|
|
|
Page
|
Results for the full year
|
1
|
Income
statement – underlying basis
|
2
|
Key
balance sheet metrics
|
2
|
Quarterly
information
|
3
|
Balance
sheet analysis
|
4
|
Group
Chief Executive’s statement
|
5
|
Summary
of Group results
|
9
|
Segmental
analysis – underlying basis
|
16
|
|
|
Divisional results
|
|
Retail
|
17
|
Commercial
Banking
|
19
|
Insurance and
Wealth
|
21
|
Central
items
|
23
|
|
|
Other financial information
|
|
Reconciliation
between statutory and underlying basis results
|
24
|
Banking
net interest margin and average interest-earning
assets
|
25
|
Volatility arising
in insurance businesses
|
25
|
Tangible net assets
per share
|
26
|
Return
on tangible equity
|
26
|
Share
buyback
|
26
|
|
|
Risk management
|
|
Credit
risk portfolio
|
27
|
Funding
and liquidity management
|
33
|
Capital
management
|
34
|
|
|
Statutory information
|
|
Condensed
consolidated financial statements
|
41
|
Consolidated income
statement
|
41
|
Consolidated
statement of comprehensive income
|
42
|
Consolidated
balance sheet
|
43
|
Consolidated
statement of changes in equity
|
45
|
Consolidated cash
flow statement
|
47
|
Notes
to the condensed consolidated financial statements
|
48
|
|
|
Forward
looking statements
|
59
|
Summary
of alternative performance measures
|
60
|
Contacts
|
61
|
|
|
|
|
BASIS
OF PRESENTATION
|
This
release covers the results of Lloyds Banking Group plc together
with its subsidiaries (the Group) for the year ended
31 December 2019.
IFRS 16 and IAS 12 (further information
in note 1 on page 48): The Group adopted IFRS 16 Leases from 1 January 2019 and as
permitted elected to apply the standard retrospectively with the
cumulative effect of initial application being recognised at that
date; comparative information has not been restated. The Group
implemented the amendments to IAS 12 Income Taxes with effect from 1 January
2019 and as a result tax relief on distributions on other equity
instruments, previously recognised in equity, is now reported
within tax expense; comparatives have been restated.
|
Statutory basis: Statutory information
is set out on pages 48 to 58. However, a number of factors have had
a significant effect on the comparability of the Group’s
financial position and results. Accordingly, the results are also
presented on an underlying basis.
|
Underlying basis: The statutory results
are adjusted for certain items which are listed below, to allow a
comparison of the Group’s underlying
performance.
- restructuring,
including severance-related costs, the rationalisation of the
non-branch property portfolio, the establishment of the Schroders
partnership, the integration of MBNA and Zurich’s UK
workplace pensions and savings business;
- volatility and
other items, which includes the effects of certain asset sales, the
volatility relating to the Group’s hedging arrangements and
that arising in the insurance businesses, insurance gross up, the
unwind of acquisition-related fair value adjustments and the
amortisation of purchased intangible assets;
- payment protection
insurance provisions.
|
Unless
otherwise stated, income statement commentaries throughout this
document compare the year ended 31 December 2019 to the year
ended 31 December 2018, and the balance sheet analysis
compares the Group balance sheet as at 31 December 2019 to the
Group balance sheet as at 31 December 2018.
Segment information: The segment results
have been restated to reflect the transfer of the Cardnet business
from Retail into Commercial Banking and certain equities business
from Commercial Banking into Central items. The underlying profit
and statutory results at Group level are unchanged as a result of
these restatements.
Alternative performance measures: The
Group uses a number of alternative performance measures, including
underlying profit, in the discussion of its business performance
and financial position. Further information on these measures is
set out on page 60.
|
|
|
|
|
|
|
|
|
|
2019
|
|
2018
|
|
Change
|
|
|
£m
|
|
£m
|
|
%
|
|
|
|
|
|
|
|
Net interest income
|
|
12,377
|
|
12,714
|
|
(3)
|
Other income
|
|
5,732
|
|
6,010
|
|
(5)
|
Operating lease depreciation
|
|
(967)
|
|
(956)
|
|
(1)
|
Net income
|
|
17,142
|
|
17,768
|
|
(4)
|
Operating costs
|
|
(7,875)
|
|
(8,165)
|
|
4
|
Remediation
|
|
(445)
|
|
(600)
|
|
26
|
Total costs
|
|
(8,320)
|
|
(8,765)
|
|
5
|
Trading surplus
|
|
8,822
|
|
9,003
|
|
(2)
|
Impairment
|
|
(1,291)
|
|
(937)
|
|
(38)
|
Underlying profit
|
|
7,531
|
|
8,066
|
|
(7)
|
Restructuring
|
|
(471)
|
|
(879)
|
|
46
|
Volatility and other items
|
|
(217)
|
|
(477)
|
|
55
|
Payment protection insurance provision
|
|
(2,450)
|
|
(750)
|
|
|
Statutory profit before tax
|
|
4,393
|
|
5,960
|
|
(26)
|
Tax expense1
|
|
(1,387)
|
|
(1,454)
|
|
5
|
Statutory profit after
tax1
|
|
3,006
|
|
4,506
|
|
(33)
|
|
|
|
|
|
|
|
Earnings per share
|
|
3.5p
|
|
5.5p
|
|
(36)
|
Dividends per share – ordinary
|
|
3.37p
|
|
3.21p
|
|
5
|
Share buyback value
|
|
–
|
|
£1.1bn
|
|
|
|
|
|
|
|
|
|
Banking net interest margin
|
|
2.88%
|
|
2.93%
|
|
(5)bp
|
Average interest-earning banking assets
|
|
£435bn
|
|
£436bn
|
|
–
|
Cost:income ratio
|
|
48.5%
|
|
49.3%
|
|
(0.8)pp
|
Asset quality ratio
|
|
0.29%
|
|
0.21%
|
|
8bp
|
Underlying return on tangible equity
|
|
14.8%
|
|
15.5%
|
|
(0.7)pp
|
Return on tangible equity
|
|
7.8%
|
|
11.7%
|
|
(3.9)pp
|
|
|
|
|
|
|
|
|
|
At 31 Dec
|
|
At 31 Dec
|
|
Change
|
|
|
2019
|
|
2018
|
|
%
|
|
|
|
|
|
|
|
Loans and advances to customers2
|
|
£440bn
|
|
£444bn
|
|
(1)
|
Customer deposits3
|
|
£412bn
|
|
£416bn
|
|
(1)
|
Loan to deposit ratio
|
|
107%
|
|
107%
|
|
–
|
Capital build4
|
|
86bp
|
|
210bp
|
|
(124)bp
|
Pro forma CET1 ratio5
|
|
13.8%
|
|
13.9%
|
|
(0.1)pp
|
Pro forma transitional MREL ratio5
|
|
32.6%
|
|
32.6%
|
|
–
|
Pro forma UK leverage ratio5
|
|
5.2%
|
|
5.6%
|
|
(0.4)pp
|
Pro forma risk-weighted assets5
|
|
£203bn
|
|
£206bn
|
|
(1)
|
Tangible net assets per share
|
|
50.8p
|
|
53.0p
|
|
(2.2)p
|
|
|
1
|
2018
restated to reflect amendments to IAS 12, see basis of
presentation.
|
2
|
Excludes
reverse repos of £54.6 billion (31 December 2018: £40.5
billion).
|
3
|
Excludes
repos of £9.5 billion (31 December 2018: £1.8
billion).
|
4
|
Capital
build is reported on a pro forma basis, reflecting the dividend
paid up by the Insurance business in the subsequent first quarter
period and is also reported before accruing for ordinary dividends,
the cancellation of the remaining 2019 share buyback and the
acquisition of Tesco Bank’s UK prime residential mortgage
portfolio.
|
5
|
The
CET1, MREL, leverage ratios and risk-weighted assets at 31 December
2019 and 31 December 2018 are reported on a pro forma basis,
reflecting the dividend paid up by the Insurance business in the
subsequent first quarter period. The pro forma CET1 ratio at
31 December 2018 incorporates the effects of the share buyback
announced in February 2019 and is reported post dividend
accrual.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
|
ended
|
|
ended
|
|
ended
|
|
ended
|
|
ended
|
|
ended
|
|
ended
|
|
ended
|
|
|
31 Dec
|
|
30 Sept
|
|
30 June
|
|
31 Mar
|
|
31 Dec
|
|
30 Sept
|
|
30 June
|
|
31 Mar
|
|
|
2019
|
|
2019
|
|
2019
|
|
2019
|
|
2018
|
|
2018
|
|
2018
|
|
2018
|
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
3,102
|
|
3,130
|
|
3,062
|
|
3,083
|
|
3,170
|
|
3,200
|
|
3,173
|
|
3,171
|
Other income
|
|
1,267
|
|
1,315
|
|
1,594
|
|
1,556
|
|
1,400
|
|
1,486
|
|
1,713
|
|
1,411
|
Operating lease depreciation
|
|
(236)
|
|
(258)
|
|
(254)
|
|
(219)
|
|
(225)
|
|
(234)
|
|
(245)
|
|
(252)
|
Net income
|
|
4,133
|
|
4,187
|
|
4,402
|
|
4,420
|
|
4,345
|
|
4,452
|
|
4,641
|
|
4,330
|
Operating costs
|
|
(2,058)
|
|
(1,911)
|
|
(1,949)
|
|
(1,957)
|
|
(2,151)
|
|
(1,990)
|
|
(2,016)
|
|
(2,008)
|
Remediation
|
|
(219)
|
|
(83)
|
|
(123)
|
|
(20)
|
|
(234)
|
|
(109)
|
|
(197)
|
|
(60)
|
Total costs
|
|
(2,277)
|
|
(1,994)
|
|
(2,072)
|
|
(1,977)
|
|
(2,385)
|
|
(2,099)
|
|
(2,213)
|
|
(2,068)
|
Trading surplus
|
|
1,856
|
|
2,193
|
|
2,330
|
|
2,443
|
|
1,960
|
|
2,353
|
|
2,428
|
|
2,262
|
Impairment
|
|
(341)
|
|
(371)
|
|
(304)
|
|
(275)
|
|
(197)
|
|
(284)
|
|
(198)
|
|
(258)
|
Underlying profit
|
|
1,515
|
|
1,822
|
|
2,026
|
|
2,168
|
|
1,763
|
|
2,069
|
|
2,230
|
|
2,004
|
Restructuring
|
|
(191)
|
|
(98)
|
|
(56)
|
|
(126)
|
|
(267)
|
|
(235)
|
|
(239)
|
|
(138)
|
Volatility and other items
|
|
122
|
|
126
|
|
(126)
|
|
(339)
|
|
(270)
|
|
(17)
|
|
(16)
|
|
(174)
|
Payment protection insurance provision
|
|
–
|
|
(1,800)
|
|
(550)
|
|
(100)
|
|
(200)
|
|
–
|
|
(460)
|
|
(90)
|
Statutory profit before tax
|
|
1,446
|
|
50
|
|
1,294
|
|
1,603
|
|
1,026
|
|
1,817
|
|
1,515
|
|
1,602
|
Tax expense1
|
|
(427)
|
|
(288)
|
|
(269)
|
|
(403)
|
|
(260)
|
|
(394)
|
|
(369)
|
|
(431)
|
Statutory profit (loss) after
tax1
|
|
1,019
|
|
(238)
|
|
1,025
|
|
1,200
|
|
766
|
|
1,423
|
|
1,146
|
|
1,171
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Banking net interest margin
|
|
2.85%
|
|
2.88%
|
|
2.89%
|
|
2.91%
|
|
2.92%
|
|
2.93%
|
|
2.93%
|
|
2.93%
|
Average interest-earning banking assets
|
|
£437bn
|
|
£435bn
|
|
£433bn
|
|
£433bn
|
|
£436bn
|
|
£435bn
|
|
£436bn
|
|
£437bn
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost:income ratio
|
|
55.1%
|
|
47.6%
|
|
47.1%
|
|
44.7%
|
|
54.9%
|
|
47.1%
|
|
47.7%
|
|
47.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset quality ratio
|
|
0.30%
|
|
0.33%
|
|
0.27%
|
|
0.25%
|
|
0.18%
|
|
0.25%
|
|
0.18%
|
|
0.23%
|
Gross asset quality ratio
|
|
0.39%
|
|
0.40%
|
|
0.38%
|
|
0.30%
|
|
0.30%
|
|
0.30%
|
|
0.26%
|
|
0.27%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underlying return on tangible equity
|
|
12.2%
|
|
14.3%
|
|
15.6%
|
|
17.0%
|
|
13.6%
|
|
15.9%
|
|
17.3%
|
|
15.4%
|
Return on tangible equity
|
|
11.0%
|
|
(2.8)%
|
|
10.5%
|
|
12.5%
|
|
7.8%
|
|
14.8%
|
|
11.9%
|
|
12.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and advances to customers2
|
|
£440bn
|
|
£447bn
|
|
£441bn
|
|
£441bn
|
|
£444bn
|
|
£445bn
|
|
£442bn
|
|
£445bn
|
Customer deposits3
|
|
£412bn
|
|
£419bn
|
|
£418bn
|
|
£417bn
|
|
£416bn
|
|
£422bn
|
|
£418bn
|
|
£413bn
|
Loan to deposit ratio
|
|
107%
|
|
107%
|
|
106%
|
|
106%
|
|
107%
|
|
105%
|
|
106%
|
|
108%
|
Pro forma risk-weighted assets4
|
|
£203bn
|
|
£209bn
|
|
£207bn
|
|
£208bn
|
|
£206bn
|
|
£207bn
|
|
£207bn
|
|
£211bn
|
Tangible net assets per share
|
|
50.8p
|
|
52.0p
|
|
53.0p
|
|
53.4p
|
|
53.0p
|
|
51.3p
|
|
52.1p
|
|
52.3p
|
|
|
1
|
Comparatives
for 2018 restated to reflect amendments to IAS 12, see basis of
presentation.
|
2
|
Excludes
reverse repos.
|
3
|
Excludes
repos.
