Total debt securities held at fair value through profit or loss 30,699 1,937 32,636 32,396 2,144 34,540
2 Other comprises sub‑investment grade (2018: £411 million; 2017: £331 million) and not rated (2018: £1,545 million; 2017: £1,972 million) .
2 Other comprises sub‑investment grade (2018: £1,920 million; 2017: £1,878 million) and not rated (2018: £344 million; 2017: £340 million) .
Mortgages An analysis by loan‑to‑value ratio of the Group's residential mortgage lending is provided below. The value of collateral used in determining the loan‑to‑value ratios has been estimated based upon the last actual valuation, adjusted to take into account subsequent movements in house prices, after making allowances for indexation error and dilapidations.
At 31 December 2017 70 per cent to 80 per cent 41,323 754 544 42,621 80 per cent to 90 per cent 22,421 422 398 23,241 90 per cent to 100 per cent 5,036 145 209 5,390
Other The majority of non‑mortgage retail lending is unsecured. At 31 December 2018, Stage 3 non‑mortgage lending amounted to £631 million, net of an impairment allowance of £366 million (2017: impaired non‑mortgage lending amounted to £817 million, net of an impairment allowance of £542 million).
The Group credit risk disclosures for unimpaired non‑mortgage retail lending report assets gross of collateral and therefore disclose the maximum loss exposure. The Group believes that this approach is appropriate.
Reverse repurchase transactions At 31 December 2018 there were reverse repurchase agreements which were accounted for as collateralised loans with a carrying value of £40,483 million (2017: £16,832 million), against which the Group held collateral with a fair value of £42,339 million (2017: £17,122 million), all of which the Group was able to repledge. Included in these amounts were collateral balances in the form of cash provided in respect of reverse repurchase agreements of £nil (2017: £nil). These transactions were generally conducted under terms that are usual and customary for standard secured lending activities.
Securities lending transactions The following on balance sheet financial assets have been lent to counterparties under securities lending transactions: 2018 £m 2017 £m
Loans and advances to banks 2,594 520 584 172 203 160 – 2,050 6,283
Loans and advances to customers 36,326 19,383 18,415 14,378 11,318 30,459 72,028 282,551 484,858
Loans and advances to banks 3,104 314 190 190 192 131 2,405 85 6,611
Available‑for‑sale financial assets 59 365 286 1,025 265 3,040 15,366 21,692 42,098
Change in derivative financial instruments and financial assets at fair value through profit or loss 22,046 9,916 (13,889)
Change in derivative financial instruments and liabilities at fair value through profit or loss (24,606) (12,481) 11,265
Net gain on sale of financial assets at fair value through other comprehensive income (2017: available‑for‑sale financial assets) (275) (446) (575)
Share of post‑tax results of associates and joint ventures (9) (6) 1
2 When considering the movement on each line of the balance sheet, the impact of foreign exchange rate movements is removed in order to show the underlying cash impact.
Total cash and cash equivalents 55,224 60,982 62,388 1 Mandatory reserve deposits are held with local central banks in accordance with statutory requirements; these deposits are not available to finance the Group’s day‑to‑day operations.
Items in course of collection from banks 755 − − − 755
Financial liabilities at fair value through profit or loss 50,877 58 − − 50,935
Note 54: Adoption of IFRS 9 and IFRS 15 continued Reclassifications On transition to IFRS 9, the Group assessed its business models in order to determine the appropriate classification. The Retail and Commercial Banking loan books are generally held to collect contractual cash flows until the lending matures and met the criteria to remain at amortised cost. Certain portfolios which are subject to higher levels of sales were reclassified as fair value through other comprehensive income. Within the Group’s insurance business, assets are managed on a fair value basis and so continued to be accounted for at fair value through profit or loss.
The standard will have a significant impact on the accounting for the insurance and participating investment contracts issued by the Group.
