# Barclays Bank UK PLC Annual Report ## 31 December 2024 --- ## Contents | Strategic Report | Page | |---|---| | Performance review | 2 | | Performance measures | 5 | | Managing risk | 7 | | Customers and clients | 10 | | Our colleagues | 12 | | Society | 13 | | Engaging with our stakeholders | 15 | | Climate and Sustainability report | 17 | | Governance | Page | | Governance Report (including Corporate Governance Statement) | 22 | | Directors’ Report | 32 | | Other Governance - Managing data privacy, security and resilience | 35 | | Risk review | | | Risk review contents | 38 | | Risk management | 41 | | Material existing and emerging risks | 45 | | Principal risk management | 59 | | Risk performance | 71 | | Supervision and regulation | 152 | | Financial statements | | | Financial statements contents | 159 | | Consolidated financial statements | 170 | | Notes to the financial statements | 178 | home.barclays/annualreport 1 Barclays Bank UK PLC Annual Report --- ## Strategic Report ### Performance review The Strategic Report was approved by the Board of Directors on 12 February 2025 and signed on their behalf by the Chair. #### Overview Barclays Bank UK PLC (the Company) is a wholly-owned subsidiary of Barclays PLC. The consolidation of Barclays Bank UK PLC and its subsidiaries is referred to as the Barclays Bank UK Group. The term Barclays refers to Barclays PLC, or depending on context the Barclays Group, and the term Barclays Group refers to Barclays PLC, together with its subsidiaries. Barclays Bank UK PLC is the ring-fenced bank within the Barclays Group. The Barclays Bank UK Group contains the majority of the Barclays Group’s Barclays UK division, including the Personal Banking, Business Banking and Barclaycard Consumer UK businesses, other than the Barclays Partner Finance business. #### Our structure ```mermaid graph TD A[Barclays Bank UK PLC] --> B(Personal Banking) A --> C(Business Banking) A --> D(Barclaycard Consumer UK) ``` Barclays is one of the most recognisable brands in the UK. We serve customers across a wide range of retail banking needs, from credit card users, to start-up businesses, to homebuyers getting on the property ladder for the first time. ##### Personal Banking Offers retail solutions to help customers with their day-to-day banking needs. From 1 November 2024, Personal Banking includes the retail banking business (‘Tesco Bank’) acquired from Tesco Personal Finance plc – which includes credit cards, unsecured personal loans, savings and operating infrastructure. ##### Business Banking Serves business clients, from high growth start-ups to SMEs, with specialist advice. ##### Barclaycard Consumer UK A leading credit card provider, offering flexible borrowing and payment solutions. Barclays Bank UK PLC is supported by the Barclays Group service company, Barclays Execution Services Limited (BX), which provides technology, operations and functional services to businesses across the Barclays Group. #### The world in which we operate As part of the Barclays Group, Barclays Bank UK PLC is driven by a common Purpose: working together for a better financial future. To do so we must be strong as an institution, prepared for the future, and able to navigate different market conditions and evolving trends. We regularly review our operating environment for emerging trends and adapt to address them. We are cognisant of those relevant to our industry and have identified three areas we need to be aware of in the execution of our strategy. We continue to make good progress in addressing them: * The impact of technology on banking products and services * The role of capital markets as the principal driver of global growth * The transition towards a low-carbon economy We reflect the environment in which we operate in the development of our strategy and evolution of our operating model. Barclays’ three-year plan is designed to withstand volatility and uncertainty, and help us to continue to meet the needs of our wider stakeholders - including customers, clients, regulators and shareholders. In 2024, we saw an increase in the external pressures placed upon us, including protest activity from activists. The scale of our business means we have a broad array of stakeholder groups to whom we respond. This can come with complex perceptions on varying topics and voices of opposition on actions we take. Our priority has been to support our colleagues and continue to deliver for our customers and clients. We actively navigate risk and uncertainty, and are vigilant to deliver for our stakeholders as the environment evolves. Strategic Report Performance review home.barclays/annualreport 2 Barclays Bank UK PLC Annual Report ### Performance review #### Focus areas * Delivering operational efficiencies to facilitate investment in growth. * Improving customer experience and product offering, and creating opportunities to deepen relationships with our customers and clients. * Growing lending market share. #### Year in review Barclays Bank UK is one of the UK’s leading financial brands, trusted by over 20 million customers. In 2024 we focused on improving our customer and client propositions and the precision in our execution. The strength of our business is reflected in our financial performance. Our customers are at the heart of everything we do and in 2024 we have endeavoured to uplift the customer experience. While we have more to do, we have seen meaningful improvements. Our targeted actions have led to a 36% reduction in customer complaints, an improvement in customer satisfaction during phone call interactions, as well as increases in digital and Premier Net Promoter Scores (NPS)¹. Optimising our footprint is important in delivering for our customers and clients. We have over 200 traditional, full-service branches across the UK which we are investing in, for example, a complete refresh of our self-service devices is underway. We are also working closely with our peers to deliver more shared banking hubs, enabling us to provide banking and cash services in areas not covered by our branch network. We have opened 103 hubs in communities across the UK, as part of a joint commitment to open at least 350 within the next five years. Our customers and clients expect us to provide seamless, fast and reliable banking 24/7. The Barclays app has nearly five billion logins a year, and in 2024 we’ve made progress in service and technology improvements. We’ve improved the app's features - including an enhanced search function, the ability to increase daily payment limits, the ability to access cash from ATMs without a card, and enhancements to our automated digital assistant. Our customers want a broader proposition and we’ve improved our products and offerings. For example, we’ve added Apple TV+ to the benefits included in Blue Rewards and given Premier customers access to all Barclays Blue Rewards features. We’ve supported over 100,000 homebuyers and owners with their mortgage applications in 2024. A new Mortgage Charter journey has enabled customers experiencing short-term payment difficulties to temporarily reduce their payments via the Barclays app, simplifying the experience and helping them to make informed decisions. Our subsidiary, Kensington Mortgages, launched a new Step Down mortgage where payments reduce after two years, helping customers facing financial changes. Kensington is currently the only mortgage provider in the UK to offer this. Through our Business Banking business, in 2024 we lent £2.17bn to SMEs to help them grow. We have also migrated 650,000 business clients from legacy infrastructure and pricing onto a new standard current account tariff that provides streamlined, competitive pricing for all. In November 2024, we completed the acquisition of Tesco Bank, which includes credit cards, unsecured personal loans, savings and operating infrastructure. Barclays Bank UK Group has also entered a long-term, exclusive partnership with Tesco Stores Limited for an initial period of 10 years to market and distribute credit cards, unsecured personal loans and deposits using the Tesco brand, as well as to explore other opportunities to offer financial services to Tesco customers. This builds on Barclays Bank UK Group’s existing strategic partnerships with other leading brands. #### Amazon co-branded credit card Barclays has launched a co-branded credit card with Amazon that lets customers earn rewards on everyday spending both with Amazon and with other retailers. The card has no annual fee and customers receive a £20 Amazon gift card upon approval. The Amazon Barclaycard will help the bank further achieve its lending ambitions. It is the only co-branded consumer credit card that Amazon offers in the UK and is the latest in a series of successful collaborations between Amazon and Barclays – including Instalments by Barclays, a reusable credit line that lets Amazon customers in the UK spread the cost of purchases over time. #### Business Banking lending Research from Barclays² revealed that business owners value convenience, speed and digital access to lending decisions, with the majority stating they prefer to use online banking to apply. In response, our Business Banking team is making funding more accessible. For example, previously, only clients with pre-assessed limits who were applying for less than £100,000 could apply online; everyone else had to contact Barclays by phone or in person. In October 2024, we redesigned our digital journey to enable existing clients to complete a product suitability assessment online before applying for lending, providing greater convenience. **Notes** 1 Premier NPS from © Ipsos 2024, Financial Research Survey (FRS), comparing Premier current accounts. 2 Internal research based on a survey taken in November 2023 with 100 client responses. Strategic Report Performance review home.barclays/annualreport 3 Barclays Bank UK PLC Annual Report #### Looking ahead Over the next two years, we will remain focused on improving our products and services, as we deliver for customers and strive to provide a world-class experience. Our customers expect more from us, and we will continue to enhance and evolve our product offerings and how they experience them. Technology and innovation bring advancements. We will focus on delivering improved capability through functional and scalable technology – simplifying by investing in digitisation, automation and data. Our digital channels – including our onboarding and application processes, and our virtual customer care support – are being regularly upgraded. We are leveraging the use of AI to simplify and improve operations; increasing efficiencies, and enhancing productivity, enabling colleagues to be there for customers and clients when they need us the most. We have the opportunity to meet our ambitions with a stronger market position in key product lines – becoming more balanced by growing market share, particularly in unsecured and secured lending and business banking. We will leverage the Tesco Bank acquisition and partnership to maximise the opportunity. Strategic Report Performance review home.barclays/annualreport 4 Barclays Bank UK PLC Annual Report ### Performance measures #### Financial performance measures The performance of Barclays Bank UK PLC contributes to the Barclays Group, against which the delivery of strategy is measured. **Income statement** Barclays Bank UK Group results for the year ended 31 December | | 2024 £m | 2023 £m | |---|---|---| | Total income | 8,423 | 7,670 | | Operating costs | (4,412) | (4,546) | | UK regulatory levies¹ | (78) | (30) | | Litigation and conduct | (21) | 9 | | Total operating expenses | (4,511) | (4,567) | | Loss on disposal of subsidiaries, associates and joint ventures | — | (124) | | Profit before impairment | 3,912 | 2,979 | | Credit impairment charges | (352) | (308) | | Profit before tax | 3,560 | 2,671 | | Taxation | (940) | (749) | | Profit after tax | 2,620 | 1,922 | | **Attributable to:** | | | | Equity holders of the parent | 2,422 | 1,745 | | Other equity instrument holders | 198 | 177 | | Profit after tax | 2,620 | 1,922 | **Income statement commentary** Profit before tax increased to £3,560m (2023: £2,671m) and includes continued investment in delivering a simpler, better and more balanced retail bank. Total income increased 10% to £8,423m, primarily driven by the £558m day 1 gain from the acquisition of Tesco Bank. Excluding the impact of the day 1 gain, income increased 3% to £7,865m: * Personal Banking income increased 13% to £5,452m, driven primarily by the day 1 gain from the acquisition of Tesco Bank. Excluding the impact of the day 1 gain, income increased to £4,895m as continued structural hedge momentum and the Q4 2024 Tesco Bank NII benefit was partially offset by adverse deposit dynamics and mortgage margin compression * Barclaycard Consumer UK income decreased 3% to £938m due to lower interest earning lending balances resulting from higher customer spend being more than offset by repayments * Business Banking income increased 6% to £2,017m driven by continued structural hedge momentum, partially offset by lower government scheme lending as repayments continue and lower deposit volumes * Head Office income increased to £16m, related primarily to hedge accounting Total operating expenses decreased 1% to £4,511m (2023: £4,567m) driven by lower structural cost actions and the transfer of Wealth Management & Investments to Barclays Private Bank and Wealth Management within Barclays Bank PLC in May 2023, partially offset by Q4 2024 Tesco Bank costs and inflation. Ongoing efficiency savings continue to be reinvested. Credit impairment charges of £352m (2023: £308m), driven by the £209m day 1 impact from the acquisition of Tesco Bank partially offset by a resilient credit performance in UK cards and UK Mortgages. UK cards 30 and 90 day arrears remained low at $0.7\%^2$ (Q4 2023: 0.9%) and 0.2%² (Q4 2023: 0.2%) respectively. The UK cards total coverage ratio reduced to 4.8% (2023: 6.8%) following the day 1 impact from the acquisition of Tesco Bank and release of the affordability linked adjustments. The effective tax rate (ETR) was 26.4% (2023: 28.0%). **Notes** 1 Comprises the impact of the Bank of England (BoE) levy scheme and the UK bank levy. 2 Excluding the impact of Tesco Bank acquisition Strategic Report Performance measures home.barclays/annualreport 5 Barclays Bank UK PLC Annual Report #### Balance sheet information The following assets and liabilities represent key balance sheet items for the Barclays Bank UK Group: | As at 31 December | 2024 £m | 2023 £m | |---|---|---| | **Assets** | | | | Debt securities at amortised cost | 17,983 | 17,794 | | Loans and advances at amortised cost to banks | 281 | 1,213 | | Loans and advances at amortised cost to customers | 206,435 | 200,782 | | Financial assets at fair value through other comprehensive income | 27,045 | 20,409 | | Cash and balances at central banks | 29,819 | 34,948 | | **Liabilities** | | | | Deposits at amortised cost from customers | 244,376 | 241,218 | **Balance sheet commentary** Loans and advances at amortised cost to customers increased 3% to £206.4bn, driven by a c.£8bn increase from the acquisition of Tesco Bank, growth in unsecured lending and mortgage lending, partially offset by securitisation of mortgage balances in Q4 2024 and continued repayment of government scheme lending in Business Banking. Deposits at amortised cost from customers increased 1% to £244.4bn, driven by a c.£7bn increase from the acquisition of Tesco Bank, partially offset by a reduction in Business Banking and retail current account balances, however these dynamics have stabilised throughout 2024. The Barclays Bank UK PLC liquidity pool assets, including cash and balances at central banks, increased to £67bn (31 December 2023: £65bn) driven by an increase in customer deposits. #### Capital and other metrics¹ | As at 31 December | 2024 | 2023 | |---|---|---| | Common equity tier 1 (CET1) ratio | 14.2% | 14.8% | | Total risk weighted assets (RWAs) | £83.6bn | £72.1bn | | UK leverage ratio | 5.3% | 5.2% | | Liquidity coverage ratio² | 202% | 180% | | Net stable funding ratio³ | 159% | 165% | The Barclays Bank UK Group CET1 ratio as at 31 December 2024 was 14.2%, which exceeds the CET1 regulatory capital minimum requirement of 12.9%. As a CRR firm, Barclays Bank UK PLC is required to disclose Return on Assets⁴, which was 0.9% in 2024 (2023: 0.6%). The Barclays Bank UK Group Return on Assets was 0.9% in 2024 (2023: 0.7%). #### Non-financial performance measures Barclays Bank UK PLC is part of the Barclays Group which uses a variety of quantitative and qualitative measures to track and assess holistic strategic delivery. Barclays Bank UK PLC has addressed the Non-Financial Reporting requirements contained in sections 414CA and 414CB of the Companies Act 2006 (the Act) through the disclosure contained in the Barclays PLC 2024 Annual Report on pages 41 to 44. **Notes** 1 Capital, RWAs and leverage are calculated applying the IFRS 9 transitional arrangements in accordance with UK CRR. Effective from 1 January 2025, these transitional arrangements no longer applied. 2 Represents the average of the last 12 spot month end ratios. 3 Represents the average of the last four spot quarter end positions. 4 Return on Assets is calculated as profit after tax divided by total balance sheet assets at the balance sheet date. Strategic Report Performance measures home.barclays/annualreport 6 Barclays Bank UK PLC Annual Report ### Managing risk The Barclays Bank UK Group is exposed to internal and external risks as part of its ongoing activities. These risks are managed as part of our business model. #### Enterprise Risk Management Framework Within the Barclays Bank UK Group, risks are identified and overseen in accordance with the Enterprise Risk Management Framework (ERMF), which supports the business in its aim to embed effective risk management and a strong risk management culture. The ERMF governs the way in which the Barclays Bank UK Group identifies and manages its risks. The ERMF is approved by the Barclays PLC Board on the recommendation of the Barclays Group Board Risk Committee; it is then adopted by the Barclays Bank UK Group with minor modifications where needed. The management of risk is then embedded into each level of the business, with all colleagues being responsible for identifying and controlling risk. In 2024, financial crime risk was elevated to a principal risk in the ERMF, effective from 1 January 2025. Previously, financial crime risk was managed as part of compliance risk. Recognising the increased external threat of financial crime, this change will enhance transparency and visibility of financial crime risk within the Barclays Bank UK Group and reinforce independent assessment, management and oversight of financial crime risk. On 1 November 2024, the Barclays Bank UK Group completed the acquisition of Tesco Bank. Following the acquisition, the acquired Tesco Bank business continues to operate largely within its own risk framework, with dispensations in place for material divergences from existing Barclays Bank UK Group policy requirements. Any subsequent changes to the Tesco Bank approach will be part of integration planning activity. #### Risk appetite Risk appetite defines the level of risk we are prepared to accept across the different risk types, taking into consideration varying levels of financial and operational stress. Risk appetite is key to our decision-making processes, including ongoing business planning and setting of strategy, new product approvals and business change initiatives. The Barclays Bank UK Group may choose to adopt a lower risk appetite than allocated to it by the Barclays Group but cannot approve a higher risk appetite limit than determined by the Barclays PLC Board without its approval. #### Three lines of defence The first line of defence comprises the revenue-generating and client-facing areas, along with all associated support functions, including Finance, Treasury, Human Resources and Operations and Technology. The first line identifies the risks, sets the controls and escalates risk events to the second line of defence. Employees in the first line have primary responsibility for their risks and their activities are subject to oversight from the relevant parts of the second and third lines. The second line of defence is made up of Risk and Compliance and oversees the first line by setting limits, rules and constraints on their operations, consistent with the risk appetite. The third line of defence comprises Internal Audit, and provides independent assurance to the Barclays Bank UK PLC Board and the Barclays Bank UK PLC Executive Committee on the effectiveness of governance, risk management and control over current, systemic and evolving risks. The Legal function provides support to all areas of the Barclays Bank UK Group and is not formally part of any of the three lines of defence. The Legal function is responsible for proactively identifying, communicating and providing legal advice on applicable laws, rules and regulations. Except in relation to the legal advice it provides or procures, it is subject to second line oversight with respect to its own operational and compliance risks, as well as with respect to the legal risk to which the Barclays Bank UK Group is exposed. #### Monitoring the risk profile Together with a strong governance process, using business and the Barclays Group level Risk Committees as well as Board level forums, the Barclays Bank UK PLC Board receives regular information in respect of the risk profile of the Barclays Bank UK Group. Information received includes measures of risk profile against risk appetite as well as the identification of new and emerging risks, which are derived by mapping risk drivers, identified through horizon scanning, to risk themes, and similar analysis. For further details of monitoring risks please refer to page 43. During 2024, the Barclays Bank UK Group ran a macroeconomic internal stress test to assess its capital adequacy and resilience under a severe but plausible macroeconomic scenario. This stress test targeted risks such as inflation, financial stress and a shock on demand; with terminal low rates set to test the Barclays Bank UK Group’s vulnerabilities through NII (Net Interest Income) margin compression. The stress test outcome for macroeconomic tests assesses full financial performance over the horizon of the scenario in terms of profitability, capital, liquidity and leverage to ensure the Barclays Bank UK Group would remain viable. We believe that our structure and governance supports us in managing risk in changing economic, political and market environments. For further detailed analysis of approach to risk management and risk performance see the full Risk review on pages 38 to 158. Strategic Report Managing risk home.barclays/annualreport 7 Barclays Bank UK PLC Annual Report The Enterprise Risk Management Framework defines ten Principal Risks | Principal Risk | Risks are classified into principal risks, as below | How risks are managed | |---|---|---| | **Credit risk** | The risk of loss to the Barclays Bank UK Group from the failure of clients, customers or counterparties (including sovereigns), to fully honour their obligations to the Barclays Bank UK Group, including the whole and timely payment of principal, interest, collateral and other receivables. | Credit risk teams identify, evaluate, sanction, limit and monitor various forms of credit exposure, individually and in aggregate. The first line deliver business plans and products within risk appetite and all limits set by the second line, by maintaining detailed financial forecasts, applying controls and managing risks to which they are exposed. | | **Market risk** | The risk of loss arising from potential adverse changes in the value of the Barclays Bank UK 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 teams use a range of complementary approaches to identify and evaluate market risk exposures. These risks are measured, limited and monitored by market risk specialists. The first line conduct their activities within the risk appetite and all mandate & scale limits set by the second line. | | **Treasury and Capital risk** | **Liquidity Risk:** The risk that the Barclays Bank UK 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. | Treasury and Capital risk is identified and managed by specialists in capital, liquidity and asset and liability management risks. A range of risk management approaches are used such as limits plan monitoring and stress testing. The first line conduct their activities within the risk appetite and all mandate & scale limits set by the second line. | | | **Capital Risk:** The risk that the Barclays Bank UK 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 and stressed conditions (both actual and as defined for internal planning or regulatory testing purposes). This also includes the risk from the Barclays Group’s pension plans. | The assessment of Liquidity Risk should be comprehensive in assessing all sources of Liquidity Risk, representing all of the assets and liabilities, on-balance sheet and off-balance sheet items including at the regional and legal entity levels. | | | **Interest Rate Risk in the banking book:** The risk that the Barclays Bank UK Group is exposed to capital or income volatility because of a mismatch between the interest rate exposures of its (non-traded) assets and liabilities. This also includes credit spread risk in the banking book, the risk that the Barclays Bank UK Group is exposed to capital or income volatility because of changes in credit spreads on its (non-traded) assets and liabilities. | Capital Risk is predominantly assessed and controlled on a forward-looking basis through the means of capital forecasts and capital plans. Key Capital risks must be identified well in advance to allow for mitigating actions to be agreed and become effective. | | | | Pension risks are monitored regularly and reported to relevant stakeholders and committees to support discussions with the relevant pension fund’s actuaries and trustees. | | | | IRRBB assessment uses earnings and value type metrics and it takes into account the type of IRRBB, the accounting nature and direct impact to earnings or capital; and, the appropriate holding period of the risk. | | | | CSRBB assessment must use earnings and value type metrics and it must take into account market liquidity spread, market credit spread and other spread components which impact the market price. | | **Climate risk** | The risk of financial losses arising from climate change through, physical risks and risks associated with transitioning to a lower carbon economy. | A risk management framework has been implemented for managing financial and operational risks from climate change across Barclays’ first and second line activities. A range of risk management practices has been developed and enhanced for identifying, measuring and quantifying the impact of climate physical and transition risks in the financed portfolios. Climate scenario analysis forms a key part of Barclays’ approach to assessing and quantifying the impact of both physical and transition risks. In addition, Barclays conducts climate risk management activities at the level of key entities, including proposing Climate Risk Appetite, identifying, assessing and monitoring climate risk drivers, setting limits and other controls to keep the bank within risk appetite, and reporting activities, as appropriate. | | **Operational risk** | The risk of loss to the Barclays Bank UK 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 risks are managed in accordance with the Operational Risk Framework, owned and overseen by the second line, and the standards within the Barclays Control Framework. The primary responsibility for the management of operational risk rests within the business and functional units where the risk arises. Management complete Risk and Control Self-Assessments to assess operational risks and the effectiveness of the controls within processes. Identified risks, events and issues are escalated to senior management and the Board to ensure timely notification and to agree the appropriate response. | The Enterprise Risk Management Framework defines ten Principal Risks Risks are classified into principal risks, as below How risks are managed | Principal Risk | Risks are classified into principal risks, as below | How risks are managed | |---|---|---| | **Model risk** | The potential for adverse consequences from decisions based on incorrect or misused model outputs and reports. | The range of controls owned by first line includes: timely model identification, robust model development, testing, documentation, annual assessment, and ongoing performance monitoring. The range of controls owned by second line includes: independent model validation, oversight over on-going model performance, and execution of overall model risk governance covering oversight and reporting and escalation to appropriate forums and committees. | | **Compliance risk** | The risk of poor outcomes for, or harm to, customers, clients and markets, arising from the delivery of the Barclays Bank UK Group’s products and services (also known as 'Conduct Risk') and the risk to Barclays, its clients, customers or markets from a failure to comply with the laws, rules and regulations applicable to the Barclays Bank UK Group (also known as Laws, Rules and Regulations Risk 'LRR Risk'). | The first line is accountable for the overall assessment and management of compliance risks in their business or function and are responsible for implementing the requirements outlined in the Compliance Risk Management Framework (CRMF). Compliance must oversee adherence to the CRMF and the management of compliance risk, and provide independent second line of defence oversight to all Barclays businesses, providing advice and challenge where appropriate. | | **Reputation risk** | The risk that an action, transaction, investment, event, decision, or business relationship will reduce trust in the Barclays Bank UK Group’s integrity and/or competence. | Reputation risk is managed by embedding our purpose and values, and maintaining a controlled culture within the Barclays Bank UK Group, with the objective of acting with integrity, enabling strong and trusted relationships to be built with customers and clients, colleagues and broader society. Each business assesses reputation risk using standardised tools and the governance is fulfilled through management committees and forums, clear escalation and reporting lines to the Barclays Bank UK Group Board. | | **Legal risk** | The risk of loss or imposition of penalties, damages or fines from the failure of the Barclays Bank UK Group to meet applicable laws, rules and regulations or contractual requirements or to assert or defend its intellectual property rights. | Legal risk is managed by the identification and management of legal risks by the Legal function and the escalation of legal risk as necessary. The Barclays Bank UK Group's businesses and functions have responsibility for engagement of the Legal function in situations that have the potential for legal risk. Legal risk is also mitigated by the requirements of the compliance risk management framework, including the responsibility of the legal professionals to proactively identify, communicate and provide legal advice on applicable laws, rules and regulations. | | **Financial crime risk** | The risk that the Barclays Bank UK Group and its associated persons (employees or third parties) commit or facilitate financial crime, and/or the Barclays Bank UK Group’s products and services are used to facilitate financial crime. Financial crime undermines market integrity and may result in: harm to clients, customers, counterparties or employees; diminished confidence in financial products and services; damage to the Barclays Bank UK Group's reputation; regulatory breaches; and/or financial penalties. | The first line is accountable for the overall assessment and management of financial crime risks in their business or function and are responsible for implementing the requirements outlined in the Financial Crime Risk Management Framework (FCRMF). Financial Crime must oversee adherence to the FCRMF and the management of financial crime risk, and provide independent second line of defence oversight to all Barclays businesses, providing advice and challenge where appropriate. | **Note** The ERMF defines ten Principal Risks. For further information on the how these Principal Risks apply specifically to Barclays Bank UK Group, please see pages 59 to 70. Strategic Report Managing risk home.barclays/annualreport 9 Barclays Bank UK PLC Annual Report --- ## Customers and Clients The following sub-sections include a summary of the largely Barclays Bank UK PLC items with references to Barclays UK referring to the businesses of Barclays Bank UK PLC and its subsidiaries. For further details, refer to the Customer and Clients section of the Barclays PLC 2024 Annual Report. Providing an excellent customer and client experience is key to our strategy. We seek to understand our customers’ and clients’ expectations and aspirations, developing products and services to build their trust and supporting them to achieve their own ambitions. #### Engaging with customers and clients Through our retail bank in the UK we reach over 20 million customers – and our engagement with them helps us to continuously improve the service we provide. Barclays UK runs on average eight panels per month for Personal, Premier and Business customers and clients, who share their views on our products and services and on their own financial health. These panels provide regular insights to bring us closer to our customers and inform the evolution of our customer journeys, and to identify new opportunities to serve them, based on emerging trends. In 2024, we collected over 1.2 million additional pieces of customer feedback. Customers told us they wanted their experiences with Barclays to feel more personal, and showed continued demand for increased convenience and functionality from the Barclays app. In response we have enhanced the app to ensure every new or updated customer experience feels personalised . Our digital experience is one of the reasons we have more active digital users than any other UK bank.