|
4
|
Risk-weighted
assets at 30 June 2018 are reported on a pro forma basis reflecting
the sale of the Irish mortgage portfolio.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 Dec
|
|
At 30 Sept
|
|
|
|
At 30 June
|
|
|
|
At 31 Dec
|
|
|
|
|
2019
|
|
2019
|
|
Change
|
|
2019
|
|
Change
|
|
2018
|
|
Change
|
|
|
£bn
|
|
£bn
|
|
%
|
|
£bn
|
|
%
|
|
£bn
|
|
%
|
Loans and advances to customers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Open mortgage book
|
|
270.1
|
|
271.0
|
|
–
|
|
264.9
|
|
2
|
|
266.6
|
|
1
|
Closed mortgage book
|
|
18.5
|
|
19.1
|
|
(3)
|
|
19.8
|
|
(7)
|
|
21.2
|
|
(13)
|
Credit cards
|
|
17.7
|
|
17.7
|
|
–
|
|
17.7
|
|
–
|
|
18.1
|
|
(2)
|
UK Retail unsecured loans
|
|
8.4
|
|
8.4
|
|
–
|
|
8.2
|
|
2
|
|
7.9
|
|
6
|
UK Motor Finance
|
|
15.6
|
|
15.6
|
|
–
|
|
15.5
|
|
1
|
|
14.6
|
|
7
|
Overdrafts
|
|
1.3
|
|
1.3
|
|
–
|
|
1.2
|
|
8
|
|
1.3
|
|
–
|
Retail other1
|
|
9.0
|
|
9.2
|
|
(2)
|
|
9.0
|
|
–
|
|
8.6
|
|
5
|
SME2
|
|
32.1
|
|
32.4
|
|
(1)
|
|
32.3
|
|
(1)
|
|
31.8
|
|
1
|
Mid Markets3
|
|
29.1
|
|
30.7
|
|
(5)
|
|
30.6
|
|
(5)
|
|
31.7
|
|
(8)
|
Global Corporates and Financial Institutions
|
|
30.8
|
|
33.7
|
|
(9)
|
|
34.7
|
|
(11)
|
|
34.4
|
|
(10)
|
Commercial Banking other
|
|
5.2
|
|
5.2
|
|
–
|
|
4.3
|
|
21
|
|
4.3
|
|
21
|
Wealth
|
|
0.9
|
|
0.9
|
|
–
|
|
0.9
|
|
–
|
|
0.9
|
|
–
|
Central items
|
|
1.7
|
|
2.0
|
|
(15)
|
|
1.9
|
|
(11)
|
|
3.0
|
|
(43)
|
Loans and advances to
customers4
|
|
440.4
|
|
447.2
|
|
(2)
|
|
441.0
|
|
–
|
|
444.4
|
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail current accounts
|
|
76.9
|
|
76.1
|
|
1
|
|
76.0
|
|
1
|
|
73.7
|
|
4
|
Commercial current accounts2,5
|
|
34.9
|
|
34.6
|
|
1
|
|
34.0
|
|
3
|
|
34.9
|
|
–
|
Retail relationship savings accounts
|
|
144.5
|
|
144.3
|
|
–
|
|
144.4
|
|
–
|
|
145.9
|
|
(1)
|
Retail tactical savings accounts
|
|
13.3
|
|
14.1
|
|
(6)
|
|
15.3
|
|
(13)
|
|
16.8
|
|
(21)
|
Commercial deposits2,6
|
|
127.6
|
|
135.8
|
|
(6)
|
|
133.2
|
|
(4)
|
|
130.1
|
|
(2)
|
Wealth
|
|
13.7
|
|
13.6
|
|
1
|
|
13.8
|
|
(1)
|
|
14.1
|
|
(3)
|
Central items
|
|
0.9
|
|
0.7
|
|
29
|
|
0.9
|
|
–
|
|
0.8
|
|
13
|
Total customer
deposits7
|
|
411.8
|
|
419.2
|
|
(2)
|
|
417.6
|
|
(1)
|
|
416.3
|
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets8
|
|
833.9
|
|
858.5
|
|
(3)
|
|
822.2
|
|
1
|
|
797.6
|
|
5
|
Total liabilities8
|
|
786.1
|
|
810.4
|
|
(3)
|
|
773.2
|
|
2
|
|
747.4
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity
|
|
41.7
|
|
42.5
|
|
(2)
|
|
43.4
|
|
(4)
|
|
43.4
|
|
(4)
|
Other equity instruments
|
|
5.9
|
|
5.4
|
|
9
|
|
5.4
|
|
9
|
|
6.5
|
|
(9)
|
Non-controlling interests
|
|
0.2
|
|
0.2
|
|
–
|
|
0.2
|
|
–
|
|
0.3
|
|
(33)
|
Total equity
|
|
47.8
|
|
48.1
|
|
(1)
|
|
49.0
|
|
(2)
|
|
50.2
|
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares in issue, excluding own shares
|
|
70,031m
|
|
70,007m
|
|
–
|
|
70,740m
|
|
(1)
|
|
71,149m
|
|
(2)
|
|
|
1
|
Primarily
Europe.
|
2
|
Includes
Retail Business Banking.
|
3
|
Includes
Mid Corporates (31 December 2019: £5.3 billion; 30
September 2019: £5.2 billion; 30 June 2019:
£5.4 billion; 31 December 2018:
£5.8 billion)
|
4
|
Excludes
reverse repos.
|
5
|
Primarily
non-interest-bearing Commercial Banking current
accounts.
|
6
|
Primarily
Commercial Banking interest-bearing accounts.
|
7
|
Excludes
repos.
|
8
|
The
adoption of IFRS 16 on 1 January 2019 resulted in the recognition
of a right-of-use asset of £1.7 billion and lease liabilities
of £1.8 billion.
|
|
|
|
|
|
|
|
|
|
2019
|
|
2018
|
|
Change
|
|
|
£m
|
|
£m
|
|
%
|
|
|
|
|
|
|
|
Net interest income
|
|
12,377
|
|
12,714
|
|
(3)
|
Other income excluding Vocalink gain on sale
|
|
5,682
|
|
6,010
|
|
(5)
|
Vocalink gain on sale
|
|
50
|
|
–
|
|
|
Other income
|
|
5,732
|
|
6,010
|
|
(5)
|
Operating lease depreciation1
|
|
(967)
|
|
(956)
|
|
(1)
|
Net income
|
|
17,142
|
|
17,768
|
|
(4)
|
|
|
|
|
|
|
|
Banking net interest margin
|
|
2.88%
|
|
2.93%
|
|
(5)bp
|
Average interest-earning banking assets
|
|
£434.7bn
|
|
£436.0bn
|
|
–
|
1
|
Net of
profits on disposal of operating lease assets of £41 million
(2018: £60 million).
|
|
|
|
|
|
|
|
|
|
2019
|
|
2018
|
|
Change
|
|
|
£m
|
|
£m
|
|
%
|
|
|
|
|
|
|
|
Operating costs
|
|
7,875
|
|
8,165
|
|
4
|
Remediation
|
|
445
|
|
600
|
|
26
|
Total costs
|
|
8,320
|
|
8,765
|
|
5
|
|
|
|
|
|
|
|
Business as usual costs1
|
|
5,478
|
|
5,836
|
|
6
|
|
|
|
|
|
|
|
Cost:income ratio
|
|
48.5%
|
|
49.3%
|
|
(0.8)pp
|
|
|
1
|
2018
Business as usual costs are adjusted to reflect the impact of
applying IFRS 16. Excluding the impact of IFRS 16 business as
usual costs in 2018 were £6,048 million.
|
|
|
|
|
|
|
|
|
|
2019
|
|
2018
|
|
Change
|
|
|
£m
|
|
£m
|
|
%
|
|
|
|
|
|
|
|
Impairment charge
|
|
1,291
|
|
937
|
|
(38)
|
Asset quality ratio
|
|
0.29%
|
|
0.21%
|
|
8bp
|
Gross asset quality ratio
|
|
0.37%
|
|
0.28%
|
|
9bp
|
|
|
|
|
|
|
|
|
|
At 31 Dec
|
|
At 31 Dec
|
|
|
|
|
20191
|
|
20181
|
|
|
|
|
%
|
|
%
|
|
Change
|
|
|
|
|
|
|
|
Stage 2 loans and advances to customers as % of total
|
|
7.7
|
|
7.8
|
|
(0.1)pp
|
Stage 2 ECL2
allowances as % of Stage 2 drawn
balances
|
|
3.7
|
|
4.1
|
|
(0.4)pp
|
|
|
|
|
|
|
|
Stage 3 loans and advances to customers as a % of
total
|
|
1.8
|
|
1.9
|
|
(0.1)pp
|
Stage 3 ECL2
allowances as % of Stage 3 drawn
balances
|
|
22.5
|
|
24.3
|
|
(1.8)pp
|
|
|
|
|
|
|
|
Total ECL2
allowances as % of drawn
balances
|
|
0.8
|
|
0.9
|
|
(0.1)pp
|
|
|
1
|
Underlying
basis.
|
2
|
Expected
credit loss.
|
|
|
|
|
|
|
|
|
|
2019
|
|
2018
|
|
Change
|
|
|
£m
|
|
£m
|
|
%
|
|
|
|
|
|
|
|
Underlying profit
|
|
7,531
|
|
8,066
|
|
(7)
|
Restructuring
|
|
(471)
|
|
(879)
|
|
46
|
Volatility and other items
|
|
|
|
|
|
|
Market
volatility and asset sales
|
|
126
|
|
(50)
|
|
|
Amortisation
of purchased intangibles
|
|
(68)
|
|
(108)
|
|
37
|
Fair
value unwind and other
|
|
(275)
|
|
(319)
|
|
14
|
|
|
(217)
|
|
(477)
|
|
55
|
Payment protection insurance provision
|
|
(2,450)
|
|
(750)
|
|
|
Statutory profit before tax
|
|
4,393
|
|
5,960
|
|
(26)
|
Tax expense1
|
|
(1,387)
|
|
(1,454)
|
|
5
|
Statutory profit after
tax1
|
|
3,006
|
|
4,506
|
|
(33)
|
|
|
|
|
|
|
|
Earnings per share
|
|
3.5p
|
|
5.5p
|
|
(36)
|
Return on tangible equity
|
|
7.8%
|
|
11.7%
|
|
(3.9)pp
|
|
|
1
|
Comparatives
restated to reflect amendments to IAS12, see basis of
presentation.
|
Further
information on the reconciliation of underlying to statutory
results is included on page 24.
|
|
|
|
|
|
|
|
|
|
At 31 Dec
|
|
At 31 Dec
|
|
Change
|
|
|
2019
|
|
2018
|
|
%
|
|
|
|
|
|
|
|
Loans and advances to customers1
|
|
£440bn
|
|
£444bn
|
|
(1)
|
Customer deposits2
|
|
£412bn
|
|
£416bn
|
|
(1)
|
Loan to deposit ratio
|
|
107%
|
|
107%
|
|
–
|
|
|
|
|
|
|
|
Wholesale funding
|
|
£128bn
|
|
£123bn
|
|
4
|
Wholesale funding <1 year maturity
|
|
£43bn
|
|
£33bn
|
|
31
|
Of which money-market funding <1 year
maturity3
|
|
£22bn
|
|
£21bn
|
|
5
|
Liquidity coverage ratio - eligible assets4
|
|
£131bn
|
|
£126bn
|
|
4
|
Liquidity coverage ratio5
|
|
137%
|
|
128%
|
|
9pp
|
|
|
1
|
Excludes
reverse repos of £54.6 billion (31 December 2018: £40.5
billion).
|
2
|
Excludes
repos of £9.5 billion (31 December 2018: £1.8
billion).
|
3
|
Excludes
balances relating to margins of £4.2 billion
(31 December 2018: £3.8 billion) and settlement
accounts of £1.9 billion (31 December 2018:
£1.2 billion).
|
4
|
Eligible
assets are calculated as a simple average of month end observations
over the previous 12 months.
|
5
|
The
Liquidity coverage ratio is calculated as a simple average of month
end observations over the previous 12 months
|
|
|
|
|
|
|
|
|
|
At 31 Dec
|
|
At 31 Dec
|
|
Change
|
|
|
2019
|
|
2018
|
|
%
|
|
|
|
|
|
|
|
Capital build1
|
|
86bp
|
|
210bp
|
|
(124)bp
|
Pro forma CET1 ratio2
|
|
13.8%
|
|
13.9%
|
|
(0.1)pp
|
CET1 ratio
|
|
13.6%
|
|
14.6%
|
|
(1.0)pp
|
Pro forma transitional total capital ratio2
|
|
21.5%
|
|
23.1%
|
|
(1.6)pp
|
Pro forma transitional MREL ratio2
|
|
32.6%
|
|
32.6%
|
|
–
|
Pro forma UK leverage ratio2
|
|
5.2%
|
|
5.6%
|
|
(0.4)pp
|
Pro forma risk-weighted assets2
|
|
£203bn
|
|
£206bn
|
|
(1)
|
|
|
|
|
|
|
|
Shareholders' equity
|
|
£42bn
|
|
£43bn
|
|
(4)
|
Tangible net assets per share
|
|
50.8p
|
|
53.0p
|
|
(2.2)p
|
|
|
1
|
Capital
build is reported on a pro forma basis, reflecting the dividend
paid up by the Insurance business in the subsequent first quarter
period and is also reported before accruing for ordinary dividends,
the cancellation of the remaining 2019 share buyback and the
acquisition of Tesco Bank’s UK prime residential mortgage
portfolio.
|
2
|
The
CET1, total, MREL, leverage ratios and risk-weighted assets at 31
December 2019 and 31 December 2018 are reported on a pro forma
basis, reflecting the dividend paid up by the Insurance business in
the subsequent first quarter period. The pro forma CET1 ratio at
31 December 2018 incorporates the effects of the share buyback
announced in February 2019 and is reported post dividend
accrual.
