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Capital and leverage strategy

Capital and leverage strategy

Capital management is a core component of Barclays' strategy

The Group's capital management strategy is driven by the strategic aims of the Group and the risk appetite set by the Board.

The Group's objectives are achieved through well embedded capital management practices.

Capital management

Barclays’ capital management objective is to maximise shareholder value by prudently optimising the level, mix and distribution to businesses of its capital resources whilst maintaining sufficient capital resources to: ensure we are well capitalised relative to minimum capital requirements of regulatory authorities; to meet the Group’s risk appetite; and to support the Group’s credit rating.

Our objectives are achieved through well embedded capital management practices:

Primary objectives

Core objectives

Provide a viable and sustainable business offering by maintaining adequate capital to cover the Group’s current and forecast business needs and associated risks

Maintain a capital plan on a short-term and medium-term basis aligned with strategic objectives, balancing capital generation of the business with business growth and shareholder distributions

Ensure the Group and its legal entities maintain adequate capital to withstand the impacts of risks that may arise under the stressed conditions analysed by the Group

Meet minimum regulatory requirements at all times in the UK and in all other jurisdictions that the group operates in, such as the United States and South Africa where regulated activities are undertaken

 

Perform group-wide internal and regulatory stress tests

 

Maintain capital buffers over regulatory minimums

 

Develop contingency plans for severe (stress management actions) and extreme stress tests (recovery actions)

Support a strong credit rating

Maintain capital ratios aligned with rating agency expectations

Capital planning

Capital forecasts are managed on a top-down and bottom-up analysis through both short-term (one year) and medium-term (three years) financial planning cycles. Barclays’ capital plans are developed with the objective of maintaining capital that is adequate in quantity and quality to support the Group's risk profile, regulatory and business needs, including Transform financial commitments.

As a result, the Group holds a diversified capital base that provides strong loss absorbing capacity and optimised returns.