International
(The information set out below forms an integral part of the audited financial statements as described in the Accounting Policies section of the Financial Statements on page 160.)
| Asset Quality Information | As at 31.12.2007 £bn |
As at 31.12.2006 £bn |
| (i) Exposure | ||
| Loans and advances to customers | 67.1 | 48.7 |
| Impairment provisions on advances | 0.3 | 0.2 |
| Loans and advances to customers before impairment provisions | 67.4 | 48.9 |
| Classification of advances*: | % | % |
| Agriculture, forestry and fishing | 2 | 2 |
| Energy | 2 | 2 |
| Manufacturing industry | 3 | 3 |
| Construction and property | 27 | 26 |
| Hotels, restaurants and wholesale and retail trade | 9 | 10 |
| Transport, storage and communication | 2 | 2 |
| Financial | 3 | 3 |
| Other services | 8 | 7 |
| Individuals: | ||
| Home mortgages | 40 | 40 |
| Other personal lending | 4 | 5 |
| 100 | 100 | |
| (ii) Credit Quality | ||
| Loans and advances to customers* | £bn | £bn |
| Neither past due nor impaired | 65.9 | 47.6 |
| Past due but not impaired | 0.7 | 0.7 |
| Impaired | 0.8 | 0.6 |
| 67.4 | 48.9 | |
| Loans neither past due nor impaired* | % | % |
| Internal rating: | ||
| Better than satisfactory risk | 30 | 29 |
| Satisfactory risk | 60 | 62 |
| Viable but monitoring | 9 | 8 |
| High Risk | 1 | 1 |
| 100 | 100 |
| Loans past due but not impaired* | £m | £m |
| Past due 0 to 3 months | 714 | 642 |
| Past due 3 to 6 months | 2 | 10 |
| Past due more than 6 months | 8 | |
| 724 | 652 | |
| Impaired loans* | £m | £m |
| Past due 0 to 3 months | 354 | 299 |
| Past due 3 to 6 months | 170 | 88 |
| Past due 6 to 12 months | 122 | 74 |
| Past due over 12 months | 113 | 63 |
| Possession cases | 67 | 57 |
| 826 | 581 | |
| Impaired loans as a % of closing advances | 1.23% | 1.19% |
| Impairment provisions | £322m | £246m |
| Impairment provisions as a % of closing advances | 0.48% | 0.51% |
| Impairment provisions as a % of impaired loans | 39% | 42% |
* Before impairment provisions.
(End of information that forms an integral part of the audited financial statements.)
The results of our International businesses are converted to sterling monthly at the average exchange rate for the month (1). The average exchange rates for the respective reporting periods were:
| Year ended 31.12.2007 |
Year ended 31.12.2006 |
|
| £1 : Australian dollar | 2.39 | 2.45 |
| £1 : Euro | 1.46 | 1.47 |
| £1 : US dollar | 2.00 | 1.84 |
The closing exchange rates used in the conversion of the International balance sheets were:
| As at 31.12.2007 |
As at 31.12.2006 |
|
| £1 : Australian dollar | 2.28 | 2.49 |
| £1 : Euro | 1.36 | 1.49 |
| £1 : US dollar | 2.00 | 1.97 |
(1) Hedging policy – our policy is to hedge both our exposures to foreign exchange profits generated in the International businesses and our structural currency exposures arising from our investment in overseas subsidiaries. In respect of the profits earned in foreign currencies, our policy is to hedge the next year’s forecast earnings using forward contracts. The structural currency exposures are largely hedged with foreign currency borrowing.