Group Finance Director's Report
Balance Sheet and Credit Quality Analysis
| Retail £bn |
Corporate £bn |
International £bn |
Treasury & Asset Mgmt £bn |
Total 31.12.2007 £bn |
Total 31.12.2006 £bn |
|
| Loans and advances to customers | 253.4 | 109.3 | 67.1 | 0.2 | 430.0 | 376.8 |
| Impairment provisions | 2.3 | 0.8 | 0.3 | 3.4 | 3.1 | |
| Loans and advances to customers (before provisions) | 255.7 | 110.1 | 67.4 | 0.2 | 433.4 | 379.9 |
| Customer deposits | 158.3 | 44.1 | 23.6 | 17.2 | 243.2 | 211.9 |
| Risk weighted assets (Basel I) | 117.6 | 129.0 | 56.9 | 26.0 | 330.8* | 276.0* |
* Includes risk weighted assets of £1.3bn (2006 £0.8bn) attributable to Insurance & Investment.
Loans and advances to customers increased by 14% to £430.0bn (2006 £376.8bn). The increase was 7% in Retail, 22% in Corporate and 38% in International.
Customer deposits increased by 15% to £243.2bn (2006 £211.9bn) and wholesale funding increased by 16% to £248.0bn (2006 £214.2bn).
Classification of advances
The mix of the Group’s gross lending portfolio at the year end is summarised in the following table:
| As at 31.12.2007 % |
As a t31.12.2006 % |
|
| Manufacturing industry | 1 | 1 |
| Construction and property | 8 | 8 |
| Hotels, restaurants and wholesale and retail trade | 2 | 2 |
| Transport, storage and communication | 1 | 2 |
| Financial | 1 | 2 |
| Other services | 6 | 5 |
| Individuals: | ||
| Residential Mortgages | 55 | 58 |
| Other personal lending | 5 | 5 |
| Overseas residents | 21 | 17 |
| Total | 100 | 100 |
Credit Quality & Provisions
The total charge for loan impairment losses against Group profits was £2,012m (2006 £1,742m), a 15% increase which represents 0.50% of average advances (2006 0.48%).
| Impairment Provisions | Total £m |
| At 1 January 2007 | 3,089 |
| Amounts written off during the year | (1,726) |
| New impairment provisions less releases | 2,111 |
| Exchange movements | 28 |
| Discount unwind on impaired advances | (129) |
| Closing balance at 31 December 2007 | 3,373 |
| New impairment provisions less releases | 2,111 |
| Recoveries of amounts previously written off | (99) |
| Net charge to income statement | 2,012 |