|
|
|
|
|
|
|
|
Pro forma CET1 ratio at 31 December 2018
|
|
|
|
|
|
13.9%
|
Banking business underlying capital build (bps)
|
|
|
|
|
|
180
|
Insurance dividends (bps)
|
|
|
|
|
|
18
|
Impact from the implementation of IFRS 16 on risk-weighted assets
(bps)
|
|
|
|
|
|
(11)
|
RWA and other movements (bps)
|
|
|
|
|
|
20
|
|
|
|
|
|
|
207
|
PPI charge (bps)
|
|
|
|
|
|
(121)
|
|
|
|
|
|
|
86
|
Cancellation of the remaining 2019 share buyback programme
(bps)
|
|
|
|
|
|
34
|
Capital used for the acquisition of the Tesco Bank’s mortgage
portfolio (bps)
|
|
|
|
|
|
(9)
|
Ordinary dividend accrual (bps)
|
|
|
|
|
|
(123)
|
Pro forma CET1 ratio at 31 December 2019
|
|
|
|
|
|
13.8%
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
Insurance
|
|
Central
|
|
|
|
|
Retail
|
|
Banking
|
|
and Wealth
|
|
items
|
|
Group
|
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
8,807
|
|
2,918
|
|
112
|
|
540
|
|
12,377
|
Other income
|
|
2,014
|
|
1,422
|
|
2,021
|
|
275
|
|
5,732
|
Operating lease depreciation
|
|
(946)
|
|
(21)
|
|
–
|
|
–
|
|
(967)
|
Net income
|
|
9,875
|
|
4,319
|
|
2,133
|
|
815
|
|
17,142
|
Operating costs
|
|
(4,760)
|
|
(2,081)
|
|
(982)
|
|
(52)
|
|
(7,875)
|
Remediation
|
|
(238)
|
|
(155)
|
|
(50)
|
|
(2)
|
|
(445)
|
Total costs
|
|
(4,998)
|
|
(2,236)
|
|
(1,032)
|
|
(54)
|
|
(8,320)
|
Trading surplus
|
|
4,877
|
|
2,083
|
|
1,101
|
|
761
|
|
8,822
|
Impairment
|
|
(1,038)
|
|
(306)
|
|
–
|
|
53
|
|
(1,291)
|
Underlying profit
|
|
3,839
|
|
1,777
|
|
1,101
|
|
814
|
|
7,531
|
|
|
|
|
|
|
|
|
|
|
|
Banking net interest margin
|
|
2.63%
|
|
3.14%
|
|
|
|
|
|
2.88%
|
Average interest-earning banking assets
|
|
£341.6bn
|
|
£92.2bn
|
|
£0.9bn
|
|
–
|
|
£434.7bn
|
Asset quality ratio
|
|
0.30%
|
|
0.30%
|
|
|
|
|
|
0.29%
|
Return on risk-weighted assets
|
|
3.99%
|
|
2.14%
|
|
|
|
|
|
3.65%
|
Loans and advances to customers1
|
|
£342.3bn
|
|
£95.5bn
|
|
£0.9bn
|
|
£1.7bn
|
|
£440.4bn
|
Customer deposits2
|
|
£252.1bn
|
|
£145.1bn
|
|
£13.7bn
|
|
£0.9bn
|
|
£411.8bn
|
Risk-weighted assets
|
|
£98.4bn
|
|
£77.4bn
|
|
£1.3bn
|
|
£26.3bn
|
|
£203.4bn
|
|
|
|
|
|
|
|
|
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
Insurance
|
|
Central
|
|
|
|
|
Retail3
|
|
Banking3
|
|
and Wealth
|
|
items3
|
|
Group
|
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
9,060
|
|
3,013
|
|
123
|
|
518
|
|
12,714
|
Other income
|
|
2,097
|
|
1,670
|
|
1,865
|
|
378
|
|
6,010
|
Operating lease depreciation
|
|
(921)
|
|
(35)
|
|
–
|
|
–
|
|
(956)
|
Net income
|
|
10,236
|
|
4,648
|
|
1,988
|
|
896
|
|
17,768
|
Operating costs
|
|
(4,897)
|
|
(2,191)
|
|
(1,021)
|
|
(56)
|
|
(8,165)
|
Remediation
|
|
(267)
|
|
(203)
|
|
(39)
|
|
(91)
|
|
(600)
|
Total costs
|
|
(5,164)
|
|
(2,394)
|
|
(1,060)
|
|
(147)
|
|
(8,765)
|
Trading surplus
|
|
5,072
|
|
2,254
|
|
928
|
|
749
|
|
9,003
|
Impairment
|
|
(861)
|
|
(71)
|
|
(1)
|
|
(4)
|
|
(937)
|
Underlying profit
|
|
4,211
|
|
2,183
|
|
927
|
|
745
|
|
8,066
|
|
|
|
|
|
|
|
|
|
|
|
Banking net interest margin
|
|
2.68%
|
|
3.27%
|
|
|
|
|
|
2.93%
|
Average interest-earning banking assets
|
|
£342.3bn
|
|
£91.2bn
|
|
£0.8bn
|
|
£1.7bn
|
|
£436.0bn
|
Asset quality ratio
|
|
0.25%
|
|
0.06%
|
|
|
|
|
|
0.21%
|
Return on risk-weighted assets
|
|
4.57%
|
|
2.50%
|
|
|
|
|
|
3.86%
|
Loans and advances to customers1
|
|
£340.1bn
|
|
£100.4bn
|
|
£0.9bn
|
|
£3.0bn
|
|
£444.4bn
|
Customer deposits2
|
|
£252.8bn
|
|
£148.6bn
|
|
£14.1bn
|
|
£0.8bn
|
|
£416.3bn
|
Risk-weighted assets
|
|
£93.5bn
|
|
£86.5bn
|
|
£1.2bn
|
|
£25.2bn
|
|
£206.4bn
|
|
|
||
1
|
Excludes
reverse repos.
|
|
|
2
|
Excludes
repos.
|
|
|
3
|
Prior
period segmental comparatives restated. See basis of
presentation.
|
|
|
|
||
1
|
Subject
to contract.
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
20181
|
|
Change
|
|
|
£m
|
|
£m
|
|
%
|
|
|
|
|
|
|
|
Net interest income
|
|
8,807
|
|
9,060
|
|
(3)
|
Other income
|
|
2,014
|
|
2,097
|
|
(4)
|
Operating lease depreciation
|
|
(946)
|
|
(921)
|
|
(3)
|
Net income
|
|
9,875
|
|
10,236
|
|
(4)
|
Operating costs
|
|
(4,760)
|
|
(4,897)
|
|
3
|
Remediation
|
|
(238)
|
|
(267)
|
|
11
|
Total costs
|
|
(4,998)
|
|
(5,164)
|
|
3
|
Trading surplus
|
|
4,877
|
|
5,072
|
|
(4)
|
Impairment
|
|
(1,038)
|
|
(861)
|
|
(21)
|
Underlying profit
|
|
3,839
|
|
4,211
|
|
(9)
|
|
|
|
|
|
|
|
Banking net interest margin
|
|
2.63%
|
|
2.68%
|
|
(5)bp
|
Average interest-earning banking assets
|
|
£341.6bn
|
|
£342.3bn
|
|
–
|
Asset quality ratio
|
|
0.30%
|
|
0.25%
|
|
5bp
|
Return on risk-weighted assets
|
|
3.99%
|
|
4.57%
|
|
(58)bp
|
|
|
|
|
|
|
|
|
|
At 31 Dec
|
|
At 31 Dec
|
|
|
|
|
2019
|
|
2018
|
|
Change
|
|
|
£bn
|
|
£bn
|
|
%
|
|
|
|
|
|
|
|
Open mortgage book
|
|
270.1
|
|
266.6
|
|
1
|
Closed mortgage book
|
|
18.5
|
|
21.2
|
|
(13)
|
Credit cards
|
|
17.7
|
|
18.1
|
|
(2)
|
UK unsecured loans
|
|
8.4
|
|
7.9
|
|
6
|
UK Motor Finance
|
|
15.6
|
|
14.6
|
|
7
|
Business Banking
|
|
1.7
|
|
1.8
|
|
(6)
|
Overdrafts
|
|
1.3
|
|
1.3
|
|
–
|
Other2
|
|
9.0
|
|
8.6
|
|
5
|
Loans and advances to customers
|
|
342.3
|
|
340.1
|
|
1
|
Operating lease assets
|
|
4.3
|
|
4.7
|
|
(9)
|
Total customer assets
|
|
346.6
|
|
344.8
|
|
1
|
|
|
|
|
|
|
|
Current Accounts
|
|
76.9
|
|
73.7
|
|
4
|
Relationship savings3
|
|
161.9
|
|
162.3
|
|
–
|
Tactical savings
|
|
13.3
|
|
16.8
|
|
(21)
|
Customer deposits
|
|
252.1
|
|
252.8
|
|
–
|
|
|
|
|
|
|
|
Risk-weighted assets
|
|
98.4
|
|
93.5
|
|
5
|
1
|
Prior
period comparatives restated. See basis of
presentation.
|
2
|
Includes
Europe and run-off.
|
3
|
Includes
Business Banking.
|
|
|
|
|
|
|
|
|
|
2019
|
|
20181
|
|
Change
|
|
|
£m
|
|
£m
|
|
%
|
|
|
|
|
|
|
|
Net interest income
|
|
2,918
|
|
3,013
|
|
(3)
|
Other income
|
|
1,422
|
|
1,670
|
|
(15)
|
Operating lease depreciation
|
|
(21)
|
|
(35)
|
|
40
|
Net income
|
|
4,319
|
|
4,648
|
|
(7)
|
Operating costs
|
|
(2,081)
|
|
(2,191)
|
|
5
|
Remediation
|
|
(155)
|
|
(203)
|
|
24
|
Total costs
|
|
(2,236)
|
|
(2,394)
|
|
7
|
Trading surplus
|
|
2,083
|
|
2,254
|
|
(8)
|
Impairment
|
|
(306)
|
|
(71)
|
|
|
Underlying profit
|
|
1,777
|
|
2,183
|
|
(19)
|
|
|
|
|
|
|
|
Banking net interest margin
|
|
3.14%
|
|
3.27%
|
|
(13)bp
|
Average interest-earning banking assets
|
|
£92.2bn
|
|
£91.2bn
|
|
1
|
Asset quality ratio
|
|
0.30%
|
|
0.06%
|
|
24bp
|
Return on risk-weighted assets
|
|
2.14%
|
|
2.50%
|
|
(36)bp
|
|
|
|
|
|
|
|
|
|
At 31 Dec
|
|
At 31 Dec
|
|
|
|
|
2019
|
|
2018
|
|
Change
|
|
|
£bn
|
|
£bn
|
|
%
|
|
|
|
|
|
|
|
SME
|
|
30.4
|
|
30.0
|
|
1
|
Mid Markets2
|
|
29.1
|
|
31.7
|
|
(8)
|
Global Corporates and Financial Institutions
|
|
30.8
|
|
34.4
|
|
(10)
|
Other
|
|
5.2
|
|
4.3
|
|
21
|
Loans and advances to customers
|
|
95.5
|
|
100.4
|
|
(5)
|
|
|
|
|
|
|
|
SME including Retail Business Banking
|
|
32.1
|
|
31.8
|
|
1
|
|
|
|
|
|
|
|
Customer deposits
|
|
145.1
|
|
148.6
|
|
(2)
|
|
|
|
|
|
|
|
Current accounts including Retail Business Banking
|
|
34.9
|
|
34.9
|
|
–
|
Other deposits including Retail Business Banking
|
|
127.6
|
|
130.1
|
|
(2)
|
|
|
|
|
|
|
|
Risk-weighted assets
|
|
77.4
|
|
86.5
|
|
(11)
|
|
|
1
|
Prior
period comparatives restated. See basis of
presentation.
|
2
|
Includes
Mid Corporates (31 December 2019: £5.3 billion;
31 December 2018: £5.8 billion).
|
|
|
|
|
|
|
|
|
|
2019
|
|
2018
|
|
Change
|
|
|
£m
|
|
£m
|
|
%
|
|
|
|
|
|
|
|
Net interest income
|
|
112
|
|
123
|
|
(9)
|
Other income
|
|
2,021
|
|
1,865
|
|
8
|
Net income
|
|
2,133
|
|
1,988
|
|
7
|
Operating costs
|
|
(982)
|
|
(1,021)
|
|
4
|
Remediation
|
|
(50)
|
|
(39)
|
|
(28)
|
Total costs
|
|
(1,032)
|
|
(1,060)
|
|
3
|
Trading surplus
|
|
1,101
|
|
928
|
|
19
|
Impairment
|
|
–
|
|
(1)
|
|
|
Underlying profit
|
|
1,101
|
|
927
|
|
19
|
|
|
|
|
|
|
|
Life and pensions sales (PVNBP)1
|
|
17,515
|
|
14,384
|
|
22
|
General insurance underwritten new GWP2
|
|
127
|
|
107
|
|
19
|
General insurance underwritten total GWP2
|
|
671
|
|
690
|
|
(3)
|
General insurance combined ratio
|
|
82%
|
|
89%
|
|
(7)pp
|
|
|
|
|
|
|
|
|
|
At 31 Dec
|
|
At 31 Dec
|
|
|
|
|
2019
|
|
2018
|
|
Change
|
|
|
£bn
|
|
£bn
|
|
%
|
|
|
|
|
|
|
|
Insurance Solvency II ratio3
|
|
170%
|
|
165%
|
|
5pp
|
UK Wealth Loans and advances to customers
|
|
0.9
|
|
0.9
|
|
–
|
UK Wealth Customer deposits
|
|
13.7
|
|
14.1
|
|
(3)
|
UK Wealth Risk-weighted assets
|
|
1.3
|
|
1.2
|
|
8
|
Total customer assets under administration
|
|
170.0
|
|
141.3
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
2018
|
||||||||
|
|
New
|
|
Existing
|
|
|
|
New
|
|
Existing
|
|
|
|
|
business
|
|
business
|
|
Total
|
|
business
|
|
business
|
|
Total
|
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Workplace, planning and retirement
|
|
387
|
|
120
|
|
507
|
|
333
|
|
153
|
|
486
|
Individual and bulk annuities
|
|
209
|
|
68
|
|
277
|
|
160
|
|
84
|
|
244
|
Protection
|
|
21
|
|
24
|
|
45
|
|
20
|
|
22
|
|
42
|
Longstanding LP&I
|
|
11
|
|
384
|
|
395
|
|
13
|
|
414
|
|
427
|
|
|
628
|
|
596
|
|
1,224
|
|
526
|
|
673
|
|
1,199
|
Life and pensions experience and other items
|
|
|
|
|
|
255
|
|
|
|
|
|
143
|
General insurance
|
|
|
|
|
|
326
|
|
|
|
|
|
272
|
|
|
|
|
|
|
1,805
|
|
|
|
|
|
1,614
|
Wealth
|
|
|
|
|
|
328
|
|
|
|
|
|
374
|
Net income
|
|
|
|
|
|
2,133
|
|
|
|
|
|
1,988
|
|
|
1
|
Present
value of new business premiums. Further information on page
60.
