Group Finance Director's Report
Operating Expenses
Underlying operating expenses increased by 7% to £5,274m (2006 £4,908m). The increase of £366m over last year includes planned investments in International and Treasury & Asset Management, the implementation costs of our cost efficiency programme and the full consolidation of Lex which became a wholly owned subsidiary on 31 May 2006. Excluding Drive, underlying operating expenses increased by 8%.
| Year ended 31.12.2007 £m |
Year ended 31.12.2006 £m |
|
| Staff | 2,911 | 2,674 |
| Accommodation, repairs and maintenance | 450 | 421 |
| Technology | 273 | 238 |
| Marketing and communication | 380 | 367 |
| Depreciation: Property and equipment and intangible assets | 417 | 380 |
| Other | 843 | 828 |
| Underlying operating expenses | 5,274 | 4,908 |
| Operating lease depreciation | 985 | 812 |
| Change in investment contract liabilities | 2,538 | 2,910 |
| Net claims incurred on insurance contracts | 2,952 | 2,328 |
| Net change in insurance contract liabilities | 2,244 | 3,894 |
| Change in unallocated surplus | (50) | 569 |
| Total | 13,943 | 15,421 |
Underlying operating expenses analysed by division:
| Year ended 31.12.2007 £m |
Year ended 31.12.2006 £m |
|
| Retail | 2,147 | 2,127 |
| Corporate | 885 | 812 |
| Insurance & Investment | 849 | 820 |
| International | 714 | 573 |
| Treasury & Asset Management | 342 | 292 |
| Group Items | 337 | 241 |
| Underlying operating expenses (excluding Drive) | 5,274 | 4,865 |
| Drive | 43 | |
| Underlying operating expenses (including Drive) | 5,274 | 4,908 |