¹ We have made progress in addressing the volume of Barclays UK customer complaints by improving the basics and enhancing customer journeys – in 2024, we saw a 36% reduction in complaints versus 2023. However, we recognise there is still more to do to improve the overall customer experience and address and remove the root causes of complaints. This focus is at the core of our new vision and strategy as we work towards improving our propositions and execution in order to deliver best-in-class service and ensure we have highly satisfied customers. When issues do occur, our Complaints team works alongside customer-facing colleagues and Relationship Managers to investigate and provide timely resolution. By logging complaints and analysing the root cause, we can identify underlying issues and trends – ensuring accountability is embedded with the relevant internal teams. We also leverage technology in our call centres to help measure client sentiment. We are focused on offering an accessible, empathetic and inclusive service for all our customers – including for those who may typically face barriers to banking services, such as people living with disabilities, complex needs or experiencing difficult life events. Please visit our ESG resources hub for further information: home.barclays/sustainability/esg-resource-hub/reporting and disclosures/. #### Reducing complaints during ISA season ISA (Individual Savings Account) season is one of the busiest times in the UK banking calendar. Customers must invest before the end of the tax year to use up their annual savings allowance and maximise their tax-free interest. In the weeks leading up to the deadline, we see an uplift in customers contacting us for our help in making their money work for them. In 2024, we focused on reducing the waiting time experienced by customers during ISA season, following feedback from customers in 2023. We introduced SMS alerts to keep customers up to date during their ISA application, as well as introducing self-service elements to the process such as transferring money into their ISA via their channel of choice. This led to a 73% reduction in ISA-related complaints. **Note** 1 eBenchmarkers, Spring 2024. #### Barclays UK Net Promoter Score (NPS) ##### About this KPI and why we use it Net Promoter Score (NPS) is used to measure the strength of customer relationships. We track NPS to identify both our strengths and where there is room for improvement, informing how we develop our services and products in the future. Maintaining strong, personal relationships and building trust and advocacy is key across all our divisions, but most observable and material in Barclays UK. With over 20 million customers, Barclays UK represents the largest customer base for which we serve customers throughout their financial lives. ##### How we performed We maintained our NPS of +17. Underlying this, we saw significant improvements in Premier and our digital channel NPS. We continue to focus on improving customer experience and service. Strategic Report Customers and Clients home.barclays/annualreport 10 Barclays Bank UK PLC Annual Report ### Barclays UK complaints #### About this KPI and why we use it The FCA publishes complaints information every six months – a good measure of how well UK institutions are driving customer outcomes. We measure our volume of complaints, tracking against goals and reviewing root causes to inform changes to our products and services. #### How we performed In 2024, we saw a 36% reduction in customer complaints after putting in place a rigorous plan to address issues that cause them, improving the basics and enhancing customer experience. We recognise there is more to do and addressing the root cause of complaints is a continued focus for us. Strategic Report Customers and Clients home.barclays/annualreport 11 Barclays Bank UK PLC Annual Report --- ## Our colleagues The following sub-sections include a summary of the largely Barclays Bank UK PLC items from the Barclays PLC 2024 Annual Report. For full details, refer to the Colleagues section of the Barclays PLC 2024 Annual Report. Figures mentioned are for the Barclays Group, other than where specifically mentioned. At the heart of achieving our plan to make Barclays Simpler, Better and More balanced are our colleagues. We are united by a shared Purpose, Values and Mindset, delivering to a consistently excellent standard in all we do – and we are making Barclays a great place to work, where every colleague can reach their potential. #### Engaging with colleagues Sharing our strategy and how colleagues can contribute towards delivery has been a key part of our 2024 engagement. Regular, two-way dialogue helps us to understand what is working well across the organisation and where we can improve. Engagement with colleagues is delivered through townhalls, skip-level meetings, site visits, leader-led sessions, focus groups and surveys. Through our bi-annual all-colleague Your View surveys, our people have the opportunity to share their feedback on working at Barclays – and in 2024 we saw the highest participation to date, with 79% of colleagues taking part. We create a respectful and inclusive environment where colleagues feel safe to speak up. Additionally, our raising concerns and whistleblowing processes provide anonymous channels for colleagues if preferred. Our long-standing partnership with Unite in the UK also offers further insight into the views of our people. We continue to consult with Unite on major change programmes, to minimise compulsory job losses and focus on reskilling and redeployment. #### Continuing to deliver a consistently excellent standard A consistently excellent standard is an integral part of our culture and a key enabler of our three-year plan. It continues to be embedded through the Barclays Group-wide multi-year Consistently Excellent culture change programme. In 2024, our focus has been supporting colleagues from understanding what it means to deliver to a higher standard to putting it into practice every day, with a focus on strengthening risk management and controls. We have rolled out Consistently Excellent workshops and we’ve also launched new risk and control focused training. This standard is now central to our hiring, promotion and colleague performance management processes. We continued to recognise colleagues for high standards through our recognition portal, our CEO Awards and our Exceptional Achievement Awards. Our leaders are critical here and, for the second year running, members of the Barclays Group Executive Committee visited sites across the world to talk about being consistently excellent – with a focus on how this enables delivery of the strategic plan. We continue to measure colleague understanding of what it means to be consistently excellent. To learn more about the 2024 Your View survey results, please visit the Colleagues section of the Barclays PLC 2024 Annual Report. #### Investing in our talent Our talent ambition continues to underpin Barclays’ approach to talent attraction, retention and development. In 2024 we refreshed, simplified and enhanced our selection experience and introduced a new single Global Talent Framework. We also introduced a new HR platform to deliver these changes at scale to our people. Our leadership framework continues to set the benchmark for what it means to lead at Barclays. It is the foundation for our leaders to improve how they lead and create an environment where colleagues can learn, grow and succeed. Development opportunities empower colleagues to build skills, advance their career and achieve sustainable high performance. We continue to deliver our key leadership development programmes - Strategic Leaders and Aspire, alongside our People Leader programme, Evolution, equipping our people leaders with effective management skills. All colleagues also have access to online learning addressing an extensive range of development topics. #### Our ambitions Building an inclusive and equitable culture, reflecting a diversity of views and backgrounds, where all colleagues can thrive is a business priority. We are focused on actions and outcomes that support a culture of belonging and diversity of thought. Our initiatives help to develop a leadership pipeline through which qualified candidates are considered for leadership roles regardless of their gender, race, or any other protected characteristic. #### Supporting our workforce Helping our people be at their best remains a priority. Our structured hybrid working model enables colleagues to connect in-person and plan their work to make the most of their time in the office and at home, where appropriate to their role. We continue to test and learn from our approach. We are also focused on supporting colleague wellbeing. We use data-driven insights and engagement through campaigns to help our people build healthy habits and promote a supportive culture. #### Our people policies Our people policies help us recruit the best people, provide equal opportunities and create an inclusive culture, in line with our Purpose, Values and Mindset, and in support of our long-term success. They are regularly reviewed and updated to ensure they are aligned with our broader people strategy. Strategic Report Our colleagues home.barclays/annualreport 12 Barclays Bank UK PLC Annual Report --- ## Society The following sub-sections include a summary of the largely Barclays Bank UK PLC items from the Barclays PLC 2024 Annual Report. For full details, refer to the Society section of the Barclays PLC 2024 Annual Report. Our success is measured not only by our commercial performance, but also by our contribution to society and the way we work together for a better financial future for all our stakeholders. Our focus on society falls broadly into three categories: Climate, Communities and Suppliers. Further information on Climate can be found in the Climate Report in the Barclays PLC 2024 Annual Report and the Climate and Sustainability Report from page 17 to 20. #### Communities We are committed to supporting the communities where we operate by enabling people to develop the skills and confidence they need to succeed, and helping businesses to grow and create jobs. Our focus is on building a stronger and more inclusive economy. Working together for a better financial future, we regularly engage with our community partners to deepen our understanding of societal issues and evolve our programmes accordingly. Formal quantitative and qualitative information is provided by our charity partners on a quarterly basis and we frequently seek feedback from the business leaders that we support through our programmes. This feedback and data helps inform and shape our strategic focus to ensure our work best serves the needs of the people and businesses we support. #### Skills and employability A vibrant, skilled workforce ensures local communities and businesses can thrive, and supports economic growth. Barclays LifeSkills has been delivering positive impact in communities for over a decade, helping millions of people develop the vital employability and financial skills they need to succeed at work and better manage their money. Barclays aims to upskill 8.7 million people and place 250,000 people into work through the LifeSkills programme from 2023 to 2027. In 2024, we upskilled 1.95m people and placed 53,494 people into work. Our Digital Eagles programme has upskilled 813,877 people in 2024, enabling people to become more confident with technology and stay safe online. Through our Military and Veterans Outreach we are supporting members of the armed forces community to take the next step in their career, as they transition to life after service. We continued our work to engage and strengthen communities through sport. The Barclays Community Football Fund now helps more than 3,500 community sports groups make football more accessible to underrepresented groups, reaching more than 550,000 young people. In 2024, Barclays and The Football Association extended their partnership through the Barclays Girl’s Football School Partnerships until 2028, with the number of participating schools reaching 20,000. In 2024, we marked our second year as the Official Banking Partner of Wimbledon. In 2025, we became principal partner of Marylebone Cricket Club (MCC), owners of Lord’s Cricket Ground in the UK. Through our partnership with the Wimbledon Foundation, we connected Barclays LifeSkills to the UK Set for Success programme – engaging over 500 young people from 2023-2024. We also became Official Parks and Participation Partner of the Lawn Tennis Association – aiming to get 150,000 more people playing tennis across Great Britain over the next five years. #### Supporting educators across the UK LifeSkills resources are used in UK schools and colleges, integrated into lessons to support educators to encourage students’ learning across a range of skills. The programme positively impacts the young people it engages, with 97% of students reporting an improvement in knowledge and skills. Partnering with charities that support underserved young people, such as The Talent Foundry, we work to ensure young people who need support the most can develop valuable transferable skills, knowledge and confidence through facilitated workshops. In 2024, Barclays LifeSkills launched new modules on entrepreneurship, exploring the role of technology and importance of sustainability. We also launched our first lessons for 5 to 7-year-olds, focused on counting money and budgeting. #### Empowering female entrepreneurs Since its 2023 launch, Barclays Eagle Labs' Female Founder Accelerator programme, funded by the UK Government and created in partnership with AccelerateHER, has supported 200 female-led UK technology businesses by providing their founders with access to advice, mentoring and networking opportunities. Separately in 2024, Barclays Business Banking has provided 1,600 hours of specialist coaching to over 400 female founders on topics including business planning, cash flow forecasts, digital support and accessing finance. Additionally, Barclays’ Head of Business Banking, Hannah Bernard, became the co-chair of the UK Government’s Invest in Women Taskforce. Strategic Report Society home.barclays/annualreport 13 Barclays Bank UK PLC Annual Report #### Suppliers The Barclays Group engages with Third Party Service Providers (TPSP¹), seeking to integrate sustainability considerations across our supply chain and provide inclusive procurement opportunities and drive economic impact to diverse TPSP² (in addition to publicly traded, large businesses). **Notes** 1 TPSP means any entity that has entered an arrangement with Barclays in order to provide business functions, activities, goods and/or services to Barclays. 2 Diverse TPSP include businesses diverse in size (micro, small and medium-sized businesses), demographic ownership make-up (largely owned and controlled by members of under-represented groups) or mission (social enterprises) Strategic Report Society home.barclays/annualreport 14 Barclays Bank UK PLC Annual Report --- ## Engaging with our stakeholders #### Section 172(1) Statement ##### How the Board has regard to the views of our stakeholders In accordance with the Companies Act 2006 (the Act), this statement sets out how the Directors have had regard to the matters set out in Section 172(1) of the Act when performing their duty to promote the success of the Company for the benefit of its shareholder, and to have regard to: a. the likely consequences of any decision in the long term; b. the interests of employees; c. the need to foster business relationships with suppliers, customers and others; d. the impact of operations on the community and the environment; e. the desirability of maintaining a reputation for high standards of business conduct; and f. the need to act fairly as between shareholders. ##### Overview Throughout the year, the Board and individual Directors engage directly and indirectly with a range of stakeholders to ensure they have a deep understanding of the impact of the Barclays Bank UK Group's operations, as well as their interests and views. This includes meeting with customers and clients, colleagues, regulators, and other stakeholders. This engagement, both directly and through reporting by executive management, to whom the day-to-day operations of the business are delegated, seeks to ensure the Board understands the key issues to enable the Directors to comply with their legal duty under Section 172(1). For more information on the Company’s key stakeholder groups and how we listen and respond to them, please refer to the “Customer & Clients”, “Our colleagues” and “Society” sections of the Strategic Report. Further relevant information regarding the Barclays Group's key stakeholder groups and how we listen and respond to them can be found in the “Our stakeholders” section of the Barclays PLC 2024 Annual Report. You can find out more about how the Directors have had regard to the matters set out in Section 172(1) when discharging their duty, and the effect of those considerations in reaching certain decisions below and in the “Principal activities of the Board in 2024” section of the Governance Report. #### Barclays Bank UK Group elements of the Barclays Group strategy In February 2024, the Barclays Group announced a new three-year plan to create a “Simpler, Better and More Balanced Bank” to improve the Barclays Group’s operational and financial performance, and total shareholder returns. The Barclays Group also set financial targets to match this ambition and improve outcomes for all stakeholders. This strategy is reinforced by the redefined purpose: “Working together for a better financial future” which emphasises that the way we operate has a strong connection to the Barclays Group’s values. For customers that means helping improve livelihoods. For clients it’s growth and scaling business. For communities, it represents upliftment, fulfilling potential beyond circumstance. And for colleagues, it provides a clear direction on why we exist and how we behave. Ahead of the Barclays Group’s announcement, and in line with the Board’s responsibility to establish a strategy for both the Company and the Barclays Bank UK Group, in 2023 the Board provided significant input into and oversight of the shaping of the Barclays Bank UK Group elements of the Barclays Group strategy, including the focus areas and related financial targets. As explained in the Strategic Report, for Barclays UK, a “Simpler, Better and More Balanced” retail bank means delivering operational efficiencies to facilitate investment in growth, improving customer experience and product offering, and growing lending market share, particularly in business banking as well as secured and unsecured lending. Aligned to the focus areas, and throughout the year, the Board received updates from the heads of each business and operations who presented on strategy execution and performance against agreed targets. The Board Audit Committee considered the associated financial reporting and operation of internal controls, while the Board Risk Committee received first and second line reporting to ensure close oversight of the respective risks. This has facilitated greater accountability at a business level and has supported closer monitoring, and measurement, of success. In support of a “More Balanced” retail bank, in late 2023, the Board first considered the opportunity to acquire Tesco Bank’s retail banking business and to enter into a long-term, exclusive partnership with Tesco Stores Limited for an initial period of 10 years to market and distribute credit cards, unsecured personal loans and deposits using the Tesco brand and to explore opportunities to offer financial services to Tesco customers. Key factors in the Board’s deliberations included: the alignment of the opportunity with the Barclays Bank UK Group’s strategy to grow lending market share; the demands that the acquisition, integration activity and management of the partnership would place on the business – including colleagues – in the short to medium-term; the impact of the acquisition on Tesco Bank colleagues and customers; and whether the acquisition and the partnership would promote the success of the Company thereby creating and delivering long-term, sustainable value for its sole shareholder, Barclays, and – in turn – Barclays’ shareholders. On 9 February 2024, the acquisition and the partnership were announced; completion occurred on 1 November 2024. Throughout the period between signing and completion, the Board and Board Committees exercised regular and robust oversight over preparation for completion and readiness for “day one”, including but not limited to the approach to migration, with a particular focus on ensuring a smooth transition for Tesco Bank colleagues and customers. Post-completion, the Board, Board Audit Committee and Board Risk Committee have continued to receive regular updates on the Tesco Bank business, including but not limited to accounting considerations (including fair value of assets and liabilities acquired), the control environment, risk mitigation, and future plans for the business and the partnership. The Board was kept apprised on appropriate engagement with Tesco Bank colleagues in the lead up to completion and, since November 2024, has encouraged Executive Committee Strategic Report Engaging with our stakeholders home.barclays/annualreport 15 Barclays Bank UK PLC Annual Report members to strengthen further the close connection with those individuals and drive stronger collaboration. The Board looks forward to meeting Tesco Bank colleagues in due course, including when it visits the Tesco Bank office in Edinburgh later this year. The Board and Board Committees will continue to receive updates on the Tesco Bank business and the partnership through 2025 and beyond so that the Directors can ensure that any decisions taken – for example, in relation to integration activity and/or other opportunities to offer financial services to Tesco customers pursuant to the partnership – will promote the success of the Company and take into account the interests and views of the Company’s stakeholders. #### Barclays and the external environment Global political and societal changes continued to present challenges to the Barclays Group throughout 2024. In response to the conflict in the Middle East, the Barclays Group was subject to ongoing criticism and protest activity, including hundreds of attacks to bank branches across the UK that resulted in significant damage. The Board, which was deeply concerned about the safety of colleagues and the disruption created for customers, oversaw the response to the attacks with the support of the Board Risk Committee. This included, but was not limited to, certain Board and Executive Committee members engaging with colleagues who were at the forefront to understand the impact of the attacks (for example, by visiting affected branches) and putting in place additional measures to ensure the security of colleagues and customers. #### Consumer Duty In the 2023 Annual Report we highlighted the Board’s oversight of the implementation of the FCA’s Consumer Duty across the Barclays Bank UK Group. This outcomes-based regulation is designed to ensure relevant financial services firms deliver good outcomes for retail customers. During 2024, the Board and the Board Risk Committee have overseen the continued embedment of the Consumer Duty for in scope products and services as well as planning and readiness for the second implementation deadline of 31 July 2024 for closed products and services (being those products and services that have not been marketed or distributed to customers after 31 July 2023). This has included enhancing fair value assessments in accordance with FCA insights, monitoring customer outcomes via Consumer Duty reporting and the quarterly Customer Outcomes Report, and receiving risks and issues reporting. The Barclays Bank UK PLC Board Consumer Duty Champion (a nominated Board member) was closely engaged in producing the first Annual Consumer Duty Board Report, which assessed whether the business was delivering good outcomes for retail customers. In July 2024, the Board - supported by its Consumer Duty Champion - considered and approved the Report, concluding that the strategy, purpose and ambition of the Barclays Bank UK Group is aligned with the Consumer Duty. The Board remains committed to ensuring good customer outcomes and will continue to focus on Consumer Duty embedment during 2025, giving consideration to the impact of any regulatory developments in relation to Consumer Duty. Sir John Kingman Chair – Barclays Bank UK PLC 12 February 2025 Strategic Report Engaging with our stakeholders home.barclays/annualreport 16 Barclays Bank UK PLC Annual Report --- ## Climate and Sustainability report ### Embedding Barclays’ climate strategy within Barclays Bank UK The following sub-sections include a summary of the Barclays Bank UK specific items from the Barclays PLC 2024 Annual Report with references to Barclays UK referring to the businesses of Barclays Bank UK PLC and its subsidiaries. The content has been included to the extent this is relates to Barclays Bank UK as a subsidiary of the Barclays Group. For full details on targets and ambitions, refer to the Climate and Sustainability Report in the Barclays PLC 2024 Annual Report. The aim with the disclosures within this Annual Report is to outline the progress we have made over the past year in relation to climate and sustainability. #### Climate related risks The Barclays climate strategy is underpinned by the way it assesses and manages exposure to climate-related risk. Climate risk is a Principal Risk within the Barclays Enterprise Risk Management Framework. Barclays faces exposure to climate-related risks either directly through its operations and infrastructure or indirectly through its financing and investment activities. The two main categories of climate risk are physical risks and transition risks. * Physical risk is defined as the risk of financial losses related to physical impacts of a changing climate. Physical risks can be event driven (acute risks), including increased frequency and/or severity of extreme weather events such as cyclones, hurricanes and flood. Longer term shifts in climate patterns (chronic risks) arise from sustained higher temperatures that may cause rises in sea levels, rising mean temperatures and more severe weather events such as increased occurrence of floods or fires. * Transition risk is defined as the risk of financial losses caused by extensive policy, legal, technology and market changes to address mitigation and adaptation requirements related to climate change. Physical and transition risks can have varying degrees of impact on Barclays and its clients, influenced by geographic and jurisdictional factors, including differing vulnerabilities to physical hazards like flooding and hurricanes as well as diverse regulatory requirements that must be adhered to for transitioning to a low-carbon economy. #### Climate change as a driver of risk The feedback effects of climate risk drivers through macro and micro transmission channels are observed in Barclays' portfolio through traditional risk categories such as credit risk, market risk, treasury and capital risk, operational risk and reputational risk. The approach for managing climate-related risks is consistent with other key risks, however there remains significant uncertainty around when these risks will materialise. Barclays has implemented a risk management framework for Climate Risk which integrates within the broader Enterprise Risk Management Framework aiming to guide effective management of climate risk and support the delivery of its climate strategy. Barclays' approach and framework undergoes regular reviews and updates – including changes to the risk taxonomy, definitions and methodology – to align with changing regulatory expectations and external developments. The potential impacts of physical and transition risk drivers will vary across Barclays' portfolios depending on composition, industry, geographic location, business operations and other contextual factors. #### Progress against targets, convergence points and ambitions ##### UK Housing During 2024, we further expanded the scope of UK Housing to include our Kensington Mortgage Company Limited book. Our UK Housing portfolio’s emissions intensity decreased by 1% during this period. This reflects the dependence of the decarbonisation of UK Housing on external changes and public policy interventions. Without these external changes, Barclays cannot materially decrease the emissions intensity of its UK Housing portfolio, which is why we continue to measure our progress against a 2030 emissions intensity 'convergence point', but not set a formal target at this time. We have made strong progress against our EPC ambition for 55% of in scope properties and collateral with a known EPC to be rated band C or better by 2030, achieving 49.7% by the end of 2024. ##### UK Agriculture An improvement in data quality, achieved through the integration of farm-level data, has allowed us to enhance the Dairy & Livestock BlueTrack$^{\text{TM}}$ model, now as an asset-based emissions model (see BlueTrack$^{\text{TM}}$ financed emissions methodology). Over time, this will enable us to better assess the impact of on-farm emissions reduction measures and where our clients are making positive change. We have re-baselined our 2023 Agriculture model on this basis. This does not impact the existing 21% reduction target from 2023-2030. In 2024, our UK Agriculture portfolio absolute financed emissions have reduced by 11%. This reflects the alignment of our financing activity towards clients with lower emissions profiles and those taking positive action towards reducing on-farm emissions. We also consider impacts from changes in client company value, which can fluctuate year to year and is reported at a delay due to the size of clients in this portfolio. However, we continue to face challenges to calculating emissions in the sector, notably a lack of data on the activities and practices of our agricultural customers, and modelling challenges around agricultural emissions intensity. To help advance approaches to Agriculture financed emissions measurement, and target setting in the banking sector more broadly, Barclays is a member of the Banking for Impact on Climate in Agriculture (B4ICA) working group. We are also engaged in a three-year collaboration with Oxford University to develop food type production datasets for the UK, with the aim of quantifying Barclays-financed emissions in more detail and consider additional transition risks. ##### Barclays UK sustainability strategy In 2024, we have made progress to deliver our sustainability strategy for Barclays UK. We have continued to enhance our suite of sustainability-related products and propositions to support Barclays UK customers to make more sustainable choices. We are focused on driving performance of these products and propositions via customer insights, targeted marketing, and enhanced sustainability skill sets within Consumer and Business Banking teams, integrating much of the day-to-day operations of sustainability within the business. However, we also recognise dependency on external factors, such as public policy and supply chain readiness, to drive customer demand. We remain committed to supporting our customers to transition to net zero and growing our sustainable finance business in the UK, aligned with Barclays’ three-year plan to grow its UK market. In Barclays UK, we have grown our Sustainability Champions community, bringing together colleagues to share best practice regarding sustainability across the business and access specialist training. We launched a Sustainability Influencer program, with selected colleagues championing sustainability within their teams, to further embed sustainability in Barclays UK. In 2024 we also delivered a Barclays UK specific training module to over 16,000 colleagues, delivered bespoke senior leader training, delivered role-specific training to colleagues in Business Banking, and launched our inaugural Sustainability Apprenticeships cohort in 2024, made up of colleagues from across Barclays UK who are obtaining a level 4 course with an external provider which aims to educate people to understand and develop ways to support the transition to a low-carbon economy. ###### Consumer Bank ###### Sustainability Hub Barclays UK continues to engage consumers through our online Consumer Sustainability Hub, which provides information on our financial products, services, informative content and partner offers that may support them in making more sustainable choices. In 2025, we will launch our in-app Sustainability Hub for current account customers, in order to drive greater engagement and visibility of our products, services and partner offers, to better support our active mobile app customers. ###### Greener Homes An important driver to decarbonise the UK Housing sector is improved energy efficiency of the housing stock. We support our retail mortgage customers to retrofit their properties and reduce their energy consumption by providing financial products, services, and partner offers. We continue to support customers purchasing EPC A- and B-rated new-build homes with our Green Home Mortgage, launched in 2018 and expanded to buy-to-let in 2022. Our Green Home Mortgage continues to perform strongly, with £1.1bn lent to Green Home Mortgage customers in 2024. Since inception, Barclays UK has lent over £4.7bn to Green Home Mortgage customers. We also continue to support eligible residential mortgage customers to install eligible energy-efficiency-related measures in their homes, offering a cash reward of up to £2,000 via our Greener Home Reward offer. In 2024 we simplified the registration process and will expand the scheme to include MCS accredited installers in 2025. Microgeneration continues to be the most popular installation since launch, with 63% of reward payments for solar panels and solar battery storage, followed by low carbon heating at 20%. In 2024, we piloted our Greener Home Loan, offering a cashback of up to £250 for eligible current account customers who take out a loan and use the money for energy-efficiency home improvements. We continue to monitor take-up and retrofit type, with solar being the most popular installation with 62% of claims. ###### Partnerships Offers We continue to develop our partnership offers to support customers home energy efficiency measures. This includes our offer of 50% off the purchase of a Home Health Check for eligible residential mortgage customers in collaboration with British Gas, and our offer of a 6-month free trial of the Hugo Pro for eligible residential mortgage customers in collaboration with Hugo Energy to provide insights into home energy usage. We also offer a free to use home energy tool through Energy Saving Trust, which supports residential mortgage customers to understand how energy efficient their homes are and improvements they could make. ###### Business Bank ###### Embedding sustainability across the Business Bank We continue to evolve our colleague training around sustainability, to better support our Business Bank clients. In 2024, 94% of our Relationship Managers completed sustainability related training, including modules on EPC ratings and green assets that are in scope of our green lending offering. In addition, our Net Zero Specialists team, established in 2023, continue to support clients to explore the steps they can take to support their decarbonisation journey. ###### SMEs Business Bank is supporting SMEs to invest in low carbon technologies as they transition to net zero. Our Green Loans for Business offer discounted interest rates when customers finance eligible green assets. In 2024, we expanded our Green Loans for Business with several additional eligible loan products; namely, our Green Commercial Mortgage, Green Buy-to-Let Mortgage, SIPP & SSAS Green Property Loans, and Green Agricultural Mortgage. We have also updated our Eligible Green Asset Guide, which lists over 65 eligible green assets for our Green Loans for Business, to improve client access to our green financing options. In 2024 we continued to offer Green Asset Finance via our partner Propel. Common barriers to SMEs transitioning are the perceived cost of change and time to develop required action plans. SMEs will often start by making changes directly within their control. Recognising this, in 2024, we launched a pilot with SaveMoneyCutCarbon to help clients explore energy, water and carbon saving opportunities, with the aim of helping them transition to net zero in a cost-effective manner. #### External engagement We recognise the opportunity to support the transition to net zero for SMEs via external engagement with policy makers and industry bodies. In 2024, Barclays became a co-chair of the Willow Review, an independent Government-backed review aiming to underline the financial benefits of sustainability for small businesses across the UK. We also became a member of Perseus, which aims to allow individual businesses to securely share their consumption data