Academic Master

Business and Finance

Performance Assessment Approach at Barclays Bank PLC


Performance Management is a highly new idea in control. This applies first to the personal sector and then to the public sector. Performance management defines the goals of the business enterprise, the consequences needed to gain one’s dreams, how powerful they are, and the drives for attaining them (Wills, 2004). In short, dedication is not always the same as attaining goals. It assists them to remember the fact that study, training, and masses of commitments are not the outcomes. For this purpose on my own, overall performance management focuses on attaining the first-rate effects in an enterprise, organization, group, or man or woman through understanding and dealing with performance, a good way to improve overall performance against planned goals. In brief, overall performance management includes all activities that efficiently attain organizational goals. One of the most important factors of human resource management in an enterprise is also a topic of particular concern in this study with a key focus on the employee performance assessment respectively (Airasian, 2000).

Barclays Bank is a state-owned bank operating in the banking area in the United Kingdom. The bank is a British multinational bank and economic company based in London, UK. Barclays Bank PLC is a restrained liability company. This means that banks can promote their shares in the stock market (Gardiner and McSkeane, 2014). The minimum rate or fee of shares that can be issued in the United Kingdom is about £ 49,000. The obligation of shareholders is constrained. The bank has every other legal entity. This means that if the shareholder dies, continuity is maintained. As a standard rule, there is no restriction to the wide variety of shareholders, so that they can enhance a large sum of capital. Bank shares are effortlessly transferable, imparting greater liquidity for shareholders correspondingly (Bauer et al., 2012a).

Global Perspective of Financial Performance

The financial system includes the interests of public and personal sectors and the markets that serve them. Providing capital to different companies and governments that collect and transfer assets via intermediaries (banks, securities businesses, insurance corporations, and so on) or directly to other individuals and institutional traders. Financial management estimates the performance and profitability of the current investments, the credibility of debtor claims on assets, and the capability for derivatives to safeguard buyers against numerous risks in the marketplace (Gompers and Lerner, 1997).

In Europe, Chinh et al. (1997), surveyed monetary participation (income sharing and shared ownership plans of employees) and accurate financial overall performance. They use data from Finland, Germany, the Netherlands, and the UK. Various performance signs are used based on respondents’ assessment of the effect of economic participation. The consequences boost numerous questions about the complementarity of financial participation and other types of participation. There is a correlation between corporate governance, ownership, and overall financial performance (Cabrera Jr and Pardo, 2008).

Impact of Investment on the Performance of Barclays Bank

According to Shavelson, Baxter, and Pine (1991), efficient capital allocation is the most important financial function today. This includes decisions about investing company funds in long-term assets. Investment decisions are very important for companies. Companies tend to determine their value, affecting growth, profitability, and risk. Investment decisions deserve special attention for the following reasons: They affect the long-term growth of the company, affect the company’s risk, involve large allocations of funds, significant losses that cannot be changed or reversed, and make more bold decisions (Carling, Reilly and Williams, 2008).

The issuance of bonds by governments, or government agencies such as deposit insurance funds and special asset management companies (AMCs), have been used in many general banking crises to offer funds to bank restructuring and provide loans to government restructuring (Sabransky, 1994). Bank for privatization with several options already in place, bonds are issued to finance two main functions in bank restructuring: government funding when buying bank shares and funding bank acquisitions of assets. The design of bonds issued to fulfill these functions is a major determinant of the long-term financial performance of restructured banks and is, therefore, an important aspect of the completion or failure of restructuring efforts (Glatthorn et al., 1998).

Impact of Asset Valuation on Business Performance

The balance of commercial banks inside the economic system depends on the right structures of asset management. Better asset management is possible to soak up the risks and shocks that commercial banks face. In addition, asset management is a prerequisite for the performance and boom of commercial banks. Asset In commercial banks, asset-liability management is determined by the bank’s potential to maintain capital, cover loan losses, assist asset growth and provide returns to traders. The biggest income source for a bank is interest income from loans minus deposit and liability interest. To obtain the same objective, banks ought to make sure the right asset and liability management, such as asset-liability management, interest rate risk control, and credit risk management (Afsah, 2003).

