We have made no secret of our desire to achieve an overseas deal. We have talked with our counterparts from many financial services companies, particularly in Europe and the US, and there is no doubt that
• Corporate and Commercial provides a wide range of banking and related services, including electronic banking, large value lease finance, share registration, venture capital, correspondent banking and capital markets services to major
(banking, treasury, large value lease finance, long-term agricultural finance, share registration, venture capital, factoring and invoice discounting, and other related services for major UK and multinational companies, banks and financial institutions, and medium-sized UK businesses; and Lloyds TSB Asset Finance)
Domestic net interest income increased by £268 million, or 7 per cent, to £4,224 million, notwithstanding a reduction of £33 million caused by a 3 basis point reduction in the underlying net interest margin. This represents 85 per cent of total group net interest income.
Net interest income from international operations increased by £89 million, or 14 per cent, to £720 million. This represents 15 per cent of total group net interest income. Strong volume growth in Brazil and New Zealand was offset by the effect of exchange rate movements. Average interest-earning assets on a local currency basis increased by 20 per cent but again this increase was partly offset by the effect of exchange rate movements. The net interest margin reduced by 5 basis points, as a result of lower margins in our Latin American businesses.
Further initiatives (cumulative) – – 155 180 190 aaaaaffffffffffffffffffffffffff aaaaaffffffffffffffffffffffffff aaaaaffffffffffffffffffffffffff aaaaaffffffffffffffffffffffffff aaaaaffffffffffffffffffffffffff
As a result of these various initiatives we expect that our business as usual costs in 2002 will grow by no more than the rate of inflation, resulting in a further improvement in the Group’s efficiency ratio and competitive position.
financial review management of risk The Board is responsible for determining the long-term strategy of the business, the markets in which the Group will operate and the level of risk acceptable to the Group in each area of its business.
Oversight’ responsibility under FSA rules. The role of such individuals is to ensure that management have in place within the business a control structure which creates awareness of the rules and regulations to which the Group is subject, and to monitor and report on adherence to these rules and regulations.
Note Figures for 2000 and earlier years have been restated to reflect the implementation of FRS 12, “Provisions, Contingent Liabilities and Contingent Assets”, FRS 15, “Tangible Fixed Assets”, FRS 18, “Accounting Policies”, and other minor adjustments.
Post-tax return on average risk-weighted assets* 2.53% 3.10% 3.04% 2.70% 2.52%
Archie G Kane Group Executive Director, IT and Operations Joined TSB Commercial Holdings in 1986 and held a number of senior and general management appointments in the Group before being appointed to the board in 2000. After some 10 years in the accountancy profession, joined General Telephone & Electronics Corporation in 1980, serving as finance director in the UK from 1983 to 1985. Chairman of the council of the Association for Payment Clearing Services. Aged 49.
remuneration policy during the year, it would be appropriate to await the outcome of the DTI consultation and the clarification which the proposed legislation would provide.
Lloyds TSB is ranked first against its comparator group, and will be reduced if below this level. The following table illustrates the percentage of the original grant to an executive director that will vest at each of the positions against the comparator group.
Performance conditions are set when the grant of options is made, and these options cannot normally be exercised unless the conditions have been met. To meet the performance conditions, the company’s ranking, based on total shareholder return (calculated by reference to both dividends and growth in share price) over the relevant (three year) period, against a comparator group of sixteen companies, must be at least ninth.
The remuneration committee has considered the provisions of the UK listing authority’s corporate governance code relating to compensation in the event of early termination of directors’
The chairman, the group chief executive and the group finance director have meetings with representatives of institutional shareholders and all shareholders are encouraged to participate in the Company’s annual general meeting.
Amortisation of goodwill 23 39 22 Depreciation and amortisation 550 386
Contingent liabilities: Acceptances and endorsements 2,243 357 Guarantees and assets pledged as collateral
Total gains and losses recognised during the year 2,662 2,583aafffffffffffffffffffffffffff aafffffffffffffffffffffffffff * restated (see note 1)
Profit on ordinary activities before tax is stated after taking account of: 2001 2000*
††The weighted average number of shares for the year has been calculated after deducting 15 million (2000: 9 million) ordinary shares held by Lloyds TSB Group Holdings (Jersey) Limited and the trustees of the TSB Group Employee Trust, the Lloyds TSB Group Employee Share Ownership Trust and the Lloyds TSB Qualifying Employee Share Ownership Trust, on which dividends have been waived (note 27).
The Group’s subsidiary, Black Horse Limited (formerly Chartered Trust plc), entered into transactions whereby it disposed of its interest in portfolios of motor vehicle and caravan instalment credit agreements for a total of £980 million to Cardiff Automobile Receivables Securitisation (UK) No 4 plc (CARS 4). CARS Trustee (UK) No 4 Limited is responsible for the collection and onward payment of all amounts falling due under the terms of the receivables sold to CARS 4. Principal receipts up to 10 December 2000 were used to purchase further receivables; subsequent to this date they are being used to redeem floating rate notes. Income receipts are applied in the following order of priority: interest due on the floating rate notes; credit manager fees; payments under swaps; amounts due to third parties; dividends; and residual income to Black Horse Limited. Black Horse Limited has been appointed by CARS Trustee (UK) No 4 Limited as credit manager and receives a fee for fulfilling this function. It has no liability to the noteholders or any creditor of CARS 4 or CARS Trustee (UK) No 4 Limited other than through failure to meet its obligations as credit manager or for breach of warranties given. Black Horse Limited has no interest in the share capital of CARS 4 or CARS Trustee (UK) No 4 Limited.
Income from long-term assurance business before tax 193 615 Attributed tax (78) (174)
✣ ¶ 61⁄2% Undated Subordinated Step-up Notes callable 2029 455 198 aaaaaffffffffffffffffffffffffff aaaaaffffffffffffffffffffffffff 3,651 3,391afffffffffffffffffffffffffff afffffffffffffffffffffffffffDated loan capital: ‡ Eurocurrency Zero Coupon Bonds 2003 (¥3 billion) 15 15 15 15 § Subordinated Fixed Rate Bonds 2003 (NZ$151 million) 43 49 – – † Subordinated Floating Rate Notes 2004 15 20 – –
At 31 December 3,683 3,821afffffffffffffffffffffffffff afffffffffffffffffffffffffff d Analysis of changes in financing during Share capital the year (including premium and merger reserve)
At 31 December 7,660 7,533affffffffffffffffffffffff afffffffffffffffffffffffffff e Analysis of the net cash outflow in 2001 2000 respect of the acquisition of group undertakings £m £m aaaaaffffffffffffffffffffffffff aaaaaffffffffffffffffffffffffff
Goodwill arising on consolidation 8 2,405 aaaaaffffffffffffffffffffffffff aaaaaffffffffffffffffffffffffff 10 6,588affffffffffffffffffffffffff afffffffffffffffffffffffffff Satisfied by: Issue of loan notes 9 1,077