Company: BCS
Filing Date: 2025-02-13
Form Type: 20-F
Source: 0000312069-25-000114
Chunk: 379

Company: BARCLAYS PLC
Filing Date: 2025-02-13
Form: 20-F
Chunk 379
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 is subject to a concentration of those risks where it has significant exposures to borrowers and counterparties in specific sectors, or to particular types of borrowers and counterparties. Any deterioration in the credit quality of such borrowers and counterparties could lead to lower recoverability from loans and advances, and higher impairment charges. Accordingly, any of the following areas of uncertainty could have a material adverse impact on the Group's business, results of operations, financial condition, and prospects: • Consumer affordability : w hilst the pressures from increased cost of living eased in the latter half of 2024 as interest rates and inflation fell, this remains an area of focus. Macroeconomic factors, such as unemployment, high interest rates or broader inflationary pressures, which impact a customer’s ability to service debt payments, could lead to increased arrears in both unsecured and secured products . Additionally, there is potential US consumer credit weakness from all time high consumer debt and student loan debt which could strain consumer affordability, leading to higher arrears and ECLs • UK Retail, Hospitality and Leisure: despite holding up reasonably well during most of 202 4 , continuing cost of living pressures, falling consumer confidence, or other macroeconomic factors adversely affecting consumers could trigger a contraction in demand which, together with rising business costs and, for UK retail, a structural shift to online shopping, would add pressure to sectors heavily reliant on consumer discretionary spending. This represents a potential risk in the Group’s UK corporate portfolio as a higher probability of default exists for retailers, hospitality providers and their landlords while these pressures remain. • Real Estate : UK property represents a significant portion of the Group's overall retail and corporate credit exposure, and the Group remains at risk of increased impairment from a material fall in property prices. Following interest rate cuts in 2024, housing market activity increased and is likely to continue with further interest rate cuts . However, as mortgages continue to roll off existing rates onto new higher rates, there is an increased risk of borrower defaults. This could put downward pressure on property prices and, in turn, impact the Group’s impairment and capital position. Furthermore, certain segments of the housing market could be subject to specific valuation impacts (for example, certain properties within the Group's residential loan portfolio may be subject to remediation activities relating to fire safety standards; similarly, certain properties within the Group's buy-to-let portfolio may be subject to remediation activities to meet minimum Energy Performance Certificate rating requirements. The Group’s corporate exposure is conservatively positioned with low loan-to-value ratios but remains vulnerable