Strategic Shareholder Climate and Risk Financial Financial Barclays PLC 58 report information sustainability report Governance review review statements Annual Report 2022 Viability statement ▪ reviewed how those risks are identified, ▪ reviewed the draft statutory accounts and the managed and controlled (further detail financial performance of the Group provided on pages 56 to 57) Consideration ▪ reviewed the possible impact of legal, ▪ considered the WCR which provides an competition and regulatory matters set out in assessment of forecast CET1, leverage, Tier 1 Note 26 to the financial statements on pages of the long-term viability and total capital ratios, as well as the build-up 479 to 484. of minimum requirement for own funds and The Group's Medium Term Plan is based on eligible liabilities (MREL) up to the end of 2025 of Barclays assumptions for macroeconomic variables such ▪ considered the Group’s Medium Term Plan as interest rates, inflation, unemployment, which ▪ reviewed the Group’s liquidity and funding have been consistently applied for the purpose The financial statements and accounts profile, including forecasts of the Group’s of forecasting the Group’s capital and liquidity have been prepared on a going concern basis. internal Liquidity Risk Appetite (LRA) and position and ratios, as well as any credit regulatory liquidity coverage ratios impairment charges or releases. The three-year time frame has also been chosen Provision 31 of the 2018 UK Corporate ▪ considered the Group’s viability under a Assessment of the Group's risk profile because: Governance Code requires the Directors to specific internal stress scenario (see below for Risks faced by the Group’s business, including in make a statement in the Annual Report regarding ▪ it is within the period covered by the formal further detail) respect of financial, conduct and operational the viability of the Group, including an explanation medium-term plans approved by the Board ▪ considered the stability of the major markets in risks, are controlled and managed within the of how they assessed the prospects of the which contain projections of profitability, cash which it operates, supply chain resilience and Group in line with the ERMF. Executive Group, the period of time for which they have flows, capital requirements and capital material known regulatory changes to be management sets a risk appetite for the Group, made the assessment and why they consider resources enacted which is then approved by the Board. Limits are that period to be appropriate. ▪ it is also within the period over which internal ▪ considered the sustainability of any future set to control risk appetite, within which Time horizon stress testing is carried out capital distributions businesses are required to operate. In light of the analysis summarised below, the ▪ it is an appropriate horizon over which to ▪ considered scenarios which might affect the Management and the Board then oversee the Board has assessed the Group’s current viability, consider the impacts of new regulations in the operational resilience of the Group ongoing risk profile. Internal Audit provides and confirms that the Directors have a financial services industry. independent assurance to the Board and ▪ considered factors that may inform the impact reasonable expectation that the Group will be Executive Committee over the effectiveness of The Directors are satisfied that this period is of a severe recession in major economies with able to continue in operation and meet its governance, risk management and control over sufficient to enable a reasonable assessment of affordability pressures on consumers from liabilities as they fall due over the next three current and evolving risks. viability to be made. high inflation and rising interest rates, energy years. This time frame is used in management’s supply pressures, and financial markets A full set of material risks to which the Working Capital and Viability Report (WCR), Considerations instability organisation is exposed can be found in the prepared at the start of February 2023. The WCR In making its assessment the Board has: material existing and emerging risks on pages ▪ considered the impact of the Group’s ambition is a formal projection of capital and liquidity based ▪ carried out a robust and detailed assessment 269 to 281 in Part 3 of the Report. to be a net zero bank by 2050 and support its upon formal profitability forecasts. The of the Group’s risk profile and material existing clients’ transition to a low-carbon economy, availability of the WCR gives management and and emerging risks (see below for further including the need to continue to incorporate the Board sufficient visibility and confidence on details), in particular those risks which senior climate considerations into its strategy, the future operating environment for this time management believes could cause the business model, the products and services it period. Group’s future results of operations or provides to customers and its financial and financial condition to differ materially from non-financial risk management processes current expectations or could adversely impact the Group’s ability to meet its material regulatory requirements