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Funding strategy

Funding strategy

Our funding strategy is to develop a diversified funding base, while providing protection against unexpected fluctuations.  We aim to align sources of funding with their use

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  • Deposit funding

    PCB, Barclaycard, Non-Core (retail) and Africa Banking activities are largely funded with customer deposits. The excess of the Investment Bank’s loans and advances over customer deposits is funded with long-term debt and equity. The Investment Bank does not rely on customer deposit funding from PCB.

    Although, contractually, current accounts are repayable on demand and savings accounts at short notice, the Group’s broad base of customers – numerically and by depositor type – helps protect against unexpected fluctuations in balances. Such accounts form a stable funding base for the Group’s operations and liquidity needs. The Group models the behaviour of both assets and liabilities to assess balance sheet funding gaps. The behavioural modelling approach reflects the forward-looking macroeconomic outlook and captures customer roll-over and optionality behaviour within a given asset or liability product. These behavioural maturities are used to determine funds transfer pricing interest rates at which businesses are rewarded and charged for sources and uses of funds.

  • Wholesale funding

    The Group maintains access to a variety of sources of wholesale funds in multiple currencies, including those available from money markets, repo markets and from term investors, across a variety of distribution channels and geographies. Barclays is an active participant in money markets, has direct access to US, European and Asian capital markets through our global investment banking operations and long-term investors through our global client base. As a result, wholesale funding is well diversified by product, investor, maturity, geography and currency.

    Team senior unsecured

    The Group expects to continue issuing public wholesale debt in 2016, in order to maintain a stable and diverse funding base by type, currency and distribution channel

  • Secured funding

    Secured funding provides an alternative source of term liquidity for the Group balance sheet.

    Barclays issues asset-backed securities (ABS) and covered bonds that are secured primarily over high-quality customer loans and advances, such as corporate loans, credit cards, and residential mortgage loans. Barclays monitors and manages encumbrance levels related to these secured funding programmes.

    Below is high level summary of our secured funding programmes. For an overview of structures, relevant investor reports, as well as prospectuses and documentation, please refer to Secured funding documentation.

    Note that these summaries should not be regarded as exhaustive and are for information purposes only. They do not disclose the risks and other significant issues related to an investment in the securities and are not a prospectus for any of the securities described. Investors should only subscribe to securities described here based on the information and risk factors disclosed in the relevant prospectus.

  • Asset-backed securities

    Barclays securitises credit cards, residential mortgage receivables and corporate loans, through a variety of transaction structures.

    Credit cards

    Barclays securitises card receivables managed by our global credit card business, Barclaycard, including assets originated both in the UK and the US.

    In the UK, we securitise assets principally via the Gracechurch Card Funding programme, whereas in the US, we use the Barclays Dryrock Issuance Trust structure, an SEC registered shelf backed solely by US domiciled assets originated by Barclays Bank Delaware.

    Residential mortgage loans

    Barclays securitises a proportion of its residential mortgage loan assets through GMFinancing and Genovastructures.

    Corporate loans

    Barclays synthetically securitises corporate loan receivables through the Gracechurch Corporate Loan (GCL) structure GCL series 2007-1.

  • Covered bonds

    Barclays issues Covered bonds from the Global Covered Bond Programme regulated by the UK Regulated Covered Bond legislation and the UK’s Financial Conduct Authority (FCA).

    Barclays Bank PLC has been on the UK FCA Regulated Covered Bond Register since November 2008. Barclays covered bonds are backed by UK residential mortgages and the programme is monitored on a monthly basis through a combination of tests such as asset coverage test and interest rate shortfall tests.