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CORRESP
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filename1.htm

United
States Securities and Exchange Commission

Division
of Corporation Finance

Office
of Finance

100
F Street N.E.

Washington,
D.C. 20549-7010

BY
EDGAR

19
April 2024

Re:
Barclays PLC Form 20-F for the fiscal year ended December 31, 2023, Filed February 20, 2024 (File No. 001-09246)

Dear
Sir or Madam,

On
behalf of Barclays PLC (the “Company” or “Barclays”), this letter responds to the comment of the Staff of the
Division of Corporation Finance (the “Staff”) of the U.S. Securities and Exchange Commission contained in the letter dated
April 5, 2024 (the “Comment Letter”) relating to the Company’s Annual Report on Form 20-F for the fiscal year ended
December 31, 2023 filed on February 20, 2024 (the “2023 Form 20-F”). Capitalised terms used and otherwise not defined have
the meanings assigned to such terms in the 2023 Form 20-F.

To
facilitate your review, we have reproduced the text of the Staff’s comment in boldfaced print below, followed by the Company’s
response to the comment.

  Yours sincerely,

  /s/  Anna Cross

  Anna Cross – Group Finance Director

    Barclays PLC. Registered in England. Registered No: 48839. Registered Office: 1 Churchill Place, London E14 5HP.

Form
20-F for the fiscal year ended December 31, 2023

Financial
Review, page 300

 1. We
                                            note your disclosure on pages 304, 308 and 315 related to the material impact of gross and
                                            net structural hedge contributions on net interest income. Please revise future filings to
                                            provide a separately captioned section discussing the structural hedge and the impact on
                                            financial results. In your disclosure, please address the following bullet points and provide
                                            any other appropriate information:

In
regard to the disclosure on pages 304, 308 and 315 of the Barclays PLC 2023 Form 20-F related to the material impact of gross and net
structural hedge contributions on net interest income, Barclays wishes to provide further insight to the background of accounting and
disclosure of the structural hedge.

Background
1: Structural Hedging Economic Risk Management

Banking
book assets and liabilities consist of a mix of both fixed and floating rate products, with varying durations. Mismatches between the
re-pricing profile of assets and liabilities creates interest rate risk.

Barclays
seeks to manage interest rate risk arising in the banking book back to a floating rate.

To
do this Barclays refer to two types of hedging programmes, a “product” hedge as shown on the right of the diagram below,
and a “structural” hedge as shown on the left.

A
product hedge manages the interest rate risk of assets and liabilities with a fixed rate and fixed maturity.

A
structural hedge manages the interest rate risk of liabilities and equity which have no contractual maturity date and that are fixed
rate and/or not sensitive to changes in interest rates (i.e. the customer rate does not change with movements in interest rates).

Whilst
Barclays centralises the interest rate risk across each of these products by executing hedges between the businesses originating the
products, and Treasury, it is the net position of these combined risks that are externalised with interest rate derivatives, which therefore
mitigate Barclays economic exposure to changes in interest rates.

    Barclays PLC. Registered in England. Registered No: 48839. Registered Office: 1 Churchill Place, London E14 5HP.

The
net externalised interest rate derivative position is receive fixed, pay floating. This offsets the natural net pay-fixed position of
the banking book balance sheet, arising from non-interest-bearing deposits/current accounts, and equity funding. This was the net overall
position consistently through the reporting periods referenced in this letter.

In
November 2023 Barclays held a teach in [https://home.barclays/content/dam/home-barclays/documents/investor-relations/fixed-income-investors/2023/20231128-Structural-Hedge-Teach-In-Transcript.pdf],
which focused on explaining the mechanics of our structural hedge from which the above diagram is sourced.

Background
2: Structural Hedging Income

Certain questions raised within this letter focus on fair value (“FV”)
movements of the existing portfolio of derivatives at reporting periods which impact the Statement of Other Comprehensive Income (“SOCI”).
Movements within the SOCI do not directly correlate with the economic risk management or net interest income of the structural hedge for
a number of reasons.

 (a) The SOCI reflects the accounting asymmetry risk arising from the
net externalised hedges executed to mitigate the economic risk. The structural hedge positions viewed in isolation, are a contributor
to that net externalised risk, but not the totality of it.

 (b) The SOCI reflects the management of accounting asymmetry (accounting
timing mismatch) risks and the impact of movements in forward interest rates on existing derivatives used in externalising the net economic
risk of the bank.

