International
2007 Performance
Underlying profit before tax in International increased by 23% to £757m (2006 £617m), with all three businesses contributing to this growth. In Australia, we have achieved profit growth during a period of significant investment in people, technology and branches, as we continue our national expansion programme. Ireland continues to deliver strong profit growth despite the investment in our distribution capability. Europe & North America benefited from strong growth across all of the businesses.
Lending increased by 38% to £67.1bn (2006 £48.7bn) and deposits increased by 35% to £23.6bn (2006 £17.5bn).
| Income Statement | Year ended 31.12.2007 £m |
Year ended 31.12.2006 £m |
| Net interest income | 1,088 | 882 |
| Underlying non-interest income | 499 | 404 |
| Fees and commission income | 206 | 155 |
| Fees and commission expense | (223) | (189) |
| Change in value of in-force long term assurance business | 112 | 104 |
| Net income from long term business | 317 | 271 |
| Investment earnings on surplus assets attributable to shareholders using long term assumptions | 6 | 3 |
| Operating lease rental income | 15 | 21 |
| Other operating income | 62 | 53 |
| Share of profits of associates and jointly controlled entities | 17 | 5 |
| Operating lease depreciation | (12) | (17) |
| Impairment on investment securities | (1) | (2) |
| Underlying net operating income | 1,587 | 1,286 |
| Underlying operating expenses | (714) | (573) |
| Staff | (399) | (301) |
| Accommodation, repairs and maintenance | (49) | (40) |
| Technology | (49) | (32) |
| Marketing and communication | (53) | (43) |
| Depreciation: Property and equipment and intangible assets | (42) | (32) |
| Other | (116) | (123) |
| Sub total | (708) | (571) |
| Recharges: | ||
| Technology | (5) | (1) |
| Accommodation | (1) | (1) |
| Underlying operating profit before provisions | 873 | 713 |
| Impairment losses on loans and advances | (116) | (96) |
| Underlying profit before tax | 757 | 617 |
| Net interest margin | 1.93% | 1.97% |
| Impairment losses as a % of average advances | 0.20% | 0.22% |
| Cost:income ratio | 45.0% | 44.6% |
| Loans and advances to customers | £67.1bn | £48.7bn |
| Risk weighted assets | £56.9bn | £41.3bn |
| Customer deposits | £23.6bn | £17.5bn |