|
2
|
Gross
written premiums.
|
3
|
Equivalent
regulatory view of ratio (including With Profits funds) at 31
December 2019 was 154 per cent (31 December 2018:
156 per cent).
|
|
|
|
|
|
|
|
|
|
2019
|
|
20181
|
|
Change
|
|
|
£m
|
|
£m
|
|
%
|
|
|
|
|
|
|
|
Net income
|
|
815
|
|
896
|
|
(9)
|
Operating costs
|
|
(52)
|
|
(56)
|
|
7
|
Remediation
|
|
(2)
|
|
(91)
|
|
98
|
Total costs
|
|
(54)
|
|
(147)
|
|
63
|
Trading surplus
|
|
761
|
|
749
|
|
2
|
Impairment
|
|
53
|
|
(4)
|
|
|
Underlying profit
|
|
814
|
|
745
|
|
9
|
|
|
1
|
Prior
periods restated. See basis of presentation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Removal of:
|
|
|||||
|
|
|
|
Volatility
|
|
|
|
|
|
|
|
|
Statutory
|
|
and other
|
|
Insurance
|
|
|
|
Underlying
|
|
|
basis
|
|
items1,2
|
|
gross up3
|
|
PPI
|
|
basis
|
2019
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
10,180
|
|
379
|
|
1,818
|
|
–
|
|
12,377
|
Other income, net of insurance claims
|
|
8,179
|
|
(426)
|
|
(2,021)
|
|
–
|
|
5,732
|
Operating lease depreciation
|
|
|
|
(967)
|
|
–
|
|
–
|
|
(967)
|
Net income
|
|
18,359
|
|
(1,014)
|
|
(203)
|
|
–
|
|
17,142
|
Operating expenses4
|
|
(12,670)
|
|
1,697
|
|
203
|
|
2,450
|
|
(8,320)
|
Trading surplus
|
|
5,689
|
|
683
|
|
–
|
|
2,450
|
|
8,822
|
Impairment
|
|
(1,296)
|
|
5
|
|
–
|
|
–
|
|
(1,291)
|
Profit before tax
|
|
4,393
|
|
688
|
|
–
|
|
2,450
|
|
7,531
|
|
|
|
|
|
|
|
|
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
13,396
|
|
152
|
|
(834)
|
|
–
|
|
12,714
|
Other income, net of insurance claims
|
|
5,230
|
|
107
|
|
673
|
|
–
|
|
6,010
|
Operating lease depreciation
|
|
|
|
(956)
|
|
–
|
|
–
|
|
(956)
|
Net income
|
|
18,626
|
|
(697)
|
|
(161)
|
|
–
|
|
17,768
|
Operating expenses4
|
|
(11,729)
|
|
2,053
|
|
161
|
|
750
|
|
(8,765)
|
Trading surplus
|
|
6,897
|
|
1,356
|
|
|
|
750
|
|
9,003
|
Impairment
|
|
(937)
|
|
–
|
|
–
|
|
–
|
|
(937)
|
Profit before tax
|
|
5,960
|
|
1,356
|
|
–
|
|
750
|
|
8,066
|
|
|
|
1
|
In the
year ended 31 December 2019 this comprises the effects of market
volatility and asset sales (gains of £126 million); the
amortisation of purchased intangibles (£68 million);
restructuring (£471 million, comprising severance related
costs, the integration of Zurich’s UK workplace pensions and
savings business and costs associated with the establishment of the
Schroders Personal Wealth Joint venture); and the fair value unwind
and other items (losses of £275 million).
|
|
2
|
In the
year ended 31 December 2018 this comprises the effects of market
volatility and asset sales (losses of £50 million); the
amortisation of purchased intangibles (£108 million);
restructuring (£879 million, comprising severance related
costs, the rationalisation of the non-branch property portfolio,
the work on implementing the ring-fencing requirements and the
integration of MBNA and Zurich’s UK workplace pensions and
savings business); and the fair value unwind and other items
(losses of £319 million).
|
|
3
|
The
Group’s insurance businesses’ income statements include
income and expenditure which are attributable to the policyholders
of the Group’s long-term assurance funds. These items have no
impact in total upon the profit attributable to equity shareholders
and, in order to provide a clearer representation of the underlying
trends within the business, these items are shown net within the
underlying results.
|
|
4
|
The
statutory basis figure is the aggregate of operating costs and
operating lease depreciation.
|
|
|
|
|
|
|
|
|
2019
|
|
2018
|
|
|
|
|
|
Group net interest income – statutory basis
(£m)
|
|
10,180
|
|
13,396
|
Insurance gross up (£m)
|
|
1,818
|
|
(834)
|
Volatility and other items (£m)
|
|
379
|
|
152
|
Group net interest income – underlying basis
(£m)
|
|
12,377
|
|
12,714
|
Non-banking net interest expense (£m)1
|
|
145
|
|
54
|
Banking net interest income – underlying basis
(£m)
|
|
12,522
|
|
12,768
|
|
|
|
|
|
Net loans and advances to customers
(£bn)2
|
|
440.4
|
|
444.4
|
Impairment provision and fair value adjustments
(£bn)
|
|
3.9
|
|
4.0
|
Non-banking items:
|
|
|
|
|
Fee-based
loans and advances (£bn)
|
|
(6.3)
|
|
(7.2)
|
Other
non-banking (£bn)
|
|
(3.1)
|
|
(4.7)
|
Gross banking loans and advances (£bn)
|
|
434.9
|
|
436.5
|
Averaging (£bn)
|
|
(0.2)
|
|
(0.5)
|
Average interest-earning banking assets (£bn)
|
|
434.7
|
|
436.0
|
|
|
|
|
|
Banking net interest margin (%)
|
|
2.88
|
|
2.93
|
|
|
|
1
|
2019
includes impact from the implementation of IFRS 16.
|
|
2
|
Excludes
reverse repos.
|
|
|
|
|
|
|
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
|
|
|
|
Insurance volatility
|
|
230
|
|
(506)
|
Policyholder interests volatility
|
|
193
|
|
46
|
Total volatility
|
|
423
|
|
(460)
|
Insurance hedging arrangements
|
|
(347)
|
|
357
|
Total
|
|
76
|
|
(103)
|
|
|
|
|
|
|
|
At 31 Dec
|
|
At 31 Dec
|
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
|
|
|
|
Shareholders’ equity
|
|
41,697
|
|
43,434
|
Goodwill
|
|
(2,324)
|
|
(2,310)
|
Intangible assets
|
|
(3,808)
|
|
(3,347)
|
Purchased value of in-force business
|
|
(247)
|
|
(271)
|
Other, including deferred tax effects
|
|
269
|
|
228
|
Tangible net assets
|
|
35,587
|
|
37,734
|
|
|
|
|
|
Ordinary shares in issue, excluding own shares
|
|
70,031m
|
|
71,149m
|
Tangible net assets per share
|
|
50.8p
|
|
53.0p
|
|
|
|
|
|
|
|
2019
|
|
2018
|
|
|
|
|
|
Average shareholders' equity (£bn)
|
|
43.0
|
|
43.0
|
Average intangible assets (£bn)
|
|
(5.9)
|
|
(5.4)
|
Average tangible equity (£bn)
|
|
37.1
|
|
37.6
|
|
|
|
|
|
Underlying profit after tax (£m)1
|
|
5,690
|
|
6,057
|
Add back amortisation of intangible assets (post tax)
(£m)
|
|
364
|
|
296
|
Less profit attributable to non-controlling interests and other
equity holders (£m)1
|
|
(547)
|
|
(531)
|
Adjusted underlying profit after tax (£m)
|
|
5,507
|
|
5,822
|
|
|
|
|
|
Underlying return on tangible equity (%)
|
|
14.8
|
|
15.5
|
|
|
|
|
|
Group statutory profit after tax (£m)1
|
|
3,006
|
|
4,506
|
Add back amortisation of intangible assets (post tax)
(£m)
|
|
364
|
|
296
|
Add back amortisation of purchased intangible assets (post tax)
(£m)
|
|
74
|
|
111
|
Less profit attributable to non-controlling interests and other
equity holders (£m)1
|
|
(547)
|
|
(531)
|
Adjusted statutory profit after tax (£m)
|
|
2,897
|
|
4,382
|
|
|
|
|
|
Statutory return on tangible equity (%)
|
|
7.8
|
|
11.7
|
|
|
|
1
|
Prior
period restated to reflect amendments to IAS 12, see basis of
presentation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
|
|
|
|
|
|
|
|
|
|
|
assets at
|
|
|
|
|
|
|
|
|
Loans
|
|
fair value
|
|
|
|
|
|
|
|
|
and
|
|
through other
|
|
|
|
|
|
|
|
|
advances
|
|
comprehensive
|
|
Undrawn
|
|
2019
|
|
|
|
|
to customers
|
|
income
|
|
balances
|
|
Total
|
|
20181
|
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
Retail
|
|
1,063
|
|
–
|
|
(25)
|
|
1,038
|
|
861
|
Commercial Banking
|
|
297
|
|
(1)
|
|
10
|
|
306
|
|
71
|
Insurance and Wealth
|
|
–
|
|
–
|
|
–
|
|
–
|
|
1
|
Central Items
|
|
(53)
|
|
–
|
|
–
|
|
(53)
|
|
4
|
Total impairment charge
|
|
1,307
|
|
(1)
|
|
(15)
|
|
1,291
|
|
937
|
Asset quality ratio
|
|
|
|
|
|
|
|
0.29%
|
|
0.21%
|
Gross asset quality ratio
|
|
|
|
|
|
|
|
0.37%
|
|
0.28%
|
|
|
1
|
Segmental
comparatives restated. See basis of presentation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stage 2
|
|
Stage 3
|
|
Total
|
|
Stage 1
|
|
Stage 2
|
|
Stage 3
|
|
POCI
|
|
as % of
|
|
as % of
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
total
|
|
total
|
At 31 December 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail
|
344,218
|
|
305,502
|
|
22,518
|
|
2,484
|
|
13,714
|
|
6.5
|
|
0.7
|
Commercial Banking
|
96,763
|
|
87,323
|
|
5,993
|
|
3,447
|
|
–
|
|
6.2
|
|
3.6
|
Insurance and Wealth
|
862
|
|
753
|
|
32
|
|
77
|
|
–
|
|
3.7
|
|
8.9
|
Central items
|
56,404
|
|
56,397
|
|
–
|
|
7
|
|
–
|
|
–
|
|
–
|
Total gross lending
|
498,247
|
|
449,975
|
|
28,543
|
|
6,015
|
|
13,714
|
|
5.7
|
|
1.2
|
ECL allowance on drawn balances
|
(3,259)
|
|
(675)
|
|
(995)
|
|
(1,447)
|
|
(142)
|
|
|
|
|
Net balance sheet carrying value
|
494,988
|
|
449,300
|
|
27,548
|
|
4,568
|
|
13,572
|
|
|
|
|
ECL allowances (drawn and undrawn) as
a percentage of gross lending (%)1
|
0.7
|
|
0.2
|
|
3.8
|
|
25.0
|
|
1.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 20182
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail
|
341,682
|
|
305,160
|
|
18,741
|
|
2,390
|
|
15,391
|
|
5.5
|
|
0.7
|
Commercial Banking
|
101,824
|
|
92,002
|
|
6,592
|
|
3,230
|
|
–
|
|
6.5
|
|
3.2
|
Insurance and Wealth
|
865
|
|
804
|
|
6
|
|
55
|
|
–
|
|
0.7
|
|
6.4
|
Central items
|
43,637
|
|
43,565
|
|
6
|
|
66
|
|
–
|
|
–
|
|
0.2
|
Total gross lending
|
488,008
|
|
441,531
|
|
25,345
|
|
5,741
|
|
15,391
|
|
5.2
|
|
1.2
|
ECL allowance on drawn balances
|
(3,150)
|
|
(525)
|
|
(994)
|
|
(1,553)
|
|
(78)
|
|
|
|
|
Net balance sheet carrying value
|
484,858
|
|
441,006
|
|
24,351
|
|
4,188
|
|
15,313
|
|
|
|
|
ECL allowances (drawn and undrawn) as a percentage of gross lending
(%)1
|
0.7
|
|
0.1
|
|
4.2
|
|
28.4
|
|
0.5
|
|
|
|
|
|
|
1
2
|
Stage 3 ECL allowances as a percentage of drawn balances are
calculated excluding loans in recoveries in Retail of
£205 million (31 December 2018: £250
million).