Issue of other equity instruments – – – (7) (7) 1,136 1,129
Movements in the merger reserve were as follows: 2018 £m 2017 £m 2016 £m
Issue costs of other equity instruments (net of tax) (7) – –
Guarantees The Company guarantees certain of its subsidiaries’ liabilities to the Bank of England.
Note 9: Financial instruments Measurement basis of financial assets and liabilities The accounting policies in note 2 to the consolidated financial statements describe how different classes of financial instruments are measured, and how income and expenses, including fair value gains and losses, are recognised. The following table analyses the carrying amounts of the Company’s financial assets and liabilities by category and by balance sheet heading.
Derivatives designated as hedging instruments, held at fair value through profit or loss £m
Financial assets at fair value through profit or loss 588 – – – 588
Note 49 to the consolidated financial statements outlines the valuation hierarchy into which financial instruments measured at fair value are categorised.
Valuation hierarchy The table below analyses the assets and liabilities of the Company. With the exception of derivatives all assets and liabilities are held at amortised cost. They are categorised into levels 1 to 3 based on the degree to which their fair value is observable. No assets or liabilities were categorised as level 1 (2017: nil) .
The carrying amount of cash and cash equivalents (2018: £57 million; 2017: £272 million) is a reasonable approximation of fair value.
We are continuing to work with Macmillan to reduce money worries for people living with cancer, by providing a bespoke service offering financial support following a diagnosis. Macmillan has trained a number of our colleagues working in specialist customer facing teams across the Group. Colleagues are able to support customers to manage their money in ways that suit their personal needs whilst being able to direct customers to Macmillan for emotional and practical support as well as financial guidance support. In turn, Macmillan’s financial guidance team actively refer clients directly to our Cancer Support Team. This two way partnership means customers gain the support they need from an emotional, practical and financial perspective.
Mailing of Annual Report and Accounts, Annual Review or Performance Summary Mar
1 The Group has adopted IFRS9 and IFRS15 with effect from 1 January 2018; in accordance with the transition requirements of the two standards, comparative information has not been restated.
Lloyds Banking Group may also make or disclose written and/or oral forward looking statements in reports filed with or furnished to the US Securities and Exchange Commission, Lloyds Banking Group annual reviews, half-year announcements, proxy statements, offering circulars, prospectuses, press releases and other written materials and in oral statements made by the directors, officers or employees of Lloyds Banking Group to third parties, including financial analysts. Except as required by any applicable law or regulation, the forward looking statements contained in this Annual Report are made as of the date hereof, and Lloyds Banking Group expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward looking statements contained in this Annual Report to reflect any change in Lloyds Banking Group’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
Asset quality ratio The underlying impairment charge for the period (on an annualised basis) in respect of loans and advances to customers after releases and write-backs, expressed as a percentage of average gross loans and advances to customers for the period.
Jaws The difference between the period on period percentage change in net income and the period on period change in operating costs calculated on an underlying basis.
Return on tangible equity Statutory profit after tax adjusted to add back amortisation of intangible assets, and to deduct profit attributable to non-controlling interests and other equity holders, divided by average tangible net assets.