to create sustainability reports with personalised recommendations. We remain a member of the UK Business Climate Hub advisory board, through which we were a partner in the UK Net Zero Business census released in September 2024. #### Climate Tech We set-up the Barclays Climate Tech Escalator in 2024, a connected pathway dedicated to growing climate tech companies. The Climate Tech Escalator supports scaling by providing tailored, dedicated support as the companies grow and helps them to harness the power of capital markets. We established a Technology & Creatives vertical in our Business Bank, which provides financial services to early-stage climate tech companies. Through Eagle Labs we support these companies with mentorship, webinars, workshops, and provide programs such as the Carbon 13 Venture Launchpad and UK Government funded Sustainability Bridge to help them scale. We recognise the funding challenge inhibiting the success of growth-stage climate tech companies, particularly those at the Series B+ investment stage. In 2024, Barclays published a paper on the role of UK public finance to bridge the financing gap for growth-stage climate tech companies, as well as the common challenges they face. In 2025 we will explore new products which can help address these financing gaps. #### Agriculture In 2024, we launched a Green Agricultural Mortgage to support UK farming clients to undertake more sustainable practices and implement energy-efficiency improvements. We continue to engage with farmers to explore the challenges and opportunities that may emerge from the decarbonisation of the Agricultural sector. In 2024 we undertook two surveys of our UK farming clients to better understand the challenges they face in progressing towards net zero, and published a policy position paper on the opportunity of biodiversity net gain (BNG). In October 2024, Barclays launched a first of its kind collaboration with the Environment Bank. This collaboration aims to help Barclays’ UK farming clients in England understand opportunities in the Biodiversity Net Gain (BNG) market. It also aims to help Barclays UK Corporate Bank clients, including UK-based housebuilders that are seeking to fulfil their BNG scheme obligations, to explore opportunities and their options in the biodiversity credits market. Recognising Barclays’ market presence in the Agriculture and Housing sectors, this collaboration supports clients across Barclays UK and UK Corporate Bank to explore new revenue opportunities emerging from the transition to a low carbon economy. #### Barclays Eagle Labs Barclays Eagle Labs look to help incubate, inspire and educate UK founders, start-ups and scale-ups to help them succeed and grow through virtual support and a network of 42 physical sites across the UK. In 2024 Eagle Labs has expanded into nine new locations and has supported over 4,439 businesses through propositions, programmes, and businesses engaged with our network. Eagle Labs also launched an online learning platform to help support founders with the knowledge and skills needed to launch and grow a tech business as part of the Digital Growth Grant activity funded by UK Government. In 2024 Eagle Labs opened applications for 22 growth programmes including the Black Founders Accelerator programme designed to champion inclusion in entrepreneurship and showcase Black Founder-led businesses. Cambridge Eagle Lab was relaunched in October 2023 as a dedicated centre for scale-ups and start-ups who are leading in climate innovation. Since the relaunch the Cambridge Eagle Lab has focussed on growing the community and now has 19 climate focussed businesses residing out of the lab including Carbon 13 and Sustainable Ventures. #### Carbon 13 Venture Launchpad The Carbon 13 Venture Launchpad in partnership with Barclays Eagle Labs supports early stage start-ups to launch high-potential, global impact climate tech ventures. This climate tech accelerator helps supports early-stage founding teams to work intensively on their carbon impact, investment readiness and go-to-market strategy. #### Sustainable Ventures partnership Eagle Labs ongoing work in the climate tech ecosystem has led to a partnership with Sustainable Ventures at their flagship site in London, where it has a dedicated Ecosystem Manager providing their members with access to Eagle Labs. In parallel, Sustainable Ventures has joined Cambridge Eagle Lab to add value to Eagle Lab members. Common barriers to SMEs transitioning are the perceived cost of change and time to develop required action plans. SMEs will often start by making changes directly within their control. Recognising this, in 2024, we launched a pilot with SaveMoneyCutCarbon to help clients explore energy, water and carbon saving opportunities, with the aim of helping them transition to net zero in a cost-effective manner. #### External engagement We recognise the opportunity to support the transition to net zero for SMEs via external engagement with policy makers and industry bodies. In 2024, Barclays became a co-chair of the Willow Review, an independent Government-backed review aiming to underline the financial benefits of sustainability for small businesses across the UK. We also became a member of Perseus, which aims to allow individual businesses to securely share their consumption data to create sustainability reports with personalised recommendations. We remain a member of the UK Business Climate Hub advisory board, through which we were a partner in the UK Net Zero Business census released in September 2024. #### Climate Tech We set-up the Barclays Climate Tech Escalator in 2024, a connected pathway dedicated to growing climate tech companies. The Climate Tech Escalator supports scaling by providing tailored, dedicated support as the companies grow and helps them to harness the power of capital markets. We established a Technology & Creatives vertical in our Business Bank, which provides financial services to early-stage climate tech companies. Through Eagle Labs we support these companies with mentorship, webinars, workshops, and provide programs such as the Carbon 13 Venture Launchpad and UK Government funded Sustainability Bridge to help them scale. We recognise the funding challenge inhibiting the success of growth-stage climate tech companies, particularly those at the Series B+ investment stage. In 2024, Barclays published a paper on the role of UK public finance to bridge the financing gap for growth-stage climate tech companies, as well as the common challenges they face. In 2025 we will explore new products which can help address these financing gaps. #### Agriculture In 2024, we launched a Green Agricultural Mortgage to support UK farming clients to undertake more sustainable practices and implement energy-efficiency improvements. We continue to engage with farmers to explore the challenges and opportunities that may emerge from the decarbonisation of the Agricultural sector. In 2024 we undertook two surveys of our UK farming clients to better understand the challenges they face in progressing towards net zero, and published a policy position paper on the opportunity of biodiversity net gain (BNG). In October 2024, Barclays launched a first of its kind collaboration with the Environment Bank. This collaboration aims to help Barclays’ UK farming clients in England understand opportunities in the Biodiversity Net Gain (BNG) market. It also aims to help Barclays UK Corporate Bank clients, including UK-based housebuilders that are seeking to fulfil their BNG scheme obligations, to explore opportunities and their options in the biodiversity credits market. Recognising Barclays’ market presence in the Agriculture and Housing sectors, this collaboration supports clients across Barclays UK and UK Corporate Bank to explore new revenue opportunities emerging from the transition to a low carbon economy. #### Barclays Eagle Labs Barclays Eagle Labs look to help incubate, inspire and educate UK founders, start-ups and scale-ups to help them succeed and grow through virtual support and a network of 42 physical sites across the UK. In 2024 Eagle Labs has expanded into nine new locations and has supported over 4,439 businesses through propositions, programmes, and businesses engaged with our network. Eagle Labs also launched an online learning platform to help support founders with the knowledge and skills needed to launch and grow a tech business as part of the Digital Growth Grant activity funded by UK Government. In 2024 Eagle Labs opened applications for 22 growth programmes including the Black Founders Accelerator programme designed to champion inclusion in entrepreneurship and showcase Black Founder-led businesses. Cambridge Eagle Lab was relaunched in October 2023 as a dedicated centre for scale-ups and start-ups who are leading in climate innovation. Since the relaunch the Cambridge Eagle Lab has focussed on growing the community and now has 19 climate focussed businesses residing out of the lab including Carbon 13 and Sustainable Ventures. #### Carbon 13 Venture Launchpad The Carbon 13 Venture Launchpad in partnership with Barclays Eagle Labs supports early stage start-ups to launch high-potential, global impact climate tech ventures. This climate tech accelerator helps supports early-stage founding teams to work intensively on their carbon impact, investment readiness and go-to-market strategy. #### Sustainable Ventures partnership Eagle Labs ongoing work in the climate tech ecosystem has led to a partnership with Sustainable Ventures at their flagship site in London, where it has a dedicated Ecosystem Manager providing their members with access to Eagle Labs. In parallel, Sustainable Ventures has joined Cambridge Eagle Lab to add value to Eagle Lab members. Common barriers to SMEs transitioning are the perceived cost of change and time to develop required action plans. SMEs will often start by making changes directly within their control. Recognising this, in 2024, we launched a pilot with SaveMoneyCutCarbon to help clients explore energy, water and carbon saving opportunities, with the aim of helping them transition to net zero in a cost-effective manner. #### External engagement We recognise the opportunity to support the transition to net zero for SMEs via external engagement with policy makers and industry bodies. In 2024, Barclays became a co-chair of the Willow Review, an independent Government-backed review aiming to underline the financial benefits of sustainability for small businesses across the UK. We also became a member of Perseus, which aims to allow individual businesses to securely share their consumption data to create sustainability reports with personalised recommendations. We remain a member of the UK Business Climate Hub advisory board, through which we were a partner in the UK Net Zero Business census released in September 2024. #### Climate Tech We set-up the Barclays Climate Tech Escalator in 2024, a connected pathway dedicated to growing climate tech companies. The Climate Tech Escalator supports scaling by providing tailored, dedicated support as the companies grow and helps them to harness the power of capital markets. We established a Technology & Creatives vertical in our Business Bank, which provides financial services to early-stage climate tech companies. Through Eagle Labs we support these companies with mentorship, webinars, workshops, and provide programs such as the Carbon 13 Venture Launchpad and UK Government funded Sustainability Bridge to help them scale. We recognise the funding challenge inhibiting the success of growth-stage climate tech companies, particularly those at the Series B+ investment stage. In 2024, Barclays published a paper on the role of UK public finance to bridge the financing gap for growth-stage climate tech companies, as well as the common challenges they face. In 2025 we will explore new products which can help address these financing gaps. #### Agriculture In 2024, we launched a Green Agricultural Mortgage to support UK farming clients to undertake more sustainable practices and implement energy-efficiency improvements. We continue to engage with farmers to explore the challenges and opportunities that may emerge from the decarbonisation of the Agricultural sector. In 2024 we undertook two surveys of our UK farming clients to better understand the challenges they face in progressing towards net zero, and published a policy position paper on the opportunity of biodiversity net gain (BNG). In October 2024, Barclays launched a first of its kind collaboration with the Environment Bank. This collaboration aims to help Barclays’ UK farming clients in England understand opportunities in the Biodiversity Net Gain (BNG) market. It also aims to help Barclays UK Corporate Bank clients, including UK-based housebuilders that are seeking to fulfil their BNG scheme obligations, to explore opportunities and their options in the biodiversity credits market. Recognising Barclays’ market presence in the Agriculture and Housing sectors, this collaboration supports clients across Barclays UK and UK Corporate Bank to explore new revenue opportunities emerging from the transition to a low carbon economy. #### Barclays Eagle Labs Barclays Eagle Labs look to help incubate, inspire and educate UK founders, start-ups and scale-ups to help them succeed and grow through virtual support and a network of 42 physical sites across the UK. In 2024 Eagle Labs has expanded into nine new locations and has supported over 4,439 businesses through propositions, programmes, and businesses engaged with our network. Eagle Labs also launched an online learning platform to help support founders with the knowledge and skills needed to launch and grow a tech business as part of the Digital Growth Grant activity funded by UK Government. In 2024 Eagle Labs opened applications for 22 growth programmes including the Black Founders Accelerator programme designed to champion inclusion in entrepreneurship and showcase Black Founder-led businesses. Cambridge Eagle Lab was relaunched in October 2023 as a dedicated centre for scale-ups and start-ups who are leading in climate innovation. Since the relaunch the Cambridge Eagle Lab has focussed on growing the community and now has 19 climate focussed businesses residing out of the lab including Carbon 13 and Sustainable Ventures. #### Carbon 13 Venture Launchpad The Carbon 13 Venture Launchpad in partnership with Barclays Eagle Labs supports early stage start-ups to launch high-potential, global impact climate tech ventures. This climate tech accelerator helps supports early-stage founding teams to work intensively on their carbon impact, investment readiness and go-to-market strategy. #### Sustainable Ventures partnership Eagle Labs ongoing work in the climate tech ecosystem has led to a partnership with Sustainable Ventures at their flagship site in London, where it has a dedicated Ecosystem Manager providing their members with access to Eagle Labs. In parallel, Sustainable Ventures has joined Cambridge Eagle Lab to add value to Eagle Lab members. Climate and Sustainability report home.barclays/annualreport 17 Barclays Bank UK PLC Annual Report ### Information provided in climate and sustainability disclosures/Disclaimers What is important to our investors and stakeholders evolves over time, and we aim to anticipate and respond to these changes. Disclosure expectations in relation to climate change and sustainability matters are particularly fast moving, and differ from more traditional areas of reporting including in relation to the level of detail and forward-looking nature of the information involved and the consideration of impacts on the environment and other persons. We have adapted our approach in relation to the disclosure of such matters. Our climate and sustainability disclosures take into account the wider context relevant to these topics, which may include evolving stakeholder views, the development of our climate strategy, longer timeframes for assessing potential risks and impacts, international long-term climate- and nature-based policy goals and evolving sustainability-related policy frameworks. Our climate and sustainability disclosures are subject to more uncertainty than disclosures relating to other subjects given market challenges in relation to data reliability, consistency and timeliness – the use of estimates, judgements and assumptions which are likely to change over time- the application and development of data, models, scenarios and methodologies, the change in regulatory landscape, and variations in reporting standards. These factors mean disclosures may be amended, updated, and recalculated in future as market practice and data quality and availability develops, and could cause actual achievements, results, performance or other future events or conditions to differ, in some cases materially, from those stated, implied and/or reflected in any forward-looking statements or metrics included in our climate and sustainability disclosures. We give no assurance as to the likelihood of the achievement or reasonableness of any projections, estimates, forecasts, targets, commitments, ambitions, prospects or returns contained in our climate and sustainability disclosures and make no commitment to revise or update any such disclosures to reflect events or circumstances occurring or existing after the date of such statements. In preparing the climate and sustainability content within the Barclays Bank UK PLC Annual Report wherever it appears, we have: * Made certain key judgements, estimations and assumptions. This is, for example, the case in relation to financed emissions, portfolio alignment, classification of environmental and social financing, operational emissions and sustainability metrics, measurement of climate risk and scenario analysis. * Used climate and sustainability data, models, scenarios and methodologies Barclays consider to be appropriate and suitable for these purposes as at the date on which they were deployed. This includes data, models, scenarios and methodologies made available by third parties (over which we have no control) and which may have been prepared using a range of different methodologies, or where the basis of preparation may not be known to Barclays. Methodologies, interpretations or assumptions may not be capable of being independently verified and may therefore be inaccurate. Climate and sustainability data, models, scenarios and methodologies are subject to future risks and uncertainties and may change over time. Climate and sustainability disclosures in this document, including climate and sustainability-related data, models and methodologies, are not of the same standard as those available in the context of other financial information and use a greater number and level of judgements, assumptions and estimates, including with respect to the classification of climate and sustainable financing activities. Climate and sustainability disclosures are also not subject to the same or equivalent disclosure standards, historical reference points, benchmarks or globally accepted accounting principles. Historical data cannot be relied on as a strong indicator of future trajectories in the case of climate change and its evolution. Outputs of models, processed data, scenario analysis and the application of methodologies will also be affected by underlying data quality, which can be hard to assess, or challenges in accessing data on a timely basis. * Continued (and will continue) to review and develop Barclays approach to data, models, scenarios and methodologies in line with market principles and standards as this subject area matures. The data, models, scenarios and methodologies used (including those made available by third parties) and the judgements, estimates and/or assumptions made in them or by us are rapidly evolving, and this may directly or indirectly affect the metrics, data points, targets, convergence points and milestones contained in the climate and sustainability content within the Annual Report. Further, changes in external factors which are outside of our control such as accounting and/or reporting standards, improvements in data quality, data availability, or updates to methodologies and models and/or updates or restatements of data by third parties, could impact – potentially materially – the performance metrics, data points, targets, convergence points and milestones contained in the climate and sustainability content within the Annual Report. In future reports we may present some or all of the information for this reporting period (including information made available by third parties) using updated or more granular data or improved models, scenarios methodologies, market practices or standards. Equally, we may need to re-baseline, restate, revise, recalculate or recalibrate performance against targets, convergence points or milestones on the basis of such updated data. Such updated information may result in different outcomes than those included in the Annual Report. It is important for readers and users of the Annual Report to be aware that direct, like-for-like comparisons of each piece of information disclosed may not always be possible from one reporting period to another. There are a variety of internal and external factors which may impact Barclays’ reported metrics and progress against targets, convergence points and milestones. Climate and Sustainability report home.barclays/annualreport 20 Barclays Bank UK PLC Annual Report --- ## Governance ### Contents | Governance | Page | |---|---| | Governance Report (including Corporate Governance Statement) | 22 | | Directors’ Report | 32 | | Other Governance - Managing data privacy, security and resilience | 35 | Governance Contents home.barclays/annualreport 21 Barclays Bank UK PLC Annual Report ### Governance Report (including Corporate Governance Statement) #### The Board The Directors who served during the year ended 31 December 2024 are set out in the table below, together with details of the composition of each of the Board Committees. | | Board | Board Audit Committee | Board Nominations Committee | Board Remuneration Committee | Board Risk Committee | |---|---|---|---|---|---| | **Current Directors (all of whom served up to the date of signing this report)** | | | | | | | Sir John Kingman Chair of the Board | C | C | | | | | Andrew Ratcliffe Deputy Chair of the Board and Independent Non-Executive Director | M | C | M | M | M | | Vanessa Bailey Independent Non-Executive Director | M | M | M | M | C | | Tracy Corrigan Independent Non-Executive Director | M | | M | M | | | Avid Larizadeh Duggan OBE Independent Non-Executive Director | M | | M | M | | | Michael Jary CBE Independent Non-Executive Director | M | M | M | C | M | | John Liver Independent Non-Executive Director | M | M | M | | M | | Chris Pilling Independent Non-Executive Director | M | M | M | | | | Bernadette Wightman Independent Non-Executive Director | M | | | | | | Vim Maru (appointed 20 February 2024) Chief Executive | M | | | | | | Claire Peel Chief Financial Officer | M | | | | | | **Former Directors** | | | | | | | Matt Hammerstein (resigned 20 February 2024) Chief Executive | M | | | | | C: Chair of Board or Board Committee. M: Member of Board or Board Committee. #### Charter of Expectations Executive and Non-Executive Directors share the same statutory duties and are subject to the same constraints. The expectations of each Director, including the behaviours and competencies required for each role, are set out in the Company’s Charter of Expectations. ##### Time commitment The Company’s Charter of Expectations also sets out the time commitment for each role. Non-Executive Directors, including the Chair, are informed of the minimum time commitment required prior to their appointment; they must, on appointment and on an ongoing basis, be able to devote sufficient time to the Company to effectively discharge their responsibilities. A Non-Executive Director’s preparation for, and attendance at, Board and Board Committee meetings is only part of their role. In addition, Non-Executive Directors are expected to provide effective oversight and scrutiny, strategic guidance and constructive challenge whilst holding the Executive Directors to account against their agreed performance objectives. The Directors’ time commitments are considered by the Board on appointment and are reviewed annually. Before taking on any new external appointment, such appointment must be agreed with the Chair and disclosed to the Board, with an indication of the time involved. During the year, the Board kept under review the number of external directorships held by each Director and considered the limits on the number of directorships imposed by relevant regulations. The Board is satisfied that there are no Directors whose time commitment is considered to be a matter for concern. ##### Training and development All new Directors are provided with a comprehensive induction, which is structured around the core components of the Barclays Bank UK Group’s strategy and tailored to their specific experience and knowledge. In order to enable the Directors to discharge their responsibilities and to undertake their roles with due care, the Directors participate in an ongoing programme of briefing sessions, deep dives, and training and development throughout the year. The focus of this programme is key areas of the Barclays Bank UK Group’s strategy through the lenses of customer, community, colleague, control and company as well as law and regulation (for example: Consumer Duty, customer experience, financial crime, growth initiatives, technology, and the Senior Managers Regime). The topics are, where possible, brought to life through interactive sessions with customers and colleagues. This provides the Directors with a more granular understanding of the Barclays Bank UK Group and the business which, in turn, contributes to informed and sound decision-making. Governance Governance Report, including Corporate Governance Statement home.barclays/annualreport 22 Barclays Bank UK PLC Annual Report #### Our corporate governance principles and how we applied them in 2024 During the year ended 31 December 2024, and up to and including the date of this report, the Company has continued to apply and has complied with its own corporate governance arrangements rather than the UK Corporate Governance Code or the Wates Corporate Governance Principles for Large Private Companies. This is on the basis that the Board continues to believe that the Company’s own governance arrangements are the most appropriate for it as a wholly owned subsidiary of a listed company which is also a complex financial institution subject to a comprehensive regulatory regime. This approach is consistent with the approach of other significant subsidiaries in the Barclays Group which are subject to the Companies (Miscellaneous Reporting) Regulations 2018 (2018 Regs). The primary aim of our governance arrangements remains as stated in the Company’s 2023 Annual Report, namely that they: * are effective, in particular to ensure the safety, independence and soundness of the ring-fenced bank * provide checks and balances and encourage constructive challenge * drive informed, collaborative and accountable decision-making * create long-term sustainable value for our shareholder, Barclays, the ultimate shareholders of Barclays and our wider stakeholders Set out below is an explanation of how the six principles that underpin the Company’s corporate governance arrangements have been applied during 2024. The Barclays Bank UK Group governance framework is set by Barclays and has been designed to facilitate the effective management of the Barclays Group. This includes the setting of Barclays Group policies in relation to matters such as the Barclays Group’s Purpose, Values and Mindset and the Barclays Group Remuneration Policy. Where appropriate, this Corporate Governance Statement makes reference to those Barclays Group-wide policies which are relevant to the way in which the Company is governed. ##### Principle One: Board Leadership and Company Purpose A successful company is led by an effective and entrepreneurial Board whose role is to establish the company’s purpose, values and strategy, aligned to its culture, and make decisions to promote its success for the long-term benefit of its shareholder, having regard to the interests of other relevant stakeholders and factors. The Board is collectively responsible for the overall leadership of the Company. This involves articulating a clear vision for the Company and establishing a strategy for both the Company and the Barclays Bank UK Group, supported by a framework of effective controls that are designed to mitigate financial and other risks and to protect the reputation of the business. The Board’s role also involves ensuring that the Company is managed in accordance with the ring-fencing legislation, that the necessary resources are in place to enable the Company to meet its objectives, and measuring performance against those objectives. ###### Principal activities of the Board in 2024 **Strategic and operational matters** * Overseeing the shaping of and providing input into the Barclays Bank UK Group elements of the Barclays Group’s three-year plan to create a “Simpler, Better and More Balanced Bank”, as announced in February 2024, including the focus areas (in respect of which further detail can be found in the “Performance review” section of the Strategic Report) and related financial targets * In monitoring and overseeing execution of the Barclays Bank UK Group strategy during 2024, receiving enhanced reporting on customer experience and growth initiatives in business banking, secured lending, and unsecured lending and - in July 2024 - participating in a “strategy day” with Executive Committee members to retest the strategy and review early progress against the focus areas * Receiving updates on the evolving geopolitical, macroeconomic and operational environment and overseeing the Barclays Bank UK Group’s ongoing support of customers, clients and colleagues through those lenses * Considering and, in turn, overseeing Barclays UK’s technology strategy, including – in conjunction with the Board Risk Committee – the challenges and opportunities that technology presents for banking products and services (for example, AI and cybersecurity) * Overseeing customer, commercial, conduct, financial, operational, people, regulatory, risk, societal, sustainability and technology matters, with regular updates from the Chief Executive and Executive Committee members on these key aspects of the business, supported by key performance indicators and other metrics (where considered appropriate) * Overseeing reputational risk matters, including in relation to protest activity from activists * Overseeing, in conjunction with the Board Audit Committee and the Board Risk Committee, the acquisition of Tesco Bank, which completed in November 2024, and the entry into a long-term, exclusive partnership with Tesco Stores Limited for an initial period of 10 years * Overseeing, in conjunction with the Board Risk Committee, the launch of a co-branded credit card with Amazon * Overseeing the continued embedment of the Consumer Duty and, in that context, approving the first Annual Consumer Duty Board Report, considering planning and readiness for the second implementation deadline of 31 July 2024 for closed products and services, enhancing fair value assessments in accordance with FCA insights, and monitoring customer outcomes via the quarterly Customer Outcomes Report * Receiving updates on developments in UK banking (for example, the October 2024 Court of Appeal judgments on commission arrangements in the motor finance industry) and the evolving legal, political and regulatory landscape (including but not limited to the draft statutory instrument amending the ring-fencing regime) Governance Governance Report, including Corporate Governance Statement home.barclays/annualreport 23 Barclays Bank UK PLC Annual Report #### Culture, colleagues and inclusion * Continuing to oversee the embedment of Consistently Excellent and monitoring delivery against that higher operating standard * Overseeing colleague engagement. Further details can be found in the “Our colleagues” section of the Strategic Report and, separately, in the “Colleagues” section of the Barclays PLC 2024 Annual Report * Reviewing, in conjunction with the Board Nominations Committee, the Board’s progress against the ambitions set out in the Board Diversity and Inclusion Policy and the Company’s progress against its ambition to build an inclusive, diverse and equitable culture where all colleagues can thrive. Further information can be found in the “Our colleagues” section of the Strategic Report and, separately, in the “Colleagues” section of the Barclays PLC 2024 Annual Report #### Finance * Reviewing and approving the Barclays Bank UK Group’s Medium Term Plan (MTP), in which strategy is embedded, together with related funding and capital plans for the Barclays Bank UK Group * Overseeing the financial performance of the Barclays Bank UK Group and its main businesses through regular reports from the Chief Financial Officer * On the recommendation of the Board Audit Committee, approving the Barclays Bank UK Group’s full year and half year financial statements, and approving the payment of a 2023 full year dividend and the payment of a 2024 half year dividend * Overseeing, in conjunction with the Board Risk Committee, the results of a range of stress tests to assess capital adequacy and resilience under severe but plausible macroeconomic scenarios #### Risk, control and regulatory matters * On the recommendation of the Board Risk Committee, approving the adoption of the revised Enterprise Risk Management Framework (ERMF) following its annual refresh, approving the Company’s qualitative and quantitative Risk Appetite Statements, and overseeing risk parameters * On the recommendation of the Board Risk Committee, approving the Barclays Bank UK Group elements of the Barclays Group Recovery and Resolution Plan and Resolvability Assessment Framework and the conclusions of the annual assessment of ring-fencing compliance * Overseeing key risk matters, including themes and emerging risks, through regular updates from the Chair of the Board Risk Committee, semi-annual reports from the Chief Risk Officer and an annual update from the Barclays Group Chief Risk Officer (in order to better understand the Group risk context) * Overseeing, in conjunction with the Board Audit Committee and the Board Risk Committee, financial crime activity that impacted the Barclays Bank UK Group in 2024, the elevation of financial crime risk to a Principal Risk and the execution of remediation activities, including but not limited to enhancements to the Barclays Bank UK Group’s control environment * Overseeing, in conjunction with the Board Audit Committee, the effectiveness of the Barclays Bank UK Group control environment underpinning depositor protection pursuant to the Financial Services Compensation Scheme * Overseeing, with the support of the Board Audit Committee, the Barclays Bank UK Group’s internal controls framework through regular reports from the Chief Controls Officer * Overseeing the Barclays Bank UK Group’s operational and technology capacity, including - in conjunction with the Board Risk Committee - the annual self-assessment of operational resilience. The recent severe systems incident impacting the business is a reminder of the need for continued focus in the management of operational risk * Overseeing, in conjunction with the Board Audit Committee and the Board Risk Committee, the services received from BX through - amongst other reports - an annual update from the BX Chief Executive Governance * Approving the Barclays