and

conduct

3.4%

2019:

9.0%

2018:

8.5%

Group

RoTE

3.2%

2019:

5.3%

2018:

3.6%

Note

a

Group

operating

expenses,

excluding

litigation

and

conduct,

and

a

GMP

charge

of

£140m.

Financial

review

Consolidated

summary

income

statement

187

Barclays

PLC

2020

Annual

Report

on

Form

20-F

2020

2019

2018

2017

2016

For

the

year

ended

31

December

£m

Continuing

operations

Interest

income

11,892

15,456

14,541

13,631

14,541

Interest

expense

(3,770)

(6,049)

(5,479)

(3,786)

(4,004)

Net

interest

income

8,122

9,407

9,062

9,845

10,537

Fee

and

commission

income

8,641

9,122

8,893

8,751

8,570

Fee

and

commission

expense

(2,070)

(2,362)

(2,084)

(1,937)

(1,802)

Net

fee

and

commission

income

6,571

6,760

6,809

6,814

6,768

Other

income

7,073

5,465

5,265

4,417

4,146

Total

income

21,766

21,632

21,136

21,076

21,451

Credit

impairment

charges

(4,838)

(1,912)

(1,468)

(2,336)

(2,373)

Operating

costs

(13,434)

(13,359)

(13,627)

(13,884)

(14,565)

UK

bank

levy

(299)

(226)

(269)

(365)

(410)

Operating

expenses

(13,733)

(13,585)

(13,896)

(14,249)

(14,975)

GMP

charge

-

(140)

-

Litigation

and

conduct

(153)

(1,849)

(2,207)

(1,207)

(1,363)

Total

operating

expenses

(13,886)

(15,434)

(16,243)

(15,456)

(16,338)

Other

net

income

23

71

69

257

490

Profit

before

tax

3,065

4,357

3,494

3,541

3,230

Tax

charge

(604)

(1,003)

(911)

(2,066)

(865)

Profit

after

tax

in

respect

of

continuing

operations

2,461

3,354

2,583

1,475

2,365

(Loss)/profit

after

tax

in

respect

of

discontinued

operation

-

(2,195)

591

Non-controlling

interests

in

respect

of

continuing

operations

(78)

(80)

(234)

(249)

(346)

Non-controlling

interests

in

respect

of

discontinued

operation

-

(140)

(402)

Other

equity

instrument

holders

(857)

(813)

(752)

(639)

(457)

Attributable

profit/(loss)

1,526

2,461

1,597

(1,748)

1,751

Selected

financial

statistics

Basic

earnings/(loss)

per

share

8.8p

14.3p

9.4p

(10.3p)

10.4p

Diluted

earnings/(loss)

per

share

8.6p

14.1p

9.2p

(10.1p)

10.3p

Dividend

per

ordinary

share

1.0p

3.0p

6.5p

3.0p

4.5p

Return

on

average

shareholders’

equity

2.7%

4.5%

3.1%

(3.1%)

3.0%

Return

on

average

tangible

shareholders’

equity

3.2%

5.3%

3.6%

(3.6%)

3.6%

Cost:

income

ratio

64%

71%

77%

73%

76%

Return

on

average

total

assets

0.11%

0.19%

0.13%

(0.14%)

0.13%

Dividend

payout

ratio

b

-

49%

48%

(29%)

43%

Average

total

equity

to

average

total

assets

4.9%

5.2%

5.7%

5.3%

Performance

measures

excluding

litigation

and

conduct

a

Profit

before

tax

3,218

6,206

5,701

4,748

4,593

Attributable

profit/(loss)

1,638

4,194

3,733

(598)

3,036

Return

on

average

tangible

shareholders’

equity

3.4%

9.0%

8.5%

(1.2%)

6.2%

Cost:

income

ratio

63%

66%

68%

70%

Note

a

Refer

to

the

Non

-IFRS

performance

measures

section

for

further

information

and

calculations

of

performance

measures

excluding

litigation

and

conduct

.

b

Total

dividends

paid

to

ordinary

equity

holders

of

the

parent

during

the

year

divided

by

profit

after

tax

attributable

to

ordinary

equity

holders

of

the

parent.

The

financial

information

above

is

extracted

from

the

published

accounts.

This

information

should

be

read

together

with

the

information

included

in

the

accompanying

consolidated

financial

statements.

Financial

review

Income

statement

commentary

188

Barclays

PLC

2020

Annual

Report

on

Form

20-F

2020

compared

to

2019

RoE

was

2.7%

(2019:

4.5%).

Statutory

RoTE

was

3.2%

(2019:

5.3%)

and

statutory

EPS

was

8.8p

(2019:

14.3p).

Profit

before

tax

was

£3,065m

(2019:

£4,357m).

Excluding

litigation

and

conduct,

profit

before

tax

was

£3,218m

(2019:

£6,206m).

Pre-provision

profits

a

were

broadly

stable

at

£8,056m

despite

the

pandemic,

benefitting

from

the

Group’s

diversified

business

model,

which

included

a

strong

performance

in

CIB

offset

by

headwinds

in

Barclays

UK

and

CC&P.

Total

income

increased

to

£21,766m

(2019:

£21,632m).

Barclays

UK

income

decreased

14%.

Barclays

International

income

increased

8%,

with

CIB

income

up

22%

and

CC&P

income

down

22%.

Credit

impairment

charges

increased

to

£4,838m

(2019:

£1,912m)

due

to

the

deterioration

in

economic

outlook

driven

by

the

COVID-19

pandemic.

The

current

year

charge

is

broadly

driven

by

£2,323m

of

non-default

provision

for

expected

future

customer

and

client

stress

and

£800m

of

single

name

wholesale

loan

charges.

The

expected

credit

loss

(ECL)

provision

remains

highly

uncertain

as

the

economic

impact

of

the

global

pandemic

continues

to

evolve.

Operating

expenses

increased

1%

to

£13,733m,

including

structural

cost

actions

and

additional

COVID-19

resulting

in

a

cost:

income

ratio

of

64%

(2019:

71%).

The

cost:

income

ratio,

excluding

litigation

and

conduct,

was

63%

(2019:

63%).

Excluding

structural

cost

actions

of

£368m

(2019:

£150m)

and

£95m

spend

to

date

of

Barclays’

COVID-19

Community

Aid

Package,

operating

expenses

would

have

been

£13,270m

(2019:

£13,435m),

reflecting

disciplined

cost

management

and

efficiencies,

resulting

in

a

cost:

income

ratio

of

61%

(2019:

62%).

Attributable

profit

was

£1,526m

(2019:

£2,461m),

generating

a

RoE

of

2.7%

(2019:

4.5%)

and

EPS

of

8.8p

(2019:

14.3p).

Excluding

litigation

and

conduct,

attributable

profit

was

£1,638m

(2019:

£4,194m),

generating

a

RoTE

of

3.4%

(2019:

9.0%)

and

EPS

of

9.5p

(2019:

24.4p).

Please

refer

to

the

Financial

review

section

in

the

Annual

Report

on

Form

20-F

2019

for

a

comparative

discussion

of

2019

financial

results

compared

to

2018.

Note

a

Excluding

litigation

and

conduct.

Financial

review

Consolidated

summary

balance

sheet

189

Barclays

PLC

2020

Annual

Report

on

Form

20-F

2020

2019

2018

2017

2016

As

at

31

December

£m

Assets

Cash

and

balances

at

central

banks

191,127

150,258

177,069

171,082

102,353

Cash

collateral

and

settlement

balances

101,367

83,256

77,222

77,168

90,135

Loans

and

advances

at

amortised

cost

342,632

339,115

326,406

324,048

345,900

Reverse

repurchase

agreements

and

other

similar

secured

lending

9,031

3,379

2,308

12,546

13,454

Trading

portfolio

assets

127,950

114,195

104,187

113,760

80,240

Financial

assets

at

fair

value

through

the

income

statement

175,151

133,086

149,648

116,281

78,608

Derivative

financial

instruments

302,446

229,236

222,538

237,669

346,626

Financial

investments

-

58,915

63,317

Financial

assets

at

fair

value

through

other

comprehensive

income

78,688

65,750

52,816

-

Assets

included

in

disposal

groups

classified

as

held

for

sale

-

1,193

71,454

Other

assets

21,122

21,954

21,089

20,586

21,039

Total

assets

1,349,514

1,140,229

1,133,283

1,133,248

1,213,126

Liabilities

Deposits

at

amortised

cost

481,036

415,787

394,838

398,701

390,744

Cash

collateral

and

settlement

balances

85,423

67,341

67,522

68,143

80,648

Repurchase

agreements

and

other

similar

secured

borrowings

14,174

14,517

18,578

40,338

19,760

Debt

securities

in

issue

a

75,796

76,369

82,286

73,314

75,932

Subordinated

liabilities

16,341

18,156

20,559

23,826

23,383

Trading

portfolio

liabilities

47,405

36,916

37,882

37,351

34,687

Financial

liabilities

designated

at

fair

value

249,765

204,326

216,834

173,718

96,031

Derivative

financial

instruments

300,775

229,204

219,643

238,345

340,487

Liabilities

included

in

disposal

groups

classified

as

held

for

sale

-

65,292

Other

liabilities

11,917

11,953

11,362

13,496

14,797

Total

liabilities

1,282,632

1,074,569

1,069,504

1,067,232

1,141,761

Equity

Called

up

share

capital

and

share

premium

4,637

4,594

4,311

22,045

21,842

Other

equity

instruments

11,172

10,871

9,632

8,941

6,449

Other

reserves

4,461

4,760

5,153

5,383

6,051

Retained

earnings

45,527

44,204

43,460

27,536

30,531

Total

equity

excluding

non-controlling

interests

65,797

64,429

62,556

63,905

64,873

Non-controlling

interests

1,085

1,231

1,223

2,111

6,492

Total

equity

66,882

65,660

63,779

66,016

71,365

Total

liabilities

and

equity

1,349,514

1,140,229

1,133,283

1,133,248

1,213,126

Net

asset

value

per

ordinary

share

315p

309p

322p

344p

Tangible

net

asset

value

per

share

269p

262p

276p

290p

Number

of

ordinary

shares

of

Barclays

PLC

(in

millions)

17,359

17,322

17,133

17,060

16,963

Year

-end

USD

exchange

rate

1.37

1.32

1.28

1.35

1.23

Year

-end

EUR

exchange

rate

1.11

1.18

1.12

1.13

1.17

Note

a

Debt

securities

in

issue

include

covered

bonds

of

£6.2bn

(2019:

£7.0bn).

Financial

review

Balance

sheet

commentary

190

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Total

assets

Total

assets

increased

£210bn

to

£1,350bn.

Cash

and

balances

at

central

banks

increased

by

£41bn

to

£191bn

and

financial

assets

at

fair

value

through

other

comprehensive

income

increased

£13bn

to

£79bn,

due

to

an

increase

in

the

liquidity

pool

predominantly

driven

by

an

increase

in

customer

deposits.

Derivative

financial

instrument

assets

increased

£73bn

to

£302bn,

driven

by

a

decrease

in

major

interest

rate

curves

and

increased

client

activity.

Cash

collateral

and

settlement

balances

increased

by

£18bn

to

£101bn,

predominantly

due

to

increased

activity.

Loans

and

advances

at

amortised

cost

increased

£4bn

to

£343bn,

which

reflected

£12bn

of

lending

under

the

government

backed

loan

schemes

and

£5bn

of

mortgage

growth,

partially

offset

by

lower

unsecured

lending

balances

Trading

portfolio

assets

increased

£14bn

to

£128bn

due

to

increased

client

activity

and

financial

assets

at

fair

value

through

the

income

statement

increased

£42bn

to

£175bn

due

to

reverse

repurchase

agreements

and

similar

secured

lending.

Total

liabilities

Total

liabilities

increased

£208bn

to

£1,283bn.

Deposits

at

amortised

cost

increased

£65bn

to

£481bn

primarily

due

to

CIB

clients

increasing

liquidity,

and

lower

consumer

spending

levels

Derivative

financial

instruments

liabilities

increased

£72bn

to

£301bn,

driven

by

a

decrease

in

major

interest

rate

curves

and

increased

client

activity.

This

is

consistent

with

the

movement

in

derivative

financial

instrument

assets.

Cash

collateral

and

settlement

balances

increased

by

£18bn

to

£85bn

predominantly

due

to

increased

activity.

Trading

portfolio

liabilities

increased

£10bn

due

to

increased

client

activity

to

£47bn

and

financial

liabilities

designated

at

fair

value

increased

by

£45bn

due

to

repurchase

agreements

and

similar

secured

borrowing.

Total

shareholders’

equity

Total

shareholders’

equity

increased

£1.4bn

to

£65.8bn.

Other

equity

instruments

increased

£0.3bn

to

£11.2bn

due

to

the

issuance

of

a

$1.5bn

AT1

instrument,

partially

offset

by

a

redemption

of

a

€1.0bn

AT1

instrument.

AT1

securities

are

perpetual

subordinated

contingent

convertible

securities

structured

to

qualify

as

AT1

instruments

under

prevailing

capital

rules

applicable

as

at

the

relevant

issue

date.

The

cash

flow

hedging

reserve

increased

£0.6bn

to

£1.6bn

as

a

result

of

fair

value

movements

on

interest

rate

swaps

held

for

hedging

purposes

due

to

a

decrease

in

major

interest

rate

curves.

The

currency

translation

reserve

decreased

£0.4bn

to

£2.9bn

due

to

strengthening

of

GBP

against

USD

of

4%,

when

comparing

year-end

closing

rates.

The

own

credit

reserve

decreased

£0.6bn

to

£1.0bn

debit,

principally

reflecting

Barclays’

lower

cost

of

funding.

Retained

earnings

increased

£1.3bn

to

£45.5bn

mainly

due

to

profits

of

£1.5bn.

Net

asset

value

per

share

increased

to

315p.

Tangible

net

asset

value

per

share

increased

7p

to

269p

as

9p

earnings

per

share

were

offset

by

net

negative

reserve

movements

of

2p.

Financial

review

Analysis

of

results

by

business

191

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Barclays

UK

2020

2019

2018

£m

Income

statement

information

Net

interest

income

5,234

5,888

6,028

Net

fee,

commission

and

other

income

1,113

1,465

1,355

Total

income

6,347

7,353

7,383

Credit

impairment

charges

(1,467)

(712)

(826)

Net

operating

income

4,880

6,641

6,557

Operating

costs

(4,270)

(3,996)

(4,075)

UK

bank

levy

(50)

(41)

(46)

Operating

expenses

(4,320)

(4,037)

(4,121)

Litigation

and

conduct

(32)

(1,582)

(483)

Total

operating

expenses

(4,352)

(5,619)

(4,604)

Other

net

income

18

-

3

Profit

before

tax

546

1,022

1,956

Attributable

profit

325

281

1,198

Balance

sheet

information

Loans

and

advances

to

customers

at

amortised

cost

£205.4bn

£193.7bn

£187.6bn

Total

assets

£289.1bn

£257.8bn

£249.7bn

Customer

deposits

at

amortised

cost

£240.5bn

£205.5bn

£197.3bn

Loan:

deposit

ratio

89%

96%

Risk

weighted

assets

£73.7bn

£74.9bn

£75.2bn

Key

facts

Average

LTV

of

mortgage

portfolio

a

51%

49%

Average

LTV

of

new

mortgage

lending

a

68%

65%

Number

of

branches

859

963

1,058

Mobile

banking

active

customers

9.2m

8.4m

7.3m

30

day

arrears

rate

-

Barclaycard

Consumer

UK

1.7%

1.8%

Number

of

employees

(full

time

equivalent)

21,300

21,400

22,600

Performance

measures

Return

on

average

allocated

equity

2.4%

2.0%

8.8%

Return

on

average

allocated

tangible

equity

3.2%

2.7%

11.9%

Average

allocated

equity

£13.7bn

£13.9bn

£13.6bn

Average

allocated

tangible

equity

£10.1bn

£10.3bn

£10.0bn

Cost:

income

ratio

69%

76%

62%

Loan

loss

rate

(bps)

68

36

43

Net

interest

margin

2.61%

3.09%

3.23%

Performance

measures

excluding

litigation

and

conduct

b

Profit

before

tax

578

2,604

2,439

Attributable

profit

343

1,813

1,670

Return

on

average

allocated

tangible

equity

3.4%

17.5%

16.7%

Cost:

income

ratio

68%

55%

56%

Notes

a

Average

loan

to

value

of

mortgages

is

balance

weighted

and

reflects

both

residential

and

BTL

mortgage

portfolios

within

the

Home

Loans

portfolio.

b

Refer

to

the

Non

-IFRS

performance

measures

section

for

further

information

and

calculations

of

performance

measures

excluding

litigation

and

conduct

.

Financial

review

Analysis

of

results

by

business

192

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Analysis

of

Barclays

UK

2020

2019

2018

£m

Analysis

of

total

income

Personal

Banking

3,522

4,009

4,006

Barclaycard

Consumer

UK

1,519

1,992

2,104

Business

Banking

1,306

1,352

1,273

Total

income

6,347

7,353

7,383

Analysis

of

credit

impairment

charges

Personal

Banking

(380)

(195)

(173)

Barclaycard

Consumer

UK

(881)

(472)

(590)

Business

Banking

(206)

(45)

(63)

Total

credit

impairment

charges

(1,467)

(712)

(826)

Analysis

of

loans

and

advances

to

customers

at

amortised

cost

Personal

Banking

£157.3bn

£151.9bn

£146.0bn

Barclaycard

Consumer

UK

£9.9bn

£14.7bn

£15.3bn

Business

Banking

£38.2bn

£27.1bn

£26.3bn

Total

loans

and

advances

to

customers

at

amortised

cost

£205.4bn

£193.7bn

£187.6bn

Analysis

of

customer

deposits

at

amortised

cost

Personal

Banking

£179.7bn

£159.2bn

£154.0bn

Barclaycard

Consumer

UK

£0.1bn

-

Business

Banking

£60.7bn

£46.3bn

£43.3bn

Total

customer

deposits

at

amortised

cost

£240.5bn

£205.5bn

£197.3bn

2020

compared

to

2019

Profit

before

tax

was

£546m

and

RoE

was

2.4%

(2019:

2.0%).

Profit

before

tax,

excluding

litigation

and

conduct,

decreased

78%

to

£578m.

RoTE

was

3.4%

(2019:

17.5%)

reflecting

a

challenging

operating

environment

and

materially

higher

credit

impairment

charges.

Total

income

decreased

14%

to

£6,347m.

Net

interest

income

reduced

11%

to

£5,234m

with

a

net

interest

margin

of

2.61%

(2019:

3.09%).

Net

fee,

commission

and

other

income

decreased

24%

to

£1,113m

.

Personal

Banking

income

decreased

12%

to

£3,522m,

reflecting

deposit

margin

compression

from

lower

interest

rates,

lower

unsecured

lending

balances,

and

COVID-19

customer

support

actions,

partially

offset

by

balance

growth

in

deposits

and

mortgages,

as

well

as

the

transfer

of

Barclays

Partner

Finance

(BPF)

from

Barclays

International

in

Q220.

Barclaycard

Consumer

UK

income

decreased

24%

to

£1,519m

as

reduced

borrowing

and

spend

levels

by

customers

resulted

in

a

lower

level

of

interest

earning

lending

(IEL)

balances,

as

well

as

lower

debt

sales.

Business

Banking

income

decreased

3%

to

£1,306m

due

to

deposit

margin

compression

from

lower

interest

rates,

lower

transactional

fee

volumes

as

a

result

of

COVID-19

and

support

actions,

partially

offset

by

lending

and

deposit

balance

growth

from

continued

support

for

SMEs

through

£11.0bn

of

BBLS

and

CBILS

loans.

Credit

impairment

charges

increased

to

£1,467m

(2019:

£712m)

due

to

the

deterioration

in

economic

outlook

driven

by

the

COVID-19

pandemic.

The

current

year

charge

is

broadly

driven

by

£847m

of

non-default

provision

for

expected

future

customer

and

client

stress.

As

at

31

December

2020,

30

and

90

day

arrears

rates

in

UK

cards

were

1.7%

(Q419:

1.7%)

and

0.8%

(Q419:

0.8%)

respectively.

Operating

expenses

increased

7%

to

£4,320m

reflecting

investment

spend

including

structural

cost

actions,

higher

servicing

and

financial

assistance

costs,

and

the

transfer

of

BPF,

partially

offset

by

efficiency

savings.

Loans

and

advances

to

customers

at

amortised

cost

increased

6%

to

£205.4bn

predominantly

from

continued

support

for

SMEs

through

£11.0bn

of

BBLS

and

CBILS

lending,

£5.1bn

of

mortgage

growth

following

a

strong

flow

of

new

applications

as

well

as

strong

customer

retention

and

the

£2.4bn

transfer

of

BPF,

partially

offset

by

£6.6bn

lower

unsecured

lending

balances.

Customer

deposits

at

amortised

cost

increased

17%

to

£240.5bn

reflecting

an

increase

of

£20.5bn

and

£14.4bn

in

Personal

Banking

and

Business

Banking

respectively,

further

strengthening

the

liquidity

position

and

contributing

to

a

loan:

deposit

ratio

of

89%

(2019:

96%).

RWAs

decreased

to

£73.7bn

(December

2019:

£74.9bn)

driven

by

lower

unsecured

lending

balances,

partially

offset

by

growth

in

mortgages

and

the

transfer

of

BPF.

Please

refer

to

the

Financial

review

section

in

the

Annual

Report

on

Form

20-F

2019

for

a

comparative

discussion

of

2019

financial

results

compared

to

2018.

Financial

review

Analysis

of

results

by

business

193

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Barclays

International

2020

2019

2018

£m

Income

statement

information

Net

interest

income

3,282

3,941

3,815

Net

trading

income

6,920

4,199

4,450

Net

fee,

commission

and

other

income

5,719

6,535

5,761

Total

income

15,921

14,675

14,026

Credit

impairment

charges

(3,280)

(1,173)

(658)

Net

operating

income

12,641

13,502

13,368

Operating

costs

(8,765)

(9,163)

(9,324)

UK

bank

levy

(240)

(174)

(210)

Operating

expenses

(9,005)

(9,337)

(9,534)

Litigation

and

conduct

(48)

(116)

(127)

Total

operating

expenses

(9,053)

(9,453)

(9,661)

Other

net

income

28

69

68

Profit

before

tax

3,616

4,118

3,775

Attributable

profit

2,220

2,816

2,599

Balance

sheet

information

Loans

and

advances

at

amortised

cost

£122.7bn

£132.8bn

£127.2bn

Trading

portfolio

assets

£127.7bn

£113.3bn

£104.0bn

Derivative

financial

instrument

assets

£301.8bn

£228.9bn

£222.1bn

Financial

assets

at

fair

value

through

the

income

statement

£170.7bn

£128.4bn

£144.7bn

Cash

collateral

and

settlement

balances

£97.5bn

£79.4bn

£74.3bn

Other

assets

£221.4bn

£178.6bn

£189.8bn

Total

assets

£1,041.8bn

£861.4bn

£862.1bn

Deposits

at

amortised

cost

£240.5bn

£210.0bn

£197.2bn

Derivative

financial

instrument

liabilities

£300.4bn

£228.9bn

£219.6bn

Loan:

deposit

ratio

51%

63%

65%

Risk

weighted

assets

£222.3bn

£209.2bn

£210.7bn

Key

facts

Number

of

employees

(full

time

equivalent)

10,800

11,200

12,400

Performance

measures

Return

on

average

allocated

equity

6.9%

8.7%

8.1%

Return

on

average

allocated

tangible

equity

7.1%

9.0%

8.4%

Average

allocated

equity

£32.1bn

£32.2bn

£32.3bn

Average

allocated

tangible

equity

£31.5bn

£31.2bn

£31.0bn

Cost:

income

ratio

57%

64%

69%

Loan

loss

rate

(bps)

257

86

50

Net

interest

margin

3.64%

4.07%

4.11%

Performance

measures

excluding

litigation

and

conduct

a

Profit

before

tax

3,664

4,234

3,902

Attributable

profit

2,258

2,906

2,705

Return

on

average

allocated

tangible

equity

7.2%

9.3%

8.7%

Cost:

income

ratio

57%

64%

68%

Note

a

Refer

to

the

Non

-IFRS

performance

measures

section

for

further

information

and

calculations

of

performance

measures

excluding

litigation

and

conduct

.

Financial

review

Analysis

of

results

by

business

194

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Analysis

of

Barclays

International

2020

2019

2018

Corporate

and

Investment

Bank

£m

Income

statement

information

FICC

5,138

3,364

2,863

Equities

2,471

1,887

2,037

Markets

7,609

5,251

4,900

Advisory

561

776

708

Equity

capital

markets

473

329

300

Debt

capital

markets

1,697

1,430

1,523

Banking

fees

2,731

2,535

2,531

Corporate

lending

590

765

878

Transaction

banking

1,546

1,680

1,627

Corporate

2,136

2,445

2,505

Other

a

-

(171)

Total

income

12,476

10,231

9,765

Credit

impairment

(charges)/releases

(1,559)

(157)

150

Net

operating

income

10,917

10,074

9,915

Operating

costs

(6,689)

(6,882)

(7,093)

UK

bank

levy

(226)

(156)

(188)

Operating

expenses

(6,915)

(7,038)

(7,281)

Litigation

and

conduct

(4)

(109)

(68)

Total

operating

expenses

(6,919)

(7,147)

(7,349)

Other

net

income

6

28

27

Profit

before

tax

4,004

2,955

2,593

Attributable

profit

2,554

1,980

1,781

Balance

sheet

information

Loans

and

advances

at

amortised

cost

£92.4bn

£92.0bn

£86.4bn

Trading

portfolio

assets

£127.5bn

£113.3bn

£104.0bn

Derivative

financial

instrument

assets

£301.7bn

£228.8bn

£222.1bn

Financial

assets

at

fair

value

through

the

income

statement

£170.4bn

£127.7bn

£144.2bn

Cash

collateral

and

settlement

balances

£96.7bn

£78.5bn

£73.4bn

Other

assets

£194.9bn

£155.3bn

£160.4bn

Total

assets

£983.6bn

£795.6bn

£790.5bn

Deposits

at

amortised

cost

£175.2bn

£146.2bn

£136.3bn

Derivative

financial

instrument

liabilities

£300.3bn

£228.9bn

£219.6bn

Risk

weighted

assets

£192.2bn

£171.5bn

£170.9bn

Performance

measures

Return

on

average

allocated

equity

9.4%

7.6%

6.8%

Return

on

average

allocated

tangible

equity

9.5%

7.6%

6.9%

Average

allocated

equity

£27.0bn

£25.9bn

£26.2bn

Average

allocated

tangible

equity

£27.0bn

£25.9bn

£26.0bn

Cost:

income

ratio

55%

70%

75%

Performance

measures

excluding

litigation

and

conduct

b

Profit

before

tax

4,008

3,064

2,661

Attributable

profit

2,556

2,064

1,843

Return

on

average

allocated

tangible

equity

9.5%

8.0%

7.1%

Cost:

income

ratio

55%

69%

75%

Notes

a

From

2019,

treasury

items

previously

included

in

Other

have

been

allocated

to

businesses.

b

Refer

to

the

non-IFRS

performance

measures

section

for

further

information

and

calculations

of

performance

measures

excluding

litigation

and

conduct

.

Financial

review

Analysis

of

results

by

business

195

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Analysis

of

Barclays

International

2020

2019

2018

Consumer,

Cards

and

Payments

£m

Income

statement

information

Net

interest

income

2,198

2,822

2,731

Net

fee,

commission,

trading

and

other

income

1,247

1,622

1,530

Total

income

3,445

4,444

4,261

Credit

impairment

charges

(1,721)

(1,016)

(808)

Net

operating

income

1,724

3,428

3,453

Operating

costs

(2,076)

(2,281)

(2,231)

UK

bank

levy

(14)

(18)

(22)

Operating

expenses

(2,090)

(2,299)

(2,253)

Litigation

and

conduct

(44)

(7)

(59)

Total

operating

expenses

(2,134)

(2,306)

(2,312)

Other

net

income

22

41

(Loss)/profit

before

tax

(388)

1,163

1,182

Attributable

(loss)/profit

(334)

836

818

Balance

sheet

information

Loans

and

advances

at

amortised

cost

£30.3bn

£40.8bn

Total

assets

£58.2bn

£65.8bn

£71.6bn

Deposits

at

amortised

cost

£65.3bn

£63.8bn

£60.9bn

Risk

weighted

assets

£30.1bn

£37.7bn

£39.8bn

Key

facts

30

day

arrears

rates

-

Barclaycard

US

2.5%

2.7%

US

cards

customer

FICO

score

distribution

<660

13%

14%

>660

87%

86%

Total

number

of

Barclaycard

payments

clients

c.365,000

c.376,000

c.374,000

Value

of

payments

processed

a

£274bn

£354bn

£344bn

Performance

measures

Return

on

average

allocated

equity

(6.6%)

13.3%

13.5%

Return

on

average

allocated

tangible

equity

(7.5%)

15.8%

16.5%

Average

allocated

equity

£5.1bn

£6.3bn

£6.1bn

Average

allocated

tangible

equity

£4.5bn

£5.3bn

£5.0bn

Cost:

income

ratio

62%

52%

54%

Loan

loss

rate

(bps)

517

234

185

Performance

measures

excluding

litigation

and

conduct

b

(Loss)/profit

before

tax

(344)

1,170

1,241

Attributable

(loss)/profit

(298)

842

862

Return

on

average

allocated

tangible

equity

(6.7%)

15.9%

17.3%

Cost:

income

ratio

61%

52%

53%

Notes

a

Includes

£268bn

(2019:

£272bn;

2018:

£268bn)

of

merchant

acquiring

payments

.

b

Refer

to

the

Non

-IFRS

performance

measures

section

for

further

information

and

calculations

of

performance

measures

excluding

litigation

and

conduct

.

Financial

review

Analysis

of

results

by

business

196

Barclays

PLC

2020

Annual

Report

on

Form

20-F

2020

compared

to

2019

Profit

before

tax

was

£3,616m.

RoE

was

6.9%

(2019:

8.7%),

CIB

RoE

was

9.4%

(2019:

7.6%)

and

CC&P

RoE

was

(6.6)%

(2019:

13.3%).

Profit

before

tax,

excluding

litigation

and

conduct,

decreased

13%

to

£3,664m

with

a

RoTE

of

7.2%

(2019:

9.3%),

reflecting

a

RoTE

of

9.5%

(2019:

8.0%)

in

CIB

and

(6.7)%

(2019:

15.9%)

in

CC&P.

Total

income

increased

to

£15,921m

(2019:

£14,675m).

CIB

income

increased

22%

to

£12,476m

driven

by

Markets

and

Banking

which

both

had

their

best

ever

year

on

a

comparable

basis

a

.

Markets

income

increased

45%

to

£7,609m

reflecting

gains

in

market

share

as

well

as

an

increase

in

market

size

b

.

FICC

income

increased

53%

to

£5,138m

driven

by

strong

performances

in

macro

and

credit,

mainly

reflecting

wider

spreads.

Equities

income

increased

31%

to

£2,471m

driven

by

derivatives

and

cash

due

to

higher

levels

of

client

activity

and

volatility.

Banking

fees

income

increased

8%

to

£2,731m

as

a

strong

performance

in

equity

and

debt

capital

markets,

driven

by

market

size,

was

offset

by

lower

fee

income

in

advisory,

which

was

impacted

by

a

reduced

fee

pool

c

.

Within

Corporate,

Transaction

banking

income

decreased

8%

to

£1,546m

as

deposit

balance

growth

was

more

than

offset

by

margin

compression.

Corporate

lending

income

decreased

by

23%

to

£590m

reflecting

c.

£210m

of

losses

on

the

mark

to

market

of

lending

and

positions,

and

the

carry

costs

of

those

hedges.

CC&P

income

decreased

22%

to

£3,445m

reflecting

lower

cards

balances,

margin

compression

and

reduced

payments

activity,

which

were

impacted

by

the

COVID-19

pandemic,

and

the

transfer

of

BPF

to

Barclays

UK

in

Q220.

Q220

included

a

c.£100m

valuation

loss

on

Barclays’

preference

shares

in

Visa

Inc.

resulting

from

the

impact

of

the

Supreme

Court

ruling

concerning

charges

paid

by

merchants.

Credit

impairment

charges

increased

to

£3,280m

(2019:

£1,173m).

CIB

credit

impairment

charges

increased

to

£1,559m

(2019:

£157m)

due

to

the

deterioration

in

economic

outlook

driven

by

the

COVID-19

pandemic.

The

current

year

charge

is

broadly

driven

by

£711m

of

non-default

provision

for

future

expected

customer

and

client

stress

and

c.£800m

of

single

name

wholesale

loan

charges.

CC&P

credit

impairment

charges

increased

to

£1,721m

(2019:

£1,016m)

due

to

the

deterioration

in

economic

outlook

driven

by

the

COVID-19

pandemic.

The

current

year

charge

is

broadly

driven

by

£752m

of

non-default

provisions

for

future

expected

customer

and

client

stress.

As

at

31

December

2020,

30

and

90

day

arrears

in

US

cards

were

2.5%

(Q419:

2.7%)

and

1.4%

(Q419:

1.4%)

respectively.

Operating

expenses

decreased

4%

to

£9,005m.

CIB

operating

expenses

decreased

2%

to

£6,915m

due

to

cost

efficiencies

and

discipline

in

the

current

environment

partially

offset

by

a

higher

bank

levy

charge

mainly

due

to

the

non-recurrence

of

prior

year

adjustments.

CC&P

operating

expenses

decreased

9%

to

£2,090m

reflecting

cost

efficiencies,

lower

marketing

spend

due

to

the

impacts

of

the

COVID-19

pandemic

and

transfer

of

BPF.

Loans

and

advances

at

amortised

cost

decreased

£10.1bn

to

£122.7bn

due

to

lower

unsecured

lending

balances

in

CC&P.

Trading

portfolio

assets

increased

£14.4bn

to

£127.7bn

due

to

increased

client

activity.

Derivative

financial

instruments

assets

increased

£72.9bn

and

liabilities

increased

£71.5bn

to

£301.8bn

and

£300.4bn

respectively

driven

by

a

decrease

in

major

interest

rate

curves

and

increased

client

activity.

Financial

assets

at

fair

value

through

the

income

statement

increased

£42.3bn

to

£170.7bn

driven

by

reverse

repurchase

agreements

and

similar

secured

lending.

Cash

collateral

and

settlements

increased

£18.1bn

to

£97.5bn

predominantly

due

to

increased

activity.

Other

assets

increased

£42.8bn

to

£221.4bn

due

to

an

increase

in

cash

at

central

banks

and

securities

within

the

liquidity

pool.

Deposits

at

amortised

cost

increased

£30.5bn

to

£240.5bn

due

to

CIB

clients

increasing

liquidity.

RWAs

increased

to

£222.3bn

(December

2019:

£209.2bn)

primarily

due

to

increased

market

volatility,

client

activity

and

a

reduction

in

credit

quality

within

CIB,

partially

offset

by

lower

CC&P

balances.

Please

refer

to

the

Financial

review

section

in

the

Annual

Report

on

Form

20-F

2019

for

a

comparative

discussion

of

2019

financial

results

compared

to

2018.

Notes

a

Period

covering

Q114

–

Q420.

Pre

2014

financials

were

not

restated

following

re-

segmentation

in

Q116.

b

Data

source:

Coalition

Greenwich,

Preliminary

FY20

Competitor

Analysis.

Market

share

represents

Barclays

share

of

the

Global

Industry

Revenue

Pool.

Analysis

is

based

on

Barclays

internal

business

structure

and

internal

revenues

c

Data

source:

Dealogic

for

the

period

covering

1

January

to

31

December

2020.

Financial

review

Analysis

of

results

by

business

197

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Head

Office

2020

2019

2018

£m

Income

statement

information

Net

interest

income

(393)

(422)

(781)

Net

fee,

commission

and

other

income

(109)

26

508

Total

income

(502)

(396)

(273)

Credit

impairment

(charges)/releases

(91)

(27)

16

Net

operating

expenses

(593)

(423)

(257)

Operating

costs

(399)

(200)

(228)

UK

bank

levy

(9)

(11)

(13)

Operating

expenses

(408)

(211)

(241)

GMP

charge

-

(140)

Litigation

and

conduct

(73)

(151)

(1,597)

Total

operating

expenses

(481)

(362)

(1,978)

Other

net

(expenses)/income

(23)

2

(2)

Loss

before

tax

(1,097)

(783)

(2,237)

Attributable

loss

(1,019)

(636)

(2,200)

Balance

sheet

information

Total

assets

£18.6bn

£21.0bn

£21.5bn

Risk

weighted

assets

£10.2bn

£11.0bn

£26.0bn

Key

facts

Number

of

employees

(full

time

equivalent)

50,900

48,200

48,500

Performance

measures

Average

allocated

equity

£10.6bn

£8.5bn

£6.2bn

Average

allocated

tangible

equity

£6.7bn

£5.1bn

£3.1bn

Performance

measures

excluding

litigation

and

conduct

a

Loss

before

tax

(1,024)

(632)

(640)

Attributable

loss

(963)

(525)

(642)

Note

a

Refer

to

the

Non

-IFRS

performance

measures

section

for

further

information

and

calculations

of

performance

measures

excluding

litigation

and

conduct

.

2020

compared

to

2019

Loss

before

tax

was

£1,097m

(2019:

£783m).

Loss

before

tax,

excluding

litigation

and

conduct,

was

£1,024m

(2019:

£632m).

Total

income

was

an

expense

of

£502m

(2019:

£396m),

which

reflected

treasury

items

and

hedge

accounting,

mark-to-market

losses

on

legacy

investments

and

funding

costs

on

legacy

capital

instruments,

including

£85m

from

repurchases

of

some

of

the

Barclays

Bank

PLC

7.625%

Contingent

Capital

Notes.

This

was

partially

offset

by

the

recognition

of

dividends

on

Barclays’

stake

in

Absa

Group

Limited.

Credit

impairment

increased

to

£91m

(2019:

£27m)

due

to

the

deterioration

in

economic

outlook

driven

by

the

COVID-19

pandemic.

The

current

year

charge

is

broadly

driven

by

provision

for

future

expected

customer

stress

in

the

Italian

home

loan

portfolio.

Operating

expenses

were

£408m

(2019:

£211m),

which

included

c.£150m

of

cost

actions,

principally

the

discontinued

use

of

certain

software

assets

and

£95m

of

charitable

donations

from

Barclays’

COVID-19

Community

Aid

Package.

Other

net

expenses

were

£23m

(2019:

income

of

£2m),

which

included

a

fair

value

loss

on

an

investment

in

an

associate.

RWAs

decreased

to

£10.2bn

(December

2019:

£11.0bn)

driven

by

the

reduction

in

value

of

Barclays’

stake

in

Absa

Group

Limited.

Please

refer

to

the

Financial

review

section

in

the

Annual

Report

on

Form

20-F

2019

for

a

comparative

discussion

of

2019

financial

results

compared

to

2018.

Financial

review

Non-IFRS

performance

measures

198

Barclays

PLC

2020

Annual

Report

on

Form

20-F

The

Group’s

management

believes

that

the

non-IFRS

performance

measures

included

in

this

document

provide

valuable

information

to

the

readers

of

the

financial

statements

as

they

enable

the

reader

to

identify

a

more

consistent

basis

for

comparing

the

businesses’

performance

between

financial

periods,

and

provide

more

detail

concerning

the

elements

of

performance

which

the

managers

of

these

businesses

are

most

directly

able

to

influence

or

are

relevant

for

an

assessment

of

the

Group.

They

also

reflect

an

important

aspect

of

the

way

in

which

operating

targets

are

defined

and

performance

is

monitored

by

management.

However,

any

non-IFRS

performance

measures

in

this

document

are

not

a

substitute

for

IFRS

measures

and

readers

should

consider

the

IFRS

measures

as

well.

Non-IFRS

performance

measures

glossary

Measure

Definition

Loan:

deposit

ratio

Loans

and

advances

at

amortised

cost

divided

by

deposits

at

amortised

cost.

The

components

of

the

calculation

have

been

included

on

page

154.

Period

end

allocated

tangible

equity

Allocated

tangible

equity

is

calculated

as

13.0%

(2019:

13.0%)

of

RWAs

for

each

business,

adjusted

for

capital

deductions,

excluding

goodwill

and

intangible

assets,

reflecting

the

assumptions

the

Group

uses

for

capital

planning

purposes.

Head

Office

allocated

tangible

equity

represents

the

difference

between

the

Group’s

tangible

shareholders’

equity

and

the

amounts

allocated

to

businesses.

Average

tangible

shareholders’

equity

Calculated

as

the

average

of

the

period

end

tangible

equity

and

the

current

month’s

period

end

tangible

equity.

The

average

tangible

shareholders’

equity

for

the

period

is

the

average

of

the

monthly

averages

within

that

period.

Average

allocated

tangible

equity

Calculated

as

the

average

of

the

period

end

allocated

tangible

equity

and

the

current

month’s

period

end

allocated

tangible

equity.

The

average

allocated

tangible

equity

for

the

period

is

the

average

of

the

monthly

averages

within

that

period.

Return

on

average

tangible

shareholders’

equity

Statutory

profit

after

tax

attributable

to

ordinary

equity

holders

of

the

parent,

as

a

proportion

of

average

shareholders’

equity

excluding

non-controlling

interests

and

other

equity

instruments

adjusted

for

the

deduction

of

intangible

assets

and

goodwill.

The

components

of

the

calculation

have

been

included

on

pages

201.

Return

on

average

allocated

tangible

equity

Statutory

profit

after

tax

attributable

to

ordinary

equity

holders

of

the

parent,

as

a

proportion

of

average

allocated

tangible

equity.

The

components

of

the

calculation

have

been

included

on

page

200.

Cost:

income

ratio

Total

operating

expenses

divided

by

total

income.

Loan

loss

rate

Quoted

in

basis

points

and

represents

total

impairment

charges

divided

by

gross

loans

and

advances

held

at

amortised

cost

at

the

balance

sheet

date.

The

components

of

the

calculation

have

been

included

on

page

114.

Net

interest

margin

Net

interest

income

divided

by

the

sum

of

average

customer

assets.

The

components

of

the

calculation

have

been

included

on

page

199.

Tangible

net

asset

value

per

share

Calculated

by

dividing

shareholders’

equity,

excluding

non-controlling

interests

and

other

equity

instruments,

less

goodwill

and

intangible

assets,

by

the

number

of

issued

ordinary

shares.

The

components

of

the

calculation

have

been

included

on

page

205.

Performance

measures

excluding

litigation

and

conduct

Calculated

by

excluding

litigation

and

conduct

charges

from

performance

measures.

The

components

of

the

calculations

have

been

included

on

pages

202

to

204.

Pre-provision

profits

Calculated

by

excluding

credit

impairment

charges

from

profit

before

tax.

The

components

of

the

calculation

have

been

included

on

pages

202

to

204.

Pre-provision

profits

excluding

litigation

and

conduct

Calculated

by

excluding

credit

impairment

charges,

and

litigation

and

conduct

charges

from

profit

before

tax.

The

components

of

the

calculation

have

been

included

on

pages

202

to

204.

Financial

review

Non-IFRS

performance

measures

199

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Margins

analysis

2020

2019

Net

interest

income

Average

customer

assets

Net

interest

margin

Net

interest

income

Average

customer

assets

Net

interest

margin

For

the

year

ended

31

December

£m

%

£m

%

Barclays

UK

5,234

200,317

2.61

5,888

190,849

3.09

Barclays

International

a,b

3,382

92,909

3.64

4,021

98,824

4.07

Total

Barclays

UK

and

Barclays

International

8,616

293,226

2.94

9,909

289,673

3.42

Other

c

(494)

(502)

Total

Barclays

Group

8,122

9,407

Notes

a

Barclays

International

margins

include

IEL

balances

within

the

investment

banking

business.

b

Barclays

has

amended

the

presentation

of

the

premium

paid

for

purchased

financial

guarantees

which

are

embedded

in

notes

it

issues

directly

to

the

market.

From

Q420

onwards,

the

full

note

coupon

is

presented

as

interest

expense

within

net

interest

income.

The

financial

guarantee

element

of

the

coupon,

for

these

notes,

had

previously

been

recognised

in

net

investment

income.

The

reclassification

of

£99m

in

2020

has

caused

a

reduction

in

the

2020

Barclays

International

and

Barclays

Group

net

interest

margins

of

0.11%

and

0.03%

respectively.

Had

the

equivalent

2019

expenses

been

recognised

in

net

interest

income,

the

Barclays

International

and

Barclays

Group

net

interest

margins

would

have

been

4.04%

and

3.41%

respectively.

c

Other

includes

Head

Office

and

non-lending

banking

businesses

not

included

in

Barclays

International

margins.

The

Group

net

interest

margin

decreased

48bps

to

2.94%.

Barclays

UK

net

interest

margin

decreased

48bps

to

2.61%

reflecting

the

impact

of

lower

UK

interest

rates,

COVID-19

customer

support

actions,

as

well

as

the

mix

impact

of

strong

mortgage

growth

and

lower

unsecured

lending

balances.

Barclays

International

net

interest

margin

decreased

43bps

to

3.64%

mainly

reflecting

lower

cards

balances.

The

Group

combined

product

and

equity

structural

hedge

notional

as

at

31

December

2020

was

£188bn,

with

an

average

duration

of

2.5

to

3

years.

Group

net

interest

income

includes

gross

structural

hedge

contributions

of

£1.7bn

(2019:

£1.8bn)

and

net

structural

hedge

contributions

of

£1.2bn

(2019:

£0.5bn).

Gross

structural

hedge

contributions

represent

the

absolute

level

of

interest

earned

from

the

fixed

receipts

on

the

basket

of

swaps

in

the

structural

hedge,

while

the

net

structural

hedge

contributions

represent

the

net

interest

earned

on

the

difference

between

the

structural

hedge

rate

and

prevailing

floating

rates.

Financial

review

Non-IFRS

performance

measures

200

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Returns

Return

on

average

tangible

equity

is

calculated

as

profit

for

the

period

attributable

to

ordinary

equity

holders

of

the

parent

as

a

proportion

of

average

tangible

equity

for

the

period,

excluding

non-controlling

and

other

equity

interests

for

businesses.

Allocated

tangible

equity

has

been

calculated

as

13.0%

(2019:

13.0%)

of

RWAs

for

each

business,

adjusted

for

capital

deductions,

excluding

goodwill

and

intangible

assets,

reflecting

the

assumptions

the

Group

uses

for

capital

planning

purposes.

Head

Office

average

allocated

tangible

equity

represents

the

difference

between

the

Group’s

average

tangible

shareholders’

equity

and

the

amounts

allocated

to

businesses.

Profit/(loss)

attributable

to

ordinary

equity

holders

of

the

parent

Average

tangible

equity

Return

on

average

tangible

equity

£m

£bn

%

For

the

year

ended

31

December

2020

Barclays

UK

325

10.1

3.2

Corporate

and

Investment

Bank

2,554

27.0

9.5

Consumer,

Cards

and

Payments

(334)

4.5

(7.5)

Barclays

International

2,220

31.5

7.1

Head

Office

(1,019)

6.7

n/m

Barclays

Group

1,526

48.3

3.2

For

the

year

ended

31

December

2019

Barclays

UK

281

10.3

2.7

Corporate

and

Investment

Bank

1,980

25.9

7.6

Consumer,

Cards

and

Payments

836

5.3

15.8

Barclays

International

2,816

31.2

9.0

Head

Office

(636)

5.1

n/m

Barclays

Group

2,461

46.6

5.3

For

the

year

ended

31

December

2018

Barclays

UK

1,198

10.0

11.9

Corporate

and

Investment

Bank

1,781

26.0

6.9

Consumer,

Cards

and

Payments

818

5.0

16.5

Barclays

International

2,599

31.0

8.4

Head

Office

(2,200)

3.1

n/m

Barclays

Group

1,597

44.1

3.6

Financial

review

Non-IFRS

performance

measures

201

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Profit/(loss)

attributable

to

ordinary

equity

holders

of

the

parent

Average

equity

Return

on

average

equity

£m

£bn

%

For

the

year

ended

31

December

2020

Barclays

UK

325

13.7

2.4

Corporate

and

Investment

Bank

2,554

27.0

9.4

Consumer,

Cards

and

Payments

(334)

5.1

(6.6)

Barclays

International

2,220

32.1

6.9

Head

Office

(1,019)

10.6

n/m

Barclays

Group

1,526

56.4

2.7

For

the

year

ended

31

December

2019

Barclays

UK

281

13.9

2.0

Corporate

and

Investment

Bank

1,980

25.9

7.6

Consumer,

Cards

and

Payments

836

6.3

13.3

Barclays

International

2,816

32.2

8.7

Head

Office

(636)

8.5

n/m

Barclays

Group

2,461

54.6

4.5

For

the

year

ended

31

December

2018

Barclays

UK

1,198

13.6

8.8

Corporate

and

Investment

Bank

1,781

26.2

6.8

Consumer,

Cards

and

Payments

818

6.1

13.5

Barclays

International

2,599

32.3

8.1

Head

Office

(2,200)

6.2

n/m

Barclays

Group

1,597

52.1

3.1

Financial

review

Non-IFRS

performance

measures

202

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Performance

measures

excluding

litigation

and

conduct

For

the

year

ended

31

December

2020

Barclays

UK

Corporate

and

Investment

Bank

Consumer,

Cards

and

Payments

Barclays

International

Head

Office

Barclays

Group

Cost:

income

ratio

£m

Total

operating

expenses

(4,352)

(6,919)

(2,134)

(9,053)

(481)

(13,886)

Impact

of

litigation

and

conduct

32

4

44

48

73

153

Operating

expenses

(4,320)

(6,915)

(2,090)

(9,005)

(408)

(13,733)

Total

income

6,347

12,476

3,445

15,921

(502)

21,766

Cost:

income

ratio

excluding

litigation

and

conduct

68%

55%

61%

57%

n/m

63%

Profit

before

tax

Profit/(loss)

before

tax

546

4,004

(388)

3,616

(1,097)

3,065

Impact

of

litigation

and

conduct

32

4

44

48

73

153

Profit/(loss)

before

tax

excluding

litigation

and

conduct

578

4,008

(344)

3,664

(1,024)

3,218

Profit

attributable

to

ordinary

equity

holders

of

the

parent

Attributable

profit/(loss)

325

2,554

(334)

2,220

(1,019)

1,526

Post-tax

impact

of

litigation

and

conduct

18

2

36

38

56

112

Profit/(loss)

attributable

to

ordinary

equity

holders

of

the

parent

excluding

litigation

and

conduct

343

2,556

(298)

2,258

(963)

1,638

Return

on

average

tangible

shareholders'

equity

Average

shareholders'

equity

£13.7bn

£27.0bn

£5.1bn

£32.1bn

£10.6bn

£56.4bn

Average

goodwill

and

intangibles

(£3.6bn)

-

(£0.6bn)

(£3.9bn)

(£8.1bn)

Average

tangible

shareholders'

equity

£10.1bn

£27.0bn

£4.5bn

£31.5bn

£6.7bn

£48.3bn

Return

on

average

tangible

shareholders'

equity

excluding

litigation

and

conduct

3.4%

9.5%

(6.7%)

7.2%

n/m

3.4%

Basic

earnings

per

ordinary

share

Basic

weighted

average

number

of

shares

17,300m

Basic

earnings

per

ordinary

share

excluding

litigation

and

conduct

9.5p

Pre-provision

profits

Profit

before

tax

excluding

credit

impairment

charges

and

litigation

and

conduct

£m

Profit

before

tax

3,065

Impact

of

credit

impairment

charges

4,838

Profit

before

tax

excluding

credit

impairment

charges

7,903

Impact

of

litigation

and

conduct

153

Profit

before

tax

excluding

credit

impairment

charges

and

litigation

and

conduct

8,056

Financial

review

Non-IFRS

performance

measures

203

Barclays

PLC

2020

Annual

Report

on

Form

20-F

For

the

year

ended

31

December

2019

Barclays

UK

Corporate

and

Investment

Bank

Consumer,

Cards

and

Payments

Barclays

International

Head

Office

Barclays

Group

Cost:

income

ratio

£m

Total

operating

expenses

(5,619)

(7,147)

(2,306)

(9,453)

(362)

(15,434)

Impact

of

litigation

and

conduct

1,582

109

7

116

151

1,849

Operating

expenses

(4,037)

(7,038)

(2,299)

(9,337)

(211)

(13,585)

Total

income

7,353

10,231

4,444

14,675

(396)

21,632

Cost:

income

ratio

excluding

litigation

and

conduct

55%

69%

52%

64%

n/m

63%

Profit

before

tax

Profit/(loss)

before

tax

1,022

2,955

1,163

4,118

(783)

4,357

Impact

of

litigation

and

conduct

1,582

109

7

116

151

1,849

Profit/(loss)

before

tax

excluding

litigation

and

conduct

2,604

3,064

1,170

4,234

(632)

6,206

Profit

attributable

to

ordinary

equity

holders

of

the

parent

Attributable

profit/(loss)

281

1,980

836

2,816

(636)

2,461

Post-tax

impact

of

litigation

and

conduct

1,532

84

6

90

111

1,733

Profit/(loss)

attributable

to

ordinary

equity

holders

of

the

parent

excluding

litigation

and

conduct

1,813

2,064

842

2,906

(525)

4,194

Return

on

average

tangible

shareholders'

equity

Average

shareholders'

equity

£13.9bn

£25.9bn

£6.3bn

£32.2bn

£8.5bn

£54.6bn

Average

goodwill

and

intangibles

(£3.6bn)

-

(£1.0bn)

(£3.4bn)

(£8.0bn)

Average

tangible

shareholders'

equity

£10.3bn

£25.9bn

£5.3bn

£31.2bn

£5.1bn

£46.6bn

Return

on

average

tangible

shareholders'

equity

excluding

litigation

and

conduct

17.5%

8.0%

15.9%

9.3%

n/m

9.0%

Basic

earnings

per

ordinary

share

Basic

weighted

average

number

of

shares

17,200m

Basic

earnings

per

ordinary

share

excluding

litigation

and

conduct

24.4p

Pre-provision

profits

Profit

before

tax

excluding

credit

impairment

charges

and

litigation

and

conduct

£m

Profit

before

tax

4,357

Impact

of

credit

impairment

charges

1,912

Profit

before

tax

excluding

credit

impairment

charges

6,269

Impact

of

litigation

and

conduct

1,849

Profit

before

tax

excluding

credit

impairment

charges

and

litigation

and

conduct

8,118

Financial

review

Non-IFRS

performance

measures

204

Barclays

PLC

2020

Annual

Report

on

Form

20-F

For

the

year

ended

31

December

2018

Barclays

UK

Corporate

and

Investment

Bank

Consumer,

Cards

and

Payments

Barclays

International

Head

Office

Barclays

Group

Cost:

income

ratio

£m

Total

operating

expenses

(4,604)

(7,349)

(2,312)

(9,661)

(1,978)

(16,243)

Impact

of

litigation

and

conduct

483

68

59

127

1,597

2,207

Operating

expenses

(4,121)

(7,281)

(2,253)

(9,534)

(381)

(14,036)

Total

income

7,383

9,765

4,261

14,026

(273)

21,136

Cost:

income

ratio

excluding

litigation

and

conduct

56%

75%

53%

68%

n/m

66%

Profit

before

tax

Profit/(loss)

before

tax

1,956

2,593

1,182

3,775

(2,237)

3,494

Impact

of

litigation

and

conduct

483

68

59

127

1,597

2,207

Profit/(loss)

before

tax

excluding

litigation

and

conduct

2,439

2,661

1,241

3,902

(640)

5,701

Profit

attributable

to

ordinary

equity

holders

of

the

parent

Attributable

profit/(loss)

1,198

1,781

818

2,599

(2,200)

1,597

Post-tax

impact

of

litigation

and

conduct

472

62

44

106

1,558

2,136

Profit/(loss)

attributable

to

ordinary

equity

holders

of

the

parent

excluding

litigation

and

conduct

1,670

1,843

862

2,705

(642)

3,733

Return

on

average

tangible

shareholders'

equity

Average

shareholders'

equity

£13.6bn

£26.2bn

£6.1bn

£32.3bn

£6.2bn

£52.1bn

Average

goodwill

and

intangibles

(£3.6bn)

(£0.2bn)

(£1.1bn)

(£1.3bn)

(£3.1bn)

(£8.0bn)

Average

tangible

shareholders'

equity

£10.0bn

£26.0bn

£5.0bn

£31.0bn

£3.1bn

£44.1bn

Return

on

average

tangible

shareholders'

equity

excluding

litigation

and

conduct

16.7%

7.1%

17.3%

8.7%

n/m

8.5%

Basic

earnings

per

ordinary

share

Basic

weighted

average

number

of

shares

17,075m

Basic

earnings

per

ordinary

share

excluding

litigation

and

conduct

21.9p

Pre-provision

profits

Profit

before

tax

excluding

credit

impairment

charges

and

litigation

and

conduct

£m

Profit

before

tax

3,494

Impact

of

credit

impairment

charges

1,468

Profit

before

tax

excluding

credit

impairment

charges

4,962

Impact

of

litigation

and

conduct

2,207

Profit

before

tax

excluding

credit

impairment

charges

and

litigation

and

conduct

7,169

Financial

review

Non-IFRS

performance

measures

205

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Tangible

net

asset

value

per

share

2020

2019

2018

£m

Total

equity

excluding

non-controlling

interests

65,797

64,429

62,556

Other

equity

instruments

(11,172)

(10,871)

(9,632)

Shareholders'

equity

attributable

to

ordinary

shareholders

of

the

parent

54,625

53,558

52,924

Goodwill

and

intangibles

(7,948)

(8,119)

(7,973)

Tangible

shareholders'

equity

attributable

to

ordinary

shareholders

of

the

parent

46,677

45,439

44,951

Shares

in

issue

17,359m

17,322m

17,133m

Net

asset

value

per

share

315p

309p

Tangible

net

asset

value

per

share

269p

262p

Financial

statements

206

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Detailed

analysis

of

our

financial

statements,

independently

audited

and

providing

in-depth

disclosure

on

the

financial

performance

of

the

Group.

Barclays

has

adopted

the

British

Bankers’

Association

(BBA)

Code

for

Financial

Reporting

Disclosure

as

adopted

by

UK

Finance

in

2017

and

has

prepared

the

2020

Annual

Report

in

compliance

with

the

BBA

Code.

Barclays

is

committed

to

continuously

reflect

the

objectives

of

reporting

set

out

in

the

BBA

Code.

Consolidated

financial

statements

Page

Note

◾

Report

of

Independent

Registered

Public

Accounting

Firm

207

n/a

◾

Consolidated

income

statement

211

n/a

◾

Consolidated

statement

of

comprehensive

income

212

n/a

◾

Consolidated

balance

sheet

213

n/a

◾

Consolidated

statement

of

changes

in

equity

214

n/a

◾

Consolidated

cash

flow

statement

216

n/a

◾

Parent

company

accounts

217

n/a

Notes

to

the

financial

statements

◾

Significant

accounting

policies

220

1

Financial

performance

and

returns

◾

Segmental

reporting

224

2

◾

Net

interest

income

226

3

◾

Net

fee

and

commission

income

226

4

◾

Net

trading

income

229

5

◾

Net

investment

income

229

6

◾

Credit

impairment

charges

230

7

◾

Operating

expenses

233

8

◾

Tax

234

9

◾

Earnings

per

share

237

10

◾

Dividends

on

ordinary

shares

237

11

Assets

and

liabilities

held

at

fair

value

◾

Trading

portfolio

238

12

◾

Financial

assets

at

fair

value

through

the

income

statement

238

13

◾

Derivative

financial

instruments

239

14

◾

Financial

assets

at

fair

value

through

other

comprehensive

income

248

15

◾

Financial

liabilities

designated

at

fair

value

248

16

◾

Fair

value

of

financial

instruments

249

17

◾

Offsetting

financial

assets

and

financial

liabilities

259

18

Assets

at

amortised

cost

and

other

◾

Loans

and

advances

and

deposits

at

amortised

cost

261

19

investments

◾

Property,

plant

and

equipment

261

20

◾

Leases

263

21

◾

Goodwill

and

intangible

assets

265

22

Accruals,

provisions,

contingent

◾

Other

liabilities

269

23

liabilities

and

legal

proceedings

◾

Provisions

269

24

◾

Contingent

liabilities

and

commitments

270

25

◾

Legal,

competition

and

regulatory

matters

271

26

Capital

instruments,

equity

and

◾

Subordinated

liabilities

275

27

reserves

◾

Ordinary

shares,

share

premium

and

other

equity

277

28

◾

Reserves

279

29

◾

Non-controlling

interests

279

30

Employee

benefits

◾

Staff

costs

281

31

◾

Share-based

payments

282

32

◾

Pensions

and

post-retirement

benefits

284

33

Scope

of

consolidation

◾

Principal

subsidiaries

289

34

◾

Structured

entities

290

35

◾

Investments

in

associates

and

joint

ventures

293

36

◾

Securitisations

293

37

◾

Assets

pledged,

collateral

received

and

assets

transferred

294

38

Other

disclosure

matters

◾

transactions

and

Directors’

remuneration

296

39

◾

Auditor’s

remuneration

298

40

◾

Interest

rate

benchmark

reform

299

41

◾

Barclays

PLC

(the

Parent

company)

301

42

Report

of

Independent

Registered

Public

Accounting

Firm

207

Barclays

PLC

2020

Annual

Report

on

Form

20-F

To

the

Shareholders

and

Board

of

Directors

Barclays

PLC:

Opinions

on

the

Consolidated

Financial

Statements

and

Internal

Control

Over

Financial

Reporting

We

have

audited

the

accompanying

consolidated

balance

sheets

of

Barclays

PLC

and

subsidiaries

(the

Company)

as

of

December

31,

2020

and

2019,

the

income

statements,

consolidated

statements

of

comprehensive

income,

consolidated

statements

of

changes

in

equity,

and

consolidated

cash

flows

statements

for

each

of

the

years

in

the

three-year

period

ended

December

31,

2020,

and

the

and

specific

disclosures

described

in

Note

1

of

the

consolidated

financial

statements

as

being

part

of

the

consolidated

financial

statements

(collectively,

the

consolidated

financial

statements).

We

also

have

audited

the

Company’s

internal

control

over

financial

reporting

as

of

December

31,

2020,

based

on

criteria

established

in

Internal

Control

–

Integrated

Framework

(2013)

issued

by

the

Committee

of

Sponsoring

Organizations

of

the

Treadway

Commission.

In

our

opinion,

the

consolidated

financial

statements

referred

to

above

present

fairly,

in

all

material

respects,

the

financial

position

of

the

Company

as

of

December

31,

2020

and

2019,

and

the

results

of

its

operations

and

its

cash

flows

for

each

of

the

years

in

the

three-year

period

ended

December

31,

2020,

in

conformity

with

International

Financial

Reporting

Standards,

as

issued

by

the

International

Accounting

Standards

Board.

Also

in

our

opinion,

the

Company

maintained,

in

all

material

respects,

effective

internal

control

over

financial

reporting

as

of

December

31,

2020

based

on

criteria

established

in

Internal

Control

–

Integrated

Framework

(2013)

issued

by

the

Committee

of

Sponsoring

Organizations

of

the

Treadway

Commission.

Basis

for

Opinions

The

Company’s

management

is

responsible

for

these

consolidated

financial

statements,

for

maintaining

effective

internal

control

over

financial

reporting,

and

for

its

assessment

of

the

effectiveness

of

internal

control

over

financial

reporting,

included

in

the

accompanying

Management’s

report

on

internal

control

over

financial

reporting

.

Our

responsibility

is

to

express

an

opinion

on

the

Company’s

consolidated

financial

statements

and

an

opinion

on

the

Company’s

internal

control

over

financial

reporting

based

on

our

audits.

We

are

a

public

accounting

firm

registered

with

the

Public

Company

Accounting

Oversight

Board

(United

States)

(PCAOB)

and

are

required

to

be

independent

with

respect

to

the

Company

in

accordance

with

the

U.S.

federal

securities

laws

and

the

applicable

rules

and

regulations

of

the

Securities

and

Exchange

Commission

and

the

PCAOB.

We

conducted

our

audits

in

accordance

with

the

standards

of

the

PCAOB.

Those

standards

require

that

we

plan

and

perform

the

audits

to

obtain

reasonable

assurance

about

whether

the

consolidated

financial

statements

are

free

of

material

misstatement,

whether

due

to

error

or

fraud,

and

whether

effective

internal

control

over

financial

reporting

was

maintained

in

all

material

respects.

Our

audits

of

the

consolidated

financial

statements

included

performing

procedures

to

assess

the

risks

of

material

misstatement

of

the

consolidated

financial

statements,

whether

due

to

error

or

fraud,

and

performing

procedures

that

respond

to

those

risks.

Such

procedures

included

examining,

on

a

test

basis,

evidence

regarding

the

amounts

and

disclosures

in

the

consolidated

financial

statements.

Our

audits

also

included

evaluating

the

accounting

principles

used

and

significant

estimates

made

by

management,

as

well

as

evaluating

the

overall

presentation

of

the

consolidated

financial

statements.

Our

audit

of

internal

control

over

financial

reporting

included

obtaining

an

understanding

of

internal

control

over

financial

reporting,

assessing

the

risk

that

a

material

weakness

exists,

and

testing

and

evaluating

the

design

and

operating

effectiveness

of

internal

control

based

on

the

assessed

risk.

Our

audits

also

included

performing

such

other

procedures

as

we

considered

necessary

in

the

circumstances.

We

believe

that

our

audits

provide

a

reasonable

basis

for

our

opinions.

Definition

and

Limitations

of

Internal

Control

Over

Financial

Reporting

A

company’s

internal

control

over

financial

reporting

is

a

process

designed

to

provide

reasonable

assurance

regarding

the

reliability

of

financial

reporting

and

the

preparation

of

financial

statements

for

external

purposes

in

accordance

with

generally

accepted

accounting

principles.

A

company’s

internal

control

over

financial

reporting

includes

those

policies

and

procedures

that

(1)

pertain

to

the

maintenance

of

records

that,

in

reasonable

detail,

accurately

and

fairly

reflect

the

transactions

and

dispositions

of

the

assets

of

the

company;

(2)

provide

reasonable

assurance

that

transactions

are

recorded

as

necessary

to

permit

preparation

of

financial

statements

in

accordance

with

generally

accepted

accounting

principles,

and

that

receipts

and

expenditures

of

the

company

are

being

made

only

in

accordance

with

authorizations

of

management

and

directors

of

the

company;

and

(3)

provide

reasonable

assurance

regarding

prevention

or

timely

detection

of

unauthorized

acquisition,

use,

or

disposition

of

the

company’s

assets

that

could

have

a

material

effect

on

the

financial

statements.

Because

of

its

inherent

limitations,

internal

control

over

financial

reporting

may

not

prevent

or

detect

misstatements.

Also,

projections

of

any

evaluation

of

effectiveness

to

future

periods

are

subject

to

the

risk

that

controls

may

become

inadequate

because

of

changes

in

conditions,

or

that

the

degree

of

compliance

with

the

policies

or

procedures

may

deteriorate.

Critical

Audit

Matters

The

critical

audit

matters

communicated

below

are

matters

arising

from

the

current

period

audit

of

the

consolidated

financial

statements

that

were

communicated

or

required

to

be

communicated

to

the

audit

committee

and

that:

(1)

relate

to

accounts

or

disclosures

that

are

material

to

the

consolidated

financial

statements

and

(2)

involved

our

especially

challenging,

subjective,

or

complex

judgments.

The

communication

of

critical

audit

matters

does

not

alter

in

any

way

our

opinion

on

the

consolidated

financial

statements,

taken

as

a

whole,

and

we

are

not,

by

communicating

the

critical

audit

matters

below,

providing

separate

opinions

on

the

critical

audit

matters

or

on

the

accounts

or

disclosures

to

which

they

relate.

Impairment

allowance

for

loans

and

advances

at

amortized

cost,

including

off-balance

sheet

elements

of

the

allowance

As

discussed

in

the

credit

risk

disclosures

on

pages

111

to

145,

the

Company’s

impairment

allowance

for

loans

and

advances,

including

off-

balance

sheet

elements

at

amortized

cost

was

£9.4bn

as

at

31

December

2020.

We

identified

the

assessment

of

impairment

allowance

for

loans

and

advances

at

amortized

cost,

including

off

-balance

sheet

elements

as

a

critical

audit

matter.

A

high

degree

of

audit

effort,

including

specialized

skills

and

knowledge,

was

required

because

it

involved

significant

measurement

uncertainty.

Specifically,

complex

and

subjective

auditor

judgement

was

required

to

assess

the

following:

◾

Model

estimations

–

Complex

and

subjective

auditor

judgement

was

applied

in

assessing

the

Company’s

modelled

estimations

of

Expected

Credit

Losses

(“ECL”)

due

to

the

inherently

judgmental

nature

of

the

underlying

models,

namely

the

IFRS

9

Probability

of

Default

(“PD”),

the

Loss

Given

Default

(“LGD”),

the

Probability

of

Survival

(“PS”)

and

the

Exposure

at

Default

(“EAD”).

The

IFRS

9

PD

and

revolving

PS

models

are

the

key

drivers

of

complexity

in

the

Company’s

calculation

of

impairment

allowance

for

loans

and

advances

at

amortized

cost,

including

off

-balance

sheet

elements

and

also

impact

the

staging

of

assets;

Report

of

Independent

Registered

Public

Accounting

Firm

208

Barclays

PLC

2020

Annual

Report

on

Form

20-F

◾

Economic

scenarios

–

Complex

and

subjective

auditor

judgement

was

applied

in

assessing

the

forward-looking

economic

scenarios

used

by

the

Company

and

the

probability

weightings

applied

to

them,

especially

when

considering

the

uncertain

economic

environment;

and,

◾

Qualitative

adjustments

–

Adjustments

to

the

model-driven

impairment

allowance

for

loans

and

advances

at

amortized

cost,

including

off-

balance

sheet

elements

are

raised

by

the

Company

to

address

known

model

limitations

or

emerging

trends

as

well

as

risks

not

captured

by

models.

These

adjustments

represent

approximately

14.8%

of

the

impairment

allowance

for

loans

and

advances

at

amortized

cost,

including

off-balance

sheet

elements.

Complex

and

subjective

auditor

judgement

was

applied

in

assessing

qualitative

adjustments

to

the

model-driven

impairment

allowance

due

to

the

inherent

estimation

uncertainty

associated

with

these

adjustments,

especially

in

relation

to

adjustments

introduced

to

respond

to

the

impact

of

economic

uncertainty.

In

addition,

auditor

judgment

was

required

to

evaluate

the

sufficiency

of

audit

evidence

obtained.

The

following

are

the

primary

procedures

we

performed

to

address

this

critical

audit

matter.

◾

We

evaluated

the

design

and

tested

the

operating

effectiveness

of

certain

internal

controls

over

the

Company’s

process

for

estimating

the

impairment

allowance

for

loans

and

advances

at

amortized

cost,

including

off

-balance

sheet

elements.

This

included

controls

relating

to

the

(1)

application

of

the

staging

criteria,

(2)

model

validation,

implementation

and

monitoring,

(3)

authorization

and

calculation

of

qualitative

adjustments

and

management

overlays,

and

(4)

selection

and

implementation

of

economic

variables

and

the

controls

over

the

economic

scenario

selection

and

probabilities.

◾

We

involved

credit

risk

modelling

professionals

with

specialized

skills

and

knowledge,

who

assisted

in

the

following:

o

evaluating

the

Company’s

impairment

methodologies

for

compliance

with

IFRS

(including

the

staging

criteria

used);

o

reperforming

and

inspecting

model

code

for

the

calculation

of

certain

components

of

the

ECL

model

(including

the

staging

criteria)

to

assess

its

consistency

with

the

Company’s

approved

staging

criteria

and

the

output

of

the

model;

o

evaluating

for

a

selection

of

models

which

were

changed

or

updated

during

the

year

as

to

whether

the

changes

(including

the

updated

model

code)

were

appropriate

by

assessing

the

updated

model

methodology

against

the

applicable

accounting

standard;

o

evaluating

the

model

output

for

a

selection

of

models

by

inspecting

the

corresponding

model

functionality

and

independently

implementing

the

model

by

rebuilding

the

model

code

and

comparing

our

independent

output

with

management’s

output;

and

o

assessing

and

reperforming,

for

a

selection

of

models,

the

reasonableness

of

the

model

predictions

by

comparing

them

against

actual

results

and

evaluating

the

resulting

differences.

◾

In

addition,

we

involved

economic

professionals

with

specialized

skills

and

knowledge,

who

assisted

in:

o

assessing

the

reasonableness

of

the

Company’s

methodology

for

determining

the

economic

scenarios

used

and

the

probability

weightings

applied

to

them;

o

assessing

key

economic

variables

which

included

comparing

samples

of

economic

variables

to

external

sources;

o

assessing

the

overall

reasonableness

of

the

economic

forecasts

by

comparing

the

Company’s

forecasts

to

our

own

modelled

forecasts;

and

o

assessing

the

reasonableness

of

the

Company’s

qualitative

adjustments

by

challenging

key

economic

assumptions

applied

in

their

calculation

based

on

external

sources.

We

evaluated

the

collective

results

of

the

procedures

performed

to

assess

the

sufficiency

of

the

audit

evidence

obtained

the

Company’s

impairment

allowance

for

loans

and

advances

at

amortized

cost,

including

off-balance

sheet

elements

of

the

allowance.

Valuation

of

certain

difficult-to-value

financial

instruments

recorded

at

fair

value

As

discussed

in

Note

17

to

the

Company’s

consolidated

financial

statements,

the

balance

of

financial

assets

and

liabilities

recorded

at

fair

value

as

at

December

31,

2020

was

£684.2bn

and

£597.9bn,

respectively.

Of

these

amounts,

Level

3

assets

(£15.0bn)

and

liabilities

(£6.6bn)

represented

2.2%

of

the

Company’s

financial

assets

carried

at

fair

value

and

1.0%

of

the

Company’s

financial

liabilities

carried

at

fair

value.

The

Company

has

Level

2

financial

assets

at

fair

value

of

£575.1bn

and

financial

liabilities

at

fair

value

of

£558.0bn.

Included

in

these

amounts

are

certain

difficult-to-value

fair

value

financial

instruments

for

which

the

Company

is

required

to

apply

valuation

techniques

which

often

involve

the

exercise

of

significant

judgement

and

the

use

of

assumptions

and

valuation

models.

We

identified

the

valuation

of

certain

difficult

-to-value

financial

instruments

recorded

at

fair

value

as

a

critical

audit

m

atter.

This

is

because

there

was

significant

measurement

uncertainty

associated

with

the

fair

value

estimates

of

these

instruments

and

subjective

auditor

judgment

was

required

to

evaluate

pricing

data

inputs,

valuation

models

and

fair

value

adjustments

(“FVA”),

including

portfolio-level

FVAs

credit

and

funding

(commonly

referred

to

as

“XVAs”).

The

following

are

the

primary

procedures

we

performed

to

address

this

critical

audit

matter:

◾

We

evaluated

the

design

and

tested

the

operating

effectiveness

of

certain

internal

controls

over

the

Company’s

process

to

measure

fair

value

of

these

portfolios.

This

included

controls

(1)

the

independent

price

verification

(‘IPV’)

of

certain

market

pricing

data

inputs,

(2)

the

determination

or

calculation

of

FVAs,

including

exit

adjustments

(to

mark

the

portfolio

to

bid

or

offer

prices),

model

shortcoming

reserves

to

address

model

limitations

and

XVAs

and

(3)

the

validation,

implementation

and

usage

of

valuation

models

including

assessment

of

the

impact

of

model

limitations

and

assumptions;

◾

For

a

selection

of

material

collateral

disputes

identified

through

management’s

control

we

challenged

management’s

valuation

where

significant

fair

value

differences

were

observable

through

comparison

with

the

market

participant’s

valuation

on

the

other

side

of

the

trade;

◾

For

a

subset

of

portfolios

that

are

subject

to

collateralization,

we

assessed

the

valuation

methodology,

and

in

certain

instances

for

trades

that

are

subject

to

collateral

disputes,

developed

an

independent

estimate

of

fair

value

for

those

trades

based

on

external

datasets.

◾

We

performed

a

retrospective

review

by

inspecting

significant

gains

and

losses

on

a

selection

of

new

trades,

trade

exits,

novations

and

restructurings

and

evaluated

whether

these

data

points

indicated

elements

of

fair

value

not

incorporated

in

the

current

valuation

methodologies;

Report

of

Independent

Registered

Public

Accounting

Firm

209

Barclays

PLC

2020

Annual

Report

on

Form

20-F

◾

We

inspected

movements

in

unobservable

inputs

throughout

the

period

to

assess

whether

gains

or

losses

generated

were

in

line

with

the

accounting

standards;

◾

We

involved

valuation

professionals

with

specialized

skills

and

knowledge

who

assisted

in

the

following:

o

assessing

the

conceptual

soundness

of

significant

models

and

methodologies

used

in

calculating

fair

values,

risk

exposures

and

in

calculating

FVAs;

and

o

developing

an

independent

estimate

of

fair

value

for

a

selection

of

trades

from

the

above

portfolios

and

challenging

the

Company

where

their

valuations

were

outside

our

tolerance.

Recoverability

of

goodwill

and

intangible

assets

As

discussed

in

Note

22

to

the

consolidated

financial

statements,

the

Company

had

goodwill

and

intangible

assets

with

a

carrying

value

of

£3.9bn

and

£4.1bn

respectively

at

31

December

2020.

The

Company

performs

impairment

testing

for

its

intangible

assets

with

indefinite

useful

lives

and

its

goodwill

acquired

in

business

combinations

at

least

on

an

annual

basis,

by

comparing

the

recoverable

amount

of

a

cash

generating

unit

(‘CGU’)

with

its

respective

carrying

amount.

The

methodology

for

the

determination

of

the

tangible

equity

of

the

individual

cash

generating

units

utilizes

a

capital

allocation

rate

that

reflects

the

relative

risk

profile

of

the

CGU.

The

CGU-specific

goodwill

and

intangible

assets

are

subsequently

added

to

the

CGU-specific

tangible

equity

to

arrive

at

the

carrying

value

subject

to

the

impairment

test.

The

recoverable

amount

is

based

on

the

value

in

use

(‘VIU’)

of

each

CGU,

as

determined

by

management's

discounted

estimated

future

cash

flows.

We

identified

the

recoverability

of

the

Company's

goodwill

and

intangible

assets

as

a

critical

audit

matter.

Subjective

and

complex

auditor

judgement

was

required

in

evaluating

the

underlying

significant

assumptions,

including

the

capital

allocation

rate

used

to

determine

the

carrying

value

of

the

CGU,

the

estimated

future

cash

flows,

which

have

been

forecasted

using

the

Group’s

Medium

Term

Plan

(‘MTP’)

and

include

adjustments

from

those

MTP

cash

flows

to

reflect

developments

in

macro-economic

conditions

and

business

developments,

and

the

discount

rate

and

the

terminal

growth

rate

used

to

extrapolate

future

cash

flows

beyond

the

period

covered

by

management’s

forecasts.

Minor

changes

to

those

assumptions

could

have

a

significant

effect

on

the

Company’s

assessment

of

the

carrying

amount

of

goodwill

and

intangible

assets.

In

addition,

specialized

skills

and

knowledge

were

required

in

assessing

the

reasonableness

of

the

discount

rate

used

and

the

methodology

over

the

determination

of

the

carrying

value

of

each

CGU

on

the

basis

of

its

capital

allocation,

as

well

as

management’s

calculation

of

VIU,

to

assess

their

compliance

with

the

requirements

of

the

accounting

standard.

The

following

are

the

primary

procedures

we

performed

to

address

this

critical

audit

matter.

◾

We

evaluated

the

design

and

tested

the

operating

effectiveness

of

certain

internal

controls

over

the

Company’s

methodology

and

process

to

estimate

the

VIU

of

each

CGU

and

capital

allocation

rate.

This

included

controls

over

application

of

the

impairment

methodology,

preparation

of

the

estimated

future

cash

flows,

and

review

of

the

significant

assumptions

in

determining

the

VIU.

◾

We

compared

certain

assumptions,

including

certain

estimated

future

cash

flows,

the

discount

rates

and

the

terminal

growth

rate

to

externally

derived

data

including

analyst

broker

reports,

peer

bank

data

and

projected

economic

growth.

◾

We

involved

valuations

professionals

with

specialized

skills

and

knowledge

who

assisted

in:

o

evaluating

the

reasonableness

of

the

discount

rate

used

by

independently

developing

discount

rate

ranges

using

external

data

sources

and

peer

bank

data;

and

o

assessing

whether

the

methodology

over

the

determination

of

the

carrying

value

of

each

CGU

on

the

basis

of

its

capital

allocation,

as

well

as

management’s

calculation

of

VIU

is

compliant

with

the

requirements

of

the

accounting

standard.

◾

We

performed

a

retrospective

review

by

comparing

the

MTP

from

to

actual

results

to

assess

the

Company’s

ability

to

accurately

prepare

forecasts.

Valuation

of

the

defined

benefit

pension

obligation

and

certain

difficult-to-value

pension

assets

in

respect

of

UK

Retirement

Fund

(‘UKRF’)

As

discussed

in

Note

33

to

the

consolidated

financial

statements,

the

Company

operates

defined

benefit

pension

plans

and

the

majority

of

the

balance

relates

to

the

UKRF.

The

total

fair

value

of

the

defined

benefit

pension

obligation

and

the

associated

assets

offsetting

these

obligations

as

of

31

December

2020

was

£33.2bn

and

£34.7bn,

respectively.

Of

these

amounts,

£32.1bn

of

the

obligation

and

£33.9bn

of

the

asset

are

UKRF.

The

determination

of

the

Company’s

defined

benefit

pension

asset

with

respect

to

these

plans

is

dependent

on

the

selection

of

certain

actuarial

assumptions,

including

the

discount

rate

used.

In

addition,

the

UKRF

is

invested

in

a

diverse

portfolio

which

includes

certain

difficult

-to-value

pension

plan

assets,

including

property

and

private

equity

investments.

We

identified

the

valuation

of

the

defined

benefit

pension

obligation

and

certain

difficult

-to-value

pension

assets

in

respect

of

UKRF

as

a

critical

audit

matter.

Subjective

and

complex

auditor

judgement,

including

specialized

skills

and

knowledge,

was

required

in

evaluating

the

discount

rates,

retail

price

index

(‘RPI’)

volatility

impact

on

pension

increases

and

mortality

assumptions

used,

as

well

as

the

methodology

used

by

Company

to

determine

these

assumptions,

as

small

changes

would

have

a

significant

impact

on

the

measurement

of

the

defined

benefit

pension

obligation.

In

addition,

specialized

skills

and

knowledge

were

required

in

assessing

the

valuation

of

certain

difficult

-to-value

pension

plan

assets,

specifically

property

and

private

equity

investments,

due

to

the

subjective

nature

of

judgements

required

of

management

and

the

measurement

uncertainty

associated

with

the

use

of

lagged

prices.

The

following

are

the

primary

procedures

we

performed

to

address

this

critical

audit

matter.

◾

We

evaluated

the

design

and

tested

the

operating

effectiveness

of

certain

internal

controls

over

the

Company’s

defined

benefit

pension

obligation

process.

This

included

controls

(1)

management’s

review

of

IAS19

assumptions

including

discount

rate,

RPI

volatility

impact

on

pension

increases

and

mortality

assumptions

as

well

as

the

methodology

used,

(2)

investment

controls

including

over

property

valuation

and

(3)

private

equity

retrospective

review

controls.

◾

We

involved

actuarial

professionals

with

specialized

skills

and

knowledge

who

assisted

in

an

independent

assessment

of

the

methodology

used,

as

well

as

the

following

for

the

discount

rate,

pension

increases,

and

mortality

rates

used

by

the

Company:

Report

of

Independent

Registered

Public

Accounting

Firm

210

Barclays

PLC

2020

Annual

Report

on

Form

20-F

o

assessing

the

appropriateness

of

the

Company’s

methodology

for

determining

the

assumptions

by

comparing

to

generally

accepted

actuarial

methods;

and

o

evaluating

the

reasonableness

of

selected

assumptions

against

publicly

available

benchmark

information.

◾

We

involved

property

professionals

with

specialized

skills

and

knowledge

who

assisted

in

the

following:

o

evaluating

the

fair

value

of

the

property

portfolio

by

analysing

the

year

on

year

movement;

and

o

assessing

the

movement

of

fair

value

within

the

property

portfolio

and

challenging

the

returns

per

the

Company’s

expert

for

a

selection

of

specific

properties

within

the

portfolio

on

the

basis

of

equivalent

yields

observed

in

the

applicable

property

market.

◾

For

a

selection

of

private

equity

interests,

we

performed

a

retrospective

review

by

comparing

the

Company’s

of

fair

value

of

the

net

asset

value

(‘NAV’)

to

the

NAVs

audited

by

third

parties

to

assess

the

Company’s

ability

to

accurately

estimate

fair

value.

◾

We

evaluated

the

reasonableness

of

the

Company’s

best

estimate

of

the

fair

value

of

its

private

equity

interests

by

developing

an

independent

estimate

of

market

movement

based

on

the

Company’s

specific

portfolio

and

its

associated

market

exposure

and

equivalent

indices.

/s/

KPMG

LLP

We

have

served

as

the

Company’s

auditor

since

2017.

London,

United

Kingdom

February

17,

2021

Consolidated

financial

statements

Consolidated

income

statement

211

Barclays

PLC

2020

Annual

Report

on

Form

20-F

2020

2019

2018

For

the

year

ended

31

December

Notes

£m

Interest

and

similar

income

3

11,892

15,456

14,541

Interest

and

similar

expense

3

(3,770)

(6,049)

(5,479)

Net

interest

income

8,122

9,407

9,062

Fee

and

commission

income

4

8,641

9,122

8,893

Fee

and

commission

expense

4

(2,070)

(2,362)

(2,084)

Net

fee

and

commission

income

6,571

6,760

6,809

Net

trading

income

5

7,029

4,235

4,566

Net

investment

income

6

13

1,131

585

Other

income

31

99

114

Total

income

21,766

21,632

21,136

Credit

impairment

charges

7

(4,838)

(1,912)

(1,468)

Net

operating

income

16,928

19,720

19,668

Staff

costs

31

(8,097)

(8,315)

(8,629)

Infrastructure

costs

8

(3,323)

(2,970)

(2,950)

Administration

and

general

expenses

8

(2,313)

(2,300)

(2,457)

Litigation

and

conduct

8

(153)

(1,849)

(2,207)

Operating

expenses

8

(13,886)

(15,434)

(16,243)

Share

of

post-tax

results

of

associates

and

joint

ventures

6

61

69

Profit

on

disposal

of

subsidiaries,

associates

and

joint

ventures

17

10

-

Profit

before

tax

3,065

4,357

3,494

Taxation

9

(604)

(1,003)

(911)

Profit

after

tax

2,461

3,354

2,583

Attributable

to:

Equity

holders

of

the

parent

1,526

2,461

1,597

Other

equity

instrument

holders

857

813

752

Total

equity

holders

of

the

parent

2,383

3,274

2,349

Non-controlling

interests

30

78

80

234

Profit

after

tax

2,461

3,354

2,583

Earnings

per

share

p

Basic

earnings

per

ordinary

share

10

8.8

14.3

9.4

Diluted

earnings

per

share

10

8.6

14.1

9.2

Consolidated

financial

statements

Consolidated

statement

of

comprehensive

income

212

Barclays

PLC

2020

Annual

Report

on

Form

20-F

2020

2019

2018

For

the

year

ended

31

December

£m

Profit

after

tax

2,461

3,354

2,583

Other

comprehensive

income/(loss)

that

may

be

recycled

to

profit

or

loss:

Currency

translation

reserve

Currency

translation

differences

a

(473)

(544)

834

Fair

value

through

other

comprehensive

income

reserve

movements

relating

to

debt

securities

Net

gains/(losses)

from

changes

in

fair

value

2,902

2,901

(553)

Net

(gains)/losses

transferred

to

net

profit

on

disposal

(295)

(502)

48

Net

losses

due

to

impairment

2

1

4

Net

(losses)/gains

due

to

fair

value

hedging

(2,000)

(2,172)

236

Other

movements

-

(5)

(26)

Tax

(155)

(57)

65

Cash

flow

hedging

reserve

Net

gains/(losses)

from

changes

in

fair

value

1,299

724

(344)

Net

gains

transferred

to

net

profit

(510)

(277)

(332)

Tax

(216)

(105)

175

Other

5

16

30

Other

comprehensive

income/(loss)

that

may

be

recycled

to

profit

or

loss

559

(20)

137

Other

comprehensive

income/(loss)

not

recycled

to

profit

or

loss:

Retirement

benefit

remeasurements

(80)

(280)

412

Fair

value

through

other

comprehensive

income

reserve

movements

relating

to

equity

instruments

(262)

(95)

(260)

Own

credit

(810)

(316)

77

Tax

198

150

(118)

Other

comprehensive

income/(loss)

not

recycled

to

profit

or

loss

(954)

(541)

111

Other

comprehensive

income/(loss)

for

the

year

(395)

(561)

248

Total

comprehensive

income

for

the

year

2,066

2,793

2,831

Attributable

to:

Equity

holders

of

the

parent

1,988

2,713

2,597

Non-controlling

interests

78

80

234

Total

comprehensive

income

for

the

year

2,066

2,793

2,831

Note

a

Includes

£17

m

gain

(2019:

£15m

gain

;

2018:

£41m

loss

)

on

recycling

of

currency

translation

differences.

Consolidated

financial

statements

Consolidated

balance

sheet

213

Barclays

PLC

2020

Annual

Report

on

Form

20-F

2020

2019

As

at

31

December

Notes

£m

Assets

Cash

and

balances

at

central

banks

191,127

150,258

Cash

collateral

and

settlement

balances

101,367

83,256

Loans

and

advances

at

amortised

cost

19

342,632

339,115

Reverse

repurchase

agreements

and

other

similar

secured

lending

9,031

3,379

Trading

portfolio

assets

12

127,950

114,195

Financial

assets

at

fair

value

through

the

income

statement

13

175,151

133,086

Derivative

financial

instruments

14

302,446

229,236

Financial

assets

at

fair

value

through

other

comprehensive

income

15

78,688

65,750

Investments

in

associates

and

joint

ventures

36

781

721

Goodwill

and

intangible

assets

22

7,948

8,119

Property,

plant

and

equipment

20

4,036

4,215

Current

tax

assets

477

412

Deferred

tax

assets

9

3,444

3,290

Retirement

benefit

assets

33

1,814

2,108

Other

assets

2,622

3,089

Total

assets

1,349,514

1,140,229

Liabilities

Deposits

at

amortised

cost

19

481,036

415,787

Cash

collateral

and

settlement

balances

85,423

67,341

Repurchase

agreements

and

other

similar

secured

borrowing

14,174

14,517

Debt

securities

in

issue

75,796

76,369

Subordinated

liabilities

27

16,341

18,156

Trading

portfolio

liabilities

12

47,405

36,916

Financial

liabilities

designated

at

fair

value

16

249,765

204,326

Derivative

financial

instruments

14

300,775

229,204

Current

tax

liabilities

645

313

Deferred

tax

liabilities

9

15

23

Retirement

benefit

liabilities

33

291

348

Other

liabilities

23

8,662

8,505

Provisions

24

2,304

2,764

Total

liabilities

1,282,632

1,074,569

Equity

Called

up

share

capital

and

share

premium

28

4,637

4,594

Other

equity

instruments

28

11,172

10,871

Other

reserves

29

4,461

4,760

Retained

earnings

45,527

44,204

Total

equity

excluding

non-controlling

interests

65,797

64,429

Non-controlling

interests

30

1,085

1,231

Total

equity

66,882

65,660

Total

liabilities

and

equity

1,349,514

1,140,229

The

Board

of

Directors

approved

the

financial

statements

on

pages

211

to

302

on

17

February

2021.

Nigel

Higgins

Group

Chairman

James

E

Staley

Group

Chief

Executive

Tushar

Morzaria

Group

Finance

Director

Consolidated

financial

statements

Consolidated

statement

of

changes

in

equity

214

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Called

up

share

capital

and

share

premium

a

Other

equity

instruments

a

Other

reserves

b

Retained

earnings

Total

equity

excluding

non-

controlling

interests

Non-

controlling

interests

Total

equity

£m

Balance

as

at

1

January

2020

4,594

10,871

4,760

44,204

64,429

1,231

65,660

Profit

after

tax

-

857

-

1,526

2,383

78

2,461

Currency

translation

movements

-

(473)

-

(473)

-

(473)

Fair

value

through

other

comprehensive

income

reserve

-

192

-

192

-

192

Cash

flow

hedges

-

573

-

573

-

573

Retirement

benefit

remeasurements

-

(111)

-

(111)

Own

credit

reserve

-

(581)

-

(581)

-

(581)

Other

-

5

-

5

Total

comprehensive

income

for

the

year

-

857

(289)

1,420

1,988

78

2,066

Employee

share

schemes

and

hedges

thereof

43

-

303

346

-

346

Issue

and

exchange

of

other

equity

instruments

-

311

-

(55)

256

(158)

98

Other

equity

instruments

coupons

paid

-

(857)

-

(857)

-

(857)

Increase

in

treasury

shares

-

(207)

-

(207)

-

(207)

Vesting

of

shares

under

employee

share

schemes

-

197

(347)

(150)

-

(150)

Dividends

paid

-

(79)

Other

reserve

movements

-

(10)

-

2

(8)

13

5

Balance

as

at

31

December

2020

4,637

11,172

4,461

45,527

65,797

1,085

66,882

Balance

as

at

1

January

2019

4,311

9,632

5,153

43,460

62,556

1,223

63,779

Profit

after

tax

-

813

-

2,461

3,274

80

3,354

Currency

translation

movements

-

(544)

-

(544)

-

(544)

Fair

value

through

other

comprehensive

income

reserve

-

71

-

71

-

71

Cash

flow

hedges

-

342

-

342

-

342

Retirement

benefit

remeasurements

-

(194)

-

(194)

Own

credit

reserve

-

(252)

-

(252)

-

(252)

Other

-

16

-

16

Total

comprehensive

income

for

the

year

-

813

(383)

2,283

2,713

80

2,793

Issue

of

new

ordinary

shares

182

-

182

-

182

Employee

share

schemes

101

-

478

579

-

579

Issue

and

exchange

of

other

equity

instruments

-

1,238

-

(406)

832

-

832

Other

equity

instruments

coupons

paid

-

(813)

-

(813)

-

(813)

Increase

in

treasury

shares

-

(224)

-

(224)

-

(224)

Vesting

of

shares

under

employee

share

schemes

-

214

(404)

(190)

-

(190)

Dividends

paid

-

(1,201)

(80)

(1,281)

Other

reserve

movements

-

1

-

(6)

(5)

8

3

Balance

as

at

31

December

2019

4,594

10,871

4,760

44,204

64,429

1,231

65,660

Notes

a

For

further

details

refer

to

Note

28.

b

For

further

details

refer

to

Note

29.

Consolidated

financial

statements

Consolidated

statement

of

changes

in

equity

215

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Called

up

share

capital

and

share

premium

a

Other

equity

instruments

a

Other

reserves

b

Retained

earnings

Total

equity

excluding

non-

controlling

interests

Non-

controlling

interests

Total

equity

£m

Balance

as

at

1

January

2018

22,045

8,941

5,247

25,522

61,755

2,111

63,866

Profit

after

tax

-

752

-

1,597

2,349

234

2,583

Currency

translation

movements

-

834

-

834

-

834

Fair

value

through

other

comprehensive

income

reserve

-

(486)

-

(486)

-

(486)

Cash

flow

hedges

-

(501)

-

(501)

-

(501)

Retirement

benefit

remeasurements

-

313

-

313

Own

credit

reserve

-

58

-

58

-

58

Other

-

30

-

30

Total

comprehensive

income

for

the

year

-

752

(95)

1,940

2,597

234

2,831

Issue

of

new

ordinary

shares

88

-

88

-

88

Employee

share

schemes

51

-

449

500

-

500

Capital

reorganisation

(17,873)

-

17,873

-

Issue

and

exchange

of

other

equity

instruments

-

692

-

(308)

384

-

384

Other

equity

instruments

coupons

paid

-

(752)

-

(752)

-

(752)

Redemption

of

preference

shares

-

(732)

(1,309)

(2,041)

Debt

to

equity

reclassification

-

419

Increase

in

treasury

shares

-

(267)

-

(267)

-

(267)

Vesting

of

shares

under

employee

share

schemes

-

268

(499)

(231)

-

(231)

Dividends

paid

-

(768)

(234)

(1,002)

Other

reserve

movements

-

(1)

-

(17)

(18)

2

(16)

Balance

as

at

31

December

2018

4,311

9,632

5,153

43,460

62,556

1,223

63,779

Notes

a

For

further

details

refer

to

Note

28.

b

For

further

details

refer

to

Note

29.

Consolidated

financial

statements

Consolidated

cash

flow

statement

216

Barclays

PLC

2020

Annual

Report

on

Form

20-F

2020

2019

a

2018

a

For

the

year

ended

31

December

Notes

£m

Reconciliation

of

profit

before

tax

to

net

cash

flows

from

operating

activities:

Profit

before

tax

3,065

4,357

3,494

Adjustment

for

non-cash

items:

Credit

impairment

charges

4,838

1,912

1,468

Depreciation,

amortisation

and

impairment

of

property,

plant,

equipment

and

intangibles

1,734

1,520

1,261

Other

provisions,

including

pensions

1,365

2,336

2,594

Net

loss

on

disposal

of

investments

and

property,

plant

and

equipment

47

7

28

Other

non-cash

movements

including

exchange

rate

movements

c

(2,977)

(280)

(4,488)

Changes

in

operating

assets

and

liabilities:

Net

decrease/(increase)

in

cash

collateral

and

settlement

balances

b

4,321

(6,436)

680

Net

increase

in

loans

and

advances

to

banks

and

customers

c

(4,365)

(2,255)

(11,049)

Net

increase

in

reverse

repurchase

agreements

and

other

similar

lending

(5,652)

(1,071)

(1,711)

Net

increase

in

deposits

65,249

20,949

14,996

Net

(decrease)/increase

in

debt

securities

in

issue

(6,309)

(9,911)

8,972

Net

(increase)/decrease

in

repurchase

agreements

and

other

similar

borrowing

(343)

(4,061)

3,525

Net

(increase)/decrease

in

derivative

financial

instruments

(1,845)

2,863

(3,571)

Net

(increase)/decrease

in

trading

assets

(13,755)

(10,008)

9,958

Net

increase/(decrease)

in

trading

liabilities

10,489

(966)

531

Net

decrease/(increase)

in

financial

assets

and

liabilities

at

fair

value

through

the

income

statement

3,374

4,054

(12,686)

Net

decrease/(increase)

in

other

assets

452

(412)

489

Net

decrease

in

other

liabilities

(1,500)

(2,872)

(4,755)

Corporate

income

tax

paid

(683)

(228)

(548)

Net

cash

from

operating

activities

57,505

(502)

9,188

Purchase

of

debt

securities

at

amortised

cost

c

(14,671)

(14,729)

(4,539)

Proceeds

from

sale

or

redemption

of

debt

securities

at

amortised

cost

c

8,480

3,590

5,109

Purchase

of

financial

assets

at

fair

value

through

other

comprehensive

income

(91,744)

(92,365)

(106,669)

Proceeds

from

sale

or

redemption

of

financial

assets

at

fair

value

through

other

comprehensive

income

80,895

81,202

107,539

Purchase

of

property,

plant

and

equipment

and

intangibles

(1,324)

(1,793)

(1,402)

Proceeds

from

sale

of

property,

plant

and

equipment

and

intangibles

-

46

18

Other

cash

flows

associated

with

investing

activities

(12)

84

1,191

Net

cash

from

investing

activities

(18,376)

(23,965)

1,247

Dividends

paid

and

other

coupon

payments

on

equity

instruments

(936)

(1,912)

(1,658)

Issuance

of

subordinated

debt

27

1,438

1,352

221

Redemption

of

subordinated

debt

27

(3,258)

(3,248)

(3,246)

Issue

of

shares

and

other

equity

instruments

28

1,165

3,582

1,964

Repurchase

of

shares

and

other

equity

instruments

(1,056)

(2,668)

(3,582)

Issuance

of

debt

securities

d

5,736

3,994

-

Net

purchase

of

treasury

shares

(357)

(410)

(486)

Net

cash

from

financing

activities

2,732

690

(6,787)

Effect

of

exchange

rates

on

cash

and

cash

equivalents

1,668

(3,347)

4,160

Net

increase/(decrease)

in

cash

and

cash

equivalents

43,529

(27,124)

7,808

Cash

and

cash

equivalents

at

beginning

of

year

166,613

193,737

185,929

Cash

and

cash

equivalents

at

end

of

year

210,142

166,613

193,737

Cash

and

cash

equivalents

comprise:

Cash

and

balances

at

central

banks

191,127

150,258

177,069

Loans

and

advances

to

banks

with

original

maturity

less

than

three

months

5,955

8,021

7,676

Cash

collateral

balances

with

central

banks

with

original

maturity

less

than

three

months

b

12,204

7,854

8,075

Treasury

and

other

eligible

bills

with

original

maturity

less

than

three

months

856

480

917

210,142

166,613

193,737

Notes

a

2019

and

2018

comparative

figures

have

been

restated

to

make

the

cash

flow

statement

more

relevant

following

a

review

of

the

disclosure

and

the

accounting

policies

applied.