Forward
interest rate movements change the future floating payments on these derivatives and are reflected in the SOCI immediately. The same
changes in interest rates also affect the accruals income generated from floating rate receivables on the balance sheet, which will flow
directly through the income statement, and not through the SOCI, as outlined in the table below.

The
SOCI thus presents only a view of accounting timing mismatches. It does not reflect changes in the underlying assets and liabilities
held at amortised cost.

    Net
Fixed Rate Liabilities

    (Source
of funds)

    Net
    Externalised Derivative (SOCI)
    Floating
Rate Funding

    (Use
of funds)

    Pay
    Fixed or 0% rate
    Receive
    Fixed

    Pay
    Floating
    Receive
    Floating

 (c) Within
                                            disclosures and external materials, we reference gross and net structural hedge income. Gross
                                            income only looks at the fixed leg of the interest rate swap and is the focus of our investor
                                            materials since the (pay) floating leg of the swap offsets the (receive) floating rate of
                                            interest on assets being funded by the hedged liability.

    Barclays PLC. Registered in England. Registered No: 48839. Registered Office: 1 Churchill Place, London E14 5HP.

 (d) The projected net interest income increase of our structural hedge
highlighted in investor materials, references the re-investment of the swaps in the structural hedge portfolio onto rates higher than
the rates at which the maturing swaps were booked. These are positions not yet executed and thus do not feature in the SOCI. The rate
at which existing swaps mature is known, but the rate at which new swaps will be booked is assumed, per the economic and market assumptions
made in our financial plans.

Background
3: Accounting Risk Management

Barclays accounting risk management mandate is separate to
the economic risk mandate and focuses exclusively on identifying all areas of accounting asymmetry across the bank and implementing hedge
accounting solutions to address accounting profit and loss (“P&L”) volatility.

Accounting asymmetry arises as a result of managing the economic
risks of amortised cost accounted assets and liabilities with derivatives that are accounted for at FV.

Hedge accounting solutions deployed within Barclays cover interest
rate, foreign exchange (FX) and inflation asymmetry risks utilising both FV and cash flow hedge accounting methods.

The net externalised economic risk position referenced above
is considered within Barclays’ cash flow hedge accounting solution. Barclays adopts hedge accounting to match the interest rate
derivatives with the floating rate assets the underlying deposits are funding. This has the effect of aligning the accounting treatment
with the economic effect of the hedges.

This treatment allows FV movements arising from forward interest
rate movements to be deferred into the cash flow hedge reserve, whilst the accrued cash flow from the derivative is realised in the income
statement.

 ● the
                                            specific interest rate risk being hedged (e.g., decrease in net interest income from decreasing
                                            interest rates) during each period presented and a description of the underlying causes of
                                            the specific risk (e.g., net assets with variable interest rates);

The
disclosure highlights the size and performance of the structural hedge programme. The programme smooths income from fixed rate non-maturing
balance sheet items that are behaviourally stable. As interest rates move, such balances, paying fixed rate (or insensitive to interest
rates) would otherwise drive material income volatility given the re-pricing mismatch with the floating rate assets they are funding.
I.e., the interest rate on the asset changes with market rates, but the interest rate on the liability is fixed.  The hedge programme
creates a fixed receivable to match the fixed payable on the liability.

    Barclays PLC. Registered in England. Registered No: 48839. Registered Office: 1 Churchill Place, London E14 5HP.

The structural hedge predominantly relates to non-interest-bearing
current accounts, the deemed rate insensitive portion of instant access savings accounts, and the bank’s equity. These sources of
funding are used to fund either floating rate customer assets or cash at central banks. This creates the structural exposure to interest
rates referred to in the prior paragraph.

Additional
disclosure covering this item will be added to a separate “Structural Hedge” captioned section, an example of which is included
in Appendix A.

 ● the
                                            type of financial instruments and derivatives you used to hedge this risk (e.g., receive
                                            fixed/pay variable swaps) during each period presented and in what interest rate scenarios
                                            the hedges result in gains or losses;

The
programme consists of a portfolio of receive-fixed, pay-floating interest rate swaps. It is executed granularly with a small amount of
the overall programme maturing and being ‘rolled over’ each month at prevailing market rates. The effect is to smooth the
portfolio level yield through time, as swap rates change. This is a strategy that is commonly applied across the UK banking industry.