Group Statement on Modern Slavery * Overseeing, with the support of the Board Nominations Committee, the Chief Executive succession process, which culminated in February 2024 with the appointment of Vim Maru as an Executive Director and Chief Executive * Overseeing Directors’ time commitments and the management of any Non-Executive Director conflicts of interest * Overseeing, in conjunction with the Board Nominations Committee, the 2024 external Board, Board Committee and Non-Executive Director evaluations and monitoring the Board’s progress against recommendations arising * Receiving regular updates from the Chairs of the Board Committees on matters discussed at meetings and from Tracy Corrigan on matters discussed at Barclays Board Sustainability Committee meetings (in her capacity as the Board’s representative on that Committee) * Receiving updates on the performance of the Company’s material subsidiaries, Barclays Insurance Services Company Limited and Kensington Mortgage Company Limited, and - in the case of Kensington Mortgage Company Limited - on integration into the Barclays Bank UK Group * Reviewing the Board’s role in relation to the oversight of material investments in technology initiatives and execution of technology programmes ##### Principle Two: Division of Responsibilities An effective Board requires a clear division of responsibilities with the Chair leading the Board and being responsible for its overall effectiveness, and the executive leadership of the company’s business being delegated to the Chief Executive. The Board should consist of an appropriate combination of executive and independent Non-Executive Directors each with a clear understanding of their accountability and responsibilities. The Board’s policies and procedures should support effective decision-making and independent challenge. ###### Chair responsibilities There is a clear division of responsibilities between the Chair and the Chief Executive. The Chair is responsible for leading the Board and its overall effectiveness, demonstrating objective judgement and promoting a culture of openness and constructive debate between all Directors. The Chair also facilitates constructive Board relations and the effective contribution of all Non-Executive Directors, and ensures Governance Governance Report, including Corporate Governance Statement home.barclays/annualreport 24 Barclays Bank UK PLC Annual Report Directors receive accurate, clear and timely information. In addition, the Deputy Chair is available, if needed, to deputise for and support the Chair in respect of the authorities and responsibilities conferred on or delegated to him by the Board from time to time. The duties of the Board are executed in part through the Board Committees, which provide oversight and make recommendations on the matters delegated to them by the Board. The Chair of each Board Committee provides a report on Board Committee business at each Board meeting, including any matters being recommended to the Board for approval. Details on the principal Board Committees and their core responsibilities and activities in 2024 are set out in Principles Three to Five on pages 25 to 30. ###### Chief Executive responsibilities Responsibility for the day-to-day management of the Company is delegated to the Chief Executive who is supported by the Company’s Executive Committee, which meets weekly. The Executive Committee supports the Chief Executive in ensuring that the Company’s values, strategy and culture align, are implemented and are communicated consistently to colleagues; for example, through townhalls, skip-level meetings, site visits, leader-led sessions, focus groups and surveys. Further details are set out in the “Our colleagues” section of the Strategic Report. ##### Accountability Accountability is driven through routine evaluations of the Board and Board Committees. For an overview of the recent external evaluation of the Board, Board Committees and Non-Executive Directors (including the Chair), please see page 26. ##### Decision-making and independent challenge The Board maintains a formal schedule of powers reserved to it in order to ensure that it has control over key decision-making. These powers include approval of key appointments, strategy, financial statements and any major acquisitions, mergers or disposals; the Board also has the power to approve material non-financial matters impacting the Barclays Bank UK Group including, but not limited to, matters involving material conduct risk and/or reputation risk considerations as well as significant customer remediation matters and strategic business changes. There are also policies and procedures in place to support effective decision-making and independent challenge, including the Barclays Group Corporate Governance Operating Manual, which sets out how Barclays Group entities and their respective Boards and Board Committees should interact and, where appropriate, escalate issues. For details of how the Directors have had regard to the matters set out in Section 172(1) of the Act when performing their duty to promote the success of the Company under Section 172, and the effect of those considerations in reaching certain decisions taken by them, please refer to the Section 172(1) Statement on pages 15 to 16 of the Strategic Report. In accordance with the Act and the Company’s Articles of Association, the Board has authority to authorise conflicts of interest, and this ensures that the influence of third parties does not compromise or override the independent judgement of the Board. The Company Secretary maintains a conflicts register, which is a record of actual and potential conflicts, together with any Board authorisation of the conflict. Throughout the year, the Board has authorised a number of potential conflicts and, on occasion, put in place appropriate procedures to manage that potential conflict. Following authorisation, all conflicts - whether actual or potential - are monitored in order to assist the relevant individuals in discharging their duties as a Director. ##### Principle Three: Composition, Succession and Evaluation A Board with the right balance of skills, experience and diversity is critical to the sustainable delivery of value to the company’s shareholder and broader stakeholders. The size of the Board should be guided by the scale and complexity of the company and appointments should be based on merit and objective criteria and with a view to promoting diversity and subject to a formal, rigorous and transparent procedure which is underpinned by an effective succession plan for the Board and senior management. A successful Board is a cohesive Board that provides informed and constructive challenge to the management team and measures its effectiveness. ###### Board composition and succession On 20 February 2024, aligned with Barclays’ announcement of the resegmentation of its operating structure into five divisions, Vim Maru was appointed as an Executive Director and Chief Executive. Matt Hammerstein stepped down from the Board as an Executive Director and Chief Executive on the same day and was appointed as Chief Executive of the Barclays Group’s UK Corporate Bank operating division. The Board thanks Matt for his hard work, service and significant contribution to the Barclays Bank UK Group. The Board Nominations Committee led the Chief Executive succession process, which culminated in the Committee recommending to the Board that it appoint Vim. Vim has over 20 years’ experience in the financial services sector - specifically, in retail banking - and was previously Barclays Global Head of Consumer Banking and Payments and, prior to that, Group Director for Retail at Lloyds Banking Group. The Board approved Vim’s appointment in February 2024, subject to regulatory approval (which was subsequently given.) The Directors have assessed the composition and size of the Board and have confirmed that they consider both to be appropriate for a large UK retail bank. This assessment is supported by a skills matrix (refreshed annually), which helps the Directors to evaluate the experience and skills on the Board in order to ensure that there is the necessary expertise and knowledge to support and challenge management in its execution of the strategy. There is currently a good balance between the Executive Directors and independent Non-Executive Directors who, together, have a strong combination of financial, retail banking, risk and technical skills as well as experience in colleague engagement, customer experience, culture, financial regulation, government, technology and transformation. Governance Governance Report, including Corporate Governance Statement home.barclays/annualreport 25 Barclays Bank UK PLC Annual Report Succession planning will remain an area of focus in 2025 and beyond in order to ensure that there is the appropriate breadth and depth of talent on the Board. The Board Nominations Committee will - on behalf of the Board - continue to review the succession plans for key Board positions, including Chair of the Board Audit Committee (on the basis that Andrew Ratcliffe’s third term on the Board will come to an end in early 2026). To the extent that any appointment to the Board is made, such appointment will be based on merit. Objective criteria are used to ensure that the Board has the necessary experience, knowledge and skills to be effective in the execution of the strategy whilst recognising the importance of diversity amongst the Directors including, but not limited to, diversity of experience, gender, ethnicity, geography and thought. The Board has achieved its gender diversity ambition - as set out in the Board Diversity and Inclusion Policy - to ensure that, by 2025, the proportion of women on the Board is at least 40% (female representation on the Board is currently 45%) and at least one of the following senior Board positions is held by a woman: Chair, Chief Executive, or Chief Financial Officer. We are also pleased to report that the Board has achieved its ethnic diversity ambition to ensure that at least one Board member is from a minority ethnic background (excluding white ethnic groups) and that, having been met, this is maintained. The gender and ethnic diversity ambitions align to the targets adopted by Barclays (which reflect the requirements of the UK Listing Rules) and, in both cases, the ambitions were achieved with due regard to a fair and balanced recruitment process. With regards to independence, the majority of the Board is considered to be independent. Independence is reviewed annually, using the independence criteria set out in the ring-fencing requirements, and the Chair meets privately with the Non-Executive Directors, where appropriate, in order to promote the required independence. ###### Board evaluation During November and December 2024, an external evaluation of the Board, Board Committees and Non-Executive Directors (including the Chair) was facilitated by Christopher Saul Associates (CSA), an independent, external corporate governance advisory firm with no connection to the Barclays Bank UK Group or any individual Director other than as disclosed within the report of the Board Nominations Committee in the Barclays PLC 2024 Annual Report. CSA conducted interviews with the Directors and certain Executive Committee members to obtain feedback on the effectiveness of the Board throughout 2024, and also attended Board and Board Committee meetings. CSA presented its final report to the Board on the findings of the evaluation in February 2025. The overall conclusion of the evaluation was that the Board is operating effectively and that the Board Committees are well integrated into overall Board processes. The Board has a collegiate and constructive culture, is well led, operates at a high standard, and benefits from quality support. However, certain areas were identified for continued focus. These include ensuring that - during 2025 - sufficient time is dedicated to key transformational topics that are relevant to the long-term vision for the Barclays Bank UK Group and that there is an ongoing focus on medium-term Board and Executive Committee succession planning as well as the simplification and timely circulation of Board papers. Work is underway to progress these matters. The evaluations of the Board Committees and Non-Executive Directors (including the Chair) concluded that they are meeting their required responsibilities and operated effectively during 2024. ###### Board Nominations Committee The Board Nominations Committee comprises independent Non-Executive Directors (see page 22). Meetings are attended by the Chief Executive and the Human Resources Director, at the invitation of the Committee Chair. The principal role and responsibilities of the Committee are set out in its terms of reference and include: * Skills and Diversity - evaluating the balance of skills, knowledge, experience and diversity for the Board and Board Committees and more broadly across the senior management of the business * Director Appointments - identifying, and recommending to the Board, candidates for appointment to the Board and Board Committees * Director Independence - considering and assessing the independence of the Non-Executive Directors, including recommendations for any steps to manage actual or potential conflicts of interest * Board Performance - assessing the performance of the Non-Executive Directors and their annual time requirements * Board Evaluation - considering actions from the Board and Board Committee evaluation process and, in conjunction with the Board, reviewing the Board’s progress against the recommendations arising from the evaluation process * Board Development - leading the development and effective implementation of policies and procedures for the induction, training and professional development of all members of the Board * Talent - overseeing the adoption of internal policies and talent progression for senior management During 2024, the principal activities of the Committee were: * Reviewing the Board’s composition, including the skills and experience of Board members and the independence of the Non-Executive Directors (excluding the Chair) * Leading, on behalf of the Board, the Chief Executive succession process, which culminated in February 2024 with the Committee recommending to the Board that it appoint Vim Maru as an Executive Director and Chief Executive * Leading, on behalf of the Board, the process to appoint Andrew Ratcliffe’s successor as Chair of the Board Audit Committee * Overseeing, on behalf of the Board, the process to identify Chris Pilling’s successor as Consumer Duty Champion (which culminated in the Board appointing John Liver into the role on 1 September 2024) * Reviewing and monitoring, on behalf of the Board, the Board’s progress against the ambitions set out in the Board Diversity and Inclusion Policy and the Company’s progress against its ambition to build an inclusive, diverse and equitable culture where all colleagues can thrive. Further information can be found in the “Our colleagues” section of the Strategic Report and, separately, in the “Colleagues” section of the Barclays PLC 2024 Annual Report Governance Governance Report, including Corporate Governance Statement home.barclays/annualreport 26 Barclays Bank UK PLC Annual Report Reviewing the Company’s talent and succession plans at Executive Committee level and one level down on a bi-annual basis and, when required, overseeing Executive Committee appointments Reviewing the Committee’s effectiveness Reviewing the results of the 2023 internal Board, Board Committee and Non-Executive Director evaluations, the overall conclusion of which was that the Board, Board Committees and the Non-Executive Directors all operated effectively during 2023 (as reported in the 2023 Annual Report) ##### The Executive Committee The Board and Board Nominations Committee regularly review the leadership and succession needs of the business, which helps the Directors to understand the breadth and depth of talent at Executive Committee level and one level down. Talent amongst these populations has, once again, been an area of focus during 2024 - Executive Committee members continued to present spotlights on the senior talent within their teams, and the Non-Executive Directors met with Managing Director and Director colleagues to hear their views on challenges and opportunities within the business. The Board remains comfortable that the Executive Committee has the capabilities and experience required to support the execution of the strategy against the backdrop of a competitive operating environment, with the changes made during the year serving to strengthen the Executive Committee’s skill set. Talent and succession at both Executive Committee level and one level down will remain a key focus for 2025 and beyond. ##### Principle Four: Audit, Risk and Internal Control The Board should establish formal and transparent policies and procedures to: (i) identify the nature and extent of principal risks the company is willing to take in order to achieve its long-term strategic objectives; (ii) manage such risks effectively; (iii) oversee the internal control framework; (iv) promote the independence and effectiveness of internal and external audit functions; and (v) satisfy itself on the integrity of financial reporting. The Company is committed to operating within a strong system of internal controls that enable business to be transacted and risk taken without exposure to unacceptable potential losses or reputational damage. The Principal Risks facing the Barclays Bank UK Group have been identified and robust processes are in place to evaluate and manage such risks including regular reporting to, and oversight by, the Board Risk Committee and the Board. A key component of the risk management framework is the ERMF, which supports the business in its aim to embed effective risk management and a strong risk management culture. The ERMF is designed to identify and set minimum requirements, in respect of the main risks, to achieve the Barclays Bank UK Group’s strategic objectives and to provide reasonable assurance that internal controls are effective. Further detail on the Principal Risks and management of them can be found in the “Managing risk” section of the Strategic Report. The Board has overall responsibility for ensuring that management maintains an effective system of risk management and internal controls 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. However, the effectiveness of the risk management and internal controls system is also reviewed regularly by the Board Risk Committee and the Board Audit Committee. Details of the role, responsibilities and activities of both Committees are set out below. The Board receives regular reports on risk matters, including reputational risk matters, in order to ensure sufficient focus around strategic and emerging risks, including those arising from within the broader Barclays Group, which may impact the Barclays Bank UK Group. ###### Board Audit Committee The Board Audit Committee comprises independent Non-Executive Directors (see page 22). At the invitation of the Committee Chair, meetings are attended by management and others, including the Chief Executive, Chief Financial Officer, Chief Internal Auditor, Chief Risk Officer, Chief Compliance Officer, Chief Operating Officer, Financial Controller, General Counsel, the Company’s statutory auditor and, at their request, Non-Executive Directors who are not members of the Committee who wish to further their knowledge and understanding of audit matters. The Board, together with the Board Audit Committee, is responsible for ensuring the integrity of the financial statements and the independence and effectiveness of the internal audit function and the statutory auditor. The Committee Chair meets regularly with both the Chief Internal Auditor and the Senior Statutory Auditor throughout the year and Committee members meet with each of them separately without management present at least annually. The Committee is responsible for overseeing financial reporting processes, reviewing the effectiveness of internal controls, considering whistleblowing arrangements and overseeing the work of the internal auditor and the statutory auditor. Throughout the year ended 31 December 2024 and to date, a comprehensive internal controls framework has been in place within the Barclays Bank UK Group that provides reasonable assurance of effective operations covering all controls, including financial and operational controls and compliance with laws and regulations. The Committee receives a quarterly report on the framework’s operation (and its continued enhancements). This includes reports from the internal audit function, the statutory auditor and the Chief Controls Officer, as well as related plans and management actions to remediate control recommendations raised in those reports. The principal role and responsibilities of the Committee are set out in its terms of reference and include: * Financial Reporting - assessing the integrity of the Barclays Bank UK Group’s financial statements and examining any significant reporting issues and judgements made * Internal Controls - examining the operation and effectiveness of the Barclays Bank UK Group’s system of internal controls * Internal Audit - monitoring and examining the operation, effectiveness, independence and objectivity of the internal audit function Governance Governance Report, including Corporate Governance Statement home.barclays/annualreport 27 Barclays Bank UK PLC Annual Report Regulatory Reporting - reviewing arrangements established by management for compliance with regulatory and financial reporting, including compliance with the ring-fencing requirements External Audit - reviewing and monitoring the statutory auditor’s independence, objectivity and effectiveness, including oversight of the regulatory developments within the delivery of audit services Whistleblowing - reviewing the integrity, independence and effectiveness of Barclays Bank UK Group’s well-established policies and procedures on whistleblowing Material Legal Matters - overseeing significant contentious and non-contentious matters, together with current or emerging legal risks In discharging its responsibilities, the Committee is to have regard to the interests of Barclays Bank UK Group’s stakeholders and shall (where appropriate) consider whether the Company and the Barclays Bank UK Group as a whole are delivering good customer outcomes. During 2024, the principal activities of the Committee were: * Ahead of the Barclays Group’s announcement in February 2024 of its three-year plan to create a “Simpler, Better and More Balanced Bank”, overseeing the financial aspects of the Barclays Bank UK Group elements of that strategy, including the financial targets * Reviewing the Barclays Bank UK Group’s full year and half year financial statements and recommending to the Board that it approve the same * Reviewing the Barclays Bank UK Group’s Q1 and Q3 2024 results for incorporation into Barclays PLC’s Q1 and Q3 2024 results * Assessing the appropriateness of key management judgements, including consideration of material conduct and litigation provisions (including collections and recoveries, and other material items) and accounting policy judgements (including expected credit losses, impairment and recoverability of goodwill) * Considering accounting matters in relation to the acquisition of Tesco Bank, including the fair value of assets and liabilities acquired * Overseeing financial crime activity that impacted the Barclays Bank UK Group in 2024 and the execution of related remediation activities, including but not limited to enhancements to the Barclays Bank UK Group’s control environment (for example, through risk reduction plans) * Overseeing the Company’s Money Laundering Reporting Officer’s report, regulatory correspondence and related work * Receiving reports from the General Counsel on litigation matters pertinent to accounting provisions, including in relation to the October 2024 Court of Appeal judgments on commission arrangements in the motor finance industry * Receiving reports from the Chief Controls Officer regarding the internal controls framework, its effectiveness and future requirements, as well as conducting timely reviews of internal audits graded “Needs Improvement” for both control environment and Management Control Approach, including the response from management * Ensuring appropriate oversight of the BX control environment where it impacts the Barclays Bank UK Group’s control environment and - post-acquisition - overseeing the control environment in relation to Tesco Bank * Overseeing the statutory auditor’s independence and objectivity and contributing to the Barclays Group’s auditor effectiveness exercise * Overseeing the performance of the internal audit function and approving the 2025 audit plan * Receiving reports from management on certain areas of the business where reports from the internal audit function had recommended improvements to existing controls (for example, relating to change management and programme governance, and control practices, regarding oversight of large-scale technology programmes) or on areas of new risk (for example, in relation to new product offerings) * Monitoring management progress on the embedding of a Risk Control Self-Assessment framework * Reviewing and re-adopting the refreshed Barclays Group policy on the provision of non-audit services by the statutory auditor * Monitoring the whistleblowing programme, including receiving regular whistleblowing metrics as they relate to the Barclays Bank UK Group, and ensuring that the procedures for protection from detrimental treatment of staff who raise concerns continue to be effective * Receiving the Company’s Data Protection Officer’s report * Reviewing the Committee’s effectiveness ###### Board Risk Committee The Board Risk Committee comprises independent Non-Executive Directors (see page 22). At the invitation of the Committee Chair, meetings are attended by management, including the Chief Executive, Chief Risk Officer, Chief Compliance Officer, Chief Financial Officer, General Counsel, Chief Internal Auditor, the Company’s statutory auditor, the Company’s Treasurer and, at their request, Non-Executive Directors who are not members of the Committee who wish to further their knowledge and understanding of risk matters. The Committee is responsible for providing oversight and advice to the Board in relation to current and potential future risk exposures, examining reports covering the Principal Risks including those that would threaten its business model, future performance, solvency or liquidity, as well as reports on risk measurement methodologies and risk appetite. The principal role and responsibilities of the Committee are set out in its terms of reference and include: * Risk Appetite and Risk Profile – reviewing and ensuring that the risks undertaken by the business are within the risk appetite of the Company, as set by the Board * Risk Limits – reviewing and adopting risk limits and mandates for financial and non-financial risk, monitoring the risk profile and receiving and considering reports on key risk issues (including emerging risks) * Regulatory – reviewing and monitoring the Company’s capital and liquidity position including considering both the existing and forecasted Company risk profile and the potential impact of stress * Internal Control and Risk Control – monitoring the internal control and risk control framework * Credit Risk – reviewing credit risk performance (including concentration of credit risk and expected credit losses) * Compliance Risk – reviewing the effectiveness of the management of compliance risk, seeking to ensure fair customer outcomes following the implementation of policies and reviewing the effectiveness of the Compliance Risk Management Framework, as it applies to the Company and its subsidiaries Governance Governance Report, including Corporate Governance Statement home.barclays/annualreport 28 Barclays Bank UK PLC Annual Report Climate Risk – considering matters including the impact on financial and operational risks arising from climate change through physical risks, risks associated with transitioning to a lower carbon economy and connected risks Risk Culture – monitoring to ensure a robust risk culture (relating to risk awareness, risk taking and risk management) Ring-fencing – reviewing the ring-fencing requirements (including attestation and ongoing compliance requirements) In discharging its responsibilities, the Committee is to have regard to the interests of Barclays Bank UK Group’s stakeholders and shall (where appropriate) consider whether the Company and the Barclays Bank UK Group as a whole are delivering good customer outcomes. During 2024, the principal activities of the Committee were: * Overseeing the first and second line of defence elements of the risks and controls associated with the execution of the Barclays Bank UK Group’s strategy * Recommending to the Board that it adopt the revised ERMF following its annual refresh and approve the qualitative and quantitative Risk Appetite Statements * Reviewing and adopting the relevant Barclays Group policies, including the Compliance Risk Management Framework * Receiving and reviewing regular financial and non-financial risk reporting on each of the Principal Risks (detailed in the “Managing risk” section of the Strategic Report), and reviewing emerging risks * Reviewing the first and second line of defence reports on the risks associated with the acquisition of Tesco Bank, the entry into a long term, exclusive partnership with Tesco Stores Limited for an initial period of 10 years and, separately, the launch of a co-branded credit card with Amazon * Monitoring the risks associated with the evolving geopolitical and macroeconomic environment, including but not limited to receiving updates on operational risk, credit risk (specifically in Business Banking) and market risk exposures (to the extent applicable) as well as a regular focused update on the UK housing and mortgage market and its effect on the Barclays Bank UK Group’s mortgage portfolio * Reviewing compliance risk, with a focus on enhanced reporting in relation to financial crime risks (in light of the heightened financial crime environment, influenced by external factors such as cyber threats), and - in turn - overseeing the elevation of financial crime to a Principal Risk * Adopting the 2024 Limits and Mandates and monitoring the risk profile in accordance with the same * Monitoring compliance with key portfolio metrics, including the use of Chief Risk Officer discretion * Overseeing risk resources and the independence of the Risk and Compliance functions * Reviewing and recommending to the Board that it approve the Barclays Bank UK Group elements of the 2024 Barclays Group Recovery Plan and the 2024 Barclays Group Resolvability Self-Assessment Report * Reviewing and challenging the effectiveness of risk management and internal controls systems, including those risks identified by the findings of internal audits * Monitoring capital and liquidity levels and approving the Company sections of the Barclays Group 2024 Internal Capital Adequacy Assessment Process and Internal Liquidity Adequacy Assessment Process * Reviewing and approving the Barclays Bank UK Group’s stress testing scenarios and results * Monitoring the risks associated with the continued embedment of the Consumer Duty and, in that context, ensuring readiness for the second implementation deadline of 31 July 2024 for closed products and services (with a particular focus on customer understanding and fair value assessments) * Overseeing the challenges and opportunities that technology presents for banking products and services through regular reporting on operations and technology * Considering regular reports on the Barclays Bank UK Group’s operational resilience (including benchmarking analysis on its maturity) and recommending to the Board that it approve the annual 2024 self-assessment. Monitoring readiness - ahead of the March 2025 regulatory deadline - to demonstrate the Barclays Bank UK Group’s ability to recover its important business services in severe but plausible service disruption scenarios within specified impact tolerances * Approving material new and amended product approvals, where considered necessary due to risk profile, with a particular focus on ensuring good customer outcomes (for example, the Blue Rewards proposition changes) * Reviewing the Barclays Bank UK Group’s ring-fencing compliance * Reviewing the Committee’s effectiveness ##### Principle Five: Remuneration The remuneration policies and practices should support strategy and promote long-term sustainable success, and be developed in accordance with formal and transparent procedures, ensuring no Director is involved in deciding their own remuneration outcome. Executive remuneration should be aligned to the company’s purpose and values and the successful delivery of the strategy; with outcomes taking account of company and individual performance, and wider circumstances such as pay across the company’s workforce and Barclays’ Fair Pay agenda. The Barclays Group Remuneration Policy is set by the Barclays Board Remuneration Committee, and reviewed and adopted by the Company’s independent Board Remuneration Committee. The policy ensures that remuneration is aligned to the Barclays Bank UK Group’s strategy and risk management approach and is designed to promote the long-term success of the Barclays Bank UK Group. Remuneration for executives and senior management is considered in the context of the wider workforce remuneration and alignment of incentives and rewards with performance and culture. Their remuneration is reviewed annually by the Board Remuneration Committee and the Barclays Board Remuneration Committee, as appropriate. No individual is involved in deciding their own remuneration. The Barclays Bank UK Group is committed to paying colleagues fairly, with regards to their specific role, seniority, responsibilities, skills and experience and other factors which properly affect pay, in a way that balances the needs of all the Barclays Bank UK Group’s stakeholders. You can find more information on Barclays’ Fair Pay agenda, which underpins all our remuneration decisions, in the Barclays Fair Pay Report 2024. The Barclays Bank UK Group also remains focused on closing its gender and ethnicity representation gaps where they exist, and the pay gaps that result, by increasing the representation of females and employees from underrepresented minority groups at more senior levels. You can find more information in the Barclays Group’s UK Pay Gaps 2024 disclosure. Governance Governance Report, including Corporate Governance Statement home.barclays/annualreport 29 Barclays Bank UK PLC Annual Report ##### Board Remuneration Committee The Committee comprises independent Non-Executive Directors (see page 22). At the invitation of the Committee Chair, meetings are attended by management, including the Chief Executive, Chief Financial Officer, Chief Risk Officer, Human Resources Director and Reward Director. The Barclays Group Human Resources Director and Barclays Group Reward and Performance Director also attend the Committee when requested to provide relevant updates. The principal role and responsibilities of the Committee are set out in its terms of reference and include: * Remuneration Policy – setting the over-arching principles and parameters of remuneration policy for the Barclays Bank UK Group, within the parameters set by the Barclays Board Remuneration Committee * Incentive Pay – considering and endorsing the incentive pool for the Company and its subsidiaries and the remuneration of key BBUK