A G Finance Ltd 7 ii # A.C.L. Ltd 1 ACL Autolease Holdings Ltd 1 ADF No.1 Pty Ltd 8 Alex Lawrie Factors Ltd 9 Alex. Lawrie Receivables Financing Ltd 9 Alexanderplatz 2017 GmbH 59 Amberdate Ltd 1 iv AN Vehicle Finance Ltd (In liquidation) 13 Anglo Scottish Utilities Partnership 1 + * Aquilus Ltd 1 Automobile Association Personal Finance Ltd 4 Bank of Scotland (B G S) Nominees Ltd 5 * Bank of Scotland (Stanlife) London Nominees Ltd 5 * Bank of Scotland Branch Nominees Ltd 5 Bank of Scotland Capital Funding (Jersey) Ltd
Bank of Scotland Central Nominees Ltd 5 * Bank of Scotland Edinburgh Nominees Ltd 5 * Bank of Scotland Equipment Finance Ltd 2 Bank of Scotland HongKong Nominees Ltd
BOSSAF Rail Ltd 1 BOS Personal Lending Ltd 4 i ii British Linen Leasing (London) Ltd 5 British Linen Leasing Ltd 5 British Linen Shipping Ltd 5 C&G Estate Agents Ltd (In liquidation) 13 C.T.S.B. Leasing Ltd (In liquidation) 13 Capital 1945 Ltd 2 Capital Bank Insurance Services Ltd
Capital Leasing (Edinburgh) Ltd (In liquidation) 73 Capital Personal Finance Ltd 4 Car Ownership Finance Ltd (In liquidation) 13 Cardnet Merchant Services Ltd 1 i #
Clerical Medical Finance plc 20 Clerical Medical Financial Services Ltd 20 Clerical Medical Forestry Ltd (In liquidation) 13 Clerical Medical International Holdings B.V. 21 Clerical Medical Investment Fund Managers Ltd 4 Clerical Medical Managed Funds Ltd
HBOS Social Housing Covered Bonds LLP 2 * HBOS UK Ltd 5 Heidi Finance Holdings (UK) Ltd 1 Hill Samuel Bank Ltd 1 Hill Samuel Finance Ltd 1 iv xi Hill Samuel Leasing Co. Ltd 1 Hill Samuel Nominees Asia Private Ltd
Lex Vehicle Leasing Ltd 2 Lime Street (Funding) Ltd 1 Lloyds (General Partner) Ltd (In liquidation) 58 Lloyds (Gresham) Ltd 1 x Lloyds (Gresham) No. 1 Ltd 1 Lloyds (Nimrod) Specialist Finance Ltd 1 Lloyds America Securities Corporation 14 Lloyds Asset Leasing Ltd 1 Lloyds Bank (BLSA) (In liquidation) 13 Lloyds Bank (Branches) Nominees Ltd 1 Lloyds Bank (Colonial & Foreign) Nominees Ltd 1 Lloyds Bank (Fountainbridge 1) Ltd 5 Lloyds Bank (Fountainbridge 2) Ltd 5 Lloyds Bank (Gibraltar) Ltd 42 Lloyds Bank (I.D.) Nominees Ltd 1 Lloyds Bank (PEP Nominees) Ltd (In liquidation) 13 Lloyds Bank (Stock Exchange Branch)
Lloyds Bank General Insurance Holdings Ltd 45 Lloyds Bank General Insurance Ltd 1 Lloyds Bank General Leasing (No. 3) Ltd 1 Lloyds Bank General Leasing (No. 5) Ltd 1 Lloyds Bank General Leasing (No. 11) Ltd 1 Lloyds Bank General Leasing (No. 17) Ltd 1 Lloyds Bank General Leasing (No. 20) Ltd
Lloyds Bank Maritime Leasing Ltd (In liquidation) 13 Lloyds Bank MTCH Ltd 1 Lloyds Bank Nominees Ltd 1 Lloyds Bank Offshore Pension Trust Ltd 58 Lloyds Bank Pension ABCS (No. 1) LLP 1 * Lloyds Bank Pension ABCS (No. 2) LLP 1 * Lloyds Bank Pension Trust (No. 1) Ltd 1 Lloyds Bank Pension Trust (No. 2) Ltd 1 Lloyds Bank Pensions Property (Guernsey) Ltd 34 i ii Lloyds Bank plc 1 ̂