Amendments

have

been

made

to

the

classification

of

cash

collateral

reported

within

cash

and

cash

equivalents

and

to

the

presentation

of

items

within

net

cash

flows

from

operating

and

investing

activities.

Footnotes

b

and

c

below

quantify

the

impact

of

the

changes

to

the

respective

cash

flow

categories

in

prior

periods

and

provide

further

detail

.

b

‘Cash

collateral

balances

with

central

banks

with

original

maturity

less

than

three

months’

was

previously

labelled

‘Cash

collateral

and

settlement

balances

with

banks

with

original

maturity

less

than

three

months’.

This

line

item

has

been

restated

to

include

only

balances

that

the

Group

holds

at

central

banks

payment

schemes.

Previously,

cash

collateral

and

settlement

balances

with

non-central

bank

counterparties

were

also

classified

as

cash

equivalents

and

included

within

this

balance.

Comparatives

have

been

restated.

The

effect

of

this

change

decreased

cash

and

cash

equivalents

by

£16,774m

as

at

31

December

2019,

£17,429m

as

at

31

December

2018

and

£18,683

as

at

31

December

2017.

As

a

result,

net

cash

from

operating

activities

increased

by

£655m

in

2019

and

£1,254m

in

2018

representing

the

net

decrease/(increase)

in

the

cash

collateral

and

settlement

bala

nces

line

item

in

those

periods

.

c

Movements

in

cash

and

cash

equivalents

relating

to

debt

securities

at

amortised

cost

were

previously

shown

within

loans

and

advances

to

banks

and

customers

in

operating

activities.

These

debt

securities

holdings

are

now

considered

to

be

part

of

the

investing

activity

performed

by

the

Group

following

a

change

in

accounting

policy

and

have

been

presented

within

investing

activities

in

2020.

Comparatives

have

been

restated.

The

effect

of

this

change

was

to

reclassify

£11,139m

of

net

cash

outflows

from

operating

activities

to

investing

activities

in

2019

and

inflows

of

£570m

in

2018.

d

Issuance

of

debt

securities

included

in

financing

activities

relate

to

instruments

that

qualify

as

eligible

liabilities

and

satisfy

regulatory

requirements

for

MREL

instruments

which

came

into

effect

during

2019.

Interest

received

was

£18,748m

(2019:

£34,061m;

2018:

£26,254m)

and

interest

paid

was

£9,577m

(2019:

£23,186m;

2018:

£16,124m).

The

Group

is

required

to

maintain

balances

with

central

banks

and

other

regulatory

authorities

and

these

amounted

to

£3,392m

(2019:

£4,893m;

2018:

£4,717m).

For

the

purposes

of

the

cash

flow

statement,

cash

comprises

cash

on

hand

and

demand

deposits

and

cash

equivalents

comprise

highly

liquid

investments

that

are

convertible

into

cash

with

an

insignificant

risk

of

changes

in

value

with

original

maturities

of

three

months

or

less.

Repurchase

and

reverse

repurchase

agreements

are

not

considered

to

be

part

of

cash

equivalents.

Financial

statements

of

Barclays

PLC

Parent

company

accounts

217

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Statement

of

comprehensive

income

2020

2019

2018

For

the

year

ended

31

December

Notes

£m

Dividends

received

from

subsidiaries

42

763

1,560

15,360

Net

interest

(expense)/income

(175)

214

(101)

Other

income

42

1,192

1,760

923

Impairment

of

subsidiary

42

(2,573)

-

Operating

expenses

(241)

(267)

(312)

(Loss)/profit

before

tax

(1,034)

3,267

15,870

Taxation

16

(86)

79

(Loss)/profit

after

tax

(1,018)

3,181

15,949

Other

comprehensive

income

-

Total

comprehensive

(loss)/income

(1,018)

3,181

15,949

(Loss)/profit

after

tax

attributable

to:

Ordinary

equity

holders

(1,875)

2,368

15,197

Other

equity

instrument

holders

857

813

752

(Loss)/profit

after

tax

(1,018)

3,181

15,949

Total

comprehensive

(loss)/income

attributable

to:

Ordinary

equity

holders

(1,875)

2,368

15,197

Other

equity

instrument

holders

857

813

752

Total

comprehensive

(loss)/income

(1,018)

3,181

15,949

For

the

year

ended

31

December

2020,

loss

after

tax

was

£1,018m

(2019:

profit

£3,181m)

and

total

comprehensive

loss

was

£1,018m

(2019:

income

£3,181m).

The

Company

has

60

members

of

staff

(2019:

79).

Balance

sheet

2020

2019

As

at

31

December

Notes

£m

Assets

Investment

in

subsidiaries

42

58,886

59,546

Loans

and

advances

to

subsidiaries

24,710

28,850

Financial

assets

at

fair

value

through

the

income

statement

42

17,521

10,348

Derivative

financial

instruments

7

58

Other

assets

65

2

Total

assets

101,189

98,804

Liabilities

Deposits

at

amortised

cost

482

500

Subordinated

liabilities

42

7,724

7,656

Debt

securities

in

issue

42

28,428

30,564

Financial

liabilities

designated

at

fair

value

42

9,507

3,498

Other

liabilities

176

119

Total

liabilities

46,317

42,337

Equity

Called

up

share

capital

28

4,340

4,331

Share

premium

account

28

297

263

Other

equity

instruments

28

11,169

10,865

Other

reserves

394

Retained

earnings

38,672

40,614

Total

equity

54,872

56,467

Total

liabilities

and

equity

101,189

98,804

The

financial

statements

on

pages

217

to

219

and

the

accompanying

note

on

pages

301

to

302

were

approved

by

the

Board

of

Directors

on

17

February

2021

and

signed

on

its

behalf

by:

Nigel

Higgins

James

E

Staley

Tushar

Morzaria

Group

Chairman

Group

Chief

Executive

Group

Finance

Director

Financial

statements

of

Barclays

PLC

Parent

company

accounts

218

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Statement

of

changes

in

equity

Called

up

share

capital

and

share

premium

Other

equity

instruments

Other

reserves

Retained

earnings

Total

equity

Notes

£m

Balance

as

at

1

January

2020

4,594

10,865

394

40,614

56,467

Profit/(loss)

after

tax

and

other

comprehensive

income

-

857

-

(1,875)

(1,018)

Issue

of

shares

under

employee

share

schemes

43

-

20

63

Issue

and

exchange

of

other

equity

instruments

-

304

-

(73)

231

Vesting

of

shares

under

employee

share

schemes

-

(14)

Dividends

paid

11

-

Other

equity

instruments

coupons

paid

-

(857)

-

(857)

Balance

as

at

31

December

2020

4,637

11,169

394

38,672

54,872

Balance

as

at

1

January

2019

4,311

9,633

394

39,842

54,180

Profit

after

tax

and

other

comprehensive

income

-

813

-

2,368

3,181

Issue

of

new

ordinary

shares

182

-

182

Issue

of

shares

under

employee

share

schemes

101

-

20

121

Issue

and

exchange

of

other

equity

instruments

-

1,232

-

(396)

836

Vesting

of

shares

under

employee

share

schemes

-

(19)

Dividends

paid

11

-

(1,201)

Other

equity

instruments

coupons

paid

-

(813)

-

(813)

Balance

as

at

31

December

2019

4,594

10,865

394

40,614

56,467

Statement

of

changes

in

equity

Called

up

share

capital

and

share

premium

Other

equity

instruments

Other

reserves

Retained

earnings

Total

equity

Notes

£m

Balance

as

at

1

January

2018

22,045

8,943

394

7,834

39,216

Profit

after

tax

and

other

comprehensive

income

-

752

-

15,197

15,949

Issue

of

new

ordinary

shares

88

-

88

Issue

of

shares

under

employee

share

schemes

51

-

24

75

Issue

and

exchange

of

other

equity

instruments

-

692

-

(308)

384

Vesting

of

shares

under

employee

share

schemes

-

(23)

Dividends

paid

11

-

(768)

Other

equity

instruments

coupons

paid

-

(752)

-

(752)

Capital

reorganisation

(17,873)

-

17,873

-

Other

reserve

movements

-

(2)

-

13

11

Balance

as

at

31

December

2018

4,311

9,633

394

39,842

54,180

Financial

statements

of

Barclays

PLC

Parent

company

accounts

219

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Cash

flow

statement

2020

2019

2018

For

the

year

ended

31

December

£m

Reconciliation

of

profit

before

tax

to

net

cash

flows

from

operating

activities:

(Loss)/profit

before

tax

(1,034)

3,267

15,870

Adjustment

for

non-cash

items:

Impairment

of

subsidiary

2,573

-

Dividends

in

specie

-

(14,294)

Other

non-cash

items

528

(582)

653

Changes

in

operating

assets

and

liabilities

-

87

55

Net

cash

generated

from

operating

activities

2,067

2,772

2,284

Capital

contribution

to

and

investment

in

subsidiary

(393)

(1,187)

(2,680)

Net

cash

used

in

investing

activities

(393)

(1,187)

(2,680)

Issue

of

shares

and

other

equity

instruments

1,175

3,597

1,953

Redemption

of

other

equity

instruments

(898)

(2,668)

(1,532)

Net

increase

in

loans

and

advances

to

subsidiaries

of

the

Parent

(4,732)

(4,464)

(7,767)

Net

increase

in

debt

securities

in

issue

3,720

2,588

9,174

Proceeds

of

borrowings

and

issuance

of

subordinated

debt

158

1,194

-

Dividends

paid

-

(1,019)

(680)

Coupons

paid

on

other

equity

instruments

(857)

(813)

(752)

Net

cash

generated

from

financing

activities

(1,434)

(1,585)

396

Net

increase

in

cash

and

cash

equivalents

240

-

Cash

and

cash

equivalents

at

beginning

of

year

-

Cash

and

cash

equivalents

at

end

of

year

240

-

Net

cash

generated

from

operating

activities

includes:

Dividends

received

763

1,560

1,066

Interest

(paid)/received

(175)

214

(101)

The

Parent

company’s

principal

activity

is

to

hold

the

investment

in

its

wholly-owned

subsidiaries,

Barclays

Bank

PLC,

Barclays

Bank

UK

PLC,

Barclays

Execution

Services

Limited

and

Barclays

Principal

Investments

Limited.

Dividends

received

are

treated

as

operating

income.

Notes

to

the

financial

statements

For

the

year

ended

31

December

2020

220

Barclays

PLC

2020

Annual

Report

on

Form

20-F

This

section

describes

the

Group’s

significant

policies

and

critical

accounting

estimates

that

relate

to

the

financial

statements

and

notes

as

a

whole.

If

an

accounting

policy

or

a

critical

accounting

estimate

relates

to

a

particular

note,

the

accounting

policy

and/or

critical

accounting

estimate

is

contained

with

the

relevant

note.

1

Significant

accounting

policies

1.

Reporting

entity

These

financial

statements

are

prepared

for

Barclays

PLC

and

its

subsidiaries

(the

Group)

under

Section

399

of

the

Companies

Act

2006.

The

Group

is

a

major

global

financial

services

provider

engaged

in

retail

banking,

credit

cards,

wholesale

banking,

investment

banking,

wealth

management

and

investment

management

services.

In

addition,

separate

financial

statements

have

been

presented

for

the

holding

company.

2.

Compliance

with

International

Financial

Reporting

Standards

The

consolidated

financial

statements

of

the

Group,

and

the

separate

financial

statements

of

Barclays

PLC,

have

been

prepared

in

accordance

with

international

accounting

standards

in

conformity

with

the

requirements

of

the

Companies

Act

2006

and

in

accordance

with

International

Financial

Reporting

Standards

(IFRS)

and

interpretations

(IFRICs)

as

issued

by

the

IASB

and

adopted

pursuant

to

Regulation

(EC)

No

1606/2002

as

it

applies

in

the

European

Union.

These

standards

have

also

been

endorsed

by

the

UK.

The

principal

accounting

policies

applied

in

the

preparation

of

the

consolidated

and

separate

financial

statements

are

set

out

below,

and

in

the

relevant

notes

to

the

financial

statements.

These

policies

have

been

consistently

applied

with

the

exception

of

the

early

adoption

of

Interest

Rate

Benchmark

Reform

–

Phase

2

(Amendments

to

IFRS

9,

IAS

39,

IFRS

7,

IFRS

4

and

IFRS16)

which

was

applied

from

1

January

2020.

3.

Basis

of

preparation

The

consolidated

and

separate

financial

statements

have

been

prepared

under

the

historical

cost

convention

modified

to

include

the

fair

valuation

of

investment

property,

and

particular

financial

instruments,

to

the

extent

required

or

permitted

under

IFRS

as

set

out

in

the

relevant

accounting

policies.

They

are

stated

in

millions

of

pounds

Sterling

(£m),

the

functional

currency

of

Barclays

PLC.

The

financial

statements

have

been

prepared

on

a

going

concern

basis,

in

accordance

with

the

Companies

Act

2006

as

applicable

to

companies

using

IFRS.

The

financial

statements

are

prepared

on

a

going

concern

basis,

as

the

Board

is

satisfied

that

the

Group

and

the

parent

company

have

the

resources

to

continue

in

business

for

a

period

of

at

least

12

months

from

approval

of

the

financial

statements.

In

making

this

assessment,

the

Board

has

considered

a

wide

range

of

information

relating

to

present

and

future

conditions

and

includes

a

review

of

a

working

capital

report

(WCR).

The

WCR

is

used

by

the

Directors

to

assess

the

future

performance

of

the

business

and

that

it

has

the

resources

in

place

that

are

required

to

meet

its

ongoing

regulatory

requirements.

The

assessment

is

based

upon

business

plans

which

contain

future

projections

of

profitability

taken

from

the

Group’s

three

year

medium-term

plan

as

well

as

projections

of

regulatory

capital

requirements

and

business

funding

needs.

The

WCR

also

includes

an

assessment

of

the

impact

of

internally

generated

stress

testing

scenarios

on

the

liquidity

and

capital

requirement

forecasts.

The

stress

tests

used

were

based

upon

an

assessment

of

reasonably

possible

downside

economic

scenarios

that

the

Group

could

experience.

The

WCR

showed

that

the

Group

had

sufficient

capital

in

place

to

support

its

future

business

requirements

and

remained

above

its

regulatory

minimum

requirements

in

the

stress

scenarios.

Accordingly,

the

Directors

concluded

that

there

was

a

reasonable

expectation

that

the

Group

and

parent

company

has

adequate

resources

to

continue

as

a

Going

Concern

for

a

period

of

at

least

12

months

from

the

date

of

approval

of

the

financial

statements.

4.

Accounting

policies

The

Group

prepares

financial

statements

in

accordance

with

IFRS.

The

Group’s

significant

accounting

policies

relating

to

specific

financial

statement

items,

together

with

a

description

of

the

accounting

estimates

and

judgements

that

were

critical

to

preparing

them,

are

set

out

under

the

relevant

notes.

Accounting

policies

that

affect

the

financial

statements

as

a

whole

are

set

out

below.

(i)

Consolidation

The

Group

applies

IFRS

10

Consolidated

financial

statements

.

The

consolidated

financial

statements

combine

the

financial

statements

of

Barclays

PLC

and

all

its

subsidiaries.

Subsidiaries

are

entities

over

which

Barclays

PLC

has

control.

The

Group

has

control

over

another

entity

when

the

Group

has

all

of

the

following:

1)

power

over

the

relevant

activities

of

the

investee,

for

example

through

voting

or

other

rights

2)

exposure

to,

or

rights

to,

variable

returns

from

its

involvement

with

the

investee,

and

3)

the

ability

to

affect

those

returns

through

its

power

over

the

investee.

The

assessment

of

control

is

based

on

the

consideration

of

all

facts

and

circumstances.

The

Group

reassesses

whether

it

controls

an

investee

if

facts

and

circumstances

indicate

that

there

are

changes

to

one

or

more

of

the

three

elements

of

control.

Intra-group

transactions

and

balances

are

eliminated

on

consolidation.

Consistent

accounting

policies

are

used

throughout

the

Group

for

the

purposes

of

the

consolidation.

Changes

in

ownership

interests

in

subsidiaries

are

accounted

for

as

equity

transactions

if

they

occur

after

control

has

already

been

obtained

and

they

do

not

result

in

loss

of

control.

As

the

consolidated

financial

statements

include

partnerships

where

the

Group

member

is

a

partner,

advantage

has

been

taken

of

the

exemption

under

Regulation

7

of

the

Partnership

(Accounts)

Regulations

2008

with

regard

to

preparing

and

filing

of

individual

partnership

financial

statements.

Details

of

the

principal

subsidiaries

are

given

in

Note

34.

(ii)

Foreign

currency

translation

The

Group

applies

IAS

21

The

Effects

of

Changes

in

Foreign

Exchange

Rates

.

Transactions

in

foreign

currencies

are

translated

into

Sterling

at

the

rate

ruling

on

the

date

of

the

transaction.

Foreign

currency

monetary

balances

are

translated

into

Sterling

at

the

period

end

exchange

rates.

Exchange

gains

and

losses

on

such

balances

are

taken

to

the

income

statement.

Non-monetary

foreign

currency

balances

in

relation

to

items

measured

in

terms

of

historical

cost

are

carried

at

historical

transaction

date

exchange

rates.

Non-monetary

foreign

currency

balances

in

relation

to

items

measured

at

fair

value

are

translated

using

the

exchange

rate

at

the

date

when

the

fair

value

was

measured.

Notes

to

the

financial

statements

For

the

year

ended

31

December

2020

221

Barclays

PLC

2020

Annual

Report

on

Form

20-F

1

Significant

accounting

policies

continued

The

Group’s

foreign

operations

(including

subsidiaries,

joint

ventures,

associates

and

branches)

based

mainly

outside

the

UK

may

have

different

functional

currencies.

The

functional

currency

of

an

operation

is

the

currency

of

the

main

economy

to

which

it

is

exposed.

Prior

to

consolidation

(or

equity

accounting)

the

assets

and

liabilities

of

non-Sterling

operations

are

translated

at

the

period

end

exchange

rate

and

items

of

income,

expense

and

other

comprehensive

income

are

translated

into

Sterling

at

the

rate

on

the

date

of

the

transactions.

Exchange

differences

arising

on

the

translation

of

foreign

operations

are

included

in

currency

translation

reserves

within

equity.

These

are

transferred

to

the

income

statement

when

the

Group

disposes

of

the

entire

interest

in

a

foreign

operation,

when

partial

disposal

results

in

the

loss

of

control

of

an

interest

in

a

subsidiary,

when

an

investment

previously

accounted

for

using

the

equity

method

is

accounted

for

as

a

financial

asset,

or

on

the

disposal

of

an

autonomous

foreign

operation

within

a

branch.

(iii)

Financial

assets

and

liabilities

The

Group

applies

IFRS

9

Financial

Instruments

to

the

recognition,

classification

and

measurement,

and

derecognition

of

financial

assets

and

financial

liabilities

and

the

impairment

of

financial

assets.

The

Group

applies

the

requirements

of

IAS

39

Financial

Instruments:

Recognition

and

Measurement

for

hedge

accounting

purposes.

Recognition

The

Group

recognises

financial

assets

and

liabilities

when

it

becomes

a

party

to

the

terms

of

the

contract.

Trade

date

or

settlement

date

accounting

is

applied

depending

on

the

classification

of

the

financial

asset.

Classification

and

measurement

Financial

assets

are

classified

on

the

basis

of

two

criteria:

i)

the

business

model

within

which

financial

assets

are

managed,

and

ii)

their

contractual

cash

flow

characteristics

(whether

the

cash

flows

represent

‘solely

payments

of

principal

and

interest’

(SPPI)).

The

Group

assesses

the

business

model

criteria

at

a

portfolio

level.

Information

that

is

considered

in

determining

the

applicable

business

model

includes

(i)

policies

and

objectives

for

the

relevant

portfolio,

(ii)

how

the

performance

and

risks

of

the

portfolio

are

managed,

evaluated

and

reported

to

management,

and

(iii)

the

frequency,

volume

and

timing

of

sales

in

prior

periods,

sales

expectation

for

future

periods,

and

the

reasons

for

such

sales.

The

contractual

cash

flow

characteristics

of

financial

assets

are

assessed

with

reference

to

whether

the

cash

flows

represent

SPPI.

In

assessing

whether

contractual

cash

flows

are

SPPI

compliant,

interest

is

defined

as

consideration

primarily

for

the

time

value

of

money

and

the

credit

risk

of

the

principal

outstanding.

The

time

value

of

money

is

defined

as

the

element

of

interest

that

provides

consideration

only

for

the

passage

of

time

and

not

consideration

for

other

risks

or

costs

associated

with

holding

the

financial

asset.

Terms

that

could

change

the

contractual

cash

flows

so

that

it

would

not

meet

the

condition

for

SPPI

are

considered,

including:

(i)

contingent

and

leverage

features,

(ii)

non-recourse

arrangements

and

(iii)

features

that

could

modify

the

time

value

of

money.

Financial

assets

are

measured

at

amortised

cost

if

they

are

held

within

a

business

model

whose

objective

is

to

hold

financial

assets

in

order

to

collect

contractual

cash

flows,

and

their

contractual

cash

flows

represent

SPPI.

Financial

assets

are

measured

at

fair

value

through

other

comprehensive

income

if

they

are

held

within

a

business

model

whose

objective

is

achieved

by

both

collecting

contractual

cash

flows

and

selling

financial

assets,

and

their

contractual

cash

flows

represent

SPPI.

Other

financial

assets

are

measured

at

fair

value

through

profit

and

loss.

There

is

an

option

to

make

an

irrevocable

election

on

initial

recognition

for

non

traded

equity

investments

to

be

measured

at

fair

value

through

other

comprehensive

income,

in

which

case

dividends

are

recognised

in

profit

or

loss,

but

gains

or

losses

are

not

reclassified

to

profit

or

loss

upon

derecognition,

and

the

impairment

requirements

of

IFRS

9

do

not

apply.

The

accounting

policy

for

each

type

of

financial

asset

or

liability

is

included

within

the

relevant

note

for

the

item.

The

Group’s

policies

for

determining

the

fair

values

of

the

assets

and

liabilities

are

set

out

in

Note

17.

Derecognition

The

Group

derecognises

a

financial

asset,

or

a

portion

of

a

financial

asset,

from

its

balance

sheet

where

the

contractual

rights

to

cash

flows

from

the

asset

have

expired,

or

have

been

transferred,

usually

by

sale,

and

with

them

either

substantially

all

the

risks

and

rewards

of

the

asset

or

significant

risks

and

rewards,

along

with

the

unconditional

ability

to

sell

or

pledge

the

asset.

Financial

liabilities

are

de-recognised

when

the

liability

has

been

settled,

has

expired

or

has

been

extinguished.

An

exchange

of

an

existing

financial

liability

for

a

new

liability

with

the

same

lender

on

substantially

different

terms

–

generally

a

difference

of

10%

or

more

in

the

present

value

of

the

cash

flows

or

a

substantive

qualitative

amendment

–

is

accounted

for

as

an

extinguishment

of

the

original

financial

liability

and

the

recognition

of

a

new

financial

liability.

Transactions

in

which

the

Group

transfers

assets

and

liabilities,

portions

of

them,

or

financial

risks

associated

with

them

can

be

complex

and

it

may

not

be

obvious

whether

substantially

all

of

the

risks

and

rewards

have

been

transferred.

It

is

often

necessary

to

perform

a

quantitative

analysis.

Such

an

analysis

compares

the

Group’s

exposure

to

variability

in

asset

cash

flows

before

the

transfer

with

its

retained

exposure

after

the

transfer.

A

cash

flow

analysis

of

this

nature

may

require

judgement.

In

particular,

it

is

necessary

to

estimate

the

asset’s

expected

future

cash

flows

as

well

as

potential

variability

around

this

expectation.

The

method

of

estimating

expected

future

cash

flows

depends

on

the

nature

of

the

asset,

with

market

and

market-implied

data

used

to

the

greatest

extent

possible.

The

potential

variability

around

this

expectation

is

typically

determined

by

stressing

underlying

parameters

to

create

reasonable

alternative

upside

and

downside

scenarios.

Probabilities

are

then

assigned

to

each

scenario.

Stressed

parameters

may

include

default

rates,

loss

severity,

or

prepayment

rates.

Notes

to

the

financial

statements

For

the

year

ended

31

December

2020

222

Barclays

PLC

2020

Annual

Report

on

Form

20-F

1

Significant

accounting

policies

continued

Accounting

for

reverse

repurchase

and

repurchase

agreements

including

other

similar

lending

and

borrowing

Reverse

repurchase

agreements

(and

stock

borrowing

or

similar

transaction)

are

a

form

of

secured

lending

whereby

the

Group

provides

a

loan

or

cash

collateral

in

exchange

for

the

transfer

of

collateral,

generally

in

the

form

of

marketable

securities

subject

to

an

agreement

to

transfer

the

securities

back

at

a

fixed

price

in

the

future.

Repurchase

agreements

are

where

the

Group

obtains

such

loans

or

cash

collateral,

in

exchange

for

the

transfer

of

collateral.

The

Group

purchases

(a

reverse

repurchase

agreement)

or

borrows

securities

subject

to

a

commitment

to

resell

or

return

them.

The

securities

are

not

included

in

the

balance

sheet

as

the

Group

does

not

acquire

the

risks

and

rewards

of

ownership.

Consideration

paid

(or

cash

collateral

provided)

is

accounted

for

as

a

loan

asset

at

amortised

cost,

unless

it

is

designated

or

mandatorily

at

fair

value

through

profit

and

loss.

The

Group

may

also

sell

(a

repurchase

agreement)

or

lend

securities

subject

to

a

commitment

to

repurchase

or

redeem

them.

The

securities

are

retained

on

the

balance

sheet

as

the

Group

retains

substantially

all

the

risks

and

rewards

of

ownership.

Consideration

received

(or

cash

collateral

provided)

is

accounted

for

as

a

financial

liability

at

amortised

cost,

unless

it

is

designated

at

fair

value

through

profit

and

loss.

(iv)

Issued

debt

and

equity

instruments

The

Group

applies

IAS

32,

Financial

Instruments:

Presentation

,

to

determine

whether

funding

is

either

a

financial

liability

(debt)

or

equity.

Issued

financial

instruments

or

their

components

are

classified

as

liabilities

if

the

contractual

arrangement

results

in

the

Group

having

an

obligation

to

either

deliver

cash

or

another

financial

asset,

or

a

variable

number

of

equity

shares,

to

the

holder

of

the

instrument.

If

this

is

not

the

case,

the

instrument

is

generally

an

equity

instrument

and

the

proceeds

included

in

equity,

net

of

transaction

costs.

Dividends

and

other

returns

to

equity

holders

are

recognised

when

paid

or

declared

by

the

members

at

the

AGM

and

treated

as

a

deduction

from

equity.

Where

issued

financial

instruments

contain

both

liability

and

equity

components,

these

are

accounted

for

separately.

The

fair

value

of

the

debt

is

estimated

first

and

the

balance

of

the

proceeds

is

included

within

equity.

5.

New

and

amended

standards

and

interpretations

The

accounting

policies

adopted

are

consistent

with

those

of

the

year,

with

the

exception

of

the

early

adoption

of

Interest

Rate

Benchmark

Reform

–

Phase

2

(Amendments

to

IFRS

9,

IAS

39,

IFRS

7,

IFRS

4

and

IFRS

16)

which

was

applied

from

1

January

2020.

IFRS

9,

IAS

39,

IFRS

7,

IFRS

4

and

IFRS

16

–

Amendments

relating

to

Interest

Rate

Benchmark

Reform

(Phase

2

amendments)

IFRS

9,

IAS

39,

IFRS

7,

IFRS

4

and

IFRS

16

were

amended

in

August

2020,

which

are

effective

for

periods

beginning

on

or

after

1

January

2021

with

earlier

adoption

permitted.

The

Group

elected

to

early

adopt

the

amendments

with

effect

from

1

January

2020.

The

amendments

have

been

endorsed

by

the

EU

and

by

the

UK.

IFRS

9

allows

companies

when

they

first

apply

IFRS

9,

to

make

an

accounting

policy

choice

to

continue

to

apply

the

hedge

accounting

requirements

of

IAS

39.

The

Group

made

the

election

to

continue

to

apply

the

IAS

39

hedge

accounting

requirements,

and

consequently,

the

amendments

to

IAS

39

in

respect

of

hedge

accounting

have

been

adopted

by

the

Group.

The

objective

of

the

amendments

is

to

provide

certain

reliefs

to

companies

when

changes

are

made

to

the

contractual

cash

flows

or

hedging

relationships

resulting

from

interest

rate

benchmark

reform.

The

reliefs

adopted

by

the

Group

have

been

described

below.

Changes

in

the

basis

for

determining

contractual

cash

flows

A

change

in

the

basis

of

determining

the

contractual

cash

flows

of

a

financial

instrument

that

are

required

by

the

reform

is

accounted

for

by

updating

the

effective

interest

rate,

without

the

recognition

of

an

immediate

gain

or

loss.

This

practical

expedient

is

only

applied

where

(1)

the

change

to

the

contractual

cash

flows

is

necessary

as

a

direct

consequence

of

the

reform

and

(2)

the

new

basis

for

determining

the

contractual

cash

flows

is

economically

equivalent

to

the

For

changes

made

in

addition

to

those

required

by

the

reform,

the

practical

expedient

is

applied

first,

after

which

the

normal

IFRS

9

requirements

for

modifications

of

financial

instruments

is

applied.

Hedge

accounting

The

IAS

39

requirements

in

respect

of

hedge

accounting

have

been

amended

in

two

phases.

The

Phase

1

amendments,

which

were

adopted

by

the

Group

in

2019,

provide

relief

to

the

hedge

accounting

requirements

prior

to

changing

a

hedge

relationship

due

to

the

interest

rate

benchmark

reform

(refer

to

Note

14).

The

Phase

2

amendments

provide

relief

when

changes

are

made

to

hedge

relationships

as

a

result

of

the

interest

rate

benchmark

reform.

The

Phase

2

amendments

adopted

by

the

Group

are

described

below.

◾

Under

a

temporary

exception,

changes

to

the

hedge

designation

and

hedge

documentation

due

to

the

interest

rate

benchmark

reform

would

not

constitute

the

discontinuation

of

the

hedge

relationship

nor

the

designation

of

a

new

hedging

relationship.

◾

In

respect

of

the

retrospective

hedge

effectiveness

assessment,

the

Group

may

elect

on

a

hedge-by-hedge

basis

to

reset

the

cumulative

fair

value

changes

to

zero

when

the

exception

to

the

retrospective

assessment

ends

(Phase

1

relief).

Any

hedge

ineffectiveness

will

continue

to

be

me

asured

and

recognised

in

full

in

profit

or

loss.

◾

Amounts

accumulated

in

the

cash

flow

hedge

reserve

would

be

deemed

to

be

based

on

the

alternative

benchmark

rate

(on

which

the

hedge

future

cash

flows

are

determined)

when

there

is

a

change

in

basis

for

determining

the

contractual

cash

flows.

◾

For

hedges

of

groups

of

items

(such

as

those

forming

part

of

a

macro

cash

flow

hedging

strategy),

the

amendments

provide

relief

for

items

within

a

designated

group

of

items

that

are

amended

for

changes

directly

required

by

the

reform.

◾

In

respect

of

whether

a

risk

component

of

a

hedged

item

is

separately

identifiable,

the

amendments

provide

temporary

relief

to

entities

to

meet

this

requirement

when

an

alternative

risk

free

rate

(RFR)

financial

instrument

is

designated

as

a

risk

component.

These

amendments

allow

entities

upon

designation

of

the

hedge

to

assume

that

the

separately

identifiable

requirement

is

met

if

the

entity

reasonably

expects

the

RFR

risk

will

become

separately

identifiable

within

the

months.

This

relief

applies

to

each

RFR

on

a

rate-by-rate

basis

and

starts

when

the

entity

first

designates

the

RFR

as

a

non-contractually

specified

risk

component.

Notes

to

the

financial

statements

For

the

year

ended

31

December

2020

223

Barclays

PLC

2020

Annual

Report

on

Form

20-F

1

Significant

accounting

policies

continued

The

amendments

to

IFRS

7

require

certain

disclosures

to

be

made

to

enable

users

of

financial

statements

to

understand

the

effect

of

interest

rate

benchmark

reform

on

an

entity’s

financial

instruments

and

risk

management

strategy.

Refer

to

Note

41

where

these

disclosures

have

been

included.

Future

accounting

developments

The

following

accounting

standards

have

been

issued

by

the

IASB

but

are

not

yet

effective:

IFRS

17

–

Insurance

contracts

In

May

2017,

the

IASB

issued

IFRS

17

Insurance

Contracts

,

a

comprehensive

new

accounting

standard

for

insurance

contracts

covering

recognition

and

measurement,

presentation

and

disclosure.

Once

effective,

IFRS

17

will

replace

IFRS

4

Insurance

Contracts

that

was

issued

in

2005.

IFRS

17

applies

to

all

types

of

insurance

contracts

(i.e.

life,

non-life,

direct

insurance

and

re-insurance),

regardless

of

the

type

of

entities

that

issue

them,

as

well

as

to

certain

guarantees

and

financial

instruments

with

discretionary

participation

features.

A

few

scope

exceptions

will

apply.

In

June

2020,

the

IASB

published

amendments

to

IFRS

17.

The

amendments

that

are

relevant

to

the

Group

are

the

scope

exclusion

for

credit

card

contracts

and

similar

contracts

that

provide

insurance

coverage,

the

optional

scope

exclusion

for

loan

contracts

that

transfer

significant

insurance

risk,

and

the

clarification

that

only

financial

guarantees

issued

are

in

scope

of

IFRS

9.

The

amendments

also

defer

the

effective

date

of

IFRS

17,

including

the

above

amendments,

to

annual

reporting

periods

beginning

on

or

after

1

January

2023.

IFRS

17,

including

the

amendments

to

IFRS

17,

has

not

yet

been

endorsed

by

the

EU

as

of

the

date

that

the

financial

statements

are

authorised

for

issue.

Following

the

UK’s

withdrawal

from

the

EU

on

31

December

2020,

the

UK-adopted

international

accounting

standards

will

be

applicable.

IFRS

17,

including

the

amendments

to

IFRS

17,

has

not

yet

been

endorsed

by

the

UK.

The

Group

is

currently

assessing

the

expected

impact

of

adopting

this

standard.

6.

Critical

accounting

estimates

and

judgements

The

preparation

of

financial

statements

in

accordance

with

IFRS

requires

the

use

of

estimates.

It

also

requires

management

to

exercise

judgement

in

applying

the

accounting

policies.

The

key

areas

involving

a

higher

degree

of

judgement

or

complexity

or

areas

where

assumptions

are

significant

to

the

consolidated

and

individual

financial

statements

are

highlighted

under

the

relevant

note.

Critical

accounting

estimates

and

judgements

are

disclosed

in:

◾

Credit

impairment

charges

on

page

230

◾

Tax

on

page

234

◾

Fair

value

of

financial

instruments

on

page

249

◾

Goodwill

and

intangible

assets

on

page

265

◾

Pensions

and

post-retirement

benefits

–

obligations

on

page

284

◾

Provisions

including

conduct

and

legal,

competition

and

regulatory

matters

on

page

271.

7.

Other

disclosures

To

improve

transparency

and

ease

of

reference,

by

concentrating

in

one

place,

certain

disclosures

required

under

IFRS

have

been

included

within

the

Risk

review

section

as

follows:

◾

Credit

risk

on

pages

104

to

105

and

110

to

145

◾

Market

risk

on

page

105

to

106

and

146

to

147

◾

Treasury

and

capital

risk

–

liquidity

on

pages

106

and

148

to

160

◾

Treasury

and

capital

risk

–

capital

on

pages

106

to

107

and

161

to

170.

These

disclosures

are

covered

by

the

Audit

opinion

(included

on

pages

207

to

210)

where

referenced

as

audited.

8.

Parent

company

accounts

The

Parent

Company’s

financial

statements

on

pages

217

to

219

also

form

part

of

the

notes

to

the

consolidated

financial

statements.

Notes

to

the

financial

statements

Financial

performance

and

returns

224

Barclays

PLC

2020

Annual

Report

on

Form

20-F

The

notes

included

in

this

section

focus

on

the

results

and

performance

of

the

Group.

Information

on

the

income

generated,

expenditure

incurred,

segmental

performance,

tax,

earnings

per

share

and

dividends

are

included

here.

For

further

detail

on

performance,

see

income

statement

commentary

within

Financial

review

(unaudited).

2

Segmental

reporting

Presentation

of

segmental

reporting

The

Group’s

segmental

reporting

is

in

accordance

with

IFRS

8

Operating

Segments

.

Operating

segments

are

reported

in

a

manner

consistent

with

the

internal

reporting

provided

to

the

Executive

Committee,

which

is

responsible

for

allocating

resources

and

assessing

performance

of

the

operating

segments,

and

has

been

identified

as

the

chief

operating

decision

maker.

All

transactions

between

business

segments

are

conducted

on

an

arm’s-length

basis,

with

intra-segment

revenue

and

costs

being

eliminated

in

Head

Office.

Income

and

expenses

directly

associated

with

each

segment

are

included

in

determining

business

segment

performance.

The

Group

is

a

British

universal

bank

diversified

by

business,

geography

and

income

type,

serving

consumer

and

wholesale

customers

and

clients

globally

and

for

segmental

reporting

purposes

it

defines

its

two

operating

divisions

as

Barclays

UK

and

Barclays

International.

◾

Barclays

UK

comprises

our

UK

Personal

Banking,

UK

Business

Banking

and

Barclaycard

Consumer

UK

businesses.

These

businesses

are

carried

on

by

our

UK

ring-fenced

bank

(Barclays

Bank

UK

PLC)

and

certain

other

entities

within

the

Group.

◾

Barclays

International

comprises

our

Corporate

and

Investment

Bank

and

Consumer,

Cards

and

Payments

businesses.

These

businesses

are

carried

on

by

our

non

ring-fenced

bank

(Barclays

Bank

PLC)

and

its

subsidiaries,

as

well

as

by

certain

other

entities

within

the

Group.

The

below

table

also

includes

Head

Office

which

comprises

head

office,

Barclays

Execution

Services

FTE

and

legacy

businesses.

Analysis

of

results

by

business

Barclays

UK

Barclays

International

Head

Office

Group

results

£m

For

the

year

ended

31

December

2020

Total

income

6,347

15,921

(502)

21,766

Credit

impairment

charges

(1,467)

(3,280)

(91)

(4,838)

Net

operating

income/(expenses)

4,880

12,641

(593)

16,928

Operating

costs

(4,270)

(8,765)

(399)

(13,434)

UK

bank

levy

(50)

(240)

(9)

(299)

Litigation

and

conduct

(32)

(48)

(73)

(153)

Total

operating

expenses

(4,352)

(9,053)

(481)

(13,886)

Other

net

income/(expenses)

a

18

28

(23)

23

Profit/(loss)

before

tax

546

3,616

(1,097)

3,065

Total

assets

(£bn)

289.1

1,041.8

18.6

1,349.5

Number

of

employees

(full

time

equivalent)

21,300

10,800

50,900

83,000

Average

number

of

employees

(full

time

equivalent)

81,800

Note

a

Other

net

income/(expenses)

represents

the

share

of

post

-tax

results

of

associates

and

joint

ventures,

profit

(or

loss)

on

disposal

of

subsidiaries,

associates

and

joint

ventures,

and

gains

on

acquisitions.

On

1

April

2020,

assets

of

£2.2bn

relating

to

the

Barclays

Partner

Finance

business

were

moved

from

Barclays

International

to

Barclays

UK,

with

net

operating

income

of

£19m

and

loss

before

tax

of

£5m

subsequently

recognised

in

Barclays

UK

for

the

rest

of

2020.

The

2019

and

2018

comparative

figures

have

not

been

restated.

Barclays

UK

Barclays

International

Head

Office

Group

results

£m

For

the

year

ended

31

December

2019

Total

income

7,353

14,675

(396)

21,632

Credit

impairment

charges

(712)

(1,173)

(27)

(1,912)

Net

operating

income/(expenses)

6,641

13,502

(423)

19,720

Operating

costs

(3,996)

(9,163)

(200)

(13,359)

UK

bank

levy

(41)

(174)

(11)

(226)

Litigation

and

conduct

(1,582)

(116)

(151)

(1,849)

Total

operating

expenses

(5,619)

(9,453)

(362)

(15,434)

Other

net

income

a

-

69

2

71

Profit/(loss)

before

tax

1,022

4,118

(783)

4,357

Total

assets

(£bn)

257.8

861.4

21.0

1,140.2

Number

of

employees

(full

time

equivalent)

21,400

11,200

48,200

80,800

Average

number

of

employees

(full

time

equivalent)

82,700

Note

a

Other

net

income

/(expenses)

represents

the

share

of

post

-tax

results

of

associates

and

joint

ventures,

profit

(or

loss)

on

disposal

of

subsidiaries,

associates

and

joint

ventures,

and

gains

on

acquisitions.

Notes

to

the

financial

statements

Financial

performance

and

returns

225

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Analysis

of

results

by

business

Barclays

UK

Barclays

International

Head

Office

Group

results

£m

For

the

year

ended

31

December

2018

Total

income

7,383

14,026

(273)

21,136

Credit

impairment

(charges)/releases

(826)

(658)

16

(1,468)

Net

operating

income/(expenses)

6,557

13,368

(257)

19,668

Operating

costs

(4,075)

(9,324)

(228)

(13,627)

UK

bank

levy

(46)

(210)

(13)

(269)

GMP

charge

-

(140)

Litigation

and

conduct

(483)

(127)

(1,597)

(2,207)

Total

operating

expenses

(4,604)

(9,661)

(1,978)

(16,243)

Other

net

income/(expenses)

a

3

68

(2)

69

Profit/(loss)

before

tax

1,956

3,775

(2,237)

3,494

Total

assets

(£bn)

249.7

862.1

21.5

1,133.3

Number

of

employees

(full

time

equivalent)

22,600

12,400

48,500

83,500

Note

a

Other

net

income/(expenses)

represents

the

share

of

post

-tax

results

of

associates

and

joint

ventures,

profit

(or

loss)

on

disposal

of

subsidiaries,

associates

and

joint

ventures,

and

gains

on

acquisitions.

Income

by

geographic

region

a

2020

2019

2018

For

the

year

ended

31

December

£m

United

Kingdom

11,211

11,809

11,529

Europe

2,059

1,754

1,617

Americas

7,425

7,064

7,058

Africa

and

Middle

East

36

59

43

Asia

1,035

946

889

Total

21,766

21,632

21,136

Income

from

individual

countries

which

represent

more

than

5%

of

total

income

a

2020

2019

2018

For

the

year

ended

31

December

£m

United

Kingdom

11,211

11,809

11,529

United

States

7,318

6,939

6,911

Note

a

The

geographical

analysis

is

based

on

the

location

of

the

office

where

the

transactions

are

recorded.

Notes

to

the

financial

statements

Financial

performance

and

returns

226

Barclays

PLC

2020

Annual

Report

on

Form

20-F

3

Net

interest

income

Accounting

for

interest

income

and

expenses

Interest

income

on

loans

and

advances

at

amortised

cost

and

financial

assets

at

fair

value

through

other

comprehensive

income,

and

interest

expense

on

financial

liabilities

held

at

amortised

cost,

are

calculated

using

the

effective

interest

method

which

allocates

interest,

and

direct

and

incremental

fees

and

costs,

over

the

expected

lives

of

the

assets

and

liabilities.

The

effective

interest

method

requires

the

Group

to

estimate

future

cash

flows,

in

some

cases

based

on

its

experience

of

customers’

behaviour,

considering

all

contractual

terms

of

the

financial

instrument,

as

well

as

the

expected

lives

of

the

assets

and

liabilities.

The

Group

incurs

certain

costs

to

originate

credit

card

balances

with

the

most

significant

being

co-brand

partner

fees.

To

the

extent

these

costs

are

attributed

to

customers

that

continuously

carry

an

outstanding

balance

(revolvers)

and

incremental

to

the

origination

of

credit

card

balances,

they

are

capitalised

and

subsequently

included

within

the

calculation

of

the

effective

interest

rate.

They

are

amortised

to

interest

income

over

the

period

of

expected

repayment

of

the

originated

balance.

Costs

attributed

to

customers

that

settle

their

outstanding

balances

each

period

(transactors)

are

deferred

on

the

balance

sheet

as

a

cost

of

obtaining

a

contract

and

amortised

to

fee

and

commission

expense

over

the

life

of

the

customer

relationship

(refer

to

Note

4).

There

are

no

other

individual

estimates

involved

in

the

calculation

of

effective

interest

rates

that

are

material

to

the

results

or

financial

position.

2020

2019

a

2018

a

£m

Cash

and

balances

at

central

banks

275

1,091

1,123

Loans

and

advances

at

amortised

cost

10,180

12,450

12,073

Fair

value

through

other

comprehensive

income

776

1,032

1,029

Negative

interest

on

liabilities

68

13

35

Other

593

870

281

Interest

and

similar

income

11,892

15,456

14,541

Deposits

at

amortised

cost

(1,030)

(2,449)

(2,250)

Debt

securities

in

issue

b

(1,360)

(1,906)

(1,677)

Subordinated

liabilities

(670)

(1,068)

(1,223)

Negative

interest

on

assets

(344)

(278)

(270)

Other

(366)

(348)

(59)

Interest

and

similar

expense

(3,770)

(6,049)

(5,479)

Net

interest

income

8,122

9,407

9,062

Notes

a

Comparatives

for

negative

interest

income

on

liabilities

and

negative

interest

expense

on

assets

have

been

re

-presented

from

Other

interest

income

and

Other

interest

expense.

b

Barclays

has

amended

the

presentation

of

the

premium

paid

for

purchased

financial

guarantees

which

are

embedded

in

notes

it

issues

directly

to

the

market.

From

20

onwards,

the

full

note

coupon

(£99m)

is

presented

as

interest

expense

within

net

interest

income.

The

financial

guarantee

element

of

the

coupon

had

previously

been

recognised

in

net

investment

income

(2019:

£25m;

2018:

£1m).

The

comparatives

have

not

been

restated.

Interest

and

similar

income

presented

above

represents

interest

revenue

calculated

using

the

effective

interest

method.

Costs

to

originate

credit

card

balances

of

£698m

(2019:

£697m;

2018:

£596m)

have

been

amortised

to

interest

and

similar

income

during

the

year.

Interest

and

similar

income

includes

£40m

(2019:

£48m;

2018:

£53m)

accrued

on

impaired

loans.

Other

interest

expense

includes

£70m

(2019:

£76m)

relating

to

IFRS

16

lease

interest

expenses.

4

Net

fee

and

commission

income

Accounting

for

net

fee

and

commission

income

The

Group

applies

IFRS

15

Revenue

from

Contracts

with

Customers.

IFRS

15

establishes

a

five-step

model

governing

revenue

recognition.

The

five-step

model

requires

the

Group

to

(i)

identify

the

contract

with

the

customer,

(ii)

identify

each

of

the

performance

obligations

included

in

the

contract,

(iii)

determine

the

amount

of

consideration

in

the

contract,

(iv)

allocate

the

consideration

to

each

of

the

identified

performance

obligations

and

(v)

recognise

revenue

as

each

performance

obligation

is

satisfied.

The

Group

recognises

fee

and

commission

income

charged

for

services

provided

by

the

Group

as

the

services

are

provided,

for

example,

on

completion

of

the

underlying

transaction.

Where

the

contractual

arrangements

also

result

in

the

Group

recognising

financial

instruments

in

scope

of

IFRS

9,

such

financial

instruments

are

initially

recognised

at

fair

value

in

accordance

with

IFRS

9

before

applying

the

provisions

of

IFRS

15.

Fee

and

commission

income

is

disaggregated

below

by

fee

types

that

reflect

the

nature

of

the

services

offere

d

across

the

Group

and

operating

segments,

in

accordance

with

IFRS

15.

The

below

table

includes

a

total

for

fees

in

scope

of

IFRS

15.

Refer

to

Note

2

for

more

detailed

information

about

operating

segments.

Notes

to

the

financial

statements

Financial

performance

and

returns

227

Barclays

PLC

2020

Annual

Report

on

Form

20-F

2020

Barclays

UK

Barclays

International

Head

Office

Total

£m

Fee

type

Transactional

810

2,353

-

3,163

Advisory

159

693

2

854

Brokerage

and

execution

212

1,173

-

1,385

Underwriting

and

syndication

-

2,867

-

2,867

Other

71

173

9

253

Total

revenue

from

contracts

with

customers

1,252

7,259

11

8,522

Other

non-contract

fee

income

-

119

-

119

Fee

and

commission

income

1,252

7,378

11

8,641

Fee

and

commission

expense

(308)

(1,754)

(8)

(2,070)

Net

fee

and

commission

income

944

5,624

3

6,571

2019

Barclays

UK

Barclays

International

Head

Office

Total

£m

Fee

type

Transactional

1,074

2,809

-

3,883

Advisory

177

903

-

1,080

Brokerage

and

execution

208

1,131

-

1,339

Underwriting

and

syndication

-

2,358

-

2,358

Other

92

242

12

346

Total

revenue

from

contracts

with

customers

1,551

7,443

12

9,006

Other

non-contract

fee

income

-

116

-

116

Fee

and

commission

income

1,551

7,559

12

9,122

Fee

and

commission

expense

(365)

(1,990)

(7)

(2,362)

Net

fee

and

commission

income

1,186

5,569

5

6,760

2018

Barclays

UK

Barclays

International

Head

Office

Total

£m

Fee

type

Transactional

1,102

2,614

-

3,716

Advisory

209

850

-

1,059

Brokerage

and

execution

153

1,073

-

1,226

Underwriting

and

syndication

-

2,462

-

2,462

Other

78

207

27

312

Total

revenue

from

contracts

with

customers

1,542

7,206

27

8,775

Other

non-contract

fee

income

-

118

-

118

Fee

and

commission

income

1,542

7,324

27

8,893

Fee

and

commission

expense

(360)

(1,707)

(17)

(2,084)

Net

fee

and

commission

income

1,182

5,617

10

6,809

Fee

types

Transactional

fees

are

service

charges

on

deposit

accounts,

cash

management

services

and

transactional

processing

fees.

These

include

interchange

and

merchant

fee

income

generated

from

credit

and

bank

card

usage.

Transaction

and

processing

fees

are

recognised

at

the

point

in

time

the

transaction

occurs

or

service

is

performed.

Interchange

and

me

rchant

fees

are

recognised

upon

settlement

of

the

card

transaction

payment.

The

Group

incurs

certain

card

including

those

cardholder

reward

programmes

and

payments

to

co-brand

partners.

Cardholder

reward

programmes

costs

customers

that

settle

their

outstanding

balance

each

period

(transactors)

are

expensed

when

incurred

and

presented

in

fee

and

commission

expense

while

costs

customers

that

continuously

carry

an

outstanding

balance

(revolvers)

are

included

in

the

effective

interest

rate

of

the

receivable

(refer

to

Note

3).

Payments

to

partners

for

new

cardholder

account

originations

transactor

accounts

are

deferred

as

costs

to

obtain

a

contract

under

IFRS

15,

while

costs

revolver

accounts

are

Notes

to

the

financial

statements

Financial

performance

and

returns

228

Barclays

PLC

2020

Annual

Report

on

Form

20-F

included

in

the

effective

interest

rate

of

the

receivable

(refer

to

Note

3).

Those

costs

deferred

under

IFRS

15

are

capitalised

and

amortised

over

the

estimated

life

of

the

customer

relationship.

Payments

to

co-brand

partners

based

on

revenue

sharing

are

presented

as

a

reduction

of

fee

and

commission

income

while

payments

based

on

profitability

are

presented

in

fee

and

commission

expense.

Advisory

fees

are

generated

from

wealth

management

services

and

investment

banking

advisory

services

mergers,

acquisitions

and

financial

restructurings.

Wealth

management

advisory

fees

are

earned

over

the

period

the

services

are

provided

and

are

generally

recognised

quarterly

when

the

market

value

of

client

assets

is

determined.

Investment

banking

advisory

fees

are

recognised

at

the

point

in

time

when

the

services

the

transaction

have

been

completed

under

the

terms

of

the

engagement.

Investment

banking

advisory

costs

are

recognised

as

incurred

in

fee

and

commission

expense

if

direct

and

incremental

to

the

advisory

services

or

are

otherwise

recognised

in

operating

expenses.

Brokerage

and

execution

Brokerage

and

execution

fees

are

earned

for

executing

client

transactions

with

various

exchanges

and

over-the-counter

markets

and

assisting

clients

in

clearing

transactions.

Brokerage

and

execution

fees

are

recognised

at

the

point

in

time

the

associated

service

has

been

completed

which

is

generally

the

trade

date

of

the

transaction.

Underwriting

and

syndication

Underwriting

and

syndication

fees

are

earned

for

the

distribution

of

client

equity

or

debt

securities

and

the

arrangement

and

administration

of

a

loan

syndication.

This

includes

commitment

fees

to

provide

loan

financing.

Underwriting

fees

are

generally

recognised

on

trade

date

if

there

is

no

remaining

contingency,

such

as

the

transaction

being

conditional

on

the

closing

of

an

acquisition

or

another

transaction.

Underwriting

costs

are

deferred

and

recognised

in

fee

and

commission

expense

when

the

associated

underwriting

fees

are

recorded.

Syndication

fees

are

earned

for

arranging

and

administering

a

loan

syndication;

however,

the

associated

fee

may

be

subject

to

variability

until

the

loan

has

been

syndicated

to

other

syndicate

members

or

until

other

contingencies

have

been

resolved

and

therefore

the

fee

revenue

is

deferred

until

the

uncertainty

is

resolved.

Included

in

the

underwriting

and

syndication

fees

are

loan

commitment

fees

which

are

not

presented

as

part

of

the

carrying

value

of

the

loan

in

accordance

with

IFRS

9.

Such

commitment

fees

are

recognised

over

time

through

to

the

contractual

maturity

of

the

commitment.

Contract

assets

and

contract

liabilities

The

Group

had

no

material

contract

assets

or

contract

liabilities

as

at

31

December

2020

(2019:

nil;

2018:

nil).

Impairment

of

fee

receivables

and

contract

assets

During

2020,

there

have

been

no

material

impairments

recognised

in

relation

to

fees

receivable

and

contract

assets

(2019:

nil;

2018:

nil).

Fees

in

relation

to

transactional

business

can

be

added

to

outstanding

customer

balances.

These

amounts

may

be

subsequently

impaired

as

part

of

the

overall

loans

and

advances

balance.

Remaining

performance

obligations

The

Group

applies

the

practical

expedient

of

IFRS

15

and

does

not

disclose

information

about

remaining

performance

obligations

that

have

original

expected

durations

of

one

year

or

less

or

because

the

Group

has

a

right

to

consideration

that

corresponds

directly

with

the

value

of

the

service

provided

to

the

client

or

customer.

Costs

incurred

in

obtaining

or

fulfilling

a

contract

The

Group

expects

that

incremental

costs

of

obtaining

a

contract

such

as

success

fee

and

commission

fees

paid

are

recoverable

and

therefore

capitalised

such

contract

costs

in

the

amount

of

£141m

at

31

December

2020

(2019:

£159m;

2018:

£125m).

Capitalised

contract

costs

are

amortised

based

on

the

transfer

of

services

to

which

the

asset

relates

which

typically

ranges

over

the

expected

life

of

the

relationship.

In

2020,

the

amount

of

amortisation

was

£36m

(2019:

£30m;

2018:

£30m)

and

there

was

no

impairment

loss

recognised

in

connection

with

the

capitalised

contract

costs

(2019:

nil;

2018:

nil).

Notes

to

the

financial

statements

Financial

performance

and

returns

229

Barclays

PLC

2020

Annual

Report

on

Form

20-F

5

Net

trading

income

Accounting

for

net

trading

income

In

accordance

with

IFRS

9,

trading

positions

are

held

at

fair

value,

and

the

resulting

gains

and

losses

are

included

in

the

income

statement,

together

with

interest

and

dividends

arising

from

long

and

short

positions

and

funding

costs

relating

to

trading

activities.

Income

arises

from

both

the

sale

and

purchase

of

trading

positions,

margins

which

are

achieved

through

market

making

and

customer

business

and

from

changes

in

fair

value

caused

by

movements

in

interest

and

exchange

rates,

equity

prices

and

other

market

variables.

Gains

or

losses

on

non-trading

financial

instruments

designated

or

mandatorily

at

fair

value

with

changes

in

fair

value

recognised

in

the

income

statement

are

included

in

net

trading

income

where

the

business

model

is

to

manage

assets

and

liabilities

on

a

fair

value

basis

which

includes

use

of

derivatives

or

where

an

instrument

is

designated

at

fair

value

to

eliminate

an

accounting

mismatch

and

the

gain

and

losses

are

reported

in

trading

income.

2020

2019

2018

£m

Net

gains

from

financial

instruments

held

for

trading

5,342

2,941

3,292

Net

gains

from

financial

instruments

designated

at

fair

value

700

256

267

Net

gains

from

financial

instruments

mandatorily

at

fair

value

987

1,038

1,007

Net

trading

income

7,029

4,235

4,566

6

Net

investment

income

Accounting

for

net

investment

income

Dividends

are

recognised

when

the

right

to

receive

the

dividend

has

been

established.

Other

accounting

policies

relating

to

net

investment

income

are

set

out

in

Note

13

and

Note

15.

2020

2019

2018

£m

Net

(losses)/gains

from

financial

instruments

mandatorily

at

fair

value

(50)

510

226

Net

gains

from

disposal

of

debt

instruments

at

fair

value

through

other

comprehensive

income

295

502

158

Net

(losses)/gains

from

disposal

of

financial

assets

and

liabilities

measured

at

amortised

cost

a

(61)

257

38

Dividend

income

37

76

91

Net

(losses)/gains

on

other

investments

b

(208)

(214)

72

Net

investment

income

13

1,131

585

Notes

a

Included

within

the

2020

balance

are

losses

of

£115m

relating

to

the

partial

redemption

of

contingent

capital

notes.

Included

within

the

2019

balance

are

gains

of

£170m

relating

to

the

sale

of

debt

securities

as

part

of

the

Group’s

Treasury

operations.

b

Barclays

has

amended

the

presentation

of

the

premium

paid

for

purchased

financial

guarantees

which

are

embedded

in

notes

it

issues

directly

to

the

market.

From

2020

onwards,

the

full

note

coupon

is

presented

as

interest

expense

within

net

interest

income.

The

financial

guarantee

element

of

the

coupon

had

previously

been

recognised

in

net

investment

incom

e.

The

reclassif

ication

into

interest

expense

is

£99m

for

2020

(2019:

£25m,

2018:

£1m).

The

comparatives

have

not

been

restated.

Notes

to

the

financial

statements

Financial

performance

and

returns

230

Barclays

PLC

2020

Annual

Report

on

Form

20-F

7

Credit

impairment

charges

Accounting

for

the

impairment

of

financial

assets

Impairment

In

accordance

with

IFRS

9,

the

Group

is

required

to

recognise

expected

credit

losses

(ECLs)

based

on

unbiased

forward-looking

information

for

all

financial

assets

at

amortised

cost,

lease

receivables,

debt

financial

assets

at

fair

value

through

other

comprehensive

income,

loan

commitments

and

financial

guarantee

contracts.

At

the

reporting

date,

an

allowance

(or

provision

for

loan

commitments

and

financial

guarantees)

is

required

for

the

12

month

(Stage

1)

ECLs.

If

the

credit

risk

has

significantly

increased

since

initial

recognition

(Stage

2),

or

if

the

financial

instrument

is

credit

impaired

(Stage

3),

an

allowance

(or

provision)

should

be

recognised

for

the

lifetime

ECLs.

The

measurement

of

ECL

is

calculated

using

three

main

components:

(i)

probability

of

default

(PD)

(ii)

loss

given

default

(LGD)

and

(iii)

the

exposure

at

default

(EAD).

The

12

month

and

lifetime

ECLs

are

calculated

by

multiplying

the

respective

PD,

LGD

and

the

EAD.

The

12

month

and

lifetime

PDs

represent

the

PD

occurring

over

the

months

and

the

remaining

maturity

of

the

instrument

respectively.

The

EAD

represents

the

expected

balance

at

default,

taking

into

account

the

repayment

of

principal

and

interest

from

the

balance

sheet

date

to

the

default

event

together

with

any

expected

drawdowns

of

committed

facilities.

The

LGD

represents

expected

losses

on

the

EAD

given

the

event

of

default,

taking

into

account,

among

other

attributes,

the

mitigating

effect

of

collateral

value

at

the

time

it

is

expected

to

be

realised

and

the

time

value

of

money.

Determining

a

significant

increase

in

credit

risk

since

initial

recognition:

The

Group

assesses

when

a

significant

increase

in

credit

risk

has

occurred

based

on

quantitative

and

qualitative

assessments.

The

credit

risk

of

an

exposure

is

considered

to

have

significantly

increased

when:

i)

Quantitative

test

The

annualised

lifetime

PD

has

increased

by

more

than

an

agreed

threshold

relative

to

the

equivalent

at

origination.

PD

deterioration

thresholds

are

defined

as

percentage

increases,

and

are

set

at

an

origination

score

band

and

segment

level

to

ensure

the

test

appropriately

captures

significant

increases

in

credit

risk

at

all

risk

levels.

Generally,

thresholds

are

inversely

correlated

to

the

origination

PD,

i.e.

as

the

origination

PD

increases,

the

threshold

value

reduces.

The

assessment

of

the

point

at

which

a

PD

increase

is

deemed

‘significant’,

is

based

upon

analysis

of

the

portfolio’s

risk

profile

against

a

common

set

of

principles

and

performance

metrics

(consistent

across

both

retail

and

wholesale

businesses),

incorporating

expert

credit

judgement

where

appropriate.

Application

of

quantitative

PD

floors

does

not

represent

the

use

of

the

low

credit

risk

exemption

as

exposures

can

separately

move

into

Stage

2

via

the

qualitative

route

described

below.

Wholesale

assets

apply

a

100%

increase

in

PD

and

0.2%

PD

floor

to

determine

a

significant

increase

in

credit

risk.

Retail

assets

apply

bespoke

relative

increase

and

absolute

PD

thresholds

based

on

product

type

and

origination

PD.

Thresholds

are

subject

to

maximums

defined

by

Group

policy

and

typically

apply

minimum

relative

thresholds

of

50-100%

and

a

maximum

relative

threshold

of

400%.

For

existing/historical

exposures

where

origination

point

scores

or

data

are

no

longer

available

or

do

not

represent

a

comparable

estimate

of

lifetime

PD,

a

proxy

origination

score

is

defined,

based

upon:

◾

back-population

of

the

approved

lifetime

PD

score

either

to

origination

date

or,

where

this

is

not

feasible,

as

far

back

as

possible

(subject

to

a

data

start

point

no

later

than

1

January

2015);

or

◾

use

of

available

historical

account

performance

data

and

other

customer

information,

to

derive

a

comparable

‘proxy’

estimation

of

origination

PD.

ii)

Qualitative

test

This

is

relevant

for

accounts

that

meet

the

portfolio’s

‘high

risk’

criteria

and

are

subject

to

closer

credit

monitoring.

High

risk

customers

may

not

be

in

arrears

but

either

through

an

event

or

an

observed

behaviour

exhibit

credit

distress.

The

definition

and

assessment

of

high

risk

includes

as

wide

a

range

of

information

as

reasonably

available,

such

as

industry

and

Group-wide

customer

level

data,

including

but

not

limited

to

bureau

scores

and

high

consumer

indebtedness

index,

wherever

possible

or

relevant.

Whilst

the

high

risk

populations

applied

for

IFRS

9

impairment

purposes

are

aligned

with

risk

management

processes,

they

are

also

regularly

reviewed

and

validated

to

ensure

that

they

capture

any

incremental

segments

where

there

is

evidence

of

credit

deterioration.

iii)

Backstop

criteria

This

is

relevant

for

accounts

that

are

more

than

30

calendar

days

past

due.

The

30

days

past

due

criteria

is

a

backstop

rather

than

a

primary

driver

of

moving

exposures

into

Stage

2.

The

criteria

for

determining

a

significant

increase

in

credit

risk

for

assets

with

bullet

repayments

follows

the

same

principle

as

all

other

assets,

i.e.

quantitative,

qualitative

and

backstop

tests

are

all

applied.

Exposures

will

move

back

to

Stage

1

once

they

no

longer

meet

the

criteria

for

a

significant

increase

in

credit

risk.

This

means

that,

at

a

minimum

all

payments

must

be

up-to-date,

the

PD

deterioration

test

is

no

longer

met,

the

account

is

no

longer

classified

as

high

risk,

and

the

customer

has

evidenced

an

ability

to

maintain

future

payments.

Exposures

are

only

removed

from

Stage

3

and

re-assigned

to

Stage

2

once

the

original

default

trigger

event

no

longer

applies.

Exposures

being

removed

from

Stage

3

must

no

longer

qualify

as

credit

impaired,

and:

a)

the

obligor

will

also

have

demonstrated

consistently

good

payment

behaviour

over

a

12-month

period,

by

making

all

consecutive

contractual

payments

due

and,

for

forborne

exposures,

the

relevant

EBA

defined

probationary

period

has

also

been

successfully

completed

or;

b)

(for

non-forborne

exposures)

the

performance

conditions

are

defined

and

approved

within

an

appropriately

sanctioned

restructure

plan,

including

12

months’

payment

history

have

been

met.

Notes

to

the

financial

statements

Financial

performance

and

returns

231

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Management

overlays

and

other

exceptions

to

model

outputs

are

applied

only

if

consistent

with

the

objective

of

identifying

significant

increases

in

credit

risk.

Forward-looking

information

The

measurement

of

ECL

involves

complexity

and

judgement,

including

estimation

of

PD,

LGD,

a

range

of

unbiased

future

economic

scenarios,

estimation

of

expected

lives

(where

contractual

life

is

not

appropriate),

and

estimation

of

EAD

and

assessing

significant

increases

in

credit

risk.

Credit

losses

are

the

expected

cash

shortfalls

from

what

is

contractually

due

over

the

expected

life

of

the

financial

instrument,

discounted

at

the

original

effective

interest

rate

(EIR).

ECLs

are

the

unbiased

probability-weighted

credit

losses

determined

by

evaluating

a

range

of

possible

outcomes

and

considering

future

economic

conditions.

The

Group

uses

a

five-scenario

model

to

calculate

ECL.

An

external

consensus

forecast

is

assembled

from

key

sources,

including

HM

Treasury

(short

and

medium

term

forecasts),

Bloomberg

(based

on

median

of

economic

forecasts)

and

the

Urban

Land

Institute

(for

US

House

Prices),

which

forms

the

baseline

scenario.

In

addition,

two

adverse

scenarios

(Downside

1

and

Downside

2)

and

two

favourable

scenarios

(Upside

1

and

Upside

2)

are

derived,

with

associated

probability

weightings.

The

adverse

scenarios

are

calibrated

to

a

similar

severity

to

internal

stress

tests,

whilst

also

considering

IFRS

9

specific

sensitivities

and

non-linearity.

Downside

2

is

benchmarked

to

the

Bank

of

England’s

annual

cyclical

scenarios

and

to

the

most

severe

scenario

from

Moody’s

inventory,

but

is

not

designed

to

be

the

same.

The

favourable

scenarios

are

calibrated

to

be

symmetric

to

the

adverse

scenarios,

subject

to

a

ceiling

calibrated

to

relevant

recent

favourable

benchmark

scenarios.

The

scenarios

include

eight

economic

variables

(GDP,

unemployment,

House

Price

Index

(HPI)

and

base

rates

in

both

the

UK

and

US

markets)

and

expanded

variables

using

statistical

models

based

on

historical

correlations.

The

upside

and

downside

shocks

are

designed

to

evolve

over

a

five-year

stress

horizon,

with

all

five

scenarios

converging

to

a

steady

state

after

approximately

eight

years.

The

methodology

for

estimating

probability

weights

for

each

of

the

scenarios

involves

a

comparison

of

the

distribution

of

key

historical

UK

and

US

macroeconomic

variables

against

the

forecast

paths

of

the

five

scenarios.

The

methodology

works

such

that

the

baseline

(reflecting

current

consensus

outlook)

has

the

highest

weight

and

the

weights

of

adverse

and

favourable

scenarios

depend

on

the

deviation

from

the

baseline;

the

further

from

the

baseline,

the

smaller

the

weight.

A

single

set

of

five

scenarios

is

used

across

all

portfolios

and

all

five

weights

are

normalised

to

equate

to

100%.

The

same

scenarios

and

weights

that

are

used

in

the

estimation

of

expected

credit

losses

are

also

used

for

the

Group

internal

planning

purposes.

The

impacts

across

the

portfolios

are

different

because

of

the

sensitivities

of

each

of

the

portfolios

to

specific

macroeconomic

variables,

for

example,

mortgages

are

highly

sensitive

to

house

prices,

and

credit

cards

and

unsecured

consumer

loans

are

highly

sensitive

to

unemployment.

Definition

of

default,

credit

impaired

assets,

write-offs,

and

interest

income

recognition

The

definition

of

default

for

the

purpose

of

determining

ECLs,

and

for

internal

credit

risk

management

purposes,

has

been

aligned

to

the

Regulatory

Capital

CRR

Article

178

definition

of

default,

to

maintain

a

consistent

approach

with

IFRS

9

and

associated

regulatory

guidance.

The

Regulatory

Capital

CRR

Article

178

definition

of

default

considers

indicators

that

the

debtor

is

unlikely

to

pay,

includes

exposures

in

forbearance

and

is

no

later

than

when

the

exposure

is

more

than

90

days

past

due

or

180

days

past

due

in

the

case

of

UK

mortgages.

When

exposures

are

identified

as

credit

impaired

at

the

time

when

they

are

purchased

or

originated

interest

income

is

calculated

on

the

carrying

value

net

of

the

impairment

allowance.

An

asset

is

considered

credit

impaired

when

one

or

more

events

occur

that

have

a

detrimental

impact

on

the

estimated

future

cash

flows

of

the

financial

asset.

This

comprises

assets

defined

as

defaulted

and

other

individually

assessed

exposures

where

imminent

default

or

actual

loss

is

identified.

Uncollectable

loans

are

written

off

against

the

for

loan

impairment

on

completion

of

the

Group’s

internal

processes

and

when

all

reasonably

expected

recoverable

amounts

have

been

collected.

Subsequent

recoveries

of

amounts

previously

written

off

are

credited

to

the

income

statement.

The

timing

and

extent

of

write-offs

may

involve

some

element

of

subjective

judgement.

Nevertheless,

a

write-off

will

often

be

prompted

by

a

specific

event,

such

as

the

inception

of

insolvency

proceedings

or

other

formal

recovery

action,

which

makes

it

possible

to

establish

that

some

or

the

entire

advance

is

beyond

realistic

prospect

of

recovery.

Accounting

for

purchased

financial

guarantee

contracts

The

Group

may

enter

into

a

financial

guarantee

contract

which

requires

the

issuer

of

such

contract

to

reimburse

the

Group

for

a

loss

it

incurs

because

a

specified

debtor

fails

to

make

payment

when

due

in

accordance

with

the

terms

of

a

debt

instrument.

For

these

separate

financial

guarantee

contracts,

the

Group

recognises

a

reimbursement

asset

aligned

with

the

recognition

of

the

underlying

ECLs,

if

it

is

considered

virtually

certain

that

a

reimbursement

would

be

received

if

the

specified

debtor

fails

to

make

payment

when

due

in

accordance

with

the

terms

of

the

debt

instrument.

Loan

modifications

and

renegotiations

that

are

not

credit-impaired

When

modification

of

a

loan

agreement

occurs

as

a

result

of

commercial

restructuring

activity

rather

than

due

to

the

credit

risk

of

the

borrower,

an

assessment

must

be

performed

to

determine

whether

the

terms

of

the

new

agreement

are

substantially

different

from

the

terms

of

the

existing

agreement.

This

assessment

considers

both

the

change

in

cash

flows

arising

from

the

modified

terms

as

well

as

the

change

in

overall

instrument

risk

profile.

In

respect

of

payment

holidays

granted

to

borrowers

which

are

not

due

to

forbearance,

if

the

revised

cash

flows

on

a

present

value

basis

(based

on

the

original

EIR)

are

not

substantially

different

from

the

original

cash

flows,

the

loan

is

not

considered

to

be

substantially

modified.

Where

terms

are

substantially

different,

the

existing

loan

will

be

derecognised

and

a

new

loan

will

be

recognised

at

fair

value,

with

any

difference

in

valuation

recognised

immediately

within

the

income

statement,

subject

to

observability

criteria.

Where

terms

are

not

substantially

different,

the

loan

carrying

value

will

be

adjusted

to

reflect

the

present

value

of

modified

cash

flows

discounted

at

the

original

EIR,

with

any

resulting

gain

or

loss

recognised

immediately

within

the

income

statement

as

a

modification

gain

or

loss.

Note

1

sets

out

details

for

changes

in

the

basis

of

determining

the

contractual

cash

flows

of

a

financial

instrument

that

are

required

by

interest

rate

benchmark

reform.

Expected

life

Lifetime

ECLs

must

be

measured

over

the

expected

life.

This

is

restricted

to

the

maximum

contractual

life

and

takes

into

account

expected

prepayment,

extension,

call

and

similar

options.

The

exceptions

are

certain

revolver

financial

instruments,

such

as

credit

cards

and

bank

Notes

to

the

financial

statements

Financial

performance

and

returns

232

Barclays

PLC

2020

Annual

Report

on

Form

20-F

overdrafts,

that

include

both

a

drawn

and

an

undrawn

component

where

the

entity’s

contractual

ability

to

demand

repayment

and

cancel

the

undrawn

commitment

does

not

limit

the

entity’s

exposure

to

credit

losses

to

the

contractual

notice

period.

For

revolving

facilities,

expected

life

is

analytically

derived

to

reflect

the

behavioural

life

of

the

asset,

i.e.

the

full

period

over

which

the

business

expects

to

be

exposed

to

credit

risk.

Behavioural

life

is

typically

based

upon

historical

analysis

of

the

average

time

to

default,

closure

or

withdrawal

of

facility.

Where

data

is

insufficient

or

analysis

inconclusive,

an

additional

‘maturity

factor’

may

be

incorporated

to

reflect

the

full

estimated

life

of

the

exposures,

based

upon

experienced

judgement

and/or

peer

analysis.

Potential

future

modifications

of

contracts

are

not

taken

into

account

when

determining

the

expected

life

or

EAD

until

they

occur.

Discounting

ECLs

are

discounted

at

the

EIR

at

initial

recognition

or

an

approximation

thereof

and

consistent

with

income

recognition.

For

loan

commitments

the

EIR

is

the

rate

that

is

expected

to

apply

when

the

loan

is

drawn

down

and

a

financial

asset

is

recognised.

Issued

financial

guarantee

contracts

are

discounted

at

the

risk

free

rate.

Lease

receivables

are

discounted

at

the

rate

implicit

in

the

lease.

For

variable/floating

rate

financial

assets,

the

spot

rate

at

the

reporting

date

is

used

and

projections

of

changes

in

the

variable

rate

over

the

expected

life

are

not

made

to

estimate

future

interest

cash

flows

or

for

discounting.

Modelling

techniques

ECLs

are

calculated

by

multiplying

three

main

components,

being

the

PD,

LGD

and

the

EAD,

discounted

at

the

original

EIR.

The

regulatory

Basel

Committee

of

Banking

Supervisors

(BCBS)

ECL

calculations

are

leveraged

for

IFRS

9

modelling

but

adjusted

for

key

differences

which

include:

◾

BCBS

requires

12

month

through

the

economic

cycle

losses

whereas

IFRS

9

requires

12

months

or

lifetime

point

in

time

losses

based

on

conditions

at

the

reporting

date

and

multiple

forecasts

of

the

future

economic

conditions

over

the

expected

lives;

◾

IFRS

9

models

do

not

include

certain

conservative

BCBS

model

floors

and

downturn

assessments

and

require

discounting

to

the

reporting

date

at

the

original

EIR

rather

than

using

the

cost

of

capital

to

the

date

of

default;

◾

Management

adjustments

are

made

to

modelled

output

to

account

for

situations

where

known

or

expected

risk

factors

and

information

have

not

been

considered

in

the

modelling

process,

for

example

forecast

economic

scenarios

for

uncertain

political

events;

and

◾

ECL

is

measured

at

the

individual

financial

instrument

level,

however

a

collective

approach

where

financial

instruments

with

similar

risk

characteristics

are

grouped

together,

with

apportionment

to

individual

financial

instruments,

is

used

where

effects

can

only

be

seen

at

a

collective

level,

for

example

for

forward-looking

information.

For

the

IFRS

9

impairment

assessment,

the

Group’s

risk

models

are

used

to

determine

the

PD,

LGD

and

EAD.

For

Stage

2

and

3,

the

Group

applies

lifetime

PDs

but

uses

12

month

PDs

for

Stage

1.

The

ECL

drivers

of

PD,

EAD

and

LGD

are

modelled

at

an

account

level

which

considers

vintage,

among

other

credit

factors.

Also,

the

assessment

of

significant

increase

in

credit

risk

is

based

on

the

initial

lifetime

PD

curve,

which

accounts

for

the

different

credit

risk

underwritten

over

time.

Forbearance

A

financial

asset

is

subject

to

forbearance

when

it

is

modified

due

to

the

credit

distress

of

the

borrower.

A

modification

made

to

the

terms

of

an

asset

due

to

forbearance

will

typically

be

assessed

as

a

non-substantial

modification

that

does

not

result

in

derecognition

of

the

original

loan,

except

in

circumstances

where

debt

is

exchanged

for

equity.

Both

performing

and

non-performing

forbearance

assets

are

classified

as

Stage

3

except

where

it

is

established

that

the

concession

granted

has

not

resulted

in

diminished

financial

obligation

and

that

no

other

regulatory

definition

of

default

criteria

have

been

triggered,

in

which

case

the

asset

is

classified

as

Stage

2.

The

minimum

probationary

period

for

non-performing

forbearance

is

12

months

and

for

performing

forbearance,

24

months.

Hence,

a

minimum

of

36

months

is

required

for

non-performing

forbearance

to

move

out

of

a

forborne

state.

No

financial

instrument

in

forbearance

can

transfer

back

to

Stage

1

until

all

of

the

Stage

2

thresholds

are

no

longer

met

and

can

only

move

out

of

Stage

3

when

no

longer

credit

impaired.

Critical

accounting

estimates

and

judgements

IFRS

9

impairment

involves

several

important

areas

of

judgement,

including

estimating

forward

looking

modelled

parameters

(PD,

LGD

and

EAD),

developing

a

range

of

unbiased

future

economic

scenarios,

estimating

expected

lives

and

assessing

significant

increases

in

credit

risk,

based

on

the

Group’s

experience

of

managing

credit

risk.

The

determination

of

expected

life

is

most

material

for

Barclays

credit

card

portfolios

which

is

obtained

via

behavioural

life

analysis

to

materially

capture

the

risk

of

these

facilities.

Within

the

retail

and

small

businesses

portfolios,

which

comprise

large

numbers

of

small

homogenous

assets

with

similar

risk

characteristics

where

credit

scoring

techniques

are

generally

used,

the

impairment

allowance

is

calculated

using

forward

looking

modelled

parameters

which

are

typically

run

at

account

level.

There

are

many

models

in

use,

each

tailored

to

a

product,

line

of

business

or

customer

category.

Judgement

and

knowledge

is

needed

in

selecting

the

statistical

methods

to

use

when

the

models

are

developed

or

revised.

The

impairment

allowance

reflected

in

the

financial

statements

for

these

portfolios

is

therefore

considered

to

be

reasonable

and

supportable.

The

impairment

charge

reflected

in

the

income

statement

for

retail

portfolios

is

£3,116

m

(2019:

£1,696m;

2018:

£1,598m)

of

the

total

impairment

charge

on

loans

and

advances

and

off

balance

sheet

loan

commitments

and

financial

guarantee

contracts.

For

individually

significant

assets

in

Stage

3,

impairment

allowances

are

calculated

on

an

individual

basis

and

all

relevant

considerations

that

have

a

bearing

on

the

expected

future

cash

flows

across

a

range

of

economic

scenarios

are

taken

into

account.

These

considerations

can

be

particularly

subjective

and

can

include

the

business

prospects

for

the

customer,

the

realisable

value

of

collateral,

the

Group’s

position

relative

to

other

claimants,

the

reliability

of

customer

information

and

the

likely

cost

and

duration

of

the

work-out

process.

The

level

of

the

impairment

allowance

is

the

difference

between

the

value

of

the

discounted

expected

future

cash

flows

(discounted

at

the

loan’s

original

effective

interest

rate),

and

its

carrying

amount.

Furthermore,

judgements

change

with

time

as

new

information

becomes

available

or

as

work-out

strategies

evolve,

resulting

in

frequent

revisions

to

the

impairment

allowance

as

individual

decisions

are

taken.

Changes

in

these

estimates

would

result

in

a

change

in

the

allowances

and

have

a

direct

impact

on

the

impairment

charge.

The

impairment

charge

reflected

in

the

financial

statements

in

relation

to

wholesale

portfolios

is

a

charge

of

£1,569m

(2019:

£208m

charge;

2018:

£133m

release)

of

the

total

impairment

charge

on

loans

and

advances

and

off

balance

sheet

loan

commitments

and

financial

guarantee

contracts.

Further

information

on

impairment

allowances,

impairment

charges,

measurement

uncertainty,

sensitivity

analysis

and

information

is

set

out

within

the

Credit

risk

performance

section.

Temporary

adjustments

to

calculated

IFRS9

impairment

allowances

may

be

applied

in

limited

circumstances

to

account

for

situations

where

known

or

expected

risk

factors

or

information

have

not

been

considered

in

the

ECL

assessment

or

modelling

process.

For

further

information

please

see

page

114

in

the

credit

risk

performance

section.

Notes

to

the

financial

statements

Financial

performance

and

returns

233

Barclays

PLC

2020

Annual

Report

on

Form

20-F

2020

2019

2018

Impairment

charges

Recoveries

and

reimburse-

ments

a

Total

Impairment

charges

Recoveries

and

reimburse-

ments

a

Total

Impairment

charges

Recoveries

and

reimburse-

ments

a

Total

£m

Loans

and

advances

4,308

(399)

3,909

1,957

(124)

1,833

1,785

(195)

1,590

Provision

for

undrawn

contractually

committed

facilities

and

guarantees

provided

776

-

776

71

-

71

(125)

-

(125)

Loans

impairment

5,084

(399)

4,685

2,028

(124)

1,904

1,660

(195)

1,465

Cash

collateral

and

settlement

balances

2

-

2

1

-

1

(1)

-

(1)

Financial

assets

at

fair

value

through

other

comprehensive

income

2

-

2

1

-

1

4

-

4

Other

financial

assets

measured

at

cost

149

-

149

6

-

6

-

Credit

impairment

charges

5,237

(399)

4,838

2,036

(124)

1,912

1,663

(195)

1,468

Note

a

Recoveries

and

reimbursements

includes

£364m

for

reimbursements

expected

to

be

received

under

the

arrange

ment

where

Group

has

entered

into

financial

guarantee

contracts

which

provide

credit

protection

over

certain

loans

assets

with

third

parties.

Cash

recoveries

of

previously

written

off

amounts

to

£35m.

Write-offs

subject

to

enforcement

activity

The

contractual

amount

outstanding

on

financial

assets

that

were

written

off

during

the

year

and

that

are

still

subject

to

enforcement

activity

is

£1,246m

(2019:

£1,660m).

This

is

lower

than

the

write-offs

presented

in

the

movement

in

gross

exposures

and

impairment

allowance

table

due

to

assets

sold

during

the

year

post

write-offs

and

post

write-off

recoveries.

Modification

of

financial

assets

Financial

assets

with

a

loss

allowance

measured

at

an

amount

equal

to

lifetime

ECL

of

£4,275m

(2019:

£1,383m)

were

subject

to

non-

substantial

modification

during

the

year,

with

a

resulting

loss

of

£34m

(2019:

£22m).

The

gross

carrying

amount

of

financial

assets

for

which

the

loss

allowance

has

changed

to

a

12

month

ECL

during

the

year

amounts

to

£1,194m

(2019:

£401m).

8

Operating

expenses

2020

2019

2018

£m

Infrastructure

costs

Property

and

equipment

1,556

1,409

1,360

Depreciation

and

amortisation

a

1,539

1,487

1,252

Lease

payments

a

34

41

329

Impairment

of

property,

equipment

and

intangible

assets

194

33

9

Total

infrastructure

costs

3,323

2,970

2,950

Administration

and

general

expenses

Consultancy,

legal

and

professional

fees

567

590

729

Marketing

and

advertising

330

425

495

UK

bank

levy

299

226

269

Other

administration

and

general

expenses

1,117

1,059

964

Total

administration

and

general

expenses

2,313

2,300

2,457

Staff

costs

8,097

8,315

8,629

Provisions

for

litigation

and

conduct

153

1,849

2,207

Operating

expenses

13,886

15,434

16,243

Note

a

Following

the

adoption

of

IFRS

16

from

1

January

2019,

the

depreciation

charge

associated

with

right

of

use

assets

is

reported

within

the

depreciation

and

amortisation

charge

for

2019

and

2020

.

For

further

details

on

staff

costs

including

accounting

policies,

refer

to

Note

31.

Notes

to

the

financial

statements

Financial

performance

and

returns

234

Barclays

PLC

2020

Annual

Report

on

Form

20-F

9

Tax

Accounting

for

income

taxes

The

Group

applies

IAS

12

Income

Taxes

in

accounting

for

taxes

on

income.

Income

tax

payable

on

taxable

profits

(current

tax)

is

recognised

as

an

expense

in

the

periods

in

which

the

profits

arise.

Withholding

taxes

are

also

treated

as

income

taxes.

Income

tax

recoverable

on

tax

allowable

losses

is

recognised

as

a

current

tax

asset

only

to

the

extent

that

it

is

regarded

as

recoverable

by

offsetting

against

taxable

profits

arising

in

the

current

or

prior

periods.

Current

tax

is

measured

using

tax

rates

and

tax

laws

that

have

been

enacted

or

substantively

enacted

at

the

balance

sheet

date.

Deferred

tax

assets

are

recognised

to

the

extent

that

it

is

probable

that

taxable

profit

will

be

available

against

which

the

deductible

temporary

differences,

and

the

carry

forward

of

unused

tax

credits

and

unused

tax

losses

can

be

utilised,

except

in

certain

circumstances

where

the

deferred

tax

asset

relating

to

the

deductible

temporary

difference

arises

from

the

initial

recognition

of

an

asset

or

liability

in

a

transaction

that

is

not

a

business

combination

and,

at

the

time

of

the

transaction,

affects

neither

the

accounting

profit

nor

taxable

profit

or

loss.

Deferred

tax

is

determined

using

tax

rates

and

legislation

enacted

or

substantively

enacted

by

the

balance

sheet

date

which

are

expected

to

apply

when

the

deferred

tax

asset

is

realised

or

the

deferred

tax

liability

is

settled.

Deferred

tax

ass

ets

and

liabilities

are

only

offset

when

there

is

both

a

legal

right

to

set-off

and

an

intention

to

settle

on

a

net

basis.

The

Group

considers

an

uncertain

tax

position

to

exist

when

it

considers

that

ultimately,

in

the

future,

the

amount

of

profit

subject

to

tax

may

be

greater

than

the

amount

initially

reflected

in

the

Group’s

tax

returns.

The

Group

accounts

for

provisions

in

respect

of

uncertain

tax

positions

in

two

different

ways.

A

current

tax

provision

is

recognised

when

it

is

considered

probable

that

the

outcome

of

a

review

by

a

tax

authority

of

an

uncertain

tax

position

will

alter

the

amount

of

cash

tax

due

to,

or

from,

a

tax

authority

in

the

future.

From

recognition,

the

current

tax

provision

is

then

measured

at

the

amount

the

Group

ultimately

expects

to

pay

the

tax

authority

to

resolve

the

position.

Effective

from

1

January

2019,

the

Group

changed

its

accounting

policy

on

the

accrual

of

interest

and

penalty

amounts

in

respect

of

uncertain

income

tax

positions

and

now

recognises

such

amounts

as

an

expense

within

profit

before

tax

and

will

continue

to

do

so

in

future

periods.

The

prior

periods’

tax

charges

have

not

been

restated

because

the

accrual

for

interest

and

penalties

in

those

periods

in

respect

of

uncertain

tax

positions

was

not

material.

Deferred

tax

provisions

are

adjustments

made

to

the

carrying

value

of

deferred

tax

assets

in

respect

of

uncertain

tax

positions.

A

deferred

tax

provision

is

recognised

when

it

is

considered

probable

that

the

outcome

of

a

review

by

a

tax

authority

of

an

uncertain

tax

position

will

result

in

a

reduction

in

the

carrying

value

of

the

deferred

tax

asset.

From

recognition

of

a

provision,

measurement

of

the

underlying

deferred

tax

asset

is

adjusted

to

take

into

account

the

expected

impact

of

resolving

the

uncertain

tax

position

on

the

loss

or

temporary

difference

giving

rise

to

the

deferred

tax

asset.

The

approach

taken

to

measurement

takes

account

of

whether

the

uncertain

tax

position

is

a

discrete

position

that

will

be

reviewed

by

the

tax

authority

in

isolation

from

any

other

position,

or

one

of

a

number

of

issues

which

are

expected

to

be

reviewed

together

concurrently

and

resolved

simultaneously

with

a

tax

authority.

The

Group’s

measurement

of

provisions

is

based

upon

its

best

estimate

of

the

additional

profit

that

will

become

subject

to

tax.

For

a

discrete

position,

consideration

is

given

only

to

the

me

rits

of

that

position.

Where

a

number

of

issues

are

expected

to

be

reviewed

and

resolved

together,

the

Group

will

take

into

account

not

only

the

merits

of

its

position

in

respect

of

each

particular

issue

but

also

the

overall

level

of

provision

relative

to

the

aggregate

of

the

uncertain

tax

positions

across

all

the

issues

that

are

expected

to

be

resolved

at

the

same

time.

In

addition,

in

assessing

provision

levels,

it

is

assumed

that

tax

authorities

will

review

uncertain

tax

positions

and

that

all

facts

will

be

fully

and

transparently

disclosed.

Critical

accounting

estimates

and

judgements

There

are

two

key

areas

of

judgement

that

impact

the

reported

tax

position.

Firstly,

the

level

of

provisioning

for

uncertain

tax

positions;

and

secondly,

the

recognition

and

measurement

of

deferred

tax

assets.

The

Group

does

not

consider

there

to

be

a

significant

risk

of

a

material

adjustment

to

the

carrying

amount

of

current

and

deferred

tax

balances,

including

provisions

for

uncertain

tax

positions

in

the

year.

The

provisions

for

uncertain

tax

positions

cover

a

diverse

range

of

issues

and

reflect

advice

from

external

counsel

where

relevant.

It

should

be

noted

that

only

a

proportion

of

the

total

uncertain

tax

positions

will

be

under

audit

at

any

point

in

time,

and

could

therefore

be

subject

to

challenge

by

a

tax

authority

over

the

Deferred

tax

assets

have

been

recognised

based

on

business

profit

forecasts.

Details

on

the

recognition

of

deferred

tax

assets

are

provided

in

this

note.

2020

2019

2018

£m

Current

tax

charge/(credit)

Current

year

1,255

1,037

689

Adjustments

in

respect

of

prior

years

31

(45)

(214)

1,286

992

475

Deferred

tax

charge/(credit)

Current

year

(830)

86

442

Adjustments

in

respect

of

prior

years

148

(75)

(6)

(682)

11

436

Tax

charge

604

1,003

911

The

table

below

shows

the

reconciliation

between

the

actual

tax

charge

and

the

tax

charge

that

would

result

from

applying

the

standard

UK

corporation

tax

rate

to

the

Group’s

profit

before

tax.

Notes

to

the

financial

statements

Financial

performance

and

returns

235

Barclays

PLC

2020

Annual

Report

on

Form

20-F

2020

2019

2018

£m

%

£m

%

£m

%

Profit

before

tax

3,065

4,357

3,494

Tax

charge

based

on

the

standard

UK

corporation

tax

rate

of

19%

(2019:

19%;

2018:

19%)

582

19.0%

828

19.0%

664

19.0%

Impact

of

profits/losses

earned

in

territories

with

different

statutory

rates

to

the

UK

(weighted

average

tax

rate

is

25.1%

(2019:

24.2%;

2018:

21.9%))

188

6.1%

227

5.2%

100

2.9%

Recurring

items:

Adjustments

in

respect

of

prior

years

179

5.8%

(120)

(2.7%)

(220)

(6.3%)

Non-creditable

taxes

including

withholding

taxes

109

3.5%

150

3.4%

156

4.5%

Impact

of

UK

bank

levy

being

non-deductible

57

1.9%

43

1.0%

51

1.5%

Non-deductible

expenses

48

1.6%

45

1.0%

81

2.3%

Tax

adjustments

in

respect

of

share-based

payments

26

0.8%

(6)

(0.1%)

17

0.5%

Impact

of

Barclays

Bank

PLC's

overseas

branches

being

taxed

both

locally

and

in

the

UK

25

0.8%

15

0.3%

16

0.5%

Banking

surcharge

and

other

items

6

0.2%

57

1.3%

104

2.9%

Changes

in

recognition

of

deferred

tax

and

effect

of

unrecognised

tax

losses

(123)

(4.0%)

(82)

(1.9%)

(104)

(3.0%)

AT1

tax

credit

(165)

(5.4%)

(157)

(3.6%)

(148)

(4.3%)

Non-taxable

gains

and

income

(208)

(6.8%)

(260)

(6.0%)

(245)

(7.0%)

Non-recurring

items:

Remeasurement

of

UK

deferred

tax

assets

due

to

cancellation

of

rate

change

(118)

(3.8%)

-

Non-deductible

provisions

for

UK

customer

redress

(7)

(0.2%)

263

6.1%

93

2.7%

Non-deductible

provisions

for

investigations

and

litigation

5

0.2%

-

346

9.9%

Total

tax

charge

604

19.7%

1,003

23.0%

911

26.1%

Factors

driving

the

effective

tax

rate

The

effective

tax

rate

of

19.7%

is

higher

than

the

UK

corporation

tax

rate

of

19%

primarily

due

to

profits

earned

outside

the

UK

being

taxed

at

local

statutory

tax

rates

that

are

higher

than

the

UK

tax

rate,

adjustments

in

respect

of

prior

years,

non-creditable

taxes

and

non-deductible

expenses

including

UK

bank

levy.

These

factors,

which

have

each

increased

the

effective

tax

rate,

are

largely

offset

by

the

impact

of

non-

taxable

gains

and

income,

tax

relief

on

payments

made

under

AT1

instruments,

the

use

of

unrecognised

tax

losses

in

the

period

and

adjustments

for

the

remeasurement

of

UK

deferred

tax

assets

as

a

result

of

the

UK

corporation

tax

rate

being

maintained

at

19%.

The

Group’s

future

tax

charge

will

be

sensitive

to

the

geographic

mix

of

profits

earned,

the

tax

rates

in

force

and

changes

to

the

tax

rules

in

the

jurisdictions

that

the

Group

operates

in.

Tax

in

the

consolidated

statement

of

comprehensive

income

The

tax

relating

to

each

component

of

other

comprehensive

income

can

be

found

in

the

consolidated

statement

of

comprehensive

income

which

includes

within

Other

a

tax

credit

of

£5m

(2019:

£16m)

on

other

items

including

share-based

payments.

Deferred

tax

assets

and

liabilities

The

deferred

tax

amounts

on

the

balance

sheet

were

as

follows:

2020

2019

£m

US

Intermediate

Holding

Company

Tax

Group

('IHC

Tax

Group')

1,001

1,037

US

Branch

Tax

Group

1,048

1,015

UK

Tax

Group

886

818

Other

(outside

the

UK

and

US

tax

groups)

509

420

Deferred

tax

asset

3,444

3,290

Deferred

tax

liability

(15)

(23)

Net

deferred

tax

3,429

3,267

US

deferred

tax

assets

in

the

IHC

and

US

Branch

Tax

Groups

The

deferred

tax

asset

in

the

IHC

Tax

Group

of

£1,001m

(2019:

£1,037m)

relates

entirely

to

temporary

differences

and

includes

£nil

(2019:

£54m)

relating

to

tax

losses

and

the

deferred

tax

asset

in

Barclays

Bank

PLC’s

US

Branch

Tax

Group

of

£1,048m

(2019:

£1,015m)

also

relates

entirely

to

temporary

differences

and

includes

£nil

(2019:

£84m)

relating

to

tax

losses.

The

deferred

tax

asset

in

the

IHC

Tax

Group

of

£1,001m

(2019:

£1,037m)

also

includes

£330m

(2019:

£359m)

arising

from

prior

net

operating

loss

conversion.

Under

New

York

State

and

City

tax

rules

the

amounts

can

be

carried

forward

and

will

expire

in

2034.

Business

profit

forecasts

indicate

these

amounts

will

be

fully

recovered

before

expiry.

They

are

included

within

the

other

temporary

differences

category

in

the

table

below.

Notes

to

the

financial

statements

Financial

performance

and

returns

236

Barclays

PLC

2020

Annual

Report

on

Form

20-F

UK

Tax

Group

deferred

tax

asset

The

deferred

tax

asset

in

the

UK

Tax

Group

of

£886m

(2019:

£818m)

includes

£565m

(2019:

£268m)

relating

to

tax

losses,

with

the

balance

relating

to

temporary

differences.

There

is

no

time

limit

on

utilisation

of

UK

tax

losses

and

business

profit

forecasts

indicate

that

these

will

be

fully

recovered.

Other

deferred

tax

assets

(outside

the

UK

and

US

tax

groups)

The

deferred

tax

asset

of

£509m

(2019:

£420m)

in

other

entities

within

the

Group

includes

£170m

(2019:

£117

m)

relating

to

tax

losses.

These

deferred

tax

assets

relate

to

a

number

of

different

territories

and

their

recognition

is

based

on

profit

forecasts

or

local

country

law

which

indicate

that

it

is

probable

that

those

deferred

tax

assets

will

be

fully

recovered.

Of

the

deferred

tax

asset

of

£509m

(2019:

£420m),

an

amount

of

£8m

(2019:

£10m)

relates

to

entities

which

have

suffered

a

loss

in

either

the

current

or

prior

year

and

for

which

the

utilisation

of

the

deferred

tax

is

dependent

on

future

taxable

profits.

This

has

been

taken

into

account

in

reaching

the

above

conclusion

that

these

deferred

tax

assets

will

be

fully

recovered

in

the

future.

The

table

below

shows

movements

on

deferred

tax

assets

and

liabilities

during

the

year.

The

amounts

are

different

from

those

disclosed

on

the

balance

sheet

and

in

the

preceding

table

as

they

are

presented

before

offsetting

asset

and

liability

balances

where

there

is

a

legal

right

to

set-off

and

an

intention

to

settle

on

a

net

basis.

Fixed

asset

timing

differences

Fair

value

through

other

comprehensive

income

Cash

flow

hedges

Retirement

benefit

obligations

Loan

impairment

allowance

Other

provisions

Share-based

payments

and

deferred

compensation

Other

temporary

differences

Tax

losses

carried

forward

Total

£m

Assets

1,338

119

-

38

501

128

344

1,458

523

4,449

Liabilities

(31)

(18)

(181)

(640)

-

(312)

-

(1,182)

At

1

January

2020

1,307

101

(181)

(602)

501

128

344

1,146

523

3,267

Income

statement

129

-

6

156

22

20

134

215

682

Other

comprehensive

income

and

reserves

-

(137)

(377)

(191)

-

5

238

-

(462)

Other

movements

(12)

(2)

(8)

4

9

(7)

(6)

(33)

(3)

(58)

1,424

(38)

(566)

(783)

666

143

363

1,485

735

3,429

Assets

1,465

-

43

666

143

363

1,564

735

4,979

Liabilities

(41)

(38)

(566)

(826)

-

(79)

-

(1,550)

At

31

December

2020

1,424

(38)

(566)

(783)

666

143

363

1,485

735

3,429

Assets

1,292

180

39

46

601

112

359

1,377

529

4,535

Liabilities

(16)

(35)

(10)

(435)

-

(262)

-

(758)

At

1

January

2019

1,276

145

29

(389)

601

112

359

1,115

529

3,777

Income

statement

51

-

(4)

(49)

23

(19)

(31)

18

(11)

Other

comprehensive

income

and

reserves

-

(42)

(210)

(205)

(40)

2

9

72

-

(414)

Other

movements

(20)

(2)

-

(4)

(11)

(9)

(5)

(10)

(24)

(85)

1,307

101

(181)

(602)

501

128

344

1,146

523

3,267

Assets

1,338

119

-

38

501

128

344

1,458

523

4,449

Liabilities

(31)

(18)

(181)

(640)

-

(312)

-

(1,182)

At

31

December

2019

1,307

101

(181)

(602)

501

128

344

1,146

523

3,267

Other

movements

include

the

impact

of

changes

in

foreign

exchange

rates

as

well

as

deferred

tax

amounts

relating

to

acquisitions

and

disposals.

The

amount

of

deferred

tax

assets

expected

to

be

recovered

after

more

than

12

months

is

£4,544m

(2019:

£3,945m).

The

amount

of

deferred

tax

liability

expected

to

be

settled

after

more

than

12

months

is

£1,510m

(2019:

£1,199m).

These

amounts

are

before

offsetting

asset

and

liability

balances

where

there

is

a

legal

right

to

set-off

and

an

intention

to

settle

on

a

net

basis.