executives and other specified individuals as determined by the Committee from time to time * Approach to Remuneration – exercising oversight of remuneration issues within the Barclays Bank UK Group and matters that more generally concern people and culture within the Barclays Bank UK Group During 2024, the principal activities of the Committee were: * Overseeing reward and recognition across the Barclays Bank UK Group’s workforce to ensure alignment with the desired culture and behaviours * Reviewing and adopting the Barclays Group Remuneration Control Framework and the Barclays Group People Risk Reward Policy, in each case for application within the Barclays Bank UK Group * Reviewing and adopting the methodology and framework for 2024 incentive funding, and reviewing and endorsing the resulting incentive pool, including considering financial performance and risk updates (and the appropriateness of risk adjustments to incentives) * Reviewing and approving, where appropriate, the remuneration of the Company’s Executive Directors and other senior employees of the Barclays Bank UK Group * Considering the appropriate bonus cap to set for the Barclays Bank UK Group Material Risk Takers and adopting a formal cap of 10:1, effective from performance-year 2024 * Receiving updates on the Barclays Bank UK Group’s remuneration initiatives and developments, including Barclays’ Fair Pay agenda and gender and ethnicity pay gaps * Considering regular updates on legal, regulatory and stakeholder matters (including the remuneration aspects of the acquisition of Tesco Bank), and pay round considerations * Reviewing the Committee’s effectiveness The Committee also participated in a briefing session led by a third party adviser on trends in consumer retail banking and the wider stakeholder environment. ##### Principle Six: Stakeholder Relationships and Engagement Directors should foster effective stakeholder relationships aligned to the company’s purpose. The Board should recognise the importance of listening to, and understanding the views of its stakeholders, including the workforce, and specifically the impact of the company’s behaviour and business on customers and clients, colleagues, suppliers, communities and society more broadly, having regard to these views and impact when taking decisions. Throughout the year, the Board engages directly and indirectly (through regular reports from the Chief Executive and Executive Committee members) with its stakeholders to ensure it has a comprehensive understanding of the impact of the Barclays Bank UK Group's operations on those stakeholders, as well as their interests and views. ###### Customers and clients Customers and clients continue to be at the heart of the decisions we make. The Board is committed to ensuring good customer outcomes and that the Consumer Duty is demonstrably embedded throughout the organisation. In 2024, the Board engaged with customers and clients in a wide variety of ways, including: hearing from founders from across the climate technology escalator on moving from seed to scale as part of the Board’s two-day offsite meeting at the Cambridge Eagle Lab (in respect of which, see “Communities and society” below); hearing from key business introducers as to why they work with Barclays UK; monitoring customer outcomes via Consumer Duty reporting and the quarterly Customer Outcomes Report; and - whilst at Barclays UK’s Customer Experience Centre in Sunderland - observing colleague calls with customers and clients and, separately, observing colleagues who were interacting via the “Chat” feature in the Barclays App. This engagement provided first-hand insight into customers’ and clients’ needs, and how Barclays UK is serving them. Where appropriate, reporting to the Board was supplemented by the results of customer and client research (for example, in relation to customer segmentation). ###### Colleagues Details of our colleague engagement model can be found in the “Our colleagues” section of the Strategic Report and, separately, in the “Colleagues” section of the Barclays PLC 2024 Annual Report. The model ensures a regular, two-way dialogue with colleagues and, in this respect, there has been a combination of townhalls, skip-level meetings, site visits, leader-led sessions, focus groups and surveys. In 2024, direct engagement between the Board and colleagues included the Directors: having regular meetings with senior management; participating in colleague events (such as the Exceptional Achievement Awards); providing mentoring; and visiting branches (including but not limited to branches impacted by protest activity), Eagle Labs, and operational and strategic sites across the UK. The Board participated Governance Governance Report, including Corporate Governance Statement home.barclays/annualreport 30 Barclays Bank UK PLC Annual Report in a two-day offsite meeting held across a number of locations in the North East, including the Newcastle Eagle Lab and the Customer Experience Centre in Sunderland. The themes of the offsite were “Customer Care” and “Customer Service”, which the Board explored through a colleague lunch to recognise individuals for making Barclays UK simpler, better and more balanced and through different “breakout sessions” with colleagues (including - as mentioned above - observing colleague calls with customers and clients and, separately, observing colleagues who were interacting via the “Chat” feature in the Barclays App). The Non-Executive Directors also met with two cohorts of Managing Director and Director colleagues during the year, which allowed them to hear a broad range of colleague opinions on challenges and opportunities within the bank. The Board receives feedback from colleagues on a variety of topics via the bi-annual Your View surveys, which - together with the aforementioned direct engagement, both inside and outside of the boardroom - enables the Board to take colleagues’ views into account when making decisions likely to affect their interests. #### Suppliers For information on our engagement with suppliers, please see page 33 of the Directors’ Report. #### Communities and society The Board has continued to engage with both the Barclays Group and management in relation to the Barclays Group’s climate strategy and how the Barclays Bank UK Group can play its part in supporting the transition to a low-carbon economy. Tracy Corrigan’s role as the Board’s representative on the Barclays Board Sustainability Committee has also enabled her to provide the Board with critical insight into the Barclays Board’s oversight of climate and sustainability matters and to represent the retail bank in that forum. With the climate strategy in mind, the Board participated in a two-day offsite meeting at the Cambridge Eagle Lab, which was relaunched in October 2023 as a dedicated centre for scale-ups and start-ups who are leading in climate innovation. The Board heard about how the site had been retrofitted and the Lab’s partnership with Carbon 13. The Board also met with founders from across the climate technology escalator, who provided insight on their experiences of moving from seed to scale. For more information on our role in society, please refer to the Society section of the Strategic Report and the Climate and Sustainability Report. #### Shareholder Finally, the Board is committed - in accordance with each Director’s duty under Section 172(1) of the Act - to promoting the success of the Company thereby creating and delivering long-term, sustainable value for its sole shareholder, Barclays. This was one of the key considerations when the Board was overseeing the shaping of and providing input into the Barclays Bank UK Group elements of the Barclay’s Group’s strategy. The Board regards engagement with the Company’s sole shareholder as being crucial to its ongoing understanding of the Barclays Group’s expectations and priorities. With that in mind, and akin to previous years, the Board was pleased to welcome both the Barclays Group Chairman and the Group Chief Executive to meetings in 2024 - as well as certain Barclays’ Executive Committee members - in order to discuss Barclays Group matters and for those individuals to gain a better understanding of the opportunities and risks of the retail bank. The Chair’s position on the Barclays Board also ensures the views of the Barclays Bank UK Group are represented at the Barclays Group level. The Directors believe that this engagement model works well and intend to use it again in 2025, supported by any informal engagement opportunities that may arise during the course of the year. For more information about the Barclays Bank UK Group’s key stakeholders, how management and/or the Directors engaged with them, the key issues raised and actions taken, please refer to the Section 172(1) Statement on pages 15 to 16 of the Strategic Report. Strategic Report Engaging with our stakeholders home.barclays/annualreport 31 Barclays Bank UK PLC Annual Report --- ### Directors’ Report The Directors present their report together with the audited accounts for the Company for the year ended 31 December 2024. Section 414A of the Act requires the Directors to present a Strategic Report in the Annual Report. The information can be found on pages 2 to 16. The Company has addressed the Non-Financial Reporting requirements contained in sections 414CA and 414CB of the Act through the disclosure contained in the Non-Financial and Sustainability Information Statement in the Barclays PLC 2024 Annual Report. In addition, the Company has chosen, in accordance with section 414C(11) of the Act and as noted in this Directors’ Report, to include certain matters in its Strategic Report that would otherwise be disclosed in this Directors’ Report: * an indication of likely future developments can be found in the Strategic Report * the particulars of important events affecting the Company since 31 December 2024 can be found in the Strategic Report and Note 24 (Legal, competition and regulatory matters) to the financial statements Other information that is relevant to the Directors’ Report, and which is incorporated by reference into this report, can be located at: | | Page(s) | |---|---| | Performance measures | 5 to 6 | | Managing risk, including Principal Risks | 7 to 9 | | Society | 13 to 14 | | Climate and Sustainability Report | 17 to 20 | | Governance Report | 22 to 31 | Disclosures required pursuant to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (2008 Regs) as updated by the 2018 Regs can be found on the following pages: | | Page | |---|---| | Engagement with employees (Sch.7 Para 11 and 11A 2008/2018 Regs) | 12 | | Financial Instruments (Sch.7 Para 6 2008 Regs) | 197 to 213 | | Hedge accounting policy (Sch.7 Para 6 2008 Regs) | 198 | #### Profits and dividends The results of the Barclays Bank UK Group show statutory profit after tax of £2,620m (2023: £1,922m). The Barclays Bank UK Group had net assets of £18,585m at 31 December 2024 (2023: £16,861m). The Company will pay a £825m dividend to its parent, Barclays PLC. Further details on dividends on ordinary shares paid in 2024 are set out in Note 10 to the financial statements. #### Share capital There was no increase in ordinary share capital during the year. Barclays PLC owns 100% of the issued ordinary shares. There are no restrictions on the transfer of ordinary shares or agreements between holders of ordinary shares known to the Company, which may result in restrictions on the transfer of ordinary shares or voting rights. Further information on the Company’s share capital can be found in Note 26 to the financial statements. #### Powers of Directors to issue or buy back the Company’s shares The powers of the Directors are determined by the Act and the Company’s Articles of Association. No shares were repurchased in 2024. #### Directors The list of current Directors of the Company can be found in the Governance Report on page 22. Changes to Directors during the year and up to the date of signing this report are set out below. | Name | Role | Effective date of appointment / resignation | |---|---|---| | Matt Hammerstein | Chief Executive | Resigned 20 February 2024 | | Vim Maru | Chief Executive | Appointed 20 February 2024 | #### Directors’ indemnities ‘Qualifying third party indemnity’ provisions (as defined by section 234 of the Act) were in force during the course of the financial year ended 31 December 2024 for the benefit of the then Directors of the Company and the then Directors of certain of the Company's subsidiaries and, at the date of this report, are in force for the benefit of the Directors of the Company and the Directors of certain of the Company's subsidiaries in relation to certain losses and liabilities which they may incur (or have incurred) in connection with their duties, powers or office. The Barclays Group also maintains Directors’ and Officers’ Liability Insurance which gives appropriate cover for legal action brought against the Company’s Directors. Governance Directors’ Report home.barclays/annualreport 32 Barclays Bank UK PLC Annual Report #### Political donations The Barclays Bank UK Group did not give any money for political purposes in the UK, or outside the UK, nor did it make any political donations to political parties or other political organisations, or to any independent election candidates, or incur any political expenditure during the year. Details of any political contributions made by the wider Barclays Group can be found in the Directors Report in the Barclays PLC 2024 Annual Report. #### Support for candidates and colleagues with disabilities and long-term conditions Barclays’ commitment to inclusion means we want to ensure that candidates with disabilities and long-term health conditions receive support and adjustments in the application process and beyond. Barclays welcomes applications from all candidates and is committed to ensuring reasonable adjustments (accommodations) are put in place to ensure a fair and inclusive candidate experience. Barclays is committed to providing all colleagues with the support and tools they need to have a productive and fulfilling career. We can consider making adjustments to remove or reduce barriers colleagues might face if they have a disability, health concern or mental health condition. We also ensure opportunities for training, career development and promotion are available to all. #### Engagement with customers, suppliers and others in a business relationship with the Company Barclays must effectively manage, monitor and mitigate risks in our supply chain. The Directors, via management, have regard to the need to foster business relationships with suppliers. We expect our Third Party Service Providers (TPSP) to make responsible decisions that, where relevant, take our stakeholders’ needs into account in both the short and the long term. Barclays expects the TPSPs to comply with applicable laws, regulations and standards within the geographies in which they operate. Barclays’ standard approach to new TPSP on boarding and renewal begins by assessing the services that are being provided and ascertaining the level of risk. TPSPs that are assessed as being above a low risk of exposure from a business risk perspective (at the point of onboarding and on an ongoing basis) are subject to Barclays’ Supplier Control Obligations (SCOs). TPSPs to whom the SCOs apply become managed TPSPs and are subject to ongoing management and controls assurance during the term of service. Prior to contractual agreement and service go live, these TPSPs are required to complete a pre-contractual questionnaire which captures their adherence to the SCOs and Barclays’ TPSP Code of Conduct (TPSP CoC). The TPSP CoC encourages our TPSPs to adopt our approach to doing business and details our expectations for matters including environmental management, and human rights, and also for living the Barclays Values. Barclays works closely with the Small Business Commissioner and other organisations, including Good Business Pays, to raise awareness to the public and larger businesses on late payments and the impact these can have on businesses and business owners. For more information on our engagement with customers and clients, please refer to the “Customers and clients” section of the Strategic Report, page 30 of the Governance Report, and the “Customers and clients” section of the Barclays PLC 2024 Annual Report. #### Branches and Country-by-Country Reporting The Barclays Bank UK Group operates through branches, offices and subsidiaries in the UK. The Company is exempt from publishing information required by The Capital Requirements (Country-by-Country Reporting) Regulations 2013 as the information is published by its parent, Barclays PLC. The information is due to be published on or around 13 February 2025 and will be available at home.barclays/annualreport. #### Research and development In the ordinary course of business, the Barclays Bank UK Group develops new products and services in each of its business divisions. #### Statutory auditor The Barclays Board Audit Committee reviews the appointment of the Barclays Group statutory auditor, as well as their relationship with the Barclays Group, including monitoring the Barclays Group’s use of the statutory auditors for non-audit services and the balance of audit and non-audit fees paid to them. The Company’s Board Audit Committee also monitors the use of the statutory auditors for non-audit services within the Barclays Bank UK Group. In December 2024, Barclays announced its intention to conduct a formal tender process for the role of statutory auditor for the Barclays Group (including the Company) with effect from the 2027 financial year onwards. After recommendation by the Board Audit Committee and upon the request of the Barclays Board, the Board approved the commencement of the formal tender process for the statutory auditor. The audit tender process will be overseen by the Barclays Board Audit Committee (with support from the Board Audit Committee) and is expected to conclude in June 2025. An announcement will be made by Barclays following the selection of the preferred firm by the Barclays Board. For more information on the audit tender process, please refer to the report of the Barclays Board Audit Committee in the Barclays PLC 2024 Annual Report. #### 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 the Company’s 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 the Company's auditor is aware of that information. This confirmation is given pursuant to section 418 of the Act 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 pages 160 to 169, is made with a view to distinguishing for shareholders the respective responsibilities of the Directors and of the auditor in relation to the financial statements. Governance Directors’ Report home.barclays/annualreport 33 Barclays Bank UK PLC Annual Report #### Going concern In preparing the Barclays Bank UK Group’s financial statements, the Directors are required to: * assess the Barclays Bank UK Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and * use the going concern basis of accounting unless they either intend to liquidate the Barclays Bank UK Group or to cease operations, or have no realistic alternative but to do so. The Barclays Bank UK Group’s business activities, financial position, capital, factors likely to affect its future development and performance and its objectives and policies in managing the financial risks to which it is exposed are discussed in the Strategic Report and Risk Management sections. The Directors have evaluated these risks in the preparation of the financial statements and consider it appropriate to prepare the financial statements on a going concern basis. #### Preparation of accounts The Directors are required by the Act to prepare the Company and the Barclays Bank UK Group accounts for each financial year and, with regard to Barclays Bank UK Group accounts, in accordance with UK-adopted international accounting standards. The Directors have prepared these accounts in accordance with (a) UK-adopted international accounting standards; and (b) International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), including interpretations issued by the IFRS Interpretations Committee. Pursuant to the Act, 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 Bank UK Group and the Company and of their profit or loss for that period. The Directors consider that, in preparing the financial statements on pages 170 to 243, the Barclays Bank UK Group and 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, provide the information necessary for the Company’s sole shareholder to assess the Barclays Bank UK Group and Company’s position and performance, business model and strategy. The Directors are responsible for such internal controls as they determine 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 Barclays Bank UK Group keep accounting records which disclose with reasonable accuracy the financial position of the Company and the Barclays Bank UK Group and which enable them to ensure that the financial statements comply with the Act. The Directors are also responsible for preparing a Strategic Report, Directors’ 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 the Company’s 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 Company and to prevent and detect fraud and other irregularities. The current Directors, whose names and functions are set out on page 22, confirm to the best of their knowledge that: (a) the financial statements, prepared in accordance with (a) UK-adopted international accounting standards; and (b) IFRS as issued by the IASB, including interpretations issued by the IFRS Interpretations Committee, 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, which is represented by the Strategic Report and the Directors’ Report, includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face. By order of the Board Katie Marshall Company Secretary 12 February 2025 Barclays Bank UK PLC Registered in England. Company No. 9740322 Registered office: 1 Churchill Place, London E14 5HP Governance Directors’ Report home.barclays/annualreport 34 Barclays Bank UK PLC Annual Report --- ### Other Governance - Managing data privacy, security and resilience #### Managing data privacy, security and resilience We have strict policies to protect privacy and keep data secure. ##### Data privacy Most of the jurisdictions in which Barclays operates have privacy and data protection laws in effect. While these may vary in detail, generally they reflect internationally recognised privacy principles found in the UN’s Universal Declaration of Human Rights, the European Convention on Human Rights and the European Union’s Charter of Fundamental Rights. We strive to operate in accordance with these standards and recognise that respect for privacy rights is a key element of good corporate governance and social responsibility. We strive to be transparent about our use of personal information when delivering our products and services and acknowledge the responsibility we have for safeguarding privacy. As Barclays increasingly adopts digital solutions to deliver next-generation consumer financial services, we appreciate our clients, customers and others may wish to understand how this may impact the use of their personal information. A globally applicable Barclays Data Privacy Standard sets out what is expected of all Barclays businesses and functions when collecting, using and sharing personal information. To promote clear accountability, the Standard includes the requirement for each business to appoint an accountable executive who has ultimate responsibility for the processing of personal data within that business. An agreed assurance programme measures compliance with the Data Privacy Standard. Barclays colleagues must complete annual privacy training which is reviewed and refreshed each year, with additional tailored training provided as necessary. The Group Data Protection Officer (DPO) reports on data privacy issues to the highest level of management. Through client, customer and employee privacy notices, we endeavour to explain clearly and openly how and why we use personal information and the legal grounds we rely on. When we receive complaints, we seek to address them fairly. Several jurisdictions also provide individuals with specific rights, such as the right to have access to or request deletion of their personal information. Barclays provides a public mailbox and secure channels via its website to enable individuals to make their privacy requests and receive responses from a dedicated team. Barclays requires its suppliers to comply with data protection and privacy laws, regulations and standards relevant to the jurisdictions in which they operate and relevant to any transferred personal data. Our requirements are set out and principally managed through our supplier contract templates, which require that suppliers commit to ensuring personal data shared with them is safeguarded and respected throughout the supply chain. ##### Data security As detailed below, Barclays' Chief Security Office and Chief Information Security Office operate controls aimed at mitigating cybersecurity-related risks and understanding internal and external threats. Barclays deploys controls designed to protect its sensitive information and the data that has been entrusted to us by customers and clients, in line with our Standards, taking into account findings from internal and external reviews of our controls. Barclays seeks to protect the security of data we share with third parties, including by conducting remote and on-site inspections with certain suppliers to review their controls against contractual obligations and industry standards. A Third Party Service Provider Framework is in place which sets out control requirements for business units to manage the operational, reputational, conduct and legal risks to Barclays through its supply chain. In operating under a hybrid working model, we have continued to educate colleagues on cybersecurity risks in order to help minimise risks related to remote working, such as data exploitation or leakage. Barclays works with industry bodies and cybersecurity vendors to learn from risk events in other organisations. Our teams use such intelligence to simulate plausible cybersecurity and data compromise scenarios that allow us to exercise, review and improve our response and recovery plans in preparation for evolving threats. ##### Operational resilience Customers and clients have increased expectations for us to be ‘Always On’. The interconnectivity of the financial sector means the stability and resilience of our systems, workforce and the continued provision of third party services, all have a direct impact on the quality of our service. Resilience and security is a focus for the Board. Barclays continues to strengthen its resilience posture and is focused on its ability to recover from a range of ‘severe but plausible’ scenarios which could cause detriment to its customers and clients and the broader financial market. To enable this, we define Groupwide business services and their interdependencies across the Group, including technology, third party services and our workforce. Recovery plans and business response plans have been developed for a range of different disruption events, such as cyber or data integrity disruptions, or technology failures. These recovery plans are reviewed and validated through regular Governance Other Governance home.barclays/annualreport 35 Barclays Bank UK PLC Annual Report testing which supports our aim to reduce the volume and impact of operational incidents year on year. We also conduct regular assurance on third parties to assess their capability. Operational resilience is delivered through an established and robust Operational Resilience Framework underpinned by a Policy, Standards, methodologies and procedures. These are integrated with the ERMF and set the tone from the top. The Standards are embedded within the Barclays Controls Framework and provide a consistent approach across the firm. The Operational Recovery Planning Policy and Standards drive the identification of the business services that are most important to Barclays, its customers, clients and the markets in which Barclays operates. The Standards also define requirements for setting recovery targets, mapping of dependencies, planning and testing. Resilience and security is the responsibility of everyone within the Group. All permanent employees are required to complete annual mandatory training on these topics. ##### Chief Security Office and Chief Information Security Office Barclays' Chief Security Office and Chief Information Security Office exist to keep the bank, its customers, clients, and colleagues safe and secure, and to support the resilience of our operations. They support Barclays' ability to operate in a protected and secure environment, and actively promote a culture of security as everyone's responsibility. The Group Chief Security Officer and Group Chief Information Security Officer (CISO) head Barclays' Chief Security Office and Chief Information Security Office, respectively. Group Chief Security Office is responsible for physical security, threat intelligence, crisis management, and investigations and liaising with law enforcement, among other areas. Barclays' Group Chief Security Officer combines 10 years of law enforcement experience with over 20 years of experience in senior leadership roles managing security at global financial institutions, and is supported by a leadership team with expertise in threat intelligence, investigations, security transformation, and crisis management, as well as other teams of subject matter experts and analysts. In 2024, Barclays’ Group CISO was elevated to report directly to the Group Chief Information Officer (a member of the Group Executive Committee), to leverage the strategic and operational benefits of aligning cybersecurity and technology. The Group Chief Information Officer reports to the Chief Operating Officer, and also sits on the Group Executive Committee. Barclays’ Group CISO is responsible for assessing and managing Barclays’ material risks from cybersecurity threats. The Group CISO is responsible for areas that, among others, include cybersecurity operations; internal penetration testing; third party security management; cryptography; vulnerability management; governance, risk, and compliance; cyber threat intelligence; and identity access management. The Group CISO has more than 20 years of experience managing cybersecurity for global financial institutions, including responsibility for cybersecurity fusion centres, cyber intelligence, security engineering and architecture, security operations, and network services. The Group CISO is supported by a team of CISOs for individual business units and jurisdictions. Chief Information Security Office leaders manage Barclays’ cybersecurity activities and are accountable for the day-to-day monitoring of residual risk, identification of gaps, oversight of remedial actions and implementation of strategy. The Group CISO and supporting leadership team collectively have advanced degrees and senior level experience managing cybersecurity risks in a variety of sectors, including those that represent critical national infrastructure, such as telecommunications and financial institutions. They are supported by teams of subject matter experts and analysts in a variety of specialisations, such as penetration testing, cyber-forensic investigations, security engineering, and vulnerability management. Supporting the delivery of Barclays’ cyber and information security strategy are multiple management committees, forums, and councils, including Cyber Control Councils for each of the eleven Standards supporting the Group Information and Cybersecurity Policy. These Cyber Control Standards Councils feed into the Cybersecurity Horizontal Controls Forum, the Group Controls Committee, the Group Risk Committee, and ultimately the Board Risk Committee. In addition, the Group COO holds standalone business reviews that include management updates on the status of cybersecurity across the Group, and a standalone COO Controls Forum that also escalates to the Group Controls Committee. Barclays’ Operational Risk and internal audit functions provide independent views of cyber risk management from second and third line of defence perspectives. Barclays assesses its cybersecurity activities against the industry-recognised National Institute of Standards and Technology (NIST) Cybersecurity Framework. Under Barclays' Enterprise Risk Management Framework, there is an Information and Cyber Security Policy supported by eleven Standards which define the minimum requirements for cybersecurity matters across the Barclays Group. The Policy leverages key risk indicators defined in the Standards to integrate cybersecurity risk management into the Group’s Enterprise Risk Management Framework. The Standards cover the following topics: Cryptography, Network Security, Security Configuration, Data Loss Prevention, Vulnerability Management, Data Security, Incident Response & Threat Intelligence, Threat Management, Governance, Identity & Access Management, and Application Security. The Group CISO approves and is accountable for the Information and Cyber Security Policy and associated Standards. As part of our programme, we periodically assess our performance against these Standards and identify areas for improvement and remediation. The Board Risk Committee, within its oversight of Operational Risk as a Principal Risk, is responsible for overseeing risks arising from cybersecurity threats. In 2024, the Group Chief Security Officer and Group CISO provided updates to the Board Risk Committee about cybersecurity risks facing the Group. Such updates addressed topics that included the cybersecurity threat environment and ransomware attack preparedness, measurement of Barclays' risk and control posture, cybersecurity incident trends and Barclays' response, plans to improve Barclays' ability to recover from a material cyberattack scenario, Barclays’ vulnerability management, privileged access to Barclays' systems, regulatory developments, and risks and opportunities related to emerging technology and artificial intelligence. Engaging external security consultants to conduct penetration tests, attack simulations and other reviews to independently benchmark Barclays’ cybersecurity capabilities is an important part of our cybersecurity programme that allows us to identify and remediate Governance Other Governance home.barclays/annualreport 36 Barclays Bank UK PLC Annual Report cybersecurity weaknesses. In 2024, Barclays’ Group CISO and Group Chief Information Officer briefed the Barclays Board Risk Committee on plans to address the findings of penetration testing and cybersecurity assessments and remediate identified weaknesses. Barclays also partners with third party security providers on certain activities such as cyber recovery, software vulnerability scanning, penetration testing, distributed denial of service (DDoS) attack prevention, phishing simulations, third party risk management, incident response, intelligence, fraud prevention, and industry benchmarking. An important part of Barclays’ cybersecurity environment is its Joint Operations Centres (JOCs), which operate 24x7x365 from three globally strategic locations, linking Barclays’ security professionals and incident response managers with control functions and business unit representatives. The JOCs deliver security responsiveness by uniting core security functions and providing a central information and coordination point for security incident management and escalation, based on defined severity levels. During live incidents, the Barclays Crisis Management Team monitors