Task 2

The Bank’s internal analysis focuses on the inner surroundings and overall performance elements consisting of financial institution personnel, control, and infrastructure to decide their strengths and weaknesses. It has a Compensation Committee which gives strategic oversight for reimbursement and management, management of the human resource, and government improvement. The aim of the Remuneration Committee is ordinarily to motivate, retain and appeal to employees which have the revel in and potential to motivate them to become experienced workers (Bauer et al., 2012a). When personnel and group of workers have high motivation, they enhance their overall performance and additionally improve the bank’s overall performance. The bank is also investing heavily in infrastructure to improve customer support and reach its national and international customers.

Microenvironment (shareholder)

Political pressure from its shareholder on Barclays has brought about the increasing strain on banks to exchange their investment model and cope with perceived flaws inside the corporate banking culture (Adair-Hauck, Glisan, and Troyan, 2013).


The World Bank recognizes sustainability as a manner to manipulate and apprehend social, environmental, and economic matters in the group in addition to affecting the welfare of the community (Kimani, 2011). PESTEL analysis is designed to perceive unique elements that in reality affect the sustainability of an organization.

Politics and Legal

The sustainability of the bank’s improvement program has spread swiftly. This reflects the bank’s awareness of the broad nature of their business and their growing interest in stakeholders in a fantastically aggressive business environment (Horsoo, 2009). Today, there’s a first-rate deal of attention approximately international issues inclusive of poverty, exchange of assets, shortage of resources, and demographic change. There has been a backlash from the government, numerous exceptional companies, and NGOs that support the sustainability of the financial institution.


The bank’s method to the sustainability agenda is beneficial and stimulates the financial institution to be transparent and open to problems which include R&D initiatives, negotiations with the government and numerous agencies, and their impact (Yahaya and Lamidi, 2015). The World Bank can broaden its recognition of company duty and prove that it could play a vital position in shaping financial improvement in international locations implementing such programs.


The Bank’s sustainable development strategy aims to provide added value to stakeholders and businesses. They attach great importance to their customers and their customers and maintain a way of promoting and understanding their customers and their company that determines their level of satisfaction. This is only possible if you pay attention to international efficiency and are confident that you will find innovative solutions and increase productivity.


Barclays Bank uses the latest technology in its business, especially in corporate banking. Its goal is to help people fight poverty-enabled financial systems (Banks, 1997). Technology has made it possible to expand system functionality and achieve economic benefits. Adding new skills, introducing new ideas, and doing a good job are some of the principles of managing an organization.

Regulatory Capital

The Barclays Tier 1 regulatory capital ratio has modified over the last decade from 7.9% in 2012 to 7.3% in 2017 and 31% in 2012. The capital equity ratio accelerated drastically in 2009 due to considerable balance sheet restructuring (boom inequity of shareholders and discount in the total size of the balance sheet) (Yahaya and Lamidi, 2015).

There is a huge debate about the regulation of financial institution capital ratios, which can be encouraged with the aid of the “Bank for International Settlements” or “the Basel Committee” on Banking Supervision and has been implemented via national regulators. In the European Union, they had been translated into the Capital Requirements Directive. The unique Basel I Accord of 1988 required banks to have a capital adequacy ratio (ratio of capital to risk-weighted property) of 8 percent in which capital (tier 1) becomes 2.7 percent. Assets are weighed in line with relatively simple policies, which include 18 percent for the OECD government, 48 percent for mortgages, and 99% for other assets. Capital Tier 2 consists of described reserves, hybrid capital investments, and subordinated debt (Coulson and Monks, 1999).