̂x Lloyds Bank Properties Ltd 1 Lloyds Bank Property Company Ltd 1 Lloyds Bank S.F. Nominees Ltd 1 Lloyds Bank Subsidiaries Ltd 1 Lloyds Bank Trust Company (International) Ltd
Lloyds TSB Pacific Ltd 51 Lloyds UDT Asset Leasing Ltd (In liquidation) 1 Lloyds UDT Asset Rentals Ltd 1 Lloyds UDT Business Development Ltd
Scottish Widows Administration Services Ltd 1 Scottish Widows Annuities Ltd (In liquidation) 73 Scottish Widows Auto Enrolment Services Ltd 1 Scottish Widows Europe 72 Scottish Widows Financial Services Holdings 3 Scottish Widows’ Fund and Life Assurance
Connery Ltd 20% 44 Esplanade St Helier Jersey JE4 9WG & Continental Shelf 225 Ltd (In liquidation) 100% 4 Mount Ephraim Road, Tunbridge Wells, Kent, TN1 1EE i & Continental Shelf 291 Ltd (In liquidation) 100% 4 Mount Ephraim Road, Tunbridge Wells, Kent, TN1 1EE i & Cruden Homes (Aberlady) Limited 50% Baberton House, Juniper Green, Edinburgh, EH14 3HN, United Kingdom i CTI Holdings Ltd 99% 7th Floor, 111 Piccadilly, Manchester, M1 2HY, United Kingdom i & D.U.K.E Real Estate Ltd 100% 1st Floor, Exchange Place, 3 Semple Street, Edinburgh, EH3 8BL ii ~ Devonshire Homes (Cullompton) Ltd 50% Devonshire House, Lowman Green, Tiverton, Devon, EX16 4LA i Devonshire Homes (Landkey) Ltd 50% Devonshire House, Lowman Green, Tiverton, Devon, EX16 4LA, United Kingdom i Devonshire Homes (St Austell) Ltd 50% Devonshire House, Lowman Green, Tiverton, Devon, EX16 4LA, United Kingdom i DHHG1 Limited 50% 220 West George Street, Glasgow, G2 2PG, United Kingdom i Dino Newco Ltd 89.25% Unit 2, Orchard Place, Nottingham Business Park, Nottingham, NG8 6PX i & Duchy Homes (Penistone) Ltd 50% Middleton House, Westland Road, Leeds, West Yorkshire, LS11 5UH i Duchy Homes (Scawthorpe) Ltd 50% Middleton House, Westland Road, Leeds, West Yorkshire, LS11 5UH i Duncan and Todd Holdings Limited 89.25% 6 Queens Road, Abderdeen, AB15 4ZT i& Ediston Homes Sauchie Ltd 50% 39/1 George Street, Edinburgh, EH2 2HN i Eley Group Ltd 85.85% Selco Way, Off First Avenue, Minworth Industrial Estate, Minworth, Sutton Coldfield, B76 1BA i & Ellis Whittam (Holdings) Ltd 89.25% Woodhouse, Aldford, Chester, CH3 6JD i & Ensco 997 Limited 32.74% The Yard Dodd Lane, Westhoughton, Bolton, Bl5 3NU iv & Ensek Holdings Limited 99% The Watercourt, 116-118 Canal Street, Nottingham, NG1 7HF xx & Equiom Holdings Ltd 99% Jubilee Buildings, Victoria Street, Douglas, Isle of Man, IM1 2SH i & Erris Homes (Almondbury) Ltd 50% Unit 11 Acorn Business Park, Killingbeck Drive, Leeds, LS14 6UF, United Kingdom i Europa Property Company (Northern) Ltd 100% Europa House, 20 Esplanade, Scarborough, North Yorkshire, YO11 2AQ vii & European Property Fund (Holdings) Ltd SARL 24.9% 1 Allee Scheffer, Luxembourg, l-25250, Luxembourg xxvii & Everest Acquisition Company Limited 89.25% 1 Park Row, Leeds, LS1 5AB i & Express Engineering (Group) Ltd 26.98% Kingsway