Unrecognised

deferred

tax

Tax

losses

and

temporary

differences

Deferred

tax

assets

have

not

been

recognised

in

respect

of

gross

deductible

temporary

differences

of

£125m

(2019:

£213m),

unused

tax

credits

of

£236m

(2019:

£247m),

and

gross

tax

losses

of

£20,913m

(2019:

£19,582m).

The

tax

losses

include

capital

losses

of

£3,947m

(2019:

£3,980m).

Of

these

tax

losses,

£139m

(2019:

£41m)

expire

within

five

years,

£236m

(2019:

£239m)

expire

within

six

to

10

years,

£7,271m

(2019:

£5,178m)

expire

within

11

to

20

years

and

£13,267m

(2019:

£14,124m)

can

be

carried

forward

indefinitely.

Deferred

tax

assets

have

not

been

recognised

in

respect

of

these

items

because

it

is

not

probable

that

future

taxable

profits

and

gains

will

be

available

against

which

they

can

be

utilised

.

Group

investments

in

subsidiaries,

branches

and

associates

Deferred

tax

is

not

recognised

in

respect

of

the

value

of

the

Group's

investments

in

subsidiaries,

branches

and

associates

where

the

Group

is

able

to

control

the

timing

of

the

reversal

of

the

temporary

differences

and

it

is

probable

that

such

differences

will

not

reverse

in

the

foreseeable

future.

The

aggregate

amount

of

these

temporary

differences

for

which

deferred

tax

liabilities

have

not

been

recognised

was

£0.8bn

(2019:

£0.7bn).

Notes

to

the

financial

statements

Financial

performance

and

returns

237

Barclays

PLC

2020

Annual

Report

on

Form

20-F

10

Earnings

per

share

2020

2019

2018

£m

Profit

attributable

to

ordinary

equity

holders

of

the

parent

1,526

2,461

1,597

2020

2019

2018

million

Basic

weighted

average

number

of

shares

in

issue

17,300

17,200

17,075

Number

of

potential

ordinary

shares

368

282

308

Diluted

weighted

average

number

of

shares

17,668

17,482

17,383

Basic

earnings

per

share

Diluted

earnings

per

share

2020

2019

2018

2020

2019

2018

p

Earnings

per

ordinary

share

8.8

14.3

9.4

8.6

14.1

9.2

The

calculation

of

basic

earnings

per

share

is

based

on

the

profit

attributable

to

equity

holders

of

the

parent

and

the

basic

weighted

average

number

of

shares

excluding

treasury

shares

held

in

employee

benefit

trusts

or

held

for

trading.

When

calculating

the

diluted

earnings

per

share,

the

weighted

average

number

of

shares

in

issue

is

adjusted

for

the

effects

of

all

expected

dilutive

potential

ordinary

shares

held

in

respect

of

Barclays

PLC,

totalling

368m

(2019:

282m)

shares.

The

total

number

of

share

options

outstanding,

under

schemes

considered

to

be

potentially

dilutive,

was

719m

(2019:

533m).

These

options

have

strike

prices

ranging

from

£0.84

to

£2.27.

Of

the

total

number

of

employee

share

options

and

share

awards

at

31

December

2020,

69m

(2019:

43m)

were

anti-dilutive.

The

100m

(2019:

125m)

increase

in

the

basic

weighted

average

number

of

shares

are

primarily

due

to

shares

issued

under

employee

share

schemes.

11

Dividends

on

ordinary

shares

In

response

to

a

request

from

the

PRA,

and

to

preserve

additional

capital

for

use

in

serving

Barclays

customers

and

clients

through

the

extraordinary

challenges

presented

by

the

COVID-19

pandemic,

the

Board

agreed

to

cancel

the

6.0p

per

ordinary

share

full

year

2019

dividend.

The

Directors

have

approved

a

total

dividend

in

respect

of

2020

of

1.0p

per

ordinary

share

of

25p

each.

The

full

year

dividend

for

2020

of

1.0p

per

ordinary

share

will

be

paid

on

1

April

2021

to

shareholders

on

the

Share

Register

on

26

February

2021.

On

31

December

2020,

there

were

17,359m

ordinary

shares

in

issue.

The

financial

statements

for

the

year

ended

31

December

2020

do

not

reflect

this

dividend,

which

will

be

accounted

for

in

shareholders’

equity

as

an

appropriation

of

retained

profits

in

the

year

ending

31

December

2021.

Dividends

are

funded

out

of

distributable

reserves.

The

Directors

have

confirmed

their

intention

to

initiate

a

share

buyback

of

up

to

£700m

after

the

balance

sheet

date.

The

share

buyback

is

expected

to

commence

in

the

first

quarter

of

2021.

The

financial

statements

for

the

year

ended

31

December

2020

do

not

reflect

the

impact

of

the

proposed

share

buyback,

which

will

be

accounted

for

as

and

when

shares

are

repurchased

by

the

Company.

Notes

to

the

financial

statements

Assets

and

liabilities

held

at

fair

value

238

Barclays

PLC

2020

Annual

Report

on

Form

20-F

The

notes

included

in

this

section

focus

on

assets

and

liabilities

the

Group

holds

and

recognises

at

fair

value.

Fair

value

refers

to

the

price

that

would

be

received

to

sell

an

asset

or

the

price

that

would

be

paid

to

transfer

a

liability

in

an

orderly

transaction

between

market

participants

at

the

measurement

date,

which

may

be

an

observable

market

price

or,

where

there

is

no

quoted

price

for

the

instrument,

may

be

an

estimate

based

on

available

market

data.

Detail

regarding

the

Group’s

approach

to

managing

market

risk

can

be

found

in

the

Market

risk

management

section.

12

Trading

portfolio

Accounting

for

trading

portfolio

assets

and

liabilities

In

accordance

with

IFRS

9,

all

assets

and

liabilities

held

for

trading

purposes

are

held

at

fair

value

with

gains

and

losses

in

the

changes

in

fair

value

taken

to

the

income

statement

in

net

trading

income

(Note

5).

Trading

portfolio

assets

Trading

portfolio

liabilities

2020

2019

2020

2019

£m

Debt

securities

and

other

eligible

bills

56,482

52,739

(30,102)

(23,741)

Equity

securities

62,192

56,000

(17,303)

(13,175)

Traded

loans

8,348

5,378

-

Commodities

928

78

-

Trading

portfolio

assets/(liabilities)

127,950

114,195

(47,405)

(36,916)

13

Financial

assets

at

fair

value

through

the

income

statement

Accounting

for

financial

assets

mandatorily

at

fair

value

Financial

assets

that

are

held

for

trading

are

recognised

at

fair

value

through

profit

or

loss.

In

addition,

financial

assets

are

held

at

fair

value

through

profit

or

loss

if

they

do

not

contain

contractual

terms

that

give

rise

on

specified

dates

to

cash

flows

that

are

SPPI,

or

if

the

financial

asset

is

not

held

in

a

business

model

that

is

either

(i)

a

business

model

to

collect

the

contractual

cash

flows

or

(ii)

a

business

model

that

is

achieved

by

both

collecting

contractual

cash

flows

and

selling.

Accounting

for

financial

assets

designated

at

fair

value

Financial

assets,

other

than

those

held

for

trading,

are

classified

in

this

category

if

they

are

so

irrevocably

designated

at

inception

and

the

use

of

the

designation

removes

or

significantly

reduces

an

accounting

mismatch.

Subsequent

changes

in

fair

value

for

these

instruments

are

recognised

in

the

income

statement

in

net

investment

income,

except

if

reporting

it

in

trading

income

reduces

an

accounting

mismatch.

The

details

on

how

the

fair

value

amounts

are

derived

for

financial

assets

at

fair

value

are

described

in

Note

17.

Designated

at

fair

value

Mandatorily

at

fair

value

Total

2020

2019

2020

2019

2020

2019

£m

Loans

and

advances

5,600

4,900

25,279

17,792

30,879

22,692

Debt

securities

292

3,995

1,401

1,254

1,693

5,249

Equity

securities

-

4,620

7,495

4,620

7,495

Reverse

repurchase

agreements

and

other

similar

secured

lending

19

40

137,597

96,847

137,616

96,887

Other

financial

assets

-

343

763

343

763

Financial

assets

at

fair

value

through

the

income

statement

5,911

8,935

169,240

124,151

175,151

133,086

Credit

risk

of

financial

assets

designated

at

fair

value

and

derivatives

The

following

table

shows

the

maximum

exposure

to

credit

risk,

the

changes

in

fair

value

attributable

to

changes

in

credit

risk,

and

the

cumulative

changes

in

fair

value

since

initial

recognition

for

loans

and

advances.

The

table

does

not

include

debt

securities

and

reverse

repurchase

agreements

and

other

similar

secured

lending

designated

at

FV

as

they

have

minimal

exposure

to

credit

risk.

Reverse

repurchase

agreements

are

collateralised

and

debt

securities

are

primarily

relating

to

high

quality

sovereigns.

Maximum

exposure

as

at

31

December

Changes

in

fair

value

during

the

year

ended

Cumulative

changes

in

fair

value

from

inception

2020

2019

2020

2019

2020

2019

£m

Loans

and

advances

designated

at

fair

value,

attributable

to

credit

risk

5,600

4,900

(47)

4

(73)

(26)

Value

mitigated

by

derivatives

795

-

3

-

3

-

Notes

to

the

financial

statements

Assets

and

liabilities

held

at

fair

value

239

Barclays

PLC

2020

Annual

Report

on

Form

20-F

14

Derivative

financial

instruments

Accounting

for

derivatives

Derivative

instruments

are

contracts

whose

value

is

derived

from

one

or

more

underlying

financial

instruments

or

indices

defined

in

the

contract.

They

include

swaps,

forward-rate

agreements,

futures,

options

and

combinations

of

these

instruments

and

primarily

affect

the

Group’s

net

interest

income,

net

trading

income

and

derivative

assets

and

liabilities.

Notional

amounts

of

the

contracts

are

not

recorded

on

the

balance

sheet.

Derivatives

are

used

to

hedge

interest

rate,

credit

risk,

inflation

risk,

exchange

rate,

commodity

equity

exposures,

and

exposures

to

certain

indices

such

as

house

price

indices

and

retail

price

indices

non-trading

positions.

All

derivative

instruments

are

held

at

fair

value

through

profit

or

loss,

except

for

derivatives

that

are

in

a

designated

cash

flow

or

net

investment

hedge

accounting

relationship.

Derivatives

are

classified

as

assets

when

their

fair

value

is

positive

or

as

liabilities

when

their

fair

value

is

negative.

This

includes

terms

included

in

a

contract

or

financial

liability

(the

host),

which,

had

it

been

a

standalone

contract,

would

have

met

the

definition

of

a

derivative.

If

these

are

separated

from

the

host,

i.e.

when

the

economic

characteristics

of

the

embedded

derivative

are

not

closely

those

of

the

host

contract

and

the

combined

instrument

is

not

measured

at

fair

value

through

profit

or

loss,

then

they

are

accounted

for

in

the

same

way

as

derivatives.

For

financial

assets,

the

requirements

are

whether

the

financial

assets

contain

contractual

terms

that

give

rise

on

specified

dates

to

cash

flows

that

are

SPPI,

and

consequently

the

requirements

for

accounting

for

embedded

derivatives

are

not

applicable

to

financial

assets.

Hedge

accounting

The

Group

applies

the

requirements

of

IAS

39

Financial

Instruments:

Recognition

and

Measurement

for

hedge

accounting

purposes.

The

Group

applies

hedge

accounting

to

represent

the

economic

effects

of

its

interest

rate,

currency

and

contractually

linked

inflation

risk

management

strategies.

Where

derivatives

are

held

for

risk

management

purposes,

and

when

transactions

meet

the

required

criteria

for

documentation

and

hedge

effectiveness,

the

Group

applies

fair

value

hedge

accounting,

cash

flow

hedge

accounting,

or

hedging

of

a

net

investment

in

a

foreign

operation,

as

appropriate

to

the

risks

being

hedged.

The

Group

has

applied

the

‘Amendments

to

IFRS

9,

IAS

39

and

IFRS

7

Interest

Rate

Benchmark

Reform’

issued

in

September

2019.

In

accordance

with

the

transition

provisions,

the

amendments

have

been

adopted

retrospectively

to

hedging

relationships

that

existed

at

the

start

of

the

reporting

period

or

were

designated

thereafter,

and

to

the

amount

accumulated

in

the

cash

flow

hedge

reserve

at

that

date.

The

amendments

provide

temporary

relief

from

applying

specific

hedge

accounting

requirements

to

hedging

relationships

directly

affected

by

IBOR

(‘Interbank

Offered

Rates’)

reform.

The

reliefs

have

the

effect

that

IBOR

reform

should

not

generally

cause

hedge

accounting

to

terminate.

However,

any

hedge

ineffectiveness

continues

to

be

recorded

in

the

income

statement.

Furthermore,

the

amendments

set

out

triggers

for

when

the

reliefs

will

end,

which

include

the

uncertainty

arising

from

interest

rate

benchmark

reform

no

longer

being

present.

In

summary,

the

reliefs

provided

by

the

amendments

that

apply

to

the

Group

are:

◾

When

considering

the

‘highly

probable’

requirement,

the

Group

has

assumed

that

the

IBOR

interest

rates

upon

which

our

hedged

items

are

based

do

not

change

as

a

result

of

IBOR

Reform.

◾

In

assessing

whether

the

hedge

is

expected

to

be

highly

effective

on

a

forward-looking

basis

the

Group

has

assumed

that

the

IBOR

interest

rates

upon

which

the

cash

flows

of

the

hedged

items

and

the

interest

rate

swaps

that

hedge

them

are

based

are

not

altered

by

IBOR

reform.

◾

The

Group

will

not

discontinue

hedge

accounting

during

the

period

of

IBOR-related

uncertainty

solely

because

the

retrospective

effectiveness

falls

outside

the

required

80–125%

range.

◾

The

Group

has

not

recycled

the

cash

flow

hedge

reserve

relating

to

the

period

after

the

reforms

are

expected

to

take

effect.

◾

The

Group

has

assessed

whether

the

hedged

IBOR

risk

component

is

a

separately

identifiable

risk

only

when

it

first

designates

a

hedged

item

in

a

fair

value

hedge

and

not

on

an

ongoing

basis.

The

Group

has

elected

to

early

adopt

the

‘Amendments

to

IFRS

9,

IAS

39,

IFRS

7,

IFRS

4

and

IFRS

16

Interest

Rate

Benchmark

Reform

–

Phase

2’

issued

in

August

2020.

The

Phase

2

amendments

provide

relief

when

changes

are

made

to

hedge

relationships

as

a

result

of

the

interest

rate

benchmark

reform.

The

Phase

2

amendments

adopted

by

the

Group

are:

◾

Under

a

temporary

exception,

the

Group

has

considered

that

changes

to

the

hedge

designation

and

hedge

documentation

due

to

the

interest

rate

benchmark

reform

would

not

constitute

the

discontinuation

of

the

hedge

relationship

nor

the

designation

of

a

new

hedging

relationship.

◾

In

respect

of

the

retrospective

hedge

effectiveness

assessment,

the

Group

may

elect,

on

a

hedge-by-hedge

basis,

to

reset

the

cumulative

fair

value

changes

to

zero

when

the

exception

to

the

retrospective

assessment

ends

(Phase

1

relief).

Any

hedge

ineffectiveness

will

continue

to

be

measured

and

recognised

in

full

in

profit

or

loss.

◾

The

Group

has

deemed

the

amounts

accumulated

in

the

cash

flow

hedge

reserve

to

be

based

on

the

alternative

benchmark

rate

(on

which

the

hedge

future

cash

flows

are

determined)

when

there

is

a

change

in

basis

for

determining

the

contractual

cash

flows.

◾

For

hedges

of

groups

of

items

(such

as

those

forming

part

of

a

macro

cash

flow

hedging

strategy),

the

amendments

provide

relief

for

items

within

a

designated

group

of

items

that

are

amended

for

changes

directly

required

by

the

reform.

◾

In

respect

of

whether

a

risk

component

of

a

hedged

item

is

separately

identifiable,

the

amendments

provide

temporary

relief

to

entities

to

meet

this

requirement

when

an

alternative

risk

free

rate

(RFR)

financial

instrument

is

designated

as

a

risk

component.

These

amendments

allow

the

Group

upon

designation

of

the

hedge

to

assume

that

the

separately

identifiable

requirement

is

met

if

the

Group

reasonably

expects

the

RFR

risk

will

become

separately

identifiable

within

the

months.

The

Group

applies

this

relief

to

each

RFR

on

a

rate-by-rate

basis

and

starts

when

the

Group

first

designates

the

RFR

as

a

non-contractually

specified

risk

component.

Fair

value

hedge

accounting

Changes

in

fair

value

of

derivatives

that

qualify

and

are

designated

as

fair

value

hedges

are

recorded

in

the

income

statement,

together

with

changes

in

the

fair

value

of

the

hedged

asset

or

liability

that

are

attributable

to

the

hedged

risk.

The

fair

value

changes

adjust

the

carrying

value

of

the

hedged

asset

or

liability

held

at

amortised

cost.

If

hedge

relationships

no

longer

meet

the

criteria

for

hedge

accounting,

hedge

accounting

is

discontinued.

For

fair

value

hedges

of

interest

rate

risk,

the

fair

value

adjustment

to

the

hedged

item

is

amortised

to

the

income

statement

over

the

period

to

maturity

of

the

previously

designated

hedge

relationship

using

the

effective

interest

method.

If

the

hedged

item

is

sold

or

repaid,

the

unamortised

fair

value

adjustment

is

recognised

immediately

in

the

income

statement.

For

items

classified

as

fair

value

through

other

comprehensive

income,

the

hedge

accounting

adjustment

is

included

in

other

comprehensive

income.

Cash

flow

hedge

accounting

Notes

to

the

financial

statements

Assets

and

liabilities

held

at

fair

value

240

Barclays

PLC

2020

Annual

Report

on

Form

20-F

For

qualifying

cash

flow

hedges,

the

fair

value

gain

or

loss

associated

with

the

effective

portion

of

the

cash

flow

hedge

is

recognised

initially

in

other

comprehensive

income,

and

then

recycled

to

the

income

statement

in

the

periods

when

the

hedged

item

will

affect

profit

or

loss.

Any

ineffective

portion

of

the

gain

or

loss

on

the

hedging

instrument

is

recognised

in

the

income

statement

immediately.

When

a

hedging

instrument

expires

or

is

sold,

or

when

a

hedge

no

longer

meets

the

criteria

for

hedge

accounting,

any

cumulative

gain

or

loss

existing

in

equity

at

that

time

remains

in

equity

and

is

recognised

when

the

hedged

item

is

ultimately

recognised

in

the

income

statement.

When

a

forecast

transaction

is

no

longer

expected

to

occur,

the

cumulative

gain

or

loss

that

was

recognised

in

equity

is

immediately

transferred

to

the

income

statement.

Hedges

of

net

investments

The

Group’s

net

investments

in

foreign

operations,

including

monetary

items

accounted

for

as

part

of

the

net

investment,

are

hedged

for

foreign

currency

risks

using

both

derivatives

and

foreign

currency

borrowings.

Hedges

of

net

investments

are

accounted

for

similarly

to

cash

flow

hedges;

the

effective

portion

of

the

gain

or

loss

on

the

hedging

instrument

is

being

recognised

directly

in

other

comprehensive

income

and

the

ineffective

portion

being

recognised

immediately

in

the

income

statement.

The

cumulative

gain

or

loss

recognised

in

other

comprehensive

income

is

recognised

in

the

income

statement

on

the

disposal

or

partial

disposal

of

the

foreign

operation,

or

other

reductions

in

the

Group’s

investment

in

the

operation.

Total

derivatives

2020

2019

Notional

contract

amount

Fair

value

Notional

contract

amount

Fair

value

Assets

Liabilities

Assets

Liabilities

£m

Total

derivative

assets/(liabilities)

held

for

trading

43,169,971

301,880

(299,795)

42,111,110

229,063

(228,617)

Total

derivative

assets/(liabilities)

held

for

risk

management

189,784

566

(980)

181,375

173

(587)

Derivative

assets/(liabilities)

43,359,755

302,446

(300,775)

42,292,485

229,236

(229,204)

Further

information

on

netting

arrangements

of

derivative

financial

instruments

can

be

found

within

Note

18.

Notes

to

the

financial

statements

Assets

and

liabilities

held

at

fair

value

241

Barclays

PLC

2020

Annual

Report

on

Form

20-F

The

fair

values

and

notional

amounts

of

derivative

instruments

held

for

trading

and

held

for

risk

management

are

set

out

in

the

following

table:

Derivatives

held

for

trading

and

held

for

risk

management

2020

2019

Notional

contract

amount

Fair

value

Notional

contract

amount

Fair

value

Assets

Liabilities

Assets

Liabilities

£m

Derivatives

held

for

trading

Foreign

exchange

derivatives

OTC

derivatives

5,461,057

84,401

(84,043)

4,906,647

56,480

(56,845)

Derivatives

cleared

by

central

counterparty

78,946

335

(335)

74,698

84

(145)

Exchange

traded

derivatives

14,034

3

(3)

18,520

12

(31)

Foreign

exchange

derivatives

5,554,037

84,739

(84,381)

4,999,865

56,576

(57,021)

Interest

rate

derivatives

OTC

derivatives

13,547,990

170,808

(161,157)

12,627,808

140,207

(133,401)

Derivatives

cleared

by

central

counterparty

18,737,415

965

(885)

17,428,460

867

(1,093)

Exchange

traded

derivatives

2,971,966

371

(360)

5,041,948

1,251

(1,265)

Interest

rate

derivatives

35,257,371

172,144

(162,402)

35,098,216

142,325

(135,759)

Credit

derivatives

OTC

derivatives

384,900

3,674

(3,909)

399,386

5,253

(5,399)

Derivatives

cleared

by

central

counterparty

462,945

931

(1,095)

426,130

2,962

(2,687)

Credit

derivatives

847,845

4,605

(5,004)

825,516

8,215

(8,086)

Equity

and

stock

index

derivatives

OTC

derivatives

466,151

18,807

(26,094)

232,050

10,628

(15,785)

Exchange

traded

derivatives

927,114

20,165

(20,521)

841,994

10,178

(10,849)

Equity

and

stock

index

derivatives

1,393,265

38,972

(46,615)

1,074,044

20,806

(26,634)

Commodity

derivatives

OTC

derivatives

4,244

89

(110)

7,327

303

(256)

Exchange

traded

derivatives

113,209

1,331

(1,283)

106,142

838

(861)

Commodity

derivatives

117,453

1,420

(1,393)

113,469

1,141

(1,117)

Derivative

assets/(liabilities)

held

for

trading

43,169,971

301,880

(299,795)

42,111,110

229,063

(228,617)

Total

OTC

derivatives

19,864,342

277,779

(275,313)

18,173,218

212,871

(211,686)

Total

derivatives

cleared

by

central

counterparty

19,279,306

2,231

(2,315)

17,929,288

3,913

(3,925)

Total

exchange

traded

derivatives

4,026,323

21,870

(22,167)

6,008,604

12,279

(13,006)

Derivative

assets/(liabilities)

held

for

trading

43,169,971

301,880

(299,795)

42,111,110

229,063

(228,617)

Derivatives

held

for

risk

management

Derivatives

designated

as

cash

flow

hedges

OTC

foreign

exchange

derivatives

6,596

351

-

OTC

interest

rate

derivatives

2,433

35

-

1,195

7

(1)

Interest

rate

derivatives

cleared

by

central

counterparty

65,408

-

66,578

-

Derivatives

designated

as

cash

flow

hedges

74,437

386

-

67,773

7

(1)

Derivatives

designated

as

fair

value

hedges

OTC

interest

rate

derivatives

11,116

155

(980)

8,379

136

(586)

Interest

rate

derivatives

cleared

by

central

counterparty

103,440

-

104,078

-

Derivatives

designated

as

fair

value

hedges

114,556

155

(980)

112,457

136

(586)

Derivatives

designated

as

hedges

of

net

investments

OTC

foreign

exchange

derivatives

791

25

-

1,145

30

-

Derivatives

designated

as

hedges

of

net

investments

791

25

-

1,145

30

-

Derivative

assets/(liabilities)

held

for

risk

management

189,784

566

(980)

181,375

173

(587)

Total

OTC

derivatives

20,936

566

(980)

10,719

173

(587)

Total

derivatives

cleared

by

central

counterparty

168,848

-

170,656

-

Derivative

assets/(liabilities)

held

for

risk

management

189,784

566

(980)

181,375

173

(587)

Notes

to

the

financial

statements

Assets

and

liabilities

held

at

fair

value

242

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Hedge

accounting

Hedge

accounting

is

applied

predominantly

for

the

following

risks:

◾

Interest

rate

risk

–

arises

due

to

a

mismatch

between

fixed

interest

rates

and

floating

interest

rates.

Interest

rate

risk

also

includes

exposure

to

inflation

risk

for

certain

types

of

investments.

◾

Currency

risk

–

arises

due

to

assets

or

liabilities

being

denominated

in

different

currencies

than

the

functional

currency

of

the

relevant

entity.

At

a

consolidated

level,

currency

risk

also

arises

when

the

functional

currency

of

subsidiaries

are

different

from

the

parent.

◾

Contractually

linked

inflation

risk

–

arises

from

financial

instruments

within

contractually

specified

inflation

risk.

The

Group

does

not

hedge

inflation

risk

that

arises

from

other

activities.

In

order

to

hedge

these

risks,

the

Group

uses

the

following

hedging

instruments:

◾

Interest

rate

derivatives

to

swap

interest

rate

exposures

into

either

fixed

or

variable

rates.

◾

Currency

derivatives

to

swap

foreign

currency

exposures

into

the

entity’s

functional

currency,

and

net

investment

exposure

to

local

currency.

◾

Inflation

derivatives

to

swap

inflation

exposure

into

either

fixed

or

variable

interest

rates.

In

some

cases,

certain

items

which

are

economically

hedged

may

be

ineligible

hedged

items

for

the

purposes

of

IAS

39,

such

as

core

deposits

and

equity.

In

these

instances,

a

proxy

hedging

solution

can

be

utilised

whereby

portfolios

of

floating

rate

assets

are

designated

as

eligible

hedged

items

in

cash

flow

hedges.

In

some

hedging

relationships,

the

Group

designates

risk

components

of

hedged

items

as

follows:

◾

Benchmark

interest

rate

risk

as

a

component

of

interest

rate

risk,

such

as

the

LIBOR

or

Risk

Free

Rate

(RFR)

component.

◾

Inflation

risk

as

a

contractually

specified

component

of

a

debt

instrument.

◾

Spot

exchange

rate

risk

for

foreign

currency

financial

assets

or

financial

liabilities.

◾

Components

of

cash

flows

of

hedged

items,

for

example

certain

interest

payments

for

part

of

the

life

of

an

instrument.

Using

the

benchmark

interest

rate

risk

results

in

other

risks,

such

as

credit

risk

and

liquidity

risk,

being

excluded

from

the

hedge

accounting

relationship.

LIBOR

is

considered

the

predominant

interest

rate

risk

and

therefore

the

hedged

items

change

in

fair

value

on

a

fully

proportionate

basis

with

reference

to

this

risk.

In

respect

of

many

of

the

Group’s

hedge

accounting

relationships,

the

hedged

item

and

hedging

instrument

change

frequently

due

to

the

dynamic

nature

of

the

risk

management

and

hedge

accounting

strategy.

The

Group

applies

hedge

accounting

to

dynamic

scenarios,

predominantly

in

relation

to

interest

rate

risk,

with

a

combination

of

hedged

items

in

order

for

its

financial

statements

to

reflect

as

closely

as

possible

the

economic

risk

management

undertaken.

In

some

cases,

if

the

hedge

accounting

objective

changes,

the

relevant

hedge

accounting

relationship

is

de-designated

and

is

replaced

with

a

different

hedge

accounting

relationship.

Changes

in

the

GBP

value

of

net

investments

due

to

foreign

currency

movements

are

captured

in

the

currency

translation

reserve,

resulting

in

a

movement

in

CET1

capital.

The

Group

mitigates

this

by

matching

the

CET1

capital

movements

to

the

revaluation

of

the

foreign

currency

RWA

exposures.

Net

investment

hedges

are

designated

where

necessary

to

reduce

the

exposure

to

movement

in

a

particular

exchange

rate

to

within

limits

mandated

by

Risk.

As

far

as

possible,

existing

external

currency

liabilities

are

designated

as

the

hedging

instruments.

The

hedging

instruments

share

the

same

risk

exposures

as

the

hedged

items.

Hedge

effectiveness

is

determined

with

reference

to

quantitative

tests,

predominantly

regression

testing,

but

to

the

extent

hedging

instruments

are

exposed

to

different

risks

than

the

hedged

items,

this

could

result

in

hedge

ineffectiveness

or

hedge

accounting

failures.

Sources

of

ineffectiveness

include

the

following:

◾

Mismatches

between

the

contractual

terms

of

the

hedged

item

and

hedging

instrument,

including

basis

differences.

◾

Changes

in

credit

risk

of

the

hedging

instruments.

◾

If

a

hedging

relationship

becomes

over-hedged,

for

example

in

hedges

of

net

investments

if

the

net

asset

value

designated

at

the

start

of

the

period

falls

below

the

amount

of

the

hedging

instrument.

◾

Cash

flow

hedges

using

external

swaps

with

non-zero

fair

values.

◾

The

effects

of

the

forthcoming

reforms

to

IBOR

because

these

might

take

effect

at

a

different

time

and

have

a

different

impact

on

hedged

items

and

hedging

instruments.

Across

all

benchmarks

which

Barclays

is

materially

exposed

to,

there

is

still

uncertainty

regarding

the

precise

timing

and

effects

of

IBOR

reform.

There

is

yet

to

be

full

consensus

regarding

methodologies

for

converging

existing

IBORs

to

their

final

benchmark

rates.

As

such,

Barclays

has

not

incorporated

any

change

in

assumptions

for

affected

benchmarks

into

its

expectations

or

calculations.

Barclays

does,

however,

assume

sufficient

liquidity

in

IBOR

linked

benchmarks

to

provide

reliable

valuation

calculations

of

both

hedged

items

and

hedging

instruments

(notwithstanding

reliefs

already

applied

within

the

financial

reporting).

The

following

table

summarises

the

significant

hedge

accounting

exposures

impacted

by

the

IBOR

reform

(see

Note

41

for

further

updates)

as

at

31

December

2020:

Notes

to

the

financial

statements

Assets

and

liabilities

held

at

fair

value

243

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Nominal

amount

of

hedged

items

directly

impacted

by

IBOR

reform

Nominal

amount

of

hedging

instruments

directly

impacted

by

IBOR

reform

Current

benchmark

rate

Expected

convergence

to

RFR

£m

GBP

London

Interbank

Offered

rate

(LIBOR)

Reformed

Sterling

Overnight

Index

Average

(SONIA)

15,740

14,276

USD

LIBOR

Secured

Overnight

Financing

Rate

(SOFR)

29,154

28,832

Euro

Overnight

Index

Average

(EONIA)

Euro

Short-Term

Rate

(€STR)

5,128

JPY

LIBOR

Tokyo

Overnight

Average

(TONA)

1,262

CHF

LIBOR

Swiss

Average

Rate

Overnight

(SARON)

145

All

Other

IBORs

Various

Other

RFRs

111

Total

51,540

49,754

Notes

to

the

financial

statements

Assets

and

liabilities

held

at

fair

value

244

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Hedged

items

in

fair

value

hedges

Accumulated

fair

value

adjustment

included

in

carrying

amount

Hedged

item

statement

of

financial

position

classification

and

risk

category

Carrying

amount

Total

Of

which:

Accumulated

fair

value

adjustment

on

items

no

longer

in

a

hedge

relationship

Change

in

fair

value

used

as

a

basis

to

determine

ineffectiveness

Hedge

ineffectiveness

recognised

in

the

income

statement

a

£m

2020

Assets

Loans

and

advances

at

amortised

cost

-

Interest

rate

risk

9,858

2,289

(638)

1,583

111

-

Inflation

risk

545

345

-

25

3

Debt

securities

classified

at

amortised

cost

-

Interest

rate

risk

1,440

23

-

18

(7)

-

Inflation

risk

4,071

(43)

-

453

3

Financial

assets

at

fair

value

through

other

comprehensive

income

-

Interest

rate

risk

41,544

1,284

351

825

(13)

-

Inflation

risk

10,821

367

(9)

307

1

Total

assets

68,279

4,265

(296)

3,211

98

Liabilities

Debt

securities

in

issue

-

Interest

rate

risk

(50,438)

(2,859)

(24)

(1,466)

(56)

Total

liabilities

(50,438)

(2,859)

(24)

(1,466)

(56)

Total

hedged

items

17,841

1,406

(320)

1,745

42

2019

Assets

Loans

and

advances

at

amortised

cost

-

Interest

rate

risk

8,442

694

(643)

1,030

76

-

Inflation

risk

525

325

-

(2)

1

Debt

securities

classified

at

amortised

cost

-

Interest

rate

risk

2,974

(1)

-

(1)

-

Inflation

risk

2,258

(41)

-

(41)

1

Financial

assets

at

fair

value

through

other

comprehensive

income

-

Interest

rate

risk

32,169

922

494

2,046

(4)

-

Inflation

risk

7,811

87

-

111

(16)

Total

assets

54,179

1,986

(149)

3,143

58

Liabilities

Debt

securities

in

issue

-

Interest

rate

risk

(55,589)

(1,574)

(75)

(1,445)

(13)

Total

liabilities

(55,589)

(1,574)

(75)

(1,445)

(13)

Total

hedged

items

(1,410)

412

(224)

1,698

45

Note

a

Hedge

ineffectiveness

is

recognised

in

net

interest

income.

For

items

classified

as

fair

value

through

other

comprehensive

income,

the

hedge

accounting

adjustment

is

not

included

in

the

carrying

amount,

but

rather

adjusts

other

comprehensive

income.

Notes

to

the

financial

statements

Assets

and

liabilities

held

at

fair

value

245

Barclays

PLC

2020

Annual

Report

on

Form

20-F

The

following

table

shows

the

fair

value

hedging

instruments

which

are

carried

on

the

Group’s

balance

sheet:

Carrying

value

Nominal

amount

Change

in

fair

value

used

as

a

basis

to

determine

ineffectiveness

Nominal

amount

directly

impacted

by

IBOR

reform

Derivative

assets

Derivative

liabilities

Loan

liabilities

Hedge

type

Risk

category

£m

As

at

31

December

2020

Fair

value

Interest

rate

risk

120

(166)

-

103,623

(925)

30,072

Inflation

risk

35

(815)

-

10,933

(778)

1,487

Total

155

(980)

-

114,556

(1,703)

31,559

As

at

31

December

2019

Fair

value

Interest

rate

risk

110

(44)

-

104,568

(1,571)

55,552

Inflation

risk

26

(542)

-

7,889

(82)

6,101

Total

136

(586)

-

112,457

(1,653)

61,653

The

following

table

profiles

the

expected

notional

values

of

current

hedging

instruments

in

future

years:

2020

2021

2022

2023

2024

2025

2026

and

later

As

at

31

December

£m

Fair

value

hedges

of:

Interest

rate

risk

(outstanding

notional

amount)

103,623

94,402

81,916

72,281

58,001

47,244

40,243

Inflation

risk

(outstanding

notional

amount)

10,933

10,128

8,817

7,966

6,051

5,062

4,348

There

are

1,906

(2019:

2,308)

interest

rate

risk

fair

value

hedges

with

an

average

fixed

rate

of

1.87%

(2019:

2.13%)

across

the

relationships

and

104

(2019:

117)

inflation

risk

fair

value

hedges

with

an

average

rate

of

0.63%

(2019:

0.70%)

across

the

relationships.

Notes

to

the

financial

statements

Assets

and

liabilities

held

at

fair

value

246

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Hedged

items

in

cash

flow

hedges

and

hedges

of

net

investments

in

foreign

operations

Description

of

hedge

relationship

and

hedged

risk

Change

in

value

of

hedged

item

used

as

the

basis

for

recognising

ineffectiveness

Balance

in

cash

flow

hedging

reserve

for

continuing

hedges

Balance

in

currency

translation

reserve

for

continuing

hedges

Balances

remaining

in

cash

flow

hedging

reserve

for

which

hedge

accounting

is

no

longer

applied

Balances

remaining

in

currency

translation

reserve

for

which

hedge

accounting

is

no

longer

applied

Hedging

gains

or

losses

recognised

in

other

comprehensi

ve

income

Hedge

ineffectivene

ss

recognised

in

the

income

statement

a

£m

2020

Cash

flow

hedge

of:

Interest

rate

risk

Loans

and

advances

at

amortised

cost

(1,124)

(598)

-

(1,370)

-

(1,124)

27

Foreign

exchange

risk

Loans

and

advances

at

amortised

cost

(70)

(15)

-

(70)

-

Debt

securities

classified

at

amortised

cost

(278)

(65)

-

(278)

-

Inflation

risk

Debt

securities

classified

at

amortised

cost

(41)

(65)

-

(41)

1

Total

cash

flow

hedge

(1,513)

(743)

-

(1,370)

-

(1,513)

28

Hedge

of

net

investment

in

foreign

operations

USD

foreign

operations

(240)

-

857

-

(240)

-

EUR

foreign

operations

(17)

-

(2)

-

(17)

-

Other

foreign

operations

(9)

-

47

-

186

(9)

-

Total

foreign

operations

(266)

-

902

-

186

(266)

-

2019

Cash

flow

hedge

of:

Interest

rate

risk

Loans

and

advances

at

amortised

cost

(696)

(223)

-

(1,072)

-

(706)

43

Inflation

risk

Debt

securities

classified

at

amortised

cost

(29)

(26)

-

(25)

2

Total

cash

flow

hedge

(725)

(249)

-

(1,072)

-

(731)

45

Hedge

of

net

investment

in

foreign

operations

USD

foreign

operations

215

-

1,087

-

215

-

EUR

foreign

operations

70

-

(1)

-

16

70

-

Other

foreign

operations

3

-

1

-

240

3

-

Total

foreign

operations

288

-

1,087

-

256

288

-

Note

a

Hedge

ineffectiveness

is

recognised

in

net

interest

income.

Notes

to

the

financial

statements

Assets

and

liabilities

held

at

fair

value

247

Barclays

PLC

2020

Annual

Report

on

Form

20-F

The

following

table

shows

the

cash

flow

and

net

investment

hedging

instruments

which

are

carried

on

the

Group’s

balance

sheet:

Carrying

value

Nominal

amount

Change

in

fair

value

used

as

a

basis

to

determine

ineffectiveness

Nominal

amount

directly

impacted

by

IBOR

reform

Derivative

assets

Derivative

liabilities

Loan

liabilities

Hedge

type

Risk

category

£m

As

at

31

December

2020

Cash

flow

Interest

rate

risk

33

-

65,042

1,151

18,195

Foreign

exchange

risk

351

-

6,596

348

-

Inflation

risk

2

-

2,799

42

-

Total

386

-

74,437

1,541

18,195

Net

investment

Foreign

exchange

risk

25

-

(8,660)

9,451

265

-

As

at

31

December

2019

Cash

flow

Interest

rate

risk

3

(1)

-

66,515

739

15,223

Inflation

risk

4

-

1,258

31

-

Total

7

(1)

-

67,773

770

15,223

Net

investment

Foreign

exchange

risk

30

-

(10,051)

11,196

288

-

There

are

29

(2019:

nil)

foreign

exchange

risk

cash

flow

hedges

with

an

average

foreign

exchange

rate

of

135.29

JPY:

1

GBP

(2019:

nil)

across

the

relationships.

The

Group’s

risk

exposure

is

directly

affected

by

interest

rate

benchmark

reform,

across

both

its

cash

flow

hedge

accounting

activities;

where

IBOR-linked

derivatives

are

designated

as

a

cash

flow

hedge

of

IBOR-linked

cash

flows,

and

its

fair

value

hedge

accounting

activities;

where

IBOR-linked

derivatives

are

designated

as

a

fair

value

hedge

of

fixed

interest

rate

assets

and

liabilities.

Further

information

on

the

group’s

risk

exposure

and

response

can

be

found

in

Note

41.

The

effect

on

the

income

statement

and

other

comprehensive

income

of

recycling

amounts

in

respect

of

cash

flow

hedges

and

net

investment

hedges

of

foreign

operations

is

set

out

in

the

following

table:

2020

2019

Amount

recycled

from

other

comprehensive

income

due

to

hedged

item

affecting

income

statement

Amount

recycled

from

other

comprehensive

income

due

to

sale

of

investment,

or

cash

flows

no

longer

expected

to

occur

Amount

recycled

from

other

comprehensive

income

due

to

hedged

item

affecting

income

statement

Amount

recycled

from

other

comprehensive

income

due

to

sale

of

investment,

or

cash

flows

no

longer

expected

to

occur

Description

of

hedge

relationship

and

hedged

risk

£m

Cash

flow

hedge

of

interest

rate

risk

Recycled

to

net

interest

income

489

17

259

18

Cash

flow

hedge

of

foreign

exchange

risk

Recycled

to

net

interest

income

268

-

Hedge

of

net

investment

in

foreign

operations

Recycled

to

other

income

-

(4)

-

15

Notes

to

the

financial

statements

Assets

and

liabilities

held

at

fair

value

248

Barclays

PLC

2020

Annual

Report

on

Form

20-F

15

Financial

assets

at

fair

value

through

other

comprehensive

income

Accounting

for

financial

assets

at

fair

value

through

other

comprehensive

income

(FVOCI)

Financial

assets

that

are

debt

instruments

held

in

a

business

model

that

is

achieved

by

both

collecting

contractual

cash

flows

and

selling

and

that

contain

contractual

terms

that

give

rise

on

specified

dates

to

cash

flows

that

are

SPPI

are

measured

at

FVOCI.

They

are

subsequently

re-

measured

at

fair

value

and

changes

therein

(except

for

those

relating

to

impairment,

interest

income

and

foreign

currency

exchange

gains

and

losses)

are

recognised

in

other

comprehensive

income

until

the

assets

are

sold.

Interest

(calculated

using

the

effective

interest

method)

is

recognised

in

the

income

statement

in

net

interest

income

(Note

3).

Upon

disposal,

the

cumulative

gain

or

loss

recognised

in

other

comprehensive

income

is

included

in

net

investment

income

(Note

6).

In

determining

whether

the

business

model

is

achieved

by

both

collecting

contractual

cash

flows

and

selling

financial

assets,

it

is

determined

that

both

collecting

contractual

cash

flows

and

selling

financial

assets

are

integral

to

achieving

the

objective

of

the

business

model.

The

Group

will

consider

past

sales

and

expectations

about

future

sales

to

establish

if

the

business

model

is

achieved.

For

equity

securities

that

are

not

held

for

trading,

the

Group

may

make

an

irrevocable

election

on

initial

recognition

to

present

subsequent

changes

in

the

fair

value

of

the

instrument

in

other

comprehensive

income

(except

for

dividend

income

which

is

recognised

in

profit

or

loss).

Gains

or

losses

on

the

de-recognition

of

these

equity

securities

are

not

transferred

to

profit

or

loss.

These

assets

are

also

not

subject

to

the

impairment

requirements

and

therefore

no

amounts

are

recycled

to

the

income

statement.

Where

the

Group

has

not

made

the

irrevocable

election

to

present

subsequent

changes

in

the

fair

value

of

the

instrument

in

other

comprehensive

income,

equity

securities

are

measured

at

fair

value

through

profit

or

loss.

2020

2019

£m

Debt

securities

and

other

eligible

bills

77,736

64,103

Equity

securities

761

1,023

Loans

and

advances

191

624

Financial

assets

at

fair

value

through

other

comprehensive

income

78,688

65,750

16

Financial

liabilities

designated

at

fair

value

Accounting

for

liabilities

designated

at

fair

value

through

profit

and

loss

In

accordance

with

IFRS

9,

financial

liabilities

may

be

designated

at

fair

value,

with

gains

and

losses

taken

to

the

income

statement

within

net

trading

income

(Note

5)

and

net

investment

income

(Note

6).

Movements

in

own

credit

are

reported

through

other

comprehensive

income,

unless

the

effects

of

changes

in

the

liability's

credit

risk

would

create

or

enlarge

an

accounting

mismatch

in

P&L.

In

these

scenarios,

all

gains

and

losses

on

that

liability

(including

the

effects

of

changes

in

the

credit

risk

of

the

liability)

are

presented

in

P&L.

On

derecognition

of

the

financial

liability

no

amount

relating

to

own

credit

risk

are

recycled

to

the

income

statement.

The

Group

has

the

ability

to

make

the

fair

value

designation

when

holding

the

instruments

at

fair

value

reduces

an

accounting

mismatch

(caused

by

an

offsetting

liability

or

asset

being

held

at

fair

value),

or

is

managed

by

the

Group

on

the

basis

of

its

fair

value,

or

includes

terms

that

have

substantive

derivative

characteristics

(Note

14).

The

details

on

how

the

fair

value

amounts

are

arrived

at

for

financial

liabilities

designated

at

fair

value

are

described

in

Note

17.

2020

2019

Fair

value

Contractual

amount

due

on

maturity

Fair

value

Contractual

amount

due

on

maturity

£m

Debt

securities

50,437

57,650

49,559

56,891

Deposits

21,706

22,107

25,526

25,725

Repurchase

agreements

and

other

similar

secured

borrowing

177,371

177,389

128,547

128,706

Other

financial

liabilities

251

694

Financial

liabilities

designated

at

fair

value

249,765

257,397

204,326

212,016

The

cumulative

own

credit

net

loss

recognised

is

£954m

(2019:

£373m

loss).

Notes

to

the

financial

statements

Assets

and

liabilities

held

at

fair

value

249

Barclays

PLC

2020

Annual

Report

on

Form

20-F

17

Fair

value

of

financial

instruments

Accounting

for

financial

assets

and

liabilities

–

fair

values

Financial

instruments

that

are

held

for

trading

are

recognised

at

fair

value

through

profit

or

loss.

In

addition,

financial

assets

are

held

at

fair

value

through

profit

or

loss

if

they

do

not

contain

contractual

terms

that

give

rise

on

specified

dates

to

cash

flows

that

are

SPPI,

or

if

the

financial

asset

is

not

held

in

a

business

model

that

is

either

(i)

a

business

model

to

collect

the

contractual

cash

flows

or

(ii)

a

business

model

that

is

achieved

by

both

collecting

contractual

cash

flows

and

selling.

Subsequent

changes

in

fair

value

for

these

instruments

are

recognised

in

the

income

statement

in

net

investment

income,

except

if

reporting

it

in

trading

income

reduces

an

accounting

mismatch.

All

financial

instruments

are

initially

recognised

at

fair

value

on

the

date

of

initial

recognition

(including

transaction

costs,

other

than

financial

instruments

held

at

fair

value

through

profit

or

loss)

and

depending

on

the

subsequent

classification

of

the

financial

asset

or

liability,

may

continue

to

be

held

at

fair

value

either

through

profit

or

loss

or

other

comprehensive

income.

The

fair

value

of

a

financial

instrument

is

the

price

that

would

be

received

to

sell

an

asset

or

paid

to

transfer

a

liability

in

an

orderly

transaction

between

market

participants

at

the

measurement

date.

Wherever

possible,

fair

value

is

determined

by

reference

to

a

quoted

market

price

for

that

instrument.

For

many

of

the

Group’s

financial

assets

and

liabilities,

especially

derivatives,

quoted

prices

are

not

available

and

valuation

models

are

used

to

estimate

fair

value.

The

models

calculate

the

expected

cash

flows

under

the

terms

of

each

specific

contract

and

then

discount

these

values

back

to

a

present

value.

These

models

use

as

their

basis

independently

sourced

market

inputs

including,

for

example,

interest

rate

yield

curves,

equities

and

commodities

prices,

option

volatilities

and

currency

rates.

For

financial

liabilities

measured

at

fair

value,

the

carrying

amount

reflects

the

effect

on

fair

value

of

changes

in

own

credit

spreads

derived

from

observable

market

data

such

as

in

primary

issuance

and

redemption

activity

for

structured

notes.

On

initial

recognition,

it

is

presumed

that

the

transaction

price

is

the

fair

value

unless

there

is

observable

information

available

in

an

active

market

to

the

contrary.

The

best

evidence

of

an

instrument’s

fair

value

on

initial

recognition

is

typically

the

transaction

price.

However,

if

fair

value

can

be

evidenced

by

comparison

with

other

observable

current

market

transactions

in

the

same

instrument,

or

is

based

on

a

valuation

technique

whose

inputs

include

only

data

from

observable

markets,

then

the

instrument

should

be

recognised

at

the

fair

value

derived

from

such

observable

market

data.

For

valuations

that

have

made

use

of

unobservable

inputs,

the

difference

between

the

model

valuation

and

the

initial

transaction

price

(Day

One

profit)

is

recognised

in

profit

or

loss

either:

on

a

straight-line

basis

over

the

term

of

the

transaction;

or

over

the

period

until

all

model

inputs

will

become

observable

where

appropriate;

or

released

in

full

when

previously

unobservable

inputs

become

observable.

Various

factors

influence

the

availability

of

observable

inputs

and

these

may

vary

from

product

to

product

and

change

over

time.

Factors

include

the

depth

of

activity

in

the

relevant

market,

the

type

of

product,

whether

the

product

is

new

and

not

widely

traded

in

the

marketplace,

the

maturity

of

market

modelling

and

the

nature

of

the

transaction

(bespoke

or

generic).

To

the

extent

that

valuation

is

based

on

models

or

inputs

that

are

not

observable

in

the

market,

the

determination

of

fair

value

can

be

more

subjective,

dependent

on

the

significance

of

the

unobservable

input

to

the

overall

valuation.

Unobservable

inputs

are

determined

based

on

the

best

information

available,

for

example

by

reference

to

similar

assets,

similar

maturities

or

other

analytical

techniques.

The

sensitivity

of

valuations

used

in

the

financial

statements

to

possible

changes

in

significant

unobservable

inputs

is

shown

on

page

257.

Critical

accounting

estimates

and

judgements

The

valuation

of

financial

instruments

often

involves

a

significant

degree

of

judgement

and

complexity,

in

particular

where

valuation

models

make

use

of

unobservable

inputs

(‘Level

3’

assets

and

liabilities).

This

note

provides

information

on

these

instruments,

including

the

gains

and

losses

recognised

in

the

period,

a

description

of

significant

valuation

techniques

and

unobservable

inputs,

and

a

sensitivity

analysis.

Valuation

IFRS

13

Fair

value

measurement

requires

an

entity

to

classify

its

assets

and

liabilities

according

to

a

hierarchy

that

reflects

the

observability

of

significant

market

inputs.

The

three

levels

of

the

fair

value

hierarchy

are

defined

below.

Quoted

market

prices

–

Level

1

Assets

and

liabilities

are

classified

as

Level

1

if

their

value

is

observable

in

an

active

market.

Such

instruments

are

valued

by

reference

to

unadjusted

quoted

prices

for

identical

assets

or

liabilities

in

active

markets

where

the

quoted

price

is

readily

available,

and

the

price

represents

actual

and

regularly

occurring

market

transactions.

An

active

market

is

one

in

which

transactions

occur

with

sufficient

volume

and

frequency

to

provide

pricing

information

on

an

ongoing

basis.

Valuation

technique

using

observable

inputs

–

Level

2

Assets

and

liabilities

classified

as

Level

2

have

been

valued

using

models

whose

inputs

are

observable

either

directly

or

indirectly.

Valuations

based

on

observable

inputs

include

assets

and

liabilities

such

as

swaps

and

forwards

which

are

valued

using

market

standard

pricing

techniques,

and

options

that

are

commonly

traded

in

markets

where

all

the

inputs

to

the

market

standard

pricing

models

are

observable.

Valuation

technique

using

significant

unobservable

inputs

–

Level

3

Assets

and

liabilities

are

classified

as

Level

3

if

their

valuation

incorporates

significant

inputs

that

are

not

based

on

observable

market

data

(unobservable

inputs).

A

valuation

input

is

considered

observable

if

it

can

be

directly

observed

from

transactions

in

an

active

market,

or

if

there

is

compelling

external

evidence

demonstrating

an

executable

exit

price.

Unobservable

input

levels

are

generally

determined

via

reference

to

observable

inputs,

historical

observations

or

using

other

analytical

techniques.

Notes

to

the

financial

statements

Assets

and

liabilities

held

at

fair

value

250

Barclays

PLC

2020

Annual

Report

on

Form

20-F

17

Fair

value

of

financial

instruments

continued

The

following

table

shows

the

Group’s

assets

and

liabilities

that

are

held

at

fair

value

disaggregated

by

valuation

technique

(fair

value

hierarchy)

and

balance

sheet

classification:

Assets

and

liabilities

held

at

fair

value

2020

2019

Valuation

technique

using

Valuation

technique

using

Level

1

Level

2

Level

3

Total

Level

1

Level

2

Level

3

Total

As

at

31

December

£m

Trading

portfolio

assets

60,671

65,416

1,863

127,950

60,352

51,579

2,264

114,195

Financial

assets

at

fair

value

through

the

income

statement

4,503

162,142

8,506

175,151

10,445

114,141

8,500

133,086

Derivative

financial

assets

9,155

288,822

4,469

302,446

5,439

220,642

3,155

229,236

Financial

assets

at

fair

value

through

other

comprehensive

income

19,792

58,743

153

78,688

18,755

46,566

429

65,750

Investment

property

-

10

-

13

Total

assets

94,121

575,123

15,001

684,245

94,991

432,928

14,361

542,280

Trading

portfolio

liabilities

(24,391)

(22,986)

(28)

(47,405)

(20,977)

(15,939)

-

(36,916)

Financial

liabilities

designated

at

fair

value

(159)

(249,251)

(355)

(249,765)

(82)

(203,882)

(362)

(204,326)

Derivative

financial

liabilities

(8,762)

(285,774)

(6,239)

(300,775)

(5,305)

(219,910)

(3,989)

(229,204)

Total

liabilities

(33,312)

(558,011)

(6,622)

(597,945)

(26,364)

(439,731)

(4,351)

(470,446)

The

following

table

shows

the

Group’s

Level

3

assets

and

liabilities

that

are

held

at

fair

value

disaggregated

by

product

type:

Level

3

assets

and

liabilities

held

at

fair

value

by

product

type

2020

2019

Assets

Liabilities

Assets

Liabilities

£m

Interest

rate

derivatives

1,613

(1,615)

605

(812)

Foreign

exchange

derivatives

144

(143)

291

(298)

Credit

derivatives

196

(351)

539

(342)

Equity

derivatives

2,498

(4,112)

1,711

(2,528)

Commodity

derivatives

18

(18)

9

(9)

Corporate

debt

698

(3)

521

-

Reverse

repurchase

and

repurchase

agreements

-

(174)

-

(167)

Non-asset

backed

loans

6,394

-

6,811

-

Asset

backed

securities

767

(24)

756

-

Equity

cash

products

542

-

1,228

-

Private

equity

investments

873

(14)

899

(19)

Other

a

1,258

(168)

991

(176)

Total

15,001

(6,622)

14,361

(4,351)

Note

a

Other

includes

commercial

real

estate

loans,

asset

backed

loans,

funds

and

fund

-

linked

products,

issued

debt,

government

sponsored

debt

and

investment

property.

Valuation

techniques

and

sensitivity

analysis

Sensitivity

analysis

is

performed

on

products

with

significant

unobservable

inputs

(Level

3)

to

generate

a

range

of

reasonably

possible

alternative

valuations.

The

sensitivity

methodologies

applied

take

account

of

the

nature

of

the

valuation

techniques

used,

as

well

as

the

availability

and

reliability

of

observable

proxy

and

historical

data

and

the

impact

of

using

alternative

models.

Sensitivities

are

dynamically

calculated

on

a

monthly

basis.

The

calculation

is

based

on

range

or

spread

data

of

a

reliable

reference

source

or

a

scenario

based

on

relevant

market

analysis

alongside

the

impact

of

using

alternative

models.

Sensitivities

are

calculated

without

reflecting

the

impact

of

any

diversification

in

the

portfolio.

The

valuation

techniques

used,

observability

and

sensitivity

analysis

for

material

products

within

Level

3,

are

described

below.

Interest

rate

derivatives

Description:

Derivatives

linked

to

interest

rates

or

inflation

indices.

The

category

includes

futures,

interest

rate

and

inflation

swaps,

swaptions,

caps,

floors,

inflation

options,

balance

guaranteed

swaps

and

other

exotic

interest

rate

derivatives.

Valuation:

Interest

rate

and

inflation

derivatives

are

generally

valued

using

curves

of

forward

rates

constructed

from

market

data

to

project

and

discount

the

expected

future

cash

flows

of

trades.

Instruments

with

optionality

are

valued

using

volatilities

implied

from

market

inputs,

and

use

industry

standard

or

bespoke

models

depending

on

the

product

type.

Notes

to

the

financial

statements

Assets

and

liabilities

held

at

fair

value

251

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Observability:

In

general,

inputs

are

considered

observable

up

to

liquid

maturities

which

are

determined

separately

for

each

input

and

underlying.

Unobservable

inputs

are

generally

set

by

referencing

liquid

market

instruments

and

applying

extrapolation

techniques

or

inferred

via

another

reasonable

method.

Foreign

exchange

derivatives

Description:

Derivatives

linked

to

the

foreign

exchange

(FX)

market.

The

category

includes

FX

forward

contracts,

FX

swaps

and

FX

options.

The

majority

are

traded

as

over

the

counter

(OTC)

derivatives.

Valuation:

FX

derivatives

are

valued

using

industry

standard

and

bespoke

models

depending

on

the

product

type.

Valuation

inputs

include

FX

rates,

interest

rates,

FX

volatilities,

interest

rate

volatilities,

FX

interest

rate

correlations

and

others

as

appropriate.

Observability:

FX

correlations,

forwards

and

volatilities

are

generally

observable

up

to

liquid

maturities

which

are

determined

separately

for

each

input

and

underlying.

Unobservable

inputs

are

set

by

referencing

liquid

market

instruments

and

applying

extrapolation

techniques,

or

inferred

via

another

reasonable

method.

Credit

derivatives

Description:

Derivatives

linked

to

the

credit

spread

of

a

referenced

entity,

index

or

basket

of

referenced

entities

or

a

pool

of

referenced

assets

(e.g.

a

securitised

product).

The

category

includes

single

name

and

index

credit

default

swaps

(CDS)

and

total

return

swaps

(TRS).

Valuation:

CDS

are

valued

on

industry

standard

models

using

curves

of

credit

spreads

as

the

principal

input.

Credit

spreads

are

observed

directly

from

broker

data,

third

party

vendors

or

priced

to

proxies.

Observability:

CDS

contracts

referencing

entities

that

are

actively

traded

are

generally

considered

observable.

Other

valuation

inputs

are

considered

observable

if

products

with

significant

sensitivity

to

the

inputs

are

actively

traded

in

a

liquid

market.

Unobservable

valuation

inputs

are

generally

determined

with

reference

to

recent

transactions

or

inferred

from

observable

trades

of

the

same

issuer

or

similar

entities.

Equity

derivatives

Description

:

Exchange

traded

or

OTC

derivatives

linked

to

equity

indices

and

single

names.

The

category

includes

vanilla

and

exotic

equity

products.

Valuation:

Equity

derivatives

are

valued

using

industry

standard

models.

Valuation

inputs

include

stock

prices,

dividends,

volatilities,

interest

rates,

equity

repurchase

curves

and,

for

multi-asset

products,

correlations.

Observability:

In

general,

valuation

inputs

are

observable

up

to

liquid

maturities

which

are

determined

separately

for

each

input

and

underlying.

Unobservable

inputs

are

set

by

referencing

liquid

market

instruments

and

applying

extrapolation

techniques,

or

inferred

via

another

reasonable

method.

Commodity

derivatives

Description:

Exchange

traded

and

OTC

derivatives

based

on

underlying

commodities

such

as

metals,

crude

oil

and

refined

products,

agricultural,

power

and

natural

gas.

Valuation:

Commodity

swaps

and

options

are

valued

using

models

incorporating

discounting

of

cash

flows

and

other

industry

standard

modelling

techniques.

Valuation

inputs

include

forward

curves,

volatilities

implied

from

market

observable

inputs

and

correlations.

Observability:

Commodity

correlations,

forwards

and

volatilities

are

generally

observable

up

to

liquid

maturities

which

are

determined

separately

for

each

input

and

underlying.

Unobservable

inputs

are

set

with

reference

to

similar

observable

products,

or

by

applying

extrapolation

techniques

to

observable

inputs.

Corporate

debt

Description:

Primarily

corporate

bonds.

Valuation:

Corporate

bonds

are

valued

using

observable

market

prices

sourced

from

broker

quotes,

inter-dealer

prices

or

other

reliable

pricing

sources.

Observability:

Prices

for

actively

traded

bonds

are

considered

observable.

Unobservable

bonds

prices

are

generally

determined

by

reference

to

bond

yields

or

CDS

spreads

for

actively

traded

instruments

issued

by

or

referencing

the

same

(or

a

similar)

issuer.

Reverse

repurchase

and

repurchase

agreements

Description:

Includes

securities

purchased

under

resale

agreements,

securities

sold

under

repurchase

agreements,

and

other

similar

secured

lending

agreements.

The

agreements

are

primarily

short-term

in

nature.

Valuation:

Repurchase

and

reverse

repurchase

agreements

are

generally

valued

by

discounting

the

expected

future

cash

flows

using

industry

standard

models

that

incorporate

market

interest

rates

and

repurchase

rates,

based

on

the

specific

details

of

the

transaction.

Observability:

Inputs

are

deemed

observable

up

to

liquid

maturities,

and

are

determined

based

on

the

specific

features

of

the

transaction.

Unobservable

inputs

are

generally

set

by

referencing

liquid

market

instruments

and

applying

extrapolation

techniques,

or

inferred

via

another

reasonable

method.

Non-asset

backed

loans

Description:

Largely

made

up

of

fixed

rate

loans.

Valuation:

Fixed

rate

loans

are

valued

using

models

that

discount

expected

future

cash

flows

based

on

interest

rates

and

loan

spreads.

Observability:

Within

this

loan

population,

the

loan

spread

is

generally

unobservable.

Unobservable

loan

spreads

are

determined

by

incorporating

funding

costs,

the

level

of

comparable

assets

such

as

gilts,

issuer

credit

quality

and

other

factors.

Asset

backed

securities

Notes

to

the

financial

statements

Assets

and

liabilities

held

at

fair

value

252

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Description:

Securities

that

are

linked

to

the

cash

flows

of

a

pool

of

referenced

assets

via

securitisation.

The

category

includes

residential

mortgage

backed

securities,

commercial

mortgage

backed

securities,

CDOs,

collateralised

loan

obligations

(CLOs)

and

other

asset

backed

securities.

Valuation:

Where

available,

valuations

are

based

on

observable

market

prices

sourced

from

broker

quotes

and

inter-dealer

prices.

Otherwise,

valuations

are

determined

using

industry

standard

discounted

cash

flow

analysis

that

calculates

the

fair

value

based

on

valuation

inputs

such

as

constant

default

rate,

conditional

prepayment

rate,

loss

given

default

and

yield.

These

inputs

are

determined

by

reference

to

a

number

of

sources

including

proxying

to

observed

transactions,

market

indices

or

market

research,

and

by

assessing

underlying

collateral

performance.

Proxying

to

observed

transactions,

indices

or

research

requires

an

assessment

and

comparison

of

the

relevant

securities’

underlying

attributes

including

collateral,

tranche,

vintage,

underlying

asset

composition

(historical

losses,

borrower

characteristics

and

loan

attributes

such

as

loan

to

value

ratio

and

geographic

concentration)

and

credit

ratings

(original

and

current).

Observability:

Where

an

asset

backed

product

does

not

have

an

observable

market

price

and

the

valuation

is

determined

using

a

discounted

cash

flow

analysis,

the

instrument

is

considered

unobservable.

Equity

cash

products

Description:

Includes

listed

equities,

Exchange

Traded

Funds

(ETF)

and

preference

shares.

Valuation:

Valuation

of

equity

cash

products

is

primarily

determined

through

market

observable

prices.

Observability:

Prices

for

actively

traded

equity

cash

products

are

considered

observable.

Unobservable

equity

prices

are

generally

determined

by

reference

to

actively

traded

instruments

that

are

similar

in

nature,

or

inferred

via

another

reasonable

method.

Private

equity

investments

Description

:

Includes

investments

in

equity

holdings

in

operating

companies

not

quoted

on

a

public

exchange.

Valuation:

Private

equity

investments

are

valued

in

accordance

with

the

‘International

Private

Equity

and

Venture

Capital

Valuation

Guidelines’

which

require

the

use

of

a

number

of

individual

pricing

benchmarks

such

as

the

prices

of

recent

transactions

in

the

same

or

similar

entities,

discounted

cash

flow

analysis

and

comparison

with

the

earnings

multiples

of

listed

companies.

While

the

valuation

of

unquoted

equity

instruments

is

subjective

by

nature,

the

relevant

methodologies

are

commonly

applied

by

other

market

participants

and

have

been

consistently

applied

over

time.

Observability:

Inputs

are

considered

observable

if

there

is

active

trading

in

a

liquid

market

of

products

with

significant

sensitivity

to

the

inputs.

Unobservable

inputs

include

earnings

estimates,

multiples

of

comparative

companies,

marketability

discounts

and

discount

rates.

Other

Description:

Other

includes

commercial

real

estate

loans,

funds

and

fund-linked

products,

asset

backed

loans,

physical

commodities

and

investment

property.

Assets

and

liabilities

reclassified

between

Level

1

and

Level

2

During

the

period,

there

were

no

material

transfers

between

Level

1

and

Level

2

(2019:

there

were

no

material

transfers

between

Level

1

and

Level

2).

Level

3

movement

analysis

The

following

table

summarises

the

movements

in

the

Level

3

balances

during

the

period.

The

table

shows

gains

and

losses

and

includes

amounts

for

all

financial

assets

and

liabilities

that

are

held

at

fair

value

transferred

to

and

from

Level

3

during

the

period.

Transfers

have

been

reflected

as

if

they

had

taken

place

at

the

beginning

of

the

year.

Asset

and

liability

transfers

between

Level

2

and

Level

3

are

primarily

due

to

i)

an

increase

or

decrease

in

observable

market

activity

an

input

or

ii)

a

change

in

the

significance

of

the

unobservable

input,

with

assets

and

liabilities

classified

as

Level

3

if

an

unobservable

input

is

deemed

significant.

Notes

to

the

financial

statements

Assets

and

liabilities

held

at

fair

value

253

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Analysis

of

movements

in

Level

3

assets

and

liabilities

As

at

1

January

2020

Total

gains

and

losses

in

the

period

recognised

in

the

income

statement

Total

gains

or

losses

recognised

in

OCI

Transfers

As

at

31

December

2020

Purchase

s

Sales

Issues

Settlements

Trading

income

Other

income

In

Out

£m

Corporate

debt

120

77

(6)

-

(35)

-

12

(17)

151

Non-asset

backed

loans

974

1,955

(2,182)

-

(12)

(10)

-

39

(55)

709

Asset

backed

securities

656

458

(428)

-

(40)

(25)

-

90

(25)

686

Equity

cash

products

392

5

(149)

-

(41)

-

11

(4)

214

Other

122

-

(21)

-

2

-

103

Trading

portfolio

assets

2,264

2,495

(2,765)

-

(52)

(132)

-

154

(101)

1,863

Non-asset

backed

loans

5,494

1,102

(283)

-

(706)

426

-

(453)

5,580

Equity

cash

products

835

15

(404)

-

(93)

(36)

-

9

-

326

Private

equity

investments

900

84

(54)

-

(3)

-

(56)

-

15

(12)

874

Other

1,271

3,718

(3,606)

-

(32)

32

(43)

-

386

-

1,726

Financial

assets

at

fair

value

through

the

income

statement

8,500

4,919

(4,347)

-

(741)

365

(135)

-

410

(465)

8,506

Non-asset

backed

loans

343

-

(237)

-

106

Asset

backed

securities

86

-

(35)

-

(4)

-

47

Financial

assets

at

fair

value

through

other

comprehensive

income

429

-

(35)

-

(237)

-

(4)

-

153

Investment

property

13

-

(2)

-

(1)

-

10

Trading

portfolio

liabilities

-

(27)

-

(1)

-

(28)

Financial

liabilities

designated

at

fair

value

(362)

-

3

(21)

1

20

4

-

(38)

38

(355)

Interest

rate

derivatives

(206)

17

(12)

-

85

109

-

(18)

23

(2)

Foreign

exchange

derivatives

(7)

-

21

(16)

-

(19)

22

1

Credit

derivatives

198

(125)

24

-

(371)

24

-

(21)

116

(155)

Equity

derivatives

(819)

(699)

(43)

-

105

(101)

-

(13)

(44)

(1,614)

Net

derivative

financial

instruments

a

(834)

(807)

(31)

-

(160)

16

-

(71)

117

(1,770)

Total

10,010

6,580

(7,177)

(21)

(1,189)

268

(132)

(4)

455

(411)

8,379

Note

a

The

derivative

financial

instruments

are

represented

on

a

net

basis.

On

a

gross

basis,

derivative

financial

assets

are

£4,469

m

(2019:

£3,155m)

and

derivative

financial

liabilities

are

£6,239m

(2019:

£3,989m)

.

Notes

to

the

financial

statements

Assets

and

liabilities

held

at

fair

value

254

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Analysis

of

movements

in

Level

3

assets

and

liabilities

As

at

1

January

2019

Purchases

Sales

Issues

Settlements

Total

gains

and

losses

in

the

period

recognised

in

the

income

statement

Total

gains

or

losses

recognised

in

OCI

Transfers

As

at

31

December

2019

Trading

income

Other

income

In

Out

£m

Corporate

debt

388

126

(52)

-

(311)

1

-

45

(77)

120

Non-asset

backed

loans

2,263

1,844

(2,799)

-

(134)

24

-

200

(424)

974

Asset

backed

securities

664

202

(166)

-

(30)

-

16

(30)

656

Equity

cash

products

136

62

(40)

-

(31)

-

293

(28)

392

Other

162

-

(1)

(24)

-

(15)

122

Trading

portfolio

assets

3,613

2,234

(3,057)

-

(446)

(60)

-

554

(574)

2,264

Non-asset

backed

loans

5,688

235

-

(755)

343

(1)

-

(16)

5,494

Equity

cash

products

559

66

-

(2)

3

209

-

835

Private

equity

investments

1,071

45

(121)

-

(28)

-

55

-

41

(163)

900

Other

2,064

5,719

(5,720)

-

(9)

12

(15)

-

24

(804)

1,271

Financial

assets

at

fair

value

through

the

income

statement

9,382

6,065

(5,841)

-

(794)

358

248

-

65

(983)

8,500

Non-asset

backed

loans

-

283

-

60

-

343

Asset

backed

securities

-

116

(30)

-

86

Equity

cash

products

2

-

(1)

-

(1)

-

Other

353

-

(135)

-

(218)

-

Financial

assets

at

fair

value

through

other

comprehensive

income

355

399

(31)

-

(135)

-

59

-

(218)

429

Investment

property

9

5

-

(1)

-

13

Trading

portfolio

liabilities

(3)

-

3

-

Financial

liabilities

designated

at

fair

value

(280)

(179)

10

(42)

41

67

(2)

-

(27)

50

(362)

-

Interest

rate

derivatives

22

(9)

-

88

(92)

-

(177)

(38)

(206)

Foreign

exchange

derivatives

7

-

25

(12)

-

(32)

5

(7)

Credit

derivatives

1,050

(59)

3

-

(866)

76

-

(9)

3

198

Equity

derivatives

(607)

(296)

(35)

-

(2)

(296)

-

(37)

454

(819)

Net

derivative

financial

instruments

472

(364)

(32)

-

(755)

(324)

-

(255)

424

(834)

Total

13,548

8,160

(8,951)

(42)

(2,089)

41

245

59

337

(1,298)

10,010

Notes

to

the

financial

statements

Assets

and

liabilities

held

at

fair

value

255

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Unrealised

gains

and

losses

on

Level

3

financial

assets

and

liabilities

The

following

table

discloses

the

unrealised

gains

and

losses

recognised

in

the

year

arising

on

Level

3

financial

assets

and

liabilities

held

at

year

end.

Unrealised

gains

and

losses

recognised

during

the

period

on

Level

3

assets

and

liabilities

held

at

year

end

2020

2019

Income

statement

Other

compre-

hensive

income

Income

statement

Other

compre-

hensive

income

Trading

income

Other

income

Total

Trading

income

Other

income

Total

As

at

31

December

£m

Trading

portfolio

assets

(114)

-

(114)

(57)

-

(57)

Financial

assets

at

fair

value

through

the

income

statement

399

(89)

-

310

346

246

-

592

Fair

value

through

other

comprehensive

income

-

(1)

-

60

Investment

property

-

(1)

-

(1)

-

(1)

-

(1)

Trading

portfolio

liabilities

-

Financial

liabilities

designated

at

fair

value

20

(1)

-

19

64

-

64

Net

derivative

financial

instruments

(91)

-

(91)

(459)

-

(459)

Total

214

(91)

(1)

122

(106)

245

60

199

Significant

unobservable

inputs

The

following

table

discloses

the

valuation

techniques

and

significant

unobservable

inputs

for

assets

and

liabilities

recognised

at

fair

value

and

classified

as

Level

3

along

with

the

range

of

values

used

for

those

significant

unobservable

inputs:

Valuation

technique(s)

c

Significant

unobservable

inputs

2020

Range

2019

Range

Min

Max

Min

Max

Units

a

Derivative

financial

instruments

b

Interest

rate

derivatives

Discounted

cash

flows

Inflation

forwards

1

3

1

3

%

Credit

spread

17

1,831

41

1,620

bps

Comparable

pricing

Price

-

84

-

37

points

Option

model

Inflation

volatility

31

227

47

190

bps

vol

Interest

rate

volatility

6

489

8

431

bps

vol

FX

-

IR

correlation

(30)

78

(30)

78

%

IR

-

IR

correlation

(20)

99

(30)

100

%

Credit

derivatives

Discounted

cash

flows

Credit

spread

5

480

72

200

bps

Comparable

pricing

Price

-

100

-

155

points

Equity

derivatives

Option

model

Equity

volatility

1

110

1

200

%

Equity

-

equity

correlation

(45)

100

(20)

100

%

Discounted

cash

flow

Discounted

margin

(225)

3,000

(500)

1,100

bps

Non-derivative

financial

instruments

Non-asset

backed

loans

Discounted

cash

flows

Loan

spread

31

1,518

31

1,884

bps

Credit

spread

200

300

180

1,223

bps

Price

-

104

-

133

points

Yield

5

8

6

12

%

Comparable

pricing

Price

-

137

-

123

points

Asset

backed

securities

Comparable

pricing

Price

-

112

-

99

points

Private

equity

investments

EBITDA

multiple

EBITDA

multiple

14

16

5

16

Multiple

Earnings

multiple

Earnings

multiple

3

28

-

27

Multiple

Discounted

cash

flow

Discount

margin

1

10

8

10

%

Corporate

debt

Comparable

pricing

Price

-

127

-

100

points

Other

d

Discounted

cash

flows

Credit

spread

146

483

126

649

bps

Notes

a

The

units

used

to

disclose

ranges

for

significant

unobservable

inputs

are

percentages,

points

and

basis

points.

Points

are

a

percentage

of

par;

for

example,

100

points

equals

100%

of

par.

A

basis

point

equals

1/100th

of

1%;

for

example,

150

basis

points

equals

1.5%.

b

Certain

derivative

instruments

are

classified

as

Level

3

due

to

a

significant

unobservable

credit

spread

input

into

the

calculation

of

the

Credit

Valuation

Adjustment

for

the

instruments.

The

range

of

significant

unobs

ervable

credit

spreads

is

between

17-

1831bps

(2019:

41-

1,620bps).

c

A

range

has

not

been

provided

for

Net

Asset

Value

as

there

would

be

a

wide

range

reflecting

the

diverse

nature

of

the

positions.

d

Other

includes

commercial

real

estate

loans.

Notes

to

the

financial

statements

Assets

and

liabilities

held

at

fair

value

256

Barclays

PLC

2020

Annual

Report

on

Form

20-F

The

following

section

describes

the

significant

unobservable

inputs

identified

in

the

table

above,

and

the

sensitivity

of

fair

value

measurement

of

the

instruments

categorised

as

Level

3

assets

or

liabilities

to

increases

in

significant

unobservable

inputs.

Wh

ere

sensitivities

are

described,

the

inverse

relationship

will

also

generally

apply.

Where

reliable

interrelationships

can

be

identified

between

significant

unobservable

inputs

used

in

fair

value

measurement,

a

description

of

those

interrelationships

is

included

below.

Forwards

A

price

or

rate

that

is

applicable

to

a

financial

transaction

that

will

take

place

in

the

future.

In

general,

a

significant

increase

in

a

forward

in

isolation

will

result

in

a

fair

value

increase

for

the

contracted

receiver

of

the

underlying

(currency,

bond,

commodity,

etc.),

but

the

sensitivity

is

dependent

on

the

specific

terms

of

the

instrument.

Credit

spread

Credit

spreads

typically

represent

the

difference

in

yield

between

an

instrument

and

a

benchmark

security

or

reference

rate.

Credit

spreads

reflect

the

additional

yield

that

a

market

participant

demands

for

taking

on

exposure

to

the

credit

risk

of

an

instrument

and

form

part

of

the

yield

used

in

a

discounted

cash

flow

calculation.

In

general,

a

significant

increase

in

credit

spread

in

isolation

will

result

in

a

movement

in

a

fair

value

decrease

for

a

cash

asset.

For

a

derivative

instrument,

a

significant

increase

in

credit

spread

in

isolation

can

result

in

a

fair

value

increase

or

decrease

depending

on

the

specific

terms

of

the

instrument.

Volatility

is

a

measure

of

the

variability

or

uncertainty

in

return

for

a

given

derivative

underlying.

It

is

an

estimate

of

how

much

a

particular

underlying

instrument

input

or

index

will

change

in

value

over

time.

In

general,

volatilities

are

implied

from

observed

option

prices.

For

unobservable

options

the

implied

volatility

may

reflect

additional

assumptions

about

the

nature

of

the

underlying

risk,

and

the

strike/maturity

profile

of

a

specific

contract.

In

general

a

significant

increase

in

volatility

in

isolation

will

result

in

a

fair

value

increase

for

the

holder

of

a

simple

option,

but

the

sensitivity

is

dependent

on

the

specific

terms

of

the

instrument.

There

may

be

interrelationships

between

unobservable

volatilities

and

other

unobservable

inputs

(e.g.

when

equity

prices

fall,

implied

equity

volatilities

generally

rise)

but

these

are

generally

specific

to

individual

markets

and

may

vary

over

time.

Correlation

is

a

measure

of

the

relationship

between

the

movements

of

two

variables.

Correlation

can

be

a

significant

input

into

valuation

of

derivative

contracts

with

more

than

one

underlying

instrument.

Credit

correlation

generally

refers

to

the

correlation

between

default

processes

for

the

separate

names

that

make

up

the

reference

pool

of

a

CDO

structure.

A

significant

increase

in

correlation

in

isolation

can

result

in

a

fair

value

increase

or

decrease

depending

on

the

specific

terms

of

the

instrument.

Comparable

price

Comparable

instrument

prices

are

used

in

valuation

by

calculating

an

implied

yield

(or

spread

over

a

liquid

benchmark)

from

the

price

of

a

comparable

observable

instrument,

then

adjusting

that

yield

(or

spread)

to

account

for

relevant

differences

such

as

maturity

or

credit

quality.

Alternatively,

a

price-to-price

basis

can

be

assumed

between

the

comparable

and

unobservable

instruments

in

order

to

establish

a

value.

In

general,

a

significant

increase

in

comparable

price

in

isolation

will

result

in

an

increase

in

the

price

of

the

unobservable

instrument.

For

derivatives,

a

change

in

the

comparable

price

in

isolation

can

result

in

a

fair

value

increase

or

decrease

depending

on

the

specific

terms

of

the

instrument.

Loan

spread

Loan

spreads

typically

represent

the

difference

in

yield

between

an

instrument

and

a

benchmark

security

or

reference

rate.

Loan

spreads

typically

reflect

credit

quality,

the

level

of

comparable

assets

such

as

gilts

and

other

factors,

and

form

part

of

the

yield

used

in

a

discounted

cash

flow

calculation.

The

ESHLA

portfolio

primarily

consists

of

long-dated

fixed

rate

loans

extended

to

counterparties

in

the

UK

Education,

Social

Housing

and

Local

Authority

sectors.

The

loans

are

categorised

as

Level

3

in

the

fair

value

hierarchy

due

to

their

illiquid

nature

and

the

significance

of

unobservable

loan

spreads

to

the

valuation.

Valuation

uncertainty

arises

from

the

long-dated

nature

of

the

portfolio,

the

lack

of

secondary

market

in

the

loans

and

the

lack

of

observable

loan

spreads.

The

majority

of

ESHLA

loans

are

to

borrowers

in

heavily

regulated

sectors

that

are

considered

extremely

low

credit

risk,

and

have

a

history

of

near

zero

defaults

since

inception

.

While

the

overall

loan

spread

range

is

from

31bps

to

1,518bps

(2019:

31bps

to

1,884bps),

the

vast

majority

of

spreads

are

concentrated

towards

the

bottom

end

of

this

range,

with

97%

of

the

loan

notional

being

valued

with

spreads

less

than

200bps

consistently

for

both

years.

In

general,

a

significant

increase

in

loan

spreads

in

isolation

will

result

in

a

fair

value

decrease

for

a

loan.

EBITDA

multiple

EBITDA

multiple

is

the

ratio

of

the

valuation

of

the

investment

to

the

earnings

before

interest,

taxes,

depreciation

and

amortisation.

In

general,

a

significant

increase

in

the

multiple

will

result

in

a

fair

value

increase

for

an

investment.

Notes

to

the

financial

statements

Assets

and

liabilities

held

at

fair

value

257

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Sensitivity

analysis

of

valuations

using

unobservable

inputs

2020

2019

Favourable

changes

Unfavourable

changes

Favourable

changes

Unfavourable

changes

Income

statement

Equity

Income

statement

Equity

Income

statement

Equity

Income

statement

Equity

£m

Interest

rate

derivatives

82

-

(123)

-

44

-

(127)

-

Foreign

exchange

derivatives

6

-

(11)

-

5

-

(7)

-

Credit

derivatives

55

-

(44)

-

73

-

(47)

-

Equity

derivatives

174

-

(179)

-

114

-

(119)

-

Commodity

derivatives

2

-

(2)

-

Corporate

debt

16

-

(14)

-

11

-

(16)

-

Non-asset

backed

loans

190

3

(409)

(3)

214

8

(492)

(8)

Equity

cash

products

158

-

(141)

-

123

-

(175)

-

Private

equity

investments

199

-

(227)

-

205

-

(235)

-

Other

a

21

-

(21)

-

1

-

(1)

-

Total

903

3

(1,171)

(3)

790

8

(1,219)

(8)

Note

a

Other

include

s

commercial

real

estate

loans

and

asset

backed

loans

.

The

effect

of

stressing

unobservable

inputs

to

a

range

of

reasonably

possible

alternatives,

alongside

considering

the

impact

of

using

alternative

models,

would

be

to

increase

fair

values

by

up

to

£906m

(2019:

£798m)

or

to

decrease

fair

values

by

up

to

£1,174m

(2019:

£1,227m)

with

substantially

all

the

potential

effect

impacting

profit

and

loss

rather

than

reserves.

Fair

value

adjustments

Key

balance

sheet

valuation

adjustments

are

quantified

below:

2020

2019

£m

Exit

price

adjustments

derived

from

market

bid-offer

spreads

(493)

(429)

Uncollateralised

derivative

funding

(115)

(57)

Derivative

credit

valuation

adjustments

(268)

(135)

Derivative

debit

valuation

adjustments

113

155

Exit

price

adjustments

derived

from

market

bid-offer

spreads

The

Group

uses

mid-market

pricing

where

it

is

a

market

maker

and

has

the

ability

to

transact

at,

or

better

than,

mid

price

(which

is

the

case

for

certain

equity,

bond

and

vanilla

derivative

markets).

For

other

financial

assets

and

liabilities,

bid-offer

adjustments

are

recorded

to

reflect

the

exit

level

for

the

expected

close

out

strategy.

The

methodology

for

determining

the

bid-offer

adjustment

for

a

derivative

portfolio

involves

calculating

the

net

risk

exposure

by

offsetting

long

and

short

positions

by

strike

and

term

in

accordance

with

the

risk

management

and

hedging

strategy.

Bid-offer

levels

are

generally

derived

from

market

quotes

such

as

broker

data.

Less

liquid

instruments

may

not

have

a

directly

observable

bid-

offer

level.

In

such

instances,

an

exit

price

adjustment

may

be

derived

from

an

observable

bid-offer

level

for

a

comparable

liquid

instrument,

or

determined

by

calibrating

to

derivative

prices,

or

by

scenario

or

historical

analysis.

Exit

price

adjustments

derived

from

market

bid-offer

spreads

have

increased

by

£64m

to

£493m

as

a

result

of

movements

in

market

bid

offer

spreads.

Discounting

approaches

for

derivative

instruments

Collateralised

In

line

with

market

practice,

the

methodology

for

discounting

collateralised

derivatives

takes

into

account

the

nature

and

currency

of

the

collateral

that

can

be

posted

within

the

relevant

credit

support

annex

(CSA).

The

CSA

aware

discounting

approach

recognises

the

‘cheapest

to

deliver’

option

that

reflects

the

ability

of

the

party

posting

collateral

to

change

the

currency

of

the

collateral.

Uncollateralised

A

fair

value

adjustment

of

£115m

is

applied

to

account

for

the

impact

of

incorporating

the

cost

of

funding

into

the

valuation

of

uncollateralised

and

partially

collateralised

derivative

portfolios

and

collateralised

derivatives

where

the

terms

of

the

agreement

do

not

allow

the

rehypothecation

of

collateral

received.

This

adjustment

is

referred

to

as

the

Funding

Fair

Valu

e

Adjustment

(FFVA).

FFVA

has

increased

by

£58m

to

£115

m

as

a

result

of

moves

in

input

funding

spreads

and

an

update

to

methodology.

FFVA

incorporates

a

scaling

factor

which

is

an

estimate

of

the

extent

to

which

the

cost

of

funding

is

incorporated

into

observed

traded

levels.

On

calibrating

the

scaling

factor,

it

is

with

the

assumption

that

Credit

Valuation

Adjustments

(CVA)

and

Debit

Valuation

Adjustments

(DVA)

are

retained

as

valuation

components

incorporated

into

such

levels.

The

effect

of

incorporating

this

scaling

factor

at

31

December

2020

was

to

reduce

FFVA

by

£115

m

(2019:

£170m).

Derivative

credit

and

debit

valuation

adjustments

CVA

and

DVA

are

incorporated

into

derivative

valuations

to

reflect

the

impact

on

fair

value

of

counterparty

credit

risk

and

Barclays’

own

credit

quality

respectively.

These

adjustments

are

calculated

for

uncollateralised

and

partially

collateralised

derivatives

across

all

asset

classes.

CVA

and

DVA

are

calculated

using

estimates

of

exposure

at

default,

probability

of

default

and

recovery

rates,

at

a

counterparty

level.

Counterparties

Notes

to

the

financial

statements

Assets

and

liabilities

held

at

fair

value

258

Barclays

PLC

2020

Annual

Report

on

Form

20-F

include

(but

are

not

limited

to)

corporates,

sovereigns

and

sovereign

agencies

and

supranationals.

Exposure

at

default

is

generally

estimated

through

the

simulation

of

underlying

risk

factors

through

approximating

with

a

more

vanilla

structure,

or

by

using

current

or

scenario-based

mark

to

market

as

an

estimate

of

future

exposure.

Probability

of

default

and

recovery

rate

information

is

generally

sourced

from

the

CDS

markets.

Where

this

information

is

not

available,

or

considered

unreliable,

alternative

approaches

are

taken

based

on

mapping

internal

counterparty

ratings

onto

historical

or

market-based

default

and

recovery

information.

In

particular,

this

applies

to

sovereign

where

the

effect

of

using

the

recovery

assumptions

implied

in

CDS

levels

would

imply

a

£32m

(2019:

£36m)

increase

in

CVA.

CVA

increased

by

£133m

to

£268m

as

a

result

of

an

increased

uncollateralised

and

partially

collateralised

derivative

asset

and

widening

input

counterparty

credit

spreads.

DVA

decreased

by

£42m

to

£113m

as

a

result

of

an

update

to

methodology

partially

offset

by

widening

input

own

credit

spreads.

Correlation

between

counterparty

credit

and

underlying

derivative

risk

factors,

termed

‘wrong-way,’

or

‘right-way’

risk,

is

not

systematically

incorporated

into

the

CVA

calculation

but

is

adjusted

where

the

underlying

exposure

is

directly

the

counterparty.

Barclays

continues

to

monitor

market

practices

and

activity

to

ensure

the

approach

to

uncollateralised

derivative

valuation

remains

appropriate.

Portfolio

exemptions

The

Group

uses

the

portfolio

exemption

in

IFRS

13

Fair

Value

Measurement

to

measure

the

fair

value

of

groups

of

financial

assets

and

liabilities.

Instruments

are

measured

using

the

price

that

would

be

received

to

sell

a

net

long

position

(i.e.

an

asset)

for

a

particular

risk

exposure

or

to

transfer

a

net

short

position

(i.e.

a

liability)

for

a

particular

risk

exposure

in

an

orderly

transaction

between

market

participants

at

the

balance

sheet

date

under

current

market

conditions.

Accordingly,

the

Group

measures

the

fair

value

of

the

group

of

financial

assets

and

liabilities

consistently

with

how

market

participants

would

price

the

net

risk

exposure

at

the

measurement

date.

Unrecognised

gains

as

a

result

of

the

use

of

valuation

models

using

unobservable

inputs

The

amount

that

has

yet

to

be

recognised

in

income

that

relates

to

the

difference

between

the

transaction

price

(the

fair

value

at

initial

recognition)

and

the

amount

that

would

have

arisen

had

valuation

models

using

unobservable

inputs

been

used

on

initial

recognition,

less

amounts

subsequently

recognised,

is

£116

m

(2019:

£113

m)

for

financial

instruments

measured

at

fair

value

and

£247m

(2019:

£255m)

for

financial

instruments

carried

at

amortised

cost.

There

are

additions

of

£27m

(2019:

£41m),

and

amortisation

and

releases

of

£24m

(2019:

£69m)

for

financial

instruments

measured

at

fair

value

and

additions

of

£6m

(2019:

£7m)

and

amortisation

and

releases

of

£14m

(2019:

£14m)

for

financial

instruments

measured

at

amortised

cost.

Third

party

credit

enhancements

Structured

and

brokered

certificates

of

deposit

issued

by

Barclays

are

insured

up

to

$250,000

per

depositor

by

the

Federal

Deposit

Insurance

Corporation

(FDIC)

in

the

US.

The

FDIC

is

funded

by

premiums

that

Barclays

and

other

banks

pay

for

deposit

insurance

coverage.

The

carrying

value

of

these

issued

certificates

of

deposit

that

are

designated

under

the

IFRS

9

fair

value

option

includes

this

third

party

credit

enhancement.

The

on-balance

sheet

value

of

these

brokered

certificates

of

deposit

amounted

to

£1,494m

(2019:

£3,218m).

Notes

to

the

financial

statements

Assets

and

liabilities

held

at

fair

value

259

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Comparison

of

carrying

amounts

and

fair

values

for

assets

and

liabilities

not

held

at

fair

value

The

following

table

summarises

the

fair

value

of

financial

assets

and

liabilities

measured

at

amortised

cost

on

the

Group’s

balance

sheet:

2020

2019

Carrying

amount

Fair

value

Level

1

Level

2

Level

3

Carrying

amount

Fair

value

Level

1

Level

2

Level

3

As

at

31

December

£m

Financial

assets

Loans

and

advances

at

amortised

cost

342,632

340,516

8,824

81,322

250,370

339,115

337,510

11,145

73,378

250,985

Reverse

repurchase

agreements

and

other

similar

secured

lending

9,031

-

9,031

-

3,379

-

3,379

-

Financial

liabilities

Deposits

at

amortised

cost

(481,036)

(481,106)

(396,124)

(82,874)

(2,108)

(415,787)

(415,807)

(327,329)

(78,659)

(9,819)

Repurchase

agreements

and

other

similar

secured

borrowing

(14,174)

-

(14,174)

-

(14,517)

-

(14,517)

-

Debt

securities

in

issue

(75,796)

(77,813)

-

(75,957)

(1,856)

(76,369)

(78,512)

-

(76,142)

(2,370)

Subordinated

liabilities

(16,341)

(16,918)

-

(16,918)

-

(18,156)

(18,863)

-

(18,863)

-

The

fair

value

is

an

estimate

of

the

price

that

would

be

received

to

sell

an

asset

or

paid

to

transfer

a

liability

in

an

orderly

transaction

between

market

participants

at

the

measurement

date.

As

a

wide

range

of

valuation

techniques

are

available,

it

may

not

be

appropriate

to

directly

compare

this

fair

value

information

to

independent

market

sources

or

other

financial

institutions.

Different

valuation

methodologies

and

assumptions

can

have

a

significant

impact

on

fair

values

which

are

based

on

unobservable

inputs.

Financial

assets

The

carrying

value

of

financial

assets

held

at

amortised

cost

is

determined

in

accordance

with

the

relevant

accounting

policy

in

Note

19.

Loans

and

advances

at

amortised

cost

The

fair

value

of

loans

and

advances,

for

the

purpose

of

this

disclosure,

is

derived

from

discounting

expected

cash

flows

in

a

way

that

reflects

the

current

market

price

for

lending

to

issuers

of

similar

credit

quality.

Where

market

data

or

credit

information

on

the

underlying

borrowers

is

unavailable,

a

number

of

proxy/extrapolation

techniques

are

employed

to

determine

the

appropriate

discount

rates.

Reverse

repurchase

agreements

and

other

similar

secured

borrowing

The

fair

value

of

reverse

repurchase

agreements

approximates

carrying

amount

as

these

balances

are

generally

short

dated

and

fully

collateralised.

Financial

liabilities

The

carrying

value

of

financial

liabilities

held

at

amortised

cost

is

determined

in

accordance

with

the

accounting

policy

in

Note

1.

Deposits

at

amortised

cost

In

many

cases,

the

fair

value

disclosed

approximates

carrying

value

because

the

instruments

are

short

term

in

nature

or

have

interest

rates

that

reprice

frequently,

such

as

customer

accounts

and

other

deposits

and

short-term

debt

securities.

The

fair

value

for

deposits

with

longer-term

maturities,

mainly

time

deposits,

are

estimated

using

discounted

cash

flows

applying

either

market

rates

or

current

rates

for

deposits

of

similar

remaining

maturities.

Consequently,

the

fair

value

discount

is

minimal.

Repurchase

agreements

and

other

similar

secured

borrowing

The

fair

value

of

repurchase

agreements

approximates

carrying

amounts

as

these

balances

are

generally

short

dated.

Debt

securities

in

issue

Fair

values

of

other

debt

securities

in

issue

are

based

on

quoted

prices

where

available,

or

where

the

instruments

are

short

dated,

carrying

amount

approximates

fair

value.

Subordinated

liabilities

Fair

values

for

dated

and

undated

convertible

and

non-convertible

loan

capital

are

based

on

quoted

market

rates

for

the

issuer

concerned

or

issuers

with

similar

terms

and

conditions.

18

Offsetting

financial

assets

and

financial

liabilities

In

accordance

with

IAS

32

Financial

Instruments:

Presentation

,

the

Group

reports

financial

assets

and

financial

liabilities

on

a

net

basis

on

the

balance

sheet

only

if

there

is

a

legally

enforceable

right

to

set-off

the

recognised

amounts

and

there

is

intention

to

settle

on

a

net

basis,

or

to

realise

the

asset

and

settle

the

liability

simultaneously.

The

following

table

shows

the

impact

of

netting

arrangements

on:

◾

all

financial

assets

and

liabilities

that

are

reported

net

on

the

balance

sheet

◾

all

derivative

financial

instruments

and

reverse

repurchase

and

repurchase

agreements

and

other

similar

secured

lending

and

borrowing

agreements

that

are

subject

to

enforceable

master

netting

arrangements

or

similar

agreements,

but

do

not

qualify

for

balance

sheet

netting.

The

‘Net

amounts’

presented

are

not

intended

to

represent

the

Group’s

actual

exposure

to

credit

risk,

as

a

variety

of

credit

mitigation

strategies

are

employed

in

addition

to

netting

and

collateral

arrangements.

Notes

to

the

financial

statements

Assets

and

liabilities

held

at

fair

value

260

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Amounts

subject

to

enforceable

netting

arrangements

Amounts

not

subject

to

enforceable

netting

arrangements

c

Balance

sheet

total

d

Effects

of

offsetting

on-balance

sheet

not

offset

Gross

amounts

Amounts

offset

a

Net

amounts

reported

on

the

balance

sheet

Financial

instruments

Financial

collateral

b

Net

amount

£m

As

at

31

December

2020

Derivative

financial

assets

342,649

(44,305)

298,344

(233,080)

(48,064)

17,200

4,102

302,446

Reverse

repurchase

agreements

and

other

similar

secured

lending

e

448,134

(306,398)

141,736

-

(141,352)

384

4,911

146,647

Total

assets

790,783

(350,703)

440,080

(233,080)

(189,416)

17,584

9,013

449,093

Derivative

financial

liabilities

(333,943)

41,982

(291,961)

233,080

46,804

(12,077)

(8,814)

(300,775)

Repurchase

agreements

and

other

similar

secured

borrowing

e

(476,912)

306,398

(170,514)

-

170,514

-

(21,031)

(191,545)

Total

liabilities

(810,855)

348,380

(462,475)

233,080

217,318

(12,077)

(29,845)

(492,320)

As

at

31

December

2019

Derivative

financial

assets

260,206

(32,546)

227,660

(175,998)

(38,922)

12,740

1,576

229,236

Reverse

repurchase

agreements

and

other

similar

secured

lending

e

374,274

(276,021)

98,253

-

(98,253)

-

2,013

100,266

Total

assets

634,480

(308,567)

325,913

(175,998)

(137,175)

12,740

3,589

329,502

Derivative

financial

liabilities

(255,269)

31,180

(224,089)

175,998

38,632

(9,459)

(5,115)

(229,204)

Repurchase

agreements

and

other

similar

secured

borrowing

e

(406,081)

276,021

(130,060)

-

130,058

(2)

(13,004)

(143,064)

Total

liabilities

(661,350)

307,201

(354,149)

175,998

168,690

(9,461)

(18,119)

(372,268)

Notes

a

Amounts

offset

for

derivative

financial

assets

additionally

includes

cash

collateral

netted

of

£4,990m

(2019:

£4,099m).

Amounts

offset

for

derivative

financial

liabilities

additionally

includes

cash

collateral

netted

of

£7,313m

(2019:

£5,465m).

Settlements

assets

and

liabilities

have

been

offset

amounting

to

£18,143

m

(2019:

£14,079m).

b

Financial

collateral

of

£48,064m

(2019:

£38,922m)

was

received

in

respect

of

derivative

assets,

including

£43,291

m

(2019:

£33,411m)

of

cash

collateral

and

£4,773m

(2019:

£5,511m)

of

non-cash

collateral.

Financial

collateral

of

£46,804m

(2019:

£38,632m)

was

placed

in

respect

of

derivative

liabilities,

including

£42,730

m

(2019:

£35,712m)

of

cash

collateral

and

£4,074m

(2019:

£2,920m)

of

non-cash

collateral.

The

collateral

amounts

are

limited

to

net

balance

sheet

exposure

so

as

to

not

include

overcollateralisation.

c

This

column

includes

contractual

rights

of

set-off

that

are

subject

to

uncertainty

under

the

laws

of

the

relevant

jurisdiction.

d

The

balance

sheet

total

is

the

sum

of

‘Net

amounts

reported

on

the

balance

sheet’

that

are

subject

to

enforceable

netting

arrangements

and

‘Amounts

not

subject

to

enforceable

netting

arrangements’.

e

Reverse

repurchase

agreements

and

other

similar

secured

lending

of

£146,647m

(2019:

£100,266m)

is

split

by

fair

value

£137,616m

(2019:

£96,887m)

and

amortised

cost

£9,031m

(2019:

£3,379m).

Repurchase

agreements

and

other

similar

secured

borrowing

of

£191,545m

(2019:

£143,064m)

is

split

by

fair

value

£177,371m

(2019:

£128,547m)

and

amortised

cost

£14,174m

(2019:

£14,517m).

Derivative

assets

and

liabilities

The

‘Financial

instruments’

column

identifies

financial

assets

and

liabilities

that

are

subject

to

set-off

under

netting

agreements,

such

as

the

ISDA

Master

Agreement

or

derivative

exchange

or

clearing

counterparty

agreements,

whereby

all

outstanding

transactions

with

the

same

counterparty

can

be

offset

and

close-out

netting

applied

across

all

outstanding

transactions

covered

by

the

agreements

if

an

event

of

default

or

other

predetermined

events

occur.

Financial

collateral

refers

to

cash

and

non-cash

collateral

obtained,

typically

daily

or

weekly,

to

cover

the

net

exposure

between

counterparties

by

enabling

the

collateral

to

be

realised

in

an

event

of

default

or

if

other

predetermined

events

occur.

Repurchase

and

reverse

repurchase

agreements

and

other

similar

secured

lending

and

borrowing

The

‘Amounts

offset’

column

identifies

financial

assets

and

liabilities

that

are

subject

to

set-off

under

netting

agreements,

such

as

Global

Master

Repurchase

Agreements

and

Global

Master

Securities

Lending

Agreements,

whereby

all

outstanding

transactions

with

the

same

counterparty

can

be

offset

and

close-out

netting

applied

across

all

outstanding

transactions

covered

by

the

agreements

if

an

event

of

default

or

other

predetermined

events

occur.

