Company: BCS
Filing Date: 2025-02-13
Form Type: 20-F
Source: 0000312069-25-000114
Chunk: 518

Company: BARCLAYS PLC
Filing Date: 2025-02-13
Form: 20-F
Chunk 518
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808 |               4.11 |                 9,712 |            263,556 | 3.68 |
| Barclays Investment Bank                    |                          1,031 |                    |                    |                 1,393 |                    |                    |                   836 |                    |      |
| Head Office                                 |                            646 |                    |                    |                   353 |                    |                    |                    24 |                    |      |
| Barclays Group net interest income          |                         12,936 |                    |                    |                12,709 |                    |                    |                10,572 |                    |      |

Note: 1 Average customer assets includes held for sale balances generating net interest income. The Group excluding IB and Head Office Net interest margin increased by 17 bps from 4.11 % to 4.28 % in 2024, due to continued structural hedge momentum and higher cards balances in USCB, partially offset by mortgage margin compression in Barclays UK and adverse product dynamics in deposits. Structural hedge The Group employs a structural hedge programme designed to stabilise NIM on fixed rate non-maturity balance sheet items that are behaviourally stable. As interest rates move, such balances would otherwise drive material income volatility where there is a re-pricing mismatch with floating rate assets. The structural hedge predominantly covers non-interest-bearing current accounts and the fixed portion of instant access savings accounts as well as equity, which are invested into either floating rate customer assets or balances at central banks, creating an exposure to changes in interest rates. The structural hedge is executed via a portfolio of receive fixed, pay variable interest rate swaps, with an amortising structure so that a small portion matures and is reinvested each month at prevailing market rates. The pay-floating leg of the interest rate swaps nets down a proportion of the receive-floating income from the customer assets, leaving a receive-fixed income stream from the structural hedge. The purpose of the structural hedge is to smooth the Group NII through time. The floating leg of the swap will re-price immediately, whereas the fixed rate yield on the portfolio reprices gradually, as a portion of the swap portfolio matures and the roll is re-invested onto new market rates. When interest rates are higher than our structural hedge yield, the pay floating rate will typically be higher than our average receive fixed rate. In this scenario, when viewed in isolation, the structural hedge will be a net drag to Group NII. When floating rates are lower than our structural hedge yield, the hedge in isolation will be a net