Company: BCS
Filing Date: 2025-02-13
Form Type: 20-F
Source: 0000312069-25-000114
Chunk: 384

Company: BARCLAYS PLC
Filing Date: 2025-02-13
Form: 20-F
Chunk 384
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 fund as the liabilities are adversely impacted by an increase in long-term inflation expectations. c) Interest rate risk in the banking book Interest rate risk in the banking book is the risk that the Group is exposed to capital or income volatility because of a mismatch between the interest rate exposures of its (non-traded) assets and liabilities. This also includes credit spread risk in the banking book, the risk that the Group is exposed to capital or income volatility because of changes in credit spreads on its (non- traded) assets and liabilities. The Group’s hedging programmes for interest rate risk in the banking book rely on behavioural assumptions and, as a result, the effectiveness of the hedging strategy cannot be guaranteed. A potential mismatch in the balance or duration of the hedging assumptions could lead to earnings deterioration if there are interest rate movements which are not adequately hedged. A decline in interest rates may also compress net interest margins on retail and corporate portfolios. In addition, the Group’s liquid asset portfolio is exposed to potential capital and/or income volatility due to movements in market rates and prices which may have a material adverse effect on the capital position of the Group.

| For further details on the Group’s approach to treasuryand capital risk, refer to thetreasury and capital riskmanagementandtreasury and capital riskperformancesections. |

v) Operational risk Operational risk is the risk of loss to the Group from inadequate or failed processes or systems, human factors or due to external events where the root cause is not due to credit or market risks. Examples include: a) Operational resilience The Group functions in a highly competitive market, with customers and clients that expect consistent and smooth business processes. The loss of or disruption to business processing is a material inherent risk within the Group and across the financial services industry, which has impacted the Group in the past and may continue to impact the Group in the future, whether arising through failures in the Group’s technology systems, cyber and/or data integrity disruptions, unavailability of a Group site, or unavailability of personnel or services supplied by third parties. A challenge for the Group, as for virtually all companies, is the ability to recover from and remain within impact tolerance for a pervasive cyberattack which impacts a number of applications, data and infrastructure services. Failure to build resilience and recovery capabilities into business processes, or into the services on which the Group’s business processes depend, may result in significant customer harm, costs to reimburse losses incurred by the Group’s customers and clients, and reputational damage. There are also risks associated with increasing regulatory focus