Segmental
comparatives restated. See basis of presentation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stage 2
|
|
Stage 3
|
|
Total
|
|
Stage 1
|
|
Stage 2
|
|
Stage 3
|
|
as % of
|
|
as % of
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
total
|
|
total
|
At 31 December 20191
|
|
|
|
|
|
|
|
|
|
|
|
Retail
|
344,776
|
|
307,138
|
|
32,415
|
|
5,223
|
|
9.4
|
|
1.5
|
Commercial Banking
|
96,763
|
|
87,323
|
|
5,993
|
|
3,447
|
|
6.2
|
|
3.6
|
Insurance and Wealth
|
862
|
|
753
|
|
32
|
|
77
|
|
3.7
|
|
8.9
|
Central items
|
56,404
|
|
56,397
|
|
–
|
|
7
|
|
–
|
|
–
|
Total gross lending
|
498,805
|
|
451,611
|
|
38,440
|
|
8,754
|
|
7.7
|
|
1.8
|
ECL allowance on drawn balances
|
(3,965)
|
|
(702)
|
|
(1,346)
|
|
(1,917)
|
|
|
|
|
Net balance sheet carrying value
|
494,840
|
|
450,909
|
|
37,094
|
|
6,837
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ECL allowances (drawn and undrawn) as
a percentage of gross lending (%)2
|
0.8
|
|
0.2
|
|
3.7
|
|
22.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 20181,3
|
|
|
|
|
|
|
|
|
|
|
|
Retail
|
342,559
|
|
305,048
|
|
31,647
|
|
5,864
|
|
9.2
|
|
1.7
|
Commercial Banking
|
101,824
|
|
92,002
|
|
6,592
|
|
3,230
|
|
6.5
|
|
3.2
|
Insurance and Wealth
|
865
|
|
804
|
|
6
|
|
55
|
|
0.7
|
|
6.4
|
Central items
|
43,637
|
|
43,565
|
|
6
|
|
66
|
|
–
|
|
0.2
|
Total gross lending
|
488,885
|
|
441,419
|
|
38,251
|
|
9,215
|
|
7.8
|
|
1.9
|
ECL allowance on drawn balances
|
(4,236)
|
|
(556)
|
|
(1,506)
|
|
(2,174)
|
|
|
|
|
Net balance sheet carrying value
|
484,649
|
|
440,863
|
|
36,745
|
|
7,041
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ECL allowances (drawn and undrawn) as a percentage of gross lending
(%)2
|
0.9
|
|
0.2
|
|
4.1
|
|
24.3
|
|
|
|
|
|
|
1
|
These
balances exclude the impact of the HBOS and MBNA acquisition
related adjustments.
|
2
|
Stage 3 ECL allowances as a percentage of drawn balances are
calculated excluding loans in recoveries in Retail of
£205 million (31 December 2018: £250
million).
|
3
|
Segmental
comparatives restated. See basis of presentation.
|
|
|
|
|
|
|
|
At 31 Dec
|
|
At 31 Dec
|
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
|
|
|
|
Customer related balances
|
|
|
|
|
Drawn
|
|
3,259
|
|
3,150
|
Undrawn
|
|
177
|
|
193
|
|
|
3,436
|
|
3,343
|
Other assets
|
|
19
|
|
19
|
Total ECL allowance
|
|
3,455
|
|
3,362
|
|
|
|
|
|
|
|
At 31 Dec
|
|
At 31 Dec
|
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
|
|
|
|
Customer related balances
|
|
|
|
|
Drawn
|
|
3,965
|
|
4,236
|
Undrawn
|
|
177
|
|
193
|
|
|
4,142
|
|
4,429
|
Other assets
|
|
19
|
|
19
|
Total ECL allowance
|
|
4,161
|
|
4,448
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Stage 1
|
|
Stage 2
|
|
Stage 3
|
|
POCI
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
At 31 December 2019
|
|
|
|
|
|
|
|
|
|
Underlying basis
|
498,805
|
|
451,611
|
|
38,440
|
|
8,754
|
|
–
|
POCI assets
|
–
|
|
(1,718)
|
|
(9,903)
|
|
(2,740)
|
|
14,361
|
Acquisition fair value adjustment
|
(558)
|
|
82
|
|
6
|
|
1
|
|
(647)
|
|
(558)
|
|
(1,636)
|
|
(9,897)
|
|
(2,739)
|
|
13,714
|
Statutory basis
|
498,247
|
|
449,975
|
|
28,543
|
|
6,015
|
|
13,714
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2018
|
|
|
|
|
|
|
|
|
|
Underlying basis
|
488,885
|
|
441,419
|
|
38,251
|
|
9,215
|
|
–
|
POCI assets
|
–
|
|
–
|
|
(12,917)
|
|
(3,476)
|
|
16,393
|
Acquisition fair value adjustment
|
(877)
|
|
112
|
|
11
|
|
2
|
|
(1,002)
|
|
(877)
|
|
112
|
|
(12,906)
|
|
(3,474)
|
|
15,391
|
Statutory basis
|
488,008
|
|
441,531
|
|
25,345
|
|
5,741
|
|
15,391
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Stage 1
|
|
Stage 2
|
|
Stage 3
|
|
POCI
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
At 31 December 2019
|
|
|
|
|
|
|
|
|
|
Underlying basis
|
3,965
|
|
702
|
|
1,346
|
|
1,917
|
|
–
|
POCI assets
|
–
|
|
–
|
|
(334)
|
|
(455)
|
|
789
|
Acquisition fair value adjustment
|
(706)
|
|
(27)
|
|
(17)
|
|
(15)
|
|
(647)
|
|
(706)
|
|
(27)
|
|
(351)
|
|
(470)
|
|
142
|
Statutory basis
|
3,259
|
|
675
|
|
995
|
|
1,447
|
|
142
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2018
|
|
|
|
|
|
|
|
|
|
Expected credit losses on drawn balances
|
|
|
|
|
|
|
|
|
|
Underlying basis
|
4,236
|
|
556
|
|
1,506
|
|
2,174
|
|
–
|
POCI assets
|
–
|
|
–
|
|
(481)
|
|
(599)
|
|
1,080
|
Acquisition fair value adjustment
|
(1,086)
|
|
(31)
|
|
(31)
|
|
(22)
|
|
(1,002)
|
|
(1,086)
|
|
(31)
|
|
(512)
|
|
(621)
|
|
78
|
Statutory basis
|
3,150
|
|
525
|
|
994
|
|
1,553
|
|
78
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Stage 1
|
|
Stage 2
|
|
Stage 3
|
|
POCI
|
||||||||||
|
£m
|
|
%1
|
|
£m
|
|
%1
|
|
£m
|
|
%1
|
|
£m
|
|
%1,2
|
|
£m
|
|
%1
|
At 31 December 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail
|
2,090
|
|
0.6
|
|
639
|
|
0.2
|
|
819
|
|
3.6
|
|
490
|
|
21.5
|
|
142
|
|
1.0
|
Commercial Banking
|
1,313
|
|
1.4
|
|
115
|
|
0.1
|
|
252
|
|
4.2
|
|
946
|
|
27.4
|
|
–
|
|
–
|
Insurance and Wealth
|
17
|
|
2.0
|
|
6
|
|
0.8
|
|
1
|
|
3.1
|
|
10
|
|
13.0
|
|
–
|
|
–
|
Central items
|
16
|
|
–
|
|
10
|
|
–
|
|
–
|
|
–
|
|
6
|
|
85.7
|
|
–
|
|
–
|
Total
|
3,436
|
|
0.7
|
|
770
|
|
0.2
|
|
1,072
|
|
3.8
|
|
1,452
|
|
25.0
|
|
142
|
|
1.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 20181,3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail
|
1,768
|
|
0.5
|
|
493
|
|
0.2
|
|
713
|
|
3.8
|
|
484
|
|
22.6
|
|
78
|
|
0.5
|
Commercial Banking
|
1,486
|
|
1.5
|
|
111
|
|
0.1
|
|
338
|
|
5.1
|
|
1,037
|
|
32.1
|
|
–
|
|
–
|
Insurance and Wealth
|
18
|
|
2.1
|
|
6
|
|
0.7
|
|
1
|
|
16.7
|
|
11
|
|
20.0
|
|
–
|
|
–
|
Central items
|
71
|
|
0.2
|
|
38
|
|
0.1
|
|
6
|
|
100.0
|
|
27
|
|
40.9
|
|
–
|
|
–
|
Total
|
3,343
|
|
0.7
|
|
648
|
|
0.1
|
|
1,058
|
|
4.2
|
|
1,559
|
|
28.4
|
|
78
|
|
0.5
|
|
|
|
|
1
|
As a
percentage of drawn balances.
|
2
|
Stage 3 ECL allowances as a percentage of drawn balances are
calculated excluding loans in recoveries in Retail of
£205 million (31 December 2018: £250
million).
|
3
|
Segmental
comparatives restated. See basis of presentation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Stage 1
|
|
Stage 2
|
|
Stage 3
|
||||||||
|
£m
|
|
%2
|
|
£m
|
|
%2
|
|
£m
|
|
%2
|
|
£m
|
|
%2,3
|
At 31 December 20191
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail
|
2,796
|
|
0.8
|
|
666
|
|
0.2
|
|
1,170
|
|
3.6
|
|
960
|
|
19.1
|
Commercial Banking
|
1,313
|
|
1.4
|
|
115
|
|
0.1
|
|
252
|
|
4.2
|
|
946
|
|
27.4
|
Insurance and Wealth
|
17
|
|
2.0
|
|
6
|
|
0.8
|
|
1
|
|
3.1
|
|
10
|
|
13.0
|
Central items
|
16
|
|
–
|
|
10
|
|
–
|
|
–
|
|
–
|
|
6
|
|
85.7
|
Total
|
4,142
|
|
0.8
|
|
797
|
|
0.2
|
|
1,423
|
|
3.7
|
|
1,922
|
|
22.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 20181,4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail
|
2,854
|
|
0.8
|
|
524
|
|
0.2
|
|
1,225
|
|
3.9
|
|
1,105
|
|
19.7
|
Commercial Banking
|
1,486
|
|
1.5
|
|
111
|
|
0.1
|
|
338
|
|
5.1
|
|
1,037
|
|
32.1
|
Insurance and Wealth
|
18
|
|
2.1
|
|
6
|
|
0.7
|
|
1
|
|
16.7
|
|
11
|
|
20.0
|
Central items
|
71
|
|
0.2
|
|
38
|
|
0.1
|
|
6
|
|
100.0
|
|
27
|
|
40.9
|
Total
|
4,429
|
|
0.9
|
|
679
|
|
0.2
|
|
1,570
|
|
4.1
|
|
2,180
|
|
24.3
|
|
|
|
|
1
|
Balances
exclude the impact of the HBOS and MBNA related acquisition
adjustments.
|
2
|
As a
percentage of drawn balances.
|
3
|
Stage 3 ECL allowances as a percentage of drawn balances are
calculated excluding loans in recoveries in Retail of
£205 million (31 December 2018: £250
million).
|
4
|
Segmental comparatives restated. See basis of
presentation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Probability-
|
|
|
|
|
|
|
|
Severe
|
|
|
weighted
|
|
Upside
|
|
Base case
|
|
Downside
|
|
Downside
|
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
Statutory basis
|
|
|
|
|
|
|
|
|
|
|
Secured
|
|
569
|
|
317
|
|
464
|
|
653
|
|
1,389
|
Other Retail
|
|
1,521
|
|
1,443
|
|
1,492
|
|
1,564
|
|
1,712
|
Commercial
|
|
1,315
|
|
1,211
|
|
1,258
|
|
1,382
|
|
1,597
|
Other
|
|
50
|
|
50
|
|
50
|
|
50
|
|
50
|
At 31 December 2019
|
|
3,455
|
|
3,021
|
|
3,264
|
|
3,649
|
|
4,748
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Probability-
|
|
|
|
|
|
|
|
Severe
|
|
|
weighted
|
|
Upside
|
|
Base case
|
|
Downside
|
|
Downside
|
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
Underlying basis
|
|
|
|
|
|
|
|
|
|
|
Secured
|
|
1,216
|
|
964
|
|
1,111
|
|
1,300
|
|
2,036
|
Other Retail
|
|
1,580
|
|
1,502
|
|
1,551
|
|
1,623
|
|
1,771
|
Commercial
|
|
1,315
|
|
1,211
|
|
1,258
|
|
1,382
|
|
1,597
|
Other
|
|
50
|
|
50
|
|
50
|
|
50
|
|
50
|
At 31 December 2019
|
|
4,161
|
|
3,727
|
|
3,970
|
|
4,355
|
|
5,454
|
|
|
|
|
|
|
|
|
|
|
|
Transitional
|
|
Fully loaded
|
||||
|
|
At 31 Dec
|
|
At 31 Dec
|
|
At 31 Dec
|
|
At 31 Dec
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
Common equity tier 1
|
|
|
|
|
|
|
|
|
Shareholders’ equity per balance sheet
|
|
41,697
|
|
43,434
|
|
41,697
|
|
43,434
|
Adjustment
to retained earnings for foreseeable dividends
|
|
(1,586)
|
|
(1,523)
|
|
(1,586)
|
|
(1,523)
|
Deconsolidation adjustments1
|
|
2,337
|
|
2,273
|
|
2,337
|
|
2,273
|
Adjustment
for own credit
|
|
26
|
|
(280)
|
|
26
|
|
(280)
|
Cash
flow hedging reserve
|
|
(1,504)
|
|
(1,051)
|
|
(1,504)
|
|
(1,051)
|
Other
adjustments
|
|
247
|
|
(19)
|
|
247
|
|
(19)
|
|
|
41,217
|
|
42,834
|
|
41,217
|
|
42,834
|
less: deductions from common equity tier 1
|
|
|
|
|
|
|
|
|
Goodwill and other intangible assets
|
|
(4,179)
|
|
(3,667)
|
|
(4,179)
|
|
(3,667)
|
Prudent valuation adjustment
|
|
(509)
|
|
(529)
|
|
(509)
|
|
(529)
|
Excess of expected losses over impairment provisions and value
adjustments
|
|
(243)
|
|
(27)
|
|
(243)
|
|
(27)
|
Removal of defined benefit pension surplus
|
|
(531)
|
|
(994)
|
|
(531)
|
|
(994)
|
Securitisation deductions
|
|
(185)
|
|
(191)
|
|
(185)
|
|
(191)
|
Significant investments1
|
|
(4,626)
|
|
(4,222)
|
|
(4,626)
|
|
(4,222)
|
Deferred tax assets
|
|
(3,200)
|
|
(3,037)
|
|
(3,200)
|
|
(3,037)
|
Common equity tier 1 capital
|
|
27,744
|
|
30,167
|
|
27,744
|
|
30,167
|
Additional tier 1
|
|
|
|
|
|
|
|
|
Other equity instruments
|
|
5,881
|
|
6,466
|
|
5,881
|
|
6,466
|
Preference shares and preferred securities2
|
|
4,127
|
|
4,008
|
|
–
|
|
–
|
Transitional
limit and other adjustments
|
|
(2,474)
|
|
(1,804)
|
|
–
|
|
–
|
|
|
7,534
|
|
8,670
|
|
5,881
|
|
6,466
|
less: deductions from tier 1
|
|
|
|
|
|
|
|
|
Significant investments1
|
|
(1,286)
|
|
(1,298)
|
|
–
|
|
–
|
Total tier 1 capital
|
|
33,992
|
|
37,539
|
|
33,625
|
|
36,633
|
Tier 2
|
|
|
|
|
|
|
|
|
Other subordinated liabilities2
|
|
13,003
|
|
13,648
|
|
13,003
|
|
13,648
|
Deconsolidation of instruments issued by insurance
entities1
|
|
(1,796)
|
|
(1,767)
|
|
(1,796)
|
|
(1,767)
|
Adjustments
for transitional limit and non-eligible instruments
|
|
2,278
|
|
1,504
|
|
(2,204)
|
|
(1,266)
|
Amortisation
and other adjustments
|
|
(3,101)
|
|
(2,717)
|
|
(3,101)
|
|
(2,717)
|
|
|
10,384
|
|
10,668
|
|
5,902
|
|
7,898
|
less: deductions from tier 2
|
|
|
|
|
|
|
|
|
Significant investments1
|
|
(960)
|
|
(973)
|
|
(2,246)
|
|
(2,271)
|
Total capital resources
|
|
43,416
|
|
47,234
|
|
37,281
|
|
42,260
|
|
|
|
|
|
|
|
|
|
Risk-weighted assets (unaudited)
|
|
203,431
|
|
206,366
|
|
203,431
|
|
206,366
|
|
|
|
|
|
|
|
|
|
Common equity tier 1 capital ratio3
|
|
13.6%
|
|
14.6%
|
|
13.6%
|
|
14.6%
|
Tier 1 capital ratio
|
|
16.7%
|
|
18.2%
|
|
16.5%
|
|
17.8%
|
Total capital ratio
|
|
21.3%
|
|
22.9%
|
|
18.3%
|
|
20.5%
|
|
|
1
|
For
regulatory capital purposes, the Group’s Insurance business
is deconsolidated and replaced by the amount of the Group’s
investment in the business. A part of this amount is deducted from
capital (via ‘significant investments’ in the table
above) and the remaining amount is risk-weighted, forming part of
threshold risk-weighted assets.
