Sant Uk.10te% Regulatory News (SAN)

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Retail Banking;

> 

Corporate Banking;

> 

Markets; and

> 

Group Infrastructure.

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Retail Banking offers a comprehensive range of banking products and related financial services (residential mortgages, savings and banking, and other personal financial services products) to customers throughout the UK. It serves customers through the Santander UK network of branches and ATMs, as well as through telephone, internet channels and intermediaries. It also includes the private banking business which offers private banking and other specialist banking services in the UK and international banking.

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Corporate Banking provides a range of banking services principally to UK companies, with a focus on services for SMEs, providing a broad range of banking products including loans, bank accounts, deposits, treasury services, invoice discounts, cash transmission and asset finance. Small businesses with a turnover of less than £250,000 are serviced through the Business Banking division, while a network of 28 regionally-based Corporate Business Centres offers services to businesses with a turnover of £250,000 to £150m. In addition, Corporate Banking includes specialist teams servicing Real Estate, Social Housing and UK infrastructure clients.

Within Corporate Banking, the Large Corporates business is responsible for larger multinational corporate clients, including related activities principally comprising foreign exchange, money market and credit activities. These related activities are structured into two main product areas: Foreign exchange and money markets, and Credit. Foreign exchange offers a range of foreign exchange products and money markets runs the securities lending/borrowing and repo businesses. Credit originates loan and bond transactions in primary markets as well as their intermediation in secondary markets.

Legacy portfolios in run-off are also managed within Corporate Banking.

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Markets is a financial markets business focused on providing value added financial services to financial institutions, as well as to the rest of Santander UK's business. It is structured into two main product areas: Fixed income and Equity. Fixed Income covers sales and trading activity for fixed income products. Equity covers equity derivatives, property derivatives and commodities. Equity derivatives' activities include the manufacture of structured products sold to both the Group and other financial institutions who sell or distribute them on to their customers.

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Group Infrastructure consists of Asset and Liability Management ('ALM'), which is responsible for the Group's capital and funding, and the Treasury asset portfolio. ALM is responsible for managing the Group's structural balance sheet composition and strategic and tactical liquidity risk management. This includes short-term and medium-term funding, covered bond and securitisation programmes. ALM's responsibilities also include management of Santander UK's banking products and structural exposure to interest rates. The Treasury asset portfolio is being run down.

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Perimeter companies pre-acquisition trading basis results - Following the acquisition of the Santander Cards business and the shareholdings in the Santander Consumer and Santander Private Banking businesses not already owned by the Group (the 'Perimeter companies') in October and November 2010, as described in Note 46, the statutory results for the year ended 31 December 2011 include the consolidated results of all the Perimeter companies for the full year, whereas the statutory results for the year ended 31 December 2010 do not.

The statutory results for the year ended 31 December 2010 only included 49.9% of the profit before tax of Santander Consumer, reflecting the Group's shareholding at that time. The statutory results for the year ended 31 December 2010 included 100% of the profit before tax of Santander Private Banking but also a non-controlling interest, prior to the acquisition of the remaining 49% shareholding.

In order to enhance the comparability of the results for the two periods, management reviews the 2010 results including the pre-acquisition results of the Perimeter companies for that period.

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Reorganisation, customer remediation and other costs - These comprise implementation costs in relation to the strategic change and cost reduction process, costs in respect of customer remediation, and certain write-offs and impairment losses taken centrally. Management needs to understand the underlying drivers of the cost base and therefore adjusts for these costs, which are managed independently.

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Hedging and other variances - The Balance Sheet and Income Statement are subject to mark-to-market volatility including that arising from the accounting for elements of derivatives deemed under IFRS rules to be ineffective as hedges. Volatility also arises on certain assets previously managed on a fair value basis, and hence classified as fair value through profit or loss under IFRS, that are now managed on an accruals basis. Where appropriate, such volatility is separately identified to enable management to view the underlying performance of the business. In addition, other variances include the reversal of coupon payments on certain equity instruments which are treated as interest expense in the trading results but are reported below the profit after tax line for statutory purposes.

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Profit on part sale and revaluation of subsidiaries - These profits are excluded from the results to allow management to understand the underlying performance of the business. In 2011, there were no such profits. In 2010, the profit that arose on the revaluation of the Group's original holding in Santander Consumer (UK) plc on the acquisition of the remaining shares by the Group was excluded from the trading results. In addition, profits on the sale of James Hay and certain other businesses were excluded from the trading results. In 2009 there were no such profits.

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Depreciation of operating lease assets - The operating lease businesses are managed as financing businesses and, therefore, management needs to see the margin earned on the businesses. Residual value risk is separately managed. As a result, the depreciation is netted against the related income in the trading results.

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Capital and other charges - These principally comprise internal nominal charges for capital invested in the Group's businesses. Management implemented this charge to assess the effectiveness of capital investments.