Financial

collateral

typically

comprises

highly

liquid

securities

which

are

legally

transferred

and

can

be

liquidated

in

the

event

of

counterparty

default.

These

offsetting

and

collateral

arrangements

and

other

credit

risk

mitigation

strategies

used

by

the

Group

are

further

explained

in

the

Credit

risk

management

section.

Notes

to

the

financial

statements

Assets

at

amortised

cost

and

other

investments

261

Barclays

PLC

2020

Annual

Report

on

Form

20-F

The

notes

included

in

this

section

focus

on

the

Group’s

loans

and

advances

and

deposits

at

amortised

cost,

leases,

property,

plant

and

equipment

and

goodwill

and

intangible

assets.

Details

regarding

the

Group’s

liquidity

and

capital

position

can

be

found

in

the

Treasury

and

capital

risk

section.

19

Loans

and

advances

and

deposits

at

amortised

cost

Accounting

for

loans

and

advances

and

deposits

held

at

amortised

cost

Loans

and

advances

to

customers

and

banks,

customer

accounts,

debt

securities

and

most

financial

liabilities,

are

held

at

amortised

cost.

That

is,

the

initial

fair

value

(which

is

normally

the

amount

advanced

or

borrowed)

is

adjusted

for

repayments

and

the

amortisation

of

coupon,

fees

and

expenses

to

represent

the

effective

interest

rate

of

the

asset

or

liability.

Balances

deferred

on-balance

sheet

as

effective

interest

rate

adjustments

are

amortised

to

interest

income

over

the

life

of

the

financial

instrument

to

which

they

relate.

Financial

assets

that

are

held

in

a

business

model

to

collect

the

contractual

cash

flows

and

that

contain

contractual

terms

that

give

rise

on

specified

dates

to

cash

flows

that

are

SPPI,

are

measured

at

amortised

cost.

The

carrying

value

of

these

financial

assets

at

initial

recognition

includes

any

directly

attributable

transaction

costs.

Refer

to

Note

1

for

details

on

‘solely

payments

of

principal

and

interest’.

In

determining

whether

the

business

model

is

a

‘hold

to

collect’

model,

the

objective

of

the

business

model

must

be

to

hold

the

financial

asset

to

collect

contractual

cash

flows

rather

than

holding

the

financial

asset

for

trading

or

short-term

profit

taking

purposes.

While

the

objective

of

the

business

model

must

be

to

hold

the

financial

asset

to

collect

contractual

cash

flows

this

does

not

mean

the

Group

is

required

to

hold

the

financial

assets

until

maturity.

When

determining

if

the

business

model

objective

is

to

collect

contractual

cash

flows

the

Group

will

consider

past

sales

and

expectations

about

future

sales.

Loans

and

advances

and

deposits

at

amortised

cost

2020

2019

As

at

31

December

£m

Loans

and

advances

at

amortised

cost

to

banks

8,900

9,624

Loans

and

advances

at

amortised

cost

to

customers

309,927

311,739

Debt

securities

at

amortised

cost

23,805

17,752

Total

loans

and

advances

at

amortised

cost

342,632

339,115

Deposits

at

amortised

cost

from

banks

17,343

15,402

Deposits

at

amortised

cost

from

customers

463,693

400,385

Total

deposits

at

amortised

cost

481,036

415,787

20

Property,

plant

and

equipment

Accounting

for

property,

plant

and

equipment

The

Group

applies

IAS

16

Property

Plant

and

Equipment

and

IAS

40

Investment

Properties

.

Property,

plant

and

equipment

is

stated

at

cost,

which

includes

direct

and

incremental

acquisition

costs

less

accumulated

depreciation

and

provisions

for

impairment,

if

required.

Subsequent

costs

are

capitalised

if

these

result

in

enhancement

of

the

asset.

Depreciation

is

provided

on

the

depreciable

amount

of

items

of

property,

plant

and

equipment

on

a

straight-line

basis

over

their

estimated

useful

economic

lives.

Depreciation

rates,

methods

and

the

residual

values

underlying

the

calculation

of

depreciation

of

items

of

property,

plant

and

equipment

are

kept

under

review

to

take

account

of

any

change

in

circumstances.

The

Group

uses

the

following

annual

rates

in

calculating

depreciation:

Annual

rates

in

calculating

depreciation

Depreciation

rate

Freehold

land

Freehold

buildings

and

long-leasehold

property

(more

than

50

years

to

run)

Leasehold

property

over

the

remaining

life

of

the

lease

(less

than

50

years

to

run)

Costs

of

adaptation

of

freehold

and

leasehold

property

Equipment

installed

in

freehold

and

leasehold

property

Computers

and

similar

equipment

Fixtures

and

fittings

and

other

equipment

Not

depreciated

2-3.3%

Over

the

remaining

life

of

the

lease

6-10%

17-33%

9-20%

Costs

of

adaptation

and

installed

equipment

are

depreciated

over

the

shorter

of

the

life

of

the

lease

or

the

depreciation

rates

noted

in

the

table

above.

Investment

property

The

Group

initially

recognises

investment

property

at

cost,

and

subsequently

at

fair

value

at

each

balance

sheet

date,

reflecting

market

conditions

at

the

reporting

date.

Gains

and

losses

on

remeasurement

are

included

in

the

income

statement.

Notes

to

the

financial

statements

Assets

at

amortised

cost

and

other

investments

262

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Investment

property

Property

Equipment

Leased

assets

Right

of

use

assets

a

Total

£m

Cost

As

at

1

January

2020

13

3,938

2,977

9

1,826

8,763

Additions

-

193

246

-

85

524

Disposals

(1)

(96)

(100)

-

(14)

(211)

Exchange

and

other

movements

(2)

(33)

(41)

-

37

(39)

As

at

31

December

2020

10

4,002

3,082

9

1,934

9,037

Accumulated

depreciation

and

impairment

As

at

1

January

2020

-

(1,901)

(2,306)

(9)

(332)

(4,548)

Depreciation

charge

-

(187)

(223)

-

(231)

(641)

Impairment

-

(25)

(2)

-

(15)

(42)

Disposals

-

82

92

-

2

176

Exchange

and

other

movements

-

18

27

-

9

54

As

at

31

December

2020

-

(2,013)

(2,412)

(9)

(567)

(5,001)

Net

book

value

10

1,989

670

-

1,367

4,036

Cost

As

at

1

January

2019

9

3,684

2,956

9

1,748

8,406

Additions

5

377

337

-

95

814

Disposals

-

(73)

(251)

-

(10)

(334)

Exchange

and

other

movements

(1)

(50)

(65)

-

(7)

(123)

As

at

31

December

2019

13

3,938

2,977

9

1,826

8,763

Accumulated

depreciation

and

impairment

As

at

1

January

2019

-

(1,792)

(2,322)

(9)

(104)

(4,227)

Depreciation

charge

-

(178)

(229)

-

(226)

(633)

Impairment

-

(11)

(1)

-

(2)

(14)

Disposals

-

56

205

-

261

Exchange

and

other

movements

-

24

41

-

65

As

at

31

December

2019

-

(1,901)

(2,306)

(9)

(332)

(4,548)

Net

book

value

13

2,037

671

-

1,494

4,215

Note

a

Right

of

use

(ROU)

asset

balances

relate

to

property

leases

under

IFRS

16.

Refer

to

Note

21

for

further

details.

Property

rentals

of

£11m

(2019:

£22m)

have

been

included

in

other

income.

The

fair

value

of

investment

property

is

determined

by

reference

to

current

market

prices

for

similar

properties,

adjusted

as

necessary

for

condition

and

location,

or

by

reference

to

recent

transactions

updated

to

reflect

current

economic

conditions.

Discounted

cash

flow

techniques

may

be

employed

to

calculate

fair

value

where

there

have

been

no

recent

transactions,

using

current

external

market

inputs

such

as

market

rents

and

interest

rates.

Valuations

are

carried

out

by

management

with

the

support

of

appropriately

qualified

independent

valuers.

Refer

to

Note

17

for

further

details.

Notes

to

the

financial

statements

Assets

at

amortised

cost

and

other

investments

263

Barclays

PLC

2020

Annual

Report

on

Form

20-F

21

Leases

Accounting

for

leases

under

IFRS

16

effective

from

1

January

2019

IFRS

16

applies

to

all

leases

with

the

exception

of

licenses

of

intellectual

property,

rights

held

by

licensing

agreement

within

the

scope

of

IAS

38

Intangible

Assets,

service

concession

arrangements,

leases

of

biological

assets

within

the

scope

of

IAS

41

Agriculture

and

leases

of

minerals,

oil,

natural

gas

and

similar

non-regenerative

resources.

IFRS

16

includes

an

accounting

policy

choice

for

a

lessee

to

elect

not

to

apply

IFRS

16

to

remaining

assets

within

the

scope

of

IAS

38

Intangible

Assets

which

the

Group

has

decided

to

apply.

When

the

Group

is

the

lessee,

it

is

required

to

recognise

both:

◾

A

lease

liability,

measured

at

the

present

value

of

remaining

cash

flows

on

the

lease,

and

◾

A

right

of

use

(ROU)

asset,

measured

at

the

amount

of

the

initial

measurement

of

the

lease

liability,

plus

any

lease

payments

made

prior

to

commencement

date,

initial

direct

costs,

and

estimated

costs

of

restoring

the

underlying

asset

to

the

condition

required

by

the

lease,

less

any

lease

incentives

received.

Subsequently

the

lease

liability

will

increase

for

the

accrual

of

interest,

resulting

in

a

constant

rate

of

return

throughout

the

life

of

the

lease,

and

reduce

when

payments

are

made.

The

right

of

use

asset

will

amortise

to

the

income

statement

over

the

life

of

the

lease.

The

lease

liability

is

remeasured

when

there

is

a

change

in

one

of

the

following:

◾

Future

lease

payments

arising

from

a

change

in

an

index

or

rate;

◾

The

Group’s

estimate

of

the

amount

expected

to

be

payable

under

a

residual

value

guarantee;

or

◾

The

Group’s

assessment

of

whether

it

will

exercise

a

purchase,

extension

or

termination

option.

When

the

lease

liability

is

remeasured,

a

corresponding

adjustment

is

made

to

the

carrying

amount

of

the

ROU

asset,

or

is

recorded

in

the

income

statement

if

the

carrying

amount

of

the

ROU

asset

has

been

reduced

to

nil.

On

the

balance

sheet,

the

ROU

assets

are

included

within

property,

plant

and

equipment

and

the

lease

liabilities

are

included

within

other

liabilities.

The

Group

applies

the

recognition

exemption

in

IFRS

16

for

leases

with

a

term

not

exceeding

12

months.

For

these

leases

the

lease

payments

are

recognised

as

an

expense

on

a

straight

line

basis

over

the

lease

term

unless

another

systematic

basis

is

more

appropriate.

When

the

Group

is

the

lessor,

the

lease

must

be

classified

as

either

a

finance

lease

or

an

operating

lease.

A

finance

lease

is

a

lease

which

confers

substantially

all

the

risks

and

rewards

of

the

leased

assets

on

the

lessee.

An

operating

lease

is

a

lease

where

substantially

all

of

the

risks

and

rewards

of

the

leased

asset

remain

with

the

lessor.

When

the

lease

is

deemed

a

finance

lease,

the

leased

asset

is

not

held

on

the

balance

sheet;

instead

a

finance

lease

receivable

is

recognised

representing

the

minimum

lease

payments

receivable

under

the

terms

of

the

lease,

discounted

at

the

rate

of

interest

implicit

in

the

lease.

When

the

lease

is

deemed

an

operating

lease,

the

lease

income

is

recognised

on

a

straight-line

basis

over

the

period

of

the

lease

unless

another

systematic

basis

is

more

appropriate.

The

Group

holds

the

leased

assets

on-balance

sheet

within

property,

plant

and

equipment.

Accounting

for

finance

leases

under

IAS

17

for

2018

Under

IAS

17,

a

finance

lease

is

a

lease

which

confers

substantially

all

the

risks

and

rewards

of

the

leased

assets

on

the

lessee.

Where

the

Group

is

the

lessor,

the

leased

asset

is

not

held

on

the

balance

sheet;

instead

a

finance

lease

receivable

is

recognised

representing

the

minimum

lease

payments

receivable

under

the

terms

of

the

lease,

discounted

at

the

rate

of

interest

implicit

in

the

lease.

Where

the

Group

is

the

lessee,

the

leased

asset

is

recognised

in

property,

plant

and

equipment

and

a

finance

lease

liability

is

recognised,

representing

the

minimum

lease

payments

payable

under

the

lease,

discounted

at

the

rate

of

interest

implicit

in

the

lease.

Interest

income

or

expense

is

recognised

in

interest

receivable

or

payable,

allocated

to

accounting

periods

to

reflect

a

constant

periodic

rate

of

return.

Accounting

for

operating

leases

under

IAS

17

for

2018

An

operating

lease

under

IAS

17

is

a

lease

where

substantially

all

of

the

risks

and

rewards

of

the

leased

assets

remain

with

the

lessor.

Where

the

Group

is

the

lessor,

lease

income

is

recognised

on

a

straight-line

basis

over

the

period

of

the

lease

unless

another

systematic

basis

is

more

appropriate.

The

Group

holds

the

leased

assets

on-balance

sheet

within

property,

plant

and

equipment.

Where

the

Group

is

the

lessee,

rentals

payable

are

recognised

as

an

expense

in

the

income

statement

on

a

straight-line

basis

over

the

lease

term

unless

another

systematic

basis

is

more

appropriate.

As

a

Lessor

Finance

lease

receivables

are

included

within

loans

and

advances

at

amortised

cost.

The

Group

specialises

in

the

provision

of

leasing

and

other

asset

finance

facilities

across

a

broad

range

of

asset

types

to

business

and

individual

customers.

The

following

table

sets

out

a

maturity

analysis

of

lease

receivables,

showing

the

lease

payments

to

be

received

after

the

reporting

date.

Notes

to

the

financial

statements

Assets

at

amortised

cost

and

other

investments

264

Barclays

PLC

2020

Annual

Report

on

Form

20-F

2020

2019

Gross

investment

in

finance

lease

receivables

Future

finance

income

Present

value

of

minimum

lease

payments

receivable

Unguarantee

d

residual

values

Gross

investment

in

finance

lease

receivables

Future

finance

income

Present

value

of

minimum

lease

payments

receivable

Unguaranteed

residual

values

£m

Not

more

than

one

year

535

(26)

509

70

1,403

(115)

1,288

77

One

to

two

year

312

(15)

297

45

909

(76)

833

53

Two

to

three

year

215

(12)

203

52

593

(49)

544

45

Three

to

four

year

107

(6)

101

27

354

(28)

326

43

Four

to

five

year

52

(3)

49

18

123

(8)

115

19

Over

five

years

24

(1)

23

13

115

(17)

98

22

Total

1,245

(63)

1,182

225

3,497

(293)

3,204

259

As

a

part

of

a

strategic

review,

Barclays

Partner

Finance

sold

its

motor

point

of

sale

finance

portfolio

that

led

to

a

decrease

in

gross

investment

in

finance

lease

receivables.

The

Group

does

not

have

any

material

operating

leases

as

a

lessor.

The

impairment

allowance

for

finance

lease

receivables

amounted

to

£29m

(2019:

£55m).

Finance

lease

income

Finance

lease

income

is

included

within

interest

income.

The

following

table

shows

amounts

recognised

in

the

income

statement

during

the

year.

2020

2019

£m

Finance

income

from

net

investment

in

lease

55

141

(Loss)/profit

on

sales

(25)

6

As

a

Lessee

The

Group

leases

various

offices,

branches

and

other

premises

under

non-cancellable

lease

arrangements

to

meet

its

operational

business

requirements.

In

some

instances,

Barclays

will

sublease

property

to

third

parties

when

it

is

no

longer

needed

to

meet

business

requirements.

Currently,

Barclays

does

not

have

any

material

subleasing

arrangements.

ROU

asset

balances

relate

to

property

leases

only.

Refer

to

Note

20

for

a

breakdown

of

the

carrying

amount

of

ROU

assets.

The

total

expenses

recognised

during

the

year

for

short

term

leases

were

£4m

(2019:

£14m).

The

portfolio

of

short

term

leases

to

which

Barclays

is

exposed

at

the

end

of

the

year

is

not

dissimilar

to

the

expenses

recognised

in

the

year.

Lease

liabilities

2020

2019

£m

As

at

1

January

1,563

1,696

Interest

expense

70

76

New

leases

85

94

Disposals

(15)

(19)

Cash

payments

(306)

(289)

Exchange

and

other

movements

47

5

As

at

31

December

(see

Note

23)

1,444

1,563

The

below

table

sets

out

a

maturity

analysis

of

undiscounted

lease

liabilities,

showing

the

lease

payments

to

be

paid

after

the

reporting

date.

Undiscounted

lease

liabilities

maturity

analysis

2020

2019

£m

Not

more

than

one

year

255

296

One

to

two

years

221

252

Two

to

three

years

198

208

Three

to

four

years

176

186

Four

to

five

years

162

165

Five

to

ten

years

557

565

Greater

than

ten

years

248

310

Total

undiscounted

lease

liabilities

as

at

31

December

1,817

1,982

Notes

to

the

financial

statements

Assets

at

amortised

cost

and

other

investments

265

Barclays

PLC

2020

Annual

Report

on

Form

20-F

In

addition

to

the

cash

flows

identified

above,

Barclays

is

exposed

to:

◾

Variable

lease

payments:

This

variability

will

typically

arise

from

either

inflation

index

instruments

or

market

based

pricing

adjustments.

Currently,

Barclays

has

809

(2019:

939)

leases

out

of

the

total

1,329

(2019:

1,467)

leases

which

have

variable

lease

payment

terms

based

on

market

based

pricing

adjustments.

Of

the

gross

cash

flows

identified

above,

£1,096m

(2019:

£1,526m)

is

attributable

to

leases

with

some

degree

of

variability

predominately

linked

to

market

based

pricing

adjustments.

◾

Extension

and

termination

options:

The

table

above

represents

Barclays

best

estimate

of

future

cash

out

flows

for

leases,

including

assumptions

regarding

the

exercising

of

contractual

extension

and

termination

options.

The

above

gross

cash

flows

have

been

reduced

by

£446m

(2019:

£474m)

for

leases

where

Barclays

is

highly

expected

to

exercise

an

early

termination

option.

However,

there

is

no

significant

impact

where

Barclays

is

expected

to

exercise

an

extension

option.

The

Group

currently

does

not

have

any

significant

sale

and

lease

back

transactions.

The

Group

does

not

have

any

restrictions

or

covenants

imposed

by

the

lessor

on

its

property

leases

which

restrict

its

businesses.

22

Goodwill

and

intangible

assets

Accounting

for

goodwill

and

intangible

assets

Goodwill

The

carrying

value

of

goodwill

is

determined

in

accordance

with

IFRS

3

Business

Combinations

and

IAS

36

Impairment

of

Assets.

Goodwill

arising

on

the

acquisition

of

subsidiaries

represents

the

excess

of

the

fair

value

of

the

purchase

consideration

over

the

fair

value

of

the

Group’s

share

of

the

assets

acquired

and

the

liabilities

and

contingent

liabilities

assumed

on

the

date

of

the

acquisition.

Goodwill

is

reviewed

annually

for

impairment,

or

more

frequently

when

there

are

indications

that

impairment

may

have

occurred.

The

test

involves

comparing

the

carrying

value

of

a

cash

generating

unit

(CGU)

including

goodwill

with

the

present

value

of

the

pre-tax

cash

flows,

discounted

at

a

rate

of

interest

that

reflects

the

inherent

risks,

of

the

CGU

to

which

the

goodwill

relates,

or

the

CGU’s

fair

value

if

this

is

higher.

Intangible

assets

Intangible

assets

other

than

goodwill

are

accounted

for

in

accordance

with

IAS

38

Intangible

Assets

.

Intangible

assets

are

initially

recognised

when

they

are

separable

or

arise

from

contractual

or

other

legal

rights,

the

cost

can

be

measured

reliably

and,

in

the

case

of

intangible

assets

not

acquired

in

a

business

combination,

where

it

is

probable

that

future

economic

benefits

attributable

to

the

assets

will

flow

from

their

use.

For

internally

generated

intangible

assets,

only

costs

incurred

during

the

development

phase

are

capitalised.

Expenditures

in

the

research

phase

are

expensed

when

it

is

incurred.

Intangible

assets

are

stated

at

cost

(which

is,

in

the

case

of

assets

acquired

in

a

business

combination,

the

acquisition

date

fair

value)

less

accumulated

amortisation

and

impairment,

if

any,

and

are

amortised

over

their

useful

lives

in

a

manner

that

reflects

the

pattern

to

which

they

contribute

to

future

cash

flows,

generally

using

the

amortisation

periods

set

out

below:

Annual

rates

in

calculating

amortisation

Amortisation

period

Goodwill

Internally

generated

software

a

Other

software

Customer

lists

Licences

and

other

Not

amortised

12

months

to

6

years

12

months

to

6

years

12

months

to

25

years

12

months

to

25

years

Intangible

assets

are

reviewed

for

impairment

when

there

are

indications

that

impairment

may

have

occurred.

Intangible

assets

not

yet

available

for

use

are

reviewed

annually

for

impairment.

Notes

to

the

financial

statements

Assets

at

amortised

cost

and

other

investments

266

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Intangible

assets

Goodwill

Internally

generated

software

Other

software

Customer

lists

Licences

and

other

Total

£m

2020

Cost

As

at

1

January

2020

4,760

6,643

505

1,465

489

13,862

Additions

and

disposals

(37)

646

131

-

22

762

Exchange

and

other

movements

(7)

(42)

3

(46)

(21)

(113)

As

at

31

December

2020

4,716

7,247

639

1,419

490

14,511

Accumulated

amortisation

and

impairment

As

at

1

January

2020

(861)

(2,989)

(279)

(1,250)

(364)

(5,743)

Disposals

37

97

10

-

3

147

Amortisation

charge

-

(771)

(51)

(43)

(33)

(898)

Impairment

charge

-

(147)

(6)

-

(153)

Exchange

and

other

movements

(1)

31

(2)

41

15

84

As

at

31

December

2020

(825)

(3,779)

(328)

(1,252)

(379)

(6,563)

Net

book

value

3,891

3,468

311

167

111

7,948

2019

Cost

As

at

1

January

2019

4,768

5,835

389

1,630

558

13,180

Additions

and

disposals

-

857

120

(124)

(39)

814

Exchange

and

other

movements

(8)

(49)

(4)

(41)

(30)

(132)

As

at

31

December

2019

4,760

6,643

505

1,465

489

13,862

Accumulated

amortisation

and

impairment

As

at

1

January

2019

(861)

(2,362)

(254)

(1,359)

(371)

(5,207)

Disposals

-

67

25

124

37

253

Amortisation

charge

-

(716)

(52)

(49)

(37)

(854)

Impairment

charge

-

(17)

(2)

-

(19)

Exchange

and

other

movements

-

39

4

34

7

84

As

at

31

December

2019

(861)

(2,989)

(279)

(1,250)

(364)

(5,743)

Net

book

value

3,899

3,654

226

215

125

8,119

Note

a

Exceptions

to

the

above

rate

relate

to

useful

lives

of

certain

core

banking

platforms

that

are

assessed

individually

and,

if

appropriate,

amortised

over

longer

periods

ranging

from

10

to

15

years.

Goodwill

and

Intangible

assets

are

allocated

to

business

operations

according

to

business

segments

as

follows:

2020

2019

Goodwill

Intangibles

Total

Goodwill

Intangibles

Total

£m

Barclays

UK

3,560

1,618

5,178

3,526

1,520

5,046

Barclays

International

289

2,435

2,724

329

2,686

3,015

Head

Office

42

4

46

44

14

58

Total

3,891

4,057

7,948

3,899

4,220

8,119

Notes

to

the

financial

statements

Assets

at

amortised

cost

and

other

investments

267

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Critical

accounting

estimates

and

judgements

Goodwill

Testing

goodwill

for

impairment

involves

a

significant

amount

of

judgement.

Goodwill

is

allocated

to

CGUs

for

the

purpose

of

impairment

testing.

The

review

of

goodwill

for

impairment

involves

calculating

a

value

in

use

(VIU)

valuation

which

is

compared

to

the

carrying

value

of

a

CGU

associated

with

the

goodwill

to

determine

whether

any

impairment

has

occurred.

This

includes

the

identification

of

independent

CGUs

across

the

organisation

and

the

allocation

of

goodwill

to

those

CGUs.

The

calculation

of

a

value

in

use

contains

a

high

degree

of

uncertainty

in

estimating

the

future

cash

flows

and

the

rates

used

to

discount

them.

Key

judgements

include

determining

the

carrying

value

of

the

CGU,

the

cash

flows

and

discount

rates

used

in

the

calculation.

◾

The

cash

flow

forecasts

used

by

management

involve

judgement

and

are

based

upon

a

view

of

the

future

prospects

of

the

business

and

market

conditions

at

the

point

in

time

the

assessment

is

prepared.

The

estimation

of

pre-tax

cash

flows

is

sensitive

to

the

periods

for

which

detailed

forecasts

are

available

and

to

assumptions

regarding

long-term

sustainable

cash

flows.

◾

The

discount

rates

applied

to

the

future

cash

flows

also

involve

judgement

as

they

can

have

a

significant

impact

on

the

valuation.

The

discount

rates

used

are

compared

to

market

participants

to

ensure

that

they

are

appropriate

and

based

on

an

estimated

cost

of

equity

for

each

CGU.

◾

The

choice

of

a

terminal

growth

rate

used

to

determine

the

present

value

of

the

future

cash

flows

of

the

CGUs

is

also

a

judgement

that

can

impact

the

outcome

of

the

assessment.

The

terminal

growth

rate

and

discount

rates

used

may

vary

due

to

external

market

rates

and

economic

conditions

that

are

beyond

management’s

control.

Further

details

of

some

of

the

key

judgements

are

set

out

below.

2020

impairment

review

The

2020

impairment

review

was

performed

during

Q4

2020.

Given

the

change

in

the

macroeconomic

and

interest

rate

outlook,

this

review

was

performed

across

all

material

CGUs.

The

review

identified

that

a

number

of

the

CGUs

have

been

adversely

impacted

by

changes

in

their

operating

environment,

in

particular

retail

and

business

banking

activity.

A

detailed

assessment

has

been

performed,

with

the

approach

and

results

of

this

analysis

set

out

below.

Determining

the

carrying

value

of

CGUs

The

carrying

value

for

each

CGU

is

the

sum

of

the

tangible

equity,

goodwill

and

intangible

balances

associated

with

that

CGU.

The

Group

manages

the

assets

and

liabilities

of

its

CGUs

with

reference

to

tangible

equity

of

the

respective

businesses.

That

tangible

equity

is

derived

from

the

level

of

risk

weighted

assets

(RWAs)

and

capital

required

to

be

deployed

in

the

CGU

and

therefore

reflects

its

relative

risk,

as

well

as

the

level

of

capital

management

consider

a

market

participant

would

require

to

hold

and

retain

to

support

business

growth.

The

goodwill

held

across

the

group

has

been

allocated

to

the

CGU

where

it

originated,

based

upon

historical

records.

The

intangible

balances

are

allocated

to

the

CGUs

based

upon

their

expected

usage

of

these

assets.

Cash

flows

The

5-year

cash

flows

used

in

the

calculation

are

based

on

the

formally

agreed

medium

term

plans

approved

by

the

Board.

These

are

prepared

using

macroeconomic

assumptions

which

management

consider

reasonable

and

supportable,

and

reflect

business

agreed

initiatives

for

the

forecast

period.

The

macroeconomic

assumptions

underpinning

the

medium

term

plan

were

determined

in

August

2020

and

management

has

considered

whether

there

are

subsequent

significant

changes

in

those

assumptions

which

would

adversely

impact

the

results

of

the

impairment

review.

As

required

by

IAS

36,

all

estimates

of

future

cash

flows

exclude

cash

inflows

or

outflows

that

are

expected

to

arise

from

restructuring

initiatives

where

a

constructive

obligation

to

carry

out

the

plan

does

not

yet

exist.

The

Education,

Social

Housing

and

Local

Authority

(ESHLA)

portfolio

has

been

excluded

from

the

Business

Banking

CGU

cash

flows.

This

is

a

legacy

loan

portfolio

which

was

previously

within

the

Non-Core

bank

and

was

not

part

of

the

business

to

which

the

goodwill

relates.

As

such,

the

cash

flows

relating

to

this

portfolio

have

been

excluded

from

the

Business

Banking

VIU

calculation.

The

Personal

Banking

CGU

cash

flows

have

been

extended

to

a

sixth

year

(prior

to

the

calculation

of

terminal

values

below)

to

reflect

an

observed

15bp

inflexion

point

in

the

yield

curve

which

was

beyond

the

period

of

the

medium

term

plan.

Discount

rates

IAS

36

requires

that

the

discount

rate

used

in

a

value

in

use

calculation

reflects

the

pre-tax

rate

an

investor

would

require

if

they

were

to

choose

an

investment

that

would

generate

similar

cash

flows

to

those

that

the

entity

expects

to

generate

from

the

asset.

In

determining

the

discount

rate,

management

have

identified

the

cost

of

equity

associated

with

market

participants

that

closely

resemble

our

cash

generating

units

and

adjusted

them

for

tax

to

arrive

at

the

pre-tax

equivalent

rate.

A

range

of

discount

rates

have

been

used

across

the

CGU’s

ranging

from

12.0%

to

16.3%

(2019:

11.0%

to

13.3%).

Terminal

growth

rate

The

terminal

growth

rate

is

used

to

estimate

the

effect

of

projecting

cash

flows

to

the

end

of

an

asset’s

useful

economic

life.

It

is

management’s

judgement

that

the

cash

flows

associated

with

the

CGUs

will

grow

in

line

with

the

major

economies

in

which

we

operate.

In

prior

years,

the

growth

rate

used

had

been

based

upon

estimated

economic

growth

rates

(GDP).

Given

macroeconomic

uncertainty,

inflation

rates

are

now

considered

a

better

approximation

of

future

growth

rates

and

are

therefore

the

basis

of

terminal

growth

rates

applied.

The

terminal

growth

rate

used

is

2.0%

(2019:1.5%).

Outcome

of

goodwill

and

intangibles

review

The

Personal

Banking

and

Business

Banking

retail

banking

CGUs

carry

the

majority

of

the

Group’s

goodwill

balance,

predominantly

as

a

consequence

of

the

Woolwich

acquisition.

The

goodwill

within

Personal

Banking

was

£2,752m

(2019:

£2,718m),

of

which

£2,501m

(2019:

£2,501m)

was

attributable

to

Woolwich,

and

within

Business

Banking

was

£629m

(2019:

£629m),

fully

attributable

to

Woolwich.

Notes

to

the

financial

statements

Assets

at

amortised

cost

and

other

investments

268

Barclays

PLC

2020

Annual

Report

on

Form

20-F

The

outcome

of

the

impairment

review

for

Personal

Banking

and

Business

Banking

are

set

out

below:

Cash

generating

unit

Tangible

equity

Goodwill

Intangibles

Carrying

value

Value

in

use

Value

in

use

exceeding

carrying

value

Value

in

use

exceeding

carrying

value

2019

£m

Personal

Banking

4,650

2,752

1,407

8,809

8,932

123

2,570

Business

Banking

1,353

629

190

2,172

2,912

740

1,981

Total

6,003

3,381

1,597

10,981

11,844

863

4,551

Based

on

management’s

plans

and

assumptions

the

value

in

use

exceeds

the

carrying

value

of

the

CGUs

and

no

impairment

has

been

indicated.

However,

the

extent

to

which

the

recoverable

amounts

exceed

the

carrying

values

for

the

Personal

Banking

and

Business

Banking

CGUs

has

reduced

significantly

in

comparison

to

the

2019

impairment

review,

reflective

of

the

challenging

macroeconomic

and

interest

rate

outlook.

Intangible

assets

During

the

year

internally

generated

software

assets

the

discontinuation

of

obsolete

systems

resulted

in

these

assets

being

impaired

by

£153m.

Sensitivity

of

key

judgements

The

CGU’s

are

sensitive

to

possible

adverse

changes

in

the

key

assumptions

that

support

the

recoverable

amount:

Cash

flows:

The

medium

term

plans

used

to

determine

the

cash

flows

used

in

the

VIU

calculation

rely

on

macroeconomic

forecasts,

including

interest

rates,

GDP

and

unemployment,

and

forecast

levels

of

market

and

client

activity.

Interest

rate

assumptions

impact

planned

cash

flows

from

both

customer

income

and

structural

hedge

contributions

and

therefore

cash

flow

expectations

are

highly

sensitive

to

movements

in

the

yield

curve.

The

cash

flows

also

contain

assumptions

with

regards

to

the

prudential

and

financial

conduct

regulatory

environment

which

may

be

subject

to

change.

Given

the

current

level

of

economic

uncertainty,

a

10%

reduction

in

cash

flows

has

been

provided

to

show

the

sensitivity

of

the

outcome

to

a

change

in

these

key

assumptions.

Discount

rate:

The

discount

rate

should

reflect

the

market

risk

free

rate

adjusted

for

the

inherent

risks

of

the

business

it

is

applied

to.

Management

have

identified

discount

rates

for

comparable

businesses

and

consider

these

to

be

a

reasonable

estimate

of

a

suitable

market

rate

for

the

profile

of

the

business

unit

being

tested.

The

risk

that

these

discount

rates

may

not

be

appropriate

is

quantified

below

and

show

the

impact

of

a

100

bps

change

in

the

discount

rate.

Terminal

growth

rate:

The

terminal

growth

rate

is

used

to

estimate

the

cash

flows

into

perpetuity

based

on

the

expected

longevity

of

the

CGU’s

businesses.

The

terminal

growth

rate

is

sensitive

to

uncertainties

in

the

macroeconomic

environment.

The

risk

that

using

inflation

data

may

not

be

appropriate

for

its

determination

is

quantified

below

and

shows

the

impact

of

100

bps

change

in

the

terminal

value.

Allocated

capital

rate:

Tangible

equity

is

allocated

based

on

the

level

of

risk

weighted

assets

(RWAs)

and

capital

required

to

be

deployed

in

the

CGU

which

is

dependent

on

the

relative

risk

of

businesses.

The

capital

ratio

used

in

determining

the

level

of

tangible

equity

allocated

to

the

CGU

and

its

capital

cash

flows

could

move

over

time.

The

impact

of

a

50

bps

increase

in

capital

ratio

is

quantified

below.

The

sensitivity

of

the

value

in

use

to

key

judgements

in

the

calculations

is

set

out

below:

Cash

generating

unit

Carrying

value

Value

in

use

Value

in

use

exceedin

g

carrying

value

Discount

rate

Terminal

growth

rate

Reduction

in

headroom

Change

required

to

reduce

headroom

to

zero

100

bps

increase

in

the

discount

rate

100

bps

decrease

in

terminal

growth

rate

50

bps

increase

to

allocated

capital

rate

10%

reduction

in

forecaste

d

cash

flows

Discount

rate

Terminal

growth

rate

Allocated

capital

rate

Cashflow

s

£m

%

£m

%

Personal

Banking

8,809

8,932

123

13.51

2.0

(893)

(623)

(220)

(972)

0.1

(0.2)

0.3

(1.3)

Business

Banking

2,172

2,912

740

13.81

2.0

(205)

(128)

(60)

(206)

4.6

(9.7)

6.2

(35.9)

Total

10,981

11,844

863

The

sensitivity

analysis

highlights

that

there

could

be

an

impairment

in

the

recoverable

value

of

the

goodwill

associated

with

Personal

Banking

if

there

were

to

be

a

change

in

management

cash

flow

forecasts,

discount

rate

or

allocated

capital

rate.

Management

continue

to

review

the

recoverability

of

its

goodwill

positions

as

the

macroeconomic

conditions

remain

uncertain.

Notes

to

the

financial

statements

Accruals,

provisions,

contingent

liabilities

and

legal

proceedings

269

Barclays

PLC

2020

Annual

Report

on

Form

20-F

The

notes

included

in

this

section

focus

on

the

Group’s

accruals,

provisions

and

contingent

liabilities.

Provisions

are

recognised

for

present

obligations

arising

as

consequences

of

past

events

where

it

is

probable

that

a

transfer

of

economic

benefit

will

be

necessary

to

settle

the

obligation,

and

it

can

be

reliably

estimated.

Contingent

liabilities

reflect

potential

liabilities

that

are

not

recognised

on

the

balance

sheet.

23

Other

liabilities

2020

2019

£m

Accruals

and

deferred

income

3,683

3,472

Other

creditors

3,447

3,257

Items

in

the

course

of

collection

due

to

other

banks

88

213

Lease

liabilities

(refer

to

Note

21)

1,444

1,563

Other

liabilities

8,662

8,505

24

Provisions

Accounting

for

provisions

The

Group

applies

IAS

37

Provisions,

Contingent

Liabilities

and

Contingent

Assets

in

accounting

for

non-financial

liabilities.

Provisions

are

recognised

for

present

obligations

arising

as

consequences

of

past

events

where

it

is

more

likely

than

not

that

a

transfer

of

economic

benefit

will

be

necessary

to

settle

the

obligation,

which

can

be

reliably

estimated.

Provision

is

made

for

the

anticipated

cost

of

restructuring,

including

redundancy

costs,

when

an

obligation

exists;

for

example,

when

the

Group

has

a

detailed

formal

plan

for

restructuring

a

business

and

has

raised

valid

expectations

in

those

affected

by

the

restructuring

by

announcing

its

main

features

or

starting

to

implement

the

plan.

Critical

accounting

estimates

and

judgements

The

financial

reporting

of

provisions

involves

a

significant

degree

of

judgement

and

is

complex.

Identifying

whether

a

present

obligation

exists

and

estimating

the

probability,

timing,

nature

and

quantum

of

the

outflows

that

may

arise

from

past

events

requires

judgements

to

be

made

based

on

the

specific

facts

and

circumstances

relating

to

individual

events

and

often

requires

specialist

professional

advice.

When

matters

are

at

an

early

stage,

accounting

judgements

and

estimates

can

be

difficult

because

of

the

high

degree

of

uncertainty

involved.

Management

continues

to

monitor

matters

as

they

develop

to

re-evaluate

on

an

ongoing

basis

whether

provisions

should

be

recognised,

however

there

can

remain

a

wide

range

of

possible

outcomes

and

uncertainties,

particularly

in

relation

to

legal,

competition

and

regulatory

matters,

and

as

a

result

it

is

often

not

practicable

to

make

meaningful

estimates

even

when

matters

are

at

a

more

advanced

stage.

The

complexity

of

such

matters

often

requires

the

input

of

specialist

professional

advice

in

making

assessments

to

produce

estimates.

Customer

redress

and

legal,

competition

and

regulatory

matters

are

areas

where

a

higher

degree

of

professional

judgement

is

required.

The

amount

that

is

recognised

as

a

provision

can

also

be

very

sensitive

to

the

assumptions

made

in

calculating

it.

This

gives

rise

to

a

large

range

of

potential

outcomes

which

require

judgement

in

determining

an

appropriate

provision

level.

See

below

for

information

on

payment

protection

redress

and

Note

26

for

more

detail

of

legal,

competition

and

regulatory

matters.

Undrawn

contractually

committed

facilities

and

guarantees

a

Customer

redress

Legal,

competition

and

regulatory

matters

Onerous

contracts

Redundancy

and

restructuring

Payment

Protection

Insurance

Other

customer

redress

Sundry

provisions

Total

£m

As

at

1

January

2020

42

143

322

1,155

420

376

306

2,764

Additions

24

194

806

-

186

106

192

1,508

Amounts

utilised

(13)

(109)

-

(979)

(195)

(171)

(118)

(1,585)

Unused

amounts

reversed

(25)

(60)

(30)

(47)

(44)

(45)

(92)

(343)

Exchange

and

other

movements

-

(10)

(34)

-

1

2

1

(40)

As

at

31

December

2020

28

158

1,064

129

368

268

289

2,304

Note

a

Undrawn

contractually

committed

facilities

and

guarantees

provisions

are

accounted

for

under

IFRS

9.

Provisions

expected

to

be

recovered

or

settled

within

no

more

than

12

months

after

31

December

2020

were

£1,751m

(2019:

£2,457m).

Onerous

contracts

Onerous

contract

provisions

comprise

an

estimate

of

the

costs

involved

with

fulfilling

the

terms

and

conditions

of

contracts

net

of

any

expected

benefits

to

be

received.

Redundancy

and

restructuring

These

provisions

comprise

the

estimated

cost

of

restructuring,

including

redundancy

costs

where

an

obligation

exists.

Additions

made

during

the

year

relate

to

formal

restructuring

plans

and

have

either

been

utilised,

or

reversed,

where

total

costs

are

now

expected

to

be

lower

than

the

original

provision

amount.

Undrawn

contractually

committed

facilities

and

guarantees

Impairment

allowance

under

IFRS

9

considers

both

the

drawn

and

the

undrawn

counterparty

exposure.

For

retail

portfolios,

the

total

impairment

allowance

is

allocated

to

the

drawn

exposure

to

the

extent

that

the

allowance

does

not

exceed

the

exposure

as

ECL

is

not

reported

separately.

Any

excess

is

reported

on

the

liability

side

of

the

balance

sheet

as

a

provision.

For

wholesale

portfolios,

the

impairment

allowance

on

the

undrawn

exposure

is

reported

on

the

liability

side

of

the

balance

sheet

as

a

provision.

For

further

information,

refer

to

Credit

risk

section

Notes

to

the

financial

statements

Accruals,

provisions,

contingent

liabilities

and

legal

proceedings

270

Barclays

PLC

2020

Annual

Report

on

Form

20-F

for

loan

commitments

and

financial

guarantees

on

page

119.

Customer

redress

Customer

redress

provisions

comprise

the

estimated

cost

of

making

redress

payments

to

customers,

clients

and

counterparties

for

losses

or

damages

associated

with

inappropriate

judgement

in

the

execution

of

the

Group’s

business

activities.

Other

than

Payment

Protection

Insurance,

there

are

no

significant

individual

customer

redress

provisions

at

31

December

2020.

Legal,

competition

and

regulatory

matters

The

Group

is

engaged

in

various

legal

proceedings,

both

in

the

UK

and

a

number

of

other

overseas

jurisdictions,

including

the

US.

For

further

information

in

relation

to

legal

proceedings

and

discussion

of

the

associated

uncertainties,

refer

to

Note

26.

Sundry

provisions

This

category

includes

provisions

that

do

not

fit

into

any

of

the

other

categories,

such

as

fraud

losses

and

dilapidation

provisions.

Payment

Protection

Insurance

(PPI)

redress

As

at

31

December

2020

Barclays

had

recognised

cumulative

provisions

totalling

£10.9bn

(December

2019:

£11bn)

,

including

a

£55m

release

in

Q4

2020

on

resolution

of

the

items

received

in

Q3

2019

and

claims

from

the

Official

Receiver

with

whom

we

reached

agreement

in

Q3

2020,

against

the

cost

of

PPI

redress

and

associated

processing

costs.

Utilisation

of

the

cumulative

provisions

to

date

is

£10.8bn

(December

2019:

£9.8bn),

leaving

a

residual

provision

of

£0.1bn

(December

2019:

£1.2bn)

to

be

utilised

in

2021.

This

represents

Barclays

best

estimate

as

at

31

December

2020

based

on

information

available.

25

Contingent

liabilities

and

commitments

Accounting

for

contingent

liabilities

Contingent

liabilities

are

possible

obligations

whose

existence

will

be

confirmed

only

by

uncertain

future

events,

and

present

obligations

where

the

transfer

of

economic

resources

is

uncertain

or

cannot

be

reliably

measured.

Contingent

liabilities

are

not

recognised

on

the

balance

sheet

but

are

disclosed

unless

the

likelihood

of

an

outflow

of

economic

resources

is

remote.

The

following

table

summarises

the

nominal

principal

amount

of

contingent

liabilities

and

commitments

which

are

not

recorded

on-balance

sheet:

2020

2019

£m

Guarantees

and

letters

of

credit

pledged

as

collateral

security

15,665

17,606

Performance

guarantees,

acceptances

and

endorsements

5,944

6,921

Total

contingent

liabilities

21,609

24,527

Of

which:

Financial

guarantees

carried

at

fair

value

229

43

Documentary

credits

and

other

short-term

trade

1,086

1,291

Standby

facilities,

credit

lines

and

other

commitments

331,963

333,164

Total

commitments

333,049

334,455

Of

which:

Loan

commitments

carried

at

fair

value

9,269

17,679

Expected

credit

losses

held

against

contingent

liabilities

and

commitments

equal

£1,064m

(2019:

£322m)

and

are

reported

in

Note

24.

Further

details

on

contingent

liabilities

relating

to

legal

and

competition

and

regulatory

matters

can

be

found

in

Note

26.

Notes

to

the

financial

statements

Accruals,

provisions,

contingent

liabilities

and

legal

proceedings

271

Barclays

PLC

2020

Annual

Report

on

Form

20-F

26

Legal,

competition

and

regulatory

matters

The

Group

faces

legal,

competition

and

regulatory

challenges,

many

of

which

are

beyond

our

control.

The

extent

of

the

impact

of

these

matters

cannot

always

be

predicted

but

may

materially

impact

our

operations,

financial

results,

condition

and

prospects.

Matters

arising

from

a

set

of

similar

circumstances

can

give

rise

to

either

a

contingent

liability

or

a

provision,

or

both,

depending

on

the

relevant

facts

and

circumstances.

The

recognition

of

provisions

in

relation

to

such

matters

involves

critical

accounting

estimates

and

judgments

in

accordance

with

the

relevant

accounting

policies

as

described

in

Note

24,

Provisions.

We

have

not

disclosed

an

estimate

of

the

potential

financial

impact

or

effect

on

the

Group

of

contingent

liabilities

where

it

is

not

currently

practicable

to

do

so.

Various

matters

detailed

in

this

note

seek

damages

of

an

unspecified

amount.

While

certain

matters

specify

the

damages

claimed,

such

claimed

amounts

do

not

necessarily

reflect

the

Group’s

potential

financial

exposure

in

respect

of

those

matters.

Matters

are

ordered

under

headings

corresponding

to

the

financial

statements

in

which

they

are

disclosed.

1.

Barclays

PLC

and

Barclays

Bank

PLC

Investigations

into

certain

advisory

services

agreements

and

action

FCA

proceedings

In

2008,

Barclays

Bank

PLC

and

Qatar

Holdings

LLC

entered

into

two

advisory

service

agreements

(the

Agreements).

The

Financial

Conduct

Authority

(FCA)

conducted

an

investigation

into

whether

the

Agreements

may

have

Barclays

PLC’s

capital

raisings

in

June

and

November

2008

(the

Capital

Raisings)

and

therefore

should

have

been

disclosed

in

the

announcements

or

public

documents

relating

to

the

Capital

Raisings.

In

2013,

the

FCA

issued

warning

notices

(the

Notices)

finding

that

Barclays

PLC

and

Barclays

Bank

PLC

acted

recklessly

and

in

breach

of

certain

disclosure-related

listing

rules,

and

that

Barclays

PLC

was

also

in

breach

of

Listing

Principle

3.

The

financial

penalty

provided

in

the

Notices

is

£50m.

Barclays

PLC

and

Barclays

Bank

PLC

continue

to

contest

the

findings.

Following

the

conclusion

of

the

Serious

Fraud

Office

(SFO)

proceedings

against

certain

former

Barclays

executives

resulting

in

their

acquittals,

the

FCA

proceedings,

which

were

stayed,

have

resumed.

All

charges

brought

by

the

SFO

against

Barclays

PLC

and

Barclays

Bank

PLC

in

relation

to

the

Agreements

were

dismissed

in

2018.

Civil

action

PCP

Capital

Partners

LLP

and

PCP

International

Finance

Limited

(PCP)

are

seeking

damages

of

up

to

approximately

£819m

from

Barclays

Bank

PLC

for

fraudulent

misrepresentation

and

deceit,

arising

from

alleged

statements

made

by

Barclays

Bank

PLC

to

PCP

in

relation

to

the

terms

on

which

securities

were

to

be

issued

to

potential

investors,

allegedly

including

PCP,

in

the

November

2008

capital

raising.

The

trial

took

place

in

2020

and

the

High

Court

has

indicated

that

judgment

is

imminent.

The

outcome

of

the

judgment,

and

any

financial

impact

on

the

Group,

is

unknown.

Barclays

Bank

PLC

is

defending

the

claim.

Investigations

into

LIBOR

and

other

benchmarks

and

actions

Regulators

and

law

enforcement

agencies,

including

certain

competition

authorities,

from

a

number

of

governments

have

conducted

investigations

relating

to

Barclays

Bank

PLC’s

involvement

in

allegedly

manipulating

certain

financial

benchmarks,

such

as

LIBOR.

The

SFO

closed

its

investigation

with

no

action

to

be

taken

against

the

Group.

Various

individuals

and

corporates

in

a

range

of

jurisdictions

have

threatened

or

brought

civil

actions

against

the

Group

and

other

banks

in

relation

to

the

alleged

manipulation

of

LIBOR

and/or

other

benchmarks.

USD

LIBOR

civil

actions

The

majority

of

the

USD

LIBOR

cases,

which

have

been

filed

in

various

US

jurisdictions,

have

been

consolidated

for

pre-trial

purposes

in

the

US

District

Court

in

the

Southern

District

of

New

York

(SDNY).

The

complaints

are

substantially

similar

and

allege,

among

other

things,

that

Barclays

PLC,

Barclays

Bank

PLC,

Barclays

Capital

Inc.

(BCI)

and

other

financial

institutions

individually

and

collectively

violated

provisions

of

the

US

Sherman

Antitrust

Act

(Antitrust

Act),

the

US

Commodity

Exchange

Act

(CEA),

the

US

Racketeer

Influenced

and

Corrupt

Organizations

Act

(RICO),

the

Securities

Exchange

Act

of

1934

and

various

state

laws

by

manipulating

USD

LIBOR

rates.

Putative

class

actions

and

individual

actions

seek

unspecified

damages

with

the

exception

of

three

lawsuits,

in

which

the

plaintiffs

are

seeking

a

combined

total

of

approximately

$900m

in

actual

damages

and

additional

punitive

damages

against

all

defendants,

including

Barclays

Bank

PLC.

Some

of

the

lawsuits

also

seek

trebling

of

damages

under

the

Antitrust

Act

and

RICO.

Barclays

Bank

PLC

has

previously

settled

certain

claims.

Two

class

action

settlements

where

Barclays

Bank

PLC

has

respectively

paid

$7.1m

and

$20m

have

received

final

court

approval.

Sterling

LIBOR

civil

actions

In

2016,

two

putative

class

actions

filed

in

the

SDNY

against

Barclays

Bank

PLC,

BCI

and

other

Sterling

LIBOR

panel

banks

alleging,

among

other

things,

that

the

defendants

manipulated

the

Sterling

LIBOR

rate

in

violation

of

the

Antitrust

Act,

CEA

and

RICO,

were

consolidated.

The

defendants’

motion

to

dismiss

the

claims

was

granted

in

2018.

The

plaintiffs

have

appealed

the

dismissal.

Japanese

Yen

LIBOR

civil

actions

In

2012,

a

putative

class

action

was

filed

in

the

SDNY

against

Barclays

Bank

PLC

and

other

Japanese

Yen

LIBOR

panel

banks

by

a

lead

plaintiff

involved

in

exchange-traded

derivatives

and

members

of

the

Japanese

Bankers

Association’s

Euroyen

Tokyo

Interbank

Offered

Rate

(Euroyen

TIBOR)

panel.

The

complaint

alleges,

among

other

things,

manipulation

of

the

Euroyen

TIBOR

and

Yen

LIBOR

rates

and

breaches

of

the

CEA

and

the

Antitrust

Act.

In

2014,

the

court

dismissed

the

plaintiff’s

antitrust

claims,

and,

in

2020,

the

court

dismissed

the

plaintiff’s

remaining

CEA

claims.

The

plaintiff

has

appealed

the

lower

court’s

dismissal

of

such

claims.

In

2015,

a

second

putative

class

action,

making

similar

allegations

to

the

above

class

action,

was

filed

in

the

SDNY

against

Barclays

PLC,

Barclays

Bank

PLC

and

BCI.

The

plaintiffs

filed

an

amended

complaint

in

2020,

and

the

defendants

have

filed

a

motion

to

dismiss.

SIBOR/SOR

civil

action

In

2016,

a

putative

class

action

was

filed

in

the

SDNY

against

Barclays

PLC,

Barclays

Bank

PLC,

BCI

and

other

defendants,

alleging

manipulation

of

the

Singapore

Interbank

Offered

Rate

(SIBOR)

and

Singapore

Swap

Offer

Rate

(SOR).

In

2018,

the

court

dismissed

all

claims

against

Barclays

PLC,

Barclays

Bank

PLC

and

BCI.

The

plaintiffs

have

appealed

the

dismissal.

ICE

LIBOR

civil

actions

In

2019,

several

putative

class

actions

were

filed

in

the

SDNY

against

Barclays

PLC,

Barclays

Bank

PLC,

BCI,

other

financial

institution

defendants

and

Intercontinental

Exchange

Inc.

and

certain

of

its

affiliates

(ICE),

asserting

antitrust

claims

that

defendants

manipulated

USD

LIBOR

through

defendants’

submissions

to

ICE.

These

actions

have

been

consolidated.

The

defendants’

motion

to

dismiss

was

granted

in

2020.

The

plaintiffs

have

appealed

the

dismissal.

In

August

2020,

an

ICE

LIBOR-related

action

was

filed

in

the

US

District

Court

for

the

Northern

Notes

to

the

financial

statements

Accruals,

provisions,

contingent

liabilities

and

legal

proceedings

272

Barclays

PLC

2020

Annual

Report

on

Form

20-F

District

of

California

on

behalf

of

individual

borrowers

and

consumers

of

loans

and

credit

cards

with

variable

interest

rates

linked

to

USD

ICE

LIBOR.

Non-US

benchmarks

civil

actions

Legal

proceedings

(which

include

the

claims

referred

to

below

in

‘Local

authority

civil

actions

concerning

LIBOR’)

have

been

brought

or

threatened

against

Barclays

Bank

PLC

(and,

in

certain

cases,

Barclays

Bank

UK

PLC)

in

the

UK

in

connection

with

alleged

manipulation

of

LIBOR,

EURIBOR

and

other

benchmarks.

Proceedings

have

also

been

brought

in

a

number

of

other

jurisdictions

in

Europe

and

Israel.

Additional

proceedings

in

other

jurisdictions

may

be

brought

in

the

future.

Foreign

Exchange

investigations

and

actions

In

2015,

the

Group

reached

settlements

totalling

approximately

$2.38bn

with

various

US

federal

and

state

authorities

and

the

FCA

in

relation

to

investigations

into

certain

sales

and

trading

practices

in

the

Foreign

Exchange

market.

Under

the

agreement

with

the

US

Department

of

Justice

(DoJ),

which

received

final

court

approval

in

January

2017,

the

Group

agreed

to

a

term

of

probation

of

three

years,

which

expired

in

January

2020.

The

Group

also

continues

to

provide

relevant

information

to

certain

authorities.

The

European

Commission

is

one

of

a

number

of

authorities

still

conducting

an

investigation

into

certain

trading

practices

in

Foreign

Exchange

markets.

The

European

Commission

announced

two

settlements

in

May

2019

and

the

Group

paid

penalties

totalling

approximately

€210m.

In

June

2019,

the

Swiss

Competition

Commission

announced

two

settlements

and

the

Group

paid

penalties

totalling

approximately

CHF

27m.

The

financial

impact

of

the

ongoing

matters

is

not

expected

to

be

material

to

the

Group’s

operating

results,

cash

flows

or

financial

position.

Various

individuals

and

corporates

in

a

range

of

jurisdictions

have

threatened

or

brought

civil

actions

against

the

Group

and

other

banks

in

relation

to

alleged

manipulation

of

Foreign

Exchange

markets.

FX

opt

out

civil

action

In

2018,

Barclays

Bank

PLC

and

BCI

settled

a

consolidated

action

filed

in

the

SDNY,

alleging

manipulation

of

Foreign

Exchange

markets

(Consolidated

FX

Action),

for

a

total

amount

of

$384m.

Also

in

2018,

a

group

of

plaintiffs

who

opted

out

of

the

Consolidated

FX

Action

filed

a

complaint

in

the

SDNY

against

Barclays

PLC,

Barclays

Bank

PLC,

BCI

and

other

defendants.

Some

of

the

plaintiff’s

claims

were

dismissed

in

2020.

Retail

basis

civil

action

In

2015,

a

putative

class

action

was

filed

against

several

international

banks,

including

Barclays

PLC

and

BCI,

on

behalf

of

a

proposed

class

of

individuals

who

exchanged

currencies

on

a

retail

basis

at

bank

branches

(Retail

Basis

Claims).

The

SDNY

has

ruled

that

the

Retail

Basis

Claims

are

not

covered

by

the

settlement

agreement

in

the

Consolidated

FX

Action.

The

Court

subsequently

dismissed

all

Retail

Basis

Claims

against

the

Group

and

all

other

defendants.

The

plaintiffs

have

filed

an

amended

complaint.

State

law

FX

civil

action

In

2017,

the

SDNY

dismissed

consolidated

putative

class

actions

brought

under

federal

and

various

state

laws

on

behalf

of

proposed

classes

of

(i)

stockholders

of

Exchange

Traded

Funds

and

others

who

purportedly

were

indirect

investors

in

FX

instruments,

and

(ii)

investors

who

traded

FX

instruments

through

FX

dealers

or

brokers

not

alleged

to

have

manipulated

Foreign

Exchange

Rates.

Barclays

Bank

PLC

and

BCI

have

settled

the

claim,

which

has

received

final

court

approval.

The

financial

impact

of

the

settlement

is

not

material

to

the

Group’s

operating

results,

cash

flows

or

financial

position.

Non-US

FX

civil

actions

Legal

proceedings

have

been

brought

or

are

threatened

against

Barclays

PLC,

Barclays

Bank

PLC,

BCI

and

Barclays

Execution

Services

Limited

(BX)

in

connection

with

alleged

manipulation

of

Foreign

Exchange

in

the

UK,

a

number

of

other

jurisdictions

in

Europe,

Israel

and

Australia

and

additional

proceedings

may

be

brought

in

the

future.

These

include

two

purported

class

actions

filed

against

Barclays

PLC,

Barclays

Bank

PLC,

BX,

BCI

and

other

financial

institutions

in

the

UK

Competition

Appeal

Tribunal

in

2019

following

the

settlements

with

the

European

Commission

described

above.

Also

in

2019,

a

separate

claim

was

filed

in

the

UK

in

the

High

Court

of

Justice

by

various

banks

and

asset

management

firms

against

Barclays

Bank

PLC

and

other

financial

institutions

alleging

breaches

of

European

and

UK

competition

laws

FX

trading.

Metals

investigations

and

actions

Barclays

Bank

PLC

previously

provided

information

to

the

DoJ,

the

US

Commodity

Futures

Trading

Commission

and

other

authorities

in

connection

with

investigations

into

metals

and

metals-based

financial

instruments.

A

number

of

US

civil

complaints,

each

on

behalf

of

a

proposed

class

of

plaintiffs,

have

been

consolidated

and

transferred

to

the

SDNY.

The

complaints

allege

that

Barclays

Bank

PLC

and

other

members

of

The

London

Gold

Market

Fixing

Ltd.

manipulated

the

prices

of

gold

and

gold

derivative

contracts

in

violation

of

the

Antitrust

Act

and

other

federal

laws.

This

consolidated

putative

class

action

remains

pending.

A

separate

US

civil

complaint

by

a

proposed

class

of

plaintiffs

against

a

number

of

banks,

including

Barclays

Bank

PLC,

BCI

and

BX,

alleging

manipulation

of

the

price

of

silver

in

violation

of

the

CEA,

the

Antitrust

Act

and

state

antitrust

and

consumer

protection

laws,

has

been

dismissed

as

against

the

Barclays

entities.

The

plaintiffs

have

the

option

to

seek

the

court’s

permission

to

appeal.

Civil

actions

have

also

been

filed

in

Canadian

courts

against

Barclays

PLC,

Barclays

Bank

PLC,

Barclays

Capital

Canada

Inc.

and

BCI

on

behalf

of

proposed

classes

of

plaintiffs

alleging

manipulation

of

gold

and

silver

prices.

US

residential

mortgage

actions

There

are

various

pending

civil

actions

relating

to

US

Residential

Mortgage-Backed

Securities

(RMBS),

including

four

actions

arising

from

unresolved

repurchase

requests

submitted

by

Trustees

for

certain

RMBS,

alleging

breaches

of

various

loan-level

representations

and

warranties

(R&Ws)

made

by

Barclays

Bank

PLC

and/or

a

subsidiary

acquired

in

2007

(the

Acquired

Subsidiary).

The

unresolved

repurchase

requests

had

an

original

principal

balance

of

approximately

$2.1bn.

The

Trustees

have

also

alleged

that

the

relevant

R&Ws

may

have

been

breached

with

respect

to

a

greater

(but

unspecified)

amount

of

loans

than

previously

stated

in

the

unresolved

repurchase

requests.

These

repurchase

actions

are

ongoing.

In

one

repurchase

action,

the

New

York

Court

of

Appeals

held

that

claims

certain

R&Ws

are

time-barred.

Barclays

Bank

PLC

has

reached

a

settlement

to

resolve

two

of

the

repurchase

actions,

which

is

subject

to

final

court

approval.

The

financial

impact

of

the

settlement

is

not

expected

to

be

material

to

the

Group’s

operating

results,

cash

flows

or

financial

position.

The

remaining

two

repurchase

actions

are

pending.

Notes

to

the

financial

statements

Accruals,

provisions,

contingent

liabilities

and

legal

proceedings

273

Barclays

PLC

2020

Annual

Report

on

Form

20-F

In

2020,

a

civil

litigation

claim

was

filed

in

the

New

Mexico

First

Judicial

District

Court

by

the

State

of

New

Mexico

against

seven

banks,

including

BCI,

on

behalf

of

two

New

Mexico

state

pension

funds

and

the

New

Mexico

State

Investment

Council

relating

to

legacy

RMBS

purchases.

As

to

BCI,

the

complaint

alleges

that

the

funds

purchased

approximately

$22m

in

RMBS

underwritten

by

BCI.

The

plaintiffs

have

asserted

claims

under

New

Mexico

state

law,

which

provides

for

the

ability

to

claim

treble

damages

and

civil

penalties.

Government

and

agency

securities

civil

actions

and

Certain

governmental

authorities

have

conducted

investigations

into

activities

relating

to

the

trading

of

certain

government

and

agency

securities

in

various

markets.

The

Group

provided

information

in

cooperation

with

such

investigations.

In

January

2021,

the

Mexican

Competition

Authority

concluded

its

investigation

into

activities

relating

to

the

trading

of

Mexican

government

bonds

and

granted

Barclays

Bank

Mexico

S.A.

immunity

from

fines.

Civil

actions

have

also

been

filed

on

the

basis

of

similar

allegations,

as

described

below.

Treasury

auction

securities

civil

actions

Consolidated

putative

class

action

complaints

filed

in

US

federal

court

against

Barclays

Bank

PLC,

BCI

and

other

financial

institutions

under

the

Antitrust

Act

and

state

common

law

allege

that

the

defendants

(i)

conspired

to

manipulate

the

US

Treasury

securities

market

and/or

(ii)

conspired

to

prevent

the

creation

of

certain

platforms

by

boycotting

or

threatening

to

boycott

such

trading

platforms.

The

defendants

have

filed

a

motion

to

dismiss.

In

addition,

certain

plaintiffs

have

filed

a

related,

direct

action

against

BCI

and

certain

other

financial

institutions,

alleging

that

defendants

conspired

to

fix

and

manipulate

the

US

Treasury

securities

market

in

violation

of

the

Antitrust

Act,

the

CEA

and

state

common

law.

Supranational,

Sovereign

and

Agency

bonds

civil

actions

Civil

antitrust

actions

have

been

filed

in

the

SDNY

and

Federal

Court

of

Canada

in

Toronto

against

Barclays

Bank

PLC,

BCI,

BX,

Barclays

Capital

Securities

Limited

and,

with

respect

to

the

civil

action

filed

in

Canada

only,

Barclays

Capital

Canada,

Inc.

and

other

financial

institutions

alleging

that

the

defendants

conspired

to

fix

prices

and

restrain

competition

in

the

market

for

US

dollar-denominated

Supranational,

Sovereign

and

Agency

bonds.

In

one

of

the

actions

filed

in

the

SDNY,

the

court

granted

the

defendants’

motion

to

dismiss

the

plaintiffs’

complaint,

which

the

plaintiffs

have

appealed.

The

plaintiffs

have

voluntarily

dismissed

the

other

SDNY

action.

Variable

Rate

Demand

Obligations

civil

actions

Civil

actions

have

been

filed

against

Barclays

Bank

PLC

and

BCI

and

other

financial

institutions

alleging

the

defendants

conspired

or

colluded

to

artificially

inflate

interest

rates

set

for

Variable

Rate

Demand

Obligations

(VRDOs).

VRDOs

are

municipal

bonds

with

interest

rates

that

reset

on

a

periodic

basis,

most

commonly

weekly.

Two

actions

in

state

court

have

been

filed

by

private

plaintiffs

on

behalf

of

the

states

of

Illinois

and

California.

Two

putative

class

action

complaints,

which

have

been

consolidated,

have

been

filed

in

the

SDNY.

In

the

SDNY

class

action,

certain

of

the

plaintiff’s

claims

were

dismissed

in

November

2020.

Government

bond

civil

actions

In

a

putative

class

action

filed

in

the

SDNY

in

2019,

plaintiffs

alleged

that

BCI

and

certain

other

bond

dealers

conspired

to

fix

the

prices

of

US

government

sponsored

entity

bonds

in

violation

of

US

antitrust

law.

BCI

agreed

to

a

settlement

of

$87m,

which

received

final

court

approval

in

2020.

Separately,

various

entities

in

Louisiana,

including

the

Louisiana

Attorney

General

and

the

City

of

Baton

Rouge,

have

commenced

litigation

against

Barclays

Bank

PLC

and

other

financial

institutions

making

similar

allegations

as

the

SDNY

class

action

plaintiffs.

In

2018,

a

separate

putative

class

action

against

various

financial

institutions

including

Barclays

PLC,

Barclays

Bank

PLC,

BCI,

Barclays

Bank

Mexico,

S.A.,

and

certain

other

subsidiaries

of

the

Group

was

consolidated

in

the

SDNY.

The

plaintiffs

asserted

antitrust

and

state

law

claims

arising

out

of

an

alleged

conspiracy

to

fix

the

prices

of

Mexican

Government

bonds.

Barclays

PLC

has

settled

the

claim

for

$5.7m,

which

is

subject

to

final

court

approval.

Odd-lot

corporate

bonds

antitrust

class

action

In

2020,

BCI,

together

with

other

financial

institutions,

were

named

as

defendants

in

a

putative

class

action.

The

complaint

alleges

a

conspiracy

to

boycott

developing

electronic

trading

platforms

for

odd-lots

and

price

fixing.

Plaintiffs

demand

unspecified

money

damages.

The

defendants

have

filed

a

motion

to

dismiss.

Interest

rate

swap

and

credit

default

swap

US

civil

actions

Barclays

PLC,

Barclays

Bank

PLC

and

BCI,

together

with

other

financial

institutions

that

act

as

market

makers

for

interest

rate

swaps

(IRS)

are

named

as

defendants

in

several

antitrust

class

actions

which

were

consolidated

in

the

SDNY

in

2016.

The

complaints

allege

the

defendants

conspired

to

prevent

the

development

of

exchanges

for

IRS

and

demand

unspecified

money

damages.

In

2018,

trueEX

LLC

filed

an

antitrust

class

action

in

the

SDNY

against

a

number

of

financial

institutions

including

Barclays

PLC,

Barclays

Bank

PLC

and

BCI

based

on

similar

allegations

with

respect

to

trueEX

LLC’s

development

of

an

IRS

platform.

In

2017,

Tera

Group

Inc.

filed

a

separate

civil

antitrust

action

in

the

SDNY

claiming

that

certain

conduct

alleged

in

the

IRS

cases

also

caused

the

plaintiff

to

suffer

harm

with

respect

to

the

Credit

Default

Swaps

market.

In

2018

and

2019,

respectively,

the

court

dismissed

certain

claims

in

both

cases

for

unjust

enrichment

and

tortious

interference

but

denied

motions

to

dismiss

the

federal

and

state

antitrust

claims,

which

remain

pending.

BDC

Finance

L.L.C.

In

2008,

BDC

Finance

L.L.C.

(BDC)

filed

a

complaint

in

the

NY

Supreme

Court,

demanding

damages

of

$298m,

alleging

that

Barclays

Bank

PLC

had

breached

a

contract

in

connection

with

a

portfolio

of

total

return

swaps

governed

by

an

ISDA

Master

Agreement

(collectively,

the

Agreement).

Following

a

trial,

the

court

ruled

in

2018

that

Barclays

Bank

PLC

was

not

a

defaulting

party,

which

was

affirmed

on

appeal.

In

October

2020,

the

trial

court

granted

Barclays

Bank

PLC’s

motion

for

summary

judgment

on

its

counterclaims

against

BDC.

BDC

has

appealed.

In

2011,

BDC’s

investment

advisor,

BDCM

Fund

Adviser,

L.L.C.

and

its

parent

company,

Black

Diamond

Capital

Holdings,

L.L.C.

also

sued

Barclays

Bank

PLC

and

BCI

in

Connecticut

State

Court

for

unspecified

damages

allegedly

resulting

from

Barclays

Bank

PLC’s

conduct

relating

to

the

Agreement,

asserting

claims

for

violation

of

the

Connecticut

Unfair

Trade

Practices

Act

and

tortious

interference

with

business

and

prospective

business

relations.

This

case

is

currently

stayed.

Notes

to

the

financial

statements

Accruals,

provisions,

contingent

liabilities

and

legal

proceedings

274

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Civil

actions

in

respect

of

the

US

Anti-Terrorism

Act

There

are

a

number

of

civil

actions,

on

behalf

of

more

than

4,000

plaintiffs,

filed

in

US

federal

courts

in

the

US

District

Court

in

the

Eastern

District

of

New

York

(EDNY)

and

SDNY

against

Barclays

Bank

PLC

and

a

number

of

other

banks.

The

complaints

generally

allege

that

Barclays

Bank

PLC

and

those

banks

engaged

in

a

conspiracy

to

facilitate

US

dollar-denominated

transactions

for

the

Government

of

Iran

and

various

Iranian

banks,

which

in

turn

funded

acts

of

terrorism

that

injured

or

killed

plaintiffs

or

plaintiffs’

family

members.

The

plaintiffs

seek

to

recover

damages

for

pain,

suffering

and

mental

anguish

under

the

provisions

of

the

US

Anti-Terrorism

Act,

which

allow

for

the

trebling

of

any

proven

damages.

The

court

granted

the

defendants’

motion

to

dismiss

three

actions

in

the

EDNY.

Plaintiffs

have

appealed

in

one

action.

The

court

also

granted

the

defendants’

motion

to

dismiss

another

action

in

the

SDNY.

The

remaining

actions

are

stayed

pending

decisions

in

these

cases.

Shareholder

derivative

action

A

purported

Barclays

shareholder

filed

a

putative

derivative

action

in

New

York

state

court

against

BCI

and

a

number

of

current

and

former

members

of

the

Board

of

Directors

of

Barclays

PLC

and

senior

executives

or

employees

of

the

Group.

The

shareholder

filed

the

claim

on

behalf

of

Barclays

PLC,

alleging

that

the

individual

defendants

harmed

the

company

through

breaches

of

their

duties

under

the

Companies

Act

2006.

The

plaintiff

seeks

damages

for

the

losses

that

Barclays

PLC

allegedly

suffered.

2.

Barclays

PLC,

Barclays

Bank

PLC

and

Barclays

Bank

UK

PLC

Investigation

into

collections

and

recoveries

relating

to

unsecured

lending

Since

2018,

the

FCA

has

been

investigating

whether

the

Group

implemented

effective

systems

and

controls

with

respect

to

collections

and

recoveries

and

whether

it

paid

due

consideration

to

the

interests

of

customers

in

default

and

arrears.

In

December

2020,

Barclays

Bank

UK

PLC

and

Barclays

Bank

PLC

settled

with

the

FCA

and

agreed

to

pay

a

total

penalty

of

£26m.

Investigation

into

UK

cards’

affordability

The

FCA

is

investigating

certain

aspects

of

the

affordability

assessment

processes

used

by

Barclays

Bank

UK

PLC

and

Barclays

Bank

PLC

for

credit

card

applications

made

to

Barclays’

UK

credit

card

business.

Barclays

is

providing

information

in

cooperation

with

the

investigation.

HM

Revenue

&

Customs

(HMRC)

assessments

concerning

UK

Value

Added

Tax

In

2018,

HMRC

issued

notices

that

have

the

effect

of

removing

certain

overseas

subsidiaries

that

have

operations

in

the

UK

from

Barclays’

UK

VAT

group,

in

which

group

supplies

between

members

are

generally

free

from

VAT.

The

notices

have

retrospective

effect

and

correspond

to

assessments

of

£181m

(inclusive

of

interest),

of

which

Barclays

would

expect

to

attribute

an

amount

of

approximately

£128m

to

Barclays

Bank

UK

PLC

and

£53m

to

Barclays

Bank

PLC.

HMRC’s

decision

has

been

appealed

to

the

First

Tier

Tribunal

(Tax

Chamber).

Local

authority

civil

actions

concerning

LIBOR

Following

settlement

by

Barclays

Bank

PLC

of

various

governmental

investigations

concerning

certain

benchmark

interest

rate

submissions

referred

to

above

in

‘Investigations

into

LIBOR

and

other

benchmarks

and

actions’,

in

the

UK,

certain

local

authorities

have

brought

claims

against

Barclays

Bank

PLC

and

Barclays

Bank

UK

PLC

asserting

that

they

entered

into

loans

in

reliance

on

misrepresentations

made

by

Barclays

Bank

PLC

in

respect

of

its

conduct

in

relation

to

LIBOR.

Barclays

Bank

PLC

and

Barclays

Bank

UK

PLC

have

applied

to

strike

out

the

claims.

3.

Barclays

PLC

Alternative

trading

systems

Barclays

PLC

has

been

named

as

a

defendant

in

a

claim

brought

in

the

UK

in

the

High

Court

of

Justice

by

various

shareholders

regarding

Barclays

PLC’s

share

price

based

on

the

allegations

contained

within

a

complaint

by

the

New

York

State

Attorney

General

(NYAG)

in

2014.

The

NYAG

complaint

was

filed

against

Barclays

PLC

and

BCI

in

the

Supreme

Court

of

the

State

of

New

York

alleging,

among

other

things,

that

Barclays

PLC

and

BCI

engaged

in

fraud

and

deceptive

practices

in

connection

with

LX,

BCI’s

SEC-registered

alternative

trading

system.

Such

claim

was

settled

in

2016,

as

previously

disclosed.

This

new

shareholder

claim

is

seeking

unquantified

damages,

although

Barclays

PLC

has

not

yet

been

served.

General

The

Group

is

engaged

in

various

other

legal,

competition

and

regulatory

matters

in

the

UK,

the

US

and

a

number

of

other

overseas

jurisdictions.

It

is

subject

to

legal

proceedings

brought

by

and

against

the

Group

which

arise

in

the

ordinary

course

of

business

from

time

to

time,

including

(but

not

limited

to)

disputes

in

relation

to

contracts,

securities,

debt

collection,

consumer

credit,

fraud,

trusts,

client

assets,

competition,

data

management

and

protection,

intellectual

property,

money

laundering,

financial

crime,

employment,

environmental

and

other

statutory

and

common

law

issues.

The

Group

is

also

subject

to

enquiries

and

examinations,

requests

for

information,

audits,

investigations

and

legal

and

other

proceedings

by

regulators,

governmental

and

other

public

bodies

in

connection

with

(but

not

limited

to)

consumer

protection

measures,

compliance

with

legislation

and

regulation,

wholesale

trading

activity

and

other

areas

of

banking

and

business

activities

in

which

the

Group

is

or

has

been

engaged.

The

Group

is

cooperating

with

the

relevant

authorities

and

keeping

all

relevant

agencies

briefed

as

appropriate

in

relation

to

these

matters

and

others

described

in

this

note

on

an

ongoing

basis.

At

the

present

time,

Barclays

PLC

does

not

expect

the

ultimate

resolution

of

any

of

these

other

matters

to

have

a

material

adverse

effect

on

the

Group’s

financial

position.

However,

in

light

of

the

uncertainties

involved

in

such

matters

and

the

matters

specifically

described

in

this

note,

there

can

be

no

assurance

that

the

outcome

of

a

particular

matter

or

matters

(including

formerly

active

matters

or

those

matters

arising

after

the

date

of

this

note)

will

not

be

material

to

Barclays

PLC’s

results,

operations

or

cash

flow

for

a

particular

period,

depending

on,

among

other

things,

the

amount

of

the

loss

resulting

from

the

matter(s)

and

the

amount

of

profit

otherwise

reported

for

the

reporting

period.

Notes

to

the

financial

statements

Capital

instruments,

equity

and

reserves

275

Barclays

PLC

2020

Annual

Report

on

Form

20-F

The

notes

included

in

this

section

focus

on

the

Group’s

loan

capital

and

shareholders’

equity

including

issued

share

capital,

retained

earnings,

other

equity

balances

and

interests

of

minority

shareholders

in

our

subsidiary

entities

(non-controlling

interests).

For

more

information

on

capital

management

and

how

the

Group

maintains

sufficient

capital

to

meet

our

regulatory

requirements

refer

to

the

Capital

risk

management

section.

27

Subordinated

liabilities

Accounting

for

subordinated

liabilities

Subordinated

liabilities

are

measured

at

amortised

cost

using

the

effective

interest

method

under

IFRS

9.

2020

2019

£m

As

at

1

January

18,156

20,559

Issuances

1,438

1,352

Redemptions

(3,464)

(3,248)

Other

211

(507)

As

at

31

December

16,341

18,156

Issuances

of

£1,438m

comprise

£782m

USD

3.564%

Fixed

Rate

Resetting

Subordinated

Callable

Notes

and

£500m

3.75%

Fixed

Rate

Resetting

Subordinated

Callable

Notes,

both

issued

externally

by

Barclays

PLC

and

£156m

USD

Floating

Rate

Notes

issued

externally

by

a

Barclays

subsidiary.

Redemptions

of

£3,464m

comprise

a

£1,126m

partial

redemption

of

USD

7.625%

Contingent

Capital

Notes

issued

externally

by

Barclays

Bank

PLC

and

full

redemptions

of

£1,124m

EUR

2.625%

Fixed

Rate

Subordinated

Callable

Notes

issued

externally

by

Barclays

PLC,

£842m

USD

5.14%

Lower

Tier

2

Notes

issued

externally

by

Barclays

Bank

PLC

and

£342m

USD

Floating

Rate

Notes

and

£30m

USD

Fixed

Rate

Notes,

both

issued

externally

by

Barclays

subsidiaries.

Other

movements

predominantly

include

foreign

exchange

movements

and

fair

value

hedge

adjustments.

Subordinated

liabilities

include

accrued

interest

and

comprise

undated

and

dated

subordinated

liabilities

as

follows:

2020

2019

£m

Undated

subordinated

liabilities

308

303

Dated

subordinated

liabilities

16,033

17,853

Total

subordinated

liabilities

16,341

18,156

None

of

the

Group’s

subordinated

liabilities

are

secured.

Undated

subordinated

liabilities

a

2020

2019

Initial

call

date

£m

Barclays

Bank

PLC

issued

Tier

One

Notes

(TONs)

6%

Callable

Perpetual

Core

Tier

One

Notes

2032

17

16

6.86%

Callable

Perpetual

Core

Tier

One

Notes

(USD

179m)

2032

205

203

Reserve

Capital

Instruments

(RCIs)

5.3304%

Step-up

Callable

Perpetual

Reserve

Capital

Instruments

2036

56

53

Undated

Notes

Junior

Undated

Floating

Rate

Notes

(USD

38m)

Any

interest

payment

date

28

29

Total

undated

subordinated

liabilities

308

303

Note

a

Instrument

values

are

disclosed

to

the

nearest

million

.

Undated

subordinated

liabilities

Undated

subordinated

liabilities

are

issued

by

Barclays

Bank

PLC

and

its

subsidiaries

for

the

development

and

expansion

of

the

business

and

to

strengthen

the

capital

bases.

The

principal

terms

of

the

undated

subordinated

liabilities

are

described

below:

Subordination

All

undated

subordinated

liabilities

rank

behind

the

claims

against

the

bank

of

depositors

and

other

unsecured

unsubordinated

creditors

and

holders

of

dated

subordinated

liabilities

in

the

following

order:

Junior

Undated

Floating

Rate

Notes;

followed

by

TONs

and

RCIs

ranking

pari

passu

with

each

other.

Interest

The

Junior

Undated

Notes

are

floating

rate

notes

where

rates

are

fixed

periodically

in

advance

based

on

the

rate.

The

TONs

and

RCIs

bear

a

fixed

rate

of

interest

until

the

initial

call

date.

After

the

initial

call

date,

in

the

event

that

they

are

not

redeemed,

the

TONs

and

RCIs

will

bear

interest

at

rates

fixed

periodically

in

advance

based

on

market

rates.

Notes

to

the

financial

statements

Capital

instruments,

equity

and

reserves

276

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Payment

of

interest

No

payment

of

principal

or

any

interest

may

be

made

in

relation

to

the

TONs

and

RCIs

unless

Barclays

Bank

PLC

satisfies

a

specified

solvency

test.

Barclays

Bank

PLC

may

elect

to

defer

any

payment

of

interest

on

the

RCIs.

Any

such

deferred

payment

of

interest

must

be

paid

on

the

earlier

of:

(i)

the

date

of

redemption

of

the

RCIs,

and

(ii)

the

coupon

payment

date

falling

on

or

nearest

to

the

tenth

anniversary

of

the

date

of

deferral

of

such

payment.

Whilst

such

deferral

is

continuing,

(i)

neither

Barclays

Bank

PLC

nor

Barclays

PLC

may

declare

or

pay

a

dividend,

subject

to

certain

exceptions,

on

any

of

its

ordinary

shares

or

preference

shares

and

(ii)

certain

restrictions

on

the

redemption,

purchase

or

reduction

of

their

respective

share

capital

and

certain

other

securities

also

apply.

Barclays

Bank

PLC

may

elect

to

defer

any

payment

of

interest

on

the

TONs

if

it

determines

that

it

is,

or

such

payment

would

result

in

it

being,

in

non-compliance

with

capital

adequacy

requirements

and

policies

of

the

PRA.

Any

such

deferred

payment

of

interest

will

only

be

payable

on

a

redemption

of

the

TONs.

Until

such

time

as

Barclays

Bank

PLC

a

payment

of

interest

on

the

TONs,

(i)

neither

Barclays

Bank

PLC

nor

Barclays

PLC

may

declare

or

pay

a

dividend,

subject

to

certain

exceptions,

on

any

of

their

respective

ordinary

shares

or

preference

shares,

or

make

payments

of

interest

in

respect

of

Barclays

Bank

PLC’s

Reserve

Capital

Instruments

and

(ii)

certain

restrictions

on

the

redemption,

purchase

or

reduction

of

their

respective

share

capital

and

certain

other

securities

also

apply.

Repayment

All

undated

subordinated

liabilities

are

repayable

at

the

option

of

Barclays

Bank

PLC,

generally

in

whole,

at

the

initial

call

date

and

on

any

subsequent

coupon

or

interest

payment

date.

In

addition,

each

issue

of

undated

subordinated

liabilities

is

repayable,

at

the

option

of

Barclays

Bank

PLC

in

whole

for

certain

tax

reasons,

either

at

any

time,

or

on

an

interest

payment

date.

There

are

no

events

of

default

except

non-

payment

of

principal

or

mandatory

interest.

Any

repayments

require

the

prior

consent

of

the

PRA.

Other

All

issues

of

undated

subordinated

liabilities

are

non-convertible.

Dated

subordinated

liabilities

a

2020

2019

Initial

call

date

Maturity

date

£m

Barclays

PLC

issued

2.625%

Fixed

Rate

Subordinated

Callable

Notes

(EUR

1,250m)

2020

2025

-

1,072

2%

Fixed

Rate

Subordinated

Callable

Notes

(EUR

1,500m)

2023

2028

1,384

1,309

4.375%

Fixed

Rate

Subordinated

Notes

(USD

1,250m)

2024

990

995

3.75%

Fixed

Rate

Resetting

Subordinated

Callable

Notes

(SGD

200m)

2025

2030

119

116

3.75%

Fixed

Rate

Resetting

Subordinated

Callable

Notes

(GBP

500m)

2025

2030

504

-

5.20%

Fixed

Rate

Subordinated

Notes

(USD

2,050m)

2026

1,610

1,561

4.836%

Fixed

Rate

Subordinated

Callable

Notes

(USD

2,000m)

2027

2028

1,627

1,578

5.088%

Fixed-to-Floating

Rate

Subordinated

Callable

Notes

(USD

1,500m)

2029

2030

1,213

1,152

3.564%

Fixed

Rate

Resetting

Subordinated

Callable

Notes

(USD

1,000m)

2030

2035

703

-

Barclays

Bank

PLC

issued

5.14%

Lower

Tier

2

Notes

(USD

1,094m)

2020

-

832

6%

Fixed

Rate

Subordinated

Notes

(EUR

1,500m)

2021

1,427

1,375

9.5%

Subordinated

Bonds

(ex-Woolwich

Plc)

2021

221

239

Subordinated

Floating

Rate

Notes

(EUR

100m)

2021

90

85

10%

Fixed

Rate

Subordinated

Notes

2021

2,108

2,157

10.179%

Fixed

Rate

Subordinated

Notes

(USD

1,521m)

2021

1,101

1,123

Subordinated

Floating

Rate

Notes

(EUR

50m)

2022

45

43

6.625%

Fixed

Rate

Subordinated

Notes

(EUR

1,000m)

2022

982

957

7.625%

Contingent

Capital

Notes

(USD

3,000m)

2022

1,132

2,284

Subordinated

Floating

Rate

Notes

(EUR

50m)

2023

45

42

5.75%

Fixed

Rate

Subordinated

Notes

2026

351

350

5.4%

Reverse

Dual

Currency

Subordinated

Loan

(JPY

15,000m)

2027

108

105

6.33%

Subordinated

Notes

2032

64

62

Subordinated

Floating

Rate

Notes

(EUR

68m)

2040

61

58

External

issuances

by

other

subsidiaries

2025

146

358

Total

dated

subordinated

liabilities

16,033

17,853

Note

a

Instrument

values

are

disclosed

to

the

nearest

million

.

Dated

subordinated

liabilities

Dated

subordinated

liabilities

are

issued

by

Barclays

PLC,

Barclays

Bank

PLC

and

its

subsidiaries

for

the

development

and

expansion

of

their

business

and

to

strengthen

their

respective

capital

bases.

The

principal

terms

of

the

dated

subordinated

liabilities

are

described

below:

Subordination

Notes

to

the

financial

statements

Capital

instruments,

equity

and

reserves

277

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Dated

subordinated

liabilities

issued

by

Barclays

PLC

ranks

behind

the

claims

against

Barclays

PLC

of

unsecured

unsubordinated

creditors

but

before

the

claims

of

the

holders

of

its

equity.

All

dated

subordinated

liabilities

externally

issued

by

Barclays

Bank

PLC

rank

behind

the

claims

against

the

bank

of

depositors

and

other

unsecured

unsubordinated

creditors

but

before

the

claims

of

the

undated

subordinated

liabilities

and

the

holders

of

its

equity.

The

dated

subordinated

liabilities

externally

issued

by

other

subsidiaries

are

similarly

subordinated

as

the

external

subordinated

liabilities

issued

by

Barclays

Bank

PLC.

Interest

on

the

Floating

Rate

Notes

is

fixed

periodically

in

advance,

based

on

the

rates.

Interest

on

Fixed

Rate

Notes

is

set

by

reference

to

market

rates

at

the

time

of

issuance

and

fixed

until

maturity.

Interest

on

the

4.836%

Fixed

Rate

Subordinated

Callable

Notes,

2%

Fixed

Rate

Subordinated

Callable

Notes

3.75%

SGD

Fixed

Rate

Resetting

Subordinated

Callable

Notes,

3.75%

GBP

Fixed

Rate

Resetting

Subordinated

Callable

Notes

and

the

3.564%

Fixed

Rate

Resetting

Subordinated

Callable

Notes

are

fixed

until

the

call

date.

After

the

respective

call

dates,

in

the

event

that

they

are

not

redeemed,

the

interest

rates

will

be

reset

and

fixed

until

maturity

based

on

a

market

rate.

Interest

on

the

5.088%

Fixed-to-Floating

Rate

Subordinated

Callable

Notes

are

fixed

until

the

call

date.

After

the

call

date,

in

the

event

that

they

are

not

redeemed,

the

interest

rate

will

reset

periodically

in

advance

based

on

market

rates.

Repayment

Those

subordinated

liabilities

with

a

call

date

are

repayable

at

the

option

of

the

issuer,

on

conditions

governing

the

respective

debt

obligations,

some

in

whole

or

in

part,

and

some

only

in

whole.

The

remaining

dated

subordinated

liabilities

outstanding

at

31

December

2020

are

redeemable

only

on

maturity,

subject

in

particular

cases

to

provisions

allowing

an

early

redemption

in

the

event

of

certain

changes

in

tax

law,

or

to

certain

changes

in

legislation

or

regulations.

Any

repayments

prior

to

maturity

require,

in

the

case

of

Barclays

PLC

and

Barclays

Bank

PLC,

the

prior

consent

of

the

PRA,

or

in

the

case

of

the

overseas

issues,

the

approval

of

the

local

regulator

for

that

jurisdiction

and

of

the

PRA

in

certain

circumstances.

There

are

no

committed

facilities

in

existence

at

the

balance

sheet

date

which

permit

the

refinancing

of

debt

beyond

the

date

of

maturity.

Other

The

7.625%

Contingent

Capital

Notes

will

be

automatically

transferred

from

investors

to

Barclays

PLC

(or

another

entity

within

the

Group)

for

nil

consideration

in

the

event

the

Barclays

PLC

transitional

CET1

ratio

falls

below

7%.

28

Ordinary

shares,

share

premium,

and

other

equity

Called

up

share

capital,

allotted

and

fully

paid

Number

of

shares

Ordinary

share

capital

Ordinary

share

premium

Total

share

capital

and

share

premium

Other

equity

instruments

m

£m

As

at

1

January

2020

17,322

4,331

263

4,594

10,871

Issued

to

staff

under

share

incentive

plans

37

9

34

43

-

AT1

securities

issuance

-

1,142

AT1

securities

redemption

-

(831)

Other

movements

-

(10)

As

at

31

December

2020

17,359

4,340

297

4,637

11,172

As

at

1

January

2019

17,133

4,283

28

4,311

9,632

Issued

to

staff

under

share

incentive

plans

76

19

82

101

-

Issuances

relating

to

Scrip

Dividend

Programme

113

29

153

182

-

AT1

securities

issuance

-

3,500

AT1

securities

redemption

-

(2,262)

Other

movements

-

1

As

at

31

December

2019

17,322

4,331

263

4,594

10,871

Called

up

share

capital

Called

up

share

capital

comprises

17,359m

(2019:

17,322m)

ordinary

shares

of

25p

each.

Share

repurchase

At

the

2020

AGM

on

7

May

2020,

Barclays

PLC

was

authorised

to

repurchase

up

to

an

aggregate

of

1,733m

of

its

ordinary

shares

of

25p.

The

authorisation

is

effective

until

the

AGM

in

2021

or

the

close

of

business

on

30

June

2021,

whichever

is

the

earlier.

No

share

repurchases

were

made

during

either

2020

or

2019.

Notes

to

the

financial

statements

Capital

instruments,

equity

and

reserves

278

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Other

equity

instruments

Other

equity

instruments

of

£11,172

m

(2019:

£10,871m)

include

AT1

securities

issued

by

Barclays

PLC.

The

AT1

securities

are

perpetual

securities

with

no

fixed

maturity

and

are

structured

to

qualify

as

AT1

instruments

under

prevailing

capital

rules

applicable

as

at

the

relevant

issue

date.

In

2020,

there

was

one

issuance

of

AT1

instruments,

in

the

form

of

Fixed

Rate

Resetting

Perpetual

Subordinated

Contingent

Convertible

Securities

(2019:

three

issuances),

totalling

£1,142m

(2019:

£3,500m)

which

includes

issuance

costs

of

£4m

(2019:

£11m)

.

There

was

also

one

redemption

in

2020

(2019:

three

redemptions),

totalling

£831m

(2019:

£2,262m).

AT1

equity

instruments

2020

2019

Initial

call

date

£m

AT1

equity

instruments

-

Barclays

PLC

8.0%

Perpetual

Subordinated

Contingent

Convertible

Securities

(EUR

1,000m)

2020

-

830

7.875%

Perpetual

Subordinated

Contingent

Convertible

Securitiesª

2022

986

995

7.875%

Perpetual

Subordinated

Contingent

Convertible

Securities

(USD

1,500m)

2022

1,131

7.25%

Perpetual

Subordinated

Contingent

Convertible

Securities

2023

1,245

7.75%

Perpetual

Subordinated

Contingent

Convertible

Securities

(USD

2,500m)

2023

1,925

5.875%

Perpetual

Subordinated

Contingent

Convertible

Securities

2024

1,244

8%

Perpetual

Subordinated

Contingent

Convertible

Securities

(USD

2,000m)

2024

1,509

7.125%

Perpetual

Subordinated

Contingent

Convertible

Securitiesª

2025

994

996

6.375%

Perpetual

Subordinated

Contingent

Convertible

Securities

2025

996

6.125%

Perpetual

Subordinated

Contingent

Convertible

Securities

(USD

1,500m)

2025

1,142

-

Total

AT1

equity

instruments

11,172

10,871

Note

a

Reported

net

of

securities

held

by

the

Group.

The

principal

terms

of

the

AT1

securities

are

described

below:

◾

AT1

securities

rank

behind

the

claims

against

Barclays

PLC

of

1)

unsubordinated

creditors;

2)

claims

which

are

expressed

to

be

subordinated

to

the

claims

of

unsubordinated

creditors

of

Barclays

PLC

but

not

further

or

otherwise;

or

3)

claims

which

are,

or

are

expressed

to

be,

junior

to

the

claims

of

other

creditors

of

Barclays

PLC,

whether

subordinated

or

unsubordinated,

other

than

claims

which

rank,

or

are

expressed

to

rank,

pari

passu

with,

or

junior

to,

the

claims

of

holders

of

the

AT1

securities.

◾

AT1

securities

are

undated

and

are

redeemable,

at

the

option

of

Barclays

PLC,

in

whole

on

(i)

the

initial

call

date,

or

on

any

fifth

anniversary

after

the

initial

call

date

or

(ii)

any

day

falling

in

a

named

period

ending

on

the

initial

reset

date,

or

on

any

fifth

anniversary

after

the

initial

reset

date.

In

addition,

the

AT1

securities

are

redeemable,

at

the

option

of

Barclays

PLC,

in

whole

in

the

event

of

certain

changes

in

the

tax

or

regulatory

treatment

of

the

securities.

Any

redemptions

require

the

prior

consent

of

the

PRA.

◾

AT1

securities

bear

a

fixed

rate

of

interest

until

the

initial

call

date

or

the

initial

reset

date,

as

the

case

may

be.

After

the

initial

call

date

or

the

initial

reset

date,

as

the

case

may

be,

in

the

event

that

they

are

not

redeemed,

the

AT1

securities

will

bear

interest

at

rates

fixed

periodically

in

advance

for

five-year

periods

based

on

market

rates.

◾

Interest

on

the

AT1

securities

will

be

due

and

payable

only

at

the

sole

discretion

of

Barclays

PLC,

and

Barclays

PLC

has

sole

and

absolute

discretion

at

all

times

and

for

any

reason

to

cancel

(in

whole

or

in

part)

any

interest

payment

that

would

otherwise

be

payable

on

any

interest

payment

date.

All

AT1

securities

will

be

converted

into

ordinary

shares

of

Barclays

PLC,

at

a

pre-determined

price,

should

the

fully

loaded

CET1

ratio

of

the

Group

fall

below

7%.

Notes

to

the

financial

statements

Capital

instruments,

equity

and

reserves

279

Barclays

PLC

2020

Annual

Report

on

Form

20-F

29

Reserves

Currency

translation

reserve

The

currency

translation

reserve

represents

the

cumulative

gains

and

losses

on

the

retranslation

of

the

Group’s

net

investment

in

foreign

operations,

net

of

the

effects

of

hedging.

Fair

value

through

other

comprehensive

income

reserve

The

fair

value

through

other

comprehensive

income

reserve

represents

the

changes

in

the

fair

value

of

fair

value

through

other

comprehensive

income

investments

since

initial

recognition.

Cash

flow

hedging

reserve

The

cash

flow

hedging

reserve

represents

the

cumulative

gains

and

losses

on

effective

cash

flow

hedging

instruments

that

will

be

recycled

to

profit

or

loss

when

the

hedged

transactions

affect

profit

or

loss.

Own

credit

reserve

The

own

credit

reserve

reflects

the

cumulative

own

credit

gains

and

losses

on

financial

liabilities

at

fair

value.

Amounts

in

the

own

credit

reserve

are

not

recycled

to

profit

or

loss

in

future

periods.

Other

reserves

and

treasury

shares

Other

reserves

relate

to

redeemed

ordinary

and

preference

shares

issued

by

the

Group.

Treasury

shares

relate

to

Barclays

PLC

shares

held

in

relation

to

the

Group’s

various

share

schemes.

These

schemes

are

described

in

Note

32.

Treasury

shares

are

deducted

from

shareholders’

equity

within

other

reserves.

A

transfer

is

made

to

retained

earnings

in

line

with

the

vesting

of

treasury

shares

held

for

the

purposes

of

share-based

payments.

2020

2019

£m

Currency

translation

reserve

2,871

3,344

Fair

value

through

other

comprehensive

income

reserve

5

(187)

Cash

flow

hedging

reserve

1,575

1,002

Own

credit

reserve

(954)

(373)

Other

reserves

and

treasury

shares

964

974

Total

4,461

4,760

30

Non-controlling

interests

Profit

attributable

to

non-

controlling

interest

Equity

attributable

to

non-

controlling

interest

Dividends

paid

to

non-

controlling

interest

2020

2019

2020

2019

2020

2019

£m

Barclays

Bank

PLC

issued:

–

Preference

shares

42

41

529

42

41

–

Upper

Tier

2

instruments

37

39

533

691

37

39

Other

non-controlling

interests

(1)

-

23

11

-

Total

78

80

1,085

1,231

79

80

In

2020,

there

were

no

issuances

(2019:

none)

and

one

redemption

of

£158m

(2019:

none)

relating

to

the

7.125%

Undated

Subordinated

Notes.

Barclays

Bank

PLC

and

protective

rights

of

non-controlling

interests

Barclays

PLC

holds

100%

of

the

voting

rights

of

Barclays

Bank

PLC.

As

at

31

December

2020,

Barclays

Bank

PLC

has

in

issue

preference

shares

and

Upper

Tier

2

instruments.

These

are

non-controlling

interests

to

the

Group.

A

fixed

coupon

rate

is

attached

to

all

Upper

Tier

2

instruments

until

the

initial

call

date,

with

the

exception

of

the

9%

Bonds,

which

are

fixed

for

the

life

of

the

issue

and

the

Series

1,

Series

2

and

Series

3

Undated

Notes,

which

are

floating

rate

at

rates

fixed

periodically

in

advance

based

on

market

rates.

After

the

initial

call

date,

in

the

event

they

are

not

redeemed,

coupon

payments

in

relation

to

the

6.125%

Undated

Notes,

and

the

9.25%

Bonds

are

fixed

periodically

in

advance

for

five-year

periods

based

on

market

rates.

Coupon

payments

for

all

other

Upper

Tier

2

instruments

are

at

rates

fixed

periodically

in

advance

based

on

market

rates.

The

payment

of

preference

share

dividends

and

Upper

Tier

2

coupons

are

typically

at

the

discretion

of

Barclays

Bank

PLC,

except

for

coupon

payments

that

become

compulsory

where

Barclays

PLC

has

declared

or

paid

a

dividend

on

ordinary

shares,

or

in

certain

cases,

any

class

of

preference

shares,

in

the

preceding

six-month

period.

Barclays

Bank

PLC

is

not

obliged

to

make

a

payment

of

interest

on

its

9.25%

Perpetual

Subordinated

Bonds

if,

in

the

immediately

preceding

12

month

interest

period,

a

dividend

has

not

been

paid

on

any

class

of

its

share

capital.

Coupons

not

paid

becomes

payable

in

each

case

if

such

a

dividend

is

subsequently

paid

or

in

certain

other

circumstances.

No

dividend

or

coupon

payments

may

be

made

unless

Barclays

Bank

PLC

satisfies

a

specified

solvency

test.

Under

the

terms

of

these

instruments,

Barclays

PLC

may

not

pay

dividends

on

ordinary

shares

until

a

dividend

or

coupon

is

on

these

instruments

or

the

instruments

are

redeemed

or

purchased

by

Barclays

Bank

PLC.

