Notes to the Financial Statements

for the year ended 31 December 2004

26 Banking Assets

		£m
26(a) Treasury bills and other eligible bills	At 31 December 2004	At 31 December 2003
Investment securities
Treasury bills and similar securities	1,223	792
Other eligible bills	177	31
	1,400	823
Other securities	85	65
	1,485	888

The movement in the book value of Treasury bills and other eligible bills held for investment purposes was as follows:
At beginning of year	823	923
Additions	1,498	1,173
Disposals	(1,023)	(1,367)
Foreign exchange and other movements	102	94
At end of year	1,400	823

Investment securities are those intended for use on a continuing basis and not for dealing purposes. The market value of Treasury bills and other eligible bills at 31 December 2004 was £1,485 million (R16,110 million) (2003: £857 million (R10,228 million)).

		£m
26(b) Loans and advances to banks	At 31 December 2004	At 31 December 2003
Remittances in transit	37	18
Other loans and advances to banks	2,485	2,074
	2,522	2,092

Maturity profile
Repayable on demand	1,016	1,711
Repayable within one year but not on demand	1,056	381
	2,522	2,092

			£m
26(c) Loans and advances to customers	Notes	Year to 31 December 2004	Year to 31 December 2003
Advances secured on residential properties		5,699	4,738
Leases and instalment debtors		2,682	2,967
Factoring accounts		53	54
Preference shares and debentures		532	511
Other loans and overdrafts		8,165	6,324
Loans granted under resale agreements		1	9
Other		648	1,132
Total loans and advances before provisions	26(e)	17,780	15,735
Provision for bad and doubtful debts	26(d)	(606)	(599)
Loans and advances to customers after provisions		17,174	15,136

Maturity profile
Repayable on demand or at short notice		1,436	3,697
Three months or less but not repayable on demand or at short notice		1,739	1,123
One year or less but over three months		1,486	906
Five years or less but over one year		5,725	4,761
Over five years		7,394	5,248
Provision for bad and doubtful debts		(606)	(599)
Loans and advances to customers after provisions		17,174	15,136

		£m
26(d) Loans and advances to customers provision for bad and doubtful debts	At 31 December 2004	At 31 December 2003
Non-performing loans
Value of non-performing loans before specific provisions	635	695
Specific provisions	(515)	(542)
Value of non-performing loans after specific provisions	120	153

Specific provisions
At beginning of year	542	350
Charge to profit and loss account	121	321
Recoveries of advances written-off in previous years	(19)	(8)
Amounts written-off in year	(210)	(185)
Foreign exchange and other movements	81	64
At end of year	515	542

General provisions
At beginning of year	57	124
Charge to profit and loss account	18	8
Amounts written back in year	-	(96)
Foreign exchange and other movements	16	21
At end of year	91	57
Total provision for bad and doubtful debts	606	599

		£m
26(e) Loans and advances to customers concentrations of exposure	At 31 December 2004	At 31 December 2003
Loans and advances before provisions
Individuals	8,738	7,236
Manufacturing	637	591
Asset management, insurance and real estate	4,063	3,930
Other industries	4,342	3,978
Loans and advances to customers before provisions	17,780	15,735

Specific provisions
Individuals	260	153
Manufacturing	10	10
Asset management, insurance and real estate	59	47
Other industries	186	332
Specific provisions against loans and other advances to customers	515	542

		£m
26(f) Debt securities	At 31 December 2004	At 31 December 2003
Book value
Investment securities
Government securities	1,425	1,254
Other public sector securities	50	70
Private sector securities Other securities	157	70
	1,632	1,394

Government securities	211	3
Other public sector securities	31
Private sector securities	60	23
	302	26
	1,934	1,420

The market value of debt securities at 31 December 2004 was £1,941 million (R21,049 million) (2003: £1,437 million (R17,149 million)).


Maturity profile book value
Due within one year	140	198
Due one year and over	1,794	1,222
	1,934	1,420

Investment securities analysed by listing status
Listed	1,539	1,368
Unlisted	93	26
	1,632	1,394

The movement in the book value of debt securities heldfor investment purposes was as follows:
At beginning of year	1,394	913
Additions	1,211	732
Disposals	(1,209)	(331)
Foreign exchange and other movements	236	80
At end of year	1,632	1,394

		£m
26(g) Equity securities and other variable yield securities	At 31 December 2004	At 31 December 2003
Book value
Investment securities
Listed on recognised investment exchanges	61	52
Unlisted	198	265
	259	317

Market value
Investment securities
Listed on recognised investment exchanges	71	43
Unlisted	248	263
	319	306

The movement in the book value of equity securities held for investment purposes was as follows:
At beginning of year	317	965
Additions	66	23
Disposals	(161)	(61)
Reclassification	-	(639)
Foreign exchange and other movements	37	29
At end of year	259	317

			£m
26(h) Investment in associated undertakings	Note	Year to 31 December 2004	Year to 31 December 2003
At beginning of year		144	124
Share of associated undertakings retained profit		5	14
Net (disposal)/acquisition of interests		(43)	19
Goodwill amortisation	18	(5)	(12)
Foreign exchange and other movements		(10)	(1)
At end of year		91	144

Represented by:
Net asset valuation		71	117
Unamortised goodwill on acquisition		20	27
		91	144