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	13,270	9,454
Other eligible bills	1,916	370
	15,186	9,824
Other securities	924	776
	16,110	10,600

The movement in the book value of Treasury bills and other eligible bills held for investment purposes was as follows:
At beginning of year	9,824	12,750
Additions	17,680	14,484
Disposals	(12,071)	(16,880)
Foreign exchange and other movements	(247)	(530)
At end of year	15,186	9,824

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	406	215
Other loans and advances to banks	26,952	24,757
	27,358	24,972

Maturity profile
Repayable on demand	11,023	20,424
Repayable within one year but not on demand	16,335	4,548
	27,358	24,972

			£m
26(c) Loans and advances to customers	Notes	Year to 31 December 2004	Year to 31 December 2003
Advances secured on residential properties		61,827	56,556
Leases and instalment debtors		29,100	35,416
Factoring accounts		579	645
Preference shares and debentures		5,768	6,100
Other loans and overdrafts		88,573	75,488
Loans granted under resale agreements		16	107
Other		7,031	13,512
Total loans and advances before provisions	26(e)	192,894	187,824
Provision for bad and doubtful debts	26(d)	(6,578)	(7,150)
Loans and advances to customers after provisions		186,316	180,674

Maturity profile
Repayable on demand or at short notice		15,573	44,130
Three months or less but not repayable on demand or at short notice		18,868	13,409
One year or less but over three months		16,124	10,811
Five years or less but over one year		62,106	56,826
Over five years		80,223	62,648
Provision for bad and doubtful debts		(6,578)	(7,150)
Loans and advances to customers after provisions		186,316	180,674

		£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	7,488	8,299
Specific provisions	(5,590)	(6,470)
Value of non-performing loans after specific provisions	1,898	1,829

Specific provisions
At beginning of year	6,470	4,835
Charge to profit and loss account	1,430	3,956
Recoveries of advances written-off in previous years	(227)	(98)
Amounts written-off in year	(2,474)	(2,289)
Foreign exchange and other movements	391	66
At end of year	5,590	6,470

General provisions
At beginning of year	680	1,713
Charge to profit and loss account	212	102
Amounts written back in year	-	(1,181)
Foreign exchange and other movements	96	46
At end of year	988	680
Total provision for bad and doubtful debts	6,578	7,150

		£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	94,790	86,374
Manufacturing	6,906	7,055
Asset management, insurance and real estate	44,076	46,911
Other industries	47,122	47,484
Loans and advances to customers before provisions	192,894	187,824

Specific provisions
Individuals	2,818	1,826
Manufacturing	105	119
Asset management, insurance and real estate	636	561
Other industries	2,031	3,964
Specific provisions against loans and other advances to customers	5,590	6,470

		£m
26(f) Debt securities	At 31 December 2004	At 31 December 2003
Book value
Investment securities
Government securities	15,448	14,969
Other public sector securities	546	836
Private sector securities Other securities	1,704	836
	17,698	16,641

Government securities	2,291	36
Other public sector securities	338
Private sector securities	649	275
	3,278	311
	20,976	16,952

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	1,519	2,363
Due one year and over	19,457	14,589
	20,976	16,952

Investment securities analysed by listing status
Listed	16,693	16,329
Unlisted	1,005	312
	17,698	16,641

The movement in the book value of debt securities heldfor investment purposes was as follows:
At beginning of year	16,641	12,612
Additions	14,289	9,039
Disposals	(14,267)	(4,087)
Foreign exchange and other movements	1,035	(923)
At end of year	17,698	16,641

		£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	665	621
Unlisted	2,146	3,163
	2,811	3,784

Market value
Investment securities
Listed on recognised investment exchanges	774	514
Unlisted	2,686	3,132
	3,460	3,646

The movement in the book value of equity securities held for investment purposes was as follows:
At beginning of year	3,784	13,331
Additions	784	285
Disposals	(1,898)	(754)
Reclassification	-	(7,891)
Foreign exchange and other movements	141	(1,187)
At end of year	2,811	3,784

			£m
26(h) Investment in associated undertakings	Note	Year to 31 December 2004	Year to 31 December 2003
At beginning of year		1,719	1,713
Share of associated undertakings retained profit		56	173
Net (disposal)/acquisition of interests		(506)	235
Goodwill amortisation	18	(52)	(148)
Foreign exchange and other movements		(230)	(254)
At end of year		987	1,719

Represented by:
Net asset valuation		770	1,396
Unamortised goodwill on acquisition		217	323
		987	1,719