the response by Incident Management Teams, Resilience Leads, and others, and has discretion to invoke one or more Barclays Crisis Leadership Teams (CLTs). CLTs are business-led teams at entity, business unit, and regional levels that provide strategic leadership in a crisis, maintain incident management oversight, and coordinate key decision making. To manage security risk from Barclays’ third party suppliers, many of which perform critical services for Barclays businesses and handle sensitive Barclays data, we have a set of contractual Information and Cyber Security Supplier Control Obligations that are based on requirements in our internal Standards. Using our dedicated Third Party Security Management team’s capabilities, as well as third party tooling, we conduct assurance over our third and fourth parties against those obligations. Activity is structured on a risk-based approach that prioritises suppliers that underpin our most important business services. Identified issues are managed formally, but we also engage proactively with third party suppliers to help them strengthen their security and resilience posture. To recognise the risk presented by third party suppliers, which are increasingly targeted by threat actors, we regularly alert third party suppliers where we anticipate that they may be more vulnerable and should take preventative action. Notwithstanding such third party risk management efforts, Barclays does not have direct control over the cybersecurity of the systems of its third and fourth parties, limiting the Group’s ability to effectively protect and defend against certain threats. #### Certifications Barclays holds three ISO27001 certifications (i.e., the international standard on how to manage information security), Cyber Essentials / Cyber Essentials Plus Certification, and a UK certification for Digital Banking. #### Training Barclays requires colleagues to complete mandatory information security training at least annually. Topics covered include incident reporting procedures, protecting sensitive data, device security, data leakage prevention, social engineering awareness, and password management. Consequences of noncompletion may include disciplinary action and impact to compensation. Barclays performs a number of key activities related to identifying, investigating, responding to and containing phishing, including an operational process that provides education and awareness through phishing simulation exercises, and management interventions for employees who demonstrate susceptibility to phishing lures. To report suspected phishing to Barclays' JOCs for further investigation, colleagues have a reporting tool integrated into their email account and receive feedback on whether the reported email was suspect or genuine. Barclays uses metrics to continually refine its phishing education and training. Governance Other Governance home.barclays/annualreport 37 Barclays Bank UK PLC Annual Report --- ## Risk review ### Contents | Risk management strategy | Page | |---|---| | Overview of the Barclays Bank UK Group’s approach to risk management. | | | ▪ Enterprise Risk Management Framework (ERMF) | 41 | | ▪ Segregation of duties – the “Three Lines of Defence” model | 41 | | ▪ Principal risks | 41 | | ▪ Risk appetite | 42 | | ▪ Risk committees | 43 | | ▪ The Barclays Bank UK Group’s risk culture | 44 | | 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 | 45 | | ▪ Material existing and emerging risks impacting individual principal risks | 49 | | ▪ Climate risk | 49 | | ▪ Credit risk | 50 | | ▪ Treasury and capital risk | 51 | | ▪ Operational risk | 52 | | ▪ Model risk | 55 | | ▪ Compliance risk | 55 | | ▪ Reputation risk | 56 | | ▪ Legal risk and legal, competition and regulatory matters | 57 | | ▪ Financial crime risk | 58 | | Principal risk management | | | The Barclays Bank UK Group’s approach to risk management for each principal risk with focus on organisation and structure and roles and responsibilities. | | | ▪ Climate risk management | 59 | | ▪ Credit risk management | 63 | | ▪ Market risk management | 64 | | ▪ Treasury and capital risk management | 65 | | ▪ Operational risk management | 67 | | ▪ Model risk management | 67 | | ▪ Compliance risk management | 68 | | ▪ Reputation risk management | 69 | | ▪ Legal risk management | 69 | | ▪ Financial crime risk management | 70 | | Risk performance | Page | |---|---| | Climate risk: The impact on Financial (Credit, Market, Treasury & Capital risks) and Operational risks arising from climate change through physical risks and risks associated with transitioning to a lower carbon economy. | | | ▪ Climate risk performance | 71 | | Credit risk: The risk of loss to the Barclays Bank UK Group from the failure of clients, customers or counterparties (including sovereigns), to fully honour their obligations to the Barclays Bank UK Group, including the whole and timely payment of principal, interest, collateral and other receivables. | | | ▪ Credit risk overview and summary of performance | 78 | | ▪ Maximum exposure and effects of netting, collateral and risk transfer | 79 | | | ▪ Expected credit losses | 83 | | | – Loans and advances at amortised cost by product | 83 | | | – Movement in gross exposure and impairment allowance including provisions for loan commitments and financial guarantees | 86 | | | – Stage 2 decomposition | 99 | | | – Stage 3 decomposition | 99 | | | ▪ Management adjustment to models for impairment | 100 | | | ▪ Climate risk ECL assessment | 102 | | | ▪ Measurement uncertainty and sensitivity analysis | 102 | | | ▪ Analysis of the concentration of credit risk | 111 | | | – Credit risk concentration by industry and geography | 111 | | | ▪ Approach to management and representation of credit quality | 113 | | | – Asset credit quality | 113 | | | – Debt securities | 113 | | | – Balance sheet credit quality | 114 | | | – Credit exposures by internal PD grade | 118 | | | ▪ Analysis of specific portfolios and asset types | 132 | | | – Secured home loans | 132 | | | – Retail credit cards and retail other | 133 | | Market risk: The risk of loss arising from potential adverse changes in the value of the Barclays Bank UK 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 | 134 | | Treasury and Capital risk – Liquidity: The risk that the Barclays Bank UK 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 | 136 | | ▪ Liquidity risk stress testing | 136 | | | ▪ Contractual maturity of financial assets and liabilities | 138 | | Treasury and Capital risk – Capital: The risk that the Barclays Bank UK 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 and stressed conditions (both actual and as defined for internal planning or regulatory testing purposes). This also includes the risk from the Barclays Bank UK Group’s pension plans. | | | ▪ Capital risk overview | 144 | | | – Capital ratios | 144 | | | – Capital resources | 144 | | | – Leverage ratios | 144 | | Treasury and Capital risk – Interest rate risk in the banking book: The risk that the Barclays Bank UK 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 | 145 | | | ▪ Net interest income sensitivity | 145 | | | ▪ Analysis of equity sensitivity | 145 | | | ▪ Volatility of the FVOCI portfolio in the liquidity pool | 146 | | Operational risk: The risk of loss to the Barclays Bank UK 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 | 147 | | ▪ Operational risk profile | 147 | | Model risk: The potential for adverse consequences from decisions based on incorrect or misused model outputs and reports. | | | ▪ Model risk overview and summary of performance | 150 | | Compliance risk: The risk of poor outcomes for, or harm to, customers, clients and markets, arising from the delivery of the Barclays Bank UK Group's products and services (i.e. conduct risk), and the risk to Barclays, its clients, customers or markets from a failure to comply with the Laws, Rules and Regulations applicable to the firm (LRR risk). This risk could manifest in a variety of ways, including: | | | ▪ Compliance risk overview and summary of performance | 150 | | Reputation risk: The risk that an action, transaction, investment, event, decision, or business relationship will reduce trust in the Barclays Bank UK Group’s integrity and/or competence. | | | ▪ Reputation risk overview and summary of performance | 151 | | Legal risk: The risk of loss or imposition of penalties, damages or fines from the failure of the Barclays Bank UK Group to meet its legal obligations, including regulatory or contractual requirements. | | | ▪ Legal risk overview and summary of performance | 151 | | Risk review | Content | |---|---| | Supervision and regulation | | | The Barclays Bank UK Group’s operations are subject to a significant body of rules and regulations. | | | ▪ Supervision of the Barclays Bank UK Group | 152 | Risk review Content home.barclays/annualreport 38 Barclays Bank UK PLC Annual Report ### Risk management strategy #### Overview of the Barclays Bank UK Group’s approach to risk management. * Enterprise Risk Management Framework (ERMF) 41 * Segregation of duties – the “Three Lines of Defence” model 41 * Principal risks 41 * Risk appetite 42 * Risk committees 43 * The Barclays Bank UK Group’s risk culture 44 #### 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 45 * Material existing and emerging risks impacting individual principal risks 49 * Climate risk 49 * Credit risk 50 * Treasury and capital risk 51 * Operational risk 52 * Model risk 55 * Compliance risk 55 * Reputation risk 56 * Legal risk and legal, competition and regulatory matters 57 * Financial crime risk 58 #### Principal risk management The Barclays Bank UK Group’s approach to risk management for each principal risk with focus on organisation and structure and roles and responsibilities. * Climate risk management 59 * Credit risk management 63 * Market risk management 64 * Treasury and capital risk management 65 * Operational risk management 67 * Model risk management 67 * Compliance risk management 68 * Reputation risk management 69 * Legal risk management 69 * Financial crime risk management 70 Risk review Contents home.barclays/annualreport 38 Barclays Bank UK PLC Annual Report ### Risk performance #### Climate risk Climate risk: The impact on Financial (Credit, Market, Treasury & Capital risks) and Operational risks arising from climate change through physical risks and risks associated with transitioning to a lower carbon economy. * Climate risk performance 71 Credit risk: The risk of loss to the Barclays Bank UK Group from the failure of clients, customers or counterparties (including sovereigns), to fully honour their obligations to the Barclays Bank UK Group, including the whole and timely payment of principal, interest, collateral and other receivables. * Credit risk overview and summary of performance 78 * Maximum exposure and effects of netting, collateral and risk transfer 79 * Expected credit losses 83 * Loans and advances at amortised cost by product 83 * Movement in gross exposure and impairment allowance including provisions for loan commitments and financial guarantees 86 * Stage 2 decomposition 99 * Stage 3 decomposition 99 * Management adjustment to models for impairment 100 * Climate risk ECL assessment 102 * Measurement uncertainty and sensitivity analysis 102 * Analysis of the concentration of credit risk 111 * Credit risk concentration by industry and geography 111 * Approach to management and representation of credit quality 113 * Asset credit quality 113 * Debt securities 113 * Balance sheet credit quality 114 * Credit exposures by internal PD grade 118 * Analysis of specific portfolios and asset types 132 * Secured home loans 132 * Retail credit cards and retail other 133 Market risk: The risk of loss arising from potential adverse changes in the value of the Barclays Bank UK 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 134 Treasury and Capital risk – Liquidity: The risk that the Barclays Bank UK 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 136 * Liquidity risk stress testing 136 * Contractual maturity of financial assets and liabilities 138 Treasury and Capital risk – Capital: The risk that the Barclays Bank UK 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 and stressed conditions (both actual and as defined for internal planning or regulatory testing purposes). This also includes the risk from the Barclays Bank UK Group’s pension plans. * Capital risk overview 144 Treasury and Capital risk – Interest rate risk in the banking book: The risk that the Barclays Bank UK 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 145 * Analysis of net interest income and equity sensitivity 145 * Volatility of the FVOCI portfolio in the liquidity pool 146 Operational risk: The risk of loss to the Barclays Bank UK 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 147 * Operational risk profile 147 Model risk: The potential for adverse consequences from decisions based on incorrect or misused model outputs and reports. * Model risk overview and summary of performance 150 Compliance risk: The risk of poor outcomes for, or harm to, customers, clients and markets, arising from the delivery of the Barclays Bank UK Group's products and services (i.e. conduct risk), and the risk to Barclays, its clients, customers or markets from a failure to comply with the Laws, Rules and Regulations applicable to the firm (LRR risk). This risk could manifest in a variety of ways, including: * Compliance risk overview and summary of performance 150 Reputation risk: The risk that an action, transaction, investment, event, decision, or business relationship will reduce trust in the Barclays Bank UK Group’s integrity and/or competence. * Reputation risk overview and summary of performance 151 Legal risk: The risk of loss or imposition of penalties, damages or fines from the failure of the Barclays Bank UK Group to meet its legal obligations, including regulatory or contractual requirements. * Legal risk overview and summary of performance 151 Risk review Risk performance Content home.barclays/annualreport 39 Barclays Bank UK PLC Annual Report ### Risk performance #### Climate risk Climate risk: The impact on Financial (Credit, Market, Treasury & Capital risks) and Operational risks arising from climate change through physical risks and risks associated with transitioning to a lower carbon economy. * Climate risk performance 71 Credit risk: The risk of loss to the Barclays Bank UK Group from the failure of clients, customers or counterparties (including sovereigns), to fully honour their obligations to the Barclays Bank UK Group, including the whole and timely payment of principal, interest, collateral and other receivables. * Credit risk overview and summary of performance 78 * Maximum exposure and effects of netting, collateral and risk transfer 79 * Expected credit losses 83 * Loans and advances at amortised cost by product 83 * Movement in gross exposure and impairment allowance including provisions for loan commitments and financial guarantees 86 * Stage 2 decomposition 99 * Stage 3 decomposition 99 * Management adjustment to models for impairment 100 * Climate risk ECL assessment 102 * Measurement uncertainty and sensitivity analysis 102 * Analysis of the concentration of credit risk 111 * Credit risk concentration by industry and geography 111 * Approach to management and representation of credit quality 113 * Asset credit quality 113 * Debt securities 113 * Balance sheet credit quality 114 * Credit exposures by internal PD grade 118 * Analysis of specific portfolios and asset types 132 * Secured home loans 132 * Retail credit cards and retail other 133 Market risk: The risk of loss arising from potential adverse changes in the value of the Barclays Bank UK 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 134 Treasury and Capital risk – Liquidity: The risk that the Barclays Bank UK 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 136 * Liquidity risk stress testing 136 * Contractual maturity of financial assets and liabilities 138 Treasury and Capital risk – Capital: The risk that the Barclays Bank UK 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 and stressed conditions (both actual and as defined for internal planning or regulatory testing purposes). This also includes the risk from the Barclays Bank UK Group’s pension plans. * Capital risk overview 144 Treasury and Capital risk – Interest rate risk in the banking book: The risk that the Barclays Bank UK 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 145 * Analysis of net interest income and equity sensitivity 145 * Volatility of the FVOCI portfolio in the liquidity pool 146 Operational risk: The risk of loss to the Barclays Bank UK 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 147 * Operational risk profile 147 Model risk: The potential for adverse consequences from decisions based on incorrect or misused model outputs and reports. * Model risk overview and summary of performance 150 Compliance risk: The risk of poor outcomes for, or harm to, customers, clients and markets, arising from the delivery of the Barclays Bank UK Group's products and services (i.e. conduct risk), and the risk to Barclays, its clients, customers or markets from a failure to comply with the Laws, Rules and Regulations applicable to the firm (LRR risk). This risk could manifest in a variety of ways, including: * Compliance risk overview and summary of performance 150 Reputation risk: The risk that an action, transaction, investment, event, decision, or business relationship will reduce trust in the Barclays Bank UK Group’s integrity and/or competence. * Reputation risk overview and summary of performance 151 Legal risk: The risk of loss or imposition of penalties, damages or fines from the failure of the Barclays Bank UK Group to meet its legal obligations, including regulatory or contractual requirements. * Legal risk overview and summary of performance 151 Risk review Risk performance Credit risk home.barclays/annualreport 39 Barclays Bank UK PLC Annual Report ### Principal risk management #### Climate risk management In Barclays’ Climate Risk Framework, Climate Risk is defined as the risk of financial losses arising from climate change, through physical risks and risks associated with transitioning to a lower carbon economy. Physical risk: is defined as the risk of financial losses related to physical impacts of a changing climate. Physical risks can be event driven (acute risks), including increased frequency and/or severity of extreme weather events such as cyclones, hurricanes and flood. Longer term shifts in climate patterns (chronic risks) arise from sustained higher temperatures that may cause rises in sea levels, rising mean temperatures and more severe weather events such as increased occurrence of floods or fires. Transition risk: is defined as the risk of financial losses caused by extensive policy, legal, technology and market changes to address mitigation and adaptation requirements related to climate change. ##### Overview The physical and transition risks of climate change have the potential to drive other Principal Risks. For Barclays Bank UK Group, the impacts of climate risks are most pronounced in our ‘elevated’ portfolios, UK Mortgages and Business Banking Agriculture, through credit risk. These portfolios are therefore the primary focus for scenario analysis and carbon modelling within Barclays Bank UK Group. In the UK Mortgages portfolio this could materialise as impacts to affordability (i.e. through damage caused by flooding, or high insurance premiums) and devaluation of house prices (i.e. due to poor energy efficiency). Within Business Banking Agriculture, physical risks have the potential to drive declines in yield, whilst transition risks such as emissions taxation have the potential to increase costs, both impacting profitability. Given the significance of climate change, and to support the Barclays Group’s ambition to be a net zero bank by 2050, Climate Risk is a Principal Risk under Barclays’ ERMF. The Barclays Group has developed a Climate Risk Framework (CRF) for financial and operational risks stemming from climate change. This enables Barclays to foster a consistent approach for managing climate risk across the firm. The key principle underpinning this framework is that climate risk is recognised as a driver of other existing financial (Credit, Market, Treasury and Capital) and non-financial (including Operational) risks, and not treated as a standalone risk type. The CRF is supported by policies, standards and other relevant guidelines which contain control objectives that must be met. The Climate Risk Framework: * Includes definitions and descriptions for climate risk * Includes key principles for the identification, measurement, monitoring and reporting of climate risk * Outlines the approach to setting risk appetite for climate risk * Outlines roles and responsibilities applicable to the Climate Risk Framework The Climate Risk Policy sets out high level requirements and control objectives to address key principles articulated in the CRF. The Climate Risk Standard sets out control requirements for implementing control objectives defined within the Climate Risk Policy. Climate risk considerations have also been incorporated as applicable to the frameworks of other principal risks. The Climate Risk Framework, Climate Risk Policy and Climate Risk Standard are applicable for Barclays' business activities, with a focus on lending, capital markets and investments. Barclays’ approach to managing climate risk focuses on the effective, identification, prioritisation and mitigation of the material climate risks with Barclays’ portfolios. The approach is customised to reflect portfolio characteristics, size and exposure to specific climate risk drivers within various portfolios. Climate risk may also drive non-financial risks such as reputational risk, which continue to be managed under their respective risk frameworks. To implement its Climate Risk Framework, Barclays continuously implements new processes, tools, models and data repository as applicable whilst also enhancing its existing ones. The Group regularly reviews its approach and practices for alignment with regulatory developments and leading practices for climate risk. ##### Organisation, Roles & Responsibilities The Barclays Group Head of Climate Risk is the Principal Risk owner accountable for the management and oversight of the climate risk profile. The Barclays Group Head of Climate Risk reports directly to Group CRO. On behalf of the Board, the BRC reviews and approves the Group's approach to managing Climate Risk. Risk review Principal risk management home.barclays/annualreport 59 Barclays Bank UK PLC Annual Report #### Risk Identification Physical and transition risk drivers can lead to adverse financial impacts through various transmission channels. Transmission channels are causal chains that explain how climate risk drivers impact firms such as the Barclays Bank Group, either directly through their own operations and infrastructure or indirectly through their financing and investment activities. Through these transmission channels, risks for Barclays may materialise in its traditional risk categories such as credit risk, market risk, treasury and capital risk, and operational risk. The impact of climate risk drivers may be significant and widespread, affecting companies, households and the general economy leading to potential financial system contagion. Barclays' work on assessing climate-related risks have been focused on the short (0-1 year) and medium term (1-5 years) horizons, in line with our financial planning cycle. The longer-term climate (> 5years) risks have been considered using both quantitative approaches, such as reverse stress testing, and qualitative analysis. The effects of climate risk drivers through macro and micro transmissions channels are observed in Barclays' portfolio through traditional risk categories such as credit risk, market risk, treasury and capital risk, operational risk (including legal risk). The below table provides examples of how Barclays' Climate Risk framework considers potential key effects of climate risk drivers on Barclays' Principal Risk types. | Principal risk | Example effects of climate risk drivers | |---|---| | **Credit risk** | A changing climate (i.e. more frequent and more intense physical hazards) and society’s response (i.e. increased transition factors such as new policies or technologies to reduce carbon emissions) impacts Credit Risk. The impact on Credit Risk relates to the failure of clients, customers or counterparties to meet their obligations as a result of physical and transition risks, which may lead to potential losses and/or exposures outside the bank risk appetite in retail and wholesale credit portfolios. Climate change can drive direct impacts such as damage to fixed assets from physical hazards, leading to changes in output and increased costs. Indirect impacts may include material disruptions to supply chains and shifting demand for goods and services. Transition factors such as low-carbon policies or technologies could also change the value and creditworthiness of counterparties clients and customers. | | **Market risk** | The impact on Market Risk relates to potential adverse changes in the value of the firm's assets and liabilities from fluctuation in market variables as a result of physical and transition risks, which may lead to potential losses due to changes in equity and commodity prices and credit spreads. Either physical hazards or transition risk factors have the potential to trigger large, sudden and negative price adjustments where climate risk has not yet been incorporated into prices, driving additional Market Risk. Fluctuations in markets and prices in susceptible sectors or countries could drive losses to the value of the Bank’s assets and liabilities. | | **Treasury & capital risk** | The impact on Treasury & Capital Risk relates to the impact on the capital requirements and liquidity funding requirements as a result of physical and transition risks, which may lead to changes in capital plans, funding plan requirements, asset and liabilities management (ALM) and exposures to changes in interest rates. Climate events can drive Treasury & Capital Risk as counterparties draw down deposits and credit lines. Physical hazards, or transition factors could lead to increased volatility which could in turn change the value of investments and drive changes to funding requirements and accessibility, capital planning, capital requirements, or hedging methodologies. | | **Operational risk** | Physical hazards and transition risk factors can lead to impacts on the firm’s own operations including damage or unsuitability of premises, disruption to business operations and supply chain and ability to recover from outages (e.g. caused by workforce, technology and third-party service providers). For example, extreme weather events can impact the operation of bank offices, branches, and support facilities such as data centres. The transition to a low-carbon economy can lead to changes in operational processes, for example to mitigate climate impacts we need to decarbonise our buildings or requirements to achieve more carbon efficient buildings. Transition risks can also drive secondary impacts on operational risks such as the risk of misreporting as a result of enhanced regulatory disclosures requirements, or physical security breaches and branch closures as a result of protests related to Barclays’ lending activities. | Barclays’ climate risk identification includes monitoring of the external environment including regulatory developments, climate-related litigations and market developments for identifying climate risk drivers that could affect Barclays Bank UK Group’s portfolios. In addition to horizon scanning, Barclays has also developed processes to identify sectors which other Principal Risks must prioritise for further analysis and risk management activities. Following this assessment, the industry sectors that are highly exposed to climate risks are deemed to be of elevated risk. These assessments are regularly reviewed and benchmarked against external studies and research and incorporate inputs from the subject matter experts. In the UK Retail and Business Banking portfolios, Barclays is using both internal and external data sources to identify portfolio segments that are vulnerable to subsidence and flood risks. Additionally, Energy Performance Certificate (EPC) ratings have been identified for portfolios that are particularly vulnerable to transition risk. Methodology and breakdown of exposure to these risks is available on page 71. #### Risk Assessment The Barclays Bank UK Group uses its Risk Register process to assess the potential effects of climate risk drivers on its portfolios. The Barclays Bank UK Group Risk Register contains key risks that may impact forward-looking business plans across Barclays Bank UK Group. The materiality of climate risks is derived either quantitatively (typically based on stress testing) or through qualitative estimations. The potential impact is evaluated based on adverse but plausible scenario. The Barclays Bank UK Risk Register is refreshed on at least an annual basis and is subsequently used to support strategic planning, risk management, scenario design, sensitivity analysis and capital adequacy assessments. Risk review Principal risk management home.barclays/annualreport 61 Barclays Bank UK PLC Annual Report #### Credit risk management (audited) Credit risk: The risk of loss to the Barclays Bank UK Group from the failure of clients, customers or counterparties, including sovereigns, to fully honour their obligations to the Barclays Bank UK Group including the whole and timely payment of principal, interest, collateral and other receivables. ##### Overview The credit risk that the Barclays Bank UK Group faces arises from retail and wholesale loans and advances together with the counterparty credit risk arising from derivative contracts with market counterparties; trading activities, including: debt securities, settlement balances with market counterparties, Fair value through other comprehensive income (FVOCI) assets and reverse repurchase loans. Wholesale lending in the Barclays Bank UK Group includes Business Banking and Education, Social Housing and Local Authorities (ESHLA). 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 Barclays Bank UK 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, including risk return objectives, 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 Barclays Bank UK Group, 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 Barclays UK 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; setting strategies for approval of transactions (principally retail); setting risk appetite; monitoring risk against limits and other parameters; setting recession readiness frameworks to protect portfolios in the event of economic stress, 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 and maintaining robust collections and recovery processes/units for retail portfolios. The credit risk management teams in the Barclays Bank UK Group are accountable to the Barclays Bank UK Group CRO who, in turn, reports to the Barclays Group CRO. For wholesale portfolios, credit risk managers are organised in sanctioning teams by client portfolio. In the 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 entrusted with the higher levels of delegated authority. The largest credit exposures require the support of the Barclays Bank UK PLC Senior Credit Officer. For exposures in excess of the Barclays Bank UK PLC Senior Credit Officer’s authority, approval by the Barclays Bank UK PLC CRO is also required. Where exposures are also of Barclays Group level significance, the Barclays Group Credit Risk Committee, attended by the Barclays Bank UK PLC Senior Credit Officer, provides a formal mechanism for the Barclays Group Senior Credit Officer to exercise the highest level of credit authority. ##### Credit risk mitigation The Barclays Bank UK 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 Barclays Bank UK Group’s normal practice is 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 Risk review Principal risk management home.barclays/annualreport 63 Barclays Bank UK PLC Annual Report 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 Barclays Bank UK 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 second lien charges over residential property and finance lease receivables * derivatives: the Barclays Bank UK Group also often seeks to enter into a margin agreement (e.g. Credit Support Annex) with counterparties with which the Barclays Bank UK 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 Barclays Bank UK Group subject to an agreement to return them for a fixed price * financial guarantees and similar off-balance sheet commitments: cash collateral may be held against these arrangements ##### Risk transfer A range of instruments including guarantees can be used to transfer credit risk from one counterparty to another. These mitigate credit risk in three 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 * first loss exposures across pools of credit risk can be hedged via synthetic securitisation structures, typically via CLN (credit lending notes) issuance. As these are fully funded upfront, they provide for a direct reduction in credit risk exposure on referenced pools #### Market risk management (audited) The risk of loss arising from potential adverse changes in the value of the Barclays Bank UK Group’s assets and liabilities from fluctuation in market variables including, but not limited to, interest rates, foreign exchange, credit spreads, implied volatilities and asset correlations. ##### Overview Market Risk within the Barclays Bank UK Group arises from the risk management of the assets held within the liquidity pool. As a result, the market risk in the Barclays Bank UK Group is minimal. Transactions carrying market risk are executed by the Barclays Bank UK Group Treasury function. ##### Organisation, roles and responsibilities The objectives of market risk management are to: * understand and control market risk by robust measurement, limit setting, reporting and oversight * control market risk within the allocated risk appetite To meet the above objectives, a governance structure is in place to manage these risks consistent with the ERMF. The Barclays Bank UK PLC Board Risk Committee recommends market risk appetite to the Barclays Bank UK PLC Board for their approval, within the parameters set by the Barclays PLC Board. The Barclays Bank UK Group CRO confirms the Barclays Bank UK Group market risk appetite with the Barclays Group CRO. The Market Risk Committee (MRC) reviews and makes recommendations concerning the Barclays Group-wide market risk profile to the Barclays Group Risk Committee. This includes overseeing the operation of the Market Risk Framework and associated policies and standards, monitoring market and regulatory changes, and reviewing limit utilisation levels. The committee is chaired by the Market Risk Principal Risk Lead and attendees include the business heads of market risk and business aligned market risk managers. The Barclays Bank UK Group Treasurer is accountable for all market risks associated with its activities, whilst the Barclays Bank UK Group CRO is the senior manager accountable for oversight of market risk, in line with the Barclays Group Framework. Risk review Principal risk management home.barclays/annualreport 64 Barclays Bank UK PLC Annual Report #### Treasury and capital risk management (audited) This comprises: Liquidity risk: The risk that the Barclays Bank UK 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 Barclays Bank UK 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 