There

are

no

restrictions

on

Barclays

Bank

PLC’s

ability

to

remit

capital

to

the

Parent

as

a

result

of

these

issued

instruments.

Preference

share

redemptions

are

typically

at

the

discretion

of

Barclays

Bank

PLC.

Upper

Tier

2

instruments

are

repayable,

at

the

option

of

Barclays

Bank

PLC

generally

in

whole

at

the

initial

call

date

and

on

any

subsequent

coupon

payment

date

or,

in

the

case

of

the

6.125%

Notes

to

the

financial

statements

Capital

instruments,

equity

and

reserves

280

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Undated

Notes

and

the

9.25%

Perpetual

Bonds,

on

any

fifth

anniversary

after

the

initial

call

date.

In

addition,

each

issue

of

Upper

Tier

2

instruments

is

repayable,

at

the

option

of

Barclays

Bank

PLC,

in

whole

for

certain

tax

reasons,

either

at

any

time,

or

on

an

interest

payment

date.

There

are

no

events

of

default

except

non-payment

of

principal

or

mandatory

interest.

Any

repayments

or

redemptions

require

the

prior

consent

of

the

PRA,

and

in

respect

of

the

preference

shares,

any

such

redemption

will

be

subject

to

the

Companies

Act

2006

and

the

Articles

of

Barclays

Bank

PLC.

2020

2019

Instrument

£m

Preference

Shares:

US

Dollar

Preference

Shares

318

Euro

Preference

Shares

211

Total

Barclays

Bank

PLC

Preference

Shares

529

Upper

Tier

2

Instruments:

Undated

Floating

Rate

Primary

Capital

Notes

Series

1

93

Undated

Floating

Rate

Primary

Capital

Notes

Series

2

179

5.03%

Undated

Reverse

Dual

Currency

Subordinated

Loan

(JPY8bn)

39

5.0%

Reverse

Dual

Currency

Undated

Subordinated

Loan

(JPY12bn)

53

Undated

Floating

Rate

Primary

Capital

Notes

Series

3

(£145m)

20

9%

Permanent

Interest

Bearing

Capital

Bonds

(£100m)

40

7.125%

Undated

Subordinated

Notes

(£525m)

-

158

6.125%

Undated

Subordinated

Notes

(£550m)

34

9.25%

Perpetual

Subordinated

Bonds

(ex

Woolwich)

(£150m)

75

Total

Upper

Tier

2

Instruments

533

691

Notes

to

the

financial

statements

Employee

benefits

281

Barclays

PLC

2020

Annual

Report

on

Form

20-F

The

notes

included

in

this

section

focus

on

the

costs

and

commitments

associated

with

employing

our

staff.

31

Staff

costs

Accounting

for

staff

costs

The

Group

applies

IAS

19

Employee

benefits

in

its

accounting

for

most

of

the

components

of

staff

costs.

Short-term

employee

benefits

–

salaries,

accrued

performance

costs

and

social

security

are

recognised

over

the

period

in

which

the

employees

provide

the

services

to

which

the

payments

relate.

Performance

costs

–

recognised

to

the

extent

that

the

Group

has

a

present

obligation

to

its

employees

that

can

be

measured

reliably

and

are

recognised

over

the

period

of

service

that

employees

are

required

to

work

to

qualify

for

the

payments.

Deferred

cash

and

share

awards

are

made

to

employees

to

incentivise

performance

over

the

period

employees

provide

services.

To

receive

payment

under

an

award,

employees

must

provide

service

over

the

vesting

period.

The

period

over

which

the

expense

for

deferred

cash

and

share

awards

is

recognised

is

based

upon

the

period

employees

consider

their

services

contribute

to

the

awards.

For

past

awards,

the

Group

considers

that

it

is

appropriate

to

recognise

the

awards

over

the

period

from

the

date

of

grant

to

the

date

that

the

awards

vest.

In

relation

to

awards

granted

from

2017,

the

Group,

taking

into

account

the

changing

employee

understanding

surrounding

those

awards,

considered

it

appropriate

for

expense

to

be

recognised

over

the

vesting

period

including

the

financial

year

prior

to

the

grant

date.

The

accounting

policies

for

share-based

payments,

and

pensions

and

other

post-retirement

benefits

are

included

in

Note

32

and

Note

33

respectively.

2020

2019

2018

£m

Incentive

awards

granted:

Current

year

bonus

1,090

1,058

1,131

Deferred

bonus

490

432

518

Total

incentive

awards

granted

1,580

1,490

1,649

Reconciliation

of

incentive

awards

granted

to

income

statement

charge:

Less:

deferred

bonuses

granted

but

not

charged

in

current

year

(335)

(293)

(359)

Add:

current

year

charges

for

deferred

bonuses

from

293

308

299

Other

differences

between

incentive

awards

granted

and

income

statement

charge

(34)

(48)

(33)

Income

statement

charge

for

performance

costs

1,504

1,457

1,556

Other

income

statement

charges:

Salaries

4,322

4,332

4,200

Social

security

costs

613

573

558

Post-retirement

benefits

a

519

501

619

Other

compensation

costs

479

480

413

Total

compensation

costs

b

7,437

7,343

7,346

Other

resourcing

costs:

Outsourcing

342

433

594

Redundancy

and

restructuring

102

132

133

Temporary

staff

costs

102

256

386

Other

114

151

170

Total

other

resourcing

costs

660

972

1,283

Total

staff

costs

8,097

8,315

8,629

Notes

a

Post-retirement

benefits

charge

includes

£279m

(2019:

£270m;

201

8:

£236m)

in

respect

of

defined

contribution

schemes

and

£240m

(2019:

£231m;

201

8:

£383m)

in

respect

of

defined

benefit

schemes.

b

£451m

(2019:

£439m;

201

8:

£296

m)

of

Group

compensation

was

capitalised

as

internally

generated

software.

Notes

to

the

financial

statements

Employee

benefits

282

Barclays

PLC

2020

Annual

Report

on

Form

20-F

32

Share-based

payments

Accounting

for

share-based

payments

The

Group

applies

IFRS

2

Share-based

Payments

in

accounting

for

employee

remuneration

in

the

form

of

shares.

Employee

incentives

include

awards

in

the

form

of

shares

and

share

options,

as

well

as

offering

employees

the

opportunity

to

purchase

shares

on

favourable

terms.

The

cost

of

the

employee

services

received

in

respect

of

the

shares

or

share

options

granted

is

recognised

in

the

income

statement

over

the

period

that

employees

provide

services.

The

overall

cost

of

the

award

is

calculated

using

the

number

of

shares

and

options

expected

to

vest

and

the

fair

value

of

the

shares

or

options

at

the

date

of

grant.

The

number

of

shares

and

options

expected

to

vest

takes

into

account

the

likelihood

that

performance

and

service

conditions

included

in

the

terms

of

the

awards

will

be

met.

Failure

to

meet

the

non-vesting

condition

is

treated

as

a

cancellation,

resulting

in

an

acceleration

of

recognition

of

the

cost

of

the

employee

services.

The

fair

value

of

shares

is

the

market

price

ruling

on

the

grant

date,

in

some

cases

adjusted

to

reflect

restrictions

on

transferability.

The

fair

value

of

options

granted

is

determined

using

option

pricing

models

to

estimate

the

numbers

of

shares

likely

to

vest.

These

take

into

account

the

exercise

price

of

the

option,

the

current

share

price,

the

risk-free

interest

rate,

the

expected

volatility

of

the

share

price

over

the

life

of

the

option

and

other

relevant

factors.

Market

conditions

that

must

be

met

in

order

for

the

award

to

vest

are

also

reflected

in

the

fair

value

of

the

award,

as

are

any

other

non-vesting

conditions

–

such

as

continuing

to

make

payments

into

a

share-based

savings

scheme.

The

charge

for

the

year

arising

from

share-based

payment

schemes

was

as

follows:

Charge

for

the

year

2020

2019

2018

£m

Deferred

Share

Value

Plan

and

Share

Value

Plan

245

272

262

Others

184

206

187

Total

equity

settled

429

478

449

Cash

settled

2

3

1

Total

share-based

payments

431

481

450

The

terms

of

the

main

current

plans

are

as

follows:

Share

Value

Plan

(SVP)

The

SVP

was

introduced

in

March

2010.

SVP

awards

have

been

granted

to

participants

in

the

form

of

a

conditional

right

to

receive

Barclays

PLC

shares

or

provisional

allocations

of

Barclays

PLC

shares

which

vest

or

are

considered

for

release

over

a

period

of

three,

five

or

seven

years.

Participants

do

not

pay

to

receive

an

award

or

to

receive

a

release

of

shares.

For

awards

granted

before

December

2017,

the

grantor

may

also

make

a

dividend

equivalent

payment

to

participants

on

release

of

a

SVP

award.

SVP

awards

are

also

made

to

eligible

employees

for

recruitment

purposes.

All

awards

are

subject

to

potential

forfeiture

in

certain

leaver

scenarios.

Deferred

Share

Value

Plan

(DSVP)

The

DSVP

was

introduced

in

February

2017.

The

terms

of

the

DSVP

are

materially

the

same

as

the

terms

of

the

SVP

as

described

above,

save

that

Executive

Directors

are

not

eligible

to

participate

in

the

DSVP

and

the

DSVP

operates

over

market

purchase

shares

only.

Other

schemes

In

addition

to

the

SVP

and

DSVP,

the

Barclays

Group

operates

a

number

of

other

schemes

settled

in

Barclays

PLC

Shares

including

Sharesave

(both

UK

and

Ireland),

Sharepurchase

(both

UK

and

overseas),

and

the

Barclays

Group

Long

Term

Incentive

Plan.

A

delivery

of

upfront

shares

to

‘Material

Risk

Takers’

can

be

made

as

a

Share

Incentive

Award

(Holding

Period).

Share

option

and

award

plans

The

weighted

average

fair

value

per

award

granted,

weighted

average

share

price

at

the

date

of

exercise/release

of

shares

during

the

year,

weighted

average

contractual

remaining

life

and

number

of

options

and

awards

outstanding

(including

those

exercisable)

at

the

balance

sheet

date

were

as

follows:

2020

2019

Weighted

average

fair

value

per

award

granted

in

year

Weighted

average

share

price

at

exercise/release

during

year

Weighted

average

remaining

contractual

life

Number

of

options/

awards

outstanding

Weighted

average

fair

value

per

award

granted

in

year

Weighted

average

share

price

at

exercise/release

during

year

Weighted

average

remaining

contractual

life

Number

of

options/

awards

outstanding

£

in

years

(000s)

£

in

years

(000s)

DSVP

and

SVP

a,b

1.06

1.24

1

416,941

1.43

1.60

1

331,491

Others

a

0.23-1.24

1.04-1.68

0-3

356,033

0.40-1.60

1.57-1.70

0-3

232,259

Notes

a

Options/award

granted

over

Barclays

PLC

shares.

b

Weighted

average

exercise

price

is

not

applicable

for

SVP

and

DSVP

awards

as

these

are

not

share

option

schemes.

SVP

and

DSVP

are

nil

cost

awards

on

which

the

performance

conditions

are

substantially

completed

at

the

date

of

grant.

Consequently,

the

fair

value

of

these

awards

is

based

on

the

market

value

at

that

date.

Sharesave

has

a

contractual

life

of

3

and

5

years,

the

expected

volatility

is

32.17%

for

3

years

and

30.32%

for

5

years.

The

risk

free

interest

rates

used

for

valuations

are

0.02%

and

0.08%

for

3

and

5

years

respectively.

Notes

to

the

financial

statements

Employee

benefits

283

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Movements

in

options

and

awards

The

movement

in

the

number

of

options

and

awards

for

the

major

schemes

and

the

weighted

average

exercise

price

of

options

was:

DSVP

and

SVP

a,b

Others

a,c

Number

(000s)

Number

(000s)

Weighted

average

ex.

price

(£)

2020

2019

2020

2019

2020

2019

Outstanding

at

beginning

of

year/acquisition

date

331,491

274,469

232,259

217,952

1.29

1.41

Granted

in

the

year

232,379

219,392

365,166

215,694

0.84

1.19

Exercised/released

in

the

year

(132,376)

(145,324)

(123,042)

(151,827)

1.22

1.21

Less:

forfeited

in

the

year

(14,553)

(17,046)

(105,068)

(42,331)

1.24

1.51

Less:

expired

in

the

year

-

(13,282)

(7,229)

1.35

2.08

Outstanding

at

end

of

year

416,941

331,491

356,033

232,259

0.96

1.29

Of

which

exercisable:

-

30,833

32,376

1.66

1.32

Notes

a

Options/award

granted

over

Barclays

PLC

shares.

b

Weighted

average

exercise

price

is

not

applicable

for

SVP

and

DSVP

awards

as

these

are

not

share

option

schemes.

c

The

number

of

awards

within

Others

at

the

end

of

the

year

principally

relates

to

Sharesave

(number

of

awards

exercisable

at

end

of

year

was

11

,677,049

).

The

weighted

average

exercise

price

relates

to

Sharesave.

Awards

and

options

granted

under

the

Group’s

share

plans

may

be

satisfied

using

new

issue

shares,

treasury

shares

and

market

purchase

shares.

Awards

granted

under

the

DSVP

may

be

satisfied

using

market

purchase

shares

only.

There

were

no

significant

modifications

to

the

share-based

payments

arrangements

in

2020

and

2019.

As

at

31

December

2020,

the

total

liability

arising

from

cash-settled

share-based

payments

transactions

was

£2m

(2019:

£3m).

Holdings

of

Barclays

PLC

shares

and

hedges

Various

employee

benefit

trusts

established

by

the

Group

hold

shares

in

Barclays

PLC

to

meet

obligations

under

the

Barclays

share-based

payment

schemes.

The

total

number

of

Barclays

shares

held

in

these

employee

benefit

trusts

at

31

December

2020

was

17.1m

(2019:

13.1m).

Dividend

rights

have

been

waived

on

all

these

shares.

The

total

market

value

of

the

shares

held

in

trust

based

on

the

year

end

share

price

of

£1.27

(2019:

£1.80)

was

£22m

(2019:

£24m).

For

accounting

of

treasury

shares,

see

Note

29.

The

Group

has

entered

into

physically

settled

forward

contracts

to

hedge

the

settlement

of

certain

share-based

payment

schemes.

The

fixed

forward

price

to

be

paid

under

these

contracts

is

£126m

and

has

been

recorded

in

retained

earnings.

Notes

to

the

financial

statements

Employee

benefits

284

Barclays

PLC

2020

Annual

Report

on

Form

20-F

33

Pensions

and

post-retirement

benefits

Accounting

for

pensions

and

post-retirement

benefits

The

Group

operates

a

number

of

pension

schemes

and

post-employment

benefit

schemes.

Defined

contribution

schemes

–

the

Group

recognises

contributions

due

in

respect

of

the

accounting

period

in

the

income

statement.

Any

contributions

unpaid

at

the

balance

sheet

date

are

included

as

a

liability.

Defined

benefit

schemes

–

the

Group

recognises

its

obligations

to

members

of

each

scheme

at

the

period

end,

less

the

fair

value

of

the

scheme

assets

after

applying

the

asset

ceiling

test.

Each

scheme’s

obligations

are

calculated

using

the

projected

unit

credit

method.

Scheme

assets

are

stated

at

fair

value

as

at

the

period

end.

Changes

in

pension

scheme

liabilities

or

assets

(remeasurements)

that

do

not

arise

from

regular

pension

cost,

net

interest

on

net

defined

benefit

liabilities

or

assets,

past

service

costs,

settlements

or

contributions

to

the

scheme,

are

recognised

in

other

comprehensive

income.

Remeasurements

comprise

experience

adjustments

(differences

between

assumptions

and

what

has

actually

occurred),

the

effects

of

changes

in

actuarial

assumptions,

return

on

scheme

assets

(excluding

amounts

included

in

the

interest

on

the

assets)

and

any

changes

in

the

effect

of

the

asset

ceiling

restriction

(excluding

amounts

included

in

the

interest

on

the

restriction).

Post-employment

benefit

schemes

–

the

cost

of

providing

healthcare

benefits

to

retired

employees

is

accrued

as

a

liability

in

the

financial

statements

over

the

period

that

the

employees

provide

services

to

the

Group,

using

a

methodology

similar

to

that

for

defined

benefit

pension

schemes.

Pension

schemes

UK

Retirement

Fund

(UKRF)

The

UKRF

is

the

Group’s

main

scheme,

representing

97%

of

the

Group’s

total

retirement

benefit

obligations.

Barclays

Bank

PLC

is

the

principal

employer

of

the

UKRF.

The

UKRF

was

closed

to

new

entrants

on

1

October

2012,

and

comprises

10

sections,

the

two

most

significant

of

which

are:

◾

Afterwork,

which

comprises

a

contributory

cash

balance

defined

benefit

element,

and

a

voluntary

defined

contribution

element.

The

cash

balance

element

is

accrued

each

year

and

revalued

until

Normal

Retirement

Age

in

line

with

the

increase

in

Retail

Price

Index

(RPI)

(up

to

a

maximum

of

5%

p.a.).

An

increase

of

up

to

2%

a

year

may

also

be

added

at

Barclays’

discretion.

The

costs

of

ill-health

retirements

and

death

in

service

benefits

for

Afterwork

members

are

borne

by

the

UKRF.

The

main

risks

that

Barclays

runs

in

relation

to

Afterwork

are

limited

although

additional

contributions

are

required

if

pre-retirement

investment

returns

are

not

sufficient

to

provide

for

the

benefits.

◾

The

1964

Pension

Scheme.

Most

employees

recruited

before

July

1997

built

up

benefits

in

this

non-contributory

defined

benefit

scheme

in

respect

of

service

up

to

31

March

2010.

Pensions

were

calculated

by

reference

to

service

and

pensionable

salary.

From

1

April

2010,

members

became

eligible

to

accrue

future

service

benefits

in

either

Afterwork

or

the

Pension

Investment

Plan

(PIP),

a

historic

defined

contribution

section

which

is

now

closed

to

future

contributions.

The

risks

that

Barclays

runs

in

relation

to

the

1964

section

are

typical

of

final

salary

pension

schemes,

principally

that

investment

returns

fall

short

of

expectations,

that

inflation

exceeds

expectations,

and

that

retirees

live

longer

than

expected.

Barclays

Pension

Savings

Plan

(BPSP)

The

BPSP

is

a

defined

contribution

scheme

providing

benefits

for

all

new

UK

hires

from

1

October

2012,

BPSP

is

not

subject

to

the

same

investment

return,

inflation

or

life

expectancy

risks

for

Barclays

that

defined

benefit

schemes

are.

Members’

benefits

reflect

contributions

paid

and

the

level

of

investment

returns

achieved.

Other

Apart

from

the

UKRF

and

the

BPSP,

Barclays

operates

a

number

of

smaller

pension

and

long-term

employee

benefits

and

post-retirement

healthcare

plans

globally,

the

largest

of

which

are

the

US

defined

benefit

schemes.

Many

of

the

schemes

are

funded,

with

assets

backing

the

obligations

held

in

separate

legal

vehicles

such

as

trusts.

Others

are

operated

on

an

unfunded

basis.

The

benefits

provided,

the

approach

to

funding,

and

the

legal

basis

of

the

schemes,

reflect

local

environments.

Governance

The

UKRF

operates

under

trust

law

and

is

managed

and

administered

on

behalf

of

the

members

in

accordance

with

the

terms

of

the

Trust

Deed

and

Rules

and

all

relevant

legislation.

The

Corporate

Trustee

is

Barclays

Pension

Funds

Trustees

Limited,

a

private

limited

company

and

a

wholly

owned

subsidiary

of

Barclays

Bank

PLC.

The

Trustee

is

the

legal

owner

of

the

assets

of

the

UKRF

which

are

held

separately

from

the

assets

of

the

Group.

The

Trustee

Board

comprises

six

Management

Directors

selected

by

Barclays,

of

whom

three

are

independent

Directors

with

no

relationship

with

Barclays

(and

who

are

not

members

of

the

UKRF),

plus

three

Member

Nominated

Directors

selected

from

eligible

active

staff,

deferred

and

pensioner

members

who

apply

for

the

role.

The

BPSP

is

a

Group

Personal

Pension

arrangement

which

operates

as

a

collection

of

personal

pension

plans.

Each

personal

pension

plan

is

a

direct

contract

between

the

employee

and

the

BPSP

provider

(Legal

&

General

Assurance

Society

Limited),

and

is

regulated

by

the

FCA.

Similar

principles

of

pension

governance

apply

to

the

Group’s

other

pension

schemes,

depending

on

local

legislation.

Amounts

recognised

The

following

tables

include

amounts

recognised

in

the

income

statement

and

an

analysis

of

benefit

obligations

and

scheme

assets

for

all

Group

defined

benefit

schemes.

The

net

position

is

reconciled

to

the

assets

and

liabilities

recognised

on

the

balance

sheet.

The

tables

include

funded

and

unfunded

post-retirement

benefits.

Notes

to

the

financial

statements

Employee

benefits

285

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Income

statement

charge

2020

2019

2018

£m

Current

service

cost

243

231

243

Net

finance

cost

(40)

(48)

(24)

Past

service

cost

(4)

-

134

Other

movements

1

2

5

Total

200

185

358

Balance

sheet

reconciliation

2020

2019

Total

Of

which

relates

to

UKRF

Total

Of

which

relates

to

UKRF

£m

Benefit

obligation

at

beginning

of

the

year

(30,333)

(29,304)

(28,269)

(27,301)

Current

service

cost

(243)

(217)

(231)

(210)

Interest

costs

on

scheme

liabilities

(573)

(549)

(747)

(718)

Past

service

cost

4

-

Remeasurement

(loss)/gain

–

financial

(3,439)

(3,358)

(3,087)

(2,964)

Remeasurement

(loss)/gain

–

demographic

(281)

(286)

223

214

Remeasurement

(loss)/gain

–

experience

244

237

277

266

Employee

contributions

(5)

(1)

(5)

(1)

Benefits

paid

1,406

1,370

1,459

1,410

Exchange

and

other

movements

30

-

47

-

Benefit

obligation

at

end

of

the

year

(33,190)

(32,108)

(30,333)

(29,304)

Fair

value

of

scheme

assets

at

beginning

of

the

year

32,093

31,362

29,722

29,036

Interest

income

on

scheme

assets

613

595

795

774

Employer

contribution

265

248

755

731

Remeasurement

–

return

on

scheme

assets

greater

than

discount

rate

3,411

3,328

2,312

2,230

Employee

contributions

5

1

5

1

Benefits

paid

(1,406)

(1,370)

(1,459)

(1,410)

Exchange

and

other

movements

(268)

(249)

(37)

-

Fair

value

of

scheme

assets

at

end

of

the

year

34,713

33,915

32,093

31,362

Net

surplus

1,523

1,807

1,760

2,058

Retirement

benefit

assets

1,814

1,807

2,108

2,058

Retirement

benefit

liabilities

(291)

-

(348)

-

Net

retirement

benefit

assets

1,523

1,807

1,760

2,058

Included

within

the

benefit

obligation

was

£867m

(2019:

£759m)

relating

to

overseas

pensions

and

£215m

(2019:

£202m)

relating

to

other

post-

employment

benefits.

As

at

31

December

2020,

the

UKRF’s

scheme

assets

were

in

surplus

versus

IAS

19

obligations

by

£1,807m

(2019:

£2,058m).

The

movement

for

the

UKRF

was

driven

by

a

net

decrease

in

the

discount

rate

and

changes

to

pension

increase

assumptions,

offset

partially

by

higher

than

assumed

asset

returns.

During

the

year

the

UKRF

invested

in

non-transferable

listed

senior

gilt-backed

notes

for

£750m,

partially

financed

by

£500m

deficit

contributions

(the

“Heron

2”

transaction).

The

net

impact

of

£250m

on

plan

assets

is

shown

as

an

outflow

under

“Exchange

and

other

movements”;

further

details

of

Heron

2

can

found

on

page

288.

The

weighted

average

duration

of

the

benefit

payments

reflected

in

the

defined

benefit

obligation

for

the

UKRF

is

17

years.

The

UKRF

expected

benefits

are

projected

to

be

paid

out

for

in

excess

of

50

years,

although

25%

of

the

total

benefits

are

expected

to

be

paid

in

the

years;

30%

in

years

11

to

20

and

25%

in

years

20

to

30.

The

remainder

of

the

benefits

are

expected

to

be

paid

beyond

30

years.

Of

the

£1,370m

(2019:

£1,410m)

UKRF

benefits

paid

out,

£520m

(2019:

£580m)

transfers

out

of

the

fund.

Where

a

scheme’s

assets

exceed

its

obligation,

an

asset

is

recognised

to

the

extent

that

it

does

not

exceed

the

present

value

of

future

contribution

holidays

or

refunds

of

contributions

(the

asset

ceiling).

In

the

case

of

the

UKRF

the

asset

ceiling

is

not

applied

as,

in

certain

specified

circumstances

such

as

wind-up,

the

Group

expects

to

be

able

to

recover

any

surplus.

Similarly,

a

liability

in

respect

of

future

minimum

funding

requirements

is

not

recognised.

The

Trustee

does

not

have

a

substantive

right

to

augment

benefits,

nor

do

they

have

the

right

to

wind

up

the

plan

except

in

the

dissolution

of

the

Group

or

termination

of

contributions

by

the

Group.

The

application

of

the

asset

ceiling

to

other

plans

and

recognition

of

additional

liabilities

in

respect

of

future

minimum

funding

requirements

are

considered

on

an

individual

plan

basis.

Critical

accounting

estimates

and

judgements

Actuarial

valuation

of

the

schemes’

obligation

is

dependent

upon

a

series

of

assumptions.

Below

is

a

summary

of

the

main

financial

and

demographic

assumptions

adopted

for

the

UKRF.

Notes

to

the

financial

statements

Employee

benefits

286

Barclays

PLC

2020

Annual

Report

on

Form

20-F

2020

2019

Key

UKRF

financial

assumptions

%

p.a.

%

p.a.

Discount

rate

1.29

1.92

Inflation

rate

(RPI)

2.99

3.02

The

UKRF

discount

rate

assumption

for

2020

was

based

on

a

standard

Willis

Towers

Watson

RATE

Link

model.

The

UKRF

discount

rate

assumption

for

2019

was

based

on

a

variant

of

the

standard

Willis

Towers

Watson

RATE

Link

model

that

included

all

bonds

rated

AA

by

at

least

one

of

the

four

major

ratings

agencies,

and

assumed

that

forward

rates

after

year

30

were

flat.

The

change

in

discount

rate

methodology

as

at

31

December

2020

led

to

a

remeasurement

gain

of

£1.2bn.

The

RPI

inflation

assumption

for

2020

was

set

by

reference

to

the

Bank

of

England’s

implied

inflation

curve.

The

inflation

assumption

incorporates

a

deduction

of

20

basis

points

as

an

allowance

for

an

inflation

risk

premium.

The

methodology

used

to

derive

the

inflation

assumptions

is

consistent

with

that

used

at

the

prior

year

end.

The

UKRF’s

post-retirement

mortality

assumptions

are

based

on

a

best

estimate

assumption

derived

from

an

analysis

in

2019

of

the

UKRF’s

own

post-retirement

mortality

experience,

and

taking

account

of

recent

evidence

from

published

mortality

surveys.

An

allowance

has

been

made

for

future

mortality

improvements

based

on

the

2019

core

projection

model

published

by

the

Continuous

Mortality

Investigation

Bureau

subject

to

a

long-term

trend

of

1.5%

per

annum

in

future

improvements.

The

methodology

used

is

consistent

with

the

prior

year

end,

except

that

the

2018

core

projection

model

was

used

at

2019.

The

table

below

shows

how

the

assumed

life

expectancy

at

60,

for

members

of

the

UKRF,

has

varied

over

the

past

three

years:

Assumed

life

expectancy

2020

2019

2018

Life

expectancy

at

60

for

current

pensioners

(years)

–

Males

27.2

27.1

27.7

–

Females

29.4

29.3

29.4

Life

expectancy

at

60

for

future

pensioners

currently

aged

40

(years)

–

Males

29.0

28.9

29.2

–

Females

31.2

31.1

31.0

On

11

December

2020,

the

UKRF

entered

into

a

£5bn

longevity

swap

to

hedge

around

a

quarter

of

current

pensioner

liabilities

against

unexpected

increases

in

life

expectancy.

The

swap

will

form

part

of

the

UKRF’s

investment

portfolio

and

provide

income

in

the

event

that

pensions

are

paid

out

for

longer

than

expected.

The

UKRF

Trustee

established

a

Guernsey

based

captive

insurer

(Barclays

UKRF

No.1

IC

Limited)

to

act

as

an

insurance

intermediary

between

the

UKRF

and

swap

provider.

The

swap

is

not

included

directly

within

the

balance

sheet

of

Barclays

PLC

as

it

is

an

asset

of

the

UKRF.

At

31

December

2020,

the

swap

is

valued

at

nil

fair

value

as

it

is

considered

to

remain

at

fair

market

value

for

both

parties

over

the

very

limited

period

from

11

December

2020

to

31

December

2020.

Sensitivity

analysis

on

actuarial

assumptions

The

sensitivity

analysis

has

been

calculated

by

valuing

the

UKRF

liabilities

using

the

amended

assumptions

shown

in

the

table

below

and

keeping

the

remaining

assumptions

the

same

as

disclosed

in

the

table

above,

except

in

the

case

of

the

inflation

sensitivity

where

other

assumptions

that

depend

on

assumed

inflation

have

also

been

amended

correspondingly.

The

difference

between

the

recalculated

liability

figure

and

that

stated

in

the

balance

sheet

reconciliation

table

above

is

the

figure

shown.

The

selection

of

these

movements

to

illustrate

the

sensitivity

of

the

defined

benefit

obligation

to

key

assumptions

should

not

be

interpreted

as

Barclays

expressing

any

specific

view

of

the

probability

of

such

movements

happening.

Change

in

key

assumptions

2020

2019

(Decrease)/

Increase

in

UKRF

defined

benefit

obligation

(Decrease)/

Increase

in

UKRF

defined

benefit

obligation

£bn

Discount

rate

0.5%

p.a.

increase

(2.5)

(2.3)

0.25%

p.a.

increase

(1.3)

(1.2)

0.25%

p.a.

decrease

1.4

1.2

0.5%

p.a.

decrease

2.9

2.6

Assumed

RPI

0.5%

p.a.

increase

1.8

1.5

0.25%

p.a.

increase

0.9

0.8

0.25%

p.a.

decrease

(0.9)

(0.7)

0.5%

p.a.

decrease

(1.8)

(1.4)

Life

expectancy

at

60

One

year

increase

1.2

1.0

One

year

decrease

(1.2)

(1.0)

Assets

A

long-term

investment

strategy

has

been

set

for

the

UKRF,

with

its

asset

allocation

comprising

a

mixture

of

equities,

bonds,

property

and

other

appropriate

assets.

This

recognises

that

different

asset

classes

are

likely

to

produce

different

long-term

returns

and

some

asset

classes

may

be

more

volatile

than

others.

The

long-term

investment

strategy

ensures,

among

other

aims,

that

investments

are

adequately

diversified.

Notes

to

the

financial

statements

Employee

benefits

287

Barclays

PLC

2020

Annual

Report

on

Form

20-F

The

UKRF

also

employs

derivative

instruments,

where

appropriate,

to

achieve

a

desired

exposure

or

return,

or

to

match

assets

more

closely

to

liabilities.

The

value

of

assets

shown

reflects

the

assets

held

by

the

scheme,

with

any

derivative

holdings

reflected

on

a

fair

value

basis.

The

value

of

the

assets

of

the

schemes

and

their

percentage

in

relation

to

total

scheme

assets

were

as

follows:

Analysis

of

scheme

assets

Total

Of

which

relates

to

UKRF

Quoted

a

£m

Unquoted

a

£m

Value

£m

%

of

total

fair

value

of

scheme

assets

%

Quoted

a

£m

Unquoted

a

£m

Value

£m

%

of

total

fair

value

of

scheme

assets

%

As

at

31

December

2020

Equities

567

1,498

2,065

5.9

378

1,498

1,876

5.5

Private

equities

-

2,233

6.4

-

2,233

6.6

Bonds

-

fixed

government

4,205

110

4,315

12.4

3,932

110

4,042

11.9

Bonds

-

index-linked

government

10,706

1,014

11,720

33.8

10,697

1,014

11,711

34.6

Bonds

-

corporate

and

other

7,439

1,678

9,117

26.3

7,214

1,678

8,892

26.2

Property

10

1,416

1,426

4.1

-

1,416

4.2

Infrastructure

-

1,812

5.2

-

1,812

5.3

Cash

and

liquid

assets

64

1,830

1,894

5.5

46

1,830

1,876

5.5

Mixed

investment

funds

9

-

9

-

Other

14

108

122

0.4

-

57

0.2

Fair

value

of

scheme

assets

23,014

11,699

34,713

100.0

22,267

11,648

33,915

100.0

As

at

31

December

2019

b

Equities

942

1,568

2,510

7.8

768

1,568

2,336

7.4

Private

equities

-

2,083

6.5

-

2,083

6.6

Bonds

-

fixed

government

3,574

300

3,874

12.1

3,303

299

3,602

11.5

Bonds

-

index-linked

government

10,355

681

11,036

34.4

10,345

682

11,027

35.2

Bonds

-

corporate

and

other

6,260

2,297

8,557

26.6

6,069

2,295

8,364

26.7

Property

11

1,633

1,644

5.1

-

1,633

5.2

Infrastructure

-

1,558

4.9

-

1,558

5.0

Cash

and

liquid

assets

596

170

766

2.4

576

169

745

2.4

Mixed

investment

funds

-

Other

-

65

0.2

-

14

-

Fair

value

of

scheme

assets

21,738

10,355

32,093

100.0

21,061

10,301

31,362

100.0

Notes

a

Valuations

on

unquoted

assets

are

provided

by

the

underlying

managers

or

qualified

independent

valuers.

Valuations

on

complex

instruments

are

based

on

UKRF

custodian

valuations.

All

valuations

are

determined

in

accordance

with

relevant

industry

guidance.

b

Analysis

of

scheme

assets

for

2019

is

resta

ted

with

a

quoted/unquoted

split.

Included

within

the

fair

value

of

scheme

assets

were

nil

(2019:

nil)

relating

to

shares

in

Barclays

PLC

and

nil

(2019:

nil)

relating

to

bonds

issued

by

Barclays

PLC.

The

UKRF

also

invests

in

pooled

investment

vehicles

which

may

hold

shares

or

debt

issued

by

Barclays

PLC.

The

UKRF

assets

above

do

not

include

the

Senior

Notes

asset

referred

to

in

the

section

below

on

Triennial

Valuation,

as

these

are

non-

transferable

instruments

and

not

recognised

under

IAS

19.

Approximately

45%

of

the

UKRF

assets

are

invested

in

liability-driven

investment

strategies;

primarily

UK

gilts

as

well

as

interest

rate

and

inflation

swaps.

These

are

used

to

better

match

the

assets

to

its

liabilities.

The

swaps

are

used

to

reduce

the

scheme’s

inflation

and

duration

risks

against

its

liabilities.

Triennial

valuation

The

latest

annual

update

as

at

30

September

2020

showed

the

funding

deficit

had

improved

to

£0.9bn

from

the

£2.3bn

shown

at

the

30

September

2019

triennial

valuation.

The

improvement

was

mainly

due

to

£1.0bn

of

deficit

reduction

contributions

paid

over

the

year.

The

main

differences

between

the

funding

and

accounting

assumptions

are

a

different

approach

to

setting

the

discount

rate

and

a

more

conservative

longevity

assumption

for

funding.

The

deficit

reduction

contributions

agreed

with

the

UKRF

Trustee

as

part

of

the

30

September

2019

triennial

valuation

recovery

plan

are

shown

in

the

table

below.

Notes

to

the

financial

statements

Employee

benefits

288

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Deficit

reduction

contributions

under

the

30

September

2019

valuation

Year

£m

Cash

paid:

2020

500

Future

commitments:

2021

700

2022

294

2023

286

2024

-

2026

-

On

12

June

2020,

Barclays

Bank

PLC

paid

the

£500m

deficit

reduction

contribution

agreed

for

2020

and

at

the

same

time

the

UKRF

subscribed

for

non-transferrable

listed

senior

fixed

rate

notes

for

£750m,

backed

by

UK

gilts

(the

Senior

Notes).

These

Senior

Notes

entitle

the

UKRF

to

semi-annual

coupon

payments

for

five

years,

and

full

repayment

in

cash

in

three

equal

tranches

in

2023,

2024,

and

at

final

maturity

in

2025.

The

Senior

Notes

were

issued

by

Heron

Issuer

Number

2

Limited

(Heron

2),

an

entity

that

is

consolidated

within

the

Group

under

IFRS

10.

As

a

result

of

the

investment

in

Senior

Notes,

the

regulatory

capital

impact

of

the

£500m

deficit

reduction

contribution

paid

on

12

June

2020

takes

effect

in

2023,

2024

and

2025

on

maturity

of

the

notes.

As

the

UKRF's

investment

in

the

Senior

Notes

does

not

qualify

as

a

plan

asset

under

IAS

19,

the

£500m

deficit

reduction

contribution

does

not

appear

in

the

IAS19

plan

assets

nor

as

an

employer

contribution

as

at

31

December

2020,

and

the

additional

£250m

scheme

investment

appears

as

an

outflow

in

the

balance

sheet

reconciliation

under

'Exchange

and

other

movements’.

The

£250m

additional

investment

by

the

UKRF

in

the

Senior

Notes

has

a

positive

capital

impact

in

2020

which

is

reduced

equally

in

2023,

2024

and

2025

on

the

maturity

of

the

notes.

Heron

2

acquired

a

total

of

£750m

of

gilts

from

Barclays

Bank

PLC

for

cash

to

support

payments

on

the

senior

notes.

A

transaction

with

a

similar

structure

was

agreed

as

part

of

the

2019

triennial

actuarial

valuation.

On

11

December

2019,

Barclays

Bank

PLC

paid

the

£500m

deficit

reduction

contribution

agreed

for

2019

and

at

the

same

time

the

UKRF

subscribed

for

non-transferrable

listed

senior

fixed

rate

notes

for

£500m,

backed

by

UK

gilts

(the

Senior

Notes).

These

Senior

Notes

entitle

the

UKRF

to

semi-annual

coupon

payments

for

five

years,

and

full

repayment

in

cash

at

maturity

in

2024.

As

the

UKRF's

investment

in

these

Senior

Notes

does

not

qualify

as

a

plan

asset

under

IAS

19,

the

2019

£500m

deficit

reduction

contribution

does

not

appear

in

the

IAS

19

plan

assets.

No

liability

is

recognised

under

IAS

19

for

the

obligation

to

make

deficit

reduction

contributions

or

to

repay

the

Senior

Notes,

as

settlement

gives

rise

to

both

a

reduction

in

cash

and

a

corresponding

increase

in

net

defined

benefit

assets.

The

deficit

reduction

contributions

are

in

addition

to

the

regular

contributions

to

meet

the

Group’s

share

of

the

cost

of

benefits

accruing

over

each

year.

The

valuation

of

the

UKRF

is

due

to

be

completed

in

2023

with

an

effective

date

of

30

September

2022.

Other

support

measures

agreed

which

remain

in

place

Collateral

–

The

UKRF

Trustee

and

Barclays

Bank

PLC

have

entered

into

an

arrangement

whereby

a

collateral

pool

has

been

put

in

place

to

provide

security

for

the

UKRF

funding

deficit

as

it

increases

or

decreases

over

time.

The

collateral

pool

is

currently

made

up

of

government

securities,

and

agreement

was

made

with

the

Trustee

to

cover

at

least

100%

of

the

funding

deficit

with

an

overall

cap

of

£9bn.

The

arrangement

provides

the

UKRF

Trustee

with

dedicated

access

to

the

pool

of

assets

in

the

event

of

Barclays

Bank

PLC

not

paying

a

deficit

reduction

contribution

to

the

UKRF

or

in

the

event

of

Barclays

Bank

PLC’s

insolvency.

These

assets

are

included

within

Note

38

Assets

pledged,

collateral

received

and

assets

transferred.

Support

from

Barclays

PLC

–

In

the

event

of

Barclays

Bank

PLC

not

paying

a

deficit

reduction

contribution

payment

required

by

a

specified

pre-

payment

date,

Barclays

PLC

has

entered

into

an

arrangement

whereby

it

will

be

required

to

use,

in

first

priority,

dividends

received

from

Barclays

Bank

UK

PLC

(if

any)

to

invest

the

proceeds

in

Barclays

Bank

PLC

(up

to

the

maximum

amount

of

the

deficit

reduction

contribution

unpaid

by

Barclays

Bank

PLC).

The

proceeds

of

the

investment

will

be

used

to

discharge

Barclays

Bank

PLC’s

unpaid

deficit

reduction

contribution.

Participation

–

As

permitted

under

the

Financial

Services

and

Markets

Act

2000

(Banking

Reform)

(Pensions)

Regulations

2015,

Barclays

Bank

UK

PLC

is

a

participating

employer

in

the

UKRF

and

will

remain

so

during

a

transitional

phase

until

September

2025

as

set

out

in

a

deed

of

participation.

Barclays

Bank

UK

PLC

will

make

contributions

for

the

future

service

of

its

employees

who

are

currently

Afterwork

members

and,

in

the

event

of

Barclays

Bank

PLC’s

insolvency

during

this

period

provision

has

been

made

to

require

Barclays

Bank

UK

PLC

to

become

the

principal

employer

of

the

UKRF.

Barclays

Bank

PLC’s

Section

75

debt

would

be

triggered

by

the

insolvency

(the

debt

would

be

calculated

after

allowing

for

the

payment

to

the

UKRF

of

the

collateral

above).

Defined

benefit

contributions

paid

with

respect

to

the

UKRF

were

as

follows:

Contributions

paid

£m

2020

748

2019

1,231

2018

741

There

were

nil

(2019:

nil;

2018:

nil)

Section

75

contributions

included

within

the

Group’s

contributions

paid

as

no

participating

employers

left

the

UKRF

in

2020.

The

Group’s

expected

contribution

to

the

UKRF

in

respect

of

defined

benefits

in

2021

is

£959m

(2020:

£743m).

In

addition,

the

expected

contributions

to

UK

defined

contribution

schemes

in

2021

is

£35m

(2020:

£33m)

to

the

UKRF

and

£209m

(2020:

£185m)

to

the

BPSP.

Notes

to

the

financial

statements

Scope

of

consolidation

289

Barclays

PLC

2020

Annual

Report

on

Form

20-F

The

notes

included

in

this

section

present

information

on

the

Group’s

investments

in

subsidiaries,

joint

ventures

and

associates

and

its

interests

in

structured

entities.

Detail

is

also

given

on

securitisation

transactions

the

Group

has

entered

into

and

arrangements

that

are

held

off-balance

sheet.

34

Principal

subsidiaries

The

Group

applies

IFRS

10

Consolidated

Financial

Statements

.

The

consolidated

financial

statements

combine

the

financial

statements

of

the

Group

and

all

its

subsidiaries.

Subsidiaries

are

entities

over

which

the

Group

has

control.

Under

IFRS

10,

this

is

when

the

Group

is

exposed

or

has

rights

to

variable

returns

from

its

involvement

in

the

entity

and

has

the

ability

to

affect

those

returns

through

its

power

over

the

entity.

The

Group

reassesses

whether

it

controls

an

entity

if

facts

and

circumstances

indicate

that

there

have

been

changes

to

its

power,

its

rights

to

variable

returns

or

its

ability

to

use

its

power

to

affect

the

amount

of

its

returns.

Intra-group

transactions

and

balances

are

eliminated

on

consolidation

and

consistent

accounting

policies

are

used

throughout

the

Group

for

the

purposes

of

the

consolidation.

Changes

in

ownership

interests

in

subsidiaries

are

accounted

for

as

equity

transactions

if

they

occur

after

control

has

been

obtained

and

they

do

not

result

in

loss

of

control.

The

significant

judgements

used

in

applying

this

policy

are

set

out

below.

Accounting

for

investment

in

subsidiaries

In

the

individual

financial

statements

of

Barclays

PLC,

investments

in

subsidiaries

are

stated

at

cost

less

impairment.

Principal

subsidiaries

for

the

Group

are

set

out

below.

This

includes

those

subsidiaries

that

are

most

significant

in

the

context

of

the

Group’s

business,

results

or

financial

position.

Principal

place

of

business

or

incorporation

Percentage

of

voting

rights

held

Non-controlling

interests

-

proportion

of

ow

nership

interests

Non-controlling

interests

-

proportion

of

voting

interests

Company

name

Nature

of

business

%

Barclays

Bank

PLC

United

Kingdom

Banking,

holding

company

100

2

-

Barclays

Bank

UK

PLC

United

Kingdom

Banking,

holding

company

100

-

Barclays

Bank

Ireland

PLC

Ireland

Banking

100

-

Barclays

Execution

Services

Limited

United

Kingdom

Service

company

100

-

Barclays

Capital

Inc.

United

States

Securities

dealing

100

-

Barclays

Capital

Securities

Limited

United

Kingdom

Securities

dealing

100

-

Barclays

Securities

Japan

Limited

Japan

Securities

dealing

100

-

Barclays

US

LLC

United

States

Holding

company

100

-

Barclays

Bank

Delaware

United

States

Credit

card

issuer

100

-

The

country

of

registration

or

incorporation

is

also

the

principal

area

of

operation

of

each

of

the

above

subsidiaries.

Ownership

interests

are

in

some

cases

different

to

voting

interests

due

to

the

existence

of

non-voting

equity

interests,

such

as

preference

shares.

Refer

to

Note

30

for

more

information.

Determining

whether

the

Group

has

control

of

an

entity

is

generally

straightforward

based

on

ownership

of

the

majority

of

the

voting

capital.

However,

in

certain

instances,

this

determination

will

involve

judgement,

particularly

in

the

case

of

structured

entities

where

voting

rights

are

often

not

the

determining

factor

in

decisions

over

the

relevant

activities.

This

judgement

will

involve

assessing

the

purpose

and

design

of

the

entity.

It

will

also

often

be

necessary

to

consider

whether

the

Group,

or

another

involved

party

with

power

over

the

relevant

activities,

is

acting

as

a

principal

in

its

own

right

or

as

an

agent

on

behalf

of

others.

There

is

also

often

considerable

judgement

involved

in

the

ongoing

assessment

of

control

over

structured

entities.

In

this

regard,

where

market

conditions

have

deteriorated

such

that

the

other

investors’

exposures

to

the

structure’s

variable

returns

have

been

substantively

eliminated,

the

Group

may

conclude

that

the

managers

of

the

structured

entity

are

acting

as

its

agent

and

therefore

will

consolidate

the

structured

entity.

An

interest

in

equity

voting

rights

exceeding

50%

would

typically

indicate

that

the

Group

has

control

of

an

entity.

However,

the

entity

set

out

below

is

excluded

from

consolidation

because

the

Group

does

not

have

exposure

to

its

variable

returns.

Percentage

of

voting

rights

held

Equity

shareholders'

funds

Retained

profit

for

the

year

Country

of

registration

or

incorporation

Company

name

%

£m

Cayman

Islands

Palomino

Limited

100

-

This

entity

is

managed

by

an

external

counterparty

and

consequently

is

not

controlled

by

the

Group.

Interests

relating

to

this

entity

are

included

in

Note

35.

Significant

restrictions

As

is

typical

for

a

group

of

its

size

and

international

scope,

there

are

restrictions

on

the

ability

of

Barclays

PLC

to

obtain

distributions

of

capital,

access

the

assets

or

repay

the

liabilities

of

members

of

its

Group

due

to

the

statutory,

regulatory

and

contractual

requirements

of

its

subsidiaries

and

due

to

the

protective

rights

of

non-controlling

interests.

These

are

considered

below.

Regulatory

requirements

Barclays’

principal

subsidiary

companies

have

assets

and

liabilities

before

intercompany

eliminations

of

£1,795bn

(2019:

£1,474bn)

and

Notes

to

the

financial

statements

Scope

of

consolidation

290

Barclays

PLC

2020

Annual

Report

on

Form

20-F

£1,703bn

(2019:

£1,388bn)

respectively.

Certain

of

these

assets

and

liabilities

are

subject

to

prudential

regulation

and

regulatory

capital

requirements

in

the

countries

in

which

they

are

regulated.

These

require

entities

to

maintain

minimum

capital

levels

which

cannot

be

returned

to

the

parent

company,

Barclays

PLC,

on

a

going

concern

basis.

In

order

to

meet

capital

requirements,

subsidiaries

may

issue

certain

equity-accounted

and

debt-accounted

financial

instruments

and

non-

equity

instruments

such

as

Tier

1

and

Tier

2

capital

instruments

and

other

forms

of

subordinated

liabilities.

Refer

to

Note

27

and

Note

28

for

particulars

of

these

instruments.

These

instruments

may

be

subject

to

cancellation

clauses

or

preference

share

restrictions

that

would

limit

the

ability

of

the

entity

to

repatriate

the

capital

on

a

timely

basis.

Liquidity

requirements

Regulated

subsidiaries

of

the

Group

are

required

to

meet

applicable

PRA

or

local

regulatory

requirements

pertaining

to

liquidity.

Some

of

the

regulated

subsidiaries

include

Barclays

Bank

PLC

and

Barclays

Capital

Securities

Limited

(which

are

regulated

on

a

combined

basis

under

a

Domestic

Liquidity

Sub-Group

(DoLSub)

arrangement),

Barclays

Bank

UK

PLC,

Barclays

Bank

Ireland

PLC,

Barclays

Capital

Inc.

and

Barclays

Bank

Delaware.

Refer

to

the

Liquidity

risk

section

for

further

details

of

liquidity

requirements,

including

those

of

the

Group’s

significant

subsidiaries.

Statutory

requirements

The

Group’s

subsidiaries

are

subject

to

statutory

requirements

not

to

make

distributions

of

capital

and

unrealised

profits

and

generally

to

maintain

solvency.

These

requirements

restrict

the

ability

of

subsidiaries

to

make

remittances

of

dividends

to

Barclays

PLC,

the

ultimate

parent,

except

in

the

event

of

a

legal

capital

reduction

or

liquidation.

In

most

cases,

the

regulatory

restrictions

referred

to

above

exceed

the

statutory

restrictions.

Asset

encumbrance

The

Group

uses

its

financial

assets

to

raise

finance

in

the

form

of

securitisations

and

through

the

liquidity

schemes

of

central

banks,

as

well

as

to

provide

security

to

the

UK

Retirement

Fund.

Once

encumbered,

the

assets

are

not

available

for

transfer

around

the

Group.

The

assets

typically

affected

are

disclosed

in

Note

38.

Other

restrictions

The

Group

is

required

to

maintain

balances

with

central

banks

and

other

regulatory

authorities,

and

these

amounted

to

£3,392m

(2019:

£4,893m).

35

Structured

entities

A

structured

entity

is

an

entity

in

which

voting

or

similar

rights

are

not

the

dominant

factor

in

deciding

control.

Structured

entities

are

generally

created

to

achieve

a

narrow

and

well-defined

objective

with

restrictions

around

their

ongoing

activities.

Depending

on

the

Group’s

power

over

the

activities

of

the

entity

and

its

exposure

to

and

ability

to

influence

its

own

returns,

it

may

consolidate

the

entity.

In

other

cases,

it

may

sponsor

or

have

exposure

to

such

an

entity

but

not

consolidate

it.

Consolidated

structured

entities

The

Group

has

contractual

arrangements

which

may

require

it

to

provide

financial

support

to

the

following

types

of

consolidated

structured

entities:

◾

Securitisation

vehicles:

The

Group

uses

securitisation

as

a

source

of

financing

and

a

means

of

risk

transfer.

Refer

to

Note

37

for

further

detail.

◾

Commercial

paper

(CP)

and

medium-term

conduits:

The

Group

provided

£11.7

bn

(2019:

£8.3bn)

in

undrawn

contractual

backstop

liquidity

facilities

to

CP

conduits.

◾

Employee

benefit

trusts:

The

Group

provides

capital

contributions

to

employee

benefit

trusts

to

enable

them

to

meet

obligations

to

employees

in

relation

to

share-based

remuneration

arrangements.

◾

Other

trusts:

During

2020,

the

Group

provided

undrawn

liquidity

facilities

of

£2.9bn

(2019:

£2.5bn)

to

certain

trusts.

Unconsolidated

structured

entities

in

which

the

Group

has

an

interest

An

interest

in

a

structured

entity

is

any

form

of

contractual

or

non-contractual

involvement

which

creates

variability

in

returns

arising

from

the

performance

of

the

entity

for

the

Group.

Such

interests

include

holdings

of

debt

or

equity

securities,

derivatives

that

transfer

financial

risks

from

the

entity

to

the

Group,

lending,

loan

commitments,

financial

guarantees

and

investment

management

agreements.

Interest

rate

swaps,

foreign

exchange

derivatives

that

are

not

complex

and

which

expose

the

Group

to

insignificant

credit

risk

by

being

senior

in

the

payment

waterfall

of

a

securitisation

and

derivatives

that

are

determined

to

introduce

risk

or

variability

to

a

structured

entity

are

not

considered

to

be

an

interest

in

an

entity

and

have

been

excluded

from

the

disclosures

below.

The

nature

and

extent

of

the

Group’s

interests

in

structured

entities

is

summarised

below:

Notes

to

the

financial

statements

Scope

of

consolidation

291

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Summary

of

interests

in

unconsolidated

structured

entities

Secured

financing

Short-term

traded

interests

Traded

derivatives

Other

interests

Total

£m

As

at

31

December

2020

Assets

Trading

portfolio

assets

-

11,361

-

11,361

Financial

assets

at

fair

value

through

the

income

statement

56,265

-

2,864

59,129

Derivative

financial

instruments

-

2,968

-

2,968

Financial

assets

at

fair

value

through

other

comprehensive

income

-

153

Loans

and

advances

at

amortised

cost

-

20,946

Reverse

repurchase

agreements

and

other

similar

secured

lending

10

-

10

Other

assets

-

16

Total

assets

56,275

11,361

2,968

23,979

94,583

Liabilities

Derivative

financial

instruments

-

7,075

-

7,075

As

at

31

December

2019

Assets

Trading

portfolio

assets

-

9,585

-

76

9,661

Financial

assets

at

fair

value

through

the

income

statement

32,859

-

2,659

35,518

Derivative

financial

instruments

-

2,369

-

2,369

Financial

assets

at

fair

value

through

other

comprehensive

income

-

391

Loans

and

advances

at

amortised

cost

-

19,061

Reverse

repurchase

agreements

and

other

similar

secured

lending

77

-

77

Other

assets

-

28

Total

assets

32,936

9,585

2,369

22,215

67,105

Liabilities

Derivative

financial

instruments

-

3,171

2,437

5,608

Secured

financing

arrangements,

short-term

traded

interests

and

traded

derivatives

are

typically

managed

under

market

risk

management

policies

described

in

the

Market

risk

management

section

which

includes

an

indication

of

the

change

of

risk

measures

compared

to

last

year.

For

this

reason,

the

total

assets

of

these

entities

are

not

considered

meaningful

for

the

purposes

of

understanding

the

and

so

have

not

been

presented.

Other

interests

include

conduits

and

lending

where

the

interest

is

driven

by

normal

customer

demand.

Secured

financing

The

Group

routinely

enters

into

reverse

repurchase

contracts,

stock

borrowing

and

similar

arrangements

on

normal

commercial

terms

where

the

counterparty

to

the

arrangement

is

a

structured

entity.

Due

to

the

nature

of

these

arrangements,

especially

the

transfer

of

collateral

and

ongoing

margining,

the

Group

has

minimal

exposure

to

the

performance

of

the

structured

entity

counterparty.

This

includes

margin

lending

which

is

presented

under

financial

assets

at

fair

value

through

the

income

statement

to

align

to

the

balance

sheet

presentation.

Short-term

traded

interests

The

Group

buys

and

sells

interests

in

structured

entities

as

part

of

its

trading

activities,

for

example,

retail

mortgage-backed

securities,

collateralised

debt

obligations

and

similar

interests.

Such

interests

are

typically

held

individually

or

as

part

of

a

larger

portfolio

for

no

more

than

90

days.

In

such

cases,

the

Group

typically

has

no

other

involvement

with

the

structured

entity

other

than

the

securities

it

holds

as

part

of

trading

activities

and

its

maximum

exposure

to

loss

is

restricted

to

the

carrying

value

of

the

asset.

As

at

31

December

2020,

£10,682m

(2019:

£8,903m)

of

the

Group’s

£11,361m

(2019:

£9,585m)

short-term

traded

interests

were

comprised

of

debt

securities

issued

by

asset

securitisation

vehicles.

Traded

derivatives

The

Group

enters

into

a

variety

of

derivative

contracts

with

structured

entities

which

reference

market

risk

variables

such

as

interest

rates,

foreign

exchange

rates

and

credit

indices

among

other

things.

The

main

derivative

types

which

are

considered

interests

in

structured

entities

include

index-based

and

entity

specific

credit

default

swaps,

balance

guaranteed

swaps,

total

return

swaps,

commodities

swaps,

and

equity

swaps.

A

description

of

the

types

of

derivatives

and

the

risk

management

practices

are

detailed

in

Note

14.

The

risk

of

loss

may

be

mitigated

through

ongoing

margining

requirements

as

well

as

a

right

to

cash

flows

from

the

structured

entity

which

are

senior

in

the

payment

waterfall.

Such

margining

requirements

are

consistent

with

market

practice

for

many

derivative

arrangements

and

in

line

with

the

Group’s

normal

credit

policies.

Derivative

transactions

require

the

counterparty

to

provide

cash

or

other

collateral

under

margining

agreements

to

mitigate

counterparty

credit

risk.

The

Group

is

mainly

exposed

to

settlement

risk

on

these

derivatives

which

is

mitigated

through

daily

margining.

Total

notional

contract

amounts

were

£153,894m

(2019:

£314,170m).

Except

for

credit

default

swaps

where

the

maximum

exposure

to

loss

is

the

swap

notional

amount,

it

is

not

possible

to

estimate

the

maximum

exposure

to

loss

in

respect

of

derivative

positions

as

the

fair

value

of

derivatives

is

subject

to

changes

in

market

rates

of

interest,

exchange

Notes

to

the

financial

statements

Scope

of

consolidation

292

Barclays

PLC

2020

Annual

Report

on

Form

20-F

rates

and

credit

indices

which

by

their

nature

are

uncertain.

In

addition,

the

Group’s

losses

would

be

subject

to

mitigating

action

under

its

traded

market

risk

and

credit

risk

policies

that

require

the

counterparty

to

provide

collateral

in

cash

or

other

assets

in

most

cases.

Other

interests

in

unconsolidated

structured

entities

The

Group’s

interests

in

structured

entities

not

held

for

the

purposes

of

short-term

trading

activities

are

set

out

below,

summarised

by

the

purpose

of

the

entities

and

limited

to

significant

categories,

based

on

maximum

exposure

to

loss.

Nature

of

interest

Multi-seller

conduit

programmes

Lending

Other

Total

£m

As

at

31

December

2020

Trading

portfolio

assets

-

Financial

assets

at

fair

value

through

the

income

statement

-

98

2,766

2,864

Financial

assets

at

fair

value

through

other

comprehensive

income

-

106

47

153

Loans

and

advances

at

amortised

cost

5,146

12,721

3,079

20,946

Other

assets

8

3

5

16

Total

on-balance

sheet

exposures

5,154

12,928

5,897

23,979

Total

off

-balance

sheet

notional

amounts

11,750

7,555

-

19,305

Maximum

exposure

to

loss

16,904

20,483

5,897

43,284

Total

assets

of

the

entity

87,004

159,804

36,083

282,891

As

at

31

December

2019

Trading

portfolio

assets

-

76

Financial

assets

at

fair

value

through

the

income

statement

-

159

2,500

2,659

Financial

assets

at

fair

value

through

other

comprehensive

income

-

391

Loans

and

advances

at

amortised

cost

5,930

8,132

4,999

19,061

Other

assets

17

4

7

28

Total

on-balance

sheet

exposures

5,947

8,295

7,973

22,215

Total

off

-balance

sheet

notional

amounts

8,649

3,751

1,621

14,021

Maximum

exposure

to

loss

14,596

12,046

9,594

36,236

Total

assets

of

the

entity

78,716

145,181

34,099

257,996

Maximum

exposure

to

loss

Unless

specified

otherwise

below,

the

Group’s

maximum

exposure

to

loss

is

the

total

of

its

on-balance

sheet

positions

and

its

off-balance

sheet

arrangements,

being

loan

commitments

and

financial

guarantees.

Exposure

to

loss

is

mitigated

through

collateral,

financial

guarantees,

the

availability

of

netting

and

credit

protection

held.

Multi-seller

conduit

programme

The

multi-seller

conduit

engages

in

providing

financing

to

various

clients

and

holds

whole

or

partial

interests

in

pools

of

receivables

or

similar

obligations.

These

instruments

are

protected

from

loss

through

overcollateralisation,

seller

guarantees,

or

other

credit

enhancements

provided

to

the

conduit.

The

Group’s

off-balance

sheet

exposure

included

in

the

table

above

represents

liquidity

facilities

that

are

provided

to

the

conduit

for

the

benefit

of

the

holders

of

the

commercial

paper

issued

by

the

conduit

and

will

only

be

drawn

where

the

conduit

is

unable

to

access

the

commercial

paper

market.

If

these

liquidity

facilities

are

drawn,

the

Group

is

protected

from

loss

through

overcollateralisation,

seller

guarantees,

or

other

credit

enhancements

provided

to

the

conduit.

Lending

The

portfolio

includes

lending

provided

by

the

Group

to

unconsolidated

structured

entities

in

the

normal

course

of

its

lending

business

to

earn

income

in

the

form

of

interest

and

lending

fees

and

includes

loans

to

structured

entities

that

are

generally

collateralised

by

property,

equipment

or

other

assets.

All

loans

are

subject

to

the

Group’s

credit

sanctioning

process.

Collateral

arrangements

are

specific

to

the

circumstances

of

each

loan

with

additional

guarantees

and

collateral

sought

from

the

sponsor

of

the

structured

entity

for

certain

arrangements.

During

the

period

the

Group

incurred

an

impairment

of

£23m

(2019:

£7m)

against

such

facilities.

Other

This

includes

fair

value

loans

with

structured

entities

where

the

market

risk

is

materially

hedged

with

corresponding

derivative

contracts,

interests

in

debt

securities

issued

by

securitisation

vehicles

and

drawn

and

undrawn

loan

facilities

to

these

entities.

In

addition,

other

includes

investment

funds

with

interests

restricted

to

management

fees

based

on

performance

of

the

fund

and

trusts

held

on

behalf

of

beneficiaries

with

interests

restricted

to

unpaid

fees.

Assets

transferred

to

sponsored

unconsolidated

structured

entities

Assets

transferred

to

sponsored

unconsolidated

structured

entities

were

£730m

(2019:

£471m).

Notes

to

the

financial

statements

Scope

of

consolidation

293

Barclays

PLC

2020

Annual

Report

on

Form

20-F

36

Investments

in

associates

and

joint

ventures

Accounting

for

associates

and

joint

ventures

The

Group

applies

IAS

28

Investments

in

Associates

and

IFRS

11

Joint

Arrangements

.

Associates

are

entities

in

which

the

Group

has

significant

influence,

but

not

control,

over

the

operating

and

financial

policies.

Generally

the

Group

holds

more

than

20%,

but

less

than

50%,

of

their

voting

shares.

Joint

ventures

are

arrangements

where

the

Group

has

joint

control

and

rights

to

the

net

assets

of

the

entity.

The

Group’s

investments

in

associates

and

joint

ventures

are

initially

recorded

at

cost

and

increased

(or

decreased)

each

year

by

the

Group’s

share

of

the

post

acquisition

profit/(loss).

The

Group

ceases

to

recognise

its

share

of

the

losses

of

equity

accounted

associates

when

its

share

of

the

net

assets

and

amounts

due

from

the

entity

have

been

written

off

in

full,

unless

it

has

a

contractual

or

constructive

obligation

to

make

good

its

share

of

the

losses.

In

some

cases,

investments

in

these

entities

may

be

held

at

fair

value

through

profit

or

loss,

for

example,

those

held

by

private

equity

businesses.

There

are

no

individually

significant

investments

in

joint

ventures

or

associates

held

by

the

Group.

2020

2019

Associates

Joint

ventures

Total

Associates

Joint

ventures

Total

£m

Equity

accounted

464

317

781

457

264

721

Held

at

fair

value

through

profit

or

loss

-

437

-

516

Total

464

754

1,218

457

780

1,237

Summarised

financial

information

for

the

Group’s

equity

accounted

associates

and

joint

ventures

is

set

out

below.

The

amounts

shown

are

the

Group’s

share

of

the

net

income

of

the

investees

for

the

year

ended

31

December

2020,

with

the

exception

of

certain

undertakings

for

which

the

amounts

are

based

on

accounts

made

up

to

dates

not

earlier

than

three

months

before

the

balance

sheet

date.

Associates

Joint

ventures

2020

2019

2020

2019

£m

Profit/(loss)

from

continuing

operations

(24)

10

24

43

Other

comprehensive

income/(expense)

(3)

-

(6)

2

Total

comprehensive

income/(loss)

from

continuing

operations

(27)

10

18

45

Unrecognised

shares

of

the

losses

of

individually

immaterial

associates

and

joint

ventures

were

£nil

(2019:

£nil).

The

Barclays

commitments

and

contingencies

to

its

associates

and

joint

ventures

comprised

unutilised

credit

facilities

provided

to

customers

of

£1,897m

(2019:

£1,726m).

In

addition,

the

Group

has

made

commitments

to

finance

or

otherwise

provide

resources

to

its

joint

ventures

and

associates

of

£443m

(2019:

£403m).

37

Securitisations

Accounting

for

securitisations

The

Group

uses

securitisations

as

a

source

of

finance

and

a

means

of

risk

transfer.

Such

transactions

generally

result

in

the

transfer

of

contractual

cash

flows

from

portfolios

of

financial

assets

to

holders

of

issued

debt

securities.

Securitisations

may,

depending

on

the

individual

arrangement,

result

in

continued

recognition

of

the

securitised

assets

and

the

recognition

of

the

debt

securities

issued

in

the

transaction;

lead

to

partial

continued

recognition

of

the

assets

to

the

extent

of

the

Group’s

continuing

involvement

in

those

assets

or

lead

to

derecognition

of

the

assets

and

the

separate

recognition,

as

assets

or

liabilities,

of

any

rights

and

obligations

created

or

retained

in

the

transfer.

Full

derecognition

only

occurs

when

the

Group

transfers

both

its

contractual

right

to

receive

cash

flows

from

the

financial

assets,

or

retains

the

contractual

rights

to

receive

the

cash

flows,

but

assumes

a

contractual

obligation

to

pay

the

cash

flows

to

another

party

without

material

delay

or

reinvestment,

and

also

transfers

substantially

all

the

risks

and

rewards

of

ownership,

including

credit

risk,

prepayment

risk

and

interest

rate

risk.

In

the

course

of

its

normal

banking

activities,

the

Group

makes

transfers

of

financial

assets,

either

where

legal

rights

to

the

cash

flows

from

the

asset

are

passed

to

the

counterparty

or

beneficially,

where

the

Group

retains

the

rights

to

the

cash

flows

but

assumes

a

responsibility

to

transfer

them

to

the

counterparty.

Depending

on

the

nature

of

the

transaction,

this

may

result

in

derecognition

of

the

assets

in

their

entirety,

partial

derecognition

or

no

derecognition

of

the

assets

subject

to

the

transfer.

A

summary

of

the

main

transactions,

and

the

assets

and

liabilities

and

the

financial

risks

arising

from

these

transactions,

is

set

out

below:

Transfers

of

financial

assets

that

do

not

result

in

derecognition

Securitisations

The

Group

was

party

to

securitisation

transactions

involving

its

credit

card

balances

and

other

personal

lending.

In

these

transactions,

the

assets,

interests

in

the

assets,

or

beneficial

interests

in

the

cash

flows

arising

from

the

assets,

are

transferred

to

a

special

purpose

entity,

which

then

issues

interest

bearing

debt

securities

to

third

party

investors.

Securitisations

may,

depending

on

the

individual

arrangement,

result

in

continued

recognition

of

the

securitised

assets

and

the

recognition

of

the

debt

securities

issued

in

the

transaction.

Partial

continued

recognition

of

the

assets

to

the

extent

of

the

Group’s

continuing

involvement

in

those

assets

can

also

occur

or

derecognition

of

the

assets

and

the

separate

recognition,

as

assets

or

liabilities,

of

any

rights

and

obligations

created

or

retained

in

the

transfer.

The

following

table

shows

the

carrying

amount

of

securitised

assets

that

have

not

resulted

in

full

derecognition,

together

with

the

associated

liabilities,

for

each

category

of

asset

on

the

balance

sheet:

Notes

to

the

financial

statements

Scope

of

consolidation

294

Barclays

PLC

2020

Annual

Report

on

Form

20-F

2020

2019

Assets

Liabilities

Assets

Liabilities

Carrying

amount

Fair

value

Carrying

amount

Fair

value

Carrying

amount

Fair

value

Carrying

amount

Fair

value

£m

Loans

and

advances

at

amortised

cost

Credit

cards,

unsecured

and

other

retail

lending

1,033

1,121

(1,019)

(1,033)

3,516

3,678

(2,918)

(2,922)

Balances

included

within

loans

and

advances

at

amortised

cost

represent

securitisations

where

substantially

all

the

risks

and

rewards

of

the

asset

have

been

retained

by

the

Group.

The

relationship

between

the

transferred

assets

and

the

associated

liabilities

is

that

holders

of

notes

may

only

look

to

cash

flows

from

the

securitised

assets

for

payments

of

principal

and

interest

due

to

them

under

the

terms

of

their

notes,

although

the

contractual

terms

of

their

notes

may

be

different

to

the

maturity

and

interest

of

the

transferred

assets.

For

transfers

of

assets

in

relation

to

repurchase

agreements,

refer

to

Note

38.

Continuing

involvement

in

financial

assets

that

have

been

derecognised

In

some

cases,

the

Group

may

have

transferred

a

financial

asset

in

its

entirety

but

may

have

continuing

involvement

in

it.

This

arises

in

asset

securitisations

where

loans

and

asset

backed

securities

were

derecognised

as

a

result

of

the

Group’s

involvement

with

asset

backed

securities,

residential

mortgage

backed

securities

and

commercial

mortgage

backed

securities.

Continuing

involvement

largely

arises

from

providing

financing

into

these

structures

in

the

form

of

retained

notes,

which

do

not

bear

first

losses.

The

table

below

shows

the

potential

financial

implications

of

such

continuing

involvement:

Continuing

involvement

a

Gain/(loss)

from

continuing

involvement

Carrying

amount

Fair

value

Maximum

exposure

to

loss

For

the

year

ended

Cumulative

to

31

December

Type

of

transfer

£m

2020

Asset

backed

securities

56

1

Residential

mortgage

backed

securities

49

1

Commercial

mortgage

backed

securities

243

237

243

2

6

Total

348

342

348

4

8

2019

Commercial

mortgage

backed

securities

189

188

189

1

4

Total

189

188

189

1

4

Note

a

Assets

which

represent

the

Group’s

continuing

involvement

in

derecognised

assets

are

recorded

in

Loans

and

advances

at

amortised

cost

and

Debt

securities

at

FVTP&L.

38

Assets

pledged,

collateral

received

and

assets

transferred

Assets

are

pledged

or

transferred

as

collateral

to

secure

liabilities

under

repurchase

agreements,

securitisations

and

stock

lending

agreements

or

as

security

deposits

relating

to

derivatives.

Assets

transferred

are

non-cash

assets

transferred

to

a

third

party

that

do

not

qualify

for

derecognition

from

the

Group

balance

sheet,

for

example

because

Barclays

retains

substantially

all

the

exposure

to

those

assets

under

an

agreement

to

repurchase

them

in

the

future

for

a

fixed

price.

Assets

pledged

or

transferred

as

collateral

include

all

assets

categorised

as

encumbered

in

the

disclosure

on

pages

222

to

223

of

the

Barclays

PLC

Pillar

3

Report

2020

(unaudited),

other

than

those

held

in

commercial

paper

conduits.

In

these

transactions,

the

Group

will

be

required

to

step

in

to

provide

financing

itself

under

a

liquidity

facility

if

the

vehicle

cannot

access

the

commercial

paper

market.

Where

non-cash

assets

are

pledged

or

transferred

as

collateral

for

cash

received,

the

asset

continues

to

be

recognised

in

full,

and

a

is

also

recognised

on

the

balance

sheet.

Where

non-cash

assets

are

pledged

or

transferred

as

collateral

in

an

exchange

for

non-cash

assets,

the

transferred

asset

continues

to

be

recognised

in

full,

and

there

is

no

associated

liability

as

the

non-cash

collateral

received

is

not

recognised

on

the

balance

sheet.

The

Group

is

unable

to

use,

sell

or

pledge

the

transferred

assets

for

the

duration

of

the

transaction

and

remains

exposed

to

interest

rate

risk

and

credit

risk

on

these

pledged

assets.

Unless

stated,

the

counterparty's

recourse

is

not

limited

to

the

transferred

assets.

The

following

table

summarises

the

nature

and

carrying

amount

of

the

assets

pledged

as

security

against

these

liabilities:

Notes

to

the

financial

statements

Scope

of

consolidation

295

Barclays

PLC

2020

Annual

Report

on

Form

20-F

2020

2019

£m

Cash

collateral

and

settlements

72,042

64,400

Loans

and

advances

at

amortised

cost

37,257

39,354

Trading

portfolio

assets

77,198

65,532

Financial

assets

at

fair

value

through

the

income

statement

5,584

10,104

Financial

assets

at

fair

value

through

other

comprehensive

income

22,185

9,278

Assets

pledged

214,266

188,668

The

following

table

summarises

the

transferred

financial

assets

and

the

associated

liabilities:

Transferred

assets

Associated

liabilities

£m

At

31

December

2020

Derivatives

77,574

(77,574)

Repurchase

agreements

65,673

(44,076)

Securities

lending

arrangements

61,183

-

Other

9,836

(7,408)

214,266

(129,058)

At

31

December

2019

Derivatives

68,609

(68,609)

Repurchase

agreements

52,840

(35,708)

Securities

lending

arrangements

49,106

-

Other

18,113

(12,005)

188,668

(116,322)

Included

within

Other

are

agreements

where

a

counterparty's

recourse

is

limited

to

the

transferred

assets.

The

relationship

between

the

transferred

assets

and

the

associated

liabilities

is

that

holders

of

notes

may

only

look

to

cash

flows

from

the

securitised

assets

for

payments

of

principal

and

interest

due

to

them

under

the

terms

of

their

notes.

Carrying

value

Fair

value

Transferred

assets

Associated

liabilities

Transferred

assets

Associated

liabilities

Net

position

£m

2020

Recourse

to

transferred

assets

only

1,033

(1,019)

1,121

(1,033)

88

2019

Recourse

to

transferred

assets

only

3,516

(2,918)

3,678

(2,922)

756

The

Group

has

an

additional

£6.3bn

(2019:

£12bn)

of

loans

and

advances

within

its

asset

backed

funding

programmes

that

can

readily

be

used

to

raise

additional

secured

funding

and

are

available

to

support

future

issuances.

Total

assets

pledged

includes

a

collateral

pool

put

in

place

to

provide

security

for

the

UKRF

funding

deficit.

Refer

to

Note

33

for

further

details.

Collateral

held

as

security

for

assets

Under

certain

transactions,

including

reverse

repurchase

agreements

and

stock

borrowing

transactions,

the

Group

is

allowed

to

resell

or

re-

pledge

the

collateral

held.

The

fair

value

at

the

balance

sheet

date

of

collateral

accepted

and

re-pledged

or

transferred

to

others

was

as

follows:

2020

2019

£m

Fair

value

of

securities

accepted

as

collateral

793,573

656,598

Of

which

fair

value

of

securities

re-pledged/transferred

to

others

685,300

554,988

Additional

disclosure

has

been

included

in

collateral

and

other

credit

enhancements

in

the

Risk

review

section.

Assets

pledged

as

collateral

include

all

assets

categorised

as

encumbered

in

the

disclosure

on

pages

222

to

223

of

the

Barclays

PLC

Pillar

3

Report

2020

(unaudited).

Notes

to

the

financial

statements

Other

disclosure

matters

296

Barclays

PLC

2020

Annual

Report

on

Form

20-F

The

notes

included

in

this

section

focus

on

transactions,

Auditors’

remuneration

and

Directors’

remuneration.

include

any

subsidiaries,

associates,

joint

ventures

and

Key

Management

Personnel.

39

transactions

and

Directors’

remuneration

transactions

Parties

are

considered

to

be

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

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

entity

are

as

follows:

Associates

Joint

ventures

Pension

funds

£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

-

75

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

As

at

1

January

7.2

Loans

issued

during

the

year

a

2.3

4.8

Loan

repayments

during

the

year

b

(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).

Notes

to

the

financial

statements

Other

disclosure

matters

297

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Deposits

outstanding

2020

2019

£m

As

at

1

January

12.1

6.9

Deposits

received

during

the

year

a

41.6

36.0

Deposits

repaid

during

the

year

b

(43.3)

(30.8)

As

at

31

December

10.4

12.1

Notes

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

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

Aggregate

emoluments

a

8.4

8.5

Amounts

paid

under

LTIPs

b

-

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

tabl

e

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

Notes

to

the

financial

statements

Other

disclosure

matters

298

Barclays

PLC

2020

Annual

Report

on

Form

20-F

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).

40

Auditor’s

remuneration

Auditor’s

remuneration

is

included

within

consultancy,

legal

and

professional

fees

in

administration

and

general

expenses

and

comprises:

2020

2019

2018

£m

Audit

of

the

Barclays

Group's

annual

accounts

9

10

8

Other

services:

Audit

of

the

Company's

subsidiaries

a

38

35

32

Other

audit

b

10

9

Other

services

2

Total

Auditor's

remuneration

59

56

51

Notes

a

Comprises

the

fees

for

the

statutory

audit

of

subsidiaries

both

inside

and

outside

the

UK

and

fees

for

work

performed

by

associates

of

KPMG

in

respect

of

the

consolidated

financial

statements

of

the

Company.

b

Comprises

services

in

relation

to

statutory

and

regulatory

filings.

These

include

audit

services

for

the

review

of

the

interim

financial

information

under

the

Listing

Rules

of

the

UK

listing

authority.

Under

SEC

regulations,

the

remuneration

of

our

auditors

is

required

to

be

presented

as

follows:

audit

fees

£52m

(2019:

£50m,

2018:

£45m),

audit-related

fees

£6m

(2019:

£5m,

2018:

£5m),

tax

fees

£nil

(2019:

£nil,

2018:

£nil),

and

all

other

fees

£1m

(2019:

£1m,

2018:

£1m).

Notes

to

the

financial

statements

Other

disclosure

matters

299

Barclays

PLC

2020

Annual

Report

on

Form

20-F

41

Interest

rate

benchmark

reform

Following

the

financial

crisis,

the

reform

and

replacement

of

benchmark

interest

rates

such

as

IBOR

has

become

a

priority

for

global

regulators.

The

UK’s

Financial

Conduct

Authority

(FCA)

and

other

global

regulators

have

instructed

market

participants

to

prepare

for

the

cessation

of

LIBOR

after

the

end

of

2021,

and

to

adopt

“near

Risk-Free

Rates”

(RFRs).

While

it

is

expected

that

most

reforms

affecting

the

Group

will

be

completed

by

the

end

of

2021,

consultations

and

possible

regulatory

changes

are

in

progress.

This

may

mean

that

some

LIBORs

continue

to

be

published

beyond

that

date.

The

Group’s

risk

exposure

is

predominately

to

GBP,

USD,

JPY

and

CHF

LIBOR

and

Euro

Overnight

Index

Average

(EONIA)

with

the

vast

majority

concentrated

in

derivatives

within

the

Corporate

and

Investment

Bank.

Some

additional

exposure

resides

on

floating

rate

loans

and

advances,

repurchase

agreements

and

debt

securities

held

and

issued

within

the

Corporate

and

Investment

Bank.

Retail

lending

and

mortgage

exposure

in

Barclays

UK

is

minimal.

The

Group

does

not

consider

there

to

be

risk

in

respect

of

the

Euro

Interbank

Offered

Rate

(EURIBOR)

arising

from

IBOR

reform

as

at

31

December

2020.

This

is

because

the

calculation

methodology

of

EURIBOR

changed

during

2019

and

the

reform

of

EURIBOR

is

complete.

In

July

2019,

the

Belgian

Financial

Services

and

Markets

Authority

(as

the

administrator

of

EURIBOR)

granted

authorisation

with

respect

to

EURIBOR

under

the

European

Union

Benchmarks

Regulation.

This

allows

market

participants

to

continue

to

use

EURIBOR

after

1

January

2021

for

both

existing

and

new

contracts.

The

EUR

Risk

Free

Rate

Working

Group

has

not

contemplated

the

cessation

of

EURIBOR.

The

Group

expects

that

EURIBOR

will

continue

to

exist

as

a

benchmark

rate

for

the

foreseeable

future.

There

are

key

differences

between

IBORs

and

RFRs.

IBORs

are

‘term

rates’,

which

means

that

they

are

published

for

a

borrowing

period

(for

example

three

months),

and

they

are

‘forward-looking’,

because

they

are

published

at

the

beginning

of

a

borrowing

period,

based

upon

an

estimated

inter-bank

borrowing

cost

for

the

period.

RFRs

are

based

upon

overnight

rates

from

actual

transactions,

and

are

therefore

published

after

the

end

of

the

overnight

borrowing

period.

Furthermore,

IBORs

include

a

credit

spread

over

the

RFRs.

Therefore,

to

transition

existing

contracts

and

agreements

to

RFRs,

adjustments

for

term

and

credit

differences

may

need

to

be

applied

to

RFR-linked

rates.

The

methodologies

for

determining

these

adjustments

are

undergoing

in-depth

consultations

by

industry

working

groups,

on

behalf

of

the

respective

global

regulators

and

participants.

How

the

Group

is

managing

the

transition

to

alternative

benchmark

rates

Barclays

has

established

a

Group-wide

LIBOR

Transition

Programme,

with

oversight

from

the

Group

Finance

Director.

The

Programme

spans

all

business

lines

and

has

cross-functional

governance

which

includes

Legal,

Conduct

Risk,

Client

Engagement

and

Communications,

Risk,

and

Finance.

The

Transition

Programme

aims

to

drive

strategic

execution,

and

identify,

manage

and

resolve

key

risks

and

issues

as

they

arise.

Accountable

Executives

are

in

place

within

key

working

groups

across

businesses

and

workstreams.

Barclays’

transition

plans

primarily

focus

on

G5

currencies

while

providing

quarterly

updates

on

progress

and

exposures

to

the

PRA/FCA

and

other

regulators

as

required.

The

Transition

Programme

follows

a

risk

based

approach,

using

recognised

‘change

delivery’

control

standards,

to

drive

strategic

execution,

and

identify,

manage

and

resolve

key

risks

and

issues

as

they

arise.

Accountable

Executives

are

in

place

within

key

working

groups,

with

overall

Board

oversight

delegated

to

the

Board

Risk

Committee

and

the

Group

Finance

Director.

Barclays

performs

a

prominent

stewardship

role

to

drive

orderly

transition

via

our

representation

on

official

sector

and

industry

working

groups

across

all

major

jurisdictions

and

product

classes.

Additionally,

the

Group

Finance

Director

is

Chair

of

the

UK’s

‘Working

Group

on

Sterling

Risk-Free

Reference

Rates’,

whose

m

andate

is

to

catalyse

a

broad-based

transition

to

using

SONIA

(‘Sterling

Overnight

Index

Average’)

as

the

primary

sterling

interest

rate

benchmark

in

bond,

loan

and

derivatives

markets.

Approaches

to

transition

exposure

expiring

post

the

expected

end

dates

for

LIBOR

vary

by

product

and

nature

of

counterparty.

The

Group

is

actively

engaging

with

the

counterparties

to

transition

or

include

appropriate

fallback

provisions

and

transition

mechanisms

in

its

floating

rate

assets

and

liabilities

with

maturities

after

2021,

when

most

IBORs

are

expected

to

cease

to

be

published.

For

the

derivative

population,

adherence

to

the

ISDA

IBOR

Fallbacks

Protocol

now

provides

Barclays

with

an

efficient

mechanism

to

amend

outstanding

trades

to

incorporate

fallbacks.

Beyond

the

ISDA

IBOR

Fallbacks

Protocol,

there

will

be

options

to

terminate

or

bilaterally

agree

new

terms

with

counterparties.

Barclays

expects

derivative

contracts

facing

central

clearing

counterparties

to

follow

a

market-wide,

standardised

approach

to

reform.

Market

participants

are

currently

awaiting

publication

of

the

results

of

ICE

Benchmark

Administration’s

consultation

on

plans

to

cease

publication

of

most

LIBORs

at

end

2021,

with

certain,

actively

used

USD

LIBOR

tenors

continuing

to

be

provided

until

end

June

2023.

The

FCA

expects

to

enable

publication

of

a

synthetic

LIBOR

rate

for

at

least

certain

actively

used

GBP

LIBOR

tenors

to

facilitate

roll-off

of

relevant

contracts

that

cannot

be

actively

transitioned

by

end

2021.

Progress

made

during

2020

During

2020,

the

Group

has

successfully

delivered

Alternative

RFR

product

capabilities

and

alternatives

to

LIBOR

across

loans,

bonds

and

derivatives.

Good

progress

has

been

made

in

relation

to

client

outreach

and

we

have

been

actively

engaging

with

customers

and

counterparties

to

transition

or

include

the

appropriate

fallback

provisions.

The

Group

has

in

place

detailed

plans,

processes

and

procedures

to

support

the

transition

of

the

remainder

during

2021.

Barclays

has

adhered

to

the

ISDA

IBOR

Fallbacks

Protocol

for

its

major

derivative

dealing

entities

and

we

continue

to

track

progress

and

engage

with

clients

on

their

own

adherence.

Following

the

progress

made

during

2020,

the

Group

continues

to

deliver

technology

and

business

process

changes

to

ensure

operational

readiness

in

preparation

for

LIBOR

cessation

and

transitions

to

RFRs

that

will

be

necessary

during

2021

in

line

with

official

sector

expectations

and

milestones.

Risks

to

which

the

Group

is

exposed

as

a

result

of

the

transition

IBOR

reform

exposes

the

Group

to

various

risks,

which

are

being

managed

through

the

LIBOR

Transition

Programme.

The

material

risks

identified

include

those

set

out

below:

◾

Conduct

and

Litigation

Risk:

This

is

the

risk

that

poor

customer

outcomes

are

brought

about

as

a

direct

result

of

inappropriate

or

negligent

conduct

on

the

part

of

Barclays,

in

connection

with

IBOR

transition.

◾

Operational

Risk

:

The

LIBOR

Transition

Programme

cuts

across

all

businesses

and

functions.

There

are

a

number

of

implementation

challenges

arising

from

transition,

including

technology,

operations,

client

communication

and

the

measurement

of

valuation,

giving

rise

to

additional

operational

risks.

◾

Market

Risk:

Changes

to

Barclays

Market

Risk

profile

are

expected

due

to

IBOR

transition.

These

changes

are

expected

to

be

managed

within

risk

appetite.

IBOR

transition

will

also

impact

the

basis

risk

profile

both

at

the

cessation

event

(when

broadly

all

LIBOR

contracts

fall

back

to

alternatives)

as

well

as

in

the

interim

period

when

alternative

rates

are

referenced

in

contracts.

Notes

to

the

financial

statements

Other

disclosure

matters

300

Barclays

PLC

2020

Annual

Report

on

Form

20-F

◾

Counterparty

Credit

Risk:

LIBOR

replacement

presents

an

increased

risk

of

clients

wishing

to

renegotiate

the

terms

of

existing

transactions.

This

is

dependent

on

client

behaviour

and

the

outcome

of

resulting

negotiations

and

could

change

the

credit

risk

profile

of

client

exposure.

◾

Financial

Risk:

There

is

a

risk

to

Barclays

and

its

clients

that

markets

are

disrupted

due

to

IBOR

reform.

This

could

give

rise

to

financial

losses

should

Barclays

be

unable

to

operate

effectively

in

financial

markets.

◾

Accounting

Risk:

This

would

occur

if

the

hedged

items

and

hedging

instruments

of

Barclays

hedging

relationships

were

to

transition

away

from

IBORs:

at

different

times;

to

different

benchmarks;

or

using

divergent

methodologies

resulting

in

significant

volatility

to

the

income

statement

either

through

hedge

accounting

ineffectiveness

or

failure

of

the

hedge

accounting

relationships.

A

disorderly

cessation

of

LIBOR

would

carry

substantial

economic,

legal,

regulatory,

reputational

and

operational

risks

for

Barclays

and

the

industry

in

general.

Barclays’

expectation

is

that

the

transition

away

from

LIBOR

will

be

carefully

managed

and

that

measures

including

the

broad

adoption

of

ISDA

IBOR

Fallbacks

Protocol,

the

approach

the

Central

Clearing

Counterparties

are

expected

to

follow,

proactive

client

engagement,

regulatory

action

and/or

terminating

or

bilaterally

amending

contracts

where

clients

do

not

wish

to

adopt

new

conventions

(e.g.

ISDA

IBOR

Fallbacks

Protocol),

can

mitigate

the

risks

associated

with

a

disorderly

cessation.

The

Group

does

not

expect

material

changes

to

its

risk

management

approach

and

strategy

as

a

result

of

interest

rate

benchmark

reform.

The

following

table

summarises

the

significant

exposures

impacted

by

interest

rate

benchmark

reform

as

at

31

December

2020:

GBP

LIBOR

USD

LIBOR

JPY

LIBOR

CHF

LIBOR

Others

Total

£m

Non-derivative

financial

assets

Loans

and

advances

at

amortised

cost

30,179

18,109

173

18

1,725

50,204

Reverse

repurchase

agreements

and

other

similar

secured

lending

-

334

-

334

Financial

assets

at

fair

value

through

the

income

statement

3,496

6,373

-

283

209

10,361

Financial

assets

at

fair

value

through

other

comprehensive

income

186

114

-

8

308

Non-derivative

financial

assets

33,861

24,930

173

301

1,942

61,207

Non-derivative

financial

liabilities

Debt

securities

in

issue

(1,023)

(10,718)

(1,201)

-

(12,942)

Subordinated

liabilities

(71)

(1,592)

-

(1,663)

Financial

liabilities

designated

at

fair

value

(149)

(1,273)

(759)

-

(139)

(2,320)

Non-derivative

financial

liabilities

(1,243)

(13,583)

(1,960)

-

(139)

(16,925)

Standby

facilities,

credit

lines

and

other

commitments

18,944

74,011

-

74

15,951

108,980

The

table

above

represents

the

exposures

to

interest

rate

benchmark

reform

by

balance

sheet

account,

which

have

yet

to

transition.

The

exposure

disclosed

is

for

positions

with

contractual

maturities

after

31

December

2021.

Balances

reported

at

amortised

cost

are

disclosed

at

their

gross

carrying

value

and

do

not

include

any

expected

credit

losses

that

may

be

held

against

them.

Balances

reported

at

fair

value

are

disclosed

at

their

fair

value

on

the

balance

sheet

date.

The

Group

also

has

exposure

to

interest

rate

benchmark

reform

in

respect

of

its

cash

collateral

balances

across

some

of

its

Credit

Support

Annex

agreements,

predominantly

in

EONIA.

This

exposure

is

not

included

within

the

table

above

due

to

its

short

dated

nature.

GBP

LIBOR

USD

LIBOR

EONIA

JPY

LIBOR

CHF

LIBOR

Others

Total

£m

Derivative

notional

contract

amount

OTC

interest

rate

derivatives

592,827

2,832,802

457,844

754,206

25,681

41,782

4,705,142

OTC

interest

rate

derivatives

-

cleared

by

central

counterparty

1,684,553

2,891,029

638,202

1,091,479

119,382

198,113

6,622,758

Exchange

traded

interest

rate

derivatives

300,182

333,705

-

2,494

-

636,381

OTC

foreign

exchange

derivatives

155,285

589,334

-

93,108

31,257

1,921

870,905

OTC

equity

and

stock

index

derivatives

1,845

7,946

544

1,929

491

2,141

14,896

Derivative

notional

contract

amount

2,734,692

6,654,816

1,096,590

1,940,722

179,305

243,957

12,850,082

The

table

above

represents

the

derivative

exposures

to

interest

rate

benchmark

reform,

which

have

yet

to

transition.

The

exposure

disclosed

is

for

positions

with

contractual

maturities

after

31

December

2021.

Derivatives

are

reported

by

using

the

notional

contract

amount

and

where

derivatives

have

both

pay

and

receive

legs

with

exposure

to

benchmark

reform

such

as

cross

currency

swaps,

the

notional

contract

amount

is

disclosed

for

both

legs.

As

at

31

December

2020,

there

were

£264bn

of

cross

currency

swaps

where

both

the

pay

and

receive

legs

are

impacted

by

interest

rate

benchmark

reform.

The

Group

also

had

£28bn

of

Barclays

issued

debt

retained

by

the

group,

impacted

by

the

interest

rate

benchmark

reform,

predominately

in

GBP

and

USD

LIBOR.

Notes

to

the

financial

statements

Other

disclosure

matters

301

Barclays

PLC

2020

Annual

Report

on

Form

20-F

The

table

below

provides

detail

on

the

contractual

maturity

of

the

above

exposures:

Over

one

year

but

not

more

than

two

years

Over

two

years

but

not

more

than

five

years

Over

five

years

but

not

more

than

ten

years

Over

ten

years

Total

Current

benchmark

rate

£m

Non-derivative

financial

assets

GBP

LIBOR

4,771

11,309

2,409

15,372

33,861

USD

LIBOR

8,389

14,654

1,715

172

24,930

JPY

LIBOR

11

144

-

18

173

CHF

LIBOR

22

73

90

116

301

Other

931

713

60

238

1,942

Non-derivative

financial

assets

14,124

26,893

4,274

15,916

61,207

Non-derivative

financial

liabilities

GBP

LIBOR

(1,055)

(116)

-

(72)

(1,243)

USD

LIBOR

(5,529)

(3,623)

(4,174)

(257)

(13,583)

JPY

LIBOR

(1,289)

(145)

(241)

(285)

(1,960)

CHF

LIBOR

-

Other

(12)

(5)

-

(122)

(139)

Non-derivative

financial

liabilities

(7,885)

(3,889)

(4,415)

(736)

(16,925)

Equity

GBP

LIBOR

-

(3,500)

USD

LIBOR

-

(3,131)

Equity

-

(6,631)

Derivative

notional

contract

amount

GBP

LIBOR

890,497

767,769

491,063

585,363

2,734,692

USD

LIBOR

2,020,529

2,572,716

1,350,762

710,809

6,654,816

EONIA

397,989

421,460

212,185

64,956

1,096,590

JPY

LIBOR

327,669

582,200

731,942

298,911

1,940,722

CHF

LIBOR

46,868

73,792

46,010

12,635

179,305

Other

50,775

96,657

72,127

24,398

243,957

Derivative

notional

contract

amount

3,734,327

4,514,594

2,904,089

1,697,072

12,850,082

Standby

facilities,

credit

lines

and

other

commitments

GBP

LIBOR

5,134

12,016

505

1,289

18,944

USD

LIBOR

15,368

56,300

735

1,608

74,011

CHF

LIBOR

-

74

-

74

Other

2,897

12,170

862

22

15,951

Standby

facilities,

credit

lines

and

other

commitments

23,399

80,560

2,102

2,919

108,980

42

Barclays

PLC

(the

Parent

company)

Total

income

Dividends

received

from

subsidiaries

Dividends

received

from

subsidiaries

of

£763m

(2019:

£1,560m,

2018:

£15,360m)

largely

relates

to

dividends

received

from

Barclays

Bank

PLC

£263m,

Barclays

Execution

Services

Limited

£250m

and

Barclays

Bank

UK

PLC

£220m.

The

dividends

received

in

2018

included

both

a

dividend

in

specie,

representing

the

transfer

of

the

holding

in

Barclays

Bank

UK

PLC

from

Barclays

Bank

PLC

to

Barclays

PLC,

and

ordinary

dividends

from

subsidiaries.

The

dividends

received

from

its

banking

subsidiaries

were

paid

up

to

Barclays

PLC

prior

to

the

announcement

made

by

the

PRA

on

31

March

2020

that

capital

be

preserved

for

use

in

serving

Barclays

customers

and

clients

through

the

extraordinary

challenges

presented

by

the

COVID-

19

pandemic.

As

part

of

a

response

to

this

announcement,

Barclays

PLC

took

steps

to

provide

additional

capital

to

its

banking

subsidiaries.

Further

detail

can

be

found

in

the

notes

below.

Other

income

Other

income

of

£1,192m

(2019:

£1,760m,

2018:

£923m)

includes

£857m

(2019:

£813m,

2018:

£752m)

of

income

received

from

gross

coupon

payments

on

Barclays

Bank

PLC

and

Barclays

Bank

UK

PLC

issued

AT1

securities

and

£248m

(2019:

£947m)

of

fair

value

and

foreign

exchange

losses

on

other

positions

with

subsidiaries.

Total

assets

and

liabilities

Investment

in

subsidiaries

The

investment

in

subsidiaries

of

£58,886m

(2019:

£59,546m)

predominantly

relates

to

investments

in

Barclays

Bank

PLC

of

£44,015m

(2019:

£42,363m)

and

Barclays

Bank

UK

PLC

of

£14,245m

(2019:

16,595m)

which

includes

holdings

of

their

AT1

securities

of

£10,995m

(2019:

Notes

to

the

financial

statements

Other

disclosure

matters

302

Barclays

PLC

2020

Annual

Report

on

Form

20-F

£10,843m).

The

decrease

of

£660m

during

the

year

was

predominantly

driven

by

a

£2,573m

impairment

in

the

cost

of

investment

of

Barclays

Bank

UK

PLC

and

the

redemption

of

AT1

holdings

of

€1,000m,

partially

offset

by

capital

contributions

to

Barclays

Bank

PLC

totaling

£1,500m

and

Barclays

Bank

UK

PLC

totaling

£220m,

as

well

as

additional

AT1

holdings

of

$1,500m

in

Barclays

Bank

PLC.

At

the

end

of

each

reporting

period

an

impairment

review

is

undertaken

in

respect

of

investment

in

the

ordinary

shares

of

subsidiaries.

Impairment

is

indicated

where

the

investment

exceeds

the

recoverable

amount.

The

recoverable

amount

is

calculated

as

a

value

in

use

(VIU)

which

is

derived

from

the

present

value

of

future

cash

flows

expected

to

be

received

from

the

investment.

The

VIU

calculations

use

forecast

attributable

profit

based

on

financial

budgets

approved

by

management,

covering

a

five

year

period

as

an

approximation

of

future

cash

flows

discounted

using

a

pre-tax

discount

rate

appropriate

to

the

subsidiary

being

tested.

A

terminal

growth

rate

has

then

been

applied

to

the

cash

flows

thereafter

which

is

based

upon

expectations

of

future

inflation

rates.

The

review

identified

an

impairment

in

the

investment

in

Barclays

Bank

UK

PLC

(see

below).

For

the

other

investment

in

subsidiaries

the

value

in

use

calculated

was

higher

than

the

carrying

value.

Impairment

in

subsidiaries

Due

to

the

impact

of

the

COVID-19

pandemic

on

the

macroeconomic

environment,

the

review

identified

impairment

of

the

investment

in

Barclays

Bank

UK

PLC

of

£2,573m,

reducing

its

carrying

value

to

£11,672

m.

The

VIU

calculation

uses

5-year

profit

before

tax

forecasts

based

on

the

formally

agreed

medium

term

plans

approved

by

the

Board

as

an

approximation

of

future

cash

flows.

The

Personal

Banking

cash

flows

specific

to

Barclays

Bank

UK

PLC

contained

in

the

calculation

have

been

extended

to

a

sixth

year

(prior

to

the

calculation

of

terminal

values)

to

reflect

an

observed

15bp

inflexion

point

in

the

yield

curve

which

was

beyond

the

period

of

the

medium

term

plan.

A

discount

rate

of

13.8%

(2019:

13.7%)

has

been

applied

to

the

cash

flow

forecast.

In

determining

the

discount

rate,

management

have

identified

a

cost

of

equity

associated

with

a

market

participant

that

closely

resemble

the

subsidiary

and

adjusted

for

tax

to

arrive

at

the

pre-tax

equivalent

rate.

A

terminal

growth

rate

of

2.0%

(2019:

1.6%)

has

been

used

to

calculate

a

terminal

value

for

the

investment.

In

prior

years

the

terminal

growth

rate

used

has

been

based

on

estimated

economic

growth

rates

(GDP).

Due

to

the

macroeconomic

uncertainties

management

now

consider

inflation

rates

to

provide

a

better

approximation

of

future

long

term

growth.

A

1%

increase

in

the

discount

rate

or

terminal

growth

rate

would

increase

the

impairment

amount

in

Barclays

Bank

UK

by

£1,056m

and

£714m

respectively.

A

reduction

in

the

forecasted

cash

flows

by

10%

per

annum

would

increase

impairment

by

£1,061m.

Loans

and

advances

in

subsidiaries

During

the

year,

loans

and

advances

to

subsidiaries

decreased

by

£4,140m

to

£24,710m

(2019:

£28,850m).