The
programme had a notional of £246bn receive-fixed, pay-floating interest rate swaps as of 31 December 2023. Where prevailing interest
rates are higher on reinvested swaps than maturing rates, the hedge yield and therefore net interest income will gradually increase over
time. Vice versa, if the prevailing interest rate is lower, than maturing rates, then income from the portfolio will be gradually declining.

The derivatives will benefit in FV from a decrease in interest
rates, and vice versa for an increase.

Additional
disclosure covering this item will be added to a separate “Structural Hedge” captioned section, an example of which is included
in Appendix A.

 ● clarify
                                            if the derivatives used are settled daily and reconcile the notional amount of £246bn
                                            disclosed on page 315 to the table on page 355 in Note 14;

The
externalised derivatives are principally cleared through the London Clearing House and settled daily.

The
structural hedge swap programme is one component of a larger portfolio of derivatives, including offsetting flows from product hedges
(e.g. pay fixed receive variable interest rate swaps for mortgages) and other risk management activities. The risk is centralised in
Treasury and netted down before externalisation, with the net externalised position then subject to cashflow hedge accounting where required.

    Barclays PLC. Registered in England. Registered No: 48839. Registered Office: 1 Churchill Place, London E14 5HP.

The
£246bn is therefore offset with non-structural hedging positions of c.£118bn, bringing the total net externalised risk position
to £128bn. The net externalised position is captured within the cashflow hedge accounted interest rate risk figure on page 360
in Note 14.

Additional
disclosure covering this item will be added to a separate “Structural Hedge” captioned section, an example of which is included
in Appendix A.

 ● clearly
                                            describe how you account for the structural hedges;

Structural
hedges are netted down against product hedges and other internal flows before the net position is executed externally using an interest
rate swap. Additional disclosure covering this will be added to a separate “Structural Hedge” captioned section, an example
of which is included in Appendix A.

These
derivatives are accounted for under IFRS 9 mandatorily at fair value through profit and loss. The accounting policy for derivatives is
covered on p.354 of the Barclays PLC 2023 Form 20-F.

 ● if
                                            you use hedge accounting, please provide us an accounting analysis detailing how your policies
                                            are consistent with the guidance in IFRS 9;

As
the underlying risk economically hedged is held at amortised cost, re-measurement of the net externalised interest rate risk position
creates accounting asymmetry and thus income statement volatility.

To mitigate accounting asymmetry, Barclays employs hedge accounting
to defer FV gains and losses from its net externalised interest rate risk position to the cash flow hedge reserve. FV gains and losses
will be recycled from the reserve to the income statement, at the point the underlying hedged item impacts the income statement.

IFRS
9 permits an entity to choose as its accounting policy either to apply the hedge accounting requirements
of IFRS 9 or to continue to apply the hedge accounting requirements of IAS 39 (Refer Para 7.2.21 of Chapter 7 IFRS 9). Barclays applies
the requirements of IAS 39 Financial Instruments: Recognition and Measurement for hedge accounting purposes.

    Barclays PLC. Registered in England. Registered No: 48839. Registered Office: 1 Churchill Place, London E14 5HP.

IAS
39 permits a hedged item to be defined as a highly probable transaction that exposes the entity to risk of changes in future cash flows
(Refer Para 78 on qualifying items of IAS 39).

In
accordance with the above, Barclays uses highly probable floating rate cashflows arising from loans and advances at amortised cost and
cash and balances at Central Banks as hedged items (Refer Para 83 and 84 on Designation of group of items as hedges items of IAS 39).
Cash flow hedge accounting is executed by matching floating rate cash flow payments observed on net externalised interest rate risk derivatives,
with floating rate cash flow receipts on the aforementioned banking book assets.

The FV gain or loss associated with the effective portion of the
cash flow hedge is recognised initially in other comprehensive income and held in the cash flow hedge reserve. In the periods when the
hedged item affects the income statement, the reserve will subsequently be recycled to the income statement. Any ineffective portion of
the gain or loss on the hedging instrument is recognised in the income statement immediately (Refer Para 95 to 97 on cash flow hedges
of IAS 39).

The
use of hedge accounting in this manner is common amongst UK peers and Barclays detail this through the breakdown of underlying asset
types utilised e.g. cash and balance at