North, Team Valley Trading Estate, Gateshead, NE11 0EG iii & 99% i FDL Salterns Ltd 50% 2 Poole Road, Bournemouth, BH2 5QY i Fern Bay Seaside Village Ltd (In liquidation) 34.48% Septimus Roe Square, Level 8, 256 Adelaide Terrace, Perth, WA 6000, Australia i & FHR European Ventures LLP n/a CMS Cameron Mckenna LLP, 78 Cannon Street, London, EC4N 6AF * & Fuel Topco Ltd 89.25% 7-9 Fashion Street, London, E1 6PX, United Kingdom i & Galion (Lakeview) Ltd 50% Higher Hill Farm Butleigh Hill, Butleigh, Glastonbury, Somerset, BA6 8TW, United Kingdom i Ginger Acquisition Company Limited 89.25% Tudno Mill, Smith Street, Aston-Under-Lyne, Ol7 0DB, United Kingdom i & Great Wigmore Property Ltd 50% 33 Cavendish Square, London, W1G 0PW & Hamsard 3468 Limited 89.25% Squire Patton Boggs (UK) LLP (Ref:CSU), Rutland House, 148 Edmund Street, Birmingham, B3 2JR xx & Hedge End Place (Durkan) LLP n/a 4 Elstree Gate, Elstree Way, Borehamwood, Hertfordshire, WD6 1JD * Hedge End Place Hold Co Ltd 50% 25 Gresham Street, London, EC2V 7HN ~ Hillcrest Homes (Hurst Green) Limited 50% Mynshulls House, 14 Cateaton Street, Manchester, M3 1SQ i Hollins Homes (Newton) Ltd 50% Suite 4 No. 1 King Street, Manchester, M2 6AW, United Kingdom i Homes By Carlton (MSTG1) Ltd 50% Carlton House, 15 Parsons Court, Welbury Way, Newton Ayciffe, County Durham, DL5 6ZE i HTF Finco Limited 33.3% The Zenith Building, 26 Spring Gardens, Manchester, M2 1AB & Iglufastnet Ltd 89.25% 2nd Floor, 165 The Broadway, Wimbledon, London, SW19 1NE i & Ingleby (1884) Ltd 80.83% Fontana House, Works Road, Letchworth Garden City, SG6 1LD xx & 99% xxi Ingleby (2016) Ltd 89.25% Unit 22, Lodge Way, Lodge Farm Industrial Estate, Northampton, NN5 7US xx & James Taylor Homes (Kingston) Ltd 50% James Taylor House, St. Albans Road East, Hatfield, AL10 0HE, United Kingdom i Kenmore Capital 2 Ltd (In liquidation) 100% Grant Thornton UK LLP, 110 Queen Street, Glasgow, G1 3BX ii ~ Kenmore Capital 3 Ltd (In receivership) 100% Grant Thornton UK LLP, 110 Queen Street, Glasgow, G1 3BX ii ~ Kenmore Capital Ltd (In liquidation) 100% Grant Thornton UK LLP, 110 Queen Street, Glasgow, G1 3BX ii ~ Keoghs Topco Ltd 99% 2 The Parklands, Bolton, Lancashire, BL6 4SE xxix & 89% xxi 89% xxx
KITE Topco Limited 89.25% Winchester House, Oxford Science Park, Heatley Road, Oxford, OX4 4GE xxi & Lidcombe Unincorporated JV 50% Level 3, 1C Homebush Bay Drive, Rhodes NSW 2138, Australia * Linley & Simpson Holdings Ltd 89.25% 3 Greengate Cardale Park, Harrogate, North Yorkshire, HG3 1GY, United Kingdom i& London Topco Ltd 62.81% Gloucester Road, Cheltenham, Gloucester, GL51 8NR i & Mableford Ltd 50% Lindum Business Park Station Road, North Hykeham, Lincoln, LN6 3QX, United Kingdom i Magicard Holdings Ltd 89.25% Waverley House, Hampshire Road, Granby Industrial Estate, Weymouth, DT4 9XD xx & 89.25% xxi Mitrefinch Holdings Ltd 89.25% Mitrefinch House, Green Lane Trading Estate, Clifton, York, North Yorkshire, YO30 5YY i & Motability Operations Group plc 20% (40%) City Gate House, 22 Southwark Bridge Road, London, SE1 9HB
