Total capital ratio 9.0 per cent; tier 1 capital ratio 8.2 per cent.
Everybody seems to want to be in the money business. New competitors are popping up all over the place.
• Telephone Banking. Telephone Banking continues to grow and the Group provides one of the largest telephony services in Europe.
Channel Islands and Isle of Man, as well as its operations in
Profit before tax on a statutory basis rose by £265 million, or 7 per cent, to £3,886 million from £3,621 million in 1999.
Our Corporate and Financial Institutions businesses, serving the larger corporate market and financial institutions, achieved record results. Corporate Banking’s continuing focus on quality income growth ensured another strong performance. Bad debt provisions remain at a relatively low level. Lloyds TSB Leasing maintained its position as the largest ‘big ticket’ leasing company in the UK and Lloyds TSB Commercial Banking, serving the commercial middle market, continued to perform well, with revenue increases, tight cost control and lower provisions all contributing to the achievement of record profits for the year. Lloyds TSB Commercial Finance and Alex Lawrie Factors, two of the leading invoice discounting and factoring companies in the UK, expanded their range of specialist products and services and continued to grow their market share.
ACL Autolease Holdings Limited (‘Chartered Trust’), the UK consumer finance and contract hire subsidiaries of Standard
c) Net interest margin is net interest income as a percentage of average interest-earning assets. d) The analysis of net interest income by domestic and international operations shown above is based on the location of the office recording the transaction, except for lending by the international business booked in London. For details of payments made under cash gift and discount mortgage schemes, see page 65, note 31.
Total operating expenses 3,952 3,417afffffffffffffffffffffffffff afffffffffffffffffffffffffff Efficiency ratio 46.7% 43.1% Efficiency ratio* 43.6% 42.7%
Staff numbers increased by 1,484 to 77,540 during 2000. Excluding an increase of 3,061 staff following the acquisition of
Exceptional restructuring costs totalling £188 million were charged to the 2000 profit and loss account. The majority of these costs related to an efficiency programme announced in February 2000, but there was also a £21 million restructuring provision to cover the costs of integrating Chartered Trust and Lloyds UDT.
The Group’s activities can be divided into three broad categories: banking and mortgages, insurance and investments, and trading activities.
• Establishment and maintenance of the Group’s large exposure policy. Exposure to individual counterparties or groups of counterparties is controlled through a tiered hierarchy of delegated sanctioning authorities. Approval requirements for each decision are based on the transaction amount, the customer’s aggregate facilities, credit risk ratings and the nature of the risk. Regular reports on significant credit exposures are provided to the group executive committee and board.
Options to acquire shares (continued) Options outstanding are exercisable between 2001 and 2010.
Profit on ordinary activities after tax 2,773 2,520 Minority interests: equity 13 6
Fees and commissions receivable 2,480 288 2,768 Dealing profits (before expenses) 149 49 198 Income from long-term assurance business 607 8 615 General insurance premium income 399 – 399 Other operating income 270 111 381 aaaaaffffffffffffffffffffffffff aaaaaffffffffffffffffffffffffff aaaaaffffffffffffffffffffffffff
Following the acquisition of the business of Scottish Widows, a detailed review of the economic assumptions used in the embedded value calculation has been carried out, to ensure that these assumptions remain appropriate for the enlarged life and pensions business in the context of forecast longterm economic trends. As a result of this review certain assumptions have been amended, including the risk-adjusted discount rate which has been reduced from 10 per cent to 8.5 per cent. The principal assumptions are shown below, together with those used in 1999: aaaaaffffffffffffffffffffffffff aaaaaffffffffffffffffffffffffff
Exchange and other adjustments – 5 – 1 – – 6 aaaaaffffffffffffffffffffffffff aaaaaffffffffffffffffffffffffff aaaaaffffffffffffffffffffffffff aaaaaffffffffffffffffffffffffff aaaaaffffffffffffffffffffffffff aaaaaffffffffffffffffffffffffff aaaaaffffffffffffffffffffffffff
Dated loan capital: ‡ Eurocurrency Zero Coupon Bonds 2003 (¥3 billion) 15 15 15 15 § Subordinated Fixed Rate Bonds 2003 (NZ$165 million) 49 65 – – † Subordinated Floating Rate Notes 2004 20 25 – –
Amended balance at 1 January 2000 – 4,131afffffffffffffffffffffffffff Increase in net tangible assets of subsidiary undertakings 955 aaaaaffffffffffffffffffffffffff
Amended balance at 1 January 2000 6,445 2,769 Exchange and other adjustments (68) – Shares issued to the QUEST (note 29) (124) (128) Goodwill written back on sale and closure of businesses 109 – Retained profit 1,041 16 aaaaaffffffffffffffffffffffffff aaaaaffffffffffffffffffffffffff
Notional Fair values principal aasdaaaffffffffffffffffffffffffffaaaaaffffffffffffffffffffffffffds amount Assets Liabilities aaaaaffffffffffffffffffffffffff aaaaaffffffffffffffffffffffffff aaaaaffffffffffffffffffffffffff
Total assets 85,582 6,615 6,937 31,419 7,449 14,714 152,716afffffffffffffffffffffffffff afffffffffffffffffffffffffff afffffffffffffffffffffffffff afffffffffffffffffffffffffff afffffffffffffffffffffffffff afffffffffffffffffffffffffff afffffffffffffffffffffffffff Liabilities: Minority interests and shareholders’ funds – – – – – 10,269 10,269 aaaaaffffffffffffffffffffffffff aaaaaffffffffffffffffffffffffff aaaaaffffffffffffffffffffffffff aaaaaffffffffffffffffffffffffff aaaaaffffffffffffffffffffffffff aaaaaffffffffffffffffffffffffff aaaaaffffffffffffffffffffffffff
The net losses arising in 1999 and earlier years and recognised in 2000 amounted to £32 million. Net losses of £200 million arose in 2000 but were not recognised in the year.
Cash and balances with central banks 1,027 1,276 Loans and advances to banks repayable on demand 2,794 1,132 aaaaaffffffffffffffffffffffffff aaaaaffffffffffffffffffffffffff 3,821 2,408afffffffffffffffffffffffffff afffffffffffffffffffffffffff The Group is required to maintain balances with the Bank of England which, at 31 December 2000, amounted to £142 million (1999: £128 million).