Second, Basel II calls for a minimal capitalization of 7 percent to be divided into two tiers, with banks requiring a minimal stage of common equity (3%) and tier 1 capital (6%). This applies on specific days. Basel II seeks to alter the risk-weighted property to credit, market, and operational risks. Banks can also use subject to regulatory consent, advanced measurements on their version or a standardized (non-modeled) method, and difficulty to regulatory approval. Basel II ordered the disclosure of more records (Githui, 2006).

When fully implemented, Basel III will enhance the quantity and quality of capital, consisting of raising capital to guard against counterparty risk and derivatives, pro-cyclical buffers and capital conservation, and other liquidity and investment ratios. Introducing many critical adjustments to common equity, in 2015, fixed capital had to be elevated from 2% to 45 % (plus buffer capital from 2 % to 7%), and middle capital improved from 4% to 6% (capital buffers). The ratio of total minimum capital remains at 8% (plus capital reserves). The EU is currently operating on Directive IV on capital requirements for enforcing Basel III, in addition to adjustments in corporate governance and reimbursement.


Figure 1: Barclay’s capital ratio and exemplary terms


Figure 2: Barclay’s dividends and payments paid to parent shareholders

Total Shareholder Return

Barclays publicly uses total shareholder return (TSR) as a way of measuring the value it creates for its shareholders. Till 2006, Barclays has provided significant value to its shareholders. The £100 that is invested in Barclays’ shares in the year 2018 become £183, the total share price and cumulative dividends at the end of 2016, with an average annual growth rate of 9%. But at the end of 2018, the price of the same share was £ 81, so its value has been decreasing since then.


Figure 3: Berkeley TSR Index

The main competitor

Barclays Bank PLC is a financial services organization operating in the highly competitive banking sector worldwide. The bank faces hard rivalry from other banks which are offering the same services or products around the world, such as a Japanese bank called Mizuho, ​​which is based in London to open up new growth opportunities. Other major competitors include Bank of America (BAC), JPMorgan Chase, and HSBC Holdings (HBC), (Barclays Bank, no 2020).

Barclays Bank PLC. Competitive advantage

Banks have very large assets based around the world. It is ranked as the third-largest bank in the world by assets with a Tier 1 base ratio of 11%. Barclays Bank PLC is the first bank to publish color reports with an efficient and efficient data management system. This group has a unique brand, is historically founded, and continuously promoted by good nationality such as sponsorship of the English Premier League. Due to its global presence, the World Bank is subject to multiple risks and economies of scale. The bank has several innovations. For example, in 1966 he created the first credit card and mobile banking users in the banking market. The chart below shows how the overall performance of Barclays’ Discretionary portfolio has exceeded the ARC average over the past five years (Keely, 1995). It illustrates the strength of the total long-term returns and benefits of investing in uncertain times that may precede the best period for investors.

Figure 4: Cumulative income

Factors Affecting Demand for Berkeley Products and Services

Clients have brilliant possibilities to apply banking products such as credit cards, insurance, loans, and other services (Miskelly, 2013). The fact that many banks operate within the market and provide comparable offerings gives brilliant potential to customers. However, banks are in a fantastic function thanks to coverage and electronic banking services (Taylor, 1994). Price is any other important aspect affecting the demand for bank merchandise. The financial institution has ensured that the rate is low priced for sure target customers. For instance, suppose a bank offers an interest-loose overdraft charge. The financial institution also offers worldwide online payments at discounted quotes for or her investment.

Barclays Bank arranges products and services conveniently and conveniently for clients, which include an additional Barclays auxiliary Debit Card delivered to their home within working days. They also have Quick Tap contactless readers in over 50,000 stores, personal banking bank additionally commenced the use of mobile banking and extended its community to nearby branches, and bank ATMs installation at strategic places throughout the UK to fulfill the desires of their customers (Husain, 1994).

The Three Main Stakeholders and Their Roles

Stakeholders are certain people who are interested in the conceivable or declared stake or interest in a policy concern.