and stressed conditions (both actual and as defined for internal planning or regulatory testing purposes). This also includes the risk from the Barclays Group’s pension plans. Interest rate risk in the banking book: The risk that the Barclays Bank UK Group is exposed to capital or income volatility because of a mismatch between the interest rate exposures of its (non-traded) assets and liabilities. This also includes credit spread risk in the banking book, the risk that the Barclays Bank UK Group is exposed to capital or income volatility because of changes in credit spreads on its (non-traded) assets and liabilities. Barclays Bank UK Group Treasury manages treasury and capital risk exposure on a day-to-day basis with the Barclays Bank UK PLC Asset and Liability Committee (ALCO) acting as the principal management body. The Barclays Bank UK Group Treasury and Capital Risk function is responsible for oversight and provides insight into key capital, liquidity, interest rate risk in the banking book (IRRBB) and pension risk management activities.The assessment and management of the Barclays Bank UK Group’s capital and liquidity position and IRRBB and pension risk requires the use of judgement, assumptions and estimates. Please see the description of material existing and emerging risks beginning on page 45 of this Annual Report for further details on such judgements, assumptions and estimates, including the potential risks involved. ##### Liquidity risk management (audited) ##### Overview The efficient management of liquidity is essential to the Barclays Bank UK Group in order to retain the confidence of the financial markets and maintain the sustainability of the business. Treasury and Capital Risk have created a framework to manage all liquidity risk exposures under both normal and stressed conditions. The framework is designed to maintain liquidity resources that are sufficient in amount, quality and funding tenor profile to remain within the liquidity limits set by the Barclays Bank UK PLC Board. The Board sets liquidity limits on 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 Barclays Bank UK Treasury and Capital Risk function is responsible for the management and governance of the liquidity risk framework, consistently with Barclays PLC Group policies and framework and with Barclays Bank UK CRO mandates. The framework established by Treasury and Capital Risk is designed to deliver the appropriate term and structure of funding, consistent with the liquidity risk appetite set by the Board. The framework incorporates a range of ongoing business management tools to monitor and stress test the Barclays Bank UK Group’s balance sheet, including limit setting. Limit setting and transfer pricing are tools designed to control the level of liquidity risk taken, and drive the appropriate mix of funds. In addition, Barclays Group maintains a recovery plan which includes application to the Barclays Bank UK Group. Adherence to limits reduces the likelihood that a liquidity stress event could lead to an inability to meet the Barclays Bank UK Group’s obligations as they fall due. The Barclays Bank UK PLC Board approves the Barclays Bank UK Group funding plan, internal stress tests, regulatory stress test results, and the Barclays Bank UK contribution to the Barclays Group recovery plan. The Barclays Bank UK PLC ALCO is responsible for monitoring and managing liquidity risk in line with the Barclays Bank UK Group’s funding management objectives, funding plan and risk framework. The Barclays UK Risk Committee monitors and reviews the liquidity risk profile and control environment, providing second line oversight of the management of liquidity risk. The Barclays Bank UK PLC Board Risk Committee reviews the risk profile and approved liquidity limits at least annually and the impact of stress scenarios on the Barclays Bank UK Group funding plan/forecast in order to agree the Barclays Bank UK Group’s projected funding abilities. ##### Capital risk management (audited) ##### Overview Capital risk is managed through ongoing monitoring and management of the capital and leverage position, regular stress testing and a robust capital governance framework. The objectives of the framework are to maintain adequate capital for the Barclays Bank UK Group 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. The Barclays Bank UK Group aims to prudently manage its overall leverage position (including risk of excessive leverage) by utilising plausible stress scenarios, reviewing and Risk review Principal risk management home.barclays/annualreport 65 Barclays Bank UK PLC Annual Report deploying management actions in response to deteriorating economic and commercial positions. In order to manage contingent leverage risk, the Barclays Bank UK Group considers the context from which the business consumption arises, the impact of client utilisation on leverage and the available actions to manage. ##### Organisation, roles and responsibilities Treasury has the primary responsibility for managing and monitoring capital adequacy. The Barclays Bank UK Group Treasury and Capital Risk function provides oversight of capital risk. Production of the Barclays Bank UK PLC Internal Capital Adequacy Assessment Process is the responsibility of Barclays Bank UK Group Treasury. Capital risk management is underpinned by a control framework and policies. Capital plans reflect the capital management strategy and are implemented to deliver on the Barclays Bank UK Group’s objectives, which are aligned to those of Barclays Group. The Barclays Bank UK Group-specific capital plans are developed in conformance with the Barclays Group control framework and policies for capital risk. The Barclays Bank UK PLC Board approves the Barclays Bank UK Group capital plan, internal stress tests and results of regulatory stress tests. The Barclays Bank UK PLC Board also approves the recovery options documented in the Barclays Group recovery plan pertaining to the Barclays Bank UK Group. The Barclays Bank UK PLC ALCO is responsible for monitoring and managing capital risk in line with the Barclays Bank UK Group’s capital management objectives, capital plan and risk frameworks. The Barclays UK Risk Committee monitors and reviews the capital risk profile and control environment, providing second line oversight of the management of capital risk. The Barclays Bank UK PLC Board Risk Committee reviews the risk profile, and sets risk appetite at a minimum annually and the impact of stress scenarios on the Barclays Bank UK Group capital plan/forecast in order to agree Barclays Bank UK Group’s projected capital resources. Management assures compliance with minimum regulatory capital requirements by reporting to the Barclays Bank UK PLC ALCO with oversight by the Barclays Group Treasury Committee, as required. In 2024, Barclays complied with all regulatory minimum capital requirements. Contingent leverage risk is managed by; i) setting comprehensive leverage (and RWA) targets for each business as part of the Treasury capital management process, taking into account adherence to early warning indicators and maintain a healthy leverage ratio, and; ii) Monitoring execution of actions taken to course-correct as necessary. Barclays Bank UK PLC is a participating employer in the UK Retirement Fund (UKRF), whose assets and liabilities are currently held on the Barclays Bank PLC balance sheet. It is Barclays intention to sectionalise the UKRF in July 2025, with Barclays Bank UK PLC employees moving to one section and other members in a separate section. Until that date, the nature of pension risk for Barclays Bank UK PLC is contingent, specifically on a Barclays Bank PLC default. Refer to Note 28 Staff Costs for further detail. ##### 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 Barclays Bank UK Group’s policy to remain within the defined risk appetite, hedging strategies are executed to mitigate the various IRRBB risks that result from these activities. However, the Barclays Bank UK Group remains susceptible to interest rate risk and other non-traded market risks from the following 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 from their contractual obligations with the Barclays Bank UK Group. 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 Barclays Bank UK Group ALCO, together with the Barclays Group Treasury Committee, are responsible for monitoring and managing IRRBB risk in line with the Barclays Bank UK Group’s management objectives and risk frameworks. The Barclays UK Risk Committee and Treasury and Capital Risk Committee monitor and review the IRRBB risk profile and control environment, providing second line oversight of the management of IRRBB. The Barclays Bank UK PLC Board Risk Committee reviews the interest rate risk profile, including setting of risk appetite at a minimum annually and the impact of stress scenarios on the interest rate risk of the Barclays Bank UK Group’s banking books. In addition, the Barclays Bank UK 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. Risk review Principal risk management home.barclays/annualreport 66 Barclays Bank UK PLC Annual Report #### Operational risk management Operational risk: The risk of loss to the Barclays Bank UK 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 and oversee 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 * deliver a consistent and aggregated measurement of operational risk which will provide clear and relevant insights, so that the right management actions can be taken to keep the operational risk profile consistent with the Barclays Bank UK Group’s strategy, the stated risk appetite and stakeholder needs The Barclays Bank UK Group operates within a system of internal controls that enables business to be transacted and risk taken without exposing the Barclays Bank UK Group 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 with the business and functional units where the risk arises. The operational risk profile and control environment is reviewed by business 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 Barclays UK Operational Risk Committee, the Barclays UK Risk Committee, the Barclays Bank UK PLC Board Risk Committee or the Barclays Bank UK PLC Board Audit Committee. In addition, specific reports are prepared by Operational Risk on a regular basis for the GRC and the Barclays Bank UK PLC Board Risk Committee. 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. Specific reports are prepared by the business and Barclays Bank UK Group Operational Risk on a regular basis for the Barclays UK Operational Risk Committee, the Barclays UK Risk Committee, and the BRC. The Barclays Group Head of Operational Risk is responsible for establishing, owning and maintaining an appropriate Barclays Group-wide Operational Risk Framework, meanwhile the Barclays Bank UK PLC Head of Operational Risk is responsible for overseeing the portfolio of operational risk across all Barclays Bank UK Group businesses. 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 Barclays Bank UK Group’s operational risk profile, including risk-based review and challenge. 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: Change Delivery Management Risk; Data & Records Management Risk; Financial Reporting Risk; Fraud Risk; Information Security Risk; Operational Recovery Planning Risk; Payments Process Risk; People Risk; Premises Risk; Physical Security Risk; Risk Reporting; Supplier Risk; Tax Risk; Technology Risk and Transaction Operations Risk. In addition to the above, operational risk encompasses the risk associated with compliance with Group Resolution Planning Prudential regulatory requirements. For definitions of the Barclays Bank UK Group’s Operational Risk Categories and Connected Risks, refer to pages 139 to 140 of the Barclays Bank UK PLC Pillar 3 Report 2024. #### Model risk management Model risk: The potential for adverse consequences from decisions based on incorrect or misused model outputs and reports. ##### Overview The Barclays Bank UK 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. Risk review Principal risk management home.barclays/annualreport 67 Barclays Bank UK PLC Annual Report Since models are imperfect and incomplete representations of reality, they may be subject to uncertainty, errors and inappropriate use affecting the accuracy of their output. This can result in inappropriate business decisions being made, financial loss, regulatory risk, reputational risk and/or inadequate capital reporting. Models may also be misused, for instance applied to products that they were not intended for, or not adjusted, where fundamental changes to their environment would justify re-evaluating their core assumptions. Robust model risk management is crucial to assessing and managing model risk. Strong model risk culture, appropriate technological environment, and adequate focus on understanding and resolving model limitations are crucial components. ##### Organisation, roles and responsibilities Model Risk is a principal risk within the ERMF and is centrally governed by the Model Risk Management ("MRM") function. MRM is an independent function responsible for establishing and maintaining the framework and the model inventory needed to assess, manage, and report model risk. The Global Head of MRM reports directly to the Group Chief Risk Officer. MRM establishes model risk policy and standards, sets out and monitors model risk appetite, validates and approves models, reports on model risk, operates the controls that govern models and maintains the inventory of all models used by the Group globally. MRM operates the Group Model Risk Committee (GMRC), the purpose of which is to review and monitor the Model Risk profile and control environment across the Model Risk portfolio and assess the exposure against the approved appetite and associated tolerances. The GMRC escalates to the Group Risk Committee (GRC). MRM also operates the Model Risk Horizontal Control Forum (MR HCF) that oversees the consistent and effective implementation of the Barclays control framework within Model Risk. The MR HCF escalates to the Group Controls Committee. MRM reports on the model risk profile to the Group Board Risk Committee, the Group Risk Committee, key Barclays Legal Entity risk and control committees and forums and Model Ownership Area (MOA) committees; the latter may be established by the business or functions. These committees consider Model Risk matters relevant to them and escalate as required in compliance with internal applicable governance policies. In addition, an independent Model Strategy and Oversight (MSO) Team provides oversight of strategic modelling decisions of material models, in particular ensuring compliance with regulations and relevant technical standards, following a risk-based approach focusing on material modelling issues, including: * Ensures a comprehensive / consistent approach taken across the bank to deliver material models requirements. * Provides challenge to modelling decisions taken by Model Owners and Developers. * Establishes, maintains, and runs the requisite forum (i.e. Group Model Management Steering Committee) to facilitate Senior Management oversight of the strategic approach taken for the development/re-development of material models and of key model aspects of associated rating systems within Barclays. As per the ERMF, the first line of defence (1LOD) is comprised of all employees engaged in the revenue generating and client facing areas of the firm as well as all associated support functions, including Finance, Treasury, Technology and Operations, Human Resources, and Administration. Employees of risk and compliance are the second line of defence (2LOD). The 1LOD for Model Risk is represented by 1LOD areas developing, using and owning models. 2LOD areas develop, use or employ models as well. In such cases, these 2LOD areas will be subject to independent oversight from MRM and within the MRM framework are considered as 1LOD. MRM is the 2LOD for Model Risk. #### Compliance risk management The risk of poor outcomes for, or harm to, customers, clients and markets, arising from the delivery of the Barclays Bank UK Group’s products and services (Compliance Risk), and the risk its clients, customers or markets from a failure to comply with the laws, rules and regulations (LRR) applicable to the firm (LRR risk). This risk could manifest itself in a variety of ways, including: Risk review Principal risk management home.barclays/annualreport 68 Barclays Bank UK PLC Annual Report relevant Compliance Risk policies and standards including monitoring and reporting on the consistent application and effectiveness of the implementation of controls to manage Compliance Risk. It is the responsibility of the first line of defence to establish conduct related controls to manage its performance and assess conformance to these policies and controls. The responsibility for LRR risk management sits across various functions and business units, including Legal, Chief Controls Office, Risk and Compliance. Senior managers are accountable within their areas of responsibility for owning and managing Compliance Risk in accordance with the CRMF, as defined within their regulatory Statement of Responsibilities, and a dedicated team has been established in Compliance to oversee and support senior managers in LRR risk management. Compliance as an independent second line function oversees that Compliance Risks are effectively identified, managed, monitored and escalated, and has a key role in helping Barclays achieve the right conduct outcomes and evolve a compliance-focused culture. The governance of Compliance Risk within the Barclays Bank UK Group is fulfilled through management committees and forums operated by the first and second lines of defence with clear escalation and reporting lines into Board level committees. The Barclays UK Risk Committee is the primary second line governance committee for the oversight of the Compliance Risk profile. The Barclays UK Risk Committee’s responsibilities include the identification and discussion of any emerging Compliance Risk exposures in the Barclays Bank UK Group. A new sub-committee of the Barclays PLC Group Risk Committee was established to provide oversight on LRR risk across the Barclays PLC Group, including Barclays Bank UK. This committee is chaired by the Barclays PLC Group Chief Compliance Officer. #### Reputation risk management The risk that an action, transaction, investment, event, decision, or business relationship will reduce trust in the Barclays Bank UK Group’s integrity and/or competence. ##### Overview A reduction of trust in the Barclays Bank UK Group’s integrity and competence may reduce the attractiveness of the Barclays Bank UK 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 The Barclays PLC Board is responsible for reviewing and monitoring the effectiveness of the Barclays Bank UK Group’s management of reputation risk. The Barclays Bank UK Group Chief Compliance Officer is responsible for overseeing the management of Reputation Risk for Barclays Bank UK Group and the Head of Public Policy and Corporate Responsibility is responsible for the publication of appropriate Reputation Risk and associated standards, including tolerances against which data is monitored, reported on and escalated, as required. The Reputation Risk Management Framework sets out what is required to manage reputation risk across the Barclays Bank UK Group, including escalations to the Group Reputation Risk Committee, as required. Each colleague is responsible for identifying, assessing and escalating reputation risk. The Barclays Bank UK Group is required to operate within established reputation risk appetite, and its component businesses prepare reports for its 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 the Barclays UK Risk Committee and the Barclays Bank UK PLC Board. #### Legal risk management The risk of loss or imposition of penalties, damages or fines from the failure of the Barclays Bank UK to meet applicable laws, rules, regulations or contractual requirements or to assert or defend its intellectual property rights. ##### Overview In conjunction with the Barclays Control Framework, the Group wide Legal Risk Management Framework (LRMF), which applies to Barclays Bank UK, comprises a number of integrated components that details how the Barclays Group identifies, manages and measures its legal risk profile. The multitude of laws and regulations that the Barclays Bank UK Group is subject to are highly dynamic and their application to particular circumstances is often unclear resulting in a high level of inherent legal risk. The LRMF seeks to mitigate legal risk, including through the implementation of Barclays Group wide legal risk policies, requiring the engagement of legal professionals to provide legal advice in situations that have the potential for legal risk, identification and management of legal risks by those legal professionals, and escalation of legal risk as necessary. Legal risk is also mitigated by the requirements of the Compliance Risk Management Framework, including the responsibility of legal professionals to proactively identify, communicate and provide legal advice on applicable laws, rules and regulations. Notwithstanding these mitigating actions, Barclays Bank UK Group operates with a level of residual legal risk, for which Barclays Bank UK Group has limited tolerance. Risk review Principal risk management home.barclays/annualreport 69 Barclays Bank UK PLC Annual Report #### Financial crime risk management The risk that the Barclays Bank UK Group and its associated persons (employees or third parties) commit or facilitate financial crime, and/ or Barclays products and services are used to facilitate financial crime. Financial Crime undermines market integrity and may result in: Harm to clients, customers, counterparties or employees; diminished confidence in financial products and services; damage to Barclays reputation; regulatory breaches; and/or financial penalties. ##### Overview Financial Crime risk incorporates anti-bribery and corruption, anti-money laundering, anti-tax evasion facilitation and sanctions risks. The Barclays Bank UK Group has no appetite to operate its business other than in full accordance with all applicable laws, rules and regulations, in order to deliver good outcomes for / avoid harm to customers, clients and markets. Barclays will enable and support clients and customers to safely pursue their financial objectives and avoid causing negative impacts to the same through regulatory or legislative breaches, including potential or foreseeable harm, caused by financial crime. Barclays strives to prevent exposure to, detect and/or disrupt financial crime through the execution of its end to end control framework. ##### Organisation, roles and responsibilities The Financial Crime Risk Management Framework (FCRMF) outlines how the Barclays Bank UK Group manages and measures its Financial Crime risk profile. The Group Chief Compliance Officer is accountable for developing, maintaining and overseeing the Group wide FCRMF. The Legal Entity Money Laundering Reporting Officers are responsible for providing effective oversight, management and escalation of financial crime risk in line with the FCRMF at the Entity and Subsidiary level. This includes defining and owning the relevant financial crime 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 financial crime related controls to manage its performance and assess conformance to these policies and controls. The responsibility for LRR risk management sits across various functions and business units, including Legal, Chief Controls Office, Risk and Compliance. Senior managers are accountable within their areas of responsibility for owning and managing financial crime risk in accordance with the FCRMF, as defined within their regulatory Statement of Responsibilities. Financial Crime Compliance is an independent second line function oversees that financial crime risks are effectively identified, managed, monitored and escalated, and has a key role in helping Barclays achieve the right conduct outcomes and evolve a compliance-focused culture. The governance of financial crime 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 the Barclays UK Risk Committee are the primary second line governance committees for the oversight of the Financial Crime Risk Profile. The risk committees’ responsibilities include the identification and discussion of any emerging financial crime risk exposures in the Barclays Group and Barclays Bank Group. Risk review Principal risk management home.barclays/annualreport 70 Barclays Bank UK PLC Annual Report --- ### Risk performance #### Climate risk Overview Barclays has assessed the physical and transition risks associated with Corporate and Financials sectors to identify and categorise industry segments / activities with heightened vulnerability to climate risks as elevated sectors. In each sector there are a range of vulnerabilities; whilst Barclays distinguishes elevated activities within high-level sectors, not all our clients in sectors classified as elevated will have high carbon intensity or physical risk vulnerability. For Barclays Bank UK PLC, UK Mortgages and Business Banking Agriculture have been identified as portfolios with ‘elevated’ exposure to the physical and transition risks of climate change. Barclays Bank UK Group has exposure to other elevated sectors in the Business Bank portfolio which are of lower materiality. Climate risk considerations have been incorporated into annual mandate and scale reviews across Barclays Bank UK Group’s portfolios. The UK Mortgages portfolio is affected by physical risks, including flooding, subsidence and coastal erosion. From a transition risk perspective, the UK Mortgages portfolio is exposed to potential changes in energy efficiency performance requirements. Both the physical and transition risks that the UK Mortgages portfolio is exposed to may impact property valuations and affordability. The Business Banking Agriculture portfolio is exposed to the physical risks of climate change such as flooding and drought. The Dairy & Cattle sub-sector is exposed to the transition risks of climate change, including changes in consumer behaviour, as well as the potential introduction of emissions taxation given the sector’s significant contribution to the UK’s methane emissions. #### Subsidence: Total Volume of stock (as % of total UK Mortgages portfolio) per risk band Subsidence is driven by the interplay of precipitation, temperature and soil type factors, which result in volumetric changes to the soil. Increased volatility in weather conditions, as a result of climate change, contributes to the acceleration of subsidence impacts. Some areas, particularly those with high concentrations of clay soil for example, London, are more susceptible to subsidence. This shrink-swell impact can cause localised property level impacts, resulting in impacts to the valuation of a property, or impacts to affordability through remediation costs and high insurance premiums. The Barclays Bank UK Group works with a third-party climate data provider to support climate risk data enhancements within the UK Mortgages portfolio. This includes the ability to map the subsidence risk at a property level. The subsidence risk scoring is based on soil properties, in particular the extent to which the soil will shrink under hot and dry weather conditions, as well as the predicted temperature and probability of extreme rainfall. These variables are combined with subsidence claims per postcode to generate a pseudo-quantitative score, where a property in class 9 is around nine times more likely as a property in class 1 to make a subsidence claim. A small proportion of the UK Mortgages portfolio is not mapped to a subsidence risk score (c.5.6%). This is due either to a lack of data coverage (i.e. the property is not covered by underlying maps), or a lack of certainty in address matching. Subsidence: Total Volume of stock (as % of total UK Mortgages portfolio) per risk band | Risk Band | Qualitative Risk Score | 30 September 2024 Volume % | 30 September 2023 Volume % | |---|---|---|---| | 0 | No Subsidence Risk | — | — | | 1 | Low | 9.6 | 9.5 | | 2 | Low | 36.1 | 36.0 | | 3 | Low | 23.4 | 23.5 | | 4 | Moderate | 4.7 | 4.7 | | 5 | Moderate | 4.6 | 4.7 | | 6 | Moderate | 3.3 | 3.4 | | 7 | High | 2.4 | 2.4 | | 8 | High | — | — | | 9 | High | 0.2 | 0.3 | | 10 | Very High | 5.3 | 5.4 | | 11 | Very High | — | — | | 12 | Very High | 2.6 | 2.6 | | 13 | Very High | — | — | | 14 | Very High | — | — | | 15 | Very High | 2.2 | 2.3 | | Missing | Missing | 5.6 | 5.2 | **Note** 1 Data collected from 3rd party source based on one quarter lag, 30 September 2024 closest available dataset. #### Flood: Total Volume of stock (as % of total UK Mortgages portfolio) per risk band Flooding in the UK is forecast to increase over time, with the potential for this increase to accelerate if greenhouse gas emissions are not reduced. The increased risk of flooding has the potential to impact the valuation of properties directly, as well as indirectly where areas may become high risk and property demand falls. Remediation costs, high insurance premiums or potential lack of insurance coverage have the potential to impact affordability. Flood: Total Volume of stock (as % of total UK Mortgages portfolio) per risk band | Risk Band | 30 September 2024 Volume % | 30 September 2023 Volume % | |---|---|---| | Negligible | 80.9 | 81.3 | | Very Low | 7.6 | 7.6 | | Low | 1.8 | 1.8 | | Moderate | 1.6 | 1.6 | | High | 2.6 | 2.6 | | Very High | 1.2 | 1.2 | | Missing | 4.3 | 3.9 | **Note** 1 Data collected from 3rd party source based on one quarter lag, 30 September 2024 closest available dataset. Flood: Very High & High Flood Risk Exposure per region (as % of Total Regional Exposure) The map below represents the proportion of properties within the UK Mortgages portfolio at High and Very High risk of flood per region as a percentage of the total regional exposure (excluding Kensington Mortgage Company originated properties). The flood metrics are presented on current risk levels and are based on average annual loss, generated using flood hazard frequency and flood depth from tidal, surface, pluvial and fluvial flooding and accounting for the mitigating impact of flood defences where these are present. The mapping covers c.95% of the UK Mortgages portfolio on a total exposure basis - the remaining c.5% of properties are not currently mapped to flood risk ratings on a property level basis as a result of a lack of data coverage (i.e. the property is not covered by underlying maps), or a lack of certainty in address matching. Darker shades indicate higher proportion of high or very high flood risk exposure High and Very High Flood Risk are shown as % of regional exposure | Region | % of Total Lending (as % of total UK Mortgages balances) | |---|---| | **South East** | **20.6%** of which: – High: 3.0% – Very High: 1.0 % | | **London** | **32.5%** Of which – High: 2.6% – Very High: 0.6% | | **East of England** | **12.2%** of which: – High: 2.4% – Very High: 0.9% | | **Yorks & the Humber** | **4.0%** of which: – High: 2.3% – Very High: 1.3% | | **East Midlands** | **4.5%** of which: – High: 2.9% – Very High: 2.5% | | **West Midlands** | **5.2%** of which: – High: 1.5% – Very High: 0.5% | | **Wales** | **2.3%** of which: – High: 2.2% – Very High: 0.6% | | **North West** | **6.0%** of which: – High: 2.7% – Very High: 1.7% | | **North East** | **1.9%** of which: – High: 1.2% – Very High: 0.7% | | **Scotland** | **3.7%** of which: – High: 1.9% – Very High: 0.9% | | **N. Ireland** | **0.9%** of which: – High: 1.1% – Very High: 0.5% | | **South West** | **6.3%** of which: – High: 2.4% – Very High: 0.9% | Risk review Risk performance Climate risk home.barclays/annualreport 72 Barclays Bank UK PLC Annual Report #### Coastal Erosion: Total Volume of stock (as % of total UK Mortgages portfolio) per risk band Coastal Erosion is defined as the loss or displacement or land, or the long-term removal of sediment and rocks along the coastline due to the action of waves, currents, tides, wind-driven water, waterborne ice, or other impacts of storms. The increased volatility of weather conditions, as a result of climate change contribute to the acceleration of coastal erosion impacts. Coastal erosion risk is calculated using the modelled hazard level and the likelihood of that particular hazard impacting the value of the property. For example, a score of 100 (Very High Risk) might be assigned to a property within an area of predicted coastline retreat. In this situation, the likelihood of the ground collapsing is high (the coastal erosion data has determined that the current surface will no longer exist in n years) and the potential severity of damage to the property is also high (the building itself could partially or completely collapse into the sea). Coastal Erosion: Total Volume of stock (as % of total UK Mortgages portfolio) per risk band | Risk Band | 30 September 2024 Volume % | 30 September 2023 Volume % | |---|---|---| | Negligible | 94.4 | 94.8 | | Low | 0.0 | 0.0 | | Moderate | 0.0 | 0.0 | | Very High | 0.0 | 0.0 | | Missing | 5.6 | 5.2 | **Note** 1 Data collected from 3rd party source based on one quarter lag, 30 September 2024 closest available dataset. #### Current and Potential Energy Performance Certificate (EPC): Total Volume of stock (as % of total UK Mortgages portfolio) per EPC rating The transition risk in the UK Mortgages portfolio is assessed via the distribution of Current & Potential EPC ratings across the portfolio. One of the levers to decarbonise the UK housing stock for the UK Government is to tighten energy efficiency requirements. In 2024, the UK Government announced that the minimum EPC rating of rental properties will be raised to EPC C (from EPC E) by 2030. It is anticipated that any tightening of minimum energy efficiency standards (MEES) will focus initially on buy-to-let properties. Buy-to-Let properties which are privately rented are currently required to have a minimum EPC rating of E. The transition risk identified has the potential to impact the valuation of properties directly, alongside impacting affordability as properties which fall under MEES may no longer be able to be rented out or the landlord may need to pay for retrofitting to be brought up to standard. EPC ratings range from A (most efficient) to G (least efficient). Current and Potential EPC ratings are used as the basis for assessing expected energy costs but do not give a precise picture of emission intensity. The UK Mortgages portfolio is mapped to the Government EPC Register. Properties may not feature on the Government EPC Register as some properties may have never been required to have an EPC rating (not been sold or rented out since 2007), their EPC rating may have expired (EPC ratings are valid for 10 years) or the property may be in Scotland or Northern Ireland (which use separate databases). Whilst Barclays’ proportion of ‘missing EPC ratings’ has declined year on year, the issue of missing EPC ratings is prevalent across the industry. Current EPC: Residential and Buy-to-let balances and volume of stock per EPC rating as at September 2024¹ | Current EPC Rating | Residential Mortgage Balances £m | Balance as % of Residential Mortgages portfolio % | Volume as % of Residential Mortgages portfolio % | Buy-to-Let Mortgage Balances £m | Balance as % of Buy-to-Let Mortgages portfolio % | Volume as % of Buy-to-Let Mortgages portfolio % | |---|---|---|---|---|---|---| | A | 601 | 0.4 | 0.3 | 19 | 0.1 | 0.1 | | B | 23,205 | 16.5 | 15.2 | 1,940 | 11.0 | 9.1 | | C | 26,952 | 19.1 | 18.4 | 5,456 | 30.9 | 31.8 | | D | 42,000 | 29.8 | 27.4 | 5,986 | 33.9 | 34.2 | | E | 16,695 | 11.9 | 9.9 | 1,587 | 9.0 | 9.2 | | F | 3,817 | 2.7 | 2.1 | 98 | 0.6 | 0.6 | | G | 723 | 0.5 | 0.4 | 25 | 0.1 | 0.1 | | Missing | 26,769 | 19.1 | 26.3 | 2,529 | 14.4 | 14.9 | | Total | 140,762 | 100 | 100 | 17,640 | 100 | 100 | **Note** 1 Data matching provided by 3rd party source based on one quarter lag, 30 September 2024 closest available dataset - EPC monitoring based on 30 September 2024 portfolio and 30 September 2024 Government EPC Register. If no valid EPC is mapped, the expired EPC (where available) is included as a proxy. EPC: Residential and Buy-to-let balances and volume of stock per EPC rating as at September 2023¹ | Current EPC Rating | Residential Mortgage Balances £m | Balance as % of Residential Mortgages portfolio % | Volume as % of Residential Mortgages portfolio % | Buy-to-Let Mortgage Balances £m | Balance as % of Buy-to-Let Mortgages portfolio % | Volume as % of Buy-to-Let Mortgages portfolio % | |---|---|---|---|---|---|---| | A | 487 | 0.3 | 0.2 | 20 | 0.1 | 0.1 | | B | 22,514 | 15.8 | 14.3 | 2,144 | 10.7 | 8.9 | | C | 24,954 | 17.5 | 16.6 | 5,781 | 28.9 | 29.6 | | D | 41,575 | 29.3 | 26.4 | 6,842 | 34.3 | 34.4 | | E | 17,546 | 12.3 | 10.2 | 1,991 | 10.0 | 10.1 | | F | 4,132 | 2.9 | 2.2 | 129 | 0.6 | 0.7 | | G | 780 | 0.5 | 0.4 | 31 | 0.2 | 0.2 | | Missing | 30,528 | 21.4 | 29.7 | 3,033 | 15.2 | 16.0 | | Total | 142,516 | 100 | 100 | 19,971 | 100 | 100 | Potential EPC¹: Residential and Buy-to-let balances and volume of stock per EPC rating as at September 2024² | Potential EPC Rating | Residential Mortgage Balances £m | Balance as % of Residential Mortgages portfolio % | Volume as % of Residential Mortgages portfolio % | Buy-to-Let Mortgage Balances £m | Balance as % of Buy-to-Let Mortgages portfolio % | Volume as % of Buy-to-Let Mortgages portfolio % | |---|---|---|---|---|---|---| | A | 13,892 | 9.9 | 9.3 | 474 | 2.7 | 2.9 | | B | 52,672 | 37.4 | 36.0 | 8,017 | 45.4 | 45.8 | | C | 37,461 | 26.6 | 22.4 | 5,802 | 32.9 | 31.8 | | D | 7,471 | 5.3 | 4.6 | 716 | 4.1 | 4.0 | | E | 2,012 | 1.4 | 1.1 | 87 | 0.5 | 0.5 | | F | 398 | 0.3 | 0.2 | 13 | 0.1 | 0.1 | | G | 87 | 0.1 | 0.1 | 3 | 0.0 | 0.0 | | Missing | 26,769 | 19.0 | 26.3 | 2,528 | 14.3 | 14.9 | | Total | 140,762 | 100 | 100 | 17,640 | 100 | 100 | Potential EPC¹: Residential and Buy-to-let balances and volume of stock per EPC rating as at September 2023² | Potential EPC Rating | Residential Mortgage Balances £m | Balance as % of Residential Mortgages portfolio % | Volume as % of Residential Mortgages portfolio % | Buy-to-Let Mortgage Balances £m | Balance as % of Buy-to-Let Mortgages portfolio % | Volume as % of Buy-to-Let Mortgages portfolio % | |---|---|---|---|---|---|---| | A | 13,193 | 9.3 | 0.2 | 516 | 2.6 | 2.9 | | B | 50,094 | 35.1 | 14.3 | 8,783 | 44.0 | 44.2 | | C | 37,594 | 26.4 | 16.6 | 6,585 | 33.0 | 31.8 | | D | 8,244 | 5.8 | 26.4 | 915 | 4.6 | 4.5 | | E | 2,297 | 1.6 | 10.1 | 118 | 0.6 | 0.6 | | F | 468 | 0.3 | 2.2 | 17 | 0.1 | 0.1 | | G | 100 | 0.1 | 0.4 | 4 | 0.0 | 0.0 | | Missing | 30,526 | 21.4 | 29.8 | 3,033 | 15.1 | 15.9 | | Total | 142,516 | 100 | 100 | 19,971 | 100 | 100 | **Notes** 1 The potential EPC is the EPC rating that a property can reasonably be expected to achieve if the recommended energy efficiency upgrades are undertaken. 