Northern Edge Ltd 39.4% The Beacon, 176 St. Vincent Street, Glasgow, G2 5SG ii & Omnium Leasing Company 39% N/A + Onapp (Topco) II Ltd 82.5% 3MC Middlemarch Business Park, Siskin Drive, Coventry, United Kingdom, CV3 4FJ i & 100% iv Onapp (Topco) Ltd 82.5% 3MC Middlemarch Business Park, Siskin Drive, Coventry, United Kingdom, CV3 4FJ xx & 82.5% xxi Optimal Audio Group Ltd 89.25% Unit 2 Century Point Halifax Road, Cressex Business Park, High Wycombe, Buckinghamshire, HP12 3SL,
ABERDEEN INVESTMENT ICVC 8 Aberdeen European Property Share Fund 48% Aberdeen Sterling Bond Fund 78% Aberdeen European Global High Yield Bond Fund 23% Aberdeen Sterling Opportunistic Corporate Bond Fund 35%
SCOTTISH WIDOWS INCOME AND GROWTH FUNDS ICVC 2 UK Index Linked Gilt Fund 100%
UK All Share Tracker Fund 92% International Bond Fund 31% UK Smaller Companies Fund 28% UK Tracker Fund 47% UK Fixed Interest Tracker Fund 97% Emerging Markets Fund 88% UK Index-Linked Tracker Fund 49%
STREET, LONDON EC4V 4LA (11) 3rd Floor South, 55 Baker Street, London, W1U 8EW (12) Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxfordshire, RG9 1HH (13) JP Morgan Funds Limited, 3 Lochside View, Edinburgh Park, Edinburgh, EH12 9DH (14) Nordea Investment Funds S.A., 562 rue de Neudorf, L-2220 Luxembourg (15) 78 SIR JOHN ROGERSON'S QUAY, DUBLIN 2, IRELAND (16) SCHRODER UNIT TRUSTS LIMITED, 31 GRESHAM STREET, LONDON, EC2V 7QA (17) UBS INVESTMENT FUNDS ICVC, 21 LOMBARD STREET, LONDON, EC3V 9AH (18) Oppenheim Asset Management Services S.à r.l. , 2, Boulevard Konrad Adenauer, L-1115
Singapore, 048583 (51) 18th Floor, United Centre, 95 Queensway, Hong Kong (52) Finance House, Orchard Brae, Edinburgh, EH4 1PF (53) 55 Baker Street, London, W1U 7EU (54) 15 Dalkeith Road, Edinburgh, EH16 5BU (55) Lichtenauerlann 170, 3062ME, Rotterdam, Netherlands (56) 48 Boulevard Grande-Duchesse Charlotte, 1330, Luxembourg (57) Caledonian Exchange, 19A Canning Street, Edinburgh, EH3 8HE (58) 11-12 Esplanade, St Helier, Jersey, JE2 3QA (59) Karl-Liebknecht-STR. 5, D_10178 Berlin, Germany (60) P O Box 12, Peveril Buildings, Peveril Square, Douglas, Isle of Man, IM99 1JJ (61) 44 Esplanade, St. Helier, Jersey, JE4 9WG (62) IFC 5, St Helier, Jersey, JE1 1ST (63) 26 New Street St Helier Jersey JE2 3RA (64) Fred. Roeskestraat 123, 1076 EE, Amsterdam, Netherlands (65) Avenue Louise 331-333, 1050 Brussels, Belgium (66) Naritaweg 165, 1043 BW, Amsterdam, Netherlands (67) Calle Pinar 7, 5°Izquierda, 28006, Madrid, Spain (68) 1-2 Victoria Buildings, Haddington Road, Dublin 4, Ireland (69) Wilmington Trust SP Services (London) Limited, Third Floor, 1 King’s Arms Yard, London,
Registered office The Mound Edinburgh EH1 1YZ Registered in Scotland no. SC95000