The

decrease

was

driven

by

the

maturity

of

£1,200m

dated

subordinated

loans

and

waiving

£1,000m

of

dated

subordinated

loans

in

relation

to

Barclays

Bank

PLC,

the

maturity

of

£1,100m

dated

subordinated

notes

in

relation

to

Barclays

Bank

UK

PLC,

the

£900m

partial

buy

back

of

dated

subordinated

loans

from

Barclays

Bank

PLC

and

Barclays

Bank

UK

PLC

and

a

£220m

reduction

used

to

fund

a

capital

contribution

to

Barclays

Bank

UK

PLC.

This

was

partially

offset

by

c£1,300m

new

issuances

of

dated

subordinated

notes

by

Barclays

Bank

UK

PLC

to

Barclays

PLC.

Financial

assets

and

liabilities

designated

at

fair

value

Financial

liabilities

designated

at

fair

value

of

£9,507m

(2019:

£3,498m)

includes

new

issuances

during

the

year

of

$2,500m

Fixed

Rate

Resetting

Senior

Callable

Notes,

$1,750m

Fixed-to-Floating

Rate

Senior

Callable

Notes,

€2,000m

Reset

Notes,

£400m

Reset

Notes

and

$300m

Zero

Coupon

Callable

Notes.

The

proceeds

raised

through

these

transactions

were

used

to

invest

in

subsidiaries

of

Barclays

PLC

and

are

included

within

the

financial

assets

designated

at

fair

value

through

the

income

statement

balance

of

£17,521m

(2019:

£10,348m).

The

effect

of

changes

in

the

liabilities’

fair

value,

including

those

due

to

credit

risk,

is

expected

to

offset

the

changes

in

the

fair

value

of

the

asset

in

the

income

statement

The

difference

between

the

financial

liabilities’

carrying

amount

and

the

contractual

amount

on

maturity

is

£324m

(2019:

£174m).

Subordinated

liabilities

and

debt

securities

in

issue

During

the

year,

Barclays

PLC

issued

£500m

and

$1,000m

of

Fixed

Rate

Resetting

Subordinated

Callable

Notes,

which

are

included

within

the

subordinated

liabilities

balance

of

£7,724m

(2019:

£7,656m)

and

redeemed

€1,250m

Fixed

Rate

Subordinated

Callable

Notes.

Debt

securities

in

issue

of

£28,428m

(2019:

£30,564m)

have

reduced

in

the

year

due

to

the

maturity

of

positions

with

subsidiaries

as

well

as

the

partial

buy

back

of

Senior

Fixed

Rate

Notes

of

€330m

and

Senior

Floating

Rate

Notes

of

$776m.

Management

of

internal

investments,

loans

and

advances

Barclays

PLC

retains

the

discretion

to

manage

the

nature

of

its

internal

investments

in

subsidiaries

according

to

their

regulatory

and

business

needs.

Barclays

PLC

may

invest

capital

and

funding

into

Barclays

Bank

PLC,

Barclays

Bank

UK

PLC

and

other

Group

subsidiaries

such

as

Barclays

Execution

Services

Limited

and

the

US

Intermediate

Holding

Company

(IHC).

Total

equity

Called

up

share

capital

and

share

premium

Called

up

share

capital

and

share

premium

of

Barclays

PLC

is

£4,637m

(2019:

£4,594m).

The

increase

in

the

year

is

primarily

due

to

shares

issued

under

employee

share

schemes.

Other

equity

instruments

Other

equity

instruments

of

£11,169

m

(2019:

£10,865m)

comprises

AT1

securities

issued

by

Barclays

PLC.

AT1

securities

are

perpetual

subordinated

contingent

convertible

securities

structured

to

qualify

as

AT1

instruments

under

prevailing

capital

rules

applicable

as

at

the

relevant

issue

date.

During

the

year

there

has

been

a

new

AT1

issuance

with

principal

amount

totaling

$1,500m

(£1,142m)

and

a

redemption

of

principal

amount

€1,000m

(£831m).

For

further

details,

please

refer

to

Note

28.

Shareholder

information

303

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Annual

General

Meeting

(AGM)

Looking

ahead

to

the

2021

AGM,

the

Board

currently

intends

to

hold

the

AGM

on

5

May

2021

at

11:00am

,

subject

to

the

ongoing

COVID-19

pandemic

and

any

UK

Government

guidance

on

social

distancing,

non-essential

travel

and/or

public

gatherings.

The

arrangements

for

the

Company’s

2021

AGM

and

details

of

the

resolutions

to

be

proposed,

together

with

explanatory

notes,

will

be

set

out

in

the

Notice

of

AGM

to

be

published

on

the

Company’s

website

(www.barclays.com)

Guidance

on

whether

physical

attendance

by

shareholders

will

be

possible

will

be

determined

nearer

the

time

of

the

AGM.

We

will

keep

the

considerable

benefits

of

shareholder

engagement

in

the

AGM

at

the

forefront

of

our

planning

for

the

2021

AGM.

Further

details

will

be

provided

in

the

Notice

of

AGM.

Keep

your

personal

details

up

to

date

Please

remember

to

tell

Equiniti

if:

◾

You

move

◾

You

need

to

update

your

bank

or

building

society

details.

If

you

are

a

Shareview

member,

you

can

update

your

bank

or

building

society

account

or

address

details

online.

If

you

hold

2,500

shares

or

less,

you

can

update

details

quickly

and

easily

over

the

telephone

using

the

Equiniti

contact

details

overleaf.

If

you

hold

more

than

2,500

shares

you

will

need

to

write

to

Equiniti.

Dividends

The

Barclays

PLC

2020

full

year

dividend

for

the

year

ended

31

December

2020

will

be

1.0p

per

share,

making

the

2020

total

dividend

1.0p.

Save

time

and

receive

your

dividends

faster

by

Choosing

to

have

them

paid

directly

into

your

bank

or

building

society

account

It

is

easy

to

set

up

and

your

money

will

be

in

your

bank

account

on

the

dividend

payment

date.

If

you

hold

2,500

shares

or

less,

you

can

provide

your

bank

or

building

society

details

quickly

and

easily

over

the

telephone

using

the

Equiniti

contact

details

overleaf.

If

you

hold

more

than

2,500

shares,

please

contact

Equiniti

for

details

of

how

to

change

your

payment

instruction.

Dividend

Re-investment

Plan

Barclays

has

decided

to

cease

to

offer

the

scrip

dividend

programme

and

will

no

longer

offer

a

scrip

alternative

for

dividends.

For

those

shareholders

who

wish

to

elect

to

use

their

cash

dividends

to

purchase

additional

ordinary

shares

in

the

market,

rather

than

receive

a

cash

payment,

Barclays

has

arranged

for

its

registrar,

Equiniti,

to

provide

and

administer

a

dividend

re-investment

plan

(DRIP).

Further

details

regarding

the

DRIP

can

be

found

at

www.barclays.com

and

www.shareview.co.uk/info/drip

Managing

your

shares

online

Shareview

Barclays

shareholders

can

go

online

to

manage

their

shareholding

and

find

out

about

Barclays

performance

by

joining

Shareview.

Through

Shareview,

you:

◾

will

receive

the

latest

updates

from

Barclays

direct

to

your

email;

◾

can

update

your

address

and

bank

details

online;

◾

can

vote

in

advance

of

general

meetings.

To

join

Shareview,

please

follow

these

three

easy

steps:

Step

1

Go

to

portfolio.shareview.co.uk

Step

2

Register

for

electronic

communications

by

following

the

instructions

on

screen

Step

3

You

will

be

sent

an

activation

code

in

the

post

the

day

Returning

funds

to

shareholders

Over

60,000

shareholders

did

not

cash

their

Shares

Not

Taken

Up

(SNTU)

cheque

following

the

Rights

Issue

in

September

2013.

In

2020,

we

continued

the

tracing

process

to

reunite

these

shareholders

with

their

SNTU

monies

and

any

unclaimed

dividends

and

by

the

end

of

the

year,

we

had

returned

approximately

£26,978

to

our

shareholders,

(2019:

approximately

£23,000).

Since

2015,

we

have

returned

approximately

£4.2m

to

our

shareholders.

Donations

to

charity

We

launched

a

Share

Dealing

Service

in

October

2017

aimed

at

shareholders

with

relatively

small

shareholdings

for

whom

it

might

otherwise

be

uneconomical

to

deal.

One

option

open

to

shareholders

was

to

donate

their

sale

proceeds

to

ShareGift.

As

a

result

of

this

initiative,

the

total

donated

to

ShareGift

since

2015

is

over

£461,267.

Useful

contact

details

Equiniti

The

Barclays

share

register

is

maintained

by

Equiniti.

If

you

have

any

questions

about

your

Barclays

shares,

please

contact

Equiniti

by

visiting

shareview.co.uk

0371

384

2055

a

(in

the

UK)

+44

121

415

7004

(from

overseas)

0371

384

2255

a

(for

the

hearing

impaired

in

the

UK)

+44

121

415

7028

(for

the

hearing

impaired

from

overseas)

Shareholder

information

304

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Aspect

House,

Spencer

Road,

Lancing,

West

Sussex

BN99

6DA

To

find

out

more,

contact

Equiniti

or

visit:

home.barclays/dividends

American

Depositary

Receipts

(ADRs)

ADRs

represent

the

ownership

of

Barclays

PLC

shares

which

are

traded

on

the

New

York

Stock

Exchange.

ADRs

carry

prices,

and

pay

dividends,

in

US

dollars.

If

you

have

any

questions

about

ADRs,

please

contact

Shareowner

Services:

StockTransfer@equiniti.com

or

visit

adr.com

+1

800

990

1135

(toll

free

in

US

and

Canada)

+1

651

453

2128

(outside

the

US

and

Canada)

Shareowner

Services,

PO

Box

64504,

St

Paul,

MN

55164-0504,

USA

Delivery

of

ADR

certificates

and

overnight

mail

Shareowner

Services,

1110

Centre

Point

Curve,

Suite

101,

Mendota

Heights,

MN

55120,

USA

Qualifying

US

and

Canadian

resident

ADR

holders

should

contact

Shareowner

Services

for

further

details

regarding

the

DRIP

Shareholder

Relations

To

give

us

your

feedback

or

if

you

have

any

questions,

please

contact:

privateshareholderrelations@barclays.com

Shareholder

Relations

Barclays

PLC

1

Churchill

Place

London

E14

5HP

Share

price

Information

on

the

Barclays

share

price

and

other

share

price

tools

are

available

at:

home.barclays/investorrelations

Alternative

formats

Shareholder

documents

can

be

provided

in

large

print,

audio

CD

or

Braille

free

of

charge

by

calling

Equiniti.

0371

384

2055

a

(in

the

UK)

+44

121

415

7004

(from

overseas)

Audio

versions

of

the

Strategic

Report

will

also

be

available

at

the

AGM.

Key

dates

1

April

2021

Full

year

dividend

payment

date

30

April

2021

Q1

Results

Announcement

5

May

2021

Annual

General

Meeting

at

11.00am

Shareholder

security

Shareholders

should

be

wary

of

any

cold

calls

with

an

offer

to

buy

or

sell

shares.

Fraudsters

use

persuasive

and

high

pressure

techniques

to

lure

shareholders

into

high-risk

investments

or

scams.

You

should

treat

any

unsolicited

calls

with

caution.

Please

keep

in

mind

that

firms

authorised

by

the

Financial

Conduct

Authority

(FCA)

are

unlikely

to

contact

you

out

of

the

blue.

You

should

consider

getting

independent

financial

or

professional

advice

from

someone

unconnected

to

the

respective

firm

before

you

hand

over

any

money.

Report

a

scam

If

you

suspect

that

you

have

been

approached

by

fraudsters

please

tell

the

FCA

using

the

share

fraud

reporting

form

at

fca.org.uk/scams.

You

can

also

call

the

FCA

Helpline

on

0800

111

6768

or

through

Action

Fraud

on

0300

123

2040.

Note

a

Lines

open

8.30am

to

5.30pm

(UK

time)

Monday

to

Friday,

excluding

public

holidays.

Additional

information

305

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Additional

shareholder

information

Articles

of

Association

Barclays

PLC

(the

“Company”)

is

a

public

limited

company

registered

in

England

and

Wales

under

company

number

48839.

Barclays,

originally

named

Barclay

&

Company

Limited,

was

incorporated

in

England

and

Wales

on

20

July

1896

under

the

Companies

Acts

1862

to

1890

as

a

company

limited

by

shares.

The

company

name

was

changed

to

Barclays

Bank

Limited

on

17

February

1917

and

it

was

registered

on

15

February

1982

as

a

public

limited

company

under

the

Companies

Acts

1948

to

1980.

On

1

January

1985,

the

company

changed

its

name

to

Barclays

PLC.

Under

the

Companies

Act

2006

a

company’s

Memorandum

of

Association

now

need

only

contain

the

names

of

the

subscribers

and

the

number

of

shares

each

subscriber

has

agreed

to

take.

For

companies

in

existence

as

of

1

October

2009,

all

other

provisions

which

were

contained

in

the

company’s

Memorandum

of

Association,

including

the

company’s

objects,

are

now

deemed

to

be

contained

in

the

company’s

articles.

The

Companies

Act

2006

also

states

that

a

company’s

objects

are

unrestricted

unless

the

company’s

articles

provide

otherwise.

The

Articles

of

Association

were

adopted

at

the

Company’s

Annual

General

Meeting

(“AGM”)

on

30

April

2010

and

amended

at

the

AGM

of

the

Company

on

25

April

2013.

The

following

is

a

summary

and

explanation

of

the

current

Articles

of

Association,

which

are

available

for

inspection.

Directors

(i)

The

minimum

number

of

Directors

(excluding

alternate

Directors)

is

five.

There

is

no

maximum

limit.

There

is

no

age

limit

for

Directors.

(ii)

Excluding

executive

remuneration

and

any

other

entitlement

to

remuneration

for

extra

services

(including

service

on

board

committees)

under

the

Articles,

a

Director

is

entitled

to

a

fee

at

a

rate

determined

by

the

Board

but

the

aggregate

fees

paid

to

all

Directors

shall

not

exceed

£2,000,000

per

annum

or

such

higher

amount

as

may

be

approved

by

an

ordinary

resolution

of

the

Company.

Each

Director

is

entitled

to

reimbursement

for

all

reasonable

travelling,

hotel

and

other

expenses

properly

incurred

by

him/her

in

or

about

the

performance

of

his/her

duties.

(iii)

No

Director

may

act

(either

himself/herself

or

through

his/her

firm)

as

an

auditor

of

the

Company.

A

Director

may

hold

any

other

office

of

the

Company

on

such

terms

as

the

Board

shall

determine.

(iv)

At

each

AGM

of

the

Company,

one

third

of

the

Directors

(rounded

down)

are

required

under

the

Articles

of

Association

to

retire

from

office

by

rotation

and

may

offer

themselves

for

re-election.

The

Directors

so

retiring

are

first,

those

who

wish

to

retire

and

not

offer

themselves

for

re-

election,

and,

second

those

who

have

been

longest

in

office

(and

in

the

case

of

equality

of

service

length

are

selected

by

lot).

Other

than

a

retiring

Director,

no

person

shall

(unless

recommended

by

the

Board)

be

eligible

for

election

unless

a

member

notifies

the

Company

Secretary

in

advance

of

his/her

intention

to

propose

a

person

for

election.

It

is

Barclays’

practice

that

all

Directors

offer

themselves

for

re-election

annually

in

accordance

with

the

UK

Corporate

Governance

Code.

(v)

The

Board

has

the

power

to

appoint

additional

Directors

or

to

fill

a

casual

vacancy

amongst

the

Directors.

Any

Director

so

appointed

holds

office

until

the

when

he/she

may

offer

himself/herself

for

reappointment.

He/she

is

not

taken

into

account

in

determining

the

number

of

Directors

retiring

by

rotation.

(vi)The

Board

may

appoint

any

Director

to

any

executive

position

or

employment

in

the

Company

on

such

terms

as

they

determine.

(vii)The

Company

may

by

ordinary

resolution

remove

a

Director

before

the

expiry

of

his/her

period

of

office

(without

prejudice

to

a

claim

for

damages

for

breach

of

contract

or

otherwise)

and

may

by

ordinary

resolution

appoint

another

person

who

is

willing

to

act

to

be

a

Director

in

his/her

place.

(viii)

A

Director

may

appoint

either

another

Director

or

some

other

person

approved

by

the

Board

to

act

as

his/her

alternate

with

power

to

attend

Board

meetings

and

generally

to

exercise

the

functions

of

the

appointing

Director

in

his/her

absence

(other

than

the

power

to

appoint

an

alternate).

(ix)

The

Board

may

authorise

any

matter

in

relation

to

which

a

Director

has,

or

can

have,

a

direct

interest

that

conflicts,

or

possibly

may

conflict

with,

the

Company’s

interests.

Only

Directors

who

have

no

interest

in

the

matter

being

considered

will

be

able

to

authorise

the

relevant

matter

and

they

may

impose

limits

or

conditions

when

giving

authorisation

if

they

think

this

is

appropriate.

(x)

A

Director

may

hold

positions

with

or

be

interested

in

other

companies

and,

subject

to

legislation

applicable

to

the

Company

and

the

FCA’s

requirements,

may

contract

with

the

Company

or

any

other

company

in

which

the

Company

is

interested.

A

Director

may

not

vote

or

count

towards

the

quorum

on

any

resolution

concerning

any

proposal

in

which

he/she

(or

any

person

connected

with

him/her)

has

a

material

interest

(other

than

by

virtue

of

his/her

interest

in

securities

of

the

Company)

or

if

he/she

has

a

duty

which

conflicts

or

may

conflict

with

the

interests

of

the

Company,

unless

the

resolution

relates

to

any

proposal:

(a)

to

indemnify

a

Director

or

provide

him/her

with

a

guarantee

or

security

in

respect

of

money

lent

by

him/her

to,

or

any

obligation

incurred

by

him/her

or

any

other

person

for

the

benefit

of

(or

at

the

request

of),

the

Company

(or

any

other

member

of

the

Group);

(b)

to

indemnify

or

give

security

or

a

guarantee

to

a

third

party

in

respect

of

a

debt

or

obligation

of

the

Company

(or

any

other

member

of

the

Group)

for

which

the

Director

has

personally

assumed

responsibility;

(c)

to

obtain

insurance

for

the

benefit

of

Directors;

(d)

involving

the

acquisition

by

a

Director

of

any

securities

of

the

Company

(or

any

other

member

of

the

Group)

pursuant

to

an

offer

to

existing

holders

of

securities

or

to

the

public;

(e)

that

the

Director

underwrite

any

issue

of

securities

of

the

Company

(or

any

other

member

of

the

Group);

(f)

concerning

any

other

company

in

which

the

Director

is

interested

as

an

officer

or

creditor

or

Shareholder

but,

broadly,

only

if

he/she

(together

with

his/her

connected

persons)

is

directly

or

indirectly

interested

in

less

than

1%

of

either

any

class

of

the

issued

equity

share

capital

or

of

the

voting

rights

of

that

company;

and

Additional

information

306

Barclays

PLC

2020

Annual

Report

on

Form

20-F

(g)

concerning

any

other

arrangement

for

the

benefit

of

employees

of

the

Company

(or

any

other

member

of

the

Group)

under

which

the

Director

benefits

or

stands

to

benefit

in

a

similar

manner

to

the

employees

concerned

and

which

does

not

give

the

Director

any

advantage

which

the

employees

to

whom

the

arrangement

relates

would

not

receive.

(xi)

A

Director

may

not

vote

or

be

counted

in

the

quorum

on

any

resolution

which

concerns

his/her

own

employment

or

appointment

to

any

office

of

the

Company

or

any

other

company

in

which

the

Company

is

interested.

(xii)

Subject

to

applicable

legislation,

the

provisions

described

in

sub-paragraphs

(x)

and

(xi)

may

be

relaxed

or

suspended

by

an

ordinary

resolution

of

the

members

of

the

Company

or

any

applicable

governmental

or

other

regulatory

body.

(xiii)

A

Director

is

required

to

hold

an

interest

in

ordinary

shares

having

a

nominal

value

of

at

least

£500,

which

currently

equates

to

2,000

Ordinary

Shares

unless

restricted

from

acquiring

or

holding

such

interest

by

any

applicable

law

or

regulation

or

any

applicable

governmental

or

other

regulatory

body.

A

Director

may

act

before

acquiring

those

shares

but

must

acquire

the

qualification

shares

within

two

months

from

his/her

appointment.

Where

a

Director

is

unable

to

acquire

the

requisite

number

of

shares

within

that

time

owing

to

law,

regulation

or

requirement

of

any

governmental

or

other

relevant

authority,

he/she

must

acquire

the

shares

as

soon

as

reasonably

practicable

once

the

restriction(s)

end.

(xiv)

The

Board

may

exercise

all

of

the

powers

of

the

Company

to

borrow

money,

to

mortgage

or

charge

its

undertaking,

property

and

uncalled

capital

and

to

issue

debentures

and

other

securities.

Classes

of

Shares

The

Company

only

has

Ordinary

Shares

in

issue.

The

Articles

of

Association

also

provide

for

pound

sterling

preference

shares

of

£100

each,

US

dollar

preference

shares

of

US$100

each,

US

dollar

preference

shares

of

$0.25

each,

euro

preference

shares

of

€100

each

and

yen

preference

shares

of

¥10,000

each

(together,

the

“Preference

Shares”).

In

accordance

with

the

authority

granted

at

the

AGM

on

25

April

2013,

Preference

Shares

may

be

issued

by

the

Board

from

time

to

time

in

one

or

more

series

with

such

rights

and

subject

to

such

restrictions

and

limitations

as

the

Board

may

determine.

No

Preference

Shares

have

been

issued

to

date.

Dividends

Subject

to

the

provisions

of

the

Articles

and

applicable

legislation,

the

Company

in

general

meeting

may

declare

dividends

on

the

Ordinary

Shares

by

ordinary

resolution,

but

any

such

dividend

may

not

exceed

the

amount

recommended

by

the

Board.

The

Board

may

also

pay

interim

or

final

dividends

if

it

appears

they

are

justified

by

the

Company’s

financial

position.

Each

Preference

Share

confers

the

right

to

a

preferential

dividend

(“Preference

Dividend”)

payable

in

such

currency

at

such

rates

(whether

fixed

or

calculated

by

reference

to

or

in

accordance

with

a

specified

procedure

or

mechanism),

on

such

dates

and

on

such

other

terms

as

may

be

determined

by

the

Board

prior

to

allotment

thereof.

The

Preference

Shares

rank

in

regard

to

payment

of

dividends

in

priority

to

the

holders

of

Ordinary

Shares

and

any

other

class

of

shares

in

the

Company

ranking

junior

to

the

Preference

Shares.

Dividends

may

be

paid

on

the

Preference

Shares

if,

in

the

opinion

of

the

Board,

the

Company

has

sufficient

distributable

profits,

after

payment

in

full

or

the

setting

aside

of

a

sum

to

provide

for

all

dividends

payable

on

(or

in

the

case

of

shares

carrying

a

cumulative

right

to

dividends,

before)

the

relevant

dividend

payment

date

on

any

class

of

shares

in

the

Company

ranking

pari

passu

with

or

in

priority

to

the

relevant

series

of

Preference

Shares

as

regards

participation

in

the

profits

of

the

Company.

If

the

Board

considers

that

the

distributable

profits

of

the

Company

available

for

distribution

are

insufficient

to

cover

the

payment

in

full

of

Preference

Dividends,

Preference

Dividends

shall

be

paid

to

the

extent

of

the

distributable

profits

on

a

pro

rata

basis.

Notwithstanding

the

above,

the

Board

may,

at

its

absolute

discretion,

determine

that

any

Preference

Dividend

which

would

otherwise

be

payable

may

either

not

be

payable

at

all

or

only

payable

in

part.

If

any

Preference

Dividend

on

a

series

of

Preference

Shares

is

not

paid,

or

is

only

paid

in

part,

for

the

reasons

described

above,

holders

of

Preference

Shares

will

not

have

a

claim

in

respect

of

such

non-payment.

If

any

dividend

on

a

series

of

Preference

Shares

is

not

paid

in

full

on

the

relevant

dividend

payment

date,

a

dividend

restriction

shall

apply.

The

dividend

restriction

means

that,

subject

to

certain

exceptions,

neither

the

Company

nor

Barclays

Bank

may

(a)

pay

a

dividend

on,

or

(b)

redeem,

purchase,

reduce

or

otherwise

acquire,

any

of

their

respective

ordinary

shares,

other

preference

shares

or

other

share

capital

ranking

equal

or

junior

to

the

relevant

series

of

Preference

Shares

until

the

earlier

of

such

time

as

the

Company

in

full

a

dividend

on

the

relevant

series

of

Preference

Shares

or

the

date

on

which

all

of

the

relevant

series

of

Preference

Shares

are

redeemed.

All

unclaimed

dividends

payable

in

respect

of

any

share

may

be

invested

or

otherwise

made

use

of

by

the

Board

for

the

benefit

of

the

Company

until

claimed.

If

a

dividend

is

not

claimed

after

12

years

of

it

becoming

payable,

it

is

forfeited

and

reverts

to

the

Company.

The

Board

may,

with

the

approval

of

an

ordinary

resolution

of

the

Company,

offer

Shareholders

the

right

to

choose

to

receive

an

allotment

of

additional

fully

paid

Ordinary

Shares

instead

of

cash

in

respect

of

all

or

part

of

any

dividend.

The

Company

currently

provides

a

scrip

dividend

programme

pursuant

to

an

authority

granted

at

the

AGM

held

on

25

April

2013

and

renewed

at

the

AGM

on

1

May

2018.

Redemption

and

Purchase

Subject

to

applicable

legislation

and

the

rights

of

the

other

shareholders,

any

share

may

be

issued

on

terms

that

it

is,

at

the

option

of

the

Company

or

the

holder

of

such

share,

redeemable.

The

Directors

are

authorised

to

determine

the

terms,

conditions

and

manner

of

redemption

of

any

such

shares

under

the

Articles

of

Association.

Calls

on

capital

The

Directors

may

make

calls

upon

the

members

in

respect

of

any

monies

unpaid

on

their

shares.

A

person

upon

whom

a

call

is

made

remains

liable

even

if

the

shares

in

respect

of

which

the

call

is

made

have

been

transferred.

Interest

will

be

chargeable

on

any

unpaid

amount

called

at

a

rate

determined

by

the

Board

(of

not

more

than

20%

per

annum).

Additional

information

307

Barclays

PLC

2020

Annual

Report

on

Form

20-F

If

a

member

fails

to

pay

any

call

in

full

(following

notice

from

the

Board

that

such

failure

will

result

in

forfeiture

of

the

relevant

shares),

such

shares

(including

any

dividends

declared

but

not

paid)

may

be

forfeited

by

a

resolution

of

the

Board,

and

will

become

the

property

of

the

Company.

Forfeiture

shall

not

absolve

a

for

amounts

payable

by

him/her

(which

may

continue

to

accrue

interest).

The

Company

also

has

a

lien

over

all

partly

paid

shares

of

the

Company

for

all

monies

payable

or

called

on

that

share

and

over

the

debts

and

liabilities

of

a

member

to

the

Company.

If

any

monies

which

are

the

subject

of

the

lien

remain

unpaid

after

a

notice

from

the

Board

demanding

payment,

the

Company

may

sell

such

shares.

Annual

and

other

general

meetings

The

Company

is

required

to

hold

an

AGM

in

addition

to

such

other

general

meetings

as

the

Directors

think

fit.

The

type

of

the

meeting

will

be

specified

in

the

notice

calling

it.

Under

the

Companies

Act

2006,

the

AGM

must

be

held

within

six

months

of

the

financial

year

end.

A

general

meeting

may

be

convened

by

the

Board

on

requisition

in

accordance

with

the

applicable

legislation.

In

the

case

of

an

AGM,

a

minimum

of

21

clear

days’

notice

is

required.

The

notice

must

be

in

writing

and

must

specify

the

place,

the

day

and

the

hour

of

the

meeting,

and

the

general

nature

of

the

business

to

be

transacted.

A

notice

convening

a

meeting

to

pass

a

special

resolution

shall

specify

the

intention

to

propose

the

resolution

as

such.

The

accidental

failure

to

give

notice

of

a

general

meeting

or

the

non-receipt

of

such

notice

will

not

invalidate

the

proceedings

at

such

meeting.

Subject

as

noted

above,

all

Shareholders

are

entitled

to

attend

and

vote

at

general

meetings.

The

Articles

do,

however,

provide

that

arrangements

may

be

made

for

simultaneous

attendance

at

a

satellite

meeting

place

or,

if

the

meeting

place

is

inadequate

to

accommodate

all

members

and

proxies

entitled

to

attend,

another

meeting

place

may

be

arranged

to

accommodate

such

persons

other

than

that

specified

in

the

notice

of

meeting,

in

which

case

Shareholders

may

be

excluded

from

the

principal

place.

Holders

of

Preference

Shares

have

no

right

to

receive

notice

of,

attend

or

vote

at,

any

general

meetings

of

the

Company

as

a

result

of

holding

Preference

Shares.

Notices

A

document

or

information

may

be

sent

by

the

Company

in

hard

copy

form,

electronic

form,

by

being

made

available

on

a

website,

or

by

another

means

agreed

with

the

recipient,

in

accordance

with

the

provisions

set

out

in

the

Companies

Act

2006.

Accordingly,

a

document

or

information

may

only

be

sent

in

electronic

form

to

a

person

who

has

agreed

to

receive

it

in

that

form

or,

in

the

case

of

a

company,

who

has

been

deemed

to

have

so

agreed

pursuant

to

applicable

legislation.

A

document

or

information

may

only

be

sent

by

being

made

available

on

a

website

if

the

recipient

has

agreed

to

receive

it

in

that

form

or

has

been

deemed

to

have

so

agreed

pursuant

to

applicable

legislation,

and

has

not

revoked

that

agreement.

In

respect

of

joint

holdings,

documents

or

information

shall

be

sent

to

the

joint

holder

whose

name

stands

first

in

the

register.

A

member

who

(having

no

registered

address

within

the

UK)

has

not

supplied

an

address

in

the

UK

at

which

documents

or

information

may

be

sent

in

hard

copy

form,

or

an

address

to

which

notices,

documents

or

information

may

be

sent

or

supplied

by

electronic

means,

is

not

entitled

to

have

documents

or

information

sent

to

him/her.

In

addition,

the

Company

may

cease

to

send

notices

to

any

member

who

has

been

sent

documents

on

two

consecutive

occasions

over

a

period

of

at

least

12

months

and

when

each

of

those

documents

is

returned

undelivered

or

notification

is

received

that

they

have

not

been

delivered.

Capitalisation

of

profits

The

Company

may,

by

ordinary

resolution,

upon

the

recommendation

of

the

Board

capitalise

all

or

any

part

of

an

amount

standing

to

the

credit

of

a

reserve

or

fund

to

be

set

free

for

distribution

provided

that

amounts

from

the

share

premium

account,

capital

redemption

reserve

or

any

profits

not

available

for

distribution

should

be

applied

only

in

paying

up

unissued

shares

to

be

allotted

to

members

credited

as

fully

paid

and

no

unrealised

profits

shall

be

applied

in

paying

up

debentures

of

the

Company

or

any

amount

unpaid

on

any

share

in

the

capital

of

the

Company.

Indemnity

Subject

to

applicable

legislation,

every

current

and

former

Director

or

other

officer

of

the

Company

(other

than

any

person

engaged

by

the

company

as

auditor)

shall

be

indemnified

by

the

Company

against

any

liability

in

relation

to

the

Company,

other

than

(broadly)

any

liability

to

the

Company

or

a

member

of

the

Group,

or

any

criminal

or

regulatory

fine.

Additional

information

308

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Dividends

on

the

ordinary

shares

of

Barclays

PLC

The

dividends

declared

for

each

of

the

last

five

years

were:

Pence

per

25p

ordinary

share

2020

2019

2018

2017

2016

Half

year

-

3.00

2.50

1.00

Full

year

1.00

-

4.00

2.00

Total

1.00

3.00

6.50

3.00

US

Dollars

per

25p

ordinary

share

2020

2019

2018

2017

2016

Half

year

-

0.04

0.03

0.01

Full

year

0.01

-

0.05

0.02

Total

0.01

0.04

0.08

0.03

The

gross

dividends

applicable

to

an

American

Depositary

Share

(ADS)

representing

four

ordinary

shares,

before

deduction

of

withholding

tax,

are

as

follows:

US

Dollars

per

American

Depositary

Share

2020

2019

2018

2017

2016

Half

year

-

0.15

0.13

0.05

Full

year

0.06

-

0.21

0.10

Total

0.06

0.15

0.34

0.15

The

final

dividends

shown

above

are

expressed

in

Dollars

translated

at

the

closing

spot

rate

for

Pounds

Sterling

as

determined

by

Bloomberg

at

5pm

in

New

York

City

(the

‘Closing

Spot

Rate’)

on

the

latest

practicable

date

for

inclusion

in

this

report.

No

representation

is

made

that

Pounds

Sterling

amounts

have

been,

or

could

have

been,

or

could

be,

converted

into

Dollars

at

these

rates.

Trading

market

for

ordinary

shares

of

Barclays

PLC

The

principal

trading

market

for

Barclays

PLC

ordinary

shares

is

the

London

Stock

Exchange.

At

the

close

of

business

on

31

December

2020,

17,359,296,032

ordinary

shares

were

in

issue.

Ordinary

share

listings

were

also

obtained

on

the

New

York

Stock

Exchange

(NYSE)

with

effect

from

9

September

1986.

Trading

on

the

NYSE

is

in

the

form

of

ADSs

under

the

symbol

‘BCS’.

Each

ADS

represents

four

ordinary

shares

and

is

evidenced

by

an

American

Depositary

Receipt

(ADR).

The

ADR

depositary

is

JP

Morgan

Chase

Bank,

N.A.

Details

of

trading

activity

are

published

in

the

stock

tables

of

leading

daily

newspapers

in

the

US.

There

were

413

ADR

holders

and

1,655

recorded

holders

of

ordinary

shares

with

US

addresses

at

31

December

2020,

whose

shareholdings

represented

approximately

3.60%

of

total

outstanding

ordinary

shares

on

that

date.

Since

a

certain

number

of

the

ordinary

shares

and

ADRs

were

held

by

brokers

or

other

nominees,

the

number

of

recorded

holders

in

the

US

may

not

be

representative

of

the

number

of

beneficial

holders

or

of

their

country

of

residence.

Additional

information

309

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Shareholdings

at

31

December

2020

a

Number

of

shareholders

Percentage

of

holders

Shares

held

Percentage

of

capital

%

Classification

of

shareholders

Personal

Holders

232,282

97.40

402,031,578

2.31

Banks

and

Nominees

2,306

0.97

14,596,933,657

84.09

Other

Companies

3,893

1.67

2,360,325,147

13.60

Insurance

Companies

1

-

208

-

Pension

Funds

4

-

5,442

-

Total

238,486

100.00

17,359,296,032

100.00

Shareholding

range

1

-

100

16,824

7.05

623,483

-

101

-

250

50,247

21.07

10,299,399

0.06

251

-

500

64,522

27.05

22,625,643

0.13

501

-

1,000

38,141

15.99

27,001,571

0.16

1,001

-

5,000

48,354

20.28

107,607,686

0.62

5,001

-

10,000

10,677

4.48

75,191,484

0.43

10,001

-

25,000

6,357

2.67

96,414,702

0.56

25,001

-

50,000

1,515

0.64

51,517,339

0.30

50,001

and

over

1,849

0.78

16,968,084,725

17.75

Total

238,486

100.00

17,359,296,032

100.00

United

States

Holdings

1,655

0.69

3,983,403

0.02

Note

a

These

figures

do

not

inclu

de

Barclays

Sharestore

members.

Taxation

of

UK

holders

The

following

is

a

summary

of

certain

UK

tax

issues

which

are

likely

to

be

material

to

the

holding

and

disposal

of

Ordinary

Shares

of

Barclays

PLC

or

ADSs

representing

such

Ordinary

Shares

(the

‘Shares’).

It

is

based

on

the

current

laws

of

England

and

Wales,

UK

tax

law

and

the

practice

of

Her

Majesty’s

Revenue

and

Customs

(‘HMRC’),

each

of

which

may

be

subject

to

change,

possibly

with

retrospective

effect.

It

is

a

general

guide

for

information

purposes

and

should

be

treated

with

appropriate

caution.

It

is

not

intended

as

tax

advice

and

it

does

not

purport

to

describe

all

of

the

tax

considerations

that

may

be

relevant

to

a

prospective

purchaser,

holder

or

disposer

of

Shares.

In

particular,

save

where

expressly

stated

to

the

contrary,

this

summary

deals

with

shareholders

who

are

resident

and,

in

the

case

of

individuals,

domiciled

in

(and

only

in)

the

UK

for

UK

tax

purposes,

who

hold

their

Shares

as

investments

(other

than

under

an

individual

savings

account)

and

who

are

the

absolute

beneficial

owners

of

their

Shares

and

any

dividends

paid

on

them.

The

statements

are

not

addressed

to:

(i)

shareholders

who

own

(or

are

deemed

to

own)

10%

or

more

of

the

voting

power

of

Barclays

PLC;

(ii)

shareholders

who

hold

Shares

as

part

of

hedging

transactions;

(iii)

investors

who

have

(or

are

deemed

to

have)

acquired

their

Shares

by

virtue

of

an

office

or

employment;

and

(iv)

shareholders

who

hold

Shares

in

connection

with

a

trade,

profession

or

vocation

carried

on

in

the

UK

(whether

through

a

branch

or

agency

or,

in

the

case

of

a

corporate

shareholder,

through

a

permanent

establishment,

or

otherwise).

It

does

not

discuss

the

tax

treatment

of

classes

of

shareholder

subject

to

special

rules,

such

as

dealers

in

securities.

Persons

who

are

in

any

doubt

as

to

their

tax

position

should

consult

their

professional

advisers.

Persons

who

may

be

liable

to

taxation

in

jurisdictions

other

than

the

UK

in

respect

of

their

acquisition,

holding

or

disposal

of

Shares

are

particularly

advised

to

consult

their

professional

advisers

as

to

whether

they

are

so

liable.

(i)

Taxation

of

dividends

In

accordance

with

UK

law,

Barclays

PLC

pays

dividends

on

the

Shares

without

any

deduction

or

withholding

for

or

on

account

of

any

taxes

imposed

by

the

UK

government

or

any

UK

taxing

authority.

The

total

dividends

(including

any

dividends

paid

by

Barclays

PLC)

paid

to

a

UK

resident

individual

shareholder

in

a

tax

year

(the

‘Total

Dividend

Income’)

will

generally

form

part

of

that

shareholder’s

total

income

for

UK

income

tax

purposes,

and

will

be

subject

to

UK

income

tax

at

the

rates

discussed

below.

For

dividends

paid

on

or

after

6

April

2016,

the

rate

of

UK

income

tax

applicable

to

the

Total

Dividend

Income

will

depend

on

the

amount

of

the

Total

Dividend

Income

and

the

UK

income

tax

band(s)

that

the

Total

Dividend

Income

falls

within

when

included

as

part

of

the

shareholder’s

total

income

for

UK

income

tax

purposes

for

that

tax

year.

For

the

tax

year

from

6

April

2020

to

5

April

2021

(inclusive),

a

nil

rate

of

UK

income

tax

applies

to

the

first

£2,000

of

Total

Dividend

Income

received

by

an

individual

shareholder

in

that

tax

year

(the

‘Nil

Rate

Amount’).

For

the

2018-2019

and

2019-2020

tax

years,

the

Nil

Rate

Amount

was

£2,000.

For

the

2016-2017

and

2017-2018

tax

years,

the

Nil

Rate

Amount

was

£5,000.

Where

the

Total

Dividend

Income

received

by

an

individual

shareholder

in

a

tax

year

exceeds

the

relevant

Nil

Rate

Amount

for

that

tax

year,

the

excess

amount

(the

‘Remaining

Dividend

Income’)

will

be

subject

to

UK

income

tax

at

the

following

rates:

(a)

at

the

rate

of

7.5%

on

any

portion

of

the

Remaining

Dividend

Income

that

falls

within

the

basic

tax

band;

(b)

at

the

rate

of

32.5%

on

any

portion

of

the

Remaining

Dividend

Income

that

falls

within

the

higher

tax

band;

and

Additional

information

310

Barclays

PLC

2020

Annual

Report

on

Form

20-F

(c)

at

the

rate

of

38.1%

on

any

portion

of

the

Remaining

Dividend

Income

that

falls

within

the

additional

tax

band.

In

determining

the

tax

band

the

Remaining

Dividend

Income

falls

within

for

a

tax

year,

the

individual

shareholder’s

Total

Dividend

Income

for

the

tax

year

in

question

(including

the

portion

comprising

the

Nil

Rate

Amount)

will

be

treated

as

the

top

slice

of

the

shareholder’s

total

income

for

UK

income

tax

purposes.

Subject

to

special

rules

for

small

companies,

UK

resident

shareholders

within

the

charge

to

UK

corporation

tax

will

not

generally

be

subject

to

UK

corporation

tax

on

the

dividends

paid

on

the

Shares,

provided

the

dividend

falls

within

an

exempt

class

and

certain

conditions

are

met.

(ii)

Taxation

of

shares

under

the

Dividend

Re-Investment

Plan

Where

a

shareholder

elects

to

purchase

Shares

using

their

cash

dividend

as

part

of

the

Dividend

Re-Investment

Plan,

such

shareholder

will

generally

be

liable

for

UK

tax

on

the

amount

of

the

dividend

as

described

in

(i)

Taxation

of

dividends

above,

in

the

same

way

as

the

shareholder

would

have

been

on

the

receipt

of

a

cash

dividend.

For

capital

gains

purposes,

the

base

cost

of

Shares

purchased

under

the

Dividend

Re-

Investment

Plan

will

be

the

amount

of

the

cash

dividend

used

to

purchase

such

Shares.

(iii)

Taxation

of

capital

gains

The

disposal

of

Shares

(including,

for

the

avoidance

of

doubt,

any

shares

purchased

as

part

of

the

Dividend

Re-Investment

Plan

or

previously

purchased

as

part

of

the

Scrip

Dividend

Programme)

may,

depending

on

the

shareholder’s

circumstances,

give

rise

to

a

liability

to

UK

tax

on

chargeable

capital

gains.

Where

Shares

are

sold,

a

liability

to

UK

tax

may

result

if

the

proceeds

from

that

sale

exceed

the

sum

of

the

base

cost

of

the

Shares

sold

and

any

other

allowable

deductions

such

as

share

dealing

costs

and,

in

certain

circumstances,

indexation

relief

(discussed

further

below).

To

arrive

at

the

total

base

cost

of

any

Barclays

PLC

shares

held,

in

appropriate

cases

the

amount

subscribed

for

rights

taken

up

in

1985,

1988

and

2013

must

be

added

to

the

cost

of

all

such

shares

held.

For

this

purpose,

current

legislation

permits

the

market

valuation

at

31

March

1982

to

be

substituted

for

the

original

cost

of

shares

purchased

before

that

date,

subject

to

certain

exceptions

for

shareholders

within

the

charge

to

UK

corporation

tax.

Shareholders

other

than

those

within

the

charge

to

UK

corporation

tax

should

note

that,

following

the

Finance

Act

2008,

no

indexation

allowance

will

be

available.

Following

the

Finance

Act

2018,

shareholders

within

the

charge

to

UK

corporation

tax

may

be

eligible

for

indexation

allowance

for

the

period

of

ownership

of

their

Shares

up

to

December

2017,

but

no

indexation

allowance

will

be

available

in

respect

of

the

period

of

ownership

starting

on

or

after

1

January

2018.

Chargeable

capital

gains

may

also

arise

from

the

gifting

of

Shares

to

connected

parties

such

as

relatives

(although

not

spouses

or

civil

partners)

and

family

trusts.

The

calculations

required

to

compute

chargeable

capital

gains

may

be

complex.

Shareholders

are

advised

to

consult

their

personal

financial

adviser

if

further

information

regarding

a

possible

tax

liability

in

respect

of

their

holdings

of

shares

is

required.

(iv)

Stamp

duty

and

stamp

duty

reserve

tax

Dealings

in

Shares

(including,

for

the

avoidance

of

doubt,

any

Shares

purchased

as

part

of

the

Dividend

Re-Investment

Plan

or

previously

purchased

as

part

of

the

Scrip

Dividend

Programme)

will

generally

be

subject

to

UK

stamp

duty

or

stamp

duty

reserve

tax

(although

see

the

comments

below

as

regards

ADSs

in

the

section

‘Taxation

of

US

holders

–

UK

stamp

duty

and

stamp

duty

reserve

tax’).

Any

document

effecting

the

transfer

on

sale

of

Shares

will

generally

be

liable

to

stamp

duty

at

0.5%

of

the

consideration

paid

for

that

transfer

(rounded

up

to

the

An

unconditional

agreement

to

transfer

Shares,

or

any

interest

therein,

will

generally

be

subject

to

stamp

duty

reserve

tax

at

0.5%

of

the

consideration

given.

Such

liability

to

stamp

duty

reserve

tax

will

be

cancelled,

or

a

right

to

a

repayment

(generally

with

interest)

in

respect

of

the

stamp

duty

reserve

tax

liability

will

arise,

if

the

agreement

is

completed

by

a

duly

stamped

transfer

within

six

years

of

the

agreement

having

become

unconditional.

Both

stamp

duty

and

stamp

duty

reserve

tax

are

normally

the

liability

of

the

transferee.

Paperless

transfers

of

Shares

within

CREST

are

liable

to

stamp

duty

reserve

tax

rather

than

stamp

duty.

Stamp

duty

reserve

tax

on

transactions

settled

within

the

CREST

system

or

reported

through

it

for

regulatory

purposes

will

be

collected

by

CREST.

Special

rules

apply

to

certain

categories

of

person,

including

intermediaries,

market

makers,

brokers,

dealers

and

persons

connected

with

depositary

arrangements

and

clearance

services.

(v)

Inheritance

tax

An

individual

may

be

liable

to

inheritance

tax

on

the

transfer

of

Shares

(including,

for

the

avoidance

of

doubt,

any

Shares

purchased

as

part

of

the

Dividend

Re-Investment

Plan

or

previously

purchased

as

part

of

the

Scrip

Dividend

Programme).

Where

an

individual

is

so

liable,

inheritance

tax

may

be

charged

on

the

amount

by

which

the

value

of

his

or

her

estate

is

reduced

as

a

result

of

any

transfer

by

way

of

gift

or

other

gratuitous

transaction

made

by

them

or

treated

as

made

by

them.

Taxation

of

US

holders

The

following

is

a

summary

of

certain

US

federal

income

tax

considerations

and

certain

UK

tax

considerations

to

the

purchase,

ownership

and

disposition

of

Ordinary

Shares

of

Barclays

PLC

or

ADSs

representing

such

Ordinary

Shares

(the

"

Shares

")

that

are

likely

to

be

relevant

for

US

Holders

(as

defined

below)

who

own

the

Shares

as

capital

assets

for

tax

purposes.

This

discussion

is

not

a

comprehensive

analysis

of

all

the

potential

US

or

UK

tax

consequences

that

may

be

relevant

to

US

Holders

and

does

not

discuss

particular

tax

consequences

that

may

be

applicable

to

US

Holders

who

may

be

subject

to

special

tax

rules,

such

as

banks,

brokers

or

dealers

in

securities

or

currencies,

traders

in

securities

that

elect

to

use

a

mark-to-market

method

of

accounting

for

securities

holdings,

financial

institutions,

tax-exempt

organisations,

regulated

investment

companies,

life

insurance

companies,

entities

or

arrangements

that

are

treated

as

partnerships

for

US

federal

income

tax

purposes

(or

partners

therein),

holders

that

own

or

are

treated

as

owning

10%

or

more

of

the

stock

of

Barclays

PLC

measured

either

by

voting

power

or

value,

holders

that

hold

Shares

as

part

of

a

straddle

or

a

hedging

or

conversion

transaction,

holders

that

purchase

or

sell

Shares

as

part

of

a

wash

sale,

holders

whose

functional

currency

is

not

the

US

Dollar,

or

holders

who

are

resident,

or

who

are

carrying

on

a

trade,

in

the

UK.

The

summary

also

does

not

address

state

or

local

taxes

or

any

aspect

of

US

federal

taxation

other

than

US

federal

income

taxation

(such

as

the

estate

and

gift

tax,

the

alternative

minimum

tax

or

the

Medicare

tax

on

net

investment

income).

Investors

are

advised

to

consult

their

tax

advisers

regarding

the

tax

implications

of

their

particular

holdings,

including

the

consequences

under

applicable

state

and

local

law,

and

in

particular

whether

they

are

eligible

for

the

benefits

of

the

Treaty

(as

defined

below).

Additional

information

311

Barclays

PLC

2020

Annual

Report

on

Form

20-F

This

discussion

is

based

on

the

Internal

Revenue

Code

of

1986,

as

amended

(the

‘Code’),

its

legislative

history,

existing

and

proposed

regulations,

published

rulings

and

court

decisions,

and

on

the

Double

Taxation

Convention

between

the

UK

and

the

US

as

entered

into

force

in

March

2003

(the

‘Treaty’),

and,

in

respect

of

UK

tax,

the

Estate

and

Gift

Tax

Convention

between

the

UK

and

the

US

as

entered

into

force

on

11

November

1979

(the

‘Estate

and

Gift

Tax

Convention’),

the

current

UK

tax

law

and

the

practice

of

HMRC,

all

of

which

are

subject

to

change,

possibly

on

a

retroactive

basis.

This

discussion

is

based

in

part

upon

the

representations

of

the

ADR

Depositary

and

the

assumption

that

each

obligation

of

the

Deposit

Agreement

and

any

will

be

performed

in

accordance

with

its

terms.

A

“US

Holder”

is

a

beneficial

owner

of

Shares

that

is

a

citizen

or

resident

of

the

United

States

or

a

US

domestic

corporation

or

that

otherwise

is

subject

to

US

federal

income

taxation

on

a

net

income

basis

in

respect

of

such

Shares

and

that

is

fully

eligible

for

benefits

under

the

Treaty.

In

general,

the

holders

of

ADRs

evidencing

ADSs

will

be

treated

as

owners

of

the

underlying

Ordinary

Shares

for

the

purposes

of

the

Treaty,

the

Estate

and

Gift

Tax

Convention,

and

the

Code.

Generally,

exchanges

of

shares

for

ADRs

and

ADRs

for

shares

will

not

be

subject

to

US

federal

income

tax

or

to

UK

capital

gains

tax.

Taxation

of

dividends

Subject

to

the

PFIC

rules

discussed

below,

the

gross

amount

of

any

distribution

of

cash

or

property

with

respect

to

the

Shares

(including

any

amount

withheld

in

respect

of

UK

taxes)

that

is

paid

out

of

Barclays

PLC’s

current

or

accumulated

earnings

and

profits

(as

determined

for

US

federal

income

tax

purposes)

will

be

includible

in

a

US

Holder’s

taxable

income

as

ordinary

dividend

income

on

the

day

such

US

Holder

receives

the

dividend,

in

the

case

of

Ordinary

Shares,

or

the

date

the

Depositary

receives

the

dividends,

in

the

case

of

ADRs,

and

will

not

be

eligible

for

the

dividends-received

deduction

allowed

to

corporations

under

the

Code.

Subject

to

certain

exceptions

for

short-term

positions,

dividends

paid

by

Barclays

PLC

to

an

individual

with

respect

to

the

Shares

will

generally

be

subject

to

taxation

at

a

preferential

rate

if

the

dividends

are

“qualified

dividend

income.”

Dividends

paid

on

the

Shares

will

be

treated

as

qualified

dividend

income

if

(i)

the

Shares

are

readily

tradable

on

an

established

securities

market

in

the

United

States

or

Barclays

PLC

is

eligible

for

the

benefits

of

a

comprehensive

tax

treaty

with

the

United

States

that

the

US

Treasury

determines

is

satisfactory

for

purposes

of

this

provision

and

that

includes

an

exchange

of

information

program,

and

(ii)

Barclays

PLC

was

not

a

PFIC

(as

defined

below)

in

the

year

of

the

distribution

or

the

immediately

preceding

taxable

year.

The

ADRs

are

listed

on

the

New

Yo

rk

Stock

Exchange,

and

will

qualify

as

readily

tradable

on

an

established

securities

market

so

long

as

they

are

so

listed.

In

addition,

the

US

Treasury

has

determined

that

the

Treaty

meets

the

requirements

for

reduced

rates

of

taxation,

and

Barclays

PLC

believes

that

it

is

eligible

for

the

benefits

of

the

Treaty.

Based

on

its

audited

financial

statements

and

relevant

market

and

shareholder

date,

Barclays

PLC

believes

that

it

was

not

treated

as

a

PFIC

for

US

federal

income

tax

purposes

with

respect

to

its

2019

or

2020

taxable

years.

In

addition,

based

on

its

audited

financial

statements

and

current

expectations

regarding

the

value

and

nature

of

its

assets,

the

sources

and

nature

of

its

income,

and

relevant

market

and

shareholder

data,

Barclays

PLC

does

not

anticipate

becoming

a

PFIC

for

its

current

taxable

year

or

in

the

foreseeable

future.

Dividends

paid

by

Barclays

PLC

to

a

US

Holder

with

respect

to

the

Shares

will

not

be

subject

to

UK

withholding

tax.

For

foreign

tax

credit

purposes,

dividends

will

generally

be

income

from

sources

outside

the

US

and

will

generally

be

“passive”

income

for

purposes

of

computing

the

foreign

tax

credit

allowable

to

a

US

Holder.

The

amount

of

the

dividend

distribution

includable

in

income

will

be

the

US

Dollar

value

of

the

distribution,

determined

at

the

spot

Pound

Sterling/US

Dollar

rate

on

the

date

the

dividend

distribution

is

includable

in

income,

regardless

of

whether

the

payment

is

in

fact

converted

into

US

Dollars.

Generally,

any

gain

or

loss

resulting

from

currency

exchange

fluctuations

during

the

period

from

the

date

the

dividend

payment

is

includable

in

income

to

the

date

the

payment

is

converted

into

US

Dollars

will

be

treated

as

ordinary

income

or

loss

and,

for

foreign

tax

credit

limitation

purposes,

from

sources

within

the

US,

and

will

not

be

eligible

for

the

special

tax

rates

applicable

to

qualified

dividend

income.

Distributions

in

excess

of

current

or

accumulated

earnings

and

profits,

as

determined

for

US

federal

income

tax

purposes,

will

be

treated

as

a

return

of

capital

to

the

extent

of

the

US

Holder’s

basis

in

the

Shares

and

thereafter

as

capital

gain.

Because

Barclays

PLC

does

not

currently

maintain

calculations

of

earnings

and

profits

for

US

federal

income

tax

purposes,

US

Holders

should

expect

that

distributions

with

respect

to

the

Shares

will

generally

be

treated

as

dividends.

US

Holders

that

receive

a

distribution

of

additional

shares

or

rights

to

subscribe

for

additional

shares

as

part

of

a

pro

rata

distribution

to

all

our

shareholders

generally

will

not

be

subject

to

US

federal

income

tax

in

respect

of

the

distribution,

unless

the

US

Holder

has

the

right

to

receive

cash

or

property,

in

which

case

the

US

Holder

will

be

treated

as

if

it

received

cash

equal

to

the

fair

market

value

of

the

distribution.

Additional

information

312

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Ta

xable

sale

or

other

disposition

of

Shares

Subject

to

the

PFIC

rules

discussed

below,

upon

a

sale

or

other

taxable

disposition

of

the

Shares,

US

Holders

generally

will

not

be

subject

to

UK

tax,

but

will

realise

gain

or

loss

for

US

federal

income

tax

purposes

in

an

amount

equal

to

the

difference

between

the

US

Dollar

value

of

the

amount

realised

on

the

disposition

and

the

US

Holder’s

adjusted

tax

basis

in

the

Shares,

as

determined

in

US

Dollars.

Such

gain

or

loss

will

be

capital

gain

or

loss,

and

will

generally

be

long-term

capital

gain

or

loss

if

the

Shares

have

been

held

for

more

than

one

year.

Long-term

capital

gain

of

a

noncorporate

US

Holder

is

generally

taxed

at

preferential

rates.

The

gain

or

loss

will

generally

be

income

or

loss

from

sources

within

the

United

States

for

foreign

tax

credit

limitation

purposes.

The

deductibility

of

capital

losses

is

subject

to

limitations.

Taxation

of

passive

foreign

investment

companies

(PFICs)

Barclays

PLC

believes

that

its

Shares

should

not

be

treated

as

stock

of

a

passive

foreign

investment

company

(“PFIC”)

for

US

federal

income

tax

purposes,

but

this

conclusion

is

a

factual

determination

that

is

made

annually

and

thus

may

be

subject

to

change.

In

general,

Barclays

PLC

will

be

a

PFIC

with

respect

to

a

US

Holder

if,

for

any

taxable

year

in

which

a

US

Holder

holds

the

Shares,

either

(i)

at

least

75%

of

the

gross

income

of

Barclays

PLC

for

the

taxable

year

is

passive

income,

or

(ii)

at

least

50%

of

the

value,

determined

on

the

basis

of

a

quarterly

average,

of

Barclays

PLC’s

assets

is

attributable

to

assets

that

produce

or

are

held

for

the

production

of

passive

income

(including

cash).

With

certain

exceptions,

a

US

Holder’s

Shares

will

be

treated

as

stock

of

a

PFIC

if

Barclays

PLC

was

a

PFIC

at

any

time

during

such

holder’s

holding

period

in

its

Shares.

If

Barclays

PLC

were

to

be

treated

as

a

PFIC

with

respect

to

a

US

Holder,

unless

such

US

Holder

elected

to

be

taxed

annually

on

a

mark-to-

market

basis

with

respect

to

its

Shares,

such

gain

and

certain

“excess

distributions”

would

be

treated

as

having

been

realised

ratably

over

a

US

Holder’s

holding

period

for

the

Shares

and

generally

would

be

taxed

at

the

highest

tax

rate

in

effect

for

each

such

year

to

which

the

gain

was

allocated,

together

with

an

interest

charge

in

respect

of

the

tax

attributable

to

each

such

year.

UK

stamp

duty

and

stamp

duty

reserve

tax

No

obligation

to

pay

UK

stamp

duty

will

arise

on

the

transfer

on

sale

of

an

ADS,

provided

that

any

instrument

of

transfer

is

not

executed

in,

and

remains

at

all

times

outside,

the

UK.

No

UK

stamp

duty

reserve

tax

is

payable

in

respect

of

an

agreement

to

transfer

an

ADS.

For

the

UK

stamp

duty

and

stamp

duty

reserve

tax

implications

of

dealings

in

Ordinary

Shares,

see

the

section

“Taxation

of

UK

holders

–

(iv)

Stamp

duty

and

stamp

duty

reserve

tax”

above.

UK

estate

and

gift

tax

Under

the

Estate

and

Gift

Tax

Convention,

Shares

held

by

an

individual

US

holder

who

is

US

domiciled

for

the

purposes

of

the

Estate

and

Gift

Ta

x

Convention

and

who

is

not

for

such

purposes

a

UK

national

generally

will

not,

provided

any

US

federal

estate

or

gift

tax

chargeable

has

been

paid,

be

subject

to

UK

inheritance

tax

on

the

individual’s

death

or

on

a

lifetime

transfer

of

Shares,

except

in

certain

cases

where

the

Shares

are

comprised

in

a

settlement

(unless

the

settlor

was

US

domiciled

and

not

a

UK

national

at

the

time

of

the

settlement),

are

part

of

the

business

property

of

a

UK

permanent

establishment

of

an

enterprise,

or

pertain

to

a

UK

fixed

base

of

an

individual

used

for

the

performance

of

independent

personal

services.

In

cases

where

the

Shares

are

subject

to

both

UK

inheritance

tax

and

US

federal

estate

or

gift

tax,

the

Estate

and

Gift

Tax

Convention

generally

provides

a

credit

against

US

federal

tax

liability

for

the

amount

of

any

inheritance

tax

paid

in

the

UK.

Foreign

Financial

Asset

Reporting

Certain

US

Holders

that

own

“specified

foreign

financial

assets”

with

an

aggregate

value

in

excess

of

US$50,000

on

the

last

day

of

the

taxable

year

or

US$75,000

at

any

time

during

the

taxable

year

are

generally

required

to

file

an

information

statement

along

with

their

tax

returns,

currently

on

Form

8938,

with

respect

to

such

assets.

“Specified

foreign

financial

assets”

include

any

financial

accounts

held

at

a

non-US

financial

institution,

as

well

as

securities

issued

by

a

non-US

issuer

that

are

not

held

in

accounts

maintained

by

financial

institutions.

The

understatement

of

income

attributable

to

“specified

foreign

financial

assets”

in

excess

of

US$5,000

extends

the

statute

of

limitations

with

respect

to

the

tax

return

to

six

years

after

the

return

was

filed.

US

Holders

who

fail

to

report

the

required

information

could

be

subject

to

substantial

penalties.

Prospective

investors

are

encouraged

to

consult

with

their

own

tax

advisors

regarding

the

possible

application

of

these

rules,

including

the

application

of

the

rules

to

their

particular

circumstances.

Backup

Withholding

and

Information

Reporting

Dividends

paid

on,

and

proceeds

from

the

sale

or

other

disposition

of,

the

Shares

to

a

US

Holder

generally

may

be

subject

to

the

information

reporting

requirements

of

the

Code

and

may

be

subject

to

backup

withholding

unless

the

US

Holder

provides

an

accurate

taxpayer

identification

number

and

makes

any

other

required

certification

or

otherwise

establishes

an

exemption.

Backup

withholding

is

not

an

additional

tax.

The

amount

of

any

backup

withholding

from

a

payment

to

a

US

Holder

will

be

allowed

as

a

refund

or

credit

against

the

US

Holder’s

US

federal

income

tax

liability,

provided

the

required

information

is

furnished

to

the

US

Internal

Revenue

Service

(“IRS”)

in

a

timely

manner.

A

holder

that

is

not

a

US

Holder

may

be

required

to

comply

with

certification

and

identification

procedures

in

order

to

establish

its

exemption

from

information

reporting

and

backup

withholding.

FATCA

Risk

Factor

In

certain

circumstances,

payments

on

shares

or

ADSs

may

be

subject

to

US

withholding

taxes

on

“passthru

payments,”

starting

on

the

date

that

is

two

years

after

the

date

on

which

final

regulations

defining

this

concept

are

adopted

in

the

United

States.

Under

the

“Foreign

Account

Tax

Compliance

Act”

(or

“FATCA”),

as

well

as

intergovernmental

agreements

between

the

United

States

and

other

countries

and

implementing

laws

in

respect

of

the

foregoing,

certain

US-source

payments

(including

dividends

and

interest)

and

certain

payments

made

by,

and

financial

accounts

held

with,

entities

that

are

classified

as

financial

institutions

under

FATCA

are

subject

to

a

special

information

reporting

and

withholding

tax

regime.

Regulations

implementing

withholding

in

respect

of

“passthru

payments”

under

FATCA

have

not

yet

been

adopted

or

proposed.

The

United

States

has

entered

into

an

intergovernmental

agreement

regarding

the

implementation

of

FATCA

with

the

UK

(the

“UK

IGA”).

Under

the

UK

IGA,

as

currently

drafted,

it

is

not

expected

that

Barclays

PLC

will

be

required

to

withhold

tax

under

FATCA

on

payments

made

with

respect

to

the

shares

or

ADSs.

However,

significant

aspects

of

when

and

how

FATCA

will

apply

remain

unclear,

and

no

assurance

can

be

given

that

withholding

under

FATCA

will

not

become

relevant

with

respect

to

payments

made

on

or

with

respect

to

the

shares

or

ADSs

in

the

future.

Investors

should

consult

their

own

tax

advisers

regarding

the

potential

impact

of

FATCA.

The

Barclays

Group

has

registered

with

the

Internal

Revenue

Service

(“IRS”)

for

FATCA.

The

Global

Intermediary

Identification

Number

(GIIN)

for

Barclays

PLC

in

the

United

Kingdom

is

E1QAZN.00000.LE.826

and

it

is

a

Reporting

Model

1

FFI.

The

GIINs

for

other

parts

of

the

Barclays

Group

or

Barclays

branches

outside

of

the

UK

may

be

obtained

from

your

usual

Barclays

contact

on

request.

The

IRS

list

of

registered

Foreign

Financial

Institutions

is

publicly

available

on

the

IRS

website.

Additional

information

313

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Exchange

controls

and

other

limitations

affecting

security

holders

Other

than

certain

economic

sanctions

which

may

be

in

force

from

time

to

time,

there

are

currently

no

UK

laws,

decrees

or

regulations

which

would

affect

the

transfer

of

capital

or

remittance

of

dividends,

interest

and

other

payments

to

holders

of

Barclays

securities

who

are

not

residents

of

the

UK.

There

are

also

no

restrictions

under

the

Articles

of

Association

of

Barclays

PLC,

or

(subject

to

the

effect

of

any

such

economic

sanctions)

under

current

UK

laws,

which

relate

only

to

non-residents

of

the

UK,

and

which

limit

the

right

of

such

non-residents

to

hold

Barclays

securities

or,

when

entitled

to

vote,

to

do

so.

Documents

on

display

It

is

possible

to

read

and

copy

documents

that

have

been

filed

by

Barclays

PLC

with

the

US

Securities

and

Exchange

Commission

via

commercial

document

retrieval

services,

and

from

the

website

maintained

by

the

US

Securities

and

Exchange

Commission

at

www.sec.gov

.

Additional

information

314

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Fees

and

charges

payable

by

a

holder

of

ADSs

The

ADR

depositary

collects

fees

for

delivery

and

surrender

of

ADSs

directly

from

investors

depositing

ordinary

shares

or

surrendering

ADSs

for

the

purpose

of

withdrawal

or

from

intermediaries

acting

for

them.

The

charges

of

the

ADR

depositary

payable

by

investors

are

as

follows:

Type

of

service

ADR

depositary

actions

Fee

ADR

depositary

or

substituting

the

underlying

shares

Issuance

of

ADSs

against

the

deposit

of

ordinary

shares,

including

deposits

and

issuances

in

respect

of:

$5.00

or

less

per

100

ADSs

(or

portion

thereof)

evidenced

by

the

new

ADSs

delivered

–

Share

distributions,

stock

splits,

rights

issues,

mergers

–

Exchange

of

securities

or

other

transactions

or

event

or

other

distribution

affecting

the

ADSs

or

deposited

securities

Receiving

or

distributing

cash

dividends

Distribution

of

cash

dividends

$0.04

or

less

per

ADS

a

Selling

or

exercising

rights

Distribution

or

sale

of

securities,

the

fee

being

in

an

amount

equal

to

the

fee

for

the

execution

and

delivery

of

ADSs

which

would

have

been

charged

as

a

result

of

the

deposit

of

such

securities

$5.00

or

less

per

each

100

ADSs

(or

portion

thereof)

Withdrawing

an

underlying

ordinary

share

Acceptance

of

ADSs

surrendered

for

withdrawal

of

deposited

ordinary

shares

$5.00

or

less

for

each

100

ADSs

(or

portion

thereof)

General

depositary

services,

particularly

those

charged

on

an

annual

basis

Other

services

performed

by

the

ADR

depositary

in

administering

the

ADS

program

No

fee

currently

payable

Expenses

of

the

ADR

depositary

Expenses

incurred

on

behalf

of

Holders

in

connection

with:

–

Expenses

of

the

ADR

depositary

in

connection

with

the

conversion

of

foreign

currency

into

US

dollars

(which

are

paid

out

of

such

foreign

currency)

Expenses

payable

at

the

sole

discretion

of

the

ADR

depositary

by

billing

Holders

or

by

deducting

charges

from

one

or

more

cash

dividends

or

other

cash

distributions

–

Taxes

and

other

governmental

charges

–

Cable,

telex

and

facsimile

transmission/delivery

–

Transfer

or

registration

fees,

if

applicable,

for

the

registration

of

transfers

or

underlying

ordinary

shares

–

Any

other

charge

payable

by

ADR

depositary

or

its

agents

Note

a

There

was

no

distribution

of

dividends

in

the

year

ended

31

December

2020

and

therefore

no

dividend

fee

per

ADS

was

charged

for

the

period.

Fees

and

payments

made

by

the

ADR

depositary

to

Barclays

The

ADR

depositary

has

agreed

to

provide

Barclays

with

an

amount

based

on

any

cash

dividend,

issuance

and

cancellations

fees

charged

during

each

twelve-month

period

for

expenses

incurred

by

Barclays

in

connection

with

the

ADS

program.

Barclays

has

not

yet

received

any

such

amounts

from

the

ADR

depositary

for

the

year

ended

31

December

2020.

Under

certain

circumstances,

including

non-routine

corporate

actions,

removal

of

the

ADR

depositary

or

termination

of

the

ADS

program

by

Barclays,

Barclays

may

be

charged

by

the

ADR

depositary

certain

fees

(including

in

connection

with

depositary

services,

certain

expenses

paid

on

behalf

of

Barclays,

an

administrative

fee,

fees

for

non-routine

services

and

corporate

actions

and

any

other

reasonable

fees/expenses

incurred

by

the

ADR

depositary).

The

ADR

depositary

has

agreed

to

waive

certain

of

its

fees

chargeable

to

Barclays

with

respect

to

standard

costs

associated

with

the

administration

of

the

ADS

program.

Additional

information

315

Barclays

PLC

2020

Annual

Report

on

Form

20-F

NYSE

Corporate

Governance

Statement

As

our

main

listing

is

on

the

London

Stock

Exchange,

we

follow

the

UK

Corporate

Governance

Code.

However,

as

Barclays

also

has

American

Depositary

Receipts

listed

on

the

New

York

Stock

Exchange

(NYSE),

we

are

also

subject

to

the

NYSE’s

Corporate

Governance

Rules

(NYSE

Rules).

We

are

exempt

from

most

of

the

NYSE

Rules,

which

US

domestic

companies

must

follow,

because

we

are

a

non-US

company

listed

on

the

NYSE.

However,

we

are

required

to

provide

an

Annual

Written

Affirmation

to

the

NYSE

of

our

compliance

with

the

applicable

NYSE

Rules

and

must

also

disclose

any

significant

differences

between

our

corporate

governance

practices

and

those

followed

by

domestic

US

companies

listed

on

the

NYSE.

Key

differences

between

the

Code

and

NYSE

Rules

are

set

out

here:

Director

Independence

NYSE

Rules

require

the

majority

of

the

Board

to

be

independent.

The

Code

requires

at

least

half

of

the

Board

(excluding

the

Chairman)

to

be

independent.

The

NYSE

Rules

contain

different

tests

from

the

Code

for

determining

whether

a

Director

is

independent.

We

follow

the

Code’s

recommendations

as

well

as

developing

best

practices

among

other

UK

public

companies.

The

independence

of

our

non-executive

Directors

is

reviewed

by

the

Board

on

an

annual

basis

and

it

takes

into

account

the

guidance

in

the

Code

and

the

criteria

we

have

established

for

determining

independence,

which

are

described

in

the

Directors’

Report.

Board

Committees

We

have

a

Board

Nominations

Committee

and

a

Board

Remuneration

Committee,

both

of

which

are

broadly

similar

in

purpose

and

constitution

to

the

Committees

required

by

the

NYSE

Rules

and

whose

terms

of

reference

comply

with

the

Code’s

requirements.

The

NYSE

Rules

state

that

both

Committees

must

be

composed

entirely

of

independent

Directors.

As

the

Group

Chairman

was

independent

on

appointment,

the

Code

permits

him

to

chair

the

Board

Nominations

Committee.

Except

for

this

appointment,

both

Committees

are

composed

solely

of

non-executive

Directors,

whom

the

Board

has

determined

to

be

independent.

We

comply

with

the

NYSE

Rules

requirement

that

we

have

a

Board

Audit

Committee

comprised

solely

of

independent

non-executive

Directors

as

defined

under

Rule

10A-3.

However,

we

follow

the

Code

recommendations,

rather

than

the

NYSE

Rules,

regarding

the

responsibilities

of

the

Board

Audit

Committee

(except

for

applicable

mandatory

responsibilities

under

the

Sarbanes-Oxley

Act)

,

although

both

are

broadly

comparable.

Although

the

NYSE

Rules

state

that

the

Board

Audit

Committee

is

to

take

responsibility

for

risk

oversight,

Barclays

has

an

additional

Board

Committee

which

addresses

different

areas

of

risk

management.

To

enhance

Board

governance

of

risk,

Barclays

has

the

Board

Risk

Committee.

A

full

description

of

the

Board

Risk

Committee

can

be

found

in

the

Directors’

Report.

Corporate

Governance

Guidelines

The

NYSE

Rules

require

domestic

US

companies

to

adopt

and

disclose

corporate

governance

guidelines.

There

is

no

equivalent

recommendation

in

the

Code

but

the

Board

Nominations

Committee

has

developed

corporate

governance

guidelines,

‘Corporate

Governance

in

Barclays’,

which

have

been

approved

and

adopted

by

the

Board.

Code

of

Ethics

The

NYSE

Rules

require

that

domestic

US

companies

adopt

and

disclose

a

code

of

business

conduct

and

ethics

for

Directors,

officers

and

employees.

The

Barclays

Way

was

introduced

in

2013,

t

his

is

a

Code

of

Conduct

which

outlines

the

Values

and

Behaviours

which

govern

our

way

of

working

across

our

business

globally.

The

Barclays

Way

has

been

adopted

on

a

Group

wide

basis

by

all

Directors,

Officers

and

employees.

The

Barclays

Way

is

available

to

view

on

the

Barclays

website

at

home.barclays/about-barclays/barclays-values.

Shareholder

Approval

of

Equity-compensation

Plans

The

NYSE

listing

standards

require

that

shareholders

must

be

given

the

opportunity

to

vote

on

all

equity-compensation

plans

and

material

revisions

to

those

plans.

We

comply

with

UK

requirements,

which

are

similar

to

the

NYSE

standards.

However,

the

Board

does

not

explicitly

take

into

consideration

the

NYSE’s

detailed

definition

of

what

are

considered

‘material

revisions’.

Additional

information

316

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Major

shareholders

Major

shareholders

do

not

have

different

voting

rights

from

those

of

other

shareholders.

Information

provided

to

the

Company

by

substantial

shareholders

pursuant

to

the

FCA’s

Disclosure

Guidance

and

Transparency

Rules

are

published

via

a

Regulatory

Information

Service

and

is

available

on

the

Company’s

website.

Refer

to

the

Directors’

report,

Other

statutory

information

section

for

a

breakdown

of

major

shareholders

as

at

31

December

2020.

Comparatives

for

2019

and

2018

are

presented

below.

As

at

31

December

2019,

the

Company

had

been

notified

under

Rule

5

of

the

Disclosure

and

Transparency

Rules

of

the

UKLA

of

the

following

holdings

of

voting

rights

in

its

shares:

2019

Holder

Number

of

Barclays

shares

%

of

total

voting

rights

attached

to

issued

share

capital

a

BlackRock

Inc

b

1,039,595,156

6.02

Qatar

Holding

LLC

c

1,017,455,690

5.87

Sherborne

Investors

d

943,949,089

5.48

The

Capital

Group

Companies

Inc

e

855,511,385

4.96

Notes

a

The

percentage

of

voting

rights

detailed

above

was

calculated

at

the

time

of

the

relevant

disclosures

made

in

accordance

with

Rule

5

of

the

Disclosure

Guidance

and

Transparency

Rules.

b

Total

shown

includes

6,950,721

contracts

for

difference

to

which

voting

rights

are

attached.

Part

of

the

holding

is

held

as

American

Depositary

Receipts.

On

4

February

2020,

BlackRock

Inc.

disclosed

by

way

of

a

Schedule

13G

filed

wit

h

the

Securities

Exchange

Commission

beneficial

ownership

of

1,149,011,610

ordinary

shares

of

the

company,

representing

6.6%

of

that

class

of

shares.

c

Qatar

Holding

LLC

is

wholly

-owned

by

Qatar

Investment

Authority.

d

We

understand

from

disclosures

that

the

Sherborne

shares

are

held

via

three

funds

ultimately

controlled

by

Edward

Bramson

and

Stephen

Welker

in

their

capacity

as

managing

directors

of

Sherborne

Investors

Management

GP,

LLC

(Sherborne

Management

GP),

and

Sherborne

Investors

GP,

LLC.

Sherborn

e

Management

GP

is

the

general

partner

of

Sherborne

Investors

Management

LP

(Sherborne

Investors)

which

is

the

investment

manager

of

each

of

the

three

funds

beneficially

interested

in

the

Sherborne

shares

being

Whistle

Investors

LLC,

Whistle

Investors

II

LLC

and

Whistle

Investors

III

LLC.

Amendment

No.2

to

a

Schedule

13D

filing,

filed

on

7

November

2019,

also

disclosed

that

certain

funded

derivative

transactions,

which

were

used

to

purchase

505,086,254

of

such

shares,

have

been

extended

to

expire

on

various

dates

during

the

period

beginning

14

December

2021

(previously

21

October

2019)

and

ending

22

July

2022

(previously

16

March

2021).

e

The

Capital

Group

Companies

Inc

(CG)

holds

its

shares

via

CG

Management

companies.

Part

of

the

CG

holding

is

held

as

American

Depositary

Receipts.

As

at

31

December

2018,

the

Company

had

been

notified

under

Rule

5

of

the

Disclosure

and

Transparency

Rules

of

the

UKLA

of

the

following

holdings

of

voting

rights

in

its

shares:

2018

Holder

Number

of

Barclays

shares

%

of

total

voting

rights

attached

to

issued

share

capital

a

The

Capital

Group

Companies

Inc

b

1,172,090,125

6.84

Qatar

Holding

LLC

c

1,017,455,690

5.94

BlackRock

Inc

d

1,018,388,143

5.95

Sherborne

Investors

e

923,787,634

5.41

Norges

Bank

514,068,594

3.00

Notes

a

The

percentage

of

voting

rights

detailed

above

was

calculated

at

the

time

of

the

relevant

disclosures

made

in

accordance

with

Rule

5

of

the

Disclosure

Guidance

and

Transparency

Rules.

b

The

Capital

Group

Companies

Inc

(CG)

holds

its

shares

via

CG

Management

companies

and

funds.

Part

of

the

CG

holding

is

held

as

American

Depositary

Receipts.

On

14

February

2019,

CG

disclosed

by

way

of

a

Schedule

13G

filed

with

the

SEC,

beneficial

ownership

of

277,002,140

ordinary

shares

of

the

Company

as

of

31

December

2018,

representing

1.6%

of

that

class

of

shares.

c

Qatar

Holding

LLC

(QH)

is

wholly

-owned

by

Qatar

Investment

Authority.

d

Total

shown

includes

8,879,783

contracts

for

difference

to

which

voting

rights

are

attached.

Part

of

the

holding

is

held

as

American

Depositary

Receipts.

On

4

February

2019,

BlackRock,

Inc.

disclosed

by

way

of

a

Schedule

13G

filed

with

the

SEC

beneficial

ownership

of

1,119,810,169

ordinary

shares

of

the

Company

as

of

31

December

2018,

representing

6.5%

of

that

class

of

shares

.

e

We

understand

from

disclosures

that

the

Sherborne

Shares

are

held

via

three

funds

ultimately

controlled

by

Edward

Bramson

and

Stephen

Welker

in

their

capacity

as

managing

directors

of

Sherborne

Investors

Management

GP,

LLC

(Sherborne

Management

GP)

a

nd

Sherbor

ne

Investors

GP,

LLC.

Sherborne

Management

GP

is

the

general

partner

of

Sherborne

Investors

Management

LP

(Sherborne

Investors)

which

is

the

investment

manager

to

two

of

the

funds,

Whistle

Investors

LLC

and

Whistle

Investors

II

LLC.

Sherborne

Investors

Management

(Guernsey)

LLC,

the

investment

manager

to

the

third

fund,

SIGC,

LP,

is

wholly

owned

by

Sherborne

Investors.

On

8

February

2019,

Sherborne

Investors

disclosed

by

way

of

a

Schedule

13D

filed

with

the

SEC

beneficial

ownership

of

943,949,089

ordinary

shares

of

the

Company

as

of

29

January

2019,

representing

approximately

5.5%

of

that

class

of

shares.

Such

Schedule

13D

also

disclosed

Edward

Bramson

and

Stephen

Welker

as

the

ultimate

deemed

beneficial

owners

of

the

Sherborne

Shares

and

that

505,

086,254

of

such

shares

were

purchased

through

funded

derivative

transactions.

Additional

information

317

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Disclosure

controls

and

procedures

The

Chief

Executive,

James

E

Staley,

and

the

Group

Finance

Director,

Tushar

Morzaria,

conducted

with

Group

Management

an

evaluation

of

the

effectiveness

of

the

design

and

operation

of

the

Group’s

disclosure

controls

and

procedures

of

each

of

Barclays

PLC

as

at

31

December

2020,

which

are

defined

as

those

controls

and

procedures

designed

to

ensure

that

information

required

to

be

disclosed

in

reports

filed

or

submitted

under

the

US

Securities

Exchange

Act

of

1934

is

recorded,

processed,

summarised

and

reported

within

the

time

periods

specified

in

the

US

Securities

and

Exchange

Commission’s

rules

and

forms.

As

of

the

date

of

the

evaluation,

the

Chief

Executive

and

Group

Finance

Director

concluded

that

the

design

and

operation

of

these

disclosure

controls

and

procedures

were

effective.

Board

of

Directors

See

the

Directors’

report

for

biographies.

Group

Executive

Committee

Officers

of

the

Group

Date

of

Appointment

as

Officer

James

E

Staley

Group

Chief

Executive

2015

Paul

Compton

Global

Head

of

Banking,

Co-President

of

Barclays

Bank

PLC

(BBPLC)

2016

Alistair

Currie

Head

of

Barclays

Corporate

Banking

2019

Stephen

Dainton

Deputy

Head

of

Markets

2019

Matt

Hammerstein

CEO,

Barclays

UK

2019

Tushar

Morzaria

Group

Finance

Director

2013

Laura

Padovani

Group

Chief

Compliance

Officer

2017

Mark

Ashton

Rigby

Group

Chief

Operating

Officer,

Chief

Executive

Officer,

BX

2019

Tristram

Roberts

Group

HR

Director

2015

Taalib

Shaah

Group

Chief

Risk

Officer

2020

Stephen

Shapiro

Group

General

Counsel

and

Company

Secretary

2017

Ashok

Vaswani

CEO,

Consumer

Banking

and

Payments

2012

C

S

Venkatakrishnan

Global

Head

of

Markets,

Co-President

of

Barclays

Bank

PLC

(BBPLC)

2016

Sasha

Wiggins

Group

Head

of

Public

Policy

and

Corporate

Responsibility

2020

Jes

Staley,

Group

Chief

Executive,

Executive

Director

See

the

Directors’

report

for

biography.

Tushar

Morzaria,

Group

Finance

Director,

Executive

Director

See

the

Directors’

report

for

biography.

Mark

Ashton-Rigby,

Group

Chief

Operating

Officer,

Chief

Executive

Officer,

BX

In

his

role

as

Group

Chief

Operating

Officer,

Mark

is

responsible

for

Barclays

Operations

and

Technology,

leading

on

the

ambition

to

be

a

world-

class

provider

of

simple,

efficient,

innovative

and

secure

Operation

and

Technology

services

to

Barclays’

trading

entities,

generating

sustainable

growth

and

returns.

Mark’s

responsibilities

also

include

Real

Estate,

Controls,

and

the

Chief

Data

Office.

Mark

is

also

Chief

Executive

Officer,

Barclays

Execution

Services

(BX).

In

that

capacity,

Mark

leads

the

continuous

enhancement

of

Barclays’

operating

structure,

to

drive

efficiency

across

the

organisation

and

generate

excellent

outcomes

for

our

customers

and

clients.

Mark

joined

Barclays

in

September

2016

as

Group

Chief

Information

Officer.

In

this

role,

Mark

was

responsible

for

the

bank’s

global

technology

systems

and

infrastructure,

and

led

on

the

transformation

of

the

technology

foundations

across

our

retail

and

wholesale

businesses.

The

increased

digitisation

of

our

consumer

offering

demonstrates

that

our

technology

infrastructure

and

innovation

capabilities

are

a

competitive

advantage

for

Barclays,

building

a

compelling

client

value

proposition.

Prior

to

joining

Barclays,

Mark

was

Chief

Information

Officer

for

JP

Morgan’s

Corporate

and

Investment

bank.

Prior

to

that,

he

held

various

Senior

Technology

roles

at

UBS

and

Deutsche

Bank.

Paul

Compton,

Global

Head

of

Banking,

Co-President

of

Barclays

Bank

PLC

(BBPLC)

Paul

Compton

is

Global

Head

of

Banking,

Co-President

of

Barclays

Bank

PLC

(BBPLC),

and

a

member

of

the

Group

Executive

Committee

of

Barclays,

based

in

New

York.

Paul

leads

the

provision

of

our

financial

advisory,

capital

raising,

financing

and

risk

management

services

to

corporations,

governments

and

financial

institutions

worldwide,

and,

together

with

C.S.

Venkatakrishnan,

is

responsible

for

overseeing

the

Corporate

and

Investment

Bank,

which

comprises

our

global

Banking,

Markets

and

Corporate

Banking

businesses.

Prior

to

his

appointment

as

Global

Head

of

Banking

and

Co-President

of

BBPLC

in

October

2020,

Paul

served

as

President

of

BBPLC,

and

previously

as

Barclays

Group

Chief

Operating

Officer,

and

as

Chief

Executive

Officer

of

Barclays

Execution

Services

(BX),

delivering

operations

and

technology

services

to

Barclays

businesses

globally.

Before

joining

Barclays

in

2016,

Paul

served

for

nearly

two

decades

in

a

variety

of

senior

roles

at

JPMorgan

Chase,

including

Group

Chief

Administrative

Officer,

and

Chief

Financial

Officer

and

Chief

Administrative

Officer

of

the

Investment

Bank.

JPMorgan,

Paul

spent

10

years

as

Principal

at

Ernst

&

Young

in

the

Brisbane,

Australia

and

New

York

offices.

Alistair

Currie,

Head

of

Barclays

Corporate

Banking

Alistair

Currie

joined

Barclays

in

August

2017

as

Chief

Operating

Officer

&

Head

of

Product

for

Corporate

Banking

and

is

a

member

of

the

Corporate

Banking

and

the

Barclays

International

COO

Executive

Committees.

In

October

2017

Alistair

became

Co-Head

of

Corporate

Banking

and

in

September

2018

Alistair

was

appointed

as

Head

of

Corporate

Banking.

Prior

to

joining

Barclays,

Alistair

was

at

the

ANZ

Banking

Group

in

Australia

where

he

most

recently

held

the

role

of

Group

Chief

Operating

Officer,

responsible

for

technology,

shared

services,

operations

and

property,

and

played

a

key

role

in

the

ANZ’s

digital

transformation.

Before

taking

up

this

role

in

2011,

he

had

previously

joined

ANZ

in

2008

as

Managing

Director,

Transaction

Banking.

Before

ANZ,

Alistair

spent

18

years

at

HSBC

in

a

variety

of

international

banking

roles

in

the

UK,

Middle

East

and

Asia

including

President

and

CEO

of

HSBC,

Taiwan,

between

2007

and

2008.

As

Regional

Head

of

Tr

ade

Services,

HSBC

Asia

Office

in

Hong

Kong

from

2004

to

2007,

Alistair

further

developed

HSBC’s

market-leading

trade

finance

position

in

the

region

and

from

2001

to

2004,

he

was

COO,

Wells

Fargo

HSBC

Trade

Bank

NA,

San

Francisco.

With

27

years

as

a

banking

professional,

Mr.

Currie

has

a

wealth

of

experience

in

institutional,

large

corporate,

mid

-corporate

and

consumer

client

segments

as

well

as

transaction

banking,

trade

finance,

cash

management

and

technology,

and

a

track

record

in

delivering

business

transformation

and

high

quality

customer

outcomes.

Stephen

Dainton,

Deputy

Head

of

Markets

Stephen

Dainton

is

Deputy

Head

of

Markets

and

a

member

of

the

Group

Executive

Committee

of

Barclays,

based

in

London.

He

is

responsible

for

Global

Sales,

Senior

Relationship

Management

(SRM)

and

Financing.

Stephen

has

over

30

years

of

experience

in

global

markets

across

trading,

sales,

risk,

capital

markets,

structuring,

and

research.

He

joined

Barclays

in

September

2017

as

Global

Head

of

Equities

and

Co

Head

Additional

information

318

Barclays

PLC

2020

Annual

Report

on

Form

20-F

of

Markets.

Prior

to

Barclays,

Stephen

spent

14

years

at

Credit

Suisse

where

he

served

as

Co-Head

of

Global

Markets

for

the

EMEA

region.

He

joined

Credit

Suisse

in

2003

in

the

Equity

Division

and

went

on

to

become

Head

of

Equities

for

the

region,

before

assuming

his

global

markets

role.

Previously,

Stephen

worked

at

Goldman

Sachs

as

Head

of

US

and

International

Equities,

based

in

New

York.

He

has

also

held

roles

in

Equities

at

Donaldson,

Lufkin

&

Jenrette

in

both

London

and

New

York.

Matt

Hammerstein,

CEO,

Barclays

UK

Matt

Hammerstein

is

the

CEO

for

Barclays

Bank

UK,

covering

Retail

Banking,

Investments

and

Wea

lth

UK,

Business

Banking

and

Barclaycard

UK.

Prior

to

becoming

CEO,

Matt

was

Head

of

Retail

Lending

covering

both

the

secured

and

unsecured

lending

businesses.

Matt

joined

Barclays

in

2004

as

Director

of

Group

Strategy,

later

progressing

to

become

the

Group

Chief

of

Staff;

a

key

strategic

role

in

which

he

provided

vital

support

to

the

Group

CEO

during

the

financial

crisis.

Matt

went

on

to

manage

Barclays

Group

Corporate

Strategy

and

Corporate

Relations,

Barclays

Customer

and

Client

Experience

in

Retail

and

Business

Banking

and

Barclays

UK

Retail

Products

and

Segments.

Before

Joining

Barclays,

Matt

was

a

Senior

Management

Consultant

at

Marakon

Associates

where

he

worked

for

12

years

in

the

financial

services,

consumer

products

and

energy

sectors

within

the

Americas

and

Europe.

Laura

Padovani,

Group

Chief

Compliance

Officer

Laura

is

currently

the

Group

Chief

Compliance

Officer

for

Barclays

and

has

worked

at

the

bank

since

2015.

Laura

joined

the

bank

as

the

Head

of

Global

Compliance

Services

and

was

promoted

to

the

role

of

Group

Chief

Compliance

Officer

in

2018.

Laura

joined

from

American

Express

and

has

over

25

years

of

financial

services

experience.

She

started

her

career

with

American

Express

in

Argentina

in

1991

where

she

established

the

first

Compliance

office

and

co-ordinated

their

Legal

function.

Laura

moved

to

New

York

in

1997

to

assist

with

the

development

of

the

Global

Anti-Money

Laundering

Program

for

American

Express.

In

2000,

Laura

broadened

her

Financial

Services

experience

moving

to

Aviva

as

the

Head

of

International

Compliance

responsible

for

all

non-UK

offices

across

North

America,

Europe

and

Asia

Pacific.

Laura

returned

to

American

Express

in

2004

focused

on

Global

Consumer

Financial

Services

and

European

Emerging

Markets,

and

then

as

the

Global

Head

of

International

Regulatory

Compliance.

Laura

is

fluent

in

Spanish

and

Italian

and

has

been

involved

in

many

networking

initiatives

for

Women,

both

at

American

Express

and

now

at

Barclays.

She

is

also

the

global

executive

sponsor

for

Spectrum,

Barlcays’

LGBTQ

network

Tristram

Roberts,

Group

HR

Director

Tristram

is

the

Group

Human

Resources

Director

and

a

member

of

the

Group

Executive

Committee.

Tristram

joined

Barclays

in

July

2013

as

HR

Director

for

the

Investment

Bank.

His

remit

was

expanded

in

May

2014

to

include

HR

responsibilities

for

Barclays

Non-Core,

and

he

became

the

Group

HR

Director

in

December

2015.

Prior

to

Barclays,

Tristram

was

Head

of

Human

Resources

for

Global

Functions

and

Operations

&

Technology

at

HSBC,

as

well

as

Group

Head

of

Performance

and

Reward.

Previously,

he

was

Group

Reward

and

Policy

Director

for

Vodafone

Group

plc.

Tristram

began

his

career

in

consulting.

He

became

a

partner

with

Arthur

Andersen

in

2001

and

was

subsequently

a

partner

with

both

Deloitte

and

KPMG.

Taalib

Shaah,

Group

Chief

Risk

Officer

Taalib

Shaah

is

Group

Chief

Risk

Officer

for

Barclays,

based

in

London.

He

is

responsible

for

helping

to

define,

set

and

manage

the

risk

profile

of

the

bank

and

leads

the

risk

management

organisation

across

the

group.

He

is

a

member

of

the

Group

Executive

Committee.

Taalib

joined

Barclays

in

late

2014

as

Chief

Risk

Officer

for

the

Investment

Bank

and

in

2017

assumed

the

role

of

Chief

Risk

Officer

for

Barclays

International

(BBPLC),

responsible

for

the

Corporate

and

Investment

Bank,

the

Private

Bank

and

the

Cards

&

Payments

business.

He

assumed

his

current

role

in

October

2020.

Prior

to

Barclays,

Taalib

spent

four

years

at

Citigroup

where

he

was

most

recently

Chief

Risk

Officer

for

Market

Risk,

Real

Estate

Credit,

Treasury,

Private

Equity

and

Head

of

Model

Validation.

Previously,

Taalib

spent

17

years

at

Credit

Suisse,

working

in

various

areas,

including

risk

and

the

front

office.

He

began

his

career

at

Ernst

and

Young.

Stephen

Shapiro,

Group

General

Counsel

and

Company

Secretary

Stephen

joined

Barclays

in

November

2017

as

Group

Company

Secretary

and

was

subsequently

appointed

Group

General

Counsel

in

August

2020,

in

addition

to

his

role

as

Company

Secretary.

Before

joining

Barclays

Stephen

served

as

the

Group

Company

Secretary

and

Deputy

General

Counsel

of

SABMiller

plc,

and

prior

to

this,

he

practised

law

as

a

partner

in

a

law

firm

in

South

Africa,

and

subsequently

in

corporate

law

and

M&A

at

Hogan

Lovells

in

the

UK.

Stephen

has

extensive

experience

in

corporate

governance,

legal,

regulatory

and

compliance

matters.

Stephen

serves

as

Vice

Chair

of

the

GC100,

the

association

of

General

Counsel

and

Company

Secretaries

working

in

FTSE

100

companies,

and

has

previously

served

as

Chairman

of

the

ICC

UK’s

Committee

on

Anti-Corruption.

Ashok

Vaswani,

CEO,

Consumer

Banking

&

Payments

Ashok

Vaswani

is

the

Chief

Executive

Officer

of

Consumer

Banking

and

Payments

overseeing

the

execution

of

plans

for

the

Group's

consumer

banking,

private

banking

and

payments

businesses

across

Asia,

UK,

Europe

and

the

US.

Prior

to

this

Ashok

was

the

CEO

for

Barclays

Bank

UK,

covering

Retail

Banking,

Wealth,

Business

Banking

and

Barclaycard

UK.

Ashok

joined

Barclays

in

2010,

managing

the

credit

card

business

across

the

UK,

Europe

and

the

Nordics,

becoming

chairman

of

Entercard.

He

went

on

to

manage

Barclays

in

Africa,

Barclays

Retail

Business

Bank

globally

and

Barclays

Personal

and

Corporate

Banking.

Ashok

is

a

member

of

Barclays

Executive

Committee,

and

a

board

member

for

Pratham

Board

and

the

Trustee

Board

at

Citizens

Advice.

He

also

sits

on

the

advisory

boards

of

a

number

of

institutions

such

as

Rutberg

&

Co

and

is

Founder

Director

of

Lend-a-Hand,

a

non-profit

organisation

focused

on

rural

education

in

India.

Ashok

has

previously

served

as

a

Non-

Executive

Director

on

the

Board

of

Barclays

Africa

Group

Limited,

The

Board

of

Directors,

Telenor

ASA

and

the

advisory

boards

of

S.

P.

Jain

Institute

of

Management,

Insead

Singapore

and

Visa

Asia

Pacific.

Prior

to

Barclays,

Ashok

was

a

partner

with

a

JP

Morgan

Chase

funded

private

equity

firm

–

Brysam

Global

Partners,

which

was

focused

on

building

retail

financial

service

businesses

in

emerging

markets.

Ashok

has

demonstrated

a

passion

for

building

and

managing

businesses

across

the

globe.

He

started

his

career

in

Mumbai,

India

and

since

then,

has

worked

and

lived

in

Asia,

Europe,

the

Middle

East

and

the

US.

Ashok

spent

twenty

years

with

Citigroup.

His

last

position

at

Citigroup

was

CEO,

Asia

Pacific.

Ashok

was

also

a

member

of

the

Citigroup

Operating

Committee,

the

Citigroup

Management

Committee,

and

the

Global

Consumer

Planning

Group.

C.S.

Venkatakrishnan,

Global

Head

of

Markets,

Co-President

of

Barclays

Bank

PLC

(BBPLC)

C.S.

Venkatakrishnan

(“Venkat”)

is

Global

Head

of

Markets,

Co-President

of

Barclays

Bank

PLC

(BBPLC),

and

a

member

of

the

Group

Executive

Committee

of

Barclays,

based

in

New

York.

Venkat

leads

our

Credit,

Equities,

Macro,

and

Securitized

Products

businesses,

and,

together

with

Paul

Compton,

is

responsible

for

overseeing

the

Corporate

and

Investment

Bank,

which

comprises

our

global

Banking,

Markets

and

Corporate

Banking

businesses.

Prior

to

his

appointment

as

Global

Head

of

Markets

and

Co-President

of

BBPLC

in

October

2020,

Venkat

served

as

Chief

Risk

Officer

at

Barclays.

Prior

to

joining

Barclays

in

2016,

he

worked

at

JP

Morgan

Chase

from

1994,

holding

senior

roles

in

Asset

Management

where

he

was

Chief

Investment

Officer

for

approximately

$200

billion

in

Global

Fixed

Income,

as

well

as

in

Investment

Banking,

and

in

Risk.

Venkat

is

the

executive

sponsor

for

Embrace,

the

global

multi-cultural

network

at

Barclays.

Sasha

Wiggins,

Group

Head

of

Public

Policy

and

Corporate

Responsibility

Additional

information

319

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Sasha

Wiggins

is

the

Group

Head

of

Public

Policy

and

Corporate

Responsibility

at

Barclays,

based

in

London.

She

is

a

member

of

the

bank’s

Group

Executive

Committee.

Sasha

is

responsible

for

leading

Barclays’

efforts

in

tackling

climate

change,

and

for

integrating

the

bank’s

ambition

and

commitments

to

help

accelerate

the

transition

to

a

low-carbon

economy

into

the

business.

She

also

has

accountability

for

the

bank’s

sustainability

and

citizenship

agendas,

and

for

ensuring

the

company’s

societal

purpose

is

present

in

strategic

decision-making

at

the

highest

levels

in

the

organisation.

In

addition,

Sasha

has

overall

responsibility

for

Corporate

Relations

and

Regulatory

Relations,

and

is

also

Group

Chief

of

Staff

to

the

Group

Chief

Executive.

Sasha

joined

Barclays

in

2002,

progressing

through

a

number

of

roles

in

the

Private

Bank.

In

2015,

she

was

appointed

CEO

of

Barclays

Bank

Ireland,

overseeing

the

Corporate

Banking

and

Wealth

businesses

in

the

region.

She

subsequently

became

Head

of

East

and

South

East

for

UK

Corporate

Banking

coverage

in

2017

where

she

was

responsible

for

developing

and

executing

the

bank’s

strategy

for

the

mid

-corporate

client

segment.

Sasha

was

appointed

the

Group

Chief

of

Staff

in

2018,

and

assumed

her

current

role

in

May

2020,

joining

the

Group

Executive

Committee.

Additional

information

320

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Section

13(r)

to

the

US

Securities

Exchange

Act

of

1934

(Iran

sanctions

and

Section

13(r)

of

the

U.S.

Securities

Exchange

Act

of

1934

as

amended

(the

“Exchange

Act”)

requires

each

SEC

reporting

issuer

to

disclose

in

its

annual

and,

if

applicable,

quarterly

reports

whether

it

or

any

of

its

affiliates

have

knowingly

engaged

in

certain

activities,

transactions

or

dealings

relating

to

Iran

or

with

the

Government

of

Iran

or

certain

designated

natural

persons

or

entities

involved

in

terrorism

or

the

proliferation

of

weapons

of

mass

destruction

during

the

period

covered

by

the

report.

The

requirement

includes

disclosure

of

activities

not

prohibited

by

U.S.

or

other

law

even

if

conducted

outside

the

U.S.

by

non-U.S.

companies

or

affiliates

in

compliance

with

local

law.

Pursuant

to

Section

13(r)

of

the

Exchange

Act

we

note

the

following

in

relation

to

activity

occurring

in

2020,

the

period

covered

by

this

annual

report,

or

in

relation

to

activity

we

became

aware

of

in

2020

relating

to

disclosable

activity

prior

to

the

reporting

period.

Except

as

noted

below,

Barclays

intends

to

continue

the

activities

described.

Barclays

does

not

allocate

profits

at

the

level

of

these

activities,

which

in

any

event

would

not

be

significant,

and

we

therefore

report

only

gross

revenue

where

measurable.

Barclays

attributed

revenue

of

approximately

GBP

425

in

2020

in

relation

to

the

activities

disclosed

below.

