Capital Structure
Capital Strategy
HBOS’ approach is to treat capital as a scarce resource. We take the view that capital is owned by the shareholders and we accept our task is to deploy it to achieve sustainable returns.
Click here to find out more about our Strategy.
Capital Structure
The capital position of HBOS Group is summarised in the table below.
Capital issuance details are available on our Debt Investor pages.
| Capital Structure Basel II |
As at 30.06.2008 Proforma basis £m |
As at 30.06.2008 £m |
As at 01.01.2008 £m |
|---|---|---|---|
| Risk Weighted Assets | 331,555 | 331,555 | 309,173 |
| Capital Resources | |||
| Core Tier 1 | |||
| Ordinary share capital | 1,338 | 938 | 933 |
| Eligible reserves | 23,924 | 20,324 | 20,421 |
| Minority interests | 118 | 118 | 123 |
| Perpetual non-cumulative preference shares | |||
| Preference share capital | 2,789 | 2,789 | 2,781 |
| Innovative Tier 1 | |||
| Preferred securities | 4,058 | 3,668 | 3,247 |
| Deductions from Tier 1 | |||
| Goodwill & other intangible assets | (2,949) | (2,949) | (2,862) |
| Excess expected loss | (778) | (778) | (875) |
| Other deductions | (66) | (66) | (37) |
| Total Tier 1 capital | 28,434 | 24,044 | 23,731 |
|
|
|||
| Upper Tier 2 | |||
| Available for sale reserve | 181 | 181 | 187 |
| Undated subordinated debt | 5,800 | 6,190 | 5,591 |
| Collectively assessed impairment provisions | 491 | 491 | 463 |
| Lower Tier 2 | |||
| Dated subordinated debt | 11,392 | 11,392 | 9,900 |
| Deductions from Tier 2 | |||
| Excess expected loss | (778) | (778) | (875) |
| Other deductions | (66) | (66) | (37) |
| Total Tier 2 capital | 17,020 | 17,410 | 15,229 |
| Supervisory deductions | |||
| Unconsolidated investments - life | (4,648) | (4,648) | (4,596) |
| Unconsolidated investments - other | (506) | (506) | (506) |
| Total supervisory deductions | (5,154) | (5,154) | (5,102) |
| Total Capital Resources | 40,300 | 36,300 | 33,858 |
| Tier 1 capital ratio (%) | 8.6 | 7.3 | 7.7 |
| Core Tier 1 ratio (%) | 6.5 | 5.3 | 5.7 |
| Total capital ratio (%) | 12.2 | 10.9 | 11.0 |
| Tier 1 gearing (%) | 24.1 | 26.9 | 25.4 |