Bank employees are the main stakeholders in the business. Their roles and responsibilities are essential to the success of their bank. Employees are responsible for providing good service to customers, so the bank needs dedicated employees who work exemplary and understand that the services they provide to customers greatly help the image of the bank (Goudkamp, 2017). The bank employees are professional and well equipped to ensure the best service to our clients.


Customers and clients are also major stakeholders in banks and other businesses. Their contribution is important for the growth and stability of the bank. Barclays Bank is responsible for ensuring that customers and their clients receive products and services that meet their needs (Airasian, 2000). Thanks to feedback, the bank can improve its products and services according to customer demand.


Shareholders are the main stakeholders of every business entity. Their contribution is very important because they are part of the decision-maker of the organization. They make important decisions about the functioning and operation of the bank.

Liquidity / Solvency

From Figure 5, it can be deduced that the trend of the liquidity management ratio during the review period. The liquid asset ratios (LAR) have changed inconsistently from year to year, increasing from 24% in 2010 to 33% in 2011 and down to 30% in 2012 (Kumar and Sakthivel, 2020). Again, this will grow to 41 % in 2013 and fall to 38% in 2014. This just shows that Barclays Bank has always followed the trend of low liquidity throughout the period.

In addition, the loan-to-deposit ratio (LDR) continued to decline over the period from 63% in 2010, the highest all year analyzed, to 18% in 2014 (Bauer et al., 2012b). Liquidity management ratios appear to indicate that certain banks invest in Treasury securities and other liquid assets. This may be due to a lack of demand for loans, as evidenced by a 42% decrease in lending between 2012 and 2013. Another 29% decrease in 2014 was due to the semi-annual loan freeze (Randall, 2017). Changes in this index are likely to be observed after a recovery in loan demand (Gil-Alana, Barros, and Mandlaze, 2017). Once again, a bank’s debt ratio (DR) position means that the bank’s solvency position is volatile.


Figure 5: Liquidity management ratio

Credit Risk Management

In Figure 6, the dynamics of credit risk management ratios show that banks have shown fluctuations in Loan Loss Provisions (LLP) to improve credit quality for five years. Bank performance on risk-adjusted margin (RAM) is generally poor, indicating poor asset management and, therefore, an inadequate bank risk management system.

RAM also shows what can be used to cover non-interest expenses (such as personnel and administrative costs) and expected shareholder profits (Syazwani, 2018). Improving asset quality is a major challenge faced by banks because it plays an important role in the credit risk management system.

Lastly, in addition to the stiff competition facing banks, Sierra Leone’s economy experienced two major shocks in 2014. The unexpected Ebola virus outbreak and an unexpected drop in iron ore prices hurt the country’s growth potential. As a result of reaping effect, the bank reported a loss of 22 billion before tax. This is the second time the bank has reported a loss in its 15 year history.


Figure 6: Credit risk management index

Conclusions and Recommendations

An important analysis of the features and capabilities of the Barclays Group PLC, including the goals and objectives the group should achieve. The paper analyzed their strengths, weaknesses, opportunities, and threats, and analyzed their competition. There is an urgent need to reduce bank operating costs and significantly increase physical, financial, and human resource productivity. To do this, the bank needs to plan a program of action to reorganize their bank’s business structure, personnel levels, process control systems, and business procedures.

There is also a separation of duties between those who carry out business transactions, manage the receipt and storage of securities, transfer and receive funds, and manage prepaid accounts provided by banks to their customers. Here are some general recommendations for banks on the effectiveness of credit management: Bank loans should be productive and should prioritize projects and companies that are not too capital intensive. Likewise, overdue loans and loan accumulation should be reduced without increasing profitability or income.

Barclays is encouraged to focus on staff and senior management to be more customer-centric in implementing strategies along with decision making and control and effective execution to achieve the desired goals. The bank also needs to be close to it and ensure the benefits of its clients by properly managing their risks.


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