2 Data matching provided by 3rd party source based on one quarter lag, 30 September 2024 closest available dataset - EPC monitoring based on 30 September 2024 portfolio and 30 September 2024 Government EPC Register. If no valid EPC is mapped, the expired EPC (where available) is included as a proxy. #### Business Banking Agriculture - Dairy & Cattle Exposure Given methane’s global warming potential the Dairy & Cattle sector is a significant contributor to the UK’s emissions footprint and is therefore susceptible to the transition risks of climate change, namely consumer preference changes and potential emissions taxation. In 2024 Barclays Bank UK launched a Client Transition Tool, which is a form completed for Barclays Bank UK Business Banking clients in Dairy & Cattle sectors for all new or refinanced lending to assess transition trajectories against Barclays’ targets and benchmarks. This tool will Risk review Risk performance Climate risk home.barclays/annualreport 74 Barclays Bank UK PLC Annual Report provide further granularity on clients' transition plans and progress. Coverage of the Client Transition Tool across the portfolio will increase over time. In 2024 Barclays Bank UK also implemented an enhanced Climate & Environment Lens questionnaire for clients in elevated climate risk sectors. The Barclays Bank UK Group utilises exposure data to identify what proportion of the Business Banking Agriculture portfolio consists of lending to Dairy & Cattle clients. #### Carbon-related assets According to Task Force on Carbon-Related Financial Disclosures (TCFD), certain industry segments are more likely to be financially impacted than others due to their exposure to certain transition and physical risk factors for example, greenhouse gas (GHG) emissions, extreme weather events like storms, hurricanes etc. and dependencies on stable weather conditions for their operations and products. These higher risk industry segments are grouped into four key areas: Energy; Transportation; Materials and Buildings; and Agriculture, Food, and Forest Products. Barclays Bank UK Group’s exposures to the industries within these groups are reported as carbon-related assets and can be found in the table on the following page. Residential Real Estate exposures are also included in this table. Barclays recognises the Mortgage portfolio within the UK as an elevated climate risk portfolio, although it is not an economic sector. On that basis they have been included in the table. Carbon-related assets (Incl. sub-sector breakdown)¹,² | Sector | Physical risk³ | Transition risk³ | 2024 Loans and advances £m | 2024 Loan commitments £m | 2024 Total £m | 2023 Loans and advances £m | 2023 Loan commitments £m | 2023 Total £m | % Change | |---|---|---|---|---|---|---|---|---|---| | Agriculture, Food and Forest Products (logging) | ü | ü | 3,318 | 691 | 4,009 | 3,518 | 799 | 4,317 | (7) | | Agriculture | ü | ü | 3,318 | 691 | 4,009 | 3,518 | 799 | 4,317 | | | Energy & Waters | ü | ü | 26 | 5 | 31 | 34 | 8 | 42 | (26) | | Power Utilities | ü | ü | 20 | 2 | 22 | 26 | 5 | 31 | | | Metals (waste & recycling) | | | 4 | 2 | 6 | 6 | 2 | 8 | | | Water Utilities | ü | | 2 | 1 | 3 | 3 | 1 | 4 | | | Manufacturing | | ü | 368 | 114 | 482 | 454 | 119 | 573 | (16) | | Automotive | ü | | 12 | 3 | 15 | 11 | 3 | 14 | | | Cements | ü | | 5 | 1 | 6 | 6 | 1 | 7 | | | Chemicals | ü | | 15 | 5 | 20 | 20 | 6 | 26 | | | Food, Bev and Tobacco | ü | | 45 | 10 | 55 | 55 | 11 | 66 | | | Manufacturing - Others | ü | | 257 | 84 | 341 | 327 | 86 | 413 | | | Metals | ü | | 15 | 5 | 20 | 15 | 5 | 20 | | | Packaging Manufacturers: Metal, Glass and Plastics | ü | ü | 2 | — | 2 | 3 | 1 | 4 | | | Paper and Forest Products (excluding logging) | ü | ü | 15 | 5 | 20 | 15 | 5 | 20 | | | Steel | ü | | 2 | 1 | 3 | 2 | 1 | 3 | | | Material and Building | | | 7,053 | 478 | 7,531 | 8,283 | 295 | 8,578 | (12) | | Construction and Materials | ü | | 643 | 196 | 839 | 931 | 195 | 1,126 | | | Real Estate Management and Development | | | 6,410 | 282 | 6,692 | 7,352 | 100 | 7,452 | | | Mining and Quarrying | ü | ü | 8 | 3 | 11 | 6 | 2 | 8 | 38% | | Mining | ü | ü | 4 | 2 | 6 | 5 | 1 | 6 | | | Oil and Gas (extraction) | ü | ü | 4 | 1 | 5 | 2 | 1 | 3 | | | Transport & storage | | ü | 243 | 55 | 298 | 345 | 58 | 403 | (26) | | Aviation | ü | ü | 2 | — | 2 | 2 | 3 | 4 | | | Other Transport Services | ü | | 112 | 17 | 129 | 154 | 17 | 171 | | | Road Haulage | ü | | 118 | 33 | 151 | 170 | 35 | 205 | | | Shipping | ü | | 11 | 5 | 16 | 18 | 5 | 23 | | | Wholesale and retail distribution and leisure | | | 353 | 87 | 440 | 465 | 86 | 551 | (20) | | Oil and Gas (wholesale) | ü | | 7 | 3 | 10 | 10 | 3 | 13 | | | Others | ü | | 346 | 84 | 430 | 455 | 83 | 538 | | | Home Loans | ü | | 163,105 | 11,415 | 174,520 | 163,510 | 8,184 | 171,694 | 2% | | Residential Real Estate | ü | | 163,105 | 11,415 | 174,520 | 163,510 | 8,184 | 171,694 | | | **Carbon-related Assets/ Elevated Risk Sector Grand Total** | | | **174,474** | **12,848** | **187,322** | **176,615** | **9,551** | **186,166** | **1%** | | Total loans & advances and loan commitments | 224,699 | 66,959 | 291,658 | 219,789 | 49,820 | 269,609 | 8% | | Total loans & advances and loan commitments | 78% | 19% | 64% | 80% | 19% | 69% | 66% | | | Sub-total of sectors spanning in multiple industries | | | | | | | | | | | Oil and Gas | ü | ü | 11 | 4 | 15 | 12 | 4 | 16 | (6)% | **Notes** 1 The scope of elevated risk sector mapping has been revised based on our periodic assessment of climate risk sectors, resulting in activities such as renewable energy within Power Utilities, Water Utilities, Construction and Material, Food and fashion related activities (Others) now being classified as elevated risk sectors/carbon related assets. The prior year comparatives have been re-presented to align with the updated sector mapping. 2 As industries decarbonise, sectors will increasingly include both carbon and non-carbon related activities e.g. Power Utilities will also include, in part, their generation capacity from renewable energy sources. 3 Physical & Transition risk indicators are added for elevated risk sectors to indicate the driver of risk. See page 49 for further details. 4 Loans & advances includes debt securities at amortised cost amounting to £17,983m (2023: £17,794m) of which carbon related assets are £nil (2023: £nil) in Material & Buildings. Risk review Risk performance Climate risk home.barclays/annualreport 76 Barclays Bank UK PLC Annual Report #### Business banking agriculture - Dairy & Cattle Exposure The Barclays Bank UK Group utilises exposure data to identify what proportion of the Business Banking Agriculture portfolio consists of lending to Dairy & Cattle clients. #### Carbon-related assets According to Task Force on Carbon-Related Financial Disclosures (TCFD), certain industry segments are more likely to be financially impacted than others due to their exposure to certain transition and physical risk factors for example, greenhouse gas (GHG) emissions, extreme weather events like storms, hurricanes etc. and dependencies on stable weather conditions for their operations and products. These higher risk industry segments are grouped into four key areas: Energy; Transportation; Materials and Buildings; and Agriculture, Food, and Forest Products. Barclays Bank UK Group’s exposures to the industries within these groups are reported as carbon-related assets and can be found in the table on the following page. Residential Real Estate exposures are also included in this table. Barclays recognises the Mortgage portfolio within the UK as an elevated climate risk portfolio, although it is not an economic sector. On that basis they have been included in the table. Risk review Risk performance Climate risk home.barclays/annualreport 75 Barclays Bank UK PLC Annual Report ### Credit risk #### Summary of Contents | | Page | |---|---| | Credit risk represents a significant risk to the Barclays Bank UK Group and mainly arises from exposure to loans and advances. | | | ▪ Credit risk overview and summary of performance | 78 | | ▪ Maximum exposure and effects of netting, collateral and risk transfer | 79 | | This section outlines the expected credit loss allowances, the movements in allowances during the year, material management adjustments to model output and measurement uncertainty and sensitivity analysis. | | | ▪ Expected credit losses | 83 | | – Loans and advances at amortised cost by product | 83 | | – Movement in gross exposure and impairment allowance including provisions for loan commitments and financial guarantees | 86 | | – Stage 2 decomposition | 99 | | – Stage 3 decomposition | 99 | | ▪ Management adjustment to models for impairment | 100 | | ▪ Climate risk ECL assessment | 102 | | ▪ Measurement uncertainty and sensitivity analysis | 102 | | The Barclays Bank UK 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 | 111 | | – Credit risk concentration by industry and geography | 111 | | ▪ Approach to management and representation of credit quality | 113 | | – Asset credit quality | 113 | | – Debt securities | 113 | | – Balance sheet credit quality | 114 | | – Credit exposures by internal PD grade | 118 | | Credit risk monitors exposure performance across a range of significant portfolios. | | | ▪ Analysis of specific portfolios and asset types | 132 | | – Secured home loans | 132 | | – Retail credit cards and retail other | 133 | Risk review Risk performance Credit risk home.barclays/annualreport 77 Barclays Bank UK PLC Annual Report All disclosures in this section, pages 78 to 133, are unaudited unless otherwise stated. #### Overview Credit risk represents a significant risk to the Barclays Bank UK Group and mainly arises from exposure to loans and advances. Credit risk disclosures are materially aligned to the recommendations of the Taskforce on Disclosures about Expected Credit Losses (DECL). #### Acquisition of Tesco Bank Barclays Bank UK PLC has acquired Tesco bank’s retail banking business effective 1 November 2024. Gross loans and advances at amortised cost as at 31 December 2024 includes £8.3bn of unsecured lending balances from the acquisition of Tesco Bank, comprising of £4.2bn of credit card receivables and £4.1bn of unsecured personal loans, with corresponding impairment allowance of £0.2bn. On the acquisition date, balances were originated into Stage 1 with £0.06bn in purchased or originated credit-impaired (POCI) balances. POCI balances represent a fixed pool of assets purchased at a deep discount to face value reflecting credit losses incurred from the point of origination to date of acquisition. #### Summary of performance in the year Gross exposure: Gross loans and advances at amortised cost to customers and banks have increased to £226bn (2023: £221bn), driven by the £8.3bn acquisition of Tesco Bank, partially offset by £(2.1)bn continued repayment of government scheme lending in Business Banking and £(0.8)bn securitisation of mortgage balances in Q424. Maximum exposure: The Barclays Bank UK Group’s net exposure to credit risk has increased to £171bn (2023: £143bn). This is primarily driven by the acquisition of Tesco Bank (leading to an increase of £13.2bn in loan commitments and £8.3bn in loans and advances at amortised cost), £7bn increase in government issued debt securities, partially offset by a £(5)bn reduction in cash and balances at central banks. Overall mitigation held against the total exposure has decreased to 53% (2023: 58%), primarily due to increase in unsecured portfolio driven by the Tesco Bank acquisition and an increase in government issued debt securities considered low risk. Credit quality: Delinquencies remain broadly stable. UK Cards provisioning continues to be underpinned by low delinquencies and strong credit quality. A range of activities are in place to protect our existing defensive positioning against macroeconomic headwinds. Further analysis on the credit quality of assets is presented in the approach to management and representation of credit quality section. Stage decomposition: A net decrease of £1.1bn is observed in Stage 2 gross exposure driven by an improved GDP forecast and repayments in Business Banking. Stage 3 balances remains broadly stable at £3.5bn (2023: £3.4bn). Refer to page 99 for further details. Scenario: The economy is gradually recovering and is further stimulated as restrictive monetary policy continues loosening. For Q424, macroeconomic scenarios have been refreshed and are designed around a broad range of economic outcomes. The Downside 2 (DS2) scenario has been broadly aligned to Barclays 2024 Internal Stress Test (IST24) which includes climate drivers. Refer to the Barclays resilience to climate scenarios on page 62 for further details. ECL: Impairment allowances on loans and advances at amortised cost including off-balance sheet remains broadly stable at £1,626m (2023: £1,686m) underpinned by an improved macroeconomic outlook and the acquisition of Tesco Bank. On-balance sheet coverage remains strong and stable at 0.8% (2023: 0.8%). Charge: Credit impairment charges were £352m (2023: £308m), driven by the charge on the acquisition of Tesco Bank partially offset by a resilient credit performance in UK cards and UK Mortgages. Management adjustments: Economic uncertainty adjustments have decreased to £78m (2023: £181m), informed by lower inflationary risk and a resilient credit performance in UK retail lending. Refer to the Management adjustment to models for impairment section on page 100 for further details. Climate: Barclays has performed a credit risk assessment of physical and transition risk due to climate change through a combination of a scenario approach and targeted reviews on specific portfolios identified as more susceptible to climate risk. As further enhancements during the year, the DS2 scenario has been aligned to the IST24 which is climate aware and for specific portfolios new climate modelling techniques were utilised to assess physical and transition risk due to climate change at customer level. Further detail can be found in the Financial statements section in Note 8 Credit impairment charges. Description of terminology can be found in the glossary, available at home.barclays/annualreport. Refer to the credit risk management section for details of governance, policies and procedures. Risk review Risk performance Credit risk home.barclays/annualreport 78 Barclays Bank UK PLC Annual Report ### Maximum exposure and effects of netting, collateral and risk transfer (audited) The following tables present a reconciliation between the Barclays Bank UK Group’s maximum exposure and its net exposure to credit risk, reflecting the financial effects of risk mitigation reducing the bank’s exposure. The Barclays Bank UK Group mitigates the credit risk to which it is exposed through netting and set-off, collateral and risk transfer. Further detail on the Barclays Bank UK Group’s policies to each of these forms of credit enhancement is presented on pages 63 to 64 of the credit risk management section. #### Collateral obtained (audited) Where collateral has been obtained in the event of default, the Barclays Bank UK 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 Barclays Bank UK Group as at 31 December 2024, as a result of the enforcement of collateral, was £nil (2023: £nil). Maximum exposure and effects of netting, collateral and risk transfer (audited) Barclays Bank UK Group | | Maximum exposure £m | Netting and set-off £m | Cash collateral £m | Non-cash collateral £m | Risk transfer £m | Exposure net of risk mitigation £m | |---|---|---|---|---|---|---| | **As at 31 December 2024** | | | | | | | | On-balance sheet: | | | | | | | | Cash and balances at central banks | 29,819 | — | — | — | — | 29,819 | | Cash collateral and settlement balances | 6,002 | — | — | — | — | 6,002 | | Loans and advances at amortised cost: | | | | | | | | Retail mortgages | 163,105 | — | — | (163,104) | — | 1 | | Retail credit cards | 15,030 | — | — | — | — | 15,030 | | Retail other | 8,331 | — | (61) | (3) | 8,267 | | Corporate loans | 20,250 | — | (23) | (10,451) | (7,012) | 2,764 | | Total loans and advances at amortised cost | 206,716 | — | (23) | (173,616) | (7,015) | 26,062 | | **Of which credit-impaired (Stage 3):** | | | | | | | | Retail mortgages | 1,597 | — | — | (1,596) | — | 1 | | Retail credit cards - excluding POCI | 88 | — | — | — | — | 88 | | Retail credit cards - POCI | 40 | — | — | — | — | 40 | | Retail other - excluding POCI | 18 | — | — | (12) | — | 6 | | Retail other - POCI | 17 | — | — | — | — | 17 | | Corporate loans | 1,227 | — | — | (725) | (328) | 174 | | Total credit-impaired loans and advances at amortised cost | 2,987 | — | — | (2,333) | (328) | 326 | | Debt securities at amortised cost | 17,983 | — | — | — | (50) | 17,933 | | Reverse repurchase agreements and other similar secured lending | 5,894 | — | — | (5,894) | — | — | | Trading portfolio assets: | | | | | | | | Debt securities | 242 | — | — | — | — | 242 | | Total trading portfolio assets | 242 | — | — | — | — | 242 | | Financial assets at fair value through the income statement | | | | | | | | Loans and advances | 1,543 | — | — | (1,366) | — | 177 | | Total financial assets at fair value through the income statement | 1,543 | — | — | (1,366) | — | 177 | | Derivative financial instruments | 1,901 | (211) | (1,688) | — | — | 2 | | Financial assets at fair value through other comprehensive income | 27,045 | — | — | — | (145) | 26,900 | | Other assets | 265 | — | — | — | — | 265 | | **Total on-balance sheet** | **297,410** | **(211)** | **(1,711)** | **(180,876)** | **(7,210)** | **107,402** | | Off-balance sheet: | | | | | | | | Contingent liabilities | 710 | — | — | — | — | 710 | | Loan commitments | 66,959 | — | — | (3,514) | (58) | 63,387 | | **Total off-balance sheet** | **67,669** | **—** | **—** | **(3,514)** | **(58)** | **64,097** | | **Total** | **365,079** | **(211)** | **(1,711)** | **(184,390)** | **(7,268)** | **171,499** | Off-balance sheet exposures are shown gross of provisions of £16m (2023: £27m). See Note 23 Contingent liabilities and commitments for further details. Corporate loans at amortised cost include £3.1bn (2023: £5bn) of BBLS and CBILS supported by UK Government guarantees of £3.1bn (2023: £4.9bn), which are included within the Risk transfer column in the table. Maximum exposure and effects of netting, collateral and risk transfer (audited) Barclays Bank UK Group | | Maximum exposure £m | Netting and set-off £m | Cash collateral £m | Non-cash collateral £m | Risk transfer £m | Exposure net of risk mitigation £m | |---|---|---|---|---|---|---| | **As at 31 December 2023** | | | | | | | | On-balance sheet: | | | | | | | | Cash and balances at central banks | 34,948 | — | — | — | — | 34,948 | | Cash collateral and settlement balances | 5,507 | — | — | — | — | 5,507 | | Loans and advances at amortised cost: | | | | | | | | Retail mortgages | 163,510 | — | — | (163,508) | — | 2 | | Retail credit cards | 9,710 | — | — | — | — | 9,710 | | Retail other | 4,292 | — | (21) | (303) | — | 3,968 | | Corporate loans | 24,483 | — | (28) | (10,787) | (9,494) | 4,174 | | Total loans and advances at amortised cost | 201,995 | — | (49) | (174,598) | (9,494) | 17,854 | | **Of which credit-impaired (Stage 3):** | | | | | | | | Retail Mortgages | 1,602 | — | — | (1,601) | — | 1 | | Retail credit cards - excluding POCI | 91 | — | — | — | — | 91 | | Retail credit cards - POCI | — | — | — | — | — | — | | Retail other - excluding POCI | 35 | — | — | (18) | — | 17 | | Retail other - POCI | — | — | — | — | — | — | | Corporate loans | 1,068 | — | — | (497) | (418) | 153 | | Total credit-impaired loans and advances at amortised cost | 2,796 | — | — | (2,116) | (418) | 262 | | Debt securities at amortised cost | 17,794 | — | — | — | (77) | 17,717 | | Reverse repurchase agreements and other similar secured lending | 3,567 | — | — | (3,567) | — | — | | Trading portfolio assets: | | | | | | | | Debt securities | 43 | — | — | — | — | 43 | | Total trading portfolio assets | 43 | — | — | — | — | 43 | | Financial assets at fair value through the income statement | | | | | | | | Loans and advances | 1,715 | — | — | (1,336) | — | 379 | | Total financial assets at fair value through the income statement | 1,715 | — | — | (1,336) | — | 379 | | Derivative financial instruments | 1,566 | (232) | (1,280) | (52) | — | 2 | | Financial assets at fair value through other comprehensive income | 20,409 | — | — | — | (65) | 20,344 | | Other assets | 186 | — | — | — | — | 186 | | **Total on-balance sheet** | **287,730** | **(232)** | **(1,329)** | **(179,553)** | **(9,636)** | **96,980** | | Off-balance sheet: | | | | | | | | Contingent liabilities | 661 | — | — | — | — | 661 | | Loan commitments | 49,820 | — | (20) | (4,265) | (64) | 45,471 | | **Total off-balance sheet** | **50,481** | **—** | **(20)** | **(4,265)** | **(64)** | **46,132** | | **Total** | **338,211** | **(232)** | **(1,349)** | **(183,818)** | **(9,700)** | **143,112** | Risk review Risk performance Credit risk home.barclays/annualreport 80 Barclays Bank UK PLC Annual Report ### Expected credit losses #### Loans and advances at amortised cost by product Total loans and advances at amortised cost in the credit risk performance section includes loans and advances at amortised cost to banks and loans and advances at amortised cost to customers. The table below presents a product breakdown by stages of loans and advances at amortised cost and the impairment allowance, including purchased or originated credit-impaired (POCI) balances. POCI balances represent a fixed pool of assets purchased at a deep discount to face value reflecting credit losses incurred from the point of origination to date of acquisition. Also included are stage allocation of debt securities by gross exposure, impairment allowance and coverage ratio. Impairment allowance under IFRS 9 considers both the drawn and the undrawn counterparty exposure. For retail portfolios, the total impairment allowance is allocated to gross loans and advances to the extent allowance does not exceed the drawn exposure and any excess is reported on the liabilities side of the balance sheet as a provision. For corporate portfolios, impairment allowance on undrawn exposure is reported on the liability side of the balance sheet as a provision. Barclays Bank UK Group (audited) | | Stage 1 | Stage 2 | Stage 3 excluding POCI | Stage 3 POCI | Total | |---|---|---|---|---|---| | **Gross exposure** | **Not past due £m** | **<=30 days past due £m** | **>30 days past due £m** | **Total £m** | **£m** | **£m** | **Total £m** | | Retail mortgages | 142,153 | 16,781 | 2,034 | 631 | 19,446 | 1,652 | — | 163,251 | | Retail credit cards | 13,497 | 1,986 | 47 | 31 | 2,064 | 179 | 40 | 15,780 | | Retail other | 7,645 | 790 | 49 | 32 | 871 | 130 | 17 | 8,663 | | Corporate loans | 16,146 | 2,905 | 6 | 108 | 3,019 | 1,464 | — | 20,629 | | Total loans and advances at amortised cost | 179,441 | 22,462 | 2,136 | 802 | 25,400 | 3,425 | 57 | 208,323 | | Debt securities at amortised cost | 17,911 | 75 | — | — | 75 | — | — | 17,986 | | Total loans and advances at amortised cost including debt securities | 197,352 | 22,537 | 2,136 | 802 | 25,475 | 3,425 | 57 | 226,309 | | **Impairment allowance** | | | | | | | | | | Retail mortgages | 30 | 41 | 13 | 7 | 61 | 55 | — | 146 | | Retail credit cards | 219 | 407 | 17 | 16 | 440 | 91 | — | 750 | | Retail other | 119 | 70 | 15 | 16 | 101 | 112 | — | 332 | | Corporate loans | 65 | 76 | 1 | — | 77 | 237 | — | 379 | | Total loans and advances at amortised cost | 433 | 594 | 46 | 39 | 679 | 495 | — | 1,607 | | Debt securities at amortised cost | 3 | — | — | — | — | — | — | 3 | | Total loans and advances at amortised cost including debt securities | 436 | 594 | 46 | 39 | 679 | 495 | — | 1,610 | | **Net exposure** | | | | | | | | | | Retail mortgages | 142,123 | 16,740 | 2,021 | 624 | 19,385 | 1,597 | — | 163,105 | | Retail credit cards | 13,278 | 1,579 | 30 | 15 | 1,624 | 88 | 40 | 15,030 | | Retail other | 7,526 | 720 | 34 | 16 | 770 | 18 | 17 | 8,331 | | Corporate loans | 16,081 | 2,829 | 5 | 108 | 2,942 | 1,227 | — | 20,250 | | Total loans and advances at amortised cost | 179,008 | 21,868 | 2,090 | 763 | 24,721 | 2,930 | 57 | 206,716 | | Debt securities at amortised cost | 17,908 | 75 | — | — | 75 | — | — | 17,983 | | Total loans and advances at amortised cost including debt securities | 196,916 | 21,943 | 2,090 | 763 | 24,796 | 2,930 | 57 | 224,699 | | **Coverage ratio** | **%** | **%** | **%** | **%** | **%** | **%** | **%** | **%** | | Retail mortgages | — | 0.2 | 0.6 | 1.1 | 0.3 | 3.3 | — | 0.1 | | Retail credit cards | 1.6 | 20.5 | 36.2 | 51.6 | 21.3 | 50.8 | — | 4.8 | | Retail other | 1.6 | 8.9 | 30.6 | 50.0 | 11.6 | 86.2 | — | 3.8 | | Corporate loans | 0.4 | 2.6 | 16.7 | — | 2.6 | 16.2 | — | 1.8 | | Total loans and advances at amortised cost | 0.2 | 2.6 | 2.2 | 4.9 | 2.7 | 14.5 | — | 0.8 | | Debt securities at amortised cost | — | — | — | — | — | — | — | — | | Total loans and advances at amortised cost including debt securities | 0.2 | 2.6 | 2.2 | 4.9 | 2.7 | 14.5 | — | 0.7 | **Note** 1 Other financial assets subject to impairment excluded in the table above include cash collateral and settlement balances, reverse repurchase agreements and other similar secured lending, financial assets at fair value through other comprehensive income and other assets. These have a total gross exposure of £39.3bn and an impairment allowance of £2m. This comprises £2m on £39.1bn Stage 1 exposure, £0m on £0.2bn Stage 2 exposure and £0m on £0m Stage 3 exposure. Loan commitments and financial guarantee contracts have total impairment allowance of £16m. Risk review Risk performance Credit risk home.barclays/annualreport 83 Barclays Bank UK PLC Annual Report ### Movement in gross exposure and impairment allowance including provisions for loan commitments and financial guarantees (audited) The following tables present a reconciliation of the opening to the closing balance of the exposure and impairment allowance. Transfers between stages in the tables have been reflected as if they had taken place at the beginning of the year. 'Net drawdowns, repayments, net re-measurement and movements due to exposure and risk parameter changes' includes additional drawdowns and partial repayments from existing facilities. Additionally, the below tables do not include other financial assets subject to impairment such as debt securities at amortised cost, reverse repurchase agreements and other similar secured lending, cash collateral and settlement balances, financial assets at fair value through other comprehensive income and other assets. The movements are measured over a 12-month period. Risk review Risk performance Credit risk home.barclays/annualreport 87 Barclays Bank UK PLC Annual Report ### Analysis of the concentration of credit risk #### 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 on pages 83 to 112. The Barclays Bank UK Group uses the following internal measures to determine credit quality for loans: Credit risk profile by internal PD grade for retail mortgages (audited) As at 31 December 2024 | Grading | PD range % | Credit quality description | Stage 1 Gross carrying amount £m | Stage 2 Gross carrying amount £m | Stage 3 excluding POCI Gross carrying amount £m | Stage 3 POCI Gross carrying amount £m | Total Gross carrying amount £m | Stage 1 Allowance for ECL £m | Stage 2 Allowance for ECL £m | Stage 3 excluding POCI Allowance for ECL £m | Stage 3 POCI Allowance for ECL £m | Total Allowance for ECL £m | Net exposure £m | Coverage ratio % | |---|---|---|---|---|---|---|---|---|---|---|---|---|---|---| | 1-3 | 0.0 to <0.05% | Strong | 26,799 | 649 | — | — | 27,448 | 1 | — | — | — | 1 | 27,447 | — | | 4-5 | 0.05 to <0.15% | Strong | 90,418 | 6,864 | — | — | 97,282 | 15 | 3 | — | — | 18 | 97,264 | — | | 6-8 | 0.15 to <0.30% | Strong | 18,572 | 4,417 | — | — | 22,989 | 10 | 6 | — | — | 16 | 22,973 | 0.1 | | 9-11 | 0.30 to <0.60% | Strong | 5,301 | 2,945 | — | — | 8,246 | 3 | 10 | — | — | 13 | 8,233 | 0.2 | | 12-14 | 0.60 to <2.15% | Satisfactory | 859 | 2,741 | — | — | 3,600 | 1 | 19 | — | — | 20 | 3,580 | 0.6 | | 15-19 | 2.15 to <11.35% | Satisfactory | 82 | 1,532 | — | — | 1,614 | — | 16 | — | — | 16 | 1,598 | 1.0 | | 20-21 | 11.35 to <100% | Higher Risk | 122 | 298 | — | — | 420 | — | 7 | — | — | 7 | 413 | 1.7 | | 22 | 100% | Credit Impaired | — | — | 1,652 | — | 1,652 | — | — | 55 | — | 55 | 1,597 | 3.3 | | **Total** | | | **142,153** | **19,446** | **1,652** | **—** | **163,251** | **30** | **61** | **55** | **—** | **146** | **163,105** | **0.1** | Credit risk profile by internal PD grade for retail credit cards (audited) As at 31 December 2024 | Grading | PD range % | Credit quality description | Stage 1 Gross carrying amount £m | Stage 2 Gross carrying amount £m | Stage 3 excluding POCI Gross carrying amount £m | Stage 3 POCI Gross carrying amount £m | Total Gross carrying amount £m | Stage 1 Allowance for ECL £m | Stage 2 Allowance for ECL £m | Stage 3 excluding POCI Allowance for ECL £m | Stage 3 POCI Allowance for ECL £m | Total Allowance for ECL £m | Net exposure £m | Coverage ratio % | |---|---|---|---|---|---|---|---|---|---|---|---|---|---|---| | 1-3 | 0.0 to <0.05% | Strong | 118 | — | — | — | 118 | — | — | — | — | — | 118 | — | | 4-5 | 0.05 to <0.15% | Strong | 1,141 | 3 | — | — | 1,144 | 1 | — | — | — | 1 | 1,143 | 0.1 | | 6-8 | 0.15 to <0.30% | Strong | 1,031 | 3 | — | — | 1,034 | 2 | — | — | — | 2 | 1,032 | 0.2 | | 9-11 | 0.30 to <0.60% | Strong | 1,375 | 6 | — | — | 1,381 | 4 | — | — | — | 4 | 1,377 | 0.3 | | 12-14 | 0.60 to <2.15% | Satisfactory | 7,392 | 54 | — | — | 7,446 | 142 | 3 | — | — | 145 | 7,301 | 1.9 | | 15-19 | 2.15 to <11.35% | Satisfactory | 2,311 | 1,330 | — | — | 3,641 | 48 | 179 | — | — | 227 | 3,414 | 6.2 | | 20-21 | 11.35 to <100% | Higher Risk | 129 | 668 | — | — | 797 | 22 | 258 | — | — | 280 | 517 | 35.1 | | 22 | 100% | Credit Impaired | — | — | 179 | 40 | 219 | — | — | 91 | — | 91 | 128 | 41.6 | | **Total** | | | **13,497** | **2,064** | **179** | **40** | **15,780** | **219** | **440** | **91** | **—** | **750** | **15,030** | **4.8** | Credit risk profile by internal PD grade for retail other (audited) As at 31 December 2024 | Grading | PD range % | Credit quality description | Stage 1 Gross carrying amount £m | Stage 2 Gross carrying amount £m | Stage 3 excluding POCI Gross carrying amount £m | Stage 3 POCI Gross carrying amount £m | Total Gross carrying amount £m | Stage 1 Allowance for ECL £m | Stage 2 Allowance for ECL £m | Stage 3 excluding POCI Allowance for ECL £m | Stage 3 POCI Allowance for ECL £m | Total Allowance for ECL £m | Net exposure £m | Coverage ratio % | |---|---|---|---|---|---|---|---|---|---|---|---|---|---|---| | 1-3 | 0.0 to <0.05% | Strong | 35 | 1 | — | — | 36 | 1 | — | — | — | 1 | 35 | 2.8 | | 4-5 | 0.05 to <0.15% | Strong | 300 | 5 | — | — | 305 | 1 | — | — | — | 1 | 304 | 0.3 | | 6-8 | 0.15 to <0.30% | Strong | 378 | 6 | — | — | 384 | 1 | — | — | — | 1 | 383 | 0.3 | | 9-11 | 0.30 to <0.60% | Strong | 952 | 59 | — | — | 1,011 | 5 | 3 | — | — | 8 | 1,003 | 0.8 | | 12-14 | 0.60 to <2.15% | Satisfactory | 5,298 | 209 | — | — | 5,507 | 74 | 11 | — | — | 85 | 5,422 | 1.5 | | 15-19 | 2.15 to <11.35% | Satisfactory | 615 | 434 | — | — | 1,049 | 20 | 36 | — | — | 56 | 994 | 5.3 | | 20-21 | 11.35 to <100% | Higher Risk | 67 | 156 | — | — | 223 | 17 | 51 | — | — | 68 | 155 | 30.5 | | 22 | 100% | Credit Impaired | — | — | 130 | 17 | 147 | — | — | 112 | — | 112 | 35 | 76.2 | | **Total** | | | **7,645** | **871** | **130** | **17** | **8,663** | **119** | **101** | **112** | **—** | **332** | **8,331** | **3.8** | Credit risk profile by internal PD grade for corporate loans (audited) As at 31 December 2024 | Grading | PD range % | Credit quality description | Stage 1 Gross carrying amount £m | Stage 2 Gross carrying amount £m | Stage 3 excluding POCI Gross carrying amount £m | Stage 3 POCI Gross carrying amount £m | Total Gross carrying amount £m | Stage 1 Allowance for ECL £m | Stage 2 Allowance for ECL £m | Stage 3 excluding POCI Allowance for ECL £m | Stage 3 POCI Allowance for ECL £m | Total Allowance for ECL £m | Net exposure £m | Coverage ratio % | |---|---|---|---|---|---|---|---|---|---|---|---|---|---|---| | 1-3 | 0.0 to <0.05% | Strong | 4,908 | 107 | — | — | 5,015 | 2 | — | — | — | 2 | 5,013 | — | | 4-5 | 0.05 to <0.15% | Strong | 2,135 | — | — | — | 2,135 | 2 | — | — | — | 2 | 2,133 | 0.1 | | 6-8 | 0.15 to <0.30% | Strong | 542 | 10 | — | — | 552 | 1 | — | — | — | 1 | 551 | 0.2 | | 9-11 | 0.30 to <0.60% | Strong | 1,330 | 52 | — | — | 1,382 | 5 | 1 | — | — | 6 | 1,3