Legacy

Guarantees

Between

1993

and

2006,

Barclays

entered

into

several

guarantees

for

the

benefit

of

Iranian

banks

in

connection

with

the

supply

of

goods

and

services

by

Barclays

customers

to

Iranian

buyers.

These

were

counter

guarantees

issued

to

Iranian

banks

to

support

guarantees

issued

by

these

banks

to

the

Iranian

buyers.

The

Iranian

banks

and

a

number

of

the

Iranian

buyers

were

subsequently

designated

as

Specially

Designated

Nationals

and

Blocked

Persons

(“SDN”)

by

the

U.S.

Department

of

the

Treasury,

Office

of

Foreign

Assets

Control

(“OFAC”).

In

addition,

between

1993

and

2005,

Barclays

entered

into

similar

guarantees

for

the

benefit

of

a

Syrian

bank

that

was

subsequently

designated

pursuant

to

the

Weap

ons

of

Mass

Destruction

Proliferators

Sanctions

Regulations

(“WMDPSR”)

in

August

2011.

These

guarantees

were

issued

either

on:

(i)

an

“extend

or

pay”

basis,

which

means

that,

although

the

guarantee

is

of

limited

duration

on

its

face,

until

there

is

full

performance

under

the

contract

to

provide

goods

and

services,

the

terms

of

the

guarantee

require

Barclays

to

maintain

the

guarantee

or

pay

the

beneficiary

bank

the

full

amount

of

the

guarantee;

or

(ii)

the

basis

that

Barclays

obligations

can

only

be

discharged

with

the

consent

of

the

beneficiary

counterparty.

Barclays

is

not

able

to

exit

its

obligations

under

the

above

guarantees

unilaterally,

and

thus

it

maintains

a

limited

legacy

portfolio

of

these

guarantees,

which

were

in

compliance

with

applicable

laws

and

regulations

at

the

time

they

were

entered

into.

Barclays

intends

to

terminate

the

guarantees

where

an

agreement

can

be

reached

with

the

counterparty,

in

accordance

with

applicable

laws

and

regulations.

Barclays

attributed

no

revenue

in

2020

in

relation

to

this

activity.

Lease

Payments

Barclays

is

party

to

a

long-term

lease,

entered

into

in

1979,

with

the

National

Iranian

Oil

Company

(“NIOC”),

pursuant

to

which

Barclays

rents

part

of

NIOC

House

in

London

for

a

Barclays

branch.

The

lease

is

for

60

years,

contains

no

early

termination

clause,

and

has

19

years

remaining.

Barclays

makes

quarterly

lease

payments

in

GBP

to

an

entity

that

is

owned

by

the

Government

of

Iran.

The

payments

are

made

in

accordance

with

applicable

laws

and

regulations.

Barclays

attributed

no

revenue

in

2020

in

relation

to

this

activity.

Local

Clearing

Systems

Banks

based

in

the

United

Arab

Emirates

(“UAE”),

including

certain

Iranian

banks

that

are

SDNs,

participate

in

the

various

banking

payment

and

settlement

systems

used

in

the

UAE

(the

“UAE

Clearing

Systems”).

Barclays,

by

virtue

of

its

banking

activities

in

the

UAE,

participates

in

the

UAE

Clearing

Systems,

in

accordance

with

applicable

laws

and

regulations.

In

order

to

mitigate

the

risk

of

engaging

in

transactions

in

which

participant

Iranian

SDN

banks

may

be

involved,

Barclays

has

implemented

restrictions

relating

to

its

involvement

in

the

UAE

Clearing

Systems.

Barclays

attributed

no

revenue

in

2020

in

relation

to

this

activity.

Payments

Notified

A

Barclays

customer

was

designated

pursuant

to

the

Global

Terrorism

Sanctions

Regulations

in

March

2016.

Barclays

continues

to

receive

credit

card

repayments

from

this

customer

in

accordance

with

applicable

laws

and

regulations.

A

block

continues

to

be

applied

to

the

card

to

prevent

any

further

spending.

Barclays

attributed

revenue

of

approximately

GBP

345

in

2020

in

relation

to

this

activity.

Barclays

maintains

customer

relationships

with

certain

UK-incorporated

medical

manufacturing

companies.

In

2020,

Barclays

processed

two

payments,

for

the

benefit

of

our

customers,

relating

to

the

export

of

medical

devices

to

privately-owned

Iranian

entities.

The

end

users

of

these

medical

devices

include

hospitals,

medical

universities,

or

clinics

that

may

be

owned

or

controlled

by,

or

affiliated

with,

the

Government

of

Iran.

The

payments

were

made

in

accordance

with

applicable

laws

and

regulations

and

all

payments

were

received

from

the

privately-owned

Iranian

entities;

no

payments

were

received

directly

from

any

SDN

or

entity

owned

or

controlled

by,

or

affiliated

with,

the

Government

of

Iran.

Although

OFAC

has

issued

general

licenses

relating

to

the

sale

of

medical

devices,

these

licenses

do

not

apply

to

sales

of

non-U.S.

origin

items

by

non-

U.S.

persons.

Barclays

attributed

revenue

of

approximately

GBP

10

in

2020

in

relation

to

this

activity.

Barclays

maintains

customer

relationships

with

several

individuals

who

work

for

UK-based

entities

that

are

ultimately

owned

by

the

Government

of

Iran

and

are

SDNs.

Payments

are

received,

in

GBP,

from

a

UK-based

payment

services

company

or

in

cash,

and

are

credited

to

the

customers’

accounts

with

Barclays.

The

payments

are

processed

in

accordance

with

applicable

laws

and

regulations.

No

payments

are

received

directly

from

any

entity

owned

by

the

Government

of

Iran

or

any

SDN.

Barclays

attributed

no

revenue

in

2020

in

relation

to

this

activity.

Barclays

maintains

a

relationship

with

Her

Majesty's

Revenue

&

Customs

(“HMRC”),

a

UK

Government

agency,

which

receives

funds

from

Iranian

SDN

financial

institutions

in

relation

to

the

settlement

of

tax

liabilities

with

the

UK

Government.

The

payments

are

received

by

Barclays

and

credited

to

the

HMRC

account.

The

payment

activity

is

covered

by

a

license

issued

by

UK

Her

Majesty’s

Treasury

(“HMT”),

another

UK

Government

agency.

Barclays

also

received

a

one-off

credit

to

HMRC’s

accounts,

from

HMT,

to

settle

the

tax

liabilities

of

an

Iranian

SDN

financial

institution.

Barclays

attributed

revenue

of

approximately

GBP

30

in

2020

in

relation

to

this

activity.

Barclays

processed

four

transactions

to

embassies

of

the

Government

of

Iran

in

the

European

Union

(“EU”)

in

relation

to

fees

for

renewing

Iranian

passports

or

replacing

Iranian

passports

that

had

been

lost

or

stolen.

The

payments

were

processed

in

accordance

with

applicable

laws

and

regulations.

Barclays

attributed

no

revenue

in

2020

in

relation

to

this

activity.

In

November

2020,

a

Barclays

customer

was

designated

as

an

SDN

pursuant

to

the

WMDPSR.

The

customer

had

two

accounts

with

Barclays,

containing

total

credits

of

less

than

GBP

1,

both

of

which

were

inactive

since

2010.

Barclays

exited

the

relationship

with

the

customer

and

closed

the

accounts.

Barclays

attributed

no

revenue

in

2020

in

relation

to

this

activity.

Additional

information

321

Barclays

PLC

2020

Annual

Report

on

Form

20-F

In

2020,

Barclays

processed

one

GBP

through

payment

from

an

entity

in

the

Netherlands,

affiliated

with

the

Government

of

Iran,

to

a

UK-based

barristers’

chambers.

Neither

entity

is

a

customer

of

Barclays.

The

payment

was

for

legal

services

provided

by

the

barristers’

chambers

two

pending

cases

between

Iran

and

the

U.S.

before

the

International

Court

of

Justice

(“ICJ”)

in

The

Hague.

The

payment

was

processed

in

accordance

with

applicable

laws

and

regulations.

OFAC’s

regulations

generally

authorize

the

provision

of

legal

services

to

the

Government

of

Iran

the

conduct

of

legal

proceedings

before

the

ICJ

involving

Iran

and

the

United

States.

However,

the

payment

for

legal

fees

did

not

fall

within

the

scope

of

any

authorization

from

OFAC

(nor

was

it

required

to,

as

there

was

no

U.S.

jurisdictional

nexus).

Barclays

attributed

revenue

of

approximately

GBP

15

in

2020

in

relation

to

this

activity.

Barclays

maintains

a

customer

relationship

with

a

UK-incorporated

charity

that

works

in

the

areas

of

blood

cancer

and

stem

cell

transplantation.

In

2020,

Barclays

processed

one

EUR

payment,

on

behalf

of

our

customer,

where

the

ultimate

beneficiary

of

the

payment

was

affiliated

with

the

Government

of

Iran.

The

payment

was

for

the

procurement

of

a

blood

sample

from

an

individual

in

Iran

and

shipping

of

the

sample

to

the

UK

to

determine

whether

the

individual

was

a

potential

donor

match

to

a

patient

in

the

UK.

The

payment

was

processed

in

accordance

with

applicable

laws

and

regulations.

Barclays

attributed

revenue

of

approximately

GBP

10

in

2020

in

relation

to

this

activity.

Barclays

maintains

a

customer

relationship

with

a

UK

university

specialising

in

medicine.

They

are

part

of

a

consortium

that

includes

a

Government

of

Iran

university,

which

has

received

funding

from

the

EU

to

conduct

research

into

a

tropical

disease.

Our

customer

is

the

administrator

for

the

consortium

and

is

responsible

for

distributing

the

funding.

Barclays

processes

grant

payments

to

the

Government

of

Iran

university’s

account

at

an

Iranian

SDN

financial

institution.

All

payments

were

processed

in

accordance

with

applicable

laws

and

regulations.

Barclays

attributed

revenue

of

approximately

GBP

15

in

2020

in

relation

to

this

activity.

Additional

information

322

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Summary

of

Barclays

Group

share

and

cash

plans

and

long-term

incentive

plans

Barclays

operates

a

number

of

share,

cash

and

long-term

incentive

plans.

The

principal

plans

used

for

awards

made

in

or,

in

respect

of,

the

2020

performance

year

are

shown

in

the

table

below.

Awards

are

granted

by

the

Barclays

PLC

Board

Remuneration

Committee

(the

“Committee”),

and

are

subject

to

the

applicable

plan

rules

(as

amended

from

time

to

time).

Share

awards

are

granted

over

ordinary

shares

in

Barclays

PLC

(“Shares”).

Barclays

has

a

number

of

employee

benefit

trusts

which

operate

in

conjunction

with

these

plans.

In

some

cases

the

trustee

purchases

Shares

in

the

market

to

satisfy

awards;

in

others,

new

issue

or

treasury

Shares

may

be

used

to

satisfy

awards

where

the

appropriate

shareholder

approval

has

been

obtained.

Summary

of

principal

share

and

cash

plans

and

long-term

incentive

plans

Name

of

plan

Eligible

employees

Executive

Directors

eligible

Delivery

Design

details

Deferred

Share

Value

Plan

(DSVP)

All

employees

(excluding

Directors)

No

Deferred

Share

awards,

typically

released

in

instalments

over

a

three,

five

or

seven

year

period,

dependent

on

future

service

and

subject

to

malus

provisions

-

Plan

typically

used

for

mandatory

deferral

of

a

proportion

of

bonus

into

Shares

where

bonus

is

above

a

threshold

(set

annually

by

the

Committee).

-

This

plan

typically

works

in

tandem

with

the

CVP

(below).

-

DSVP

awards

vest

over

three,

five

or

seven

years

dependent

on

future

service.

-

Vesting

is

subject

to

malus,

suspension

provisions

and

the

other

provisions

of

the

rules

of

the

DSVP.

-

For

awards

granted

before

2018,

dividend

equivalents

may

be

released

based

on

the

number

of

Shares

under

award

that

are

released.

-

On

cessation

of

employment,

eligible

leavers

(as

set

out

in

the

rules

of

the

DSVP)

normally

remain

eligible

for

release

(on

the

scheduled

release

dates)

subject

to

the

Committee

and/or

trustee

discretion.

For

other

leavers,

awards

will

normally

lapse.

-

On

change

of

control,

awards

may

vest

at

the

Committee’s

and/or

trustee’s

discretion.

-

For

DSVP

awards

made

to

Material

Risk

Takers

(“MRTs”),

a

holding

period

of

either

6

or

12

months

will

apply

to

Shares

(after

tax)

on

release.

Share

Value

Plan

(SVP)

All

employees

(including

executive

Directors)

Yes

Deferred

Share

awards,

typically

released

in

instalments

over

a

three,

five

or

seven

year

period,

dependent

on

future

service

and

subject

to

malus

provisions

-

The

SVP

is

in

all

material

respects

the

same

as

the

DSVP

described

above.

The

principle

differences

are

that

(i)

executive

Directors

may

only

participate

in

the

SVP

and

(ii)

under

the

DSVP,

if

a

MRT

whose

award

is

deferred

over

five

or

seven

years

resigns

after

the

third

anniversary

of

grant,

they

will

automatically

be

treated

as

an

eligible

leaver

in

respect

of

any

unvested

tranches

of

that

award.

Cash

Value

Plan

(CVP)

All

employees

(excluding

Directors)

No

Deferred

cash

award

typically

released

in

instalments

over

a

three,

five

or

seven

year

period,

dependent

on

future

service

and

subject

to

malus

provisions

-

The

CVP

is

typically

used

for

mandatory

deferral

of

a

proportion

of

bonus

where

bonus

is

above

a

threshold

(set

annually

by

the

Committee.

-

This

plan

typically

works

in

tandem

with

the

DSVP.

-

CVP

awards

vest

over

three,

five

or

seven

years

dependent

on

future

service.

-

Vesting

is

subject

to

malus,

suspension

provisions

and

the

other

provisions

of

the

rules

of

the

CVP.

-

Participants

granted

awards

before

2020

may

be

awarded

a

service

credit

of

10%

of

the

initial

value

of

the

award

on

the

third

anniversary

of

a

grant.

-

Change

of

control

and

leaver

provisions

are

as

for

DSVP.

Barclays

Long

Term

Incentive

Plan

(LTIP)

Selected

employees

(including

executive

Directors)

Yes

Awards

over

Shares

subject

to

risk-adjusted

performance

conditions

and

malus

provisions

-

Awarded

on

a

discretionary

basis

with

participation

reviewed

by

the

Committee.

-

Awards

only

vest

if

the

risk-adjusted

performance

conditions

are

satisfied

over

a

three

year

period.

-

LTIP

awards

vest

over

seven

years

dependent

on

future

service.

-

Vesting

is

subject

to

malus,

suspension

provisions

and

the

other

provisions

of

the

rules

of

the

LTIP.

-

Any

Shares

released

under

the

LTIP

award

(after

payment

of

tax)

will

be

subject

to

an

additional

holding

period

of

no

less

than

the

minimum

regulatory

requirements

(currently

12

months).

Additional

information

323

Barclays

PLC

2020

Annual

Report

on

Form

20-F

-

On

cessation

of

employment,

eligible

leavers

normally

remain

eligible

for

release

(on

the

scheduled

release

dates)

pro-rated

for

time

and

performance.

For

other

leavers,

awards

will

normally

lapse.

-

On

change

of

control,

awards

may

vest

at

the

Committee’s

discretion.

Sharesave

All

employees

in

the

UK

and

Ireland

Yes

Options

over

Shares

at

a

discount

of

20%,

with

Shares

delivered

or

cash

value

of

savings

returned

after

three

to

five

years

-

HMRC

tax

advantaged

plan

in

the

UK

and

approved

by

the

Revenue

Commissioners

in

Ireland.

-

Opportunity

to

purchase

Shares

at

a

discount

price

(currently

a

20%

discount)

set

on

award

date

with

savings

made

over

three

or

five

year

term.

-

Maximum

individual

savings

of

£300

per

month

or

the

Euro

equivalent

in

Ireland.

-

On

cessation

of

employment,

eligible

leavers

may

exercise

options

and

acquire

Shares

to

the

extent

of

their

savings

for

six

months.

-

On

change

of

control,

participants

may

exercise

options

and

acquire

Shares

to

the

extent

of

their

savings

for

six

months.

Sharepurchase

All

employees

in

the

UK

Yes

Shares

purchased

from

gross

salary

deductions

and

Dividend/Matching

Shares

are

held

in

trust

for

three

to

five

years

-

HMRC

tax

advantaged

plan

in

the

UK.

-

Participants

may

purchase

up

to

£1,800

of

Shares

each

tax

year

(“Partnership

Shares”).

-

Barclays

matches

the

first

£600

of

Partnership

Shares

on

a

one

for

one

basis

for

each

tax

year

(“Matching

Shares”).

-

Dividends

received

are

awarded

as

Dividend

Shares.

-

Partnership

Shares

may

be

withdrawn

at

any

time

(though

if

removed

prior

to

three

years

from

award,

the

corresponding

Matching

Shares

are

forfeited).

-

Depending

on

reason

for

and

timing

of

leaving,

Matching

Shares

may

be

forfeited.

-

On

change

of

control,

participants

are

able

to

instruct

the

Sharepurchase

trustee

how

to

act

or

vote

on

their

behalf

in

relation

to

their

Shares.

Global

Sharepurchase

Employees

in

certain

non-UK

jurisdictions

Yes

Shares

purchased

from

net

salary

deductions

and

Dividend/Matching

Shares

are

held

in

trust

for

three

to

five

years

-

Global

Sharepurchase

is

an

extension

of

the

Sharepurchase

plan

(above).

-

Operates

in

substantially

the

same

way

as

Sharepurchase

but

without

the

tax

advantages.

Additional

information

324

Barclays

PLC

2020

Annual

Report

on

Form

20-F

The

Group’s

corporate

structure

consists

of

a

number

of

comprising

subsidiaries,

joint

ventures,

associates

and

significant

other

interests.

A

full

list

of

these

undertakings,

the

country

of

incorporation

and

the

ownership

of

each

share

class

is

set

out

below.

The

information

is

provided

as

at

31

December

2020.

The

entities

are

grouped

by

the

countries

in

which

they

are

incorporated.

The

profits

earned

by

the

activities

of

these

entities

are

in

some

cases

taxed

in

countries

other

than

the

country

of

incorporation.

Barclays’

2020

Country

Snapshot

provides

details

of

where

the

Group

carries

on

its

business,

where

its

profits

are

subject

to

tax

and

the

taxes

it

pays

in

each

country

it

operates

in.

Wholly

owned

subsidiaries

Unless

otherwise

stated

the

undertakings

below

are

wholly

owned

and

consolidated

by

Barclays

and

the

share

capital

disclosed

comprises

ordinary

and/or

common

shares,

100%

of

the

nominal

value

of

which

is

held

by

the

Group

subsidiaries.

Notes

A

Directly

held

by

Barclays

PLC

Class

E

Preference

Shares,

Class

F

Ordinary

B

Partnership

Interest

Shares,

Class

F

Preference

Shares,

Class

H

2012,

C

Membership

Interest

Ordinary

Shares,

Class

H

2012

Preference

D

Trust

Interest

Shares,

Class

H

Ordinary

Shares,

Class

H

E

Guarantor

Preference

Shares,

Class

I

Preference

Shares,

F

Preference

Shares

Class

J

Ordinary

Shares,

Class

J

Preference

Shares

G

A

Preference

Shares

W

First

Class

Common

Shares,

Second

Class

H

B

Preference

Shares

Common

Shares

I

Ordinary/Common

Shares

in

addition

to

other

X

PEF

Carry

Shares

shares

Y

EUR

Tracker

1

Shares,

GBP

Tracker

1

Shares,

J

A

Ordinary

Shares

USD

Tracker

1

Shares,

USD

Tracker

2

Shares,

USD

K

B

Ordinary

Shares

Tracker

3

Shares

L

C

Ordinary

Shares

Z

Not

Consolidated

(see

Note

35

Structured

M

F

Ordinary

Shares

entities)

N

W

Ordinary

Shares

AA

USD

Linked

Ordinary

Shares

O

First

Preference

Shares,

Second

Preference

BB

Redeemable

Class

B

Shares

CC

Capital

Contribution

Shares

P

Registered

Address

not

in

country

of

DD

Nominal

Shares

incorporation

EE

Class

A

Redeemable

Preference

Shares

Q

Core

Shares,

Insurance

(Classified)

Shares

FF

Class

B

Redeemable

Preference

Shares

R

B,

C,

D,

E

(94.36%),

F

(94.36%),

G

(94.36%),

H

GG

A

Shares

–

Tranche

I,

Premium

–

Tranche

I,

C

(94.36%),

I

(94.36%),

J

(95.23%)

and

K

Class

Shares

–

Tranche

II,

Premium

–

Tranche

II

Shares

II

D

Ordinary

Shares

S

A

Unit

Shares,

B

Unit

Shares

T

Non-Redeemable

Ordinary

Shares

U

C

Preference

Shares,

D

Preference

Shares

V

Class

A

Ordinary

Shares,

Class

B

Ordinary

Shares,

Class

C

Ordinary

Shares,

Class

C

Preference

Shares,

Class

D

Ordinary

Shares,

Class

D

Preference

Shares,

Class

E

Ordinary

shares,

Wholly

owned

subsidiaries

Note

Wholly

owned

subsidiaries

Note

Wholly

owned

subsidiaries

Note

United

Kingdom

Barclays

Security

Trustee

Limited

A

Kirsche

Investments

Limited

-

1

Churchill

Place,

London,

E14

5HP

Barclays

Services

(Japan)

Limited

Long

Island

Assets

Limited

Aequor

Investments

Limited

Barclays

Shea

Limited

Maloney

Investments

Limited

Ardencroft

Investments

Limited

Barclays

Singapore

Global

Shareplans

Menlo

Investments

Limited

B

D

&

B

Investments

Limited

Nominee

Limited

Mercantile

Credit

Company

Limited

B.P.B.

(Holdings)

Limited

Barclays

Term

Funding

Limited

Liability

B

Mercantile

Leasing

Company

(No.132)

Limited

Barclay

Leasing

Limited

Partnership

MK

Opportunities

LP

B

Barclays

(Barley)

Limited

(In

Liquidation)

J,

K

Barclays

UK

Investments

Limited

Murray

House

Investment

Management

Limited

Barclays

Aldersgate

Investments

Limited

Barclays

Unquoted

Investments

Limited

(In

Liquidation)

Barclays

Asset

Management

Limited

Barclays

Unquoted

Property

Investments

Naxos

Investments

Limited

Barclays

Bank

PLC

A,

F,

I

Limited

North

Colonnade

Investments

Limited

Barclays

Bank

UK

PLC

A

Barclays

Wealth

Nominees

Limited

Northwharf

Investments

Limited

I,

X

Barclays

Capital

Asia

Holdings

Limited

Barclayshare

Nominees

Limited

Northwharf

Nominees

Limited

Barclays

Capital

Finance

Limited

Barcosec

Limited

Radbroke

Mortgages

UK

Limited

Barclays

Capital

Japan

Securities

Holdings

Barsec

Nominees

Limited

Real

Estate

Participation

Management

Limited

BB

Client

Nominees

Limited

Real

Estate

Participation

Services

Limited

Barclays

Capital

Nominees

(No.2)

Limited

BMBF

(No.24)

Limited

Relative

Value

Investments

UK

Limited

Liability

B

Barclays

Capital

Nominees

(No.3)

Limited

BMI

(No.9)

Limited

Partnership

Barclays

Capital

Nominees

Limited

BNRI

ENG

2013

Limited

Partnership

B

Relative

Value

Trading

Limited

Barclays

Capital

Securities

Client

Nominee

BNRI

ENG

2014

Limited

Partnership

B

Roder

Investments

No.

1

Limited

I,

Y

Limited

BNRI

ENG

GP

LLP

B

Roder

Investments

No.

2

Limited

I,

Y

Barclays

Capital

Securities

Limited

F,

I

BNRI

England

2010

Limited

Partnership

B

RVT

CLO

Investments

LLP

B

Barclays

CCP

Funding

LLP

B

BNRI

England

2011

Limited

Partnership

B

Solution

Personal

Finance

Limited

Barclays

Converted

Investments

(No.2)

Limited

BNRI

England

2012

Limited

Partnership

B

Surety

Trust

Limited

Barclays

Direct

Investing

Nominees

Limited

Carnegie

Holdings

Limited

I,

J,

K

Sustainable

Impact

Capital

Limited

Barclays

Directors

Limited

Chapelcrest

Investments

Limited

Swan

Lane

Investments

Limited

Barclays

Equity

Holdings

Limited

Clydesdale

Financial

Services

Limited

US

Real

Estate

Holdings

No.1

Limited

Barclays

Execution

Services

Limited

A

Cobalt

Investments

Limited

US

Real

Estate

Holdings

No.2

Limited

Barclays

Executive

Schemes

Trustees

Limited

Cornwall

Homes

Loans

Limited

US

Real

Estate

Holdings

No.3

Limited

Barclays

Financial

Planning

Nominee

Company

CP

Flower

Guaranteeco

(UK)

Limited

(In

E

US

Real

Estate

Holdings

No.4

Limited

Liquidation)

Wedd

Jefferson

(Nominees)

Limited

Barclays

Funds

Investments

Limited

CPIA

England

2009

Limited

Partnership

B

Westferry

Investments

Limited

Barclays

Global

Shareplans

Nominee

Limited

CPIA

England

No.2

Limited

Partnership

B

Woolwich

Homes

Limited

Barclays

Group

Holdings

Limited

DMW

Realty

Limited

Woolwich

Qualifying

Employee

Share

Barclays

Group

Operations

Limited

Dorset

Home

Loans

Limited

Ownership

Trustee

Limited

Barclays

Industrial

Development

Limited

Durlacher

Nominees

Limited

Zeban

Nominees

Limited

Barclays

Industrial

Investments

Limited

Eagle

Financial

and

Leasing

Services

(UK)

-

Hill

House,

1

Little

New

Street,

London,

Barclays

Insurance

Services

Company

Limited

EC4A

3TR

Barclays

International

Holdings

Limited

Equity

Value

Investments

No.1

Limited

Barclays

Nominees

(Branches)

Limited

(In

Barclays

Investment

Management

Limited

Equity

Value

Investments

No.2

Limited

Liquidation)

Barclays

Investment

Solutions

Limited

Finpart

Nominees

Limited

Gerrard

Management

Services

Limited

(In

Barclays

Leasing

(No.9)

Limited

FIRSTPLUS

Financial

Group

Limited

Liquidation)

Barclays

Long

Island

Limited

Foltus

Investments

Limited

Lombard

Street

Nominees

Limited

(In

Barclays

Marlist

Limited

Global

Dynasty

Natural

Resource

Private

B

Liquidation)

Barclays

Mercantile

Business

Finance

Limited

Equity

Limited

Partnership

Ruthenium

Investments

Limited

(In

Barclays

Nominees

(George

Yard)

Limited

Z

Globe

Nominees

Limited

Liquidation)

Barclays

Pension

Funds

Trustees

Limited

Hawkins

Funding

Limited

Woolwich

Plan

Managers

Limited

(In

Barclays

Principal

Investments

Limited

A,

J,

K

Heraldglen

Limited

I,

O

liquidation)

Barclays

Private

Bank

Isle

of

Wight

Home

Loans

Limited

Woolwich

Surveying

Services

Limited

(In

Barclays

SAMS

Limited

J.V.

Estates

Limited

liquidation)

Additional

information

325

Barclays

PLC

2020

Annual

Report

on

Form

20-F

continued

Wholly

owned

subsidiaries

Note

Wholly

owned

subsidiaries

Note

Wholly

owned

subsidiaries

Note

-

5

The

North

Colonnade,

London,

E14

4BB

China

Barclays

Securities

Japan

Limited

Leonis

Investments

LLP

B

-

Room

213,

Building

1,

No.

1000

Chenhui

Barclays

Wealth

Services

Limited

-

Aurora

Building,

120

Bothwell

Street,

Rvh

Road,

Zhangjiang

Hi-Tech

Park,

Shanghai

Glasgow,

G2

7JS

Barclays

Technology

Centre

(Shanghai)

Jersey

R.C.

Grieg

Nominees

Limited

Company

Limited

(In

Liquidation)

-

2

nd

Floor,

Gaspé

House,

66-72

Esplanade,

-

50

Lothian

Road,

Festival

Square,

Edinburgh,

St.

Helier,

JE1

1GH

EH3

9WJ

Germany

Barclays

Services

Jersey

Limited

BNRI

PIA

Scot

GP

Limited

-

TaunusTurm,

Taunustor

1,

60310,

Frankfurt

-

5

Espalanade,

St

Helier,

JE2

3QA

BNRI

Scots

GP,

LLP

B

Barclays

Capital

Effekten

GmbH

Barclays

Wealth

Management

Jersey

Limited

Pecan

Aggregator

LP

B

-

Stuttgarter

Straße

55-57,

73033

Göppingen

BIFML

PTC

Limited

-

Logic

House,

Waterfront

Business

Park,

Holding

Stuttgarter

Straße

GmbH

(In

-

13

Castle

Street,

St.

Helier,

JE4

5UT

Fleet

Road,

Fleet,

GU51

3SB

Liquidation)

Barclays

Index

Finance

Trust

S

The

Logic

Group

Enterprises

Limited

-

Lime

Grove

House,

Green

Street,

St

Helier,

The

Logic

Group

Holdings

Limited

J

Guernsey

JE1

2ST

-

9,

allée

Scheffer,

L-2520,

Luxembourg

-

P.O.

Box

33,

Dorey

Court,

Admiral

Park,

St.

Barbridge

Limited

(In

Liquidation)

I,

DD

Barclays

Claudas

Investments

Partnership

B,

P

Peter

Port,

GY1

4AT

-

13

Library

Place,

St

Helier,

JE4

8NE

Barclays

Pelleas

Investments

Limited

B,

P

Barclays

UKRF

No.1

IC

Limited

Z

Barclays

Nominees

(Jersey)

Limited

Partnership

Barclays

UKRF

ICC

Limited

Z

Barclaytrust

Channel

Islands

Limited

Barclays

Blossom

Finance

General

Partnership

B,

P

Barclays

Insurance

Guernsey

PCC

Limited

Q

-

Estera

Trust

(Jersey)

Limited,

13-14

-

PO

BOX

41,

Floor

2,

Le

Marchant

House,

Le

Esplanade,

St

Helier,

JE1

1EE

Argentina

Truchot,

St

Peter

Port,

GY1

3BE

MK

Opportunities

GP

Ltd

-

855

Leandro

N.Alem

Avenue,

8th

Floor,

Barclays

Nominees

(Guernsey)

Limited

(In

Buenos

Aires

Liquidation)

Korea,

Republic

of

Compañía

Sudamerica

S.A.

-

A-1705

Yeouido

Park

Center,

28-3

-

Marval,

O’Farrell

&

Mairal,

Av.

Leandro

N.

Hong

Kong

Yeouido

-dong,

Yeongdeungpo

-gu,

Seoul

Alem

882,

Buenos

Aires,

C1001AAQ

-

42nd

floor

Citibank

Tower,

Citibank

Plaza,

Barclays

Korea

GP

Limited

Compañia

Regional

del

Sur

S.A.

3

Garden

Road

Barclays

Bank

(Hong

Kong

Nominees)

Limited

Luxembourg

Brazil

(in

Liquidation)

-

9,

allée

Scheffer,

L-2520

-

Av.

Brigadeiro

Faria

Lima,

No.

4.440,

12th

Barclays

Capital

Asia

Nominees

Limited

(In

Barclays

Alzin

Investments

S.à

r.l.

Floor,

Bairro

Itaim

Bibi,

Sao

Paulo,

CEP,

Liquidation)

Barclays

Bayard

Investments

S.à

r.l.

J,

K

04538

-132

-

Level

41,

Cheung

Kong

Center,

2

Queen's

Barclays

Bedivere

Investments

S.à

r.l.

Barclays

Brasil

Assessoria

Financeira

Ltda

Road,

Central

Barclays

Bordang

Investments

S.à

r.l.

BNC

Brazil

Consultoria

Empresarial

Ltda

Barclays

Capital

Asia

Limited

Barclays

BR

Investments

S.à

r.l.

Barclays

Cantal

Investments

S.à

r.l.

Canada

India

Barclays

Capital

Luxembourg

S.à

r.l.

-

333

Bay

Street,

Suite

4910,

Toronto

ON

M5H

-

208

Ceejay

House,

Shivsagar

Estate,

Dr

A

Barclays

Capital

Trading

Luxembourg

S.à

r.l.

J,

K

2R2

Beasant

Road,

Worli,

Mumbai,

400

018

Barclays

Claudas

Investments

S.à

r.l.

Barclays

Capital

Canada

Inc.

Barclays

Securities

(India)

Private

Limited

Barclays

Equity

Index

Investments

S.à

r.l.

-

Stikeman

Elliot

LLP,

199

Bay

Street,

5300

Barclays

Wealth

Trustees

(India)

Private

Limited

Barclays

International

Luxembourg

Dollar

Commerce

Court

West,

Toronto

ON

M5L

1B9

-

5

th

to

12

th

Floor

(Part),

Building

G2,

Gera

Holdings

S.à

r.l.

Barclays

Corporation

Limited

Commerzone

SEZ,

Survey

No.65,

Kharadi,

Barclays

Lamorak

Investments

S.à

r.l.

T

-

5

The

North

Colonnade

London,

E14

4BB

Pune,

411014

Barclays

Leto

Investments

S.à

r.l.

CPIA

Canada

Holdings

B,

P

Barclays

Global

Service

Centre

Private

Limited

Barclays

Luxembourg

EUR

Holdings

S.à

r.l

T

-

Level

10,

Block

B6,

Nirlon

Knowledge

Park,

Barclays

Luxembourg

Finance

S.à

r.l.

Cayman

Islands

Off

Western

Express

Highway,

Goregaon

Barclays

Luxembourg

GBP

Holdings

S.à

r.l.

T

-

Maples

Corporate

Services

Limited,

PO

Box

(East),

Mumbai,

40063

Barclays

Luxembourg

Global

Funding

S.à

r.l.

309,

Ugland

House,

George

Town,

Grand

Barclays

Investments

&

Loans

(India)

Private

F,

I

Barclays

Luxembourg

Holdings

S.à

r.l.

I,

AA

Cayman,

KY1-1104

Limited

Barclays

Luxembourg

Holdings

SSC

B

Alymere

Investments

Limited

G,

H,

I

Barclays

Pelleas

Investments

S.à

r.l.

Analytical

Trade

UK

Limited

Ireland

-

68-70

Boulevard

de

la

Petrusse,

L-2320

Barclays

Capital

(Cayman)

Limited

-

One

Molesworth

Street,

Dublin

2,

D02RF29

Adler

Toy

Holding

Sarl

Barclays

Securities

Financing

Limited

F,

I

Barclaycard

International

Payments

Limited

Braven

Investments

No.1

Limited

Barclays

Bank

Ireland

Public

Limited

Company

Mauritius

Calthorpe

Investments

Limited

Barclays

Europe

Client

Nominees

Designated

-

C/O

Rogers

Capital

Corporate

Services

Capton

Investments

Limited

Activity

Company

Limited,

3

rd

Floor,

Rogers

House,

No.5

Claudas

Investments

Limited

I,EE,F

F

Barclays

Europe

Firm

Nominees

Designated

President

John

Kennedy

Street,

Port

Louis

Claudas

Investments

Two

Limited

Activity

Company

Barclays

Capital

Mauritius

Limited

(In

CPIA

Investments

No.1

Limited

V

Barclays

Europe

Nominees

Designated

Activity

Liquidation)

CPIA

Investments

No.2

Limited

F,

I

Company

Barclays

Capital

Securities

Mauritius

Limited

Gallen

Investments

Limited

-

25-28

North

Wall

Quay,

Dublin

1,

D01H104

-

Fifth

Floor,

Ebene

Esplanade,

24

Cybercity,

Hurley

Investments

No.1

Limited

Erimon

Home

Loans

Ireland

Limited

Ebene

JV

Assets

Limited

L

-70

Sir

John

Rogerson’s

Quay,

Dublin

2

Barclays

Mauritius

Overseas

Holdings

Limited

Mintaka

Investments

No.

4

Limited

Barclays

Finance

Ireland

Limited

OGP

Leasing

Limited

Mexico

Palomino

Limited

Z

Isle

of

Man

-

Paseo

de

la

Reforma

505,

41

Floor,

Torre

Pelleas

Investments

Limited

-

P

O

Box

9,

Victoria

Street,

Douglas,

IM99

1AJ

Mayor,

Col.

Cuauhtemoc,

CP

06500

Pippin

Island

Investments

Limited

Barclays

Nominees

(Manx)

Limited

Barclays

Bank

Mexico,

S.A.

K,

M

Razzoli

Investments

Limited

F,

I

Barclays

Private

Clients

International

Limited

J,

K

Barclays

Capital

Casa

de

Bolsa,

S.A.

de

C.V.

K,

M

RVH

Limited

F,

I

-2

nd

Floor,

St

Georges

Court,

Upper

Church

Grupo

Financiero

Barclays

Mexico,

S.A.

de

C.V.

K,

M

Wessex

Investments

Limited

Street,

Douglas,

IM1

1EE

Servicios

Barclays,

S.A.

de

C.V.

-

Walkers

Corporate

Limited,

Cayman

Barclays

Holdings

(isle

of

Man)

Limited

(In

Corporate

Centre,

27

Hospital

Road,

George

Liquidation)

Monaco

Town,

KY1-

9008

-

31

Avenue

de

la

Costa,

Monte

Carlo

BP

339

Long

Island

Holding

B

Limited

Japan

Barclays

Private

Asset

Management

(Monaco)

-

10-1,

Roppongi

6-chome,

Minato-ku,

S.A.M

Tokyo

Barclays

Funds

and

Advisory

Japan

Limited

Additional

information

326

Barclays

PLC

2020

Annual

Report

on

Form

20-F

continued

Wholly

owned

subsidiaries

Note

Wholly

owned

subsidiaries

Note

Other

%

Note

Philippines

US

Secured

Investments

LLC

CC

Cayman

Islands

-

21/F,

Philamlife

Tower,

8767

Paseo

de

Verain

Investments

LLC

-PO

Box

309GT,

Ugland

House,

Roxas,

Makati

City,

1226

Wilmington

Riverfront

Receivables

LLC

J,

K

South

Church

Street,

Grand

Meridian

(SPV-AMC)

Corporation

-Corporation

Service

Company,

80

State

Cayman,

KY1-1104

Street,

Albany,

NY,

12207

-2543

Barclays

US

Holdings

Limited

90

J

Saudi

Arabia

Barclays

Payment

Solutions

Inc.

Third

Energy

Holdings

Limited

78.94

F,

J,

K,

Z

-

3

rd

Floor

Al

Dahna

Center,

114

Al-Ahsa

-

Corporation

Service

Company,

100

Pearl

Street,

PO

Box

1454,

Riyadh

11431

Street,

17

th

Floor,

MC-CSC1,

Hartford,

Korea,

Republic

of

Barclays

Saudi

Arabia

(In

Liquidation)

CT

06103

-

18

th

Floor,

Daishin

Finance

Centre,

Barclays

Capital

Inc.

343,

Samil-daero,

Jung-go,

Seoul

Singapore

-

745

Seventh

Avenue,

New

York

NY

10019

Woori

BC

Pegasus

Securitization

70.00

W

-

10

Marina

Boulevard,

#24-01

Marina

Bay

Alynore

Investments

Limited

Partnership

B

Specialty

Co.,

Limited

Financial

Centre,

Tower

2,

018983

Glenwood

Ave,

Suite

550,

Raleigh,

NC,

Barclays

Capital

Futures

(Singapore)

Private

27608

Luxembourg

Limited

Barclays

US

GPF

Inc.

-

9,

allée

Scheffer,

L-2520

Barclays

Capital

Holdings

(Singapore)

Private

Equifirst

Corporation

(In

Liquidation)

BNRI

Limehouse

No.1

Sarl

96.30

R

Limited

Preferred

Funding

S.à

r.l.

33.33

FF

Barclays

Merchant

Bank

(Singapore)

Ltd.

Zimbabwe

Preferred

Investments

S.à

r.l.

33.33

FF,

I

-

2

Premium

Close,

Mount

Pleasant

Business

Spain

Park,

Mount

Pleasant,

Harare

Malta

-

Calle

Jose,

Abascal

51,

28003,

Madrid

Branchcall

Computers

(Pvt)

Limited

-

RS2

Buildings,

Fort

Road,

Mosta

Barclays

Tenedora

De

Inmuebles

SL.

Other

Unless

otherwise

stated,

the

undertakings

below

are

consolidated

and

the

share

capital

disclosed

comprises

ordinary

and/or

common

shares

which

are

held

by

subsidiaries

of

the

Group.

The

Group’s

overall

ownership

percentage

is

provided

for

each

undertaking.

MST

1859

BVP

Galvani

Global,

S.A.U.

RS2

Software

PLC

18.25

Z

Switzerland

Monaco

-

Chemin

de

Grange

Canal

18-20,

PO

Box

-

31

Avenue

de

la

Costa,

3941,

1211,

Geneva

Monte

Carlo

Barclays

Bank

(Suisse)

SA

Societe

Civile

Immobiliere

31

Avenue

75.00

Barclays

Switzerland

Services

SA

de

la

Costa

BPB

Holdings

SA

Other

%

Note

Netherlands

United

States

United

Kingdom

-

Alexanderstraat

18,

2514

JM,

The

-

Corporation

Service

Company,

251

Little

-

1

Churchill

Place,

London,

E14

5HP

Hague

Falls

Drive,

Wilmington,

DE

19808

Barclaycard

Funding

PLC

75.00

J

Tulip

Oil

Holding

BV

30.36

GG,

Z

Analytical

Trade

Holdings

LLC

PSA

Credit

Company

Limited

50.00

J,

L

Analytical

Trade

Investments

LLC

BB

(In

Liquidation)

Portugal

Archstone

Equity

Holdings

Inc

Barclays

Covered

Bond

Funding

LLP

(In

50.00

B

Av.

Manuel

Júlio

Carvalho

e

Costa,

Barclays

Bank

Delaware

F,

I

Liquidation)

no.

15-A,

2750-423

Cascais

Barclays

Capital

Derivatives

Funding

LLC

C

Barclays

Covered

Bonds

Limited

50.00

B

Projepolska,

S.A.

(In

Liquidation)

24.50

Z

Barclays

Capital

Energy

Inc.

Liability

Partnership

Barclays

Capital

Equities

Trading

GP

B

-

St

Helen’s,

1

Undershaft,

London,

South

Africa

Barclays

Capital

Holdings

Inc.

G,

H,

I

EC3P

3DQ

-

9

Elektron

Road,

Techno

Park,

Barclays

Capital

Real

Estate

Finance

Inc.

Igloo

Regeneration

(General

Partner)

25.00

L,

Z

Stellenbosch

7600

Barclays

Capital

Real

Estate

Holdings

Inc.

Limited

Imalivest

Mineral

Resources

LP

66.63

J,

K,

Z

Barclays

Capital

Real

Estate

Inc.

-

3

-

5

London

Road,

Rainham,

Kent,

Barclays

Commercial

Mortgage

Securities

LLC

C

ME8

7RG

Sweden

Barclays

Dryrock

Funding

LLC

C

Trade

Ideas

Limited

20.00

Z

-

c/o

ForeningsSparbanken

AB,

Barclays

Electronic

Commerce

Holdings

Inc.

-

50

Lothian

Road,

Festival

Square,

105

34

Stockholm

Barclays

Financial

LLC

C

Edinburgh,

EH3

9WJ

EnterCard

Group

AB

40.00

K,

Z

Barclays

Group

US

Inc.

G,

I

Equistone

Founder

Partner

II

L.P.

20.00

B,

Z

Barclays

Insurance

U.S.

Inc.

Equistone

Founder

Partner

III

L.P.

35.00

B,

Z

United

States

of

America

Barclays

Oversight

Management

Inc.

-

Enigma,

Wavendon

Business

Park

-

Corporation

Services

Company,

Barclays

Receivables

LLC

C

Milton

Keynes,

MK17

8LX

251

Little

Falls,

Drive

Wilmington,

Barclays

Services

Corporation

Intelligent

Processing

Solutions

Limited

19.50

Z

DE,

19808

Barclays

Services

LLC

C

-

65A

Basinghall

Street,

London,

DG

Solar

Lessee

II,

LLC

75.00

C,

Z

Barclays

US

CCP

Funding

LLC

C

EC2V

5DZ

DG

Solar

Lessee,

LLC

75.00

C,

Z

Barclays

US

Funding

LLC

C

Cyber

Defence

Alliance

Limited

25.00

E,

Z

-Corporation

Trust

Company,

Barclays

US

Investments

Inc.

J,

K

-

Gate

House,

Turnpike

Road,

High

Corporation

Trust

Centre,

1209

Barclays

US

LLC

G,H,I,

U

Wycombe,

Buckinghamshire

HP12

Orange

Street,

Wilmington

DE

BCAP

LLC

C

3NR

19801

Crescent

Real

Estate

Member

LLC

C

GW

City

Ventures

Limited

50.00

K,

Z

VS

BC

Solar

Lessee

I

LLC

50.00

C,

Z

Curve

Investments

GP

B

GN

Tower

Limited

50.00

Z

Subsidiaries

by

virtue

of

control

The

below

are

Subsidiaries

in

accordance

with

s.1162

Companies

Act

2006

as

Barclays

can

exercise

dominant

influence

or

control

over

them.

Gracechurch

Services

Corporation

-

55

Baker

Street,

London,

W1U

7EU

Lagalla

Investments

LLC

Formerly

H

Limited

(In

Liquidation)

70.32

J,Z,K,L,II

Long

Island

Holding

A

LLC

C

-

Haberfield

Old

Moor

Road,

LTDL

Holdings

LLC

C

Wennington,

Lancaster,

LA2

8PD

Marbury

Holdings

LLC

Full

House

Holdings

Limited

67.42

J,Z,K.L,II

Preferred

Liquidity,

LLC

J

-

6th

Floor

60

Gracechurch

Subsidiaries

by

virtue

of

control

%

Note

Procella

Investments

No.2

LLC

C

Street,

London,

EC3V

0HR

United

Kingdom

Procella

Investments

No.3

LLC

C

-

13-15

York

Buildings,

London,

-

1

Churchill

Place,

London,

E14

Relative

Value

Holdings,

LLC

WC2N

6JU

5HP

Surrey

Funding

Corporation

BGF

Group

PLC

24.58

Z

Oak

Pension

Asset

Management

00.00

Z

Sussex

Purchasing

Corporation

-

Aurora

Building,

120

Bothwell

Limited

Sutton

Funding

LLC

C

Street,

Glasgow,

G2

7JS

Water

Street

Investments

Limited

00.00

Z

TPProperty

LLC

C

Buchanan

Wharf

(Glasgow)

78.00

E

Management

Limited

Cayman

Islands

-

PO

Box

309GT,

Ugland

House,

South

Church

Street,

Grand

Cayman,

KY1-1104

Hornbeam

Limited

00.00

Z

Additional

information

327

Barclays

PLC

2020

Annual

Report

on

Form

20-F

continued

Joint

Ventures

The

below

are

Joint

Ventures

in

accordance

with

s.

18,

Schedule

4,

The

Large

and

Medium-sized

Companies

and

Groups

(Accounts

and

Reports)

Regulations

2008

and

are

proportionally

consolidated.

Joint

Ventures

%

Note

United

Kingdom

-

All

Saints

Triangle,

Caledonian

Road,

London,

N1

9UT

Vaultex

UK

Limited

50.00

Joint

management

factors

The

Joint

Venture

Board

comprises

two

Barclays

representative

directors,

two

JV

partner

directors

and

three

non-JV

partner

directors.

The

Board

are

responsible

for

setting

the

company

strategy

and

budgets.

Additional

information

Additional

financial

disclosure

328

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Deposits

and

short-term

borrowings

Deposits

include

deposits

from

banks

and

customer

accounts.

2020

2019

2018

Average

for

the

year

ended

31

December

£m

Deposits

at

amortised

cost

UK

364,736

329,810

313,829

Europe

47,365

39,191

32,707

Americas

37,032

31,531

33,441

Asia

12,509

8,809

6,761

Africa

8,865

7,589

7,273

Total

deposits

at

amortised

cost

470,507

416,930

394,011

2020

2019

2018

For

the

year

ended

31

December

a

£m

Deposits

at

amortised

cost

481,036

415,787

394,838

In

offices

in

the

United

Kingdom:

Current

and

demand

accounts

-

interest

free

132,484

98,207

94,074

-

interest

bearing

40,543

34,362

31,309

Savings

accounts

145,376

128,290

123,789

Other

time

deposits

-

retail

11,549

14,585

12,677

Other

time

deposits

-

wholesale

70,125

64,774

64,675

Total

repayable

in

offices

in

the

United

Kingdom

400,077

340,218

326,524

In

offices

outside

the

United

Kingdom:

Current

and

demand

accounts

-

interest

free

15,309

10,613

11,091

-

interest

bearing

13,772

12,932

12,240

Savings

accounts

14,940

14,109

13,801

Other

time

deposits

36,938

37,915

31,182

Total

repayable

in

offices

outside

the

United

Kingdom

80,959

75,569

68,314

Deposits

at

amortised

cost

in

offices

in

the

United

Kingdom

received

from

non-residents

amounted

to

£34,370m

(2019:

£32,685m).

Note

a

The

UK/Non-UK

deposit

analysis

is

based

on

the

location

of

the

office

where

the

transactions

are

recorded.

Additional

information

Additional

financial

disclosure

329

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Short-term

borrowings

Short-term

borrowings

include

deposits

from

banks,

commercial

paper,

negotiable

certificates

of

deposit

and

repurchase

agreements.

Deposits

from

banks

Deposits

from

banks

are

taken

from

a

wide

range

of

counterparties

and

generally

have

maturities

of

less

than

one

year.

2020

2019

2018

£m

Year

-end

balance

17,343

15,402

14,166

Average

balance

a

25,255

22,162

19,736

Maximum

balance

a

38,215

27,009

26,426

Average

interest

rate

during

year

0.3%

1.5%

2.0%

Year

-end

interest

rate

0.5%

2.2%

2.7%

Notes

a

Calculated

based

on

month

-end

balances.

Commercial

paper

Commercial

paper

is

issued

by

the

Group,

mainly

in

the

United

States,

generally

in

denominations

of

not

less

than

$100,000,

with

maturities

of

up

to

270

days.

2020

2019

2018

£m

Year

-end

balance

14,430

14,269

14,479

Average

balance

a

20,939

18,289

12,192

Maximum

balance

a

25,427

21,086

15,192

Average

interest

rate

during

year

1.2%

1.1%

Year

-end

interest

rate

1.8%

1.5%

0.9%

Note

a

Calculated

based

on

month

-end

balances.

Negotiable

certificates

of

deposit

Negotiable

certificates

of

deposits

are

issued

mainly

in

the

United

Kingdom

and

United

States,

generally

in

denominations

of

not

less

than

$100,000.

2020

2019

2018

£m

Year

-end

balance

7,160

8,056

10,861

Average

balance

a

13,418

11,153

18,485

Maximum

balance

a

19,317

13,769

24,098

Average

interest

rate

during

year

1.0%

2.8%

1.2%

Year

-end

interest

rate

1.8%

3.9%

2.0%

Note

a

Calculated

based

on

month

-end

balances.

Repurchase

agreements

Repurchase

agreements

are

entered

into

with

both

customers

and

banks

and

generally

have

maturities

of

not

more

than

three

months.

2020

2019

2018

£m

Year

-end

balance

14,174

14,517

18,578

Average

balance

a

21,015

17,036

19,962

Maximum

balance

a

35,958

22,292

23,341

Average

interest

rate

during

year

0.3%

0.9%

Year

-end

interest

rate

0.5%

1.4%

1.0%

Note

a

Calculated

based

on

month

-end

balances.

Additional

information

Additional

financial

disclosure

330

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Commitments

and

contractual

obligations

Commercial

commitments

include

guarantees,

contingent

liabilities

and

standby

facilities.

Commercial

commitments

Amount

of

commitment

expiration

per

period

Less

than

one

year

Between

one

to

three

years

Between

three

to

five

years

After

five

years

Total

amounts

committed

£m

As

at

31

December

2020

Guarantees

and

letters

of

credit

pledged

as

collateral

security

15,642

23

-

15,665

Performance

guarantees,

acceptances

and

endorsements

5,942

2

-

5,944

Documentary

credits

and

other

short-term

trade

1,086

-

1,086

Standby

facilities,

credit

lines

and

other

commitments

331,374

359

202

28

331,963

As

at

31

December

2019

Guarantees

and

letters

of

credit

pledged

as

collateral

security

17,493

107

6

-

17,606

Performance

guarantees,

acceptances

and

endorsements

6,810

78

22

11

6,921

Documentary

credits

and

other

short-term

trade

1,291

-

1,291

Standby

facilities,

credit

lines

and

other

commitments

332,160

367

273

364

333,164

Contractual

obligations

include

debt

securities

and

purchase

obligations.

Contractual

obligations

Payments

due

by

period

Less

than

one

year

Between

one

to

three

years

Between

three

to

five

years

After

five

years

Total

£m

As

at

31

December

2020

Long-term

debt

a

32,723

19,182

15,867

34,899

102,671

Purchase

obligations

981

1,387

342

125

2,835

Total

33,704

20,569

16,209

35,024

105,506

As

at

31

December

2019

Long-term

debt

a

27,979

22,152

20,418

36,272

106,821

Purchase

obligations

651

951

463

128

2,193

Total

28,630

23,103

20,881

36,400

109,014

Note

a

Long-term

debt

has

been

prepared

to

reflect

cash

flows

on

an

undiscounted

basis

,

which

includes

interest

payments.

Net

cash

flows

from

derivatives

used

to

hedge

long-term

debt

amount

to

£3.3bn

(2019:

£2.4bn).

Further

information

on

the

contractual

maturity

of

the

Group’s

assets

and

liabilities

is

given

in

the

Liquidity

risk

section.

Additional

information

Additional

financial

disclosure

331

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Securities

Investment

securities

include

securities

reported

within

loans

and

advances

at

amortised

cost

and

financial

assets

at

fair

value

through

other

comprehensive

income.

Other

securities

include

securities

reported

within

trading

portfolio

and

financial

assets

at

fair

value

through

the

income

statement.

Analysis

of

securities

2020

2019

2018

As

at

31

December

£m

Investment

securities

US

government,

other

public

bodies

and

agencies

18,192

16,952

14,323

United

Kingdom

government

16,680

17,617

9,400

Other

government

33,337

18,748

16,067

Mortgage

and

asset

backed

securities

4,012

2,730

2,119

Corporate

and

other

issuers

29,320

25,817

14,856

Debt

securities

101,541

81,864

56,765

Equity

securities

761

1,023

1,122

Investment

securities

102,302

82,887

57,887

Other

securities

US

government,

other

public

bodies

and

agencies

21,005

19,782

23,890

United

Kingdom

government

7,193

10,393

10,155

Other

government

17,831

12,045

9,825

Mortgage

and

asset

backed

securities

1,733

2,354

2,024

Corporate

and

other

issuers

10,413

13,415

15,911

Debt

securities

58,175

57,989

61,805

Equity

securities

66,812

63,495

45,584

Other

securities

124,987

121,484

107,389

Investment

debt

securities

include

government

securities

held

as

part

of

the

Group’s

treasury

management

portfolio

for

asset

and

liability,

liquidity

and

regulatory

purposes

and

are

for

use

on

a

continuing

basis

in

the

activities

of

the

Group.

In

addition,

the

Group

holds

as

investments

listed

and

unlisted

corporate

securities.

Maturities

and

yield

of

investment

debt

securities

Maturing

within

one

year

Maturing

after

one

but

within

five

years

Maturing

after

five

but

within

ten

years

Maturing

after

ten

years

Total

Amount

Yield

Amount

Yield

Amount

Yield

Amount

Yield

Amount

Yield

As

at

31

December

2020

£m

%

£m

%

£m

%

£m

%

£m

%

US

government,

other

public

bodies

and

agencies

3,211

1.3%

8,119

0.6%

5,259

1.1%

1,603

2.5%

18,192

1.0%

United

Kingdom

government

653

1.3%

8,002

1.4%

2,085

2.0%

5,940

1.1%

16,680

1.3%

Other

government

8,435

0.6%

11,443

1.1%

9,474

0.8%

3,985

1.6%

33,337

0.9%

Other

issuers

4,648

1.2%

16,271

1.6%

7,365

1.1%

5,048

1.0%

33,332

1.3%

Total

book

value

16,947

0.9%

43,835

1.2%

24,183

1.0%

16,576

1.3%

101,541

1.1%

The

yield

for

each

range

of

maturities

is

calculated

by

dividing

the

annualised

interest

income

prevailing

at

the

reporting

date

by

the

book

value

of

securities

held

at

that

date.

The

above

table

is

only

for

debt

securities

held

at

the

reporting

date

and

does

not

include

associated

hedges.

Additional

information

Additional

financial

disclosure

332

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Average

balance

sheet

Average

balances

are

based

upon

monthly

averages.

Assets

2020

Average

balance

Interest

income

Interest

expenseᵃ

Total

net

interest

Rate

£m

%

Cash

and

balances

at

central

banks

UK

79,242

133

(19)

114

0.1

Cash

and

balances

at

central

banks

Non-UK

123,183

142

(281)

(139)

(0.1)

Cash

and

balances

at

central

banks

Total

202,425

275

(300)

(25)

-

Loans

and

advances

at

amortised

cost

UK

286,214

7,194

-

7,194

2.5

Loans

and

advances

at

amortised

cost

Non-UK

72,177

2,986

(4)

2,982

4.1

Loans

and

advances

at

amortised

cost

b

Total

358,391

10,180

(4)

10,176

2.8

Cash

collateral

UK

65,225

214

(31)

183

0.3

Cash

collateral

Non-UK

18,110

36

-

36

0.2

Cash

collateral

Total

83,335

250

(31)

219

0.3

Reverse

repurchase

agreements

UK

1,893

16

-

16

0.8

Reverse

repurchase

agreements

Non-UK

8,917

4

(9)

(5)

(0.1)

Reverse

repurchase

agreements

Total

10,810

20

(9)

11

0.1

Interest

earning

assets

at

fair

value

through

other

comprehensive

income

UK

71,931

721

-

721

1.0

Interest

earning

assets

at

fair

value

through

other

comprehensive

income

Non-UK

2,927

55

-

55

1.9

Interest

earning

assets

at

fair

value

through

other

comprehensive

income

Total

74,858

776

-

776

1.0

Other

interest

and

similar

income

c

391

-

391

-

Total

interest

earning

assets

not

at

fair

value

through

income

statement

729,819

11,892

(344)

11,548

1.6

Less:

interest

and

similar

expense

(3,770)

344

(3,426)

-

Net

interest

729,819

8,122

-

8,122

-

Financial

assets

at

fair

value

through

income

statement

UK

187,927

Financial

assets

at

fair

value

through

income

statement

Non-UK

76,369

Financial

assets

at

fair

value

through

income

statement

Total

264,296

Total

interest

earning

assets

994,115

Impairments

(7,969)

Non-interest

earning

assets

425,438

Total

1,411,584

Percentage

of

total

average

interest

earning

assets

in

offices

outside

the

UK

30%

Notes

a

For

the

purposes

of

the

average

balance

sheet,

negative

interest

earned

o

n

assets

(which

is

presented

within

interest

and

similar

expense

in

the

statutory

accounts)

is

included

in

determining

the

total

net

interest

figure.

This

presentation

is

deemed

appropriate

to

represent

the

return

associated

with

each

asset

class

in

the

table.

b

Loans

and

advances

at

amortised

cost

include

all

doubtful

lending.

Interest

receivable

on

such

lending

has

been

included

to

the

extent

to

which

either

cash

payments

have

been

received

or

interest

has

been

accrued

in

accordance

with

the

income

recog

nition

policy

of

the

Barclays

Group.

c

Other

interest

and

similar

income

principally

includes

interest

income

relating

to

hedging

activity.

Additional

information

Additional

financial

disclosure

333

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Assets

2019

Average

balance

Interest

income

Interest

expenseᵃ

Total

net

interest

Rate

£m

%

Cash

and

balances

at

central

banks

UK

70,371

465

(28)

437

0.6

Cash

and

balances

at

central

banks

Non-UK

101,423

626

(233)

393

0.4

Cash

and

balances

at

central

banks

Total

171,794

1,091

(261)

830

0.5

Loans

and

advances

at

amortised

cost

UK

271,607

8,682

-

8,682

3.2

Loans

and

advances

at

amortised

cost

Non-UK

71,976

3,768

(3)

3,765

5.2

Loans

and

advances

at

amortised

cost

b

Total

343,583

12,450

(3)

12,447

3.6

Cash

collateral

UK

59,446

394

(14)

380

0.6

Cash

collateral

Non-UK

7,400

49

-

49

0.7

Cash

collateral

Total

66,846

443

(14)

429

0.6

Reverse

repurchase

agreements

UK

2,990

57

-

57

1.9

Reverse

repurchase

agreements

Non-UK

2,041

11

-

11

0.5

Reverse

repurchase

agreements

Total

5,031

68

-

68

1.4

Interest

earning

assets

at

fair

value

through

other

comprehensive

income

UK

63,366

957

-

957

1.5

Interest

earning

assets

at

fair

value

through

other

comprehensive

income

Non-UK

2,961

75

-

75

2.5

Interest

earning

assets

at

fair

value

through

other

comprehensive

income

Total

66,327

1,032

-

1,032

1.6

Other

interest

and

similar

income

c

372

-

372

-

Total

interest

earning

assets

not

at

fair

value

through

income

statement

653,581

15,456

(278)

15,178

2.3

Less:

interest

and

similar

expense

(6,049)

278

(5,771)

-

Net

interest

653,581

9,407

-

9,407

-

Financial

assets

at

fair

value

through

income

statement

UK

192,300

Financial

assets

at

fair

value

through

income

statement

Non-UK

68,031

Financial

assets

at

fair

value

through

income

statement

Total

260,331

Total

interest

earning

assets

913,912

Impairments

(6,574)

Non-interest

earning

assets

356,756

Total

1,264,094

Percentage

of

total

average

interest

earning

assets

in

offices

outside

the

UK

28%

Notes

a

Comparatives

for

negative

interest

income

on

liabilities

and

negative

interest

expense

on

assets

have

been

re

-presented.

Negative

interest

earned

on

assets

(which

is

presented

within

interest

and

similar

expense

in

the

statutory

accounts)

is

included

in

determining

the

total

net

interest

figure.

This

presentation

is

deemed

appropriate

to

represent

the

return

associated

with

each

asset

class

in

the

table.

b

Loans

and

advances

at

amortised

cost

include

all

doubtful

lending.

Interest

receivable

on

such

lending

has

been

included

to

the

extent

to

which

ei

ther

cash

payments

have

been

received

or

interest

has

been

accrued

in

accordance

with

the

income

recognition

policy

of

the

Barclays

Group.

c

Other

interest

and

similar

income

principally

includes

interest

income

relating

to

hedging

activity.

Additional

information

Additional

financial

disclosure

334

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Assets

2018

Average

balance

Interest

income

Interest

expenseᵃ

Total

net

interest

Rate

£m

%

Cash

and

balances

at

central

banks

UK

70,719

297

(48)

249

0.4

Cash

and

balances

at

central

banks

Non-UK

106,370

826

(208)

618

0.6

Cash

and

balances

at

central

banks

Total

177,089

1,123

(256)

867

0.5

Loans

and

advances

at

amortised

cost

UK

262,796

8,744

-

8,744

3.3

Loans

and

advances

at

amortised

cost

Non-UK

66,619

3,329

(2)

3,327

5.0

Loans

and

advances

at

amortised

cost

b

Total

329,415

12,073

(2)

12,071

3.7

Cash

collateral

UK

52,218

324

(12)

312

0.6

Cash

collateral

Non-UK

5,343

47

-

47

0.9

Cash

collateral

Total

57,561

371

(12)

359

0.6

Reverse

repurchase

agreements

UK

857

2

-

2

0.2

Reverse

repurchase

agreements

Non-UK

855

10

-

10

1.2

Reverse

repurchase

agreements

Total

1,712

12

-

12

0.7

Interest

earning

assets

at

fair

value

through

other

comprehensive

income

UK

53,499

956

-

956

1.8

Interest

earning

assets

at

fair

value

through

other

comprehensive

income

Non-UK

2,850

73

-

73

2.6

Interest

earning

assets

at

fair

value

through

other

comprehensive

income

Total

56,349

1,029

-

1,029

1.8

Other

interest

and

similar

income

c

-

(67)

-

(67)

Total

interest

earning

assets

not

at

fair

value

through

income

statement

622,126

14,541

(270)

14,271

2.3

Less:

interest

and

similar

expense

-

(5,479)

270

(5,209)

Net

interest

622,126

9,062

-

9,062

Financial

assets

at

fair

value

through

income

statement

UK

171,318

Financial

assets

at

fair

value

through

income

statement

Non-UK

73,153

Financial

assets

at

fair

value

through

income

statement

Total

244,471

Total

interest

earning

assets

866,597

Impairments

(6,875)

Non-interest

earning

assets

349,877

Total

1,209,599

Percentage

of

total

average

interest

earning

assets

in

offices

outside

the

UK

29%

Notes

a

Comparatives

for

negative

interest

income

on

liabilities

and

negative

interest

expense

on

assets

have

been

re

-presented.

Negative

interest

earned

on

assets

(which

is

presented

within

interest

and

similar

expense

in

the

statutory

accounts)

is

included

in

determining

the

total

net

interest

figure.

This

presentation

is

deemed

appropriate

to

represent

the

return

associated

with

each

asset

class

in

the

table.

b

Loans

and

advances

at

amortised

cost

incl

ude

all

doubtful

lending.

Interest

receivable

on

such

lending

has

been

included

to

the

extent

to

which

either

cash

payments

have

been

received

or

interest

has

been

accrued

in

accordance

with

the

income

recognition

policy

of

the

Barclays

Group.

c

Other

interest

and

similar

income

principally

includes

interest

income

relating

to

hedging

activity.

Additional

information

Additional

financial

disclosure

335

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Liabilities

2020

Average

balance

Interest

expense

Interest

incomeᵃ

Total

net

interest

Rate

£m

%

Deposits

at

amortised

cost

UK

272,031

586

(15)

571

0.2

Deposits

at

amortised

cost

Non-UK

70,382

444

(15)

429

0.6

Deposits

at

amortised

cost

Total

342,413

1,030

(30)

1,000

0.3

Cash

collateral

UK

52,869

96

(31)

65

0.1

Cash

collateral

Non-UK

13,921

38

-

38

0.3

Cash

collateral

Total

66,790

134

(31)

103

0.2

Debt

securities

in

issue

UK

67,529

1,006

-

1,006

1.5

Debt

securities

in

issue

Non-UK

23,543

354

(2)

352

1.5

Debt

securities

in

issue

Total

91,072

1,360

(2)

1,358

1.5

Subordinated

liabilities

UK

18,845

662

-

662

3.5

Subordinated

liabilities

Non-UK

220

8

-

8

3.6

Subordinated

liabilities

Total

19,065

670

-

670

3.5

Repurchase

agreements

UK

19,694

68

-

68

0.3

Repurchase

agreements

Non-UK

1,321

7

(5)

2

0.2

Repurchase

agreements

Total

21,015

75

(5)

70

0.3

Other

interest

and

similar

expense

b

-

501

-

501

-

Total

interest

bearing

liabilities

not

at

fair

value

through

P&L

540,355

3,770

(68)

3,702

0.7

Interest

bearing

liabilities

at

fair

value

through

P&L

UK

240,792

Interest

bearing

liabilities

at

fair

value

through

P&L

Non-UK

51,890

Interest

bearing

liabilities

at

fair

value

through

P&L

Total

292,682

Total

interest

bearing

liabilities

833,037

Interest

free

customer

deposits

UK

115,234

Interest

free

customer

deposits

Non-UK

12,860

Interest

free

customer

deposits

Total

128,094

Other

non-interest

bearing

liabilities

381,243

Shareholders'

equity

69,210

Total

1,411,584

Percentage

of

total

average

interest

bearing

liabilities

in

offices

outside

the

UK

19%

Notes

a

For

the

purposes

of

the

average

balance

sheet,

negative

interest

earned

on

liabilities

(which

is

presented

within

interest

and

similar

income

in

the

statutory

accounts)

is

included

in

determining

the

total

net

interest

figure.

This

presentation

is

deemed

a

ppropriate

to

represent

the

return

associated

with

each

asset

class

in

the

table.

b

Other

interest

and

similar

expense

principally

includes

interest

expense

relating

to

hedging

activity.

Additional

information

Additional

financial

disclosure

336

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Liabilities

2019

Average

balance

Interest

expense

Interest

incomeᵃ

Total

net

interest

Rate

£m

%

Deposits

at

amortised

cost

UK

244,387

1,306

-

1,306

0.5

Deposits

at

amortised

cost

Non-UK

67,556

1,143

(1)

1,142

1.7

Deposits

at

amortised

cost

Total

311,943

2,449

(1)

2,448

0.8

Cash

collateral

UK

50,638

214

(10)

204

0.4

Cash

collateral

Non-UK

8,332

82

-

82

1.0

Cash

collateral

Total

58,970

296

(10)

286

0.5

Debt

securities

in

issue

UK

61,053

1,134

-

1,134

1.9

Debt

securities

in

issue

Non-UK

25,730

772

(2)

770

3.0

Debt

securities

in

issue

Total

86,783

1,906

(2)

1,904

2.2

Subordinated

liabilities

UK

19,499

1,046

-

1,046

5.4

Subordinated

liabilities

Non-UK

374

22

-

22

5.9

Subordinated

liabilities

Total

19,873

1,068

-

1,068

5.4

Repurchase

agreements

UK

14,655

127

-

127

0.9

Repurchase

agreements

Non-UK

2,381

20

-

20

0.8

Repurchase

agreements

Total

17,036

147

-

147

0.9

Other

interest

and

similar

expense

b

-

183

-

183

-

Total

interest

bearing

liabilities

not

at

fair

value

through

P&L

494,605

6,049

(13)

6,036

1.2

Interest

bearing

liabilities

at

fair

value

through

P&L

UK

232,242

Interest

bearing

liabilities

at

fair

value

through

P&L

Non-UK

62,304

Interest

bearing

liabilities

at

fair

value

through

P&L

Total

294,546

Total

interest

bearing

liabilities

789,151

Interest

free

customer

deposits

UK

94,733

Interest

free

customer

deposits

Non-UK

10,375

Interest

free

customer

deposits

Total

105,108

Other

non-interest

bearing

liabilities

307,952

Shareholders'

equity

61,883

Total

1,264,094

Percentage

of

total

average

interest

bearing

liabilities

in

offices

outside

the

UK

21%

Notes

a

Comparatives

for

negative

interest

income

on

liabilities

and

negative

interest

expense

on

assets

have

been

re

-presented.

Negative

interest

earned

on

liabilities

(which

is

presented

within

interest

and

similar

income

in

the

statutory

accounts)

is

included

i

n

determining

the

total

net

interest

figure.

This

presentation

is

deemed

appropriate

to

represent

the

return

associated

with

each

asset

class

in

the

table.

b

Other

interest

and

similar

expense

principally

includes

interest

expense

relating

to

hedging

acti

vity.

Additional

information

Additional

financial

disclosure

337

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Liabilities

2018

Average

balance

Interest

expense

Interest

incomeᵃ

Total

net

interest

Rate

£m

%

Deposits

at

amortised

cost

UK

235,002

1,301

-

1,301

0.6

Deposits

at

amortised

cost

Non-UK

57,576

949

-

949

1.6

Deposits

at

amortised

cost

Total

292,578

2,250

-

2,250

0.8

Cash

collateral

UK

44,782

176

(7)

169

0.4

Cash

collateral

Non-UK

5,498

70

-

70

1.3

Cash

collateral

Total

50,280

246

(7)

239

0.5

Debt

securities

in

issue

UK

48,973

1,123

-

1,123

2.3

Debt

securities

in

issue

Non-UK

32,177

554

(28)

526

1.6

Debt

securities

in

issue

Total

81,150

1,677

(28)

1,649

2.0

Subordinated

liabilities

UK

21,369

1,208

-

1,208

5.7

Subordinated

liabilities

Non-UK

145

15

-

15

10.3

Subordinated

liabilities

Total

21,514

1,223

-

1,223

5.7

Repurchase

agreements

UK

13,660

157

-

157

1.1

Repurchase

agreements

Non-UK

6,302

35

-

35

0.6

Repurchase

agreements

Total

19,962

192

-

192

1.0

Other

interest

and

similar

expense

b

-

(109)

-

(109)

-

Total

interest

bearing

liabilities

not

at

fair

value

through

P&L

465,484

5,479

(35)

5,444

1.2

Interest

bearing

liabilities

at

fair

value

through

P&L

UK

225,502

Interest

bearing

liabilities

at

fair

value

through

P&L

Non-UK

56,872

Interest

bearing

liabilities

at

fair

value

through

P&L

Total

282,374

Total

interest

bearing

liabilities

747,858

Interest

free

customer

deposits

UK

91,935

Interest

free

customer

deposits

Non-UK

9,496

Interest

free

customer

deposits

Total

101,431

Other

non-interest

bearing

liabilities

298,521

Shareholders'

equity

61,789

Total

1,209,599

Percentage

of

total

average

interest

bearing

liabilities

in

offices

outside

the

UK

21%

Notes

a

Comparatives

for

negative

interest

income

on

liabilities

and

negative

interest

expense

on

assets

have

been

re

-presented.

Negative

interest

earned

on

liabilities

(which

is

presented

within

interest

and

similar

income

in

the

statutory

accounts)

is

included

i

n

determining

the

total

net

interest

figure.

This

presentation

is

deemed

appropriate

to

represent

the

return

associated

with

each

asset

class

in

the

table.

b

Other

interest

and

similar

expense

principally

includes

interest

expense

relating

to

hedging

acti

vity.

Additional

information

Additional

financial

disclosure

338

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Changes

in

total

interest

–

volume

and

rate

analysis

The

following

tables

allocate

changes

in

interest

between

changes

in

volume

and

changes

in

interest

rates

for

the

last

two

years.

Volume

and

rate

variances

have

been

calculated

on

the

movement

in

the

average

balances

and

the

change

in

the

interest

rates

on

average

interest

earning

assets

and

average

interest

bearing

liabilities.

Where

variances

have

arisen

from

changes

in

both

volumes

and

interest

rates,

these

have

been

allocated

proportionately

between

the

two.

Interest

income

2020/2019

Change

due

to

increase/(decrease)

in:

2019/2018

Change

due

to

increase/(decrease)

in:

Total

change

Volume

Rate

Total

change

Volume

Rate

£m

Cash

and

balances

at

central

banks

UK

(323)

47

(370)

188

(1)

189

Cash

and

balances

at

central

banks

Non-UK

(532)

71

(603)

(225)

(29)

(196)

Cash

and

balances

at

central

banks

Total

(855)

118

(973)

(37)

(30)

(7)

Loans

and

advances

at

amortised

cost

UK

(1,488)

447

(1,935)

(62)

286

(348)

Loans

and

advances

at

amortised

cost

Non-UK

(783)

10

(793)

438

275

163

Loans

and

advances

at

amortised

cost

Total

(2,271)

457

(2,728)

376

561

(185)

Cash

collateral

UK

(197)

32

(229)

68

43

25

Cash

collateral

Non-UK

(13)

39

(52)

2

16

(14)

Cash

collateral

Total

(210)

71

(281)

70

59

11

Reverse

repurchase

agreements

UK

(41)

(16)

(25)

55

12

43

Reverse

repurchase

agreements

Non-UK

(16)

5

(21)

1

9

(8)

Reverse

repurchase

agreements

Total

(57)

(11)

(46)

56

21

35

Interest

earning

assets

at

fair

value

through

other

comprehensive

income

UK

(236)

116

(352)

1

162

(161)

Interest

earning

assets

at

fair

value

through

other

comprehensive

income

Non-UK

(20)

(1)

(19)

2

3

(1)

Interest

earning

assets

at

fair

value

through

other

comprehensive

income

Total

(256)

115

(371)

3

165

(162)

Other

interest

income

19

-

19

439

-

439

Total

interest

receivable

(3,630)

750

(4,380)

907

776

131

Interest

expense

2020/2019

Change

due

to

increase/(decrease)

in:

2019/2018

Change

due

to

increase/(decrease)

in:

Total

change

Volume

Rate

Total

change

Volume

Rate

£m

Deposits

at

amortised

cost

UK

(735)

125

(860)

5

51

(46)

Deposits

at

amortised

cost

Non-UK

(713)

46

(759)

193

168

25

Deposits

at

amortised

cost

Total

(1,448)

171

(1,619)

198

219

(21)

Cash

collateral

UK

(139)

9

(148)

35

23

12

Cash

collateral

Non-UK

(44)

36

(80)

12

30

(18)

Cash

collateral

Total

(183)

45

(228)

47

53

(6)

Debt

securities

in

issue

UK

(128)

114

(242)

11

249

(238)

Debt

securities

in

issue

Non-UK

(418)

(61)

(357)

244

(122)

366

Debt

securities

in

issue

Total

(546)

53

(599)

255

127

128

Subordinated

liabilities

UK

(385)

(34)

(351)

(161)

(103)

(58)

Subordinated

liabilities

Non-UK

(14)

(7)

7

15

(8)

Subordinated

liabilities

Total

(399)

(41)

(358)

(154)

(88)

(66)

Repurchase

agreements

UK

(59)

35

(94)

(30)

11

(41)

Repurchase

agreements

Non-UK

(18)

(6)

(12)

(15)

(28)

13

Repurchase

agreements

Total

(77)

29

(106)

(45)

(17)

(28)

Other

interest

expense

319

-

319

291

-

291

Total

interest

payable

(2,334)

257

(2,591)

592

294

298

Additional

information

Additional

financial

disclosure

339

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Credit

risk

additional

disclosure

This

section

of

the

report

contains

supplementary

information

that

is

more

detailed

or

contains

longer

histories

than

the

data

presented

in

the

Risk

review

section.

Risk

elements

in

loans

and

advances

at

amortised

cost

There

are

three

main

higher

credit

risk

elements

identified

in

loans

and

advances

at

amortised

cost:

Loans

assessed

as

Stage

3

credit

impaired

Stage

3

credit

impaired

loans

are

loans

in

default

assessed

for

lifetime

expected

credit

losses.

Further

details

on

the

approach

to

expected

credit

loss

provisioning

under

IFRS

9,

including

the

classification

into

stages

of

gross

exposures

and

approach

to

the

measurement

of

lifetime

expected

credit

losses,

can

be

found

in

Note

1.

Loans

greater

than

90

days

past

due

not

considered

Stage

3

credit

impaired

Under

a

US

reporting

framework,

all

accruing

loans

greater

than

90

days

past

due

are

considered

to

be

at

higher

risk

of

loss.

The

Group

classifies

all

loans

and

advances

past

due

90

days

except

mortgages

as

Stage

3

credit

impaired

loans

and

therefore

these

are

already

considered

a

higher

credit

risk.

However,

in

addition

to

Stage

3

gross

loans

and

advances

past

due

greater

than

90

days

as

at

31

December

2020,

there

are

a

further

£167m

of

Stage

2

mortgage

loans

between

90

to

180

days

past

due.

Restructured

loans

not

included

above

Restructured

loans

comprises

loans

not

included

above

where,

for

economic

or

legal

reasons

the

debtor’s

financial

difficulties,

a

concession

has

been

granted

to

the

debtor

that

would

not

otherwise

be

considered.

For

information

on

restructured

loans

refer

to

disclosures

on

forbearance

in

the

credit

risk

section.

These

risk

elements

in

loans

and

advances

may

be

analysed

between

the

United

Kingdom

and

Rest

of

the

World

as

follows:

Risk

elements

in

loans

and

advances

at

amortised

cost

2020

2019

2018

2017

a

2016

a

As

at

31

December

£m

Gross

stage

3

credit

impaired

loans

(2017

–

2016:

Individually

impaired

loans)

United

Kingdom

4,828

4,552

5,150

2,648

2,688

Rest

of

the

world

4,169

3,371

3,353

1,756

1,926

Total

8,997

7,923

8,503

4,404

4,614

Accruing

gross

loans

which

are

not

stage

3

credit

impaired

loans

and

are

contractually

overdue

90

days

or

more

as

to

principal

or

interest

(2017

–

2016:

Accruing

gross

loans

which

are

not

individually

impaired

loans

and

are

contractually

overdue

90

days

or

more

as

to

principal

or

interest)

United

Kingdom

167

139

167

752

810

Rest

of

the

world

-

516

664

Total

167

139

167

1,268

1,474

Other

gross

restructured

loans

(2017

–

2016:

Impaired

and

restructured

loans)

b

United

Kingdom

-

Rest

of

the

world

-

Total

-

Total

risk

elements

in

loans

and

advances

at

amortised

cost

United

Kingdom

4,995

4,691

5,317

3,400

3,498

Rest

of

the

world

4,169

3,371

3,353

2,272

2,590

Total

9,164

8,062

8,670

5,672

6,088

Note

a

The

comparatives

for

2017

and

2016

have

been

presented

on

an

IAS

39

basis.

b

Prior

year

comparatives

have

been

restated

to

ensure

a

consistent

basis

of

reporting

with

2020.

Interest

forgone

on

risk

elements

in

loans

and

advances

at

amortised

cost

2020

2019

a

2018

a

£m

Interest

income

that

would

have

been

recognised

under

the

original

contractual

terms

United

Kingdom

117

108

141

Rest

of

the

World

69

83

77

Total

186

191

218

Note

a

Prior

year

comparatives

have

been

restated

to

ensure

a

consistent

basis

of

reporting

with

2020.

Additional

information

Additional

financial

disclosure

340

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Potential

problem

loans

Potential

problem

loans

are

those

loans

for

which

serious

doubt

exists

as

to

the

ability

of

the

borrower

to

continue

to

comply

with

repayment

terms

in

the

near

future.

The

loans

and

advances

at

amortised

cost

by

product

disclosure

in

the

credit

risk

section

includes

gross

exposure

and

associated

impairment

allowance

for

assets

classified

as

Stage

2,

but

not

past

due

i.e.

assets

satisfying

the

criteria

for

a

Significant

Increase

in

Credit

Risk,

but

which

are

still

complying

with

repayment

terms.

Forbearance

measures

consist

of

concessions

towards

a

debtor

that

is

experiencing

or

is

about

to

experience

difficulties

in

meeting

their

financial

commitments.

Both

performing

and

non-performing

forbearance

assets

are

classified

as

Stage

3

except

where

it

is

established

that

the

concession

granted

has

not

resulted

in

diminished

financial

obligation

and

that

no

other

regulatory

definition

of

default

criteria

has

been

triggered,

in

which

case

the

asset

is

classified

as

Stage

2.

The

minimum

probationary

period

for

non-performing

forbearance

is

12

months

and

for

performing

forbearance,

24

months.

Hence,

a

minimum

of

36

months

is

required

for

non-performing

forbearance

to

move

out

of

a

forborne

state.

Further

details

can

be

found

in

the

credit

risk

section.

In

order

to

assess

asset

credit

quality,

12-month

PDs

are

used

to

map

assets

into

strong,

satisfactory,

higher

risk

or

credit

impaired.

A

credit

risk

profile

by

internal

PD

grade

for

gross

loans

and

advances

at

amortised

cost

and

allowance

for

ECL

is

shown

in

the

credit

risk

section,

analysing

each

of

these

categories

by

stage.

Wholesale

accounts

that

are

deemed

to

contain

heightened

levels

of

risk

are

recorded

on

graded

watchlists

comprising

four

categories,

graded

in

line

with

the

perceived

severity

of

the

risk

attached

to

the

lending,

and

its

probability

of

default.

Where

a

counterparty’s

financial

health

gives

grounds

for

concern,

it

is

immediately

placed

into

the

appropriate

category.

Once

an

account

has

been

placed

on

a

watchlist,

the

exposure

is

monitored

and,

where

appropriate,

exposure

reductions

are

effected.

Further

information

on

monitoring

weaknesses

in

portfolios

can

be

found

in

the

Barclays

PLC

Pillar

3

Report

2020

(unaudited).

Additional

information

Additional

financial

disclosure

341

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Impairment

The

comparatives

for

2017

and

2016

are

presented

on

an

IAS

39

basis.

Movements

in

allowance

for

impairment

by

geography

2020

2019

2018

2017

2016

£m

Allowance

for

impairment

as

at

1

January

6,308

6,770

7,102

4,620

4,921

Exchange

and

other

adjustments

(381)

(834)

(226)

(293)

(816)

Amounts

written

off:

United

Kingdom

(715)

(732)

(949)

(1,111)

(1,272)

Europe

(202)

(98)

(62)

(157)

(218)

Americas

(1,043)

(1,037)

(862)

(1,038)

(664)

Africa

and

Middle

East

(3)

(9)

-

(9)

(20)

Asia

(1)

(7)

(18)

(14)

(19)

New

and

increased/(released)

impairment

allowance:

United

Kingdom

1,787

1,087

842

1,345

1,371

Europe

425

116

84

110

260

Americas

1,931

1,072

809

1,192

1,025

Africa

and

Middle

East

192

(30)

32

23

44

Asia

37

10

18

(16)

8

Allowance

for

impairment

as

at

31

December

8,335

6,308

6,770

4,652

4,620

Average

loans

and

advances

at

amortised

cost

for

the

year

358,391

343,583

329,415

296,068

304,805

Analysis

of

impairment

charges

2020

2019

2018

2017

2016

As

at

31

December

£m

Impairment

charges:

United

Kingdom

1,527

786

742

1,138

1,130

Europe

472

127

48

92

242

Americas

1,686

927

758

1,084

921

Africa

and

Middle

East

189

(14)

17

22

43

Asia

35

8

25

(16)

7

Loans

and

advances

at

amortised

cost

3,909

1,833

1,590

2,320

2,343

Provision

for

undrawn

contractually

committed

facilities

and

guarantees

provided

776

71

(125)

13

9

Loans

impairment

4,685

1,904

1,465

2,333

2,352

Cash

collateral

and

settlement

balances

2

1

(1)

-

Financial

investments

-

3

21

Other

financial

assets

measured

at

amortised

cost

149

6

-

Financial

assets

at

fair

value

through

other

comprehensive

income

2

1

4

-

Impairment

charges

4,838

1,912

1,468

2,336

2,373

Additional

information

Additional

financial

disclosure

342

Barclays

PLC

2020

Annual

Report

on

Form

20-F

The

industry

classifications

in

the

tables

below

have

been

prepared

at

the

level

of

the

borrowing

entity.

This

means

that

a

loan

to

a

subsidiary

of

a

major

corporation

is

classified

by

the

industry

in

which

the

subsidiary

operates,

even

though

the

Parent’s

predominant

business

may

be

in

a

different

industry.

Total

impairment

charges

on

loans

and

advances

at

amortised

cost

by

industry

2020

2019

2018

2017

2016

As

at

31

December

£m

United

Kingdom:

Financial

institutions

(37)

(3)

71

(42)

(1)

Manufacturing

26

(6)

(2)

(11)

39

Construction

32

1

-

10

7

Property

154

16

(13)

(10)

(13)

Energy

and

water

12

6

-

35

12

Wholesale

and

retail

distribution

and

leisure

67

42

(38)

51

38

Business

and

other

services

175

24

(97)

220

56

Home

loans

21

6

1

31

(4)

Cards,

unsecured

and

other

personal

lending

1,008

685

877

856

975

Other

69

15

(57)

(2)

20

Total

United

Kingdom

1,527

786

742

1,138

1,129

Overseas

2,382

1,048

848

1,182

1,214

Total

impairment

charges

3,909

1,833

1,590

2,320

2,343

Allowance

for

impairment

by

industry

2020

a

2019

2018

2017

2016

As

at

31

December

£m

%

£m

%

£m

%

£m

%

£m

%

United

Kingdom:

Financial

institutions

80

1.0

65

1.0

68

1.0

11

0.2

5

0.1

Manufacturing

49

0.6

42

0.7

38

0.6

34

0.7

60

1.3

Construction

64

0.8

43

0.7

41

0.6

37

0.8

35

0.8

Property

222

2.7

81

1.3

94

1.4

48

1.0

89

1.9

Government

and

central

bank

1

-

1

-

11

0.2

1

-

Energy

and

water

58

0.7

21

0.3

6

0.1

108

2.3

114

2.5

Wholesale

and

retail

distribution

and

leisure

355

4.3

159

2.5

140

2.1

186

4.0

143

3.1

Business

and

other

services

247

3.0

205

3.2

196

2.9

482

10.4

252

5.5

Home

loans

110

1.3

93

1.5

98

1.4

137

2.9

144

3.1

Cards,

unsecured

and

other

personal

lending

2,761

33.1

2,440

38.7

2,766

40.9

1,671

35.9

1,653

35.8

Other

152

1.8

95

1.5

102

1.5

42

0.9

49

1.1

Total

United

Kingdom

4,099

49.2

3,246

51.5

3,560

52.6

2,757

59.3

2,544

55.1

Overseas

4,236

50.8

3,062

48.5

3,210

47.4

1,895

40.7

2,076

44.9

Total

8,335

100.0

6,308

100.0

6,770

100.0

4,652

100.0

4,620

100.0

Note

a

Other

financial

assets

subject

to

impairment

not

included

in

the

table

above

include

£165m

impairment

allowance

relating

to

cash

collateral

and

settlement

balances,

financial

assets

at

fair

value

through

other

comprehensive

income

and

other

assets.

Additional

information

Additional

financial

disclosure

343

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Amounts

written

off

and

recovered

by

industry

Amounts

written

off

Recoveries

of

amounts

previously

written

off

2020

2019

2018

2017

2016

2020

a

2019

2018

2017

2016

As

at

31

December

£m

United

Kingdom:

Financial

institutions

26

6

8

2

18

5

2

47

1

Manufacturing

3

2

12

2

15

14

4

3

Construction

8

9

7

10

5

3

1

3

1

Property

21

42

46

22

18

5

13

6

1

11

Energy

and

water

3

-

4

32

-

12

-

2

Wholesale

and

retail

distribution

and

leisure

23

13

48

23

25

35

20

15

8

5

Business

and

other

services

37

49

227

105

52

40

6

9

10

Home

loans

5

10

13

11

1

3

-

Cards,

unsecured

and

other

personal

lending

578

593

552

897

1,134

25

41

93

132

206

Other

11

8

35

5

10

31

5

7

4

2

Total

United

Kingdom

715

732

949

1,111

1,272

184

96

139

207

241

Overseas

1,249

1,151

942

1,218

921

215

28

56

127

125

Total

1,964

1,883

1,891

2,329

2,193

399

124

195

334

366

Note

a

Recoveries

include

£364m

for

reimbursements

expected

to

be

received

under

the

arrangement

where

the

Group

has

entered

into

financial

guarantee

contracts

which

provide

credit

protection

over

certain

loans

assets

with

third

parties.

Cash

recoveries

of

previously

written

off

amounts

to

£35m.

Impairment

ratios

2020

2019

2018

2017

2016

%

Impairment

charges

as

a

percentage

of

average

loans

and

advances

at

amortised

cost

1.31

0.56

0.45

0.79

0.78

Amounts

written

off

(net

of

recoveries)

as

a

percentage

of

average

loans

and

advances

at

amortised

cost

0.44

0.51

0.67

0.60

Allowance

for

impairment

balance

as

a

percentage

of

loans

and

advances

at

amortised

cost

as

at

31

December

2.37

1.83

2.03

1.42

1.32

Additional

information

Additional

financial

disclosure

344

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Maturity

analysis

of

gross

loans

and

advances

at

amortised

cost

Maturity

analysis

of

gross

loans

and

advances

at

amortised

cost

On

demand

Not

more

than

three

months

Over

three

months

but

not

more

than

six

months

Over

six

months

but

not

more

than

one

year

Over

one

year

but

not

more

than

three

years

Over

three

years

but

not

more

than

five

years

Over

five

years

but

not

more

than

ten

years

Over

ten

years

Total

As

at

31

December

2020

£m

United

Kingdom

Corporate

lending

2,173

3,845

1,642

3,283

15,150

9,666

18,090

20,557

74,406

Other

lending

to

customers

in

the

United

Kingdom

4,225

975

2,569

1,959

10,830

11,422

21,998

137,948

191,926

Total

United

Kingdom

6,398

4,820

4,211

5,242

25,980

21,088

40,088

158,505

266,332

Europe

3,456

2,854

947

1,693

8,134

3,231

2,482

3,176

25,973

Americas

3,935

2,725

1,867

2,813

13,064

7,859

6,017

5,724

44,004

Africa

and

Middle

East

879

803

232

423

427

443

452

203

3,862

Asia

1,218

1,271

1,378

386

1,435

4,749

117

242

10,796

Total

gross

loans

and

advances

at

amortised

cost

15,886

12,473

8,635

10,557

49,040

37,370

49,156

167,850

350,967

As

at

31

December

2019

United

Kingdom

Corporate

lending

2,667

2,902

1,152

3,218

15,313

12,096

7,871

20,266

65,485

Other

lending

to

customers

in

the

United

Kingdom

4,178

1,438

6,652

4,618

11,262

10,755

23,532

132,785

195,220

Total

United

Kingdom

6,845

4,340

7,804

7,836

26,575

22,851

31,403

153,051

260,705

Europe

2,852

2,157

1,117

2,479

7,062

4,322

2,640

3,757

26,386

Americas

4,356

2,456

2,475

4,110

10,772

9,751

7,332

7,498

48,750

Africa

and

Middle

East

662

267

128

384

771

208

189

3,271

Asia

1,358

1,415

1,635

457

544

543

132

227

6,311

Total

gross

loans

and

advances

at

amortised

cost

16,073

11,030

13,298

15,010

45,337

38,238

41,715

164,722

345,423

Additional

information

Additional

financial

disclosure

345

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Industrial

and

geographical

concentrations

of

Gross

loans

and

advances

at

amortised

cost

Gross

loans

and

advances

at

amortised

cost

by

industry

2020

2019

2018

2017

a

2016

a

As

at

31

December

£m

Financial

institutions

30,384

29,366

28,237

35,654

49,648

Manufacturing

8,287

8,392

8,849

9,193

12,198

Construction

4,236

2,877

2,802

3,284

3,525

Property

22,194

21,673

20,933

20,364

20,831

Government

and

central

bank

28,449

23,851

12,776

9,090

9,312

Energy

and

water

4,943

5,442

5,582

5,644

7,154

Wholesale

and

retail

distribution

and

leisure

12,992

10,224

11,809

12,605

13,070

Business

and

other

services

20,107

17,420

19,989

20,381

21,390

Home

loans

160,185

154,911

150,735

147,460

145,184

Cards,

unsecured

loans

and

other

personal

lending

46,929

60,045

60,561

57,245

59,851

Other

12,261

11,222

10,903

7,780

8,357

Gross

loans

and

advances

at

amortised

cost

350,967

345,423

333,176

328,700

350,520

Gross

loans

and

advances

at

amortised

cost

in

the

UK

2020

2019

2018

2017

a

2016

a

As

at

31

December

£m

Financial

institutions

7,878

7,268

6,200

6,233

8,200

Manufacturing

5,741

4,904

4,440

6,198

6,816

Construction

4,071

2,623

2,593

3,025

3,254

Property

19,637

18,876

18,036

18,168

18,145

Government

and

central

bank

19,140

19,902

7,867

7,906

7,226

Energy

and

water

2,454

2,777

2,668

2,501

2,229

Wholesale

and

retail

distribution

and

leisure

11,205

8,547

9,970

10,617

10,586

Business

and

other

services

14,325

12,460

15,092

16,385

16,425

Home

loans

149,964

144,734

138,323

134,820

131,945

Cards,

unsecured

loans

and

other

personal

lending

23,035

30,808

31,139

30,786

31,260

Other

8,882

7,806

7,348

6,220

6,464

Gross

loans

and

advances

at

amortised

cost

in

the

UK

266,332

260,705

243,676

242,859

242,550

Gross

loans

and

advances

at

amortised

cost

in

Europe

2020

2019

2018

2017

a

2016

a

As

at

31

December

£m

Financial

institutions

5,986

5,958

5,950

6,143

5,541

Manufacturing

906

1,072

1,335

1,347

2,522

Construction

127

133

85

80

30

Property

515

510

716

734

1,047

Government

and

central

bank

2,513

1,849

1,778

323

702

Energy

and

water

831

827

676

621

1,217

Wholesale

and

retail

distribution

and

leisure

616

752

735

808

907

Business

and

other

services

898

907

991

1,023

1,014

Home

loans

8,139

8,387

10,563

11,578

12,189

Cards,

unsecured

loans

and

other

personal

lending

4,930

5,108

5,076

4,483

4,283

Other

512

883

839

632

385

Gross

loans

and

advances

at

amortised

cost

in

Europe

25,973

26,386

28,744

27,772

29,837

Additional

information

Additional

financial

disclosure

346

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Gross

loans

and

advances

at

amortised

cost

in

the

Americas

2020

2019

2018

2017

a

2016

a

As

at

31

December

£m

Financial

institutions

12,614

12,374

12,458

18,559

30,348

Manufacturing

1,096

1,782

2,426

1,262

2,348

Construction

5

77

71

147

204

Property

1,824

2,161

2,097

1,272

1,463

Government

and

central

bank

395

471

2,869

-

162

Energy

and

water

1,397

1,437

1,667

1,986

2,709

Wholesale

and

retail

distribution

and

leisure

774

635

613

660

949

Business

and

other

services

4,384

3,623

2,973

2,629

3,322

Home

loans

771

646

715

567

595

Cards,

unsecured

loans

and

other

personal

lending

18,236

23,445

23,756

21,486

23,700

Other

2,508

2,099

2,187

523

828

Gross

loans

and

advances

at

amortised

cost

in

the

Americas

44,004

48,750

51,832

49,091

66,628

Gross

loans

and

advances

at

amortised

cost

in

Africa

and

Middle

East

2020

2019

2018

2017

a

2016

a

As

at

31

December

£m

Financial

institutions

1,422

948

1,319

1,066

1,065

Manufacturing

138

160

51

13

60

Construction

-

2

Property

72

55

112

80

Government

and

central

bank

297

269

262

860

1,031

Energy

and

water

59

116

200

252

494

Wholesale

and

retail

distribution

and

leisure

100

67

123

219

328

Business

and

other

services

326

363

221

64

237

Home

loans

843

728

698

378

357

Cards,

unsecured

loans

and

other

personal

lending

562

534

494

406

494

Other

43

31

96

97

200

Gross

loans

and

advances

at

amortised

cost

in

Africa

and

Middle

East

3,862

3,271

3,519

3,467

4,348

Gross

loans

and

advances

at

amortised

cost

in

Asia

2020

2019

2018

2017

a

2016

a

As

at

31

December

£m

Financial

institutions

2,484

2,818

2,310

3,653

4,494

Manufacturing

406

474

597

373

452

Construction

33

44

53

32

35

Property

146

71

29

78

96

Government

and

central

bank

6,104

1,360

-

1

191

Energy

and

water

202

285

371

284

505

Wholesale

and

retail

distribution

and

leisure

297

223

368

301

300

Business

and

other

services

174

67

712

280

392

Home

loans

468

416

436

117

98

Cards,

unsecured

loans

and

other

personal

lending

166

150

96

84

114

Other

316

403

433

308

480

Gross

loans

and

advances

at

amortised

cost

in

Asia

10,796

6,311

5,405

5,511

7,157

Note

a

The

comparatives

for

2017

and

2016

have

been

presented

on

an

IAS

39

basis.

Interest

rate

sensitivity

of

gross

loans

and

advances

at

amortised

cost

2020

2019

Fixed

rate

Variable

rate

Total

Fixed

rate

Variable

rate

Total

As

at

31

December

£m

Gross

loans

and

advances

at

amortised

cost

171,982

178,985

350,967

158,819

186,604

345,423

Additional

information

Additional

financial

disclosure

347

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Foreign

outstandings

for

countries

where

this

exceeds

0.75%

of

total

Group

assets

a

As

%

of

assets

Total

Banks

and

other

financial

institutions

Government

and

official

institutions

Commercial

industrial

and

other

private

sectors

Financial

guarantees

%

£m

As

at

31

December

2020

United

States

9.5

128,531

86,065

22,665

18,710

1,091

France

1.2

16,085

12,691

2,429

937

28

As

at

31

December

2019

United

States

9.4

107,178

64,929

20,668

20,798

783

Germany

1.3

15,216

10,787

2,886

1,447

96

France

1.0

11,269

9,979

-

1,231

59

Netherlands

0.9

10,246

7,224

738

2,084

200

As

at

31

December

2018

United

States

8.7

98,695

61,457

17,324

18,713

1,201

Germany

2.1

24,269

5,062

17,240

1,851

116

France

1.8

20,017

12,269

3,636

4,077

35

Notes

a

Foreign

outstanding

includes

cross

border

exposure

in

non-local

currency

of

the

Barclays

branches

and

subsidiaries,

and

in

country

foreign

currency

exp

osure.

b

Figures

are

net

of

short

securities.