|
2
|
Preference
shares, preferred securities and other subordinated liabilities are
categorised as subordinated liabilities in the balance
sheet.
|
3
|
The
common equity tier 1 ratio is 13.8 per cent on a pro forma basis
upon recognition of the dividend paid by the Insurance business in
February 2020 in relation to its 2019 earnings (31 December 2018:
13.9 per cent pro forma, incorporating the effects of the share
buyback announced in February 2019).
|
|
|
|
|
|
|
|
Transitional2
|
||
|
|
At 31 Dec
|
|
At 31 Dec
|
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
|
|
|
|
Total capital resources (transitional basis)
|
|
43,416
|
|
47,234
|
Ineligible AT1 and tier 2 instruments1
|
|
(874)
|
|
(613)
|
Amortised portion of eligible tier 2 instruments issued by Lloyds
Banking Group plc
|
|
24
|
|
–
|
Senior unsecured securities issued by Lloyds Banking Group
plc
|
|
23,554
|
|
20,213
|
Total MREL
resources2
|
|
66,120
|
|
66,834
|
|
|
|
|
|
Risk-weighted assets
|
|
203,431
|
|
206,366
|
|
|
|
|
|
MREL ratio3
|
|
32.5%
|
|
32.4%
|
|
|
|
|
|
Leverage exposure measure
|
|
654,387
|
|
663,277
|
|
|
|
|
|
MREL leverage ratio
|
|
10.1%
|
|
10.1%
|
|
|
1
|
Instruments
with less than one year to maturity or governed under non-EEA law
without a contractual bail-in clause.
|
2
|
Until
2022, externally issued regulatory capital in operating entities
can count towards the Group’s MREL to the extent that such
capital would count towards the Group's consolidated capital
resources.
|
3
|
The
MREL ratio is 32.6 per cent on a pro forma basis upon recognition
of the dividend paid up by the Insurance business in February 2020
in relation to its 2019 earnings (31 December 2018: 32.6 per cent
pro forma).
|
|
|
|
|
|
|
|
At 31 Dec
|
|
At 31 Dec
|
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
|
|
|
|
|
Foundation Internal Ratings Based (IRB) Approach
|
|
53,842
|
|
60,555
|
Retail IRB Approach
|
|
63,208
|
|
59,522
|
Other IRB Approach
|
|
18,544
|
|
15,666
|
IRB Approach
|
|
135,594
|
|
135,743
|
Standardised (STA) Approach
|
|
24,420
|
|
25,757
|
Credit risk
|
|
160,014
|
|
161,500
|
Counterparty credit risk
|
|
5,083
|
|
5,718
|
Contributions to the default fund of a central
counterparty
|
|
210
|
|
830
|
Credit valuation adjustment risk
|
|
584
|
|
702
|
Operational risk
|
|
25,482
|
|
25,505
|
Market risk
|
|
1,790
|
|
2,085
|
Underlying risk-weighted assets
|
|
193,163
|
|
196,340
|
Threshold risk-weighted assets1
|
|
10,268
|
|
10,026
|
Total risk-weighted assets
|
|
203,431
|
|
206,366
|
|
|
1
|
Threshold
risk-weighted assets reflect the element of significant investments
and deferred tax assets that are permitted to be risk-weighted
instead of being deducted from CET1 capital. Significant
investments primarily arise from investment in the Group’s
Insurance business.
|
|
|
|
|
|
|
|
Fully loaded
|
||
|
|
At 31 Dec
|
|
At 31 Dec
|
|
|
2019
|
|
2018
|
|
|
£m
|
|
£m
|
Total tier 1 capital for leverage ratio
|
|
|
|
|
Common equity tier 1 capital
|
|
27,744
|
|
30,167
|
Additional tier 1 capital
|
|
5,881
|
|
6,466
|
Total tier 1 capital
|
|
33,625
|
|
36,633
|
|
|
|
|
|
Exposure measure
|
|
|
|
|
Statutory balance sheet assets
|
|
|
|
|
Derivative financial instruments
|
|
26,369
|
|
23,595
|
Securities financing transactions
|
|
67,424
|
|
69,301
|
Loans and advances and other assets
|
|
740,100
|
|
704,702
|
Total assets
|
|
833,893
|
|
797,598
|
|
|
|
|
|
Qualifying central bank claims
|
|
(49,590)
|
|
(50,105)
|
|
|
|
|
|
Deconsolidation
adjustments1
|
|
|
|
|
Derivative financial instruments
|
|
(1,293)
|
|
(1,376)
|
Securities financing transactions
|
|
(334)
|
|
(487)
|
Loans and advances and other assets
|
|
(167,410)
|
|
(130,048)
|
Total deconsolidation adjustments
|
|
(169,037)
|
|
(131,911)
|
|
|
|
|
|
Derivatives adjustments
|
|
|
|
|
Adjustments for regulatory netting
|
|
(11,298)
|
|
(8,828)
|
Adjustments for cash collateral
|
|
(12,551)
|
|
(10,536)
|
Net written credit protection
|
|
458
|
|
539
|
Regulatory potential future exposure
|
|
16,337
|
|
18,250
|
Total derivatives adjustments
|
|
(7,054)
|
|
(575)
|
|
|
|
|
|
Securities financing transactions adjustments
|
|
1,164
|
|
40
|
Off-balance sheet items
|
|
53,191
|
|
56,393
|
Regulatory deductions and other adjustments
|
|
(8,180)
|
|
(8,163)
|
|
|
|
|
|
Total exposure
measure2
|
|
654,387
|
|
663,277
|
Average exposure
measure3
|
|
667,433
|
|
|
|
|
|
|
|
UK Leverage ratio2,5
|
|
5.1%
|
|
5.5%
|
Average UK leverage
ratio3
|
|
5.0%
|
|
|
|
|
|
|
|
CRD IV exposure
measure4
|
|
703,977
|
|
713,382
|
CRD IV leverage
ratio4
|
|
4.8%
|
|
5.1%
|
1
|
Deconsolidation
adjustments relate to the deconsolidation of certain Group entities
that fall outside the scope of the Group’s regulatory capital
consolidation, being primarily the Group’s Insurance
business.
|
2
|
Calculated
in accordance with the UK Leverage Ratio Framework which requires
qualifying central bank claims to be excluded from the leverage
exposure measure.
|
3
|
The
average UK leverage ratio is based on the average of the month end
tier 1 capital position and average exposure measure over the
quarter (1 October 2019 to 31 December 2019). The average of
5.0 per cent compares to 4.9 per cent at the start and 5.1 per cent
at the end of the quarter.
|
4
|
Calculated
in accordance with CRD IV rules which include central bank claims
within the leverage exposure measure.
|
5
|
The UK
leverage ratio is 5.2 per cent on a pro forma basis upon
recognition of the dividend paid up by the Insurance business in
February 2020 in relation to its 2019 earnings (31 December 2018:
5.6 per cent pro forma).
|
|
|
|
|
|
|||
|
|
IFRS 9 full impact
|
|||||
|
|
At 31 Dec
|
|
At 31 Dec
|
|||
|
|
2019
|
|
2018
|
|||
|
|
|
|
|
|||
Common equity tier 1 (£m)
|
|
27,002
|
|
29,592
|
|||
Transitional tier 1 (£m)
|
|
33,249
|
|
36,964
|
|||
Transitional total capital (£m)
|
|
43,153
|
|
47,195
|
|||
Total risk-weighted assets (£m)
|
|
203,083
|
|
206,614
|
|||
Common equity tier 1 ratio (%)
|
|
13.3%
|
|
14.3%
|
|||
Transitional tier 1 ratio (%)
|
|
16.4%
|
|
17.9%
|
|||
Transitional total capital ratio (%)
|
|
21.2%
|
|
22.8%
|
|||
UK leverage ratio exposure measure (£m)
|
|
653,643
|
|
663,182
|
|||
UK leverage ratio (%)
|
|
5.0%
|
|
5.4%
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
20181
|
|
|
Note
|
|
£m
|
|
£m
|
|
|
|
|
|
|
|
Interest and similar income
|
|
|
|
16,861
|
|
16,349
|
Interest and similar expense
|
|
|
|
(6,681)
|
|
(2,953)
|
Net interest income
|
|
|
|
10,180
|
|
13,396
|
Fee and commission income
|
|
|
|
2,756
|
|
2,848
|
Fee and commission expense
|
|
|
|
(1,350)
|
|
(1,386)
|
Net fee and commission income
|
|
|
|
1,406
|
|
1,462
|
Net trading income
|
|
|
|
18,288
|
|
(3,876)
|
Insurance premium income
|
|
|
|
9,574
|
|
9,189
|
Other operating income
|
|
|
|
2,908
|
|
1,920
|
Other income
|
|
|
|
32,176
|
|
8,695
|
Total income
|
|
|
|
42,356
|
|
22,091
|
Insurance claims
|
|
|
|
(23,997)
|
|
(3,465)
|
Total income, net of insurance claims
|
|
|
|
18,359
|
|
18,626
|
Regulatory provisions
|
|
|
|
(2,895)
|
|
(1,350)
|
Other operating expenses
|
|
|
|
(9,775)
|
|
(10,379)
|
Total operating expenses
|
|
|
|
(12,670)
|
|
(11,729)
|
Trading surplus
|
|
|
|
5,689
|
|
6,897
|
Impairment
|
|
|
|
(1,296)
|
|
(937)
|
Profit before tax
|
|
|
|
4,393
|
|
5,960
|
Tax expense
|
|
3
|
|
(1,387)
|
|
(1,454)
|
Profit for the year
|
|
|
|
3,006
|
|
4,506
|
|
|
|
|
|
|
|
Profit attributable to ordinary shareholders
|
|
|
|
2,459
|
|
3,975
|
Profit attributable to other equity holders
|
|
|
|
466
|
|
433
|
Profit attributable to equity holders
|
|
|
|
2,925
|
|
4,408
|
Profit attributable to non-controlling interests
|
|
|
|
81
|
|
98
|
Profit for the year
|
|
|
|
3,006
|
|
4,506
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
4
|
|
3.5p
|
|
5.5p
|
Diluted earnings per share
|
|
4
|
|
3.4p
|
|
5.5p
|
1
|
Restated,
see note 1.