2011

Retail

Banking

£m

Corporate Banking

£m

 Markets

£m

Group

Infrastructure

£m

Total

£m

Adjustments

£m

Group Total

£m

Net interest income/(expense)

3,399

427

(3)

(51)

3,772

58

3,830

Non-interest income/(expense)

753

411

162

(53)

1,273

82

1,355

Total trading income/(expense)

4,152

838

159

(104)

5,045

140

5,185

Administration expenses

(1,582)

(250)

(108)

(50)

(1,990)

(5)

(1,995)

Depreciation, amortisation and impairment

(206)

(12)

(3)

-

(221)

(226)

(447)

Total trading expenses

(1,788)

(262)

(111)

(50)

(2,211)

(231)

(2,442)

Impairment losses on loans and advances

(339)

(226)

-

-

(565)

-

(565)

Provisions for other liabilities and charges

-

(3)

(3)

(151)

(157)

(760)

(917)

Trading profit before tax

2,025

347

45

(305)

2,112

(851)

1,261

Adjust for:

- Reorg.n, customer remediation and other costs

(937)

-

-

-

(937)

- Hedging and other variances

(31)

-

-

117

86

- Capital and other charges

(141)

(35)

-

176

-

Profit before tax

916

312

45

(12)

1,261

Revenue from external customers

5,305

844

159

(1,263)

5,045

Inter-segment revenue

(1,153)

(6)

-

1,159

-

Total trading income

4,152

838

159

(104)

5,045

Customer assets

175,416

30,895

-

-

206,311

Total assets(1)

180,443

50,057

28,652

38,422

297,574

Customer deposits

120,052

29,139

-

-

149,191

Total liabilities

126,153

46,927

29,618

82,210

284,908

Average number of staff

18,590

1,936

260

133

20,919

2011

Net interest

income

£m

Non-

interest

income

£m

Administration

expenses

£m

Depreciation,

amortisation and impairment

£m

Impairment losses on loans and advances

£m

Provisions for other liabilities and charges

£m

Profit

before

tax

£m

Reorg.n, customer remediation and other costs

-

-

(5)

(172)

-

(760)

(937)

Depreciation of operating lease assets

-

54

-

(54)

-

-

-

Hedging and other variances

58

28

-

-

-

-

86

58

82

(5)

(226)

-

(760)

(851)

Retail

Banking

£m

Corporate Banking

£m

Markets

£m

Group

Infrastructure

£m

Total

£m

Net interest income

472

-

-

-

472

Non-interest income

44

-

-

-

44

Total operating income

516

-

-

-

516

Administration expenses

(205)

-

-

-

(205)

Depreciation, amortisation and impairment

(14)

-

-

-

(14)

Total operating expenses excluding provisions and charges

(219)

-

-

-

(219)

Impairment losses on loans and advances

(165)

-

-

-

(165)

Provision for other liabilities and charges

(10)

-

-

-

(10)

Total operating provisions and charges

(175)

-

-

-

(175)

Profit before tax

122

-

-

-

122

2010

Retail

Banking

£m

Corporate Banking

£m

 Markets

£m

Group

Infrastructure

£m

Total

£m

Adjustments

£m

Group Total

£m

Net interest income

3,494

357

-

302

4,153

(339)

3,814

Non-interest income/(expenses)

652

347

221

(80)

1,140

80

1,220

Total trading income

4,146

704

221

222

5,293

(259)

5,034

Administration expenses

(1,615)

(246)

(74)

(48)

(1,983)

190

(1,793)

Depreciation, amortisation and impairment

(175)

(11)

(2)

-

(188)

(87)

(275)

Total trading expenses

(1,790)

(257)

(76)

(48)

(2,171)

103

(2,068)

Impairment losses on loans and advances

(703)

(168)

-

(40)

(911)

199

(712)

Provisions for other liabilities and charges

-

-

-

-

-

(129)

(129)

Trading profit before tax

1,653

279

145

134

2,211

(86)

2,125

Adjust for:

- Perimeter co. pre-acquisition trading basis results

(95)

-

-

25

(70)

- Reorg.n, customer remediation and other costs

(155)

-

-

40

(115)

- Profit on part sale and revaluation of subs

-

-

-

126

126

- Hedging and other variances

(31)

-

-

4

(27)

- Capital and other charges

(81)

(32)

-

113

-

Profit before tax

1,291

247

145

442

2,125

Revenue from external customers

5,796

929

221

(1,653)

5,293

Inter-segment revenue

(1,650)

(225)

-

1,875

-

Total trading income

4,146

704

221

222

5,293

Customer assets

175,431

26,660

-

-

202,091

Total assets(1)

180, 672

49,718

22,070

50,400

302,860

Customer deposits

125,721

27,776

-

-

153,497

Total liabilities

130,778

50,229

22,835

86,744

290,586

Average number of staff

16,714

1,927

184

122

18,947

2010

Net

interest

income

£m

Non-

interest

income

£m

Administration

expenses

£m

Depreciation,

 amortisation and impairment

£m

Impairment losses on loans and advances

£m

Provisions for other liabilities and charges

£m

Profit

before

tax

£m

Perimeter co. pre-acquisition trading basis results

(396)

(27)

182