Off-balance

sheet

and

other

credit

exposures

2020

2019

2018

As

at

31

December

£m

Off-balance

sheet

exposures

Contingent

liabilities

21,609

24,527

20,303

Commitments

333,049

334,455

324,223

On-balance

sheet

exposures

Trading

portfolio

assets

127,950

114,195

104,187

Financial

assets

at

fair

value

through

the

income

statement

175,151

133,086

149,648

Derivative

financial

instruments

302,446

229,236

222,538

Financial

assets

at

fair

value

through

other

comprehensive

income

78,688

65,750

52,816

Notional

principal

amounts

of

credit

derivatives

2020

2019

2018

As

at

31

December

£m

Credit

derivatives

held

or

issued

for

trading

purposes

a

847,845

825,516

759,075

Note

a

Includes

credit

derivatives

held

as

economic

hedges

which

are

not

designated

as

hedges

for

accounting

purposes.

transactions

additional

disclosure

For

US

disclosure

purposes,

the

aggregate

emoluments

of

all

Directors

and

Officers

of

Barclays

PLC

who

held

office

during

the

year

(2020:

28

persons,

2019:

31

persons,

2018:

24

persons)

for

the

year

ended

31

December

2020

amounted

to

£70.2m

(2019:

£68.0m,

2018:

£64.3m).

In

addition,

the

aggregate

amount

set

aside

for

the

year

ended

31

December

2020,

to

provide

pension

benefits

for

the

Directors

and

Officers

amounted

to

£nil

(2019:

£0.1m,

2018:

£nil).

Glossary

of

terms

348

Barclays

PLC

2020

Annual

Report

on

Form

20-F

‘Advanced-Internal

Ratings

Based

(A-IRB)’

See

‘Internal

Ratings

Based

(IRB)’.

‘Acceptances

and

endorsements’

An

acceptance

is

an

undertaking

by

a

bank

to

pay

a

bill

of

exchange

drawn

on

a

customer.

Reimbursement

of

an

acceptance

by

the

customer

is

normally

immediate.

Endorsements

are

residual

liabilities

of

the

Barclays

Group

in

respect

of

bills

of

exchange

which

have

been

paid

and

subsequently

rediscounted.

‘Additional

Tier

1

(AT

1)

capital’

AT1

capital

largely

comprises

eligible

non-common

equity

capital

securities

and

any

premium.

‘Additional

Tier

1

(AT1)

securities’

Non-common

equity

securities

that

are

eligible

as

AT1

capital.

‘Advanced

Measurement

Approach

(AMA)’

Under

the

AMA,

banks

are

allowed

to

develop

their

own

empirical

model

to

quantify

required

capital

for

operational

risk.

Banks

can

only

use

this

approach

subject

to

approval

from

their

local

regulators.

‘Agencies’

Bonds

issued

by

state

and

/

or

government

agencies

or

government-sponsored

entities.

‘Agency

Mortgage-Backed

Securities’

Mortgage-Backed

Securities

issued

by

government-sponsored

entities.

‘All

price

risk

(APR)’

An

estimate

of

all

the

material

market

risks,

including

rating

migration

and

default

for

the

correlation

trading

portfolio.

‘American

Depository

Receipts

(ADR)’

A

negotiable

certificate

that

represents

the

ownership

of

shares

in

a

non-US

company

(e.g.

Barclays)

trading

in

US

financial

markets.

‘Americas’

Geographic

segment

comprising

the

US,

Canada

and

countries

where

Barclays

operates

within

Latin

America.

‘Annual

Earnings

at

Risk

(AEaR)’

A

measure

of

the

potential

change

in

Net

Interest

Income

(NII)

due

to

an

interest

rate

movement

over

a

one-

year

period.

‘Annualised

cumulative

weighted

average

lifetime

PD’

The

probability

of

default

over

the

remaining

life

of

the

asset,

expressed

as

an

annual

rate,

reflecting

a

range

of

possible

economic

scenarios.

‘Application

scorecards’

Algorithm

based

decision

tools

used

to

aid

business

decisions

and

manage

credit

risk

based

on

available

customer

data

at

the

point

of

application

for

a

product.

‘Arrears’

Customers

are

said

to

be

in

arrears

when

they

are

behind

in

fulfilling

their

obligations

with

the

result

that

an

outstanding

loan

is

unpaid

or

overdue.

Such

customers

are

also

said

to

be

in

a

state

of

delinquency.

When

a

customer

is

in

arrears,

their

entire

outstanding

balance

is

said

to

be

delinquent,

meaning

that

delinquent

balances

are

the

total

outstanding

loans

on

which

payments

are

overdue.

‘Asia’

Geographic

segment

comprising

countries

where

Barclays

operates

within

Asia

and

the

Middle

East.

‘Asset

Backed

Commercial

Paper

(ABCP)’

Typically

short-term

notes

secured

on

specified

assets

issued

by

consolidated

special

purpose

entities

for

funding

purposes.

‘Asset

Backed

Securities

(ABS)’

Securities

that

represent

an

interest

in

an

underlying

pool

of

referenced

assets.

The

referenced

pool

can

comprise

any

assets

which

attract

a

set

of

associated

cash

flows

but

are

commonly

pools

of

residential

or

commercial

mortgages

and,

in

the

case

of

a

Collateralised

Debt

Obligation

(CDO),

the

referenced

pool

may

be

ABS

or

other

classes

of

assets.

‘Attributable

profit’

Profit

after

tax

that

is

attributable

to

ordinary

equity

holders

of

Barclays

adjusted

for

the

after

tax

amounts

of

capital

securities

classified

as

equity.

‘Average

allocated

tangible

equity’

Calculated

as

the

average

of

the

period

end

allocated

tangible

equity

and

the

current

month’s

period

end

allocated

tangible

equity.

The

average

allocated

tangible

equity

for

the

period

is

the

average

of

the

monthly

averages

within

that

period.

‘Average

tangible

shareholders’

equity’

Calculated

as

the

average

of

the

period

end

tangible

equity

and

the

current

month’s

period

end

tangible

equity.

The

average

tangible

shareholders’

equity

for

the

period

is

the

average

of

the

monthly

averages

within

that

period.

‘Average

UK

leverage

ratio’

As

per

the

PRA

rulebook,

calculated

as

the

average

capital

measure

based

on

the

last

day

of

each

month

in

the

quarter

divided

by

the

average

exposure

measure

for

the

quarter,

where

the

average

exposure

is

based

on

each

day

in

the

quarter.

‘Back

testing’

Includes

a

number

of

techniques

that

assess

the

continued

statistical

validity

of

a

model

by

simulating

how

the

model

would

have

predicted

recent

experience.

‘Bank

of

England

(BoE)’

The

central

bank

of

the

United

Kingdom

with

devolved

responsibility

for

managing

monetary

policy

and

to

oversee

regulation

of

the

UK’s

financial

sector.

Through

the

Prudential

Regulation

Committee,

the

BoE

exercises

control

over

the

PRA.

‘Barclays

Africa’

or

‘Absa’

or

‘Absa

Group

Limited’

Barclays

Africa

Group

Limited

(now

Absa

Group

Limited),

which

was

previously

a

subsidiary

of

the

Barclays

Group.

Following

a

sell

down

of

shares

resulting

in

a

loss

of

control,

the

Barclays

Group’s

shareholding

in

Absa

Group

Limited

is

now

classified

as

a

financial

asset

at

fair

value

through

other

comprehensive

income.

‘Balance

weighted

Loan

to

Value

(LTV)

ratio’

In

the

context

of

the

credit

risk

disclosures

on

secured

home

loans,

a

means

of

calculating

marked

to

market

LTVs

derived

by

calculating

individual

LTVs

at

account

level

and

weighting

it

by

the

balances

to

arrive

at

the

average

position.

Balance

weighted

Loan

to

Value

ratio

is

calculated

using

the

following

formula:

LTV

=

((loan

1

balance

x

Marked

to

market

(MTM)

LTV%

for

loan

1)

+

(loan

2

balance

x

Marked

to

market

(MTM)

LTV%

for

loan

2)

+

...)

/

total

outstandings

in

portfolio.

‘Barclaycard’

An

international

consumer

payments

business

serving

the

needs

of

businesses

and

consumers

through

credit

cards,

consumer

lending,

merchant

acquiring,

commercial

cards

and

point

of

sale

finance.

Barclaycard

has

scaled

operations

in

the

UK,

US,

Germany

and

Scandinavia.

‘Barclaycard

Consumer

UK’

The

UK

Barclaycard

business.

‘Barclays’

or

’Barclays

Group’

Barclays

PLC,

together

with

its

subsidiaries.

‘Barclays

Bank

Group’

Barclays

Bank

PLC,

together

with

its

subsidiaries.

‘Barclays

Bank

UK

Group’

Barclays

Bank

UK

PLC,

together

with

its

subsidiaries.

Glossary

of

terms

349

Barclays

PLC

2020

Annual

Report

on

Form

20-F

‘Barclays

Operating

businesses’

The

core

Barclays

businesses

operated

by

Barclays

UK

(which

include

the

UK

Personal

Banking;

UK

Business

Banking

and

the

Barclaycard

Consumer

UK

businesses)

and

Barclays

International

(the

large

UK

Corporate

business;

the

International

Corporate

and

Private

Bank

businesses;

the

Investment

Bank;

the

Barclaycard

International

business;

and

Payments).

‘Barclays

Execution

Services’

or

‘BX’

or

‘Group

Service

Company’

Barclays

Execution

Services

Limited,

the

Group

services

company

set

up

to

provide

services

to

Barclays

UK

and

Barclays

International

to

deliver

operational

continuity.

‘Barclays

International’

The

segment

of

Barclays

held

by

Barclays

Bank

PLC.

The

division

includes

the

large

UK

Corporate

business;

the

International

Corporate

and

Private

Bank

businesses;

the

Investment

Bank;

the

Barclaycard

International

business;

and

Payments.

‘Barclays

UK’

The

segment

of

Barclays

held

by

Barclays

Bank

UK

PLC.

The

division

includes

the

UK

Personal

Banking;

UK

Business

Banking

and

the

Barclaycard

Consumer

UK

businesses.

Following

a

transfer

from

Barclays

International

in

Q2

2020,

this

also

includes

Barclays

Partner

Finance

(BPF).

‘Basel

3’

The

third

of

the

Basel

Accords,

setting

minimum

requirements

and

standards

that

apply

to

internationally

active

banks.

Basel

3

is

a

set

of

measures

developed

by

the

Basel

Committee

on

Banking

Supervision

aiming

to

strengthen

the

regulation,

supervision

and

risk

management

of

banks.

‘Basel

Committee

on

Banking

Supervision

(BCBS)’

or

‘The

Basel

Committee’

A

forum

for

regular

cooperation

on

banking

supervisory

matters

which

develops

global

supervisory

standards

for

the

banking

industry.

Its

45

members

are

officials

from

central

banks

or

prudential

supervisors

from

28

jurisdictions.

‘Basic

Indicator

Approach

(BIA)’

Under

the

BIA,

banks

are

required

to

hold

regulatory

capital

for

operational

risk

equal

to

15%

of

the

annual

average,

calculated

over

a

rolling

three-year

period,

of

the

relevant

income

indicator

for

the

bank

as

whole.

‘Basis

point(s)’

or

‘bp(s)’

One

hundredth

of

a

per

cent

(0.01%);

100

basis

points

is

1%.

The

measure

is

used

in

quoting

movements

in

interest

rates,

yields

on

securities

and

for

other

purposes.

‘Basis

risk’

Index/tenor

risk,

that

arises

when

floating

rate

products

are

linked

to

different

interest

rate

indices,

which

are

imperfectly

correlated,

especially

under

stressed

market

conditions.

‘Behavioural

scorecards’

Algorithm

based

decision

tools

used

to

aid

business

decisions

and

manage

credit

risk

based

on

existing

customer

data

derived

from

account

usage.

‘Book

quality’

In

the

context

of

the

Capital

Risk

section

of

the

Barclays

PLC

Annual

Report,

changes

in

RWAs

caused

by

factors

such

as

underlying

customer

behaviour

or

demographics

leading

to

changes

in

risk

profile.

‘Book

size’

In

the

context

of

the

Capital

Risk

section

of

the

Barclays

PLC

Annual

Report

,

changes

in

RWAs

driven

by

business

activity,

including

net

originations

or

repayments.

‘Bounce

Back

Loan

Scheme

(BBLS)’

A

UK

Government

(British

Business

Bank)

backed

loan

scheme

which

allows

small

and

medium-sized

businesses

to

borrow

between

£2,000

and

£50,000.

The

UK

Government

guarantees

100%

of

the

loan

and

pays

the

first

12

months

of

interest

on

behalf

of

the

borrowers,

subject

to

terms

and

conditions.

‘Business

Banking’

Business

Banking

in

Barclays

UK

offers

specialist

advice,

products

and

services

to

small

and

medium

enterprises

in

the

UK.

‘Business

Lending’

Business

Lending

in

Barclays

UK

primarily

relates

to

small

and

medium

enterprises

typically

with

a

turnover

up

to

£16m.

‘Business

scenario

stresses’

Multi

asset

scenario

analysis

of

extreme,

but

plausible

events

that

may

impact

the

market

risk

exposures

of

the

Investment

Bank.

‘Buy

to

let

mortgage’

A

mortgage

where

the

intention

of

the

customer

is

to

let

the

property

at

origination.

‘Capital

Conservation

Buffer

(CCB)’

A

capital

buffer

of

2.5%

of

a

bank’s

total

exposures

that

needs

to

be

met

with

an

additional

amount

of

Common

Equity

Tier

1

capital

above

the

4.5%

minimum

requirement

for

Common

Equity

Tier

1

set

out

in

CRR.

Its

objective

is

to

conserve

a

bank’s

capital

by

ensuring

that

banks

build

up

surplus

capital

outside

periods

of

stress

which

can

be

drawn

down

if

losses

are

incurred.

‘Capital

ratios’

Key

financial

ratios

measuring

the

bank's

capital

adequacy

or

financial

strength

expressed

as

a

percentage

of

RWAs.

‘Capital

Requirements

Directive

(CRD)’

Directive

2013/36/EU,

a

component

of

the

CRD

IV

package

which

accompanies

the

Capital

Requirements

Regulation

and

sets

out

macroprudential

standards

including

the

countercyclical

capital

buffer

and

capital

buffers

for

systemically

important

institutions.

Directive

(EU)

2019/878,

published

as

part

of

the

EU

Risk

Reduction

Measure

package

amends

CRD.

These

amendments

entered

into

force

from

27

June

2019,

with

EU

member

states

required

to

adopt

the

measures

within

the

Directive

by

28

December

2020.

‘Capital

Requirements

Regulation

(CRR)’

Regulation

(EU)

No

575/2013,

a

component

of

the

CRD

IV

package

which

accompanies

the

Capital

Requirements

Directive

and

sets

out

detailed

rules

for

capital

eligibility,

the

calculation

of

RWAs,

the

measurement

of

leverage,

the

management

of

large

exposures

and

minimum

standards

for

liquidity.

Between

27

June

2019

and

28

June

2023,

this

regulation

will

be

amended

in

line

with

the

requirements

of

amending

Regulation

(EU)

2019/876

(CRR

II).

‘Capital

Requirements

Regulation

II

(CRR

II)’

Regulation

(EU)

2019/876,

amending

Regulation

(EU)

No

575/2013

(CRR).

This

is

a

component

of

the

EU

Risk

Reduction

Measure

package.

The

requirements

set

out

in

CRR

II

will

be

introduced

between

27

June

2019

and

28

June

2023.

‘Capital

requirements

on

the

underlying

exposures

(KIRB)’

An

approach

available

to

banks

when

calculating

RWAs

for

securitisation

exposures.

This

is

based

upon

the

RWA

amounts

that

would

be

calculated

under

the

IRB

approach

for

the

underlying

pool

of

securitised

exposures

in

the

program,

had

such

exposures

not

been

securitised.

‘Capital

resources’

Common

Equity

Tier

1,

Additional

Tier

1

capital

and

Tier

2

capital

that

are

eligible

to

satisfy

capital

requirements

under

CRD.

Referred

to

as

‘own

funds’

within

EU

regulatory

texts.

‘Capital

risk’

The

risk

that

the

Barclays

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

testing

purposes).

This

includes

the

risk

from

the

Barclays

Group’s

pension

plans.

Glossary

of

terms

350

Barclays

PLC

2020

Annual

Report

on

Form

20-F

‘Central

Counterparty’

or

‘Central

Clearing

Counterparties

(CCPs)’

A

clearing

house

mediating

between

the

buyer

and

the

seller

in

a

financial

transaction,

such

as

a

derivative

contract

or

repurchase

agreement

(repo).

Where

a

central

counterparty

is

used,

a

single

bi-lateral

contract

between

the

buyer

and

seller

is

replaced

with

two

contracts,

one

between

the

buyer

and

the

CCP

and

one

between

the

CCP

and

the

seller.

The

use

of

CCPs

allows

for

greater

oversight

and

improved

credit

risk

mitigation

in

over-the-counter

(OTC)

markets.

‘Charge-off’

In

the

retail

segment

this

refers

to

the

point

in

time

when

collections

activity

changes

from

the

collection

of

arrears

to

the

recovery

of

the

full

balance.

This

is

normally

when

six

payments

are

in

arrears.

‘Client

Assets’

Assets

managed

or

administered

by

the

Barclays

Group

on

behalf

of

clients

including

assets

under

management

(AUM),

custody

assets,

assets

under

administration

and

client

deposits.

‘CLOs

and

Other

insured

assets’

Highly

rated

CLO

positions

wrapped

by

monolines,

non-CLOs

wrapped

by

monolines

and

other

assets

wrapped

with

Credit

Support

Annex

(CSA)

protection.

‘Collateralised

Debt

Obligation

(CDO)’

A

security

issued

by

a

third

party

which

references

Asset

Backed

Securities

and/or

certain

other

purchased

by

the

issuer.

CDOs

may

feature

exposure

to

sub-prime

mortgage

assets

through

the

underlying

assets.

‘Collateralised

Loan

Obligation

(CLO)’

A

security

backed

by

repayments

from

a

pool

of

commercial

loans.

The

payments

may

be

made

to

different

classes

of

owners

(in

tranches).

‘Collateralised

Mortgage

Obligation

(CMO)’

A

security

backed

by

mortgages.

A

special

purpose

entity

receives

income

from

the

mortgages

and

passes

them

on

to

investors

in

the

security.

‘Combined

Buffer

Requirement

(CBR)’

In

the

context

of

the

CRD

capital

obligations,

the

total

Common

Equity

Tier

1

capital

required

to

meet

the

combined

requirements

of

the

Capital

Conservation

Buffer,

the

GSII

Buffer

or

the

OSII

buffer

as

applicable,

the

Systemic

Risk

buffer

and

an

institution

specific

counter-cyclical

buffer.

‘Commercial

paper

(CP)’

Short-term

notes

issued

by

entities,

including

banks,

for

funding

purposes.

‘Commercial

real

estate

(CRE)’

Commercial

real

estate

includes

office

buildings,

industrial

property,

medical

centres,

hotels,

retail

stores,

shopping

centres,

farm

land,

multifamily

housing

buildings,

warehouses,

garages,

industrial

properties

and

other

similar

properties.

Commercial

real

estate

loans

are

loans

backed

by

a

package

of

commercial

real

estate.

Note:

for

the

purposes

of

the

Credit

Risk

section,

the

UK

CRE

portfolio

includes

property

investment,

development,

trading

and

housebuilders

but

excludes

social

housing

contractors.

‘Commissions

and

other

incentives’

Includes

commission-based

arrangements,

guaranteed

incentives

and

Long

Term

Incentive

Plan

awards.

‘Committee

of

Sponsoring

Organisations

of

the

Treadway

Commission

Framework

(COSO)’

A

joint

initiative

of

five

private

sector

organisations

dedicated

to

the

development

of

frameworks

and

providing

guidance

on

enterprise

risk

management,

internal

control

and

fraud

deterrence.

‘Commodity

derivatives’

Exchange

traded

and

over-the-counter

(OTC)

derivatives

based

on

an

underlying

commodity

(e.g.

metals,

precious

metals,

oil

and

oil

power

and

natural

gas).

‘Commodity

risk’

Measures

the

impact

of

changes

in

commodity

prices

and

volatilities,

including

the

basis

between

(e.g.

Brent

vs.

WTI

crude

prices).

‘Common

Equity

Tier

1

(CET1)

capital’

The

highest

quality

form

of

regulatory

capital

under

CRR

that

comprises

common

shares

issued

and

premium,

retained

earnings

and

other

reserves,

less

specified

regulatory

adjustments.

‘Common

Equity

Tier

1

(CET1)

ratio’

A

measure

of

Common

Equity

Tier

1

capital

expressed

as

a

percentage

of

RWAs.

‘Compensation:

income

ratio’

The

ratio

of

compensation

expense

over

total

income.

Compensation

represents

total

staff

costs

less

non-

compensation

items

consisting

of

outsourcing,

staff

training,

redundancy

costs

and

retirement

costs.

‘

Comprehensive

Capital

Analysis

and

Review

(CCAR)’

An

annual

exercise,

required

by

and

evaluated

by

the

Federal

Reserve,

through

which

the

largest

bank

holding

companies

operating

in

the

US

assess

whether

they

have

sufficient

capital

to

continue

operations

through

periods

of

economic

and

financial

stress

and

have

robust

capital-planning

processes

that

account

for

their

unique

risks.

‘Comprehensive

Risk

Capital

Charge

(CRCC)’

An

estimate

of

all

the

material

market

risks,

including

rating

migration

and

default

for

the

correlation

trading

portfolio.

‘Comprehensive

Risk

Measure

(CRM)’

An

estimate

of

all

the

material

market

risks,

including

rating

migration

and

default

for

the

correlation

trading

portfolio.

Also

referred

to

as

All

Price

Risk

(APR)

and

Comprehensive

Risk

Capital

Charge

(CRCC).

‘Conduct

risk’

The

risk

of

detriment

to

customers,

clients,

market

integrity,

competition

or

Barclays

from

the

inappropriate

supply

of

financial

services,

including

instances

of

wilful

or

negligent

misconduct.

‘Constant

Currency

Basis’

Excluding

the

impact

of

foreign

currency

conversion

to

GBP

when

comparing

financial

results

in

two

different

financial

periods.

‘Consumer,

Cards

and

Payments’

Barclays

US

Consumer

Bank,

Payments

(including

merchant

acquiring

and

commercial

payments),

Barclaycard

Germany

and

the

Private

Bank.

‘Contingent

Capital

Notes

(CCNs)’

Interest

bearing

debt

securities

issued

by

the

Barclays

Group

or

its

subsidiaries

that

are

either

permanently

written

off

or

converted

into

an

equity

instrument

from

the

issuer's

perspective

in

the

event

of

the

Common

Equity

Tier

1

(CET1)

ratio

of

the

relevant

Barclays

Group

entity

falling

below

a

specific

level,

or

at

the

direction

of

regulators.

‘Conversion

Trigger’

Used

in

the

context

of

Contingent

Capital

Notes

and

AT1

securities.

A

capital

adequacy

trigger

event

occurs

when

the

CET1

ratio

of

the

bank

falls

below

a

certain

level

(the

trigger)

as

defined

in

the

Terms

&

Conditions

of

the

instruments

issued.

See

‘Contingent

Capital

Notes

(CCNs)’.

‘Coronavirus

Business

Interruption

Loan

Scheme

(CBILS)’

A

loan

scheme

by

the

British

Business

Bank

(BBB)

to

support

UK

based

small

and

medium-sized

businesses

(turnover

of

up

to

£45

million)

adversely

impacted

by

COVID-19.

The

CBILS

scheme

provides

loans

up

to

£5

million

which

are

backed

by

an

80%

UK

Government

(BBB)

guarantee.

The

UK

Government

will

pay

interest

and

fees

for

the

first

12

months

on

behalf

of

the

borrowers,

subject

to

terms

and

conditions.

Glossary

of

terms

351

Barclays

PLC

2020

Annual

Report

on

Form

20-F

Coronavirus

Large

Business

Interruption

Loan

Scheme

(CLBILS)’

A

loan

scheme

by

the

British

Business

Bank

(BBB)

to

support

UK

based

medium-sized

businesses

(turnover

above

£45

million,

but

with

no

access

to

CCFF)

adversely

impacted

by

COVID-19,

The

CBILS

scheme

provides

loans

of

up

to

£200

million

which

are

backed

by

an

80%

UK

Government

(BBB)

guarantee.

‘Corporate

and

Investment

Bank

(CIB)’

Barclays

Corporate

and

Investment

Bank

businesses

which

form

part

of

Barclays

International.

‘Correlation

risk’

Refers

to

the

change

in

marked

to

market

value

of

a

security

when

the

correlation

between

the

underlying

assets

changes

over

time.

‘Cost

of

Equity’

The

rate

of

return

targeted

by

the

equity

holders

of

a

company.

‘Cost:

income

jaws’

Relationship

of

the

percentage

change

movement

in

operating

expenses

relative

to

total

income.

‘Cost:

income

ratio’

Total

operating

expenses

divided

by

total

income.

‘Countercyclical

Capital

Buffer

(CCyB)’

An

additional

buffer

introduced

as

part

of

the

CRD

IV

package

that

requires

banks

to

have

an

additional

cushion

of

CET

1

capital

with

which

to

absorb

potential

losses,

enhancing

their

resilience

and

contributing

to

a

stable

financial

system.

‘Countercyclical

leverage

ratio

buffer

(CCLB)’

A

macroprudential

buffer

that

has

applied

to

specific

PRA

regulated

institutions

since

2018

and

is

calculated

at

35%

of

any

risk

weighted

countercyclical

capital

buffer

set

by

the

Financial

Policy

Committee

(FPC).

The

CCLB

applies

in

addition

to

the

minimum

of

3.25%

and

any

G-SII

additional

leverage

ratio

buffer

that

applies.

‘Counterparty

credit

risk

(CCR)’

The

risk

that

a

counterparty

to

a

transaction

could

default

before

the

final

settlement

of

a

transaction’s

cash

flows.

In

the

context

of

RWAs,

a

component

of

RWAs

that

represents

the

risk

of

loss

from

derivatives,

repurchase

agreements

and

similar

transactions

as

a

result

of

the

default

of

the

counterparty.

‘Coverage

ratio’

This

represents

the

percentage

of

impairment

allowance

reserve

against

the

gross

exposure.

‘Covered

bonds’

Debt

securities

backed

by

a

portfolio

of

mortgages

that

are

segregated

from

the

issuer’s

other

assets

solely

for

the

benefit

of

the

holders

of

the

covered

bonds.

‘Covid

Corporate

Finance

Facility

(CCFF)’

Bank

of

England

(BOE)

scheme

to

support

liquidity

among

larger

investment

grade

firms

which

make

a

material

UK

contribution,

helping

to

bridge

coronavirus

disruption

to

their

cash

flows.

The

Bank

of

England

provides

liquidity

by

purchasing

short-term

debt

in

the

form

of

commercial

paper

from

corporates.

Barclays

acts

as

dealer.

‘CRD

IV’

The

Fourth

Capital

Requirements

Directive,

comprising

an

EU

Directive

and

an

accompanying

Regulation

(CRR)

that

together

prescribe

EU

capital

adequacy

and

liquidity

requirements,

and

which

implements

Basel

3

in

the

European

Union.

‘CRD

V’

The

Fifth

Capital

Requirements

Directive,

comprising

an

EU

amending

Directive

and

an

accompanying

amending

Regulation

(CRR

II)

that

together

prescribe

EU

capital

adequacy

and

liquidity

requirements,

and

which

implements

enhanced

Basel

3

proposals

in

the

European

Union.

‘Credit

conversion

factor

(CCF)’

A

factor

used

to

estimate

the

risk

from

off-balance

sheet

commitments

for

the

purpose

of

calculating

the

total

Exposure

at

Default

(EAD)

used

to

calculate

RWAs.

‘Credit

default

swaps

(CDS)’

A

contract

under

which

the

protection

seller

receives

premiums

or

interest-related

payments

in

return

for

contracting

to

make

payments

to

the

protection

buyer

in

the

event

of

a

defined

credit

event.

Credit

events

normally

include

bankruptcy,

payment

default

on

a

reference

asset

or

assets,

or

downgrades

by

a

rating

agency.

‘Credit

derivatives

(CDs)’

An

arrangement

whereby

the

credit

risk

of

an

asset

(the

reference

asset)

is

transferred

from

the

buyer

to

the

seller

of

the

protection.

‘Credit

impairment

charges’

Also

known

as

‘credit

impairment’.

Impairment

charges

on

loans

and

advances

to

customers

and

banks

and

impairment

charges

on

fair

value

through

other

comprehensive

income

assets

and

reverse

repurchase

agreements.

‘Credit

market

exposures’

Assets

and

other

instruments

relating

to

commercial

real

estate

and

leveraged

finance

businesses

that

have

been

significantly

impacted

by

the

deterioration

in

the

global

credit

markets.

The

exposures

include

positions

subject

to

fair

value

movements

in

the

Income

Statement,

positions

that

are

classified

as

loans

and

advances,

and

available

for

sale

and

other

assets.

‘Credit

quality

step’

In

the

context

of

the

Standardised

Approach

to

calculating

credit

risk

RWAs

,

a

“credit

quality

assessment

scale”

maps

the

credit

assessments

of

a

recognised

credit

rating

agency

or

export

credit

agency

to

credit

quality

steps

that

determine

the

risk

weight

to

be

applied

to

an

exposure.

‘Credit

rating’

An

evaluation

of

the

creditworthiness

of

an

entity

seeking

to

enter

into

a

credit

agreement.

‘Credit

risk’

The

risk

of

loss

to

Barclays

from

the

failure

of

clients,

customers

or

counterparties,

including

sovereigns,

to

fully

honour

their

obligations

to

Barclays,

including

the

whole

and

timely

payment

of

principal,

interest,

collateral

and

other

receivables.

In

the

context

of

RWAs,

it

is

the

component

of

RWAs

that

represents

the

risk

of

loss

in

loans

and

advances

and

similar

transactions

resulting

from

the

default

of

the

counterparty.

‘Credit

risk

mitigation’

A

range

of

techniques

and

strategies

to

actively

mitigate

credit

risks

to

which

the

bank

is

exposed.

These

can

be

broadly

divided

into

three

types:

collateral,

netting

and

set-off,

and

risk

transfer.

‘Credit

spread’

The

premium

over

the

benchmark

or

risk-free

rate

required

by

the

market

to

accept

a

lower

credit

quality.

‘Credit

Valuation

Adjustment

(CVA)’

The

difference

between

the

risk-free

value

of

a

portfolio

of

trades

and

the

market

value

which

takes

into

account

the

counterparty’s

risk

of

default.

The

CVA

therefore

represents

an

estimate

of

the

adjustment

to

fair

value

that

a

market

participant

would

make

to

incorporate

the

credit

risk

of

the

counterparty

due

to

any

failure

to

perform

on

contractual

agreements.

‘CRR

leverage

exposure’

Calculated

in

accordance

with

Article

429

of

the

CRR.

‘CRR

leverage

ratio’

Calculated

using

the

CRR

definition

of

“Tier

1

capital”

for

the

numerator

and

the

CRR

definition

of

“leverage

exposure”

as

the

denominator.

‘Customer

assets’

Represents

loans

and

advances

to

customers.

Average

balances

are

calculated

as

the

sum

of

all

daily

balances

for

the

year

to

date

divided

by

number

of

days

in

the

year

to

date.

Glossary

of

terms

352

Barclays

PLC

2020

Annual

Report

on

Form

20-F

‘Customer

deposits’

In

the

context

of

the

Liquidity

Risk

section,

money

deposited

by

all

individuals

and

companies

that

are

not

credit

institutions.

Such

funds

are

recorded

as

liabilities

in

the

Barclays

Group’s

balance

sheet

under

“deposits

at

amortised

cost”.

‘Customer

liabilities’

See

‘Customer

deposits’.

‘Daily

Value

at

Risk

(DVaR)’

An

estimate

of

the

potential

loss

which

might

arise

from

market

movements

under

normal

market

conditions,

if

the

current

positions

were

to

be

held

unchanged

for

one

business

day,

measured

to

a

specified

confidence

level.

‘DBRS’

A

credit

rating

agency.

‘Debit

Valuation

Adjustment

(DVA)’

The

opposite

of

Credit

Valuation

Adjustment

(CVA).

It

is

the

difference

between

the

risk-free

value

of

a

portfolio

of

trades

and

the

market

value

which

takes

into

account

the

Barclays

Group’s

risk

of

default.

The

DVA,

therefore,

represents

an

estimate

of

the

adjustment

to

fair

value

that

a

market

participant

would

make

to

incorporate

the

credit

risk

of

the

Barclays

Group

due

to

any

failure

to

perform

on

contractual

obligations.

The

DVA

decreases

the

value

of

a

liability

to

take

into

account

a

reduction

in

the

remaining

balance

that

would

be

settled

should

the

Barclays

Group

default

or

not

perform

any

contractual

obligations.

‘Debt

buybacks’

Purchases

of

the

Barclays

Group’s

issued

debt

securities,

including

equity

accounted

instruments,

leading

to

their

de-

recognition

from

the

balance

sheet.

‘Debt

securities

in

issue’

Transferable

securities

evidencing

indebtedness

of

the

Barclays

Group.

These

are

liabilities

of

the

Barclays

Group

and

include

certificates

of

deposit

and

commercial

paper.

‘Default

grades’

The

Barclays

Group

classifies

ranges

of

default

probabilities

into

a

set

of

21

intervals

called

default

grades,

in

order

to

distinguish

differences

in

the

probability

of

default

risk.

‘Default

fund

contributions’

The

amount

of

contribution

made

by

members

of

a

central

counterparty

(CCP).

All

members

are

required

to

contribute

to

this

fund

in

advance

of

using

a

CCP.

The

default

fund

can

be

used

by

the

CCP

to

cover

losses

incurred

by

the

CCP

where

losses

are

greater

than

the

margins

provided

by

a

defaulting

member.

‘Derivatives

netting’

Adjustments

applied

across

asset

and

liability

mark-to-market

derivative

positions

pursuant

to

legally

enforceable

bilateral

netting

agreements

and

eligible

cash

collateral

received

in

derivative

transactions

that

meet

the

requirements

of

BCBS

270

(Basel

III

leverage

ratio

framework

and

disclosure

requirements).

‘Diversification

effect’

Reflects

the

fact

the

risk

of

a

diversified

portfolio

is

smaller

than

the

sum

of

the

risks

of

its

constituent

parts.

It

is

measured

as

the

sum

of

the

individual

asset

class

DVaR

estimates

less

the

total

DVaR.

‘Dodd-Frank

Act

(DFA)’

The

US

Dodd-Frank

Wall

Street

Reform

and

Consumer

Protection

Act

of

2010.

‘Economic

Value

of

Equity

(EVE)’

A

measure

of

the

potential

change

in

value

of

expected

future

cash

flows

due

to

an

adverse

interest

rate

movement,

based

on

existing

balance

sheet

run-off

profile.

'Effective

Expected

Positive

Exposure

(EEPE)'

The

weighted

average

over

time

of

effective

expected

exposure.

The

weights

are

the

proportion

that

an

individual

exposure

represents

of

the

entire

exposure

horizon

time

interval.

‘Eligible

liabilities’

Liabilities

and

capital

instruments

that

are

eligible

to

meet

MREL

that

do

not

already

qualify

as

own

funds.

‘Encumbrance’

The

use

of

assets

to

secure

liabilities,

such

as

by

way

of

a

lien

or

charge.

‘Enterprise

Risk

Management

Framework

(ERMF)’

The

Barclays

Group’s

risk

management

responsibilities

are

laid

out

in

the

Enterprise

Risk

Management

Framework,

which

describes

how

Barclays

identifies

and

manages

risk.

The

framework

identifies

the

principal

risks

faced

by

the

Barclays

Group;

sets

out

risk

appetite

requirements;

sets

out

roles

and

responsibilities

for

risk

management;

and

sets

out

risk

committee

structure.

‘Equities’

Trading

businesses

encompassing

Cash

Equities,

Equity

Derivatives

&

Equity

Financing

‘Equity

and

stock

index

derivatives’

Derivatives

whose

value

is

derived

from

equity

securities.

This

category

includes

equity

and

stock

index

swaps

and

options

(including

warrants,

which

are

equity

options

listed

on

an

exchange).

The

Barclays

Group

also

enters

into

fund-linked

derivatives,

being

swaps

and

options

whose

underlyings

include

mutual

funds,

hedge

funds,

indices

and

multi-asset

portfolios.

An

equity

swap

is

an

agreement

between

two

parties

to

exchange

periodic

payments,

based

upon

a

notional

principal

amount,

with

one

side

paying

fixed

or

floating

interest

and

the

other

side

paying

based

on

the

actual

return

of

the

stock

or

stock

index.

An

equity

option

provides

the

buyer

with

the

right,

but

not

the

obligation,

either

to

purchase

or

sell

a

specified

stock,

basket

of

stocks

or

stock

index

at

a

specified

price

or

level

on

or

before

a

specified

date.

‘Equity

risk’

In

the

context

of

trading

book

capital

requirements,

the

risk

of

change

in

market

value

of

an

equity

investment.

‘Equity

structural

hedge’

An

interest

rate

hedge

in

place

to

reduce

earnings

volatility

of

the

overnight

/

short

term

equity

investment

and

to

smoothen

the

income

over

a

medium/long

term.

‘EU

Risk

Reduction

Measure

package’

A

collection

of

amending

Regulations

and

Directives

that

update

core

EU

regulatory

texts

and

which

came

into

force

on

27

June

2019.

‘Euro

Interbank

Offered

Rate

(EURIBOR)’

A

benchmark

interest

rate

at

which

banks

can

borrow

funds

from

other

banks

in

the

European

interbank

market.

‘Europe’

Geographic

segment

comprising

countries

in

which

Barclays

operates

within

the

EU

(excluding

the

UK),

Northern

Continental

and

Eastern

Europe.

‘European

Banking

Authority

(EBA)’

The

European

Banking

Authority

(EBA)

is

an

independent

EU

Authority

which

works

to

ensure

effective

and

consistent

prudential

regulation

and

supervision

across

the

European

banking

sector.

Its

overall

objectives

are

to

maintain

financial

stability

in

the

EU

and

to

safeguard

the

integrity,

efficiency

and

orderly

functioning

of

the

banking

sector.

‘European

Securities

and

Markets

Authority

(ESMA)’

An

independent

European

Supervisory

Authority

with

the

remit

of

enhancing

the

protection

of

investors

and

reinforcing

stable

and

well-functioning

financial

markets

in

the

European

Union.

Glossary

of

terms

353

Barclays

PLC

2020

Annual

Report

on

Form

20-F

‘Eurozone’

Represents

the

19

European

Union

countries

that

have

adopted

the

Euro

as

their

common

currency.

The

19

countries

are

Austria,

Belgium,

Cyprus,

Estonia,

Finland,

France,

Germany,

Greece,

Ireland,

Italy,

Latvia,

Lithuania,

Luxembourg,

Malta,

Netherlands,

Portugal,

Slovakia,

Slovenia

and

Spain.

‘Expected

Credit

Losses

(ECL)’

A

present

value

measure

of

the

credit

losses

expected

to

result

from

default

events

that

may

occur

during

a

specified

period

of

time.

ECLs

must

reflect

the

present

value

of

cash

shortfalls,

and

the

unbiased

and

probability

weighted

assessment

of

a

range

of

outcomes.

‘Expected

Losses’

A

regulatory

measure

of

anticipated

losses

for

exposures

captured

under

an

internal

ratings

based

credit

risk

approach

for

capital

adequacy

calculations.

It

is

measured

as

the

Barclays

Group's

modelled

view

of

anticipated

losses

based

on

Probability

of

Default

(PD),

Loss

Given

Default

(LGD)

and

Exposure

at

Default

(EAD),

with

a

one-year

time

horizon.

’Expert

lender

models’

Models

of

risk

measures

that

are

used

for

parts

of

the

portfolio

where

the

risk

drivers

are

specific

to

a

particular

counterparty,

but

where

there

is

insufficient

data

to

support

the

construction

of

a

statistical

model.

These

models

utilise

the

knowledge

of

credit

experts

that

have

in

depth

experience

of

the

specific

customer

type

being

modelled.

‘Exposure’

Generally

refers

to

positions

or

actions

taken

by

a

bank,

or

consequences

thereof,

that

may

put

a

certain

amount

of

a

bank’s

resources

at

risk.

‘Exposure

at

Default

(EAD)’

The

estimation

of

the

extent

to

which

the

Barclays

Group

may

be

exposed

to

a

customer

or

counterparty

in

the

event

of,

and

at

the

time

of,

that

counterparty’s

default.

At

default,

the

customer

may

not

have

drawn

the

loan

fully

or

may

already

have

repaid

some

of

the

principal,

so

that

exposure

may

be

less

than

the

approved

loan

limit.

‘External

Credit

Assessment

Institutions

(ECAI)’

Institutions

whose

credit

assessments

may

be

used

by

credit

institutions

for

the

determination

of

risk

weight

exposures

according

to

CRR.

‘External

ratings

based

approach

/

internal

assessment

approach

(Sec

ERBA

/

IAA)’

Under

the

SEC-ERBA

approach,

regulatory

capital

is

assigned

to

securitisation

tranches

on

the

basis

of

their

external

credit

rating.

SEC-ERBA

approach

can

also

be

used

for

unrated

ABCP

exposures

where

the

institution

has

the

regulatory

permission

to

use

the

Internal

Assessment

approach

(IAA)

to

assign

a

credit

rating

to

the

unrated

ABCP

exposure.

‘Federal

Reserve

Board

(FRB)’

The

Board

of

Governors

of

the

Federal

Reserve

System,

commonly

known

as

the

Federal

Reserve

Board,

is

responsible

for-

amongst

other

things

–

setting

monetary

policy

in

the

US.

'FICC'

Represents

Macro

(including

rates

and

currency),

Credit

and

Securitised

products.

'Financial

Policy

Committee

(FPC)'

The

Bank

of

England’s

Financial

Policy

Committee

identifies,

monitors

and

takes

action

to

remove

or

reduce

systemic

risks

with

a

view

to

protecting

and

enhancing

the

resilience

of

the

UK

financial

system.

The

FPC

also

has

a

secondary

objective

to

support

the

economic

policy

of

the

UK

Government.

'Foundation

Internal

Ratings

Based

(F-IRB)’

See

‘Internal

Ratings

Based

(IRB)’.

‘Financial

Conduct

Authority

(FCA)’

The

statutory

body

responsible

for

conduct

of

business

regulation

and

supervision

of

UK

authorised

firms.

The

FCA

also

has

responsibility

for

the

prudential

regulation

of

firms

that

do

not

fall

within

the

PRA’s

scope.

‘Financial

Services

Compensation

Scheme

(FSCS)’

The

UK’s

fund

for

compensation

of

authorised

financial

services

firms

that

are

unable

to

pay

claims.

‘Financial

collateral

comprehensive

method

(FCCM)’

A

counterparty

credit

risk

exposure

calculation

approach

which

applies

volatility

adjustments

to

the

market

value

of

exposure

and

collateral

when

calculating

RWA

values.

‘Financial

Stability

Board

(FSB)’

An

international

body

that

monitors

and

makes

recommendations

about

the

global

financial

system.

It

promotes

international

financial

stability

by

coordinating

national

financial

authorities

and

international

standard-setting

bodies

as

they

work

toward

developing

strong

regulatory,

supervisory

and

other

financial

sector

policies.

It

fosters

a

level

playing

field

by

encouraging

coherent

implementation

of

these

policies

across

sectors

and

jurisdictions.

‘Fitch’

A

credit

rating

agency.

‘Forbearance

Programmes’

Forbearance

programmes

to

assist

customers

in

financial

difficulty

through

agreements

to

accept

less

than

contractual

amounts

due

where

financial

distress

would

otherwise

prevent

satisfactory

repayment

within

the

original

terms

and

conditions

of

the

contract.

These

agreements

may

be

initiated

by

the

customer,

Barclays

or

a

third

party

and

include

approved

debt

counselling

plans,

minimum

due

reductions,

interest

rate

concessions

and

switches

from

capital

and

interest

repayments

to

interest-only

payments.

‘Foreclosures

in

Progress’

The

process

by

which

the

bank

initiates

legal

action

against

a

customer

with

the

intention

of

terminating

a

loan

agreement

whereby

the

bank

may

repossess

the

property

subject

to

local

law

and

recover

amounts

it

is

owed.

‘Foreign

exchange

derivatives’

The

Barclays

Group’s

principal

exchange

rate-related

contracts

are

forward

foreign

exchange

contracts,

currency

swaps

and

currency

options.

Forward

foreign

exchange

contracts

are

agreements

to

buy

or

sell

a

specified

quantity

of

foreign

currency,

usually

on

a

specified

future

date

at

an

agreed

rate.

Currency

swaps

generally

involve

the

exchange,

or

notional

exchange,

of

equivalent

amounts

of

two

currencies

and

a

commitment

to

exchange

interest

periodically

until

the

principal

amounts

are

re-exchanged

on

a

future

date.

Currency

options

provide

the

buyer

with

the

right,

but

not

the

obligation,

either

to

purchase

or

sell

a

fixed

amount

of

a

currency

at

a

specified

exchange

rate

on

or

before

a

future

date.

As

compensation

for

assuming

the

option

risk,

the

option

writer

generally

receives

a

premium

at

the

start

of

the

option

period.

‘Foreign

exchange

risk’

In

the

context

of

DVaR,

the

impact

of

changes

in

foreign

exchange

rates

and

volatilities.

‘Full

time

equivalent’

Full

time

equivalent

units

are

the

on-job

hours

paid

for

employee

services

divided

by

the

number

of

ordinary-time

hours

normally

paid

for

a

full-time

staff

member

when

on

the

job

(or

contract

employees

where

applicable).

‘Fully

loaded’

When

a

measure

is

presented

or

described

as

being

on

a

fully

loaded

basis,

it

is

calculated

without

applying

the

transitional

provisions

set

out

in

Part

Ten

of

CRR.

‘Funded

credit

protection’

A

technique

of

credit

risk

mitigation

where

the

reduction

of

the

credit

risk

on

the

exposure

of

an

institution

derives

from

the

right

of

that

institution,

in

the

event

of

the

default

of

the

counterparty

or

on

the

occurrence

of

other

specified

credit

events

relating

to

the

Glossary

of

terms

354

Barclays

PLC

2020

Annual

Report

on

Form

20-F

counterparty,

to

liquidate,

or

to

obtain

transfer

or

appropriation

of,

or

to

retain

certain

assets

or

amounts,

or

to

reduce

the

amount

of

the

exposure

to,

or

to

replace

it

with,

the

amount

of

the

difference

between

the

amount

of

the

exposure

and

the

amount

of

a

claim

on

the

institution.

‘Gains

on

acquisitions’

The

amount

by

which

the

acquirer’s

interest

in

the

net

fair

value

of

the

identifiable

assets,

liabilities

and

contingent

liabilities,

recognised

in

a

business

combination,

exceeds

the

cost

of

the

combination.

‘General

Data

Protection

Regulation

(GDPR)’

GDPR

(Regulation

(EU)

2016/679)

is

a

regulation

by

which

the

European

Parliament,

the

Council

of

the

European

Union

and

the

European

Commission

intend

to

strengthen

and

unify

data

protection

for

all

individuals

within

the

European

Union.

‘General

market

risk’

The

risk

of

a

price

change

in

a

financial

instrument

due

to

a

change

in

the

level

of

interest

rates

or

owing

to

a

broad

equity

market

movement

unrelated

to

any

specific

attributes

of

individual

securities.

‘Global-Systemically

Important

Banks

(G-SIBs

or

G-SIIs)’

Global

financial

institutions

whose

size,

complexity

and

systemic

interconnectedness,

mean

that

their

distress

or

failure

would

cause

significant

disruption

to

the

wider

financial

system

and

economic

activity.

The

Financial

Stability

Board

and

the

Basel

Committee

on

Banking

Supervision

publish

a

list

of

global

systemically

important

banks.

‘G-SII

additional

leverage

ratio

buffer

(G-SII

ALRB)’

A

macroprudential

buffer

that

applies

to

G-SIBs

and

other

major

domestic

UK

banks

and

building

societies,

including

banks

that

are

subject

to

ring-fencing

requirements.

The

G-SII

ALRB

will

be

calibrated

as

35%

(on

a

phased

basis)

of

the

combined

Systemic

Risk

Buffers

that

apply

to

the

bank.

‘GSII

Buffer’

Common

Equity

Tier

1

capital

required

to

be

held

under

CRD

to

ensure

that

G-SIBs

build

up

surplus

capital

to

compensate

for

the

systemic

risk

that

such

institutions

represent

to

the

financial

system.

’Grandfathering’

In

the

context

of

capital

resources,

the

phasing

in

of

the

application

of

instrument

eligibility

rules

which

allows

CRR

and

CRR

II

non-compliant

capital

instruments

to

be

included

in

regulatory

capital

subject

to

certain

thresholds

which

decrease

over

the

transitional

period.

‘Gross

charge-off

rates’

Represents

the

balances

charged-off

to

recoveries

in

the

reporting

period,

expressed

as

a

percentage

of

average

outstanding

balances

excluding

balances

in

recoveries.

Charge-off

to

recoveries

generally

occurs

when

the

collections

focus

switches

from

the

collection

of

arrears

to

the

recovery

of

the

entire

outstanding

balance,

and

represents

a

fundamental

change

in

the

relationship

between

the

bank

and

the

customer.

This

is

a

measure

of

the

proportion

of

customers

that

have

gone

into

default

during

the

period.

‘Gross

write-off

rates’

Expressed

as

a

percentage

and

represent

balances

written

off

in

the

reporting

period

divided

by

gross

loans

and

advances

held

at

amortised

cost

at

the

balance

sheet

date.

‘Gross

new

lending’

New

lending

advanced

to

customers

during

the

period.

‘Guarantee’

Unless

otherwise

described,

an

undertaking

by

a

third

party

to

pay

a

creditor

should

a

debtor

fail

to

do

so.

It

is

a

form

of

credit

substitution.

‘Head

Office’

Comprises

head

office,

Barclays

Services

FTE

and

legacy

businesses.

‘High-Net-Worth’

Businesses

within

Barclays

UK

and

Barclays

International

that

provide

banking

and

other

services

to

high

net

worth

customers.

‘High

quality

liquidity

assets

(HQLA)’

It

comprises

eligible

and

unencumbered

cash

or

assets

that

can

be

converted

into

cash

at

little

or

no

loss

of

value

in

private

markets,

to

meet

liquidity

needs

arising

from

a

liquidity

stress

scenario

or

event.

Please

refer

to

‘Level

1

assets’

and

‘Level

2

assets’.

‘High

Risk’

In

retail

banking,

‘High

Risk’

is

defined

as

the

subset

of

up-to-date

customers

who,

either

through

an

event

or

observed

behaviour

exhibit

potential

financial

difficulty.

Where

appropriate,

these

customers

are

proactively

contacted

to

assess

whether

assistance

is

required.

‘Home

loan’

A

loan

to

purchase

a

residential

property.

The

property

is

then

used

as

collateral

to

guarantee

repayment

of

the

loan.

The

borrower

gives

the

lender

a

lien

against

the

property

and

the

lender

can

foreclose

on

the

property

if

the

borrower

does

not

repay

the

loan

per

the

agreed

terms.

Also

known

as

a

residential

mortgage.

‘IHC’

or

‘US

IHC’

Barclays

US

LLC,

the

intermediate

holding

company

established

by

Barclays

in

July

2016,

which

holds

most

of

Barclays’

subsidiaries

and

assets

in

the

US.

'Internal

Model

Approach

(IMA)’

In

the

context

of

RWAs,

RWAs

for

which

the

exposure

amount

has

been

derived

via

the

use

of

a

PRA

approved

internal

market

risk

model.

'Internal

Model

Method

(IMM)’

In

the

context

of

RWAs,

RWAs

for

which

the

exposure

amount

has

been

derived

via

the

use

of

a

PRA

approved

internal

counterparty

credit

risk

model.

‘Identified

Impairment

(II)’

Specific

impairment

allowances

for

financial

assets,

individually

estimated.

‘IFRS

9

transitional

arrangements’

Following

the

application

of

IFRS

9

as

of

1

January

2018,

Article

473a

of

CRR

permits

institutions

to

phase-in

the

impact

on

capital

and

leverage

ratios

of

the

impairment

requirements

under

the

new

accounting

standard.

‘Impairment

Allowances’

A

provision

held

on

the

balance

sheet

as

a

result

of

the

raising

of

a

charge

against

profit

for

expected

losses

in

the

lending

book.

An

impairment

allowance

may

either

be

identified

or

unidentified

and

individual

or

collective.

‘Income’

Total

income,

unless

otherwise

specified.

‘Incremental

Risk

Charge

(IRC)’

An

estimate

of

the

incremental

risk

arising

from

rating

migrations

and

defaults

for

traded

debt

instruments

beyond

what

is

already

captured

in

specific

market

risk

VaR

for

the

non-correlation

trading

portfolio.

‘Independent

Validation

Unit

(IVU)’

The

function

within

the

bank

responsible

for

independent

review,

challenge

and

approval

of

all

models.

‘Individual

liquidity

guidance

(ILG)’

Guidance

given

to

a

bank

about

the

amount,

quality

and

funding

profile

of

liquidity

resources

that

the

PRA

has

asked

the

bank

to

maintain.

‘Inflation

risk’

In

the

context

of

DVaR,

the

impact

of

changes

in

inflation

rates

and

volatilities

on

cash

instruments

and

derivatives.

‘Insurance

Risk’

The

risk

of

the

Barclays

Group’s

aggregate

insurance

premiums

received

from

policyholders

under

a

portfolio

of

insurance

contracts

being

inadequate

to

cover

the

claims

arising

from

those

policies.

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of

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2020

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Report

on

Form

20-F

‘Interchange’

Income

paid

to

a

credit

card

issuer

for

the

clearing

and

settlement

of

a

sale

or

cash

advance

transaction.

‘Interest-only

home

loans’

Under

the

terms

of

these

loans,

the

customer

makes

payments

of

interest

only

for

the

entire

term

of

the

mortgage,

although

customers

may

make

early

repayments

of

the

principal

within

the

terms

of

their

agreement.

The

customer

is

responsible

for

repaying

the

entire

outstanding

principal

on

maturity,

which

may

require

the

sale

of

the

mortgaged

property.

‘Interest

rate

derivatives’

Derivatives

linked

to

interest

rates.

This

category

includes

interest

rate

swaps,

collars,

floors

options

and

swaptions.

An

interest

rate

swap

is

an

agreement

between

two

parties

to

exchange

fixed

rate

and

floating

rate

interest

by

means

of

periodic

payments

based

upon

a

notional

principal

amount

and

the

interest

rates

defined

in

the

contract.

Certain

agreements

combine

interest

rate

and

foreign

currency

swap

transactions,

which

may

or

may

not

include

the

exchange

of

principal

amounts.

A

basis

swap

is

a

form

of

interest

rate

swap,

in

which

both

parties

exchange

interest

payments

based

on

floating

rates,

where

the

floating

rates

are

based

upon

different

underlying

reference

indices.

In

a

forward

rate

agreement,

two

parties

agree

a

future

settlement

of

the

difference

between

an

agreed

rate

and

a

future

interest

rate,

applied

to

a

notional

principal

amount.

The

settlement,

which

generally

occurs

at

the

start

of

the

contract

period,

is

the

discounted

present

value

of

the

payment

that

would

otherwise

be

made

at

the

end

of

that

period.

‘Interest

rate

risk’

The

risk

of

interest

rate

volatility

adversely

impacting

the

Barclays

Group’s

Net

Interest

Margin.

In

the

context

of

the

calculation

of

market

risk

DVaR,

measures

the

impact

of

changes

in

interest

(swap)

rates

and

volatilities

on

cash

instruments

and

derivatives.

‘Interest

rate

risk

in

the

banking

book

(IRRBB)’

The

risk

that

the

Barclays

Group

is

exposed

to

capital

or

income

volatility

because

of

a

mismatch

between

the

interest

rate

exposures

of

its

(non-traded)

assets

and

liabilities.

‘Internal

Assessment

Approach

(IAA)’

One

of

three

types

of

calculation

that

a

bank

with

permission

to

use

the

Internal

Ratings

Based

(IRB)

approach

may

apply

to

securitisation

exposures.

It

consists

of

mapping

a

bank's

internal

rating

methodology

for

credit

exposures

to

those

of

an

External

Credit

Assessment

Institution

(ECAI)

to

determine

the

appropriate

risk

weight

based

on

the

ratings

based

approach.

Its

applicability

is

limited

to

ABCP

programmes

liquidity

facilities

and

credit

enhancement.

‘Internal

Capital

Adequacy

Assessment

Process

(ICAAP)’

It

describes

how

the

firm

identifies,

manages

and

qualifies

the

risks

it

is

exposed

to,

in

pursuit

of

its

business

strategy.

It

assesses

whether

the

quality

and

quantity

of

capital

is

available

to

absorb

capital

losses

for

the

risks

the

firm

undertakes.

The

capital

adequacy

is

assessed

on

a

point

of

time

basis

and

on

a

forward

looking

basis

taking

into

account

baseline

and

stressed

economic

capital

conditions.

‘Internal

Ratings

Based

(IRB)’

An

approach

under

the

CRR

framework

that

relies

on

the

bank’s

internal

models

to

derive

the

risk

weights.

The

IRB

approach

is

divided

into

two

alternative

applications,

Advanced

and

Foundation:

–

Advanced

IRB

(A-IRB):

the

bank

uses

its

own

estimates

of

Probability

of

Default

(PD),

Loss

Given

Default

(LGD)

and

credit

conversion

factor

to

model

a

given

risk

exposure.

–

Foundation

IRB

(F-IRB):

the

bank

applies

its

own

PD

as

for

Advanced,

but

it

uses

standard

parameters

for

the

LGD

and

the

credit

conversion

factor.

The

Foundation

IRB

approach

is

specifically

designed

for

wholesale

credit

exposures.

Hence

retail,

equity,

securitisation

positions

and

non-credit

obligations

asset

exposures

are

treated

under

standardised

or

A-IRB.

‘Internal

Ratings

Based

approach

(SEC-IRBA)’

This

is

a

method

to

calculate

risk-weighted

exposure

amounts

for

securitisation

positions.

Under

this

method,

an

institution

must

be

able

to

model

regulatory

capital

requirements

for

underlying

exposures

in

the

securitisation

as

if

these

had

not

been

securitised

(‘K

IRB

’),

subject

to

certain

other

inputs

and

criteria.

‘Investment

Bank’

The

Barclays

Group’s

investment

bank

which

consists

of

origination

led

and

returns

focused

markets

and

banking

business,

and

which

forms

part

of

the

Corporate

and

Investment

Bank

segment

of

Barclays

International.

‘Investment

Banking

Fees’

In

the

context

of

Investment

Bank

analysis

of

Total

Income,

fees

generated

from

origination

activity

businesses

–

including

financial

advisory,

debt

and

equity

underwriting.

‘Investment

grade’

A

debt

security,

treasury

bill

or

similar

instrument

with

a

credit

rating

of

AAA

to

BBB

as

measured

by

external

credit

rating

agencies.

‘ISDA

Master

Agreement’

The

most

commonly

used

master

contract

for

OTC

derivative

transactions

internationally.

It

is

part

of

a

framework

of

documents,

designed

to

enable

OTC

derivatives

to

be

documented

fully

and

flexibly.

The

framework

consists

of

a

master

agreement,

a

schedule,

confirmations,

definitions

booklets,

and

a

credit

support

annex.

The

ISDA

Master

Agreement

is

published

by

the

International

Swaps

and

Derivatives

Association,

commonly

known

as

“ISDA”.

‘Key

Risk

Scenarios

(KRS)’

Key

Risk

Scenarios

are

a

summary

of

the

extreme

potential

risk

exposure

for

each

Key

Risk

in

each

business

and

function,

including

an

assessment

of

the

potential

frequency

of

risk

events,

the

average

size

of

losses

and

three

extreme

scenarios.

The

Key

Risk

Scenario

assessments

are

a

key

input

to

the

Advanced

Measurement

Approach

calculation

of

regulatory

and

economic

capital

requirements.

‘Large

exposure’

A

large

exposure

is

defined

as

the

total

exposure

of

a

bank

to

a

counterparty

or

group

of

connected

clients,

whether

in

the

banking

book

or

trading

book

or

both,

which

in

aggregate

equals

or

exceeds

10%

of

the

bank's

eligible

capital.

‘Legal

risk’

The

risk

of

loss

or

imposition

of

penalties,

damages

or

fines

from

the

failure

of

the

Barclays

Group

to

meet

its

legal

obligations

including

regulatory

or

contractual

requirements.

‘Lending’

In

the

context

of

Investment

Bank

analysis

of

Total

Income,

lending

income

includes

Net

Interest

Income

(NII),

gains

or

losses

on

loan

sale

activity,

and

risk

management

activity

relating

to

the

loan

portfolio.

‘Letters

of

credit’

A

letter

typically

used

for

the

purposes

of

international

trade

guaranteeing

that

a

debtor’s

payment

to

a

creditor

will

be

made

on

time

and

in

full.

In

the

event

that

the

debtor

is

unable

to

make

payment,

the

bank

will

be

required

to

cover

the

full

or

remaining

amount

of

the

purchase.

‘Level

1

assets’

High

quality

liquid

assets

under

the

Basel

Committee’s

Liquidity

Coverage

Ratio

(LCR),

including

cash,

central

bank

reserves

and

higher

quality

government

securities.

‘Level

2

assets’

High

quality

liquid

assets

under

the

Basel

Committee’s

Liquidity

Coverage

Ratio

(LCR),

Level

2A

assets,

including,

e.g.

lower

quality

government

securities,

covered

bonds

and

corporate

debt

securities,

and

Level

2B

assets,

including,

e.g.

lower

rated

corporate

bonds,

residential

mortgage

backed

securities

and

equities

that

meet

certain

conditions.

Glossary

of

terms

356

Barclays

PLC

2020

Annual

Report

on

Form

20-F

‘Lifetime

expected

credit

losses’

An

assessment

of

expected

losses

associated

with

default

events

that

may

occur

during

the

life

of

an

exposure,

reflecting

the

present

value

of

cash

shortfalls

over

the

remaining

expected

life

of

the

asset.

‘Lifetime

Probability’

The

likelihood

of

accounts

entering

default

during

the

expected

remaining

life

of

the

asset.

‘Liquidity

Coverage

Ratio

(LCR)’

The

ratio

of

the

stock

of

high

quality

liquid

assets

to

expected

net

cash

outflows

over

the

days.

High-

quality

liquid

assets

should

be

unencumbered,

liquid

in

markets

during

a

time

of

stress

and,

ideally,

be

central

bank

eligible.

These

include,

e.g.

cash

and

claims

on

central

governments

and

central

banks.

‘Liquidity

Pool’

The

Barclays

Group

liquidity

pool

comprises

cash

at

central

banks

and

highly

liquid

collateral

specifically

held

by

the

Barclays

Group

as

a

contingency

to

enable

the

bank

to

m

eet

cash

outflows

in

the

event

of

stressed

market

conditions.

‘Liquidity

Risk’

The

risk

that

the

Barclays

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.

‘Liquidity

risk

appetite

(LRA)’

The

level

of

liquidity

risk

that

the

Barclays

Group

chooses

to

take

in

pursuit

of

its

business

objectives

and

in

meeting

its

regulatory

obligations.

‘Liquidity

Risk

Management

Framework

(the

Liquidity

Framework)’

The

Liquidity

Risk

Management

Framework,

which

is

sanctioned

by

the

Board

Risk

Committee,

incorporates

liquidity

policies,

systems

and

controls

that

the

Barclays

Group

has

implemented

to

manage

liquidity

risk

within

tolerances

approved

by

the

Board

and

regulatory

agencies.

‘Litigation

and

conduct

charges’

or

‘Litigation

and

conduct’

Litigation

and

conduct

charges

include

regulatory

fines,

litigation

settlements

and

conduct-related

customer

redress.

‘Loan

loss

rate’

Quoted

in

basis

points

and

represents

total

impairment

charges

divided

by

gross

loans

and

advances

held

at

amortised

cost

at

the

balance

sheet

date.

‘Loan

to

deposit

ratio’

or

‘Loan:

deposit

ratio’

Loans

and

advances

at

amortised

costs

divided

by

deposits

at

amortised

cost.

‘Loan

to

value

(LTV)

ratio’

Expresses

the

amount

borrowed

against

an

asset

(i.e.

a

mortgage)

as

a

percentage

of

the

appraised

value

of

the

asset.

The

ratios

are

used

in

determining

the

appropriate

level

of

risk

for

the

loan

and

are

generally

reported

as

an

average

for

new

mortgages

or

an

entire

portfolio.

Also

see

‘Marked

to

market

(MTM)

LTV

ratio’.

‘London

Interbank

Offered

Rate

(LIBOR)’

A

benchmark

interest

rate

at

which

banks

can

borrow

funds

from

other

banks

in

the

London

interbank

market.

‘Loss

Given

Default

(LGD)’

The

percentage

of

Exposure

at

Default

(EAD)

that

will

not

be

recovered

following

default.

LGD

comprises

the

actual

loss

(the

part

that

is

not

expected

to

be

recovered),

together

with

the

economic

costs

associated

with

the

recovery

process.

‘Management

VaR’

A

measure

of

the

potential

loss

of

value

arising

from

unfavourable

market

movements

at

a

specific

confidence

level,

if

current

positions

were

to

be

held

unchanged

for

predefined

period.

Corporate

and

Investment

Bank

uses

Management

VaR

with

a

two-year

equally

weighted

historical

period,

at

a

95%

confidence

level,

with

a

one

day

holding

period.

‘Mandatory

break

clause’

In

the

context

of

counterparty

credit

risk,

a

contract

clause

that

means

a

trade

will

be

ended

on

a

particular

date.

‘Marked

to

market

approach’

A

counterparty

credit

risk

exposure

calculation

approach

which

uses

the

current

marked

to

market

value

of

derivative

positions

as

well

as

a

potential

future

exposure

add-on

to

calculate

an

exposure

to

which

a

risk

weight

can

be

applied.

This

is

also

known

as

the

Current

Exposure

Method.

‘Marked

to

market

(MTM)

LTV

ratio’

The

loan

amount

as

a

percentage

of

the

current

value

of

the

asset

used

to

secure

the

loan.

Also

see

‘Balance

weighted

Loan

to

Value

(LTV)

ratio’

and

‘Valuation

weighted

Loan

to

Value

(LTV)

ratio.’

‘Market

risk’

The

risk

of

loss

arising

from

potential

adverse

changes

in

the

value

of

the

Barclays

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.

‘Master

netting

agreement’

An

agreement

that

provides

for

a

single

net

settlement

of

all

financial

instruments

and

collateral

covered

by

the

agreement

in

the

event

of

the

counterparty’s

default

or

bankruptcy

or

insolvency,

resulting

in

a

reduced

exposure.

‘Master

trust

securitisation

programme’

A

securitisation

structure

where

a

trust

is

set

up

for

the

purpose

of

acquiring

a

pool

of

receivables.

The

trust

issues

multiple

series

of

securities

backed

by

these

receivables.

‘Material

Risk

Takers

(MRTs)’

category

and

residual

trade

maturity)

to

the

gross

notional

value

of

each

contract.

‘PRA

waivers’

PRA

approvals

that

specifically

give

permission

to

the

bank

to

either

modify

or

waive

existing

rules.

Waivers

are

specific

to

an

organisation

and

require

applications

being

submitted

to

and

approved

by

the

PRA.

‘Primary

securitisations’

The

issuance

of

securities

(bonds

and

commercial

papers)

for

fund-raising.

‘Primary

Stress

Tests’

In

the

context

of

Traded

Market

Risk,

Stress

Testing

provides

an

estimate

of

potentially

significant

future

losses

that

might

arise

from

extreme

market

moves

or

scenarios.

Primary

Stress

Tests

apply

stress

moves

to

key

liquid

risk

factors

for

each

of

the

major

trading

asset

classes.

‘Prime

Services’

Involves

financing

of

fixed

income

and

equity

positions

using

Repo

and

stock

lending

facilities.

The

Prime

Services

business

also

provides

brokerage

facilitation

services

for

hedge

fund

clients

offering

execution

and

clearance

facilities

for

a

variety

of

asset

classes.

‘Principal’

In

the

context

of

a

loan,

the

amount

borrowed,

or

the

part

of

the

amount

borrowed

which

remains

unpaid

(excluding

interest).

‘Private

equity

investments’

Investments

in

equity

securities

in

operating

companies

not

quoted

on

a

public

exchange.

Investment

in

private

equity

often

involves

the

investment

of

capital

in

private

companies

or

the

acquisition

of

a

public

company

that

results

in

the

delisting

of

public

equity.

Capital

for

private

equity

investment

is

raised

by

retail

or

institutional

investors

and

used

to

fund

investment

strategies

such

as

leveraged

buyouts,

venture

capital,

growth

capital,

distressed

investments

and

mezzanine

capital.

‘Principal

Risks’

The

principal

risks

affecting

the

Barclays

Group,

as

described

in

the

Risk

Review

section

of

the

Barclays

PLC

Annual

Report.

‘Pro-cyclicality’

Movements

in

financial

variables

(including

capital

requirements)

following

natural

fluctuations

in

the

economic

cycle,

where

the

subsequent

impact

on

lending

or

other

market

behaviours

acts

as

an

amplification

of

the

economic

cycle

by

the

financial

sector.

‘Probability

of

Default

(PD)’

The

likelihood

that

a

loan

will

not

be

repaid

and

will

fall

into

default.

PD

may

be

calculated

for

each

client

who

has

a

loan

(normally

applicable

to

wholesale

customers/clients)

or

for

a

portfolio

of

clients

with

similar

attributes

(normally

applicable

to

retail

customers).

To

calculate

PD,

Barclays

assesses

the

credit

quality

of

borrowers

and

other

counterparties

and

assigns

them

an

internal

risk

rating.

Multiple

rating

methodologies

may

be

used

to

inform

the

rating

decision

on

individual

large

credits,

such

as

internal

and

external

models,

rating

agency

ratings,

and

for

wholesale

assets

market

information

such

as

credit

spreads.

For

smaller

credits,

a

single

source

may

suffice

such

as

the

result

from

an

internal

rating

model.

‘Product

structural

hedge’

An

interest

rate

hedge

put

in

place

to

reduce

earnings

volatility

on

product

balances

with

instant

access

(such

as

non-

interest

bearing

current

accounts

and

managed

rate

deposits)

and

to

smoothen

the

income

over

a

medium/long

term.

Glossary

of

terms

359

Barclays

PLC

2020

Annual

Report

on

Form

20-F

‘Properties

in

Possession

held

as

‘Loans

and

Advances

to

Customers’’

Properties

in

the

UK

and

Italy

where

the

customer

continues

to

retain

legal

title

but

where

the

bank

has

enforced

the

possession

order

as

part

of

the

foreclosure

process

to

allow

for

the

disposal

of

the

asset

or

the

court

has

ordered

the

auction

of

the

property.

‘Properties

in

Possession

held

as

‘Other

Real

Estate

Owned’’

Properties

in

South

Africa

where

the

bank

has

taken

legal

ownership

of

the

title

as

a

result

of

purchase

at

an

auction

or

similar

and

treated

as

‘Other

Real

Estate

Owned’

within

other

assets

on

the

bank’s

balance

sheet.

‘Proprietary

trading’

When

a

bank,

brokerage

or

other

financial

institution

trades

on

its

own

account,

at

its

own

risk,

rather

than

on

behalf

of

customers,

so

as

to

make

a

profit

for

itself.

‘Prudential

Regulation

Authority

(PRA)’

The

statutory

body

responsible

for

the

prudential

supervision

of

banks,

building

societies,

insurers

and

a

small

number

of

significant

investment

banks

in

the

UK.

The

PRA

is

a

subsidiary

of

the

Bank

of

England.

‘Prudential

Valuation

Adjustment

(PVA)’

A

calculation

which

adjusts

the

accounting

values

of

positions

held

on

balance

sheet

at

fair

value

to

comply

with

regulatory

valuation

standards,

which

place

greater

emphasis

on

the

inherent

uncertainty

around

the

value

at

which

a

trading

book

position

could

be

exited.

‘Public

benchmark’

Unsecured

medium

term

notes

issued

in

public

syndicated

transactions.

‘Qualifying

central

bank

claims’

An

amount

calculated

in

line

with

the

PRA

policy

statement

allowing

banks

to

exclude

claims

on

the

central

bank

from

the

calculation

of

the

leverage

exposure

measure,

as

long

as

these

are

matched

by

deposits

denominated

in

the

same

currency

and

of

identical

or

longer

maturity.

‘Qualifying

Revolving

Retail

Exposure

(QRRE)’

In

the

context

of

the

IRB

approach

to

credit

risk

RWA

calculations,

an

exposure

meeting

the

criteria

set

out

in

Capital

Requirements

Regulation

(CRR

Article

154.4).

It

includes

most

types

of

credit

card

exposure.

‘Rates’

In

the

context

of

Investment

Bank

income

analysis,

trading

revenue

relating

to

government

bonds

and

linear

interest

rate

derivatives.

‘Re-aging’

The

returning

of

a

delinquent

account

to

up-to-date

status

without

collecting

the

full

arrears

(principal,

interest

and

fees).

‘Real

Estate

Mortgage

Investment

Conduits

(REMICs)’

An

entity

that

holds

a

fixed

pool

of

mortgages

and

that

is

separated

into

multiple

classes

of

interests

for

issuance

to

investors.

‘Recovery

book’

Represents

the

total

amount

of

exposure

which

has

been

transferred

to

recovery

units

who

set

and

implement

strategies

to

recover

the

Group’s

exposure.

‘Recovery

book

Impairment

Coverage

Ratio’

Impairment

allowance

held

against

recoveries

balances

expressed

as

a

percentage

of

balance

in

recoveries.

‘Recovery

book

proportion

of

outstanding

balances’

Represents

the

amount

of

recoveries

(gross

month-end

customer

balances

of

all

accounts

that

have

charged-off)

as

at

the

period

end

compared

to

total

outstanding

balances.

The

size

of

the

recoveries

book

would

ultimately

have

an

impact

on

the

overall

impairment

requirement

on

the

portfolio.

Balances

in

recovery

will

decrease

if:

assets

are

written-off;

amounts

are

collected;

or

assets

are

sold

to

a

third

party

(i.e.

debt

sale).

‘Regulatory

capital’

The

amount

of

capital

that

a

bank

holds

to

satisfy

regulatory

requirements.

‘Renegotiated

loans’

Loans

are

generally

renegotiated

either

as

part

of

an

ongoing

customer

relationship

or

in

response

to

an

adverse

change

in

the

circumstances

of

the

borrower.

In

the

latter

case,

renegotiation

can

result

in

an

extension

of

the

due

date

of

payment

or

repayment

plans

under

which

the

Barclays

Group

offers

a

concessionary

rate

of

interest

to

genuinely

distressed

borrowers.

This

will

result

in

the

asset

continuing

to

be

overdue,

and

individually

impaired

if

the

renegotiated

payments

of

interest

and

principal

will

not

recover

the

original

carrying

amount

of

the

asset.

In

other

cases,

renegotiation

will

lead

to

a

new

agreement,

which

is

treated

as

a

new

loan.

‘Repurchase

agreement

(Repo)’

or

‘Reverse

repurchase

agreement

(Reverse

repo)’

Arrangements

that

allow

counterparties

to

use

financial

securities

as

collateral

for

an

interest

bearing

cash

loan.

The

borrower

agrees

to

sell

a

security

to

the

lender

subject

to

a

commitment

to

repurchase

the

asset

at

a

specified

price

on

a

given

date.

For

the

party

selling

the

security

(and

agreeing

to

repurchase

it

in

the

future),

it

is

a

Repurchase

agreement

or

Repo;

for

the

counterparty

to

the

transaction

(buying

the

security

and

agreeing

to

sell

in

the

future),

it

is

a

Reverse

repurchase

agreement

or

Reverse

repo.

‘Reputation

risk’

The

risk

that

an

action,

transaction,

investment

or

event

will

reduce

trust

in

the

Barclays

Group’s

integrity

and

competence

by

clients,

counterparties,

investors,

regulators,

employees

or

the

public.

‘Re-securitisations’

The

repackaging

of

securitised

products

into

securities.

The

resulting

securities

are

therefore

securitisation

positions

where

the

underlying

assets

are

also

predominantly

securitisation

positions.

‘Reserve

Capital

Instruments

(RCIs)’

Hybrid

issued

capital

securities

which

may

be

debt

or

equity

accounted,

depending

on

the

terms.

‘Residential

Mortgage-Backed

Securities

(RMBS)’

Securities

that

represent

interests

in

a

group

of

residential

mortgages.

Investors

in

these

securities

have

the

right

to

cash

received

from

future

mortgage

payments

(interest

and/or

principal).

‘Residual

maturity’

The

remaining

contractual

term

of

a

credit

obligation

associated

with

a

credit

exposure.

‘Restructured

loans’

Comprises

loans

where,

for

economic

or

legal

reasons

the

debtor’s

financial

difficulties,

a

concession

has

been

granted

to

the

debtor

that

would

not

otherwise

be

considered.

Where

the

concession

results

in

the

expected

cash

flows

discounted

at

the

original

effective

interest

rate

being

less

than

the

loan’s

carrying

value,

an

impairment

allowance

will

be

raised.

‘Retail

Loans’

Loans

to

individuals

or

small

and

medium

sized

enterprises

rather

than

to

financial

institutions

and

larger

businesses.

It

includes

both

secured

and

unsecured

loans

such

as

mortgages

and

credit

card

balances,

as

well

as

loans

to

certain

smaller

business

customers,

typically

with

exposures

up

to

£3m

or

with

a

turnover

of

up

to

£5m.

‘Return

on

average

Risk

Weighted

Assets’

Statutory

profit

after

tax

as

a

proportion

of

average

RWAs.

‘Return

on

average

tangible

shareholders’

equity

(RoTE)’

Profit

after

tax

attributable

to

ordinary

equity

holders

of

the

parent,

as

a

proportion

of

average

shareholders’

equity

excluding

non-controlling

interests

and

other

equity

instruments

adjusted

for

the

deduction

of

intangible

assets

and

goodwill.

Glossary

of

terms

360

Barclays

PLC

2020

Annual

Report

on

Form

20-F

‘Return

on

average

allocated

tangible

equity’

Profit

after

tax

attributable

to

ordinary

equity

holders

of

the

parent,

as

a

proportion

of

average

allocated

tangible

equity.

‘Risk

appetite’

The

level

of

risk

that

Barclays

is

prepared

to

accept

whilst

pursuing

its

business

strategy,

recognising

a

range

of

possible

outcomes

as

business

plans

are

implemented.

‘Risk

weighted

assets

(RWAs)’

A

measure

of

a

bank’s

assets

adjusted

for

their

associated

risks.

Risk

weightings

are

established

in

accordance

with

the

Basel

rules

as

implemented

by

CRR

and

local

regulators.

‘Risks

not

in

VaR

(RNIVS)’

Refers

to

all

the

key

market

risks

which

are

not

captured

or

not

well

captured

within

the

VaR

model

framework.

‘Sarbanes-Oxley

requirements’

The

Sarbanes-Oxley

Act

2002

(SOX),

which

was

introduced

by

the

US

Government

to

safeguard

against

corporate

governance

scandals

such

as

Enron,

WorldCom

and

Tyco.

All

US-listed

companies

must

comply

with

SOX.

‘Second

Lien’

Debt

that

is

issued

against

the

same

collateral

as

higher

lien

debt

but

that

is

subordinate

to

it.

In

the

case

of

default,

compensation

for

this

debt

will

only

be

received

after

the

first

lien

has

been

repaid

and

thus

represents

a

riskier

investment

than

the

first

lien.

‘Secondary

Stress

Tests’

Secondary

stress

tests

are

used

in

measuring

potential

losses

arising

from

illiquid

market

risks

that

cannot

be

hedged

or

reduced

within

the

time

period

covered

in

Primary

Stress

Tests.

‘Secured

Overnight

Financing

Rate

(SOFR)’

A

broad

measure

of

the

cost

of

borrowing

cash

overnight

collateralized

by

U.S.

Treasury

securities

in

the

repurchase

agreement

(repo)

market.

‘Securities

Financing

Transactions

(SFT)’

In

the

context

of

RWAs,

any

of

the

following

transactions:

a

repurchase

transaction,

a

securities

or

commodities

lending

or

borrowing

transaction,

or

a

margin

lending

transaction

whereby

cash

collateral

is

received

or

paid

in

respect

of

the

transfer

of

a

‘Securities

Financing

Transactions

adjustments’

In

the

context

of

leverage

ratio,

a

regulatory

add-on

calculated

as

exposure

less

collateral,

taking

into

account

master

netting

agreements.

‘Securities

lending

arrangements’

Arrangements

whereby

securities

are

legally

transferred

to

a

third

party

subject

to

an

agreement

to

return

them

at

a

future

date.

The

counterparty

generally

provides

collateral

against

non-performance

in

the

form

of

cash

or

other

assets.

‘Securitisation’

Typically,

a

process

by

which

debt

instruments

such

as

mortgage

loans

or

credit

card

balances

are

aggregated

into

a

pool,

which

is

used

to

back

new

securities.

A

company

sells

assets

to

a

special

purpose

vehicle

(SPV)

which

then

issues

securities

backed

by

the

assets.

This

allows

the

credit

quality

of

the

assets

to

be

separated

from

the

credit

rating

of

the

original

borrower

and

transfers

risk

to

external

investors.

‘Set-off

clauses’

In

the

context

of

counterparty

credit

risk,

contract

clauses

that

allow

Barclays

to

set

off

amounts

owed

to

us

by

a

counterparty

against

amounts

owed

by

us

to

the

counterparty.

‘Settlement

balances’

Receivables

or

payables

recorded

between

the

date

(the

trade

date)

a

financial

instrument

(such

as

a

bond)

is

sold,

purchased

or

otherwise

closed

out,

and

the

date

the

asset

is

delivered

by

or

to

the

entity

(the

settlement

date)

and

cash

is

received

or

paid.

‘Settlement

Netting’

Netting

approach

used

in

the

calculation

of

the

leverage

exposure

measure

whereby

firms

may

calculate

their

exposure

value

of

regular

way

purchases

and

sales

awaiting

settlement

in

accordance

with

Article

429g

of

CRR,

as

amended

by

Regulation

(EU)

2019/876

(CRR

2).

‘Settlement

risk’

The

risk

that

settlement

in

a

transfer

system

will

not

take

place

as

expected,

usually

owing

to

a

party

defaulting

on

one

or

more

settlement

obligations.

‘Significant

Increase

in

Credit

Risk

(SICR)’

Barclays

assesses

when

a

significant

increase

in

credit

risk

has

occurred

based

on

quantitative

and

qualitative

assessments.

‘Small

and

Medium-Sized

Enterprises

(SME)’

An

enterprise

which

employs

fewer

than

250

persons

and

which

has

an

annual

turnover

which

does

not

exceed

EUR

50

million,

and

/

or

an

annual

balance

sheet

total

not

exceeding

EUR

43

million.

Within

the

SME

category,

a

small

enterprise

is

defined

as

an

enterprise

which

employs

fewer

than

50

persons

and

whose

annual

turnover

and/or

annual

balance

sheet

total

does

not

exceed

EUR

10

million.

This

is

defined

in

accordance

with

Commission

Recommendation

2003/361/EC

of

6

May

2003

concerning

the

definition

of

micro,

small

and

medium

sized

enterprises.

‘Slotting’

Slotting

is

an

internal

Barclays

terminology

for

what

is

known

as

“Specialised

Lending”

in

the

IRB

approach

as

described

in

Capital

Requirements

Regulation

(CRR

Article

147.8).

A

standard

set

of

rules

are

required

to

be

used

in

credit

risk

RWA

calculations,

based

upon

an

assessment

of

factors

such

as

the

financial

strength

of

the

counterparty.

The

requirements

for

the

application

of

the

Specialised

Lending

approach

are

detailed

in

CRR

Article

153.5.

‘Sovereign

exposure(s)’

Exposures

to

central

governments,

including

holdings

in

government

bonds

and

local

government

bonds.

‘Specific

market

risk’

A

risk

that

is

due

to

the

individual

nature

of

an

asset

and

can

potentially

be

diversified

or

the

risk

of

a

price

change

in

an

investment

due

to

factors

the

issuer

or,

in

the

case

of

a

derivative,

the

issuer

of

the

underlying

investment.

‘Spread

risk’

Measures

the

impact

of

changes

to

the

swap

spread,

i.e.

the

difference

between

swap

rates

and

government

bond

yields.

‘SRB

ALRB’

The

Systemic

Risk

Buffer

(SRB)

Additional

Leverage

Ratio

Buffer

is

firm

specific

requirement

set

by

the

PRA

using

its

powers

under

section

55M

of

the

Financial

Services

and

Markets

Act

2000.

Barclays

is

required

to

hold

an

amount

of

CET1

capital

that

is

equal

to

or

greater

than

its

Additional

Leverage

Ratio

Buffer.

‘Stage

1’

This

represents

financial

instruments

where

the

credit

risk

of

the

financial

instrument

has

not

increased

significantly

since

initial

recognition.

Stage

1

financial

instruments

are

required

to

recognise

a

12

month

expected

credit

loss

allowance.

‘Stage

2’

This

represents

financial

instruments

where

the

credit

risk

of

the

financial

instrument

has

increased

significantly

since

initial

recognition.

Stage

2

financial

instruments

are

required

to

recognise

a

lifetime

expected

credit

loss

allowance.

‘Stage

3’

This

represents

financial

instruments

where

the

financial

instrument

is

considered

impaired.

Stage

3

financial

instruments

are

required

to

recognise

a

lifetime

expected

credit

loss

allowance.

‘Standard

&

Poor’s’

A

credit

rating

agency.

Glossary

of

terms

361

Barclays

PLC

2020

Annual

Report

on

Form

20-F

‘Standardised

approach

(SEC-SA)’

This

is

a

method

to

calculate

risk-weighted

exposure

amounts

for

securitisation

positions.

Under

this

method,

an

institution

must

be

able

calculate

regulatory

capital

requirements

per

standardized

approach

for

underlying

exposures

in

the

securitisation

as

if

these

had

not

been

securitised

(‘K

SA

’),

subject

to

certain

other

inputs

and

criteria.

‘Standby

facilities,

credit

lines

and

other

commitments’

Agreements

to

lend

to

a

customer

in

the

future,

subject

to

certain

conditions.

Such

commitments

are

either

made

for

a

fixed

period,

or

have

no

specific

maturity

but

are

cancellable

by

the

lender

subject

to

notice

requirements.

‘Statutory’

Line

items

of

income,

expense,

profit

or

loss,

assets,

liabilities

or

equity

stated

in

accordance

with

the

requirements

of

the

UK

Companies

Act

2006

and

the

requirements

of

International

Financial

Reporting

Standards

(IFRS).

‘Statutory

return

on

average

shareholders’

equity’

Statutory

profit

after

tax

attributable

to

ordinary

shareholders

as

a

proportion

of

average

shareholders’

equity.

‘STD’

/

‘Standardised

Approach’

A

method

of

calculating

RWAs

that

relies

on

a

mandatory

framework

set

by

the

regulator

to

derive

risk

weights

based

on

counterparty

type

and

a

credit

rating

provided

by

an

External

Credit

Assessment

Institute.

‘Sterling

Over

Night

Index

Average

(SONIA)’

Reflects

bank

and

building

societies’

wholesale

overnight

funding

rates

in

the

sterling

unsecured

market

administrated

and

calculated

by

the

Bank

of

England.

‘Stress

Testing’

A

process

which

involves

identifying

possible

future

adverse

events

or

changes

in

economic

conditions

that

could

have

unfavourable

effects

on

the

Barclays

Group

(either

financial

or

non-financial),

assessing

the

Barclays

Group’s

ability

to

withstand

such

changes,

and

identifying

management

actions

to

mitigate

the

impact.

‘Stressed

Value

at

Risk

(SVaR)’

An

estimate

of

the

potential

loss

arising

from

a

12-month

period

of

significant

financial

stress

calibrated

to

99%

confidence

level

over

a

10-day

holding

period.

‘Structured

entity’

An

entity

in

which

voting

or

similar

rights

are

not

the

dominant

factor

in

deciding

control.

Structured

entities

are

generally

created

to

achieve

a

narrow

and

well

defined

objective

with

restrictions

around

their

ongoing

activities.

‘Structural

hedge’

or

‘hedging’

An

interest

rate

hedge

in

place

to

reduce

earnings

volatility

and

to

smoothen

the

income

over

a

medium/long

term

on

positions

that

exist

within

the

balance

sheet

and

do

not

re-price

in

line

with

market

rates.

See

also

‘Equity

structural

hedge’

and

‘Product

structural

hedge’.

‘Structural

model

of

default’

A

model

based

on

the

assumption

that

an

obligor

will

default

when

its

assets

are

insufficient

to

cover

its

liabilities.

‘Structured

credit’

Includes

the

legacy

structured

credit

portfolio

primarily

comprising

derivative

exposures

and

financing

exposures

to

structured

credit

vehicles.

‘Structured

finance

or

structured

notes’

A

structured

note

is

an

investment

tool

that

pays

a

return

linked

to

the

value

or

level

of

a

specified

asset

or

index

and

sometimes

offers

capital

protection

if

the

value

declines.

Structured

notes

can

be

linked

to

equities,

interest

rates,

funds,

commodities

and

foreign

currency.

‘Sub-prime’

Sub-prime

is

defined

as

loans

to

borrowers

typically

having

weakened

credit

histories

that

include

payment

delinquencies

and

potentially

more

severe

problems

such

as

court

judgments

and

bankruptcies.

They

may

also

display

reduced

repayment

capacity

as

measured

by

credit

scores,

high

debt-to-income

ratios,

or

other

criteria

indicating

heightened

risk

of

default.

‘Subordinated

liabilities’

Liabilities

which,

in

the

event

of

insolvency

or

liquidation

of

the

issuer,

are

subordinated

to

the

claims

of

depositors

and

other

creditors

of

the

issuer.

‘Supranational

bonds’

Bonds

issued

by

an

international

organisation,

where

membership

transcends

national

boundaries

(e.g.

the

European

Union

or

World

Trade

Organisation).

‘Synthetic

Securitisation

Transactions’

Securitisation

transactions

effected

through

the

use

of

derivatives.

‘Systemic

Risk

Buffer’

CET1

capital

that

may

be

required

to

be

held

as

part

of

the

Combined

Buffer

Requirement

increasing

the

capacity

of

UK

banks

to

absorb

stress

and

limiting

the

damage

to

the

economy

as

a

result

of

restricted

lending.

‘Tangible

Net

Asset

Value

(TNAV)’

Shareholders’

equity

excluding

non-controlling

interests

adjusted

for

the

deduction

of

intangible

assets

and

goodwill.

‘Tangible

Net

Asset

Value

per

share’

Calculated

by

dividing

shareholders’

equity,

excluding

non-controlling

interests

and

other

equity

instruments,

less

goodwill

and

intangible

assets,

by

the

number

of

issued

ordinary

shares.

‘Tangible

shareholders’

equity’

Shareholders’

equity

excluding

non-controlling

interests

and

other

equity

instruments

adjusted

for

the

deduction

of

intangible

assets

and

goodwill.

‘Term

premium’

Additional

interest

required

by

investors

to

hold

assets

with

a

longer

period

to

maturity.

‘The

Fundamental

Review

of

the

Trading

Book

(FRTB)’

A

comprehensive

suite

of

capital

rules

developed

by

the

Basel

Committee

on

Banking

Supervision

as

part

of

Basel

III

and

applicable

to

banks’

wholesale

trading

activities.

‘The

Standardised

Approach

(TSA)’

Under

TSA,

banks

are

required

to

hold

regulatory

capital

for

operational

risk

equal

to

the

annual

average,

calculated

over

a

rolling

three-year

period,

of

the

relevant

income

indicator

(across

all

business

lines),

multiplied

by

a

supervisory

defined

percentage

factor

by

business

lines.

‘The

three

lines

of

defence’

The

three

lines

of

defence

operating

model

enables

Barclays

to

separate

risk

management

activities

between

those

client

facing

areas

of

the

Barclays

Group

and

associated

support

functions

responsible

for

identifying

risk,

operating

within

applicable

limits

and

escalating

risk

events

(first

line);

colleagues

in

Risk

and

Compliance

who

establish

the

limits,

rules

and

constraints

under

which

the

first

line

operates

and

monitor

their

performance

against

those

limits

and

constraints

(second

line);

and,

colleagues

in

Internal

Audit

who

provide

assurance

to

the

Board

and

Executive

Management

over

the

effectiveness

of

governance,

risk

management

and

control

over

risks

(third

line).

The

Legal

function

does

not

sit

in

any

of

the

three

lines,

but

supports

them

all.

The

Legal

function

is,

however,

subject

to

oversight

from

Risk

and

Compliance

with

respect

to

operational

and

conduct

risks.

‘Tier

1

capital’

The

sum

of

the

Common

Equity

Tier

1

capital

and

Additional

Tier

1

capital.

‘Tier

1

capital

ratio’

The

ratio

which

expresses

Tier

1

capital

as

a

percentage

of

RWAs

under

CRR.

Glossary

of

terms

362

Barclays

PLC

2020

Annual

Report

on

Form

20-F

‘Tier

2

(T2)

capita

l’

A

type

of

capital

as

defined

in

the

CRR

principally

composed

of

capital

instruments,

subordinated

loans

and

share

premium

accounts

where

qualifying

conditions

have

been

met.

‘Tier

2

(T2)

securities’

Securities

that

are

treated

as

Tier

2

(T2)

capital

in

the

context

of

CRR.

‘Total

balances

on

forbearance

programmes

coverage

ratio’

Impairment

allowance

held

against

Forbearance

balances

expressed

as

a

percentage

of

balance

in

forbearance.

‘Total

capital

ratio’

Total

regulatory

capital

as

a

percentage

of

RWAs.

‘Total

Loss

Absorbing

Capacity

(TLAC)’

A

standard

published

by

the

FSB

which

is

applicable

to

G-SIBs

and

requires

a

G-SIB

to

hold

a

prescriptive

minimum

level

of

instruments

and

liabilities

that

should

be

readily

available

for

bail-in

within

resolution

to

absorb

losses

and

recapitalise

the

institution.

‘Total

outstanding

balance’

In

retail

banking,

total

outstanding

balance

is

defined

as

the

gross

month-end

customer

balances

on

all

accounts

including

accounts

charged

off

to

recoveries.

‘Total

return

swap’

An

instrument

whereby

the

seller

of

protection

receives

the

full

return

of

the

asset,

including

both

the

income

and

change

in

the

capital

value

of

the

asset.

The

buyer

of

the

protection

in

return

receives

a

predetermined

amount.

‘Traded

Market

Risk’

The

risk

of

a

reduction

to

earnings

or

capital

due

to

volatility

of

trading

book

positions.

‘Trading

book’

All

positions

in

financial

instruments

and

commodities

held

by

an

institution

either

with

trading

intent,

or

in

order

to

hedge

positions

held

with

trading

intent.

‘Traditional

Securitisation

Transactions’

Securitisation

transactions

in

which

an

underlying

pool

of

assets

generates

cash

flows

to

service

payments

to

investors.

‘Transitional’

When

a

measure

is

presented

or

described

as

being

on

a

transitional

basis,

it

is

calculated

in

accordance

with

the

transitional

provisions

set

out

in

Part

Ten

of

CRR.

‘Treasury

and

Capital

Risk’

This

comprises

of

Liquidity

Risk,

Capital

Risk

and

Interest

Rate

Risk

in

the

banking

book.

‘Twelve

month

expected

credit

losses’

The

portion

of

the

lifetime

ECL

arising

if

default

occurs

within

12

months

of

the

reporting

date

(or

shorter

period

if

the

expected

life

is

less

than

12

months),

weighted

by

the

probability

of

said

default

occurring.

‘Twelve

month

PD’

The

likelihood

of

accounts

entering

default

within

12

months

of

the

reporting

date.

‘Unencumbered’

Assets

not

used

to

secure

liabilities

or

otherwise

pledged.

‘United

Kingdom

(UK)’

Geographic

segment

where

Barclays

operates

comprising

the

UK.

Also

see

‘Europe’.

‘UK

Bank

Levy’

A

levy

that

applies

to

UK

banks,

building

societies

and

the

UK

operations

of

foreign

banks.

The

levy

is

payable

based

on

a

percentage

of

the

chargeable

equity

and

liabilities

of

the

bank

on

its

balance

sheet

date.

‘UK

leverage

exposure’

Calculated

as

per

the

PRA

rulebook,

where

the

exposure

calculation

also

includes

the

FPC’s

recommendation

to

allow

banks

to

exclude

claims

on

the

central

bank

from

the

calculation

of

the

leverage

exposure

measure,

as

long

as

these

are

matched

by

deposits

denominated

in

the

same

currency

and

of

identical

or

longer

maturity.

‘UK

leverage

ratio’

As

per

the

PRA

rulebook,

means

a

bank’s

Tier

1

capital

divided

by

its

total

exposure

measure,

with

this

ratio

expressed

as

a

percentage.

‘Unfunded

credit

protection’

A

technique

of

credit

risk

mitigation

where

the

reduction

of

the

credit

risk

on

the

exposure

of

an

institution

derives

from

the

obligation

of

a

third

party

to

pay

an

amount

in

the

event

of

the

default

of

the

borrower

or

the

occurrence

of

other

specified

credit

events.

‘US

Partner

Portfolio’

Co-branded

credit

card

programs

with

companies

across

various

sectors

including

travel,

entertainment,

retail

and

financial

sectors.

‘US

Residential

Mortgages’

Securities

that

represent

interests

in

a

group

of

US

residential

mortgages.

‘Valuation

weighted

Loan

to

Value

(LTV)

ratio’

In

the

context

of

credit

risk

disclosures

on

secured

home

loans,

a

means

of

calculating

marked

to

market

LTVs

derived

by

comparing

total

outstanding

balance

and

the

value

of

total

collateral

we

hold

against

these

balances.

Valuation

weighted

Loan

to

Value

ratio

is

calculated

using

the

following

formula:

LTV

=

total

outstandings

in

portfolio/total

property

values

of

total

outstandings

in

portfolio.

‘Value

at

Risk

(VaR)’

A

measure

of

the

potential

loss

of

value

arising

from

unfavourable

market

movements

at

a

specific

confidence

level

and

within

a

specific

timeframe.

‘Weighted

off

balance

sheet

commitments’

Regulatory

add-ons

to

the

leverage

exposure

measure

based

on

credit

conversion

factors

used

in

the

Standardised

Approach

to

credit

risk.

‘Wholesale

loans’

or

‘wholesale

lending’

Lending

to

larger

businesses,

financial

institutions

and

sovereign

entities.

‘Write

-off

(gross)’

The

point

where

it

is

determined

that

an

asset

is

irrecoverable,

or

it

is

no

longer

considered

economically

viable

to

try

to

recover

the

asset

or

it

is

deemed

immaterial

or

full

and

final

settlement

is

reached

and

the

shortfall

written

off.

In

the

event

of

write-off,

the

customer

balance

is

removed

from

the

balance

sheet

and

the

impairment

allowance

held

against

the

asset

is

released.

Net

write-offs

represent

gross

write-offs

less

post

write-off

recoveries.

‘Wrong

-way

risk’

Arises

in

a

trading

exposure

when

there

is

significant

correlation

between

the

underlying

asset

and

the

counterparty,

which

in

the

event

of

default

would

lead

to

a

significant

mark

to

market

loss.

When

assessing

the

credit

exposure

of

a

wrong-way

trade,

analysts

take

into

account

the

correlation

between

the

counterparty

and

the

underlying

asset

as

part

of

the

sanctioning

process.

EXHIBIT

INDEX

Exhibit

Description

1.1

2.1

Long

Term

Debt

Instruments:

Barclays

PLC

is

not

party

to

any

single

instrument

relating

to

long-term

debt

pursuant

to

which

a

total

amount

of

securities

exceeding

10%

of

its

total

assets

(on

a

consolidated

basis)

is

authorised

to

be

issued.

Barclays

PLC

hereby

agrees

to

furnish

to

the

Securities

and

Exchange

Commission

(the

“Commission”),

upon

its

request,

a

copy

of

any

instrument

defining

the

rights

of

holders

of

its

long-term

debt

or

the

rights

of

holders

of

the

long-term

debt

of

any

of

its

subsidiaries

for

which

consolidated

or

unconsolidated

financial

statements

are

required

to

be

filed

with

the

Commission.

2.2

4.1

4.2

4.3

4.4

4.5

4.6

4.7

4.8

4.9

4.10

4.11

4.12

4.13

4.14

4.15

(incorporated

by

reference

to

the

2019

Form

20-F

filed

on

February

13,

2020)

4.16

(incorporated

by

reference

to

the

2019

Form

20-F

filed

on

February

13,

2020)

4.17

(incorporated

by

reference

to

the

2019

Form

20-F

filed

on

February

13,

2020)

4.18

(incorporated

by

reference

to

the

2019

Form

20-F

filed

on

February

13,

2020)

8.1

12.1

13.1

15.1

99.1

101.INS

XBRL

Instance

Document

101.SCH

XBRL

Taxonomy

Extension

Schema

101.CAL

XBRL

Taxonomy

Extension

Schema

Calculation

Linkbase

101.DEF

XBRL

Taxonomy

Extension

Schema

Definition

Linkbase

101.LAB

XBRL

Taxonomy

Extension

Schema

Label

Linkbase

101.PRE

XBRL

Taxonomy

Extension

Schema

Presentation

Linkbase

Signatures

The

registrant

hereby

certifies

that

it

meets

all

of

the

requirements

for

filing

on

Form

20-F

and

that

it

has

duly

caused

and

authorised

the

undersigned

to

sign

this

annual

report

on

its

behalf.

Date

February

18,

2021

Barclays

PLC

(Registrant)

By

/s/

Tushar

Morzaria

Tushar

Morzaria,

Group

Finance

Director

Barclays - 20-F annual report 2020

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