|
|
|
|
|
|
|
|
2019
|
|
20181
|
|
|
£m
|
|
£m
|
|
|
|
|
|
Profit for the year
|
|
3,006
|
|
4,506
|
Other comprehensive income
|
|
|
|
|
Items that will not subsequently be reclassified to profit or
loss:
|
|
|
|
|
Post-retirement defined benefit scheme remeasurements:
|
|
|
|
|
Remeasurements
before tax
|
|
(1,433)
|
|
167
|
Tax
|
|
316
|
|
(47)
|
|
|
(1,117)
|
|
120
|
Movements in revaluation reserve in respect of equity shares held
at fair value through other comprehensive income:
|
|
|
|
|
Change
in fair value
|
|
–
|
|
(97)
|
Tax
|
|
12
|
|
22
|
|
|
12
|
|
(75)
|
Gains and losses attributable to own credit risk:
|
|
|
|
|
Gains
(losses) before tax
|
|
(419)
|
|
533
|
Tax
|
|
113
|
|
(144)
|
|
|
(306)
|
|
389
|
|
|
|
|
|
Share of other comprehensive income of associates and joint
ventures
|
|
–
|
|
8
|
|
|
|
|
|
Items that may subsequently be reclassified to profit or
loss:
|
|
|
|
|
Movements in revaluation reserve in respect of debt securities held
at fair value through other comprehensive income:
|
|
|
|
|
Change
in fair value
|
|
(30)
|
|
(37)
|
Income
statement transfers in respect of disposals
|
|
(196)
|
|
(275)
|
Impairment
recognised in the income statement
|
|
(1)
|
|
–
|
Tax
|
|
71
|
|
119
|
|
|
(156)
|
|
(193)
|
Movements in cash flow hedging reserve:
|
|
|
|
|
Effective
portion of changes in fair value taken to other comprehensive
income
|
|
1,209
|
|
234
|
Net
income statement transfers
|
|
(608)
|
|
(701)
|
Tax
|
|
(148)
|
|
113
|
|
|
453
|
|
(354)
|
Currency translation differences (tax: nil)
|
|
(12)
|
|
(8)
|
Other comprehensive income for the year, net of
tax
|
|
(1,126)
|
|
(113)
|
Total comprehensive income for the year
|
|
1,880
|
|
4,393
|
|
|
|
|
|
Total comprehensive income attributable to ordinary
shareholders
|
|
1,333
|
|
3,862
|
Total comprehensive income attributable to other equity
holders
|
|
466
|
|
433
|
Total comprehensive income attributable to equity
holders
|
|
1,799
|
|
4,295
|
Total comprehensive income attributable to non-controlling
interests
|
|
81
|
|
98
|
Total comprehensive income for the year
|
|
1,880
|
|
4,393
|
|
|
1
|
Restated,
see note 1.
|
|
|
|
|
|
|
|
|
|
|
|
At 31 Dec
|
|
At 31 Dec
|
|
|
|
|
20191
|
|
2018
|
|
|
|
|
£m
|
|
£m
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
Cash and balances at central banks
|
|
|
|
55,130
|
|
54,663
|
Items in the course of collection from banks
|
|
|
|
313
|
|
647
|
Financial assets at fair value through profit or loss
|
|
|
|
160,189
|
|
158,529
|
Derivative financial instruments
|
|
|
|
26,369
|
|
23,595
|
Loans
and advances to banks
|
|
|
|
9,775
|
|
6,283
|
Loans
and advances to customers
|
|
|
|
494,988
|
|
484,858
|
Debt
securities
|
|
|
|
5,544
|
|
5,238
|
Financial assets at amortised cost
|
|
|
|
510,307
|
|
496,379
|
Financial assets at fair value through other comprehensive
income
|
|
|
|
25,092
|
|
24,815
|
Investments in joint ventures and associates
|
|
|
|
304
|
|
91
|
Goodwill
|
|
|
|
2,324
|
|
2,310
|
Value of in-force business
|
|
|
|
5,558
|
|
4,762
|
Other intangible assets
|
|
|
|
3,808
|
|
3,347
|
Property, plant and equipment
|
|
|
|
13,104
|
|
12,300
|
Current tax recoverable
|
|
|
|
7
|
|
5
|
Deferred tax assets
|
|
|
|
2,666
|
|
2,453
|
Retirement benefit assets
|
|
|
|
681
|
|
1,267
|
Assets arising from reinsurance contracts held
|
|
|
|
23,567
|
|
7,860
|
Other assets
|
|
|
|
4,474
|
|
4,575
|
Total assets
|
|
|
|
833,893
|
|
797,598
|
|
|
1
|
Reflects
the implementation of IFRS16, see note 1.
|
|
|
|
|
|
|
|
|
|
|
|
At 31 Dec
|
|
At 31 Dec
|
|
|
|
|
20191
|
|
2018
|
Equity and liabilities
|
|
|
|
£m
|
|
£m
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Deposits from banks
|
|
|
|
28,179
|
|
30,320
|
Customer deposits
|
|
|
|
421,320
|
|
418,066
|
Items in course of transmission to banks
|
|
|
|
373
|
|
636
|
Financial liabilities at fair value through profit or
loss
|
|
|
|
21,486
|
|
30,547
|
Derivative financial instruments
|
|
|
|
25,779
|
|
21,373
|
Notes in circulation
|
|
|
|
1,079
|
|
1,104
|
Debt securities in issue
|
|
|
|
97,689
|
|
91,168
|
Liabilities arising from insurance contracts and participating
investment contracts
|
|
|
|
111,449
|
|
98,874
|
Liabilities arising from non-participating investment
contracts
|
|
|
|
37,459
|
|
13,853
|
Other liabilities
|
|
|
|
20,333
|
|
19,633
|
Retirement benefit obligations
|
|
|
|
257
|
|
245
|
Current tax liabilities
|
|
|
|
187
|
|
377
|
Deferred tax liabilities
|
|
|
|
44
|
|
–
|
Other provisions
|
|
|
|
3,323
|
|
3,547
|
Subordinated liabilities
|
|
|
|
17,130
|
|
17,656
|
Total liabilities
|
|
|
|
786,087
|
|
747,399
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
Share capital
|
|
|
|
7,005
|
|
7,116
|
Share premium account
|
|
|
|
17,751
|
|
17,719
|
Other reserves
|
|
|
|
13,695
|
|
13,210
|
Retained profits
|
|
|
|
3,246
|
|
5,389
|
Shareholders’ equity
|
|
|
|
41,697
|
|
43,434
|
Other equity instruments
|
|
|
|
5,906
|
|
6,491
|
Total equity excluding non-controlling interests
|
|
|
|
47,603
|
|
49,925
|
Non-controlling interests
|
|
|
|
203
|
|
274
|
Total equity
|
|
|
|
47,806
|
|
50,199
|
Total equity and liabilities
|
|
|
|
833,893
|
|
797,598
|
|
|
1
|
Reflects
the implementation of IFRS16, see note 1.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to equity shareholders
|
|
|
|
|
|
|
||||||
|
|
Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
capital
|
|
|
|
|
|
|
|
Other
|
|
Non -
|
|
|
|
|
and
|
|
Other
|
|
Retained
|
|
|
|
equity
|
|
controlling
|
|
|
|
|
premium
|
|
reserves
|
|
profits
|
|
Total
|
|
instruments
|
|
interests
|
|
Total
|
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 1 January 2019
|
|
24,835
|
|
13,210
|
|
5,389
|
|
43,434
|
|
6,491
|
|
274
|
|
50,199
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the year
|
|
–
|
|
–
|
|
2,925
|
|
2,925
|
|
–
|
|
81
|
|
3,006
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post-retirement defined benefit scheme remeasurements, net of
tax
|
|
–
|
|
–
|
|
(1,117)
|
|
(1,117)
|
|
–
|
|
–
|
|
(1,117)
|
Movements in revaluation reserve in respect of financial assets
held at fair value through other comprehensive income, net of
tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt
securities
|
|
–
|
|
(156)
|
|
–
|
|
(156)
|
|
–
|
|
–
|
|
(156)
|
Equity
shares
|
|
–
|
|
12
|
|
–
|
|
12
|
|
–
|
|
–
|
|
12
|
Gains and losses attributable to own credit risk, net of
tax
|
|
–
|
|
–
|
|
(306)
|
|
(306)
|
|
–
|
|
–
|
|
(306)
|
Movements in cash flow hedging reserve, net of tax
|
|
–
|
|
453
|
|
–
|
|
453
|
|
–
|
|
–
|
|
453
|
Currency translation differences (tax: £nil)
|
|
–
|
|
(12)
|
|
–
|
|
(12)
|
|
–
|
|
–
|
|
(12)
|
Total other comprehensive income
|
|
–
|
|
297
|
|
(1,423)
|
|
(1,126)
|
|
–
|
|
–
|
|
(1,126)
|
Total comprehensive income
|
|
–
|
|
297
|
|
1,502
|
|
1,799
|
|
–
|
|
81
|
|
1,880
|
Transactions with owners
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
|
|
–
|
|
–
|
|
(2,312)
|
|
(2,312)
|
|
–
|
|
(138)
|
|
(2,450)
|
Distributions on other equity instruments
|
|
–
|
|
–
|
|
(466)
|
|
(466)
|
|
–
|
|
–
|
|
(466)
|
Issue of ordinary shares
|
|
107
|
|
–
|
|
–
|
|
107
|
|
–
|
|
–
|
|
107
|
Share buyback
|
|
(189)
|
|
189
|
|
(1,095)
|
|
(1,095)
|
|
–
|
|
–
|
|
(1,095)
|
Redemption of preference shares
|
|
3
|
|
(3)
|
|
–
|
|
–
|
|
–
|
|
–
|
|
–
|
Issue of other equity instruments
|
|
–
|
|
–
|
|
(3)
|
|
(3)
|
|
896
|
|
–
|
|
893
|
Redemptions of other equity instruments
|
|
–
|
|
–
|
|
–
|
|
–
|
|
(1,481)
|
|
–
|
|
(1,481)
|
Movement in treasury shares
|
|
–
|
|
–
|
|
(3)
|
|
(3)
|
|
–
|
|
–
|
|
(3)
|
Value of employee services:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
option schemes
|
|
–
|
|
–
|
|
71
|
|
71
|
|
–
|
|
–
|
|
71
|
Other
employee award schemes
|
|
–
|
|
–
|
|
165
|
|
165
|
|
–
|
|
–
|
|
165
|
Changes in non-controlling interests
|
|
–
|
|
–
|
|
–
|
|
–
|
|
–
|
|
(14)
|
|
(14)
|
Total transactions with owners
|
|
(79)
|
|
186
|
|
(3,643)
|
|
(3,536)
|
|
(585)
|
|
(152)
|
|
(4,273)
|
Realised gains and losses on equity shares held at fair value
through other comprehensive income
|
|
–
|
|
2
|
|
(2)
|
|
–
|
|
–
|
|
–
|
|
–
|
Balance at 31 December 2019
|
|
24,756
|
|
13,695
|
|
3,246
|
|
41,697
|
|
5,906
|
|
203
|
|
47,806
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to equity shareholders
|
|
|
|
|
|
|
||||||
|
|
Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
capital
|
|
|
|
|
|
|
|
Other
|
|
Non -
|
|
|
|
|
and
|
|
Other
|
|
Retained
|
|
|
|
equity
|
|
controlling
|
|
|
|
|
premium
|
|
reserves
|
|
profits
|
|
Total
|
|
instruments
|
|
interests
|
|
Total
|
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 1 January 2018
|
|
24,831
|
|
13,553
|
|
3,976
|
|
42,360
|
|
5,355
|
|
237
|
|
47,952
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the year1
|
|
–
|
|
–
|
|
4,408
|
|
4,408
|
|
–
|
|
98
|
|
4,506
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post-retirement defined benefit scheme remeasurements, net of
tax
|
|
–
|
|
–
|
|
120
|
|
120
|
|
–
|
|
–
|
|
120
|
Share of other comprehensive income of joint ventures and
associates
|
|
–
|
|
–
|
|
8
|
|
8
|
|
–
|
|
–
|
|
8
|
Movements in revaluation reserve in respect of financial assets
held at fair value through other comprehensive income, net of
tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt securities
|
|
–
|
|
(193)
|
|
–
|
|
(193)
|
|
–
|
|
–
|
|
(193)
|
Equity shares
|
|
–
|
|
(75)
|
|
–
|
|
(75)
|
|
–
|
|
–
|
|
(75)
|
Gains and losses attributable to own credit risk, net of
tax
|
|
–
|
|
–
|
|
389
|
|
389
|
|
–
|
|
–
|
|
389
|
Movements in cash flow hedging reserve, net of tax
|
|
–
|
|
(354)
|
|
–
|
|
(354)
|
|
–
|
|
–
|
|
(354)
|
Currency translation differences (tax: £nil)
|
|
–
|
|
(8)
|
|
–
|
|
(8)
|
|
–
|
|
–
|
|
(8)
|
Total other comprehensive income
|
|
–
|
|
(630)
|
|
517
|
|
(113)
|
|
–
|
|
–
|
|
(113)
|
Total comprehensive income
|
|
–
|
|
(630)
|
|
4,925
|
|
4,295
|
|
–
|
|
98
|
|
4,393
|
Transactions with owners
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
|
|
–
|
|
–
|
|
(2,240)
|
|
(2,240)
|
|
–
|
|
(61)
|
|
(2,301)
|
Distributions on other equity instruments1
|
|
–
|
|
–
|
|
(433)
|
|
(433)
|
|
–
|
|
–
|
|
(433)
|
Issue of ordinary shares
|
|
162
|
|
–
|
|
–
|
|
162
|
|
–
|
|
–
|
|
162
|
Share buyback
|
|
(158)
|
|
158
|
|
(1,005)
|
|
(1,005)
|
|
–
|
|
–
|
|
(1,005)
|
Issue of other equity instruments
|
|
–
|
|
–
|
|
(5)
|
|
(5)
|
|
1,136
|
|
–
|
|
1,131
|
Movement in treasury shares
|
|
–
|
|
–
|
|
40
|
|
40
|
|
|
|
–
|
|
40
|
Value of employee services:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
–
|
Share
option schemes
|
|
–
|
|
–
|
|
53
|
|
53
|
|
–
|
|
–
|
|
53
|
Other
employee award schemes
|
|
–
|
|
–
|
|
207
|
|
207
|
|
–
|
|
–
|
|
207
|
Total transactions with owners
|
|
4
|
|
158
|
|
(3,383)
|
|
(3,221)
|
|
1,136
|
|
(61)
|
|
(2,146)
|
Realised gains and losses on equity shares held at fair value
through other comprehensive income
|
|
–
|
|
129
|
|
(129)
|
|
–
|
|
–
|
|
–
|
|
–
|
Balance at 31 December 2018
|
|
24,835
|
|
13,210
|
|
5,389
|
|
43,434
|
|
6,491
|
|
274
|
|
50,199
|
|
|
1
|
Restated,
see note 1.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
2018
|
|
|
|
|
£m
|
|
£m
|
|
|
|
|
|
|
|
Profit before tax
|
|
|
|
4,393
|
|
5,960
|
Adjustments for:
|
|
|
|
|
|
|
Change
in operating assets
|
|
|
|
(11,049)
|
|
(4,472)
|
Change
in operating liabilities
|
|
|
|
3,642
|
|
(8,673)
|
Non-cash
and other items
|
|
|
|
15,573
|
|
(2,892)
|
Tax
paid
|
|
|
|
(1,278)
|
|
(1,030)
|
Net cash provided by (used in) operating activities
|
|
|
|
11,281
|
|
(11,107)
|
Cash flows from investing activities
|
|
|
|
|
|
|
Purchase of financial assets
|
|
|
|
(9,730)
|
|
(12,657)
|
Proceeds from sale and maturity of financial assets
|
|
|
|
9,631
|
|
26,806
|
Purchase of fixed assets
|
|
|
|
(3,442)
|
|
(3,514)
|
Proceeds from sale of fixed assets
|
|
|
|
1,432
|
|
1,334
|
Acquisition of businesses, net of cash acquired
|
|
|
|
(21)
|
|
(49)
|
Disposal of businesses, net of cash disposed
|
|
|
|
–
|
|
1
|
Net cash (used in) provided by investing activities
|
|
|
|
(2,130)
|
|
11,921
|
Cash flows from financing activities
|
|
|
|
|
|
|
Dividends paid to ordinary shareholders
|
|
|
|
(2,312)
|
|
(2,240)
|
Distributions on other equity instruments
|
|
|
|
(466)
|
|
(433)
|
Dividends paid to non-controlling interests
|
|
|
|
(138)
|
|
(61)
|
Interest paid on subordinated liabilities
|
|
|
|
(1,178)
|
|
(1,268)
|
Proceeds from issue of subordinated liabilities
|
|
|
|
–
|
|
1,729
|
Proceeds from issue of other equity instruments
|
|
|
|
893
|
|
1,131
|
Proceeds from issue of ordinary shares
|
|
|
|
36
|
|
102
|
Share buyback
|
|
|
|
(1,095)
|
|
(1,005)
|
Repayment of subordinated liabilities
|
|
|
|
(818)
|
|
(2,256)
|
Redemption of other equity instruments
|
|
|
|
(1,481)
|
|
–
|
Net cash used in financing activities
|
|
|
|
(6,559)
|
|
(4,301)
|
Effects of exchange rate changes on cash and cash
equivalents
|
|
|
|
(5)
|
|
3
|
Change in cash and cash equivalents
|
|
|
|
2,587
|
|
(3,484)
|
Cash and cash equivalents at beginning of year
|
|
|
|
55,224
|
|
58,708
|
Cash and cash equivalents at end of year
|
|
|
|
57,811
|
|
55,224
|
|
|
|
|
|
|
|
|
|
|
|
Base case
|
|
Upside
|
|
Downside
|
|
Severe
downside
|
|
|
%
|
|
%
|
|
%
|
|
%
|
|
|
|
|
|
|
|
|
|
At 31 December 2019
|
|
|
|
|
|
|
|
|
Interest rate
|
|
1.25
|
|
2.04
|
|
0.49
|
|
0.11
|
Unemployment rate
|
|
4.3
|
|
3.9
|
|
5.8
|
|
7.2
|
House price growth
|
|
1.3
|
|
5.0
|
|
(2.6)
|
|
(7.1)
|
Commercial real estate price growth
|
|
(0.2)
|
|
1.8
|
|
(3.8)
|
|
(7.1)
|
|
|
|
|
|
|
|
|
|
At 31 December 2018
|
|
|
|
|
|
|
|
|
Interest rate
|
|
1.25
|
|
2.34
|
|
1.30
|
|
0.71
|
Unemployment rate
|
|
4.5
|
|
3.9
|
|
5.3
|
|
6.9
|
House price growth
|
|
2.5
|
|
6.1
|
|
(4.8)
|
|
(7.5)
|
Commercial real estate price growth
|
|
0.4
|
|
5.3
|
|
(4.7)
|
|
(6.4)
|
|
|
|
|
|
|
|
|
|
|
|
Base case
|
|
Upside
|
|
Downside
|
|
Severe
downside
|
|
|
%
|
|
%
|
|
%
|
|
%
|
|
|
|
|
|
|
|
|
|
At 31 December 2019
|
|
|
|
|
|
|
|
|
Interest rate
|
|
1.75
|
|
2.56
|
|
0.75
|
|
0.75
|
Unemployment rate
|
|
4.6
|
|
4.6
|
|
6.9
|
|
8.3
|
House price growth
|
|
6.0
|
|
26.3
|
|
(1.9)
|
|
(2.3)
|
Commercial real estate price growth
|
|
0.1
|
|
10.4
|
|
(0.6)
|
|
(1.1)
|
|
|
|
|
|
|
|
|
|
At 31 December 2018
|
|
|
|
|
|
|
|
|
Interest rate
|
|
1.75
|
|
4.00
|
|
1.75
|
|
1.25
|
Unemployment rate
|
|
4.8
|
|
4.3
|
|
6.3
|
|
8.6
|
House price growth
|
|
13.7
|
|
34.9
|
|
0.6
|
|
(1.6)
|
Commercial real estate price growth
|
|
0.1
|
|
26.9
|
|
(0.5)
|
|
(0.5)
|
|
|
|
|
|
|
|
|
|
|
|
Base case
|
|
Upside
|
|
Downside
|
|
Severe
downside
|
|
|
%
|
|
%
|
|
%
|
|
%
|
|
|
|
|
|
|
|
|
|
At 31 December 2019
|
|
|
|
|
|
|
|
|
Interest rate
|
|
0.75
|
|
0.75
|
|
0.35
|
|
0.01
|
Unemployment rate
|
|
3.8
|
|
3.4
|
|
3.9
|
|
3.9
|
House price growth
|
|
(1.9)
|
|
(0.8)
|
|
(14.8)
|
|
(33.1)
|
Commercial real estate price growth
|
|
(0.9)
|
|
0.3
|
|
(17.5)
|
|
(30.9)
|
|
|
|
|
|
|
|
|
|
At 31 December 2018
|
|
|
|
|
|
|
|
|
Interest rate
|
|
0.75
|
|
0.75
|
|
0.75
|
|
0.25
|
Unemployment rate
|
|
4.1
|
|
3.5
|
|
4.3
|
|
4.2
|
House price growth
|
|
0.4
|
|
2.3
|
|
(26.5)
|
|
(33.5)
|
Commercial real estate price growth
|
|
(0.1)
|
|
0.0
|
|
(23.8)
|
|
(33.8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2019
|
|
At 31 December 2018
|
||||||||
|
|
Base
|
|
Probability
|
|
|
|
Base
|
|
Probability
|
|
|
|
|
case
|
|
-weighted
|
|
Difference
|
|
case
|
|
-weighted
|
|
Difference
|
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UK mortgages
|
|
464
|
|
569
|
|
105
|
|
253
|
|
460
|
|
207
|
Other Retail
|
|
1,492
|
|
1,521
|
|
29
|
|
1,294
|
|
1,308
|
|
14
|
Commercial
|
|
1,258
|
|
1,315
|
|
57
|
|
1,472
|
|
1,513
|
|
41
|
Other
|
|
50
|
|
50
|
|
–
|
|
81
|
|
81
|
|
–
|
|
|
3,264
|
|
3,455
|
|
191
|
|
3,100
|
|
3,362
|
|
262
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2019
|
|
At 31 December 2018
|
||||
|
|
|
|
Upside
|
|
Downside
|
|
Upside
|
|
Downside
|
|
|
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
ECL allowance
|
|
|
|
3,001
|
|
3,677
|
|
2,775
|
|
3,573
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2019
|
|
At 31 December 2018
|
||||
|
|
|
|
10pp
|
|
10pp
|
|
10pp
|
|
10pp
|
|
|
|
|
increase
|
|
decrease
|
|
increase
|
|
decrease
|
|
|
|
|
in HPI
|
|
in HPI
|
|
in HPI
|
|
in HPI
|
|
|
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
ECL impact
|
|
|
|
(110)
|
|
147
|
|
(114)
|
|
154
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2019
|
|
At 31 December 2018
|
||||
|
|
|
|
1pp
|
|
1pp
|
|
1pp
|
|
1pp
|
|
|
|
|
increase in
|
|
decrease in
|
|
increase in
|
|
decrease in
|
|
|
|
|
unemployment
|
|
unemployment
|
|
unemployment
|
|
unemployment
|
|
|
|
|
|
|
|
|
£m
|
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
ECL impact
|
|
|
|
141
|
|
(143)
|
|
172
|
|
(155)
|
|
|
|
|
|
|
|
2019
|
|
20181
|
|
|
£m
|
|
£m
|
|
|
|
|
|
Profit before tax
|
|
4,393
|
|
5,960
|
UK corporation tax thereon
|
|
(835)
|
|
(1,132)
|
Impact of surcharge on banking profits
|
|
(364)
|
|
(409)
|
Non-deductible costs: conduct charges
|
|
(370)
|
|
(101)
|
Non-deductible costs: bank levy
|
|
(43)
|
|
(43)
|
Other non-deductible costs
|
|
(121)
|
|
(90)
|
Non-taxable income
|
|
40
|
|
87
|
Tax relief on coupons on other equity instruments
|
|
89
|
|
83
|
Tax-exempt gains on disposals
|
|
102
|
|
124
|
Recognition (derecognition) of losses that arose in prior
years
|
|
18
|
|
(9)
|
Remeasurement of deferred tax due to rate changes
|
|
(6)
|
|
32
|
Differences in overseas tax rates
|
|
(14)
|
|
6
|
Policyholder tax
|
|
(67)
|
|
(62)
|
Policyholder deferred tax asset in respect of life assurance
expenses
|
|
(53)
|
|
73
|
Adjustments in respect of prior years
|
|
237
|
|
(13)
|
Tax expense
|
|
(1,387)
|
|
(1,454)
|
|
|
1
|
Restated,
see note 1.
|
|
|
|
|
|
|
|
2019
|
|
20181
|
|
|
£m
|
|
£m
|
|
|
|
|
|
Profit attributable to equity shareholders – basic and
diluted
|
|
2,459
|
|
3,975
|
|
|
|
|
|
1
|
Restated,
see note 1.
|
p
|
|
|
|
|
|
|
2019
|
|
2018
|
|
|
million
|
|
million
|
|
|
|
|
|
Weighted average number of ordinary shares in issue –
basic
|
|
70,603
|
|
71,638
|
Adjustment for share options and awards
|
|
682
|
|
641
|
Weighted average number of ordinary shares in issue –
diluted
|
|
71,285
|
|
72,279
|
|
|
|
|
|
Basic earnings per share
|
|
3.5p
|
|
5.5p
|
Diluted earnings per share
|
|
3.4p
|
|
5.5p
|
|
|
Shares
quoted ex-dividend
|
16
April 2020
|
|
|
Record
date
|
17
April 2020
|
|
|
Final
date for joining or leaving the dividend reinvestment
plan
|
4 May
2020
|
|
|
Dividends
paid
|
27 May
2020
|
|
|
Shares
quoted ex-dividend
|
4 June
2020
|
Record
date
|
5 June
2020
|
Final
date for joining or leaving the dividend reinvestment
plan
|
19 June
2020
|
Dividends
paid
|
30 June
2020
|
|
|
Shares
quoted ex-dividend
|
6
August 2020
|
Record
date
|
7
August 2020
|
Final
date for joining or leaving the dividend reinvestment
plan
|
21
August 2020
|
Dividends
paid
|
14
September 2020
|
|
|
Shares
quoted ex-dividend
|
5
November 2020
|
Record
date
|
6
November 2020
|
Final
date for joining or leaving the dividend reinvestment
plan
|
20
November 2020
|
Dividends
paid
|
11
December 2020
|
|
|
Asset
quality ratio
|
The
underlying impairment charge for the period (on an annualised
basis) in respect of loans and advances to customers after releases
and write-backs, expressed as a percentage of average gross loans
and advances to customers for the period
|
Banking
net interest margin
|
Banking
net interest income on customer and product balances in the banking
businesses as a percentage of average gross banking
interest-earning assets for the period
|
Business
as usual costs
|
Operating
costs, less investment expensed and depreciation
|
Cost:income
ratio
|
Total
costs as a percentage of net income calculated on an underlying
basis
|
Gross
asset quality ratio
|
The
underlying impairment charge for the period (on an annualised
basis) in respect of loans and advances to customers before
releases and write-backs, expressed as a percentage of average
gross loans and advances to customers for the period
|
Loan to
deposit ratio
|
Loans
and advances to customers net of allowance for impairment losses
and excluding reverse repurchase agreements divided by customer
deposits excluding repurchase agreements on an underlying
basis
|
Jaws
|
The
difference between the period on period percentage change in net
income and the period on period change in total costs calculated on
an underlying basis
|
Present
value of new business premium
|
The
total single premium sales received in the period (on an annualised
basis) plus the discounted value of premiums expected to be
received over the term of the new regular premium
contracts
|
Return
on risk-weighted assets
|
Underlying
profit before tax divided by average risk-weighted
assets
|
Return
on tangible equity
|
Statutory
profit after tax adjusted to add back amortisation of intangible
assets, and to deduct profit attributable to non-controlling
interests and other equity holders, divided by average tangible net
assets
|
Tangible
net assets per share
|
Net
assets excluding intangible assets such as goodwill and
acquisition-related intangibles divided by the weighted average
number of ordinary shares in issue
|
Trading
surplus
|
Underlying
profit before impairment charge
|
Underlying,
‘or above the line’ profit
|
Statutory
profit adjusted for certain items as detailed in the Basis of
Presentation
|
Underlying
return on tangible equity
|
Underlying
profit after tax at the standard UK corporation tax rate adjusted
to add back amortisation of intangible assets, and to deduct profit
attributable to non-controlling interests and other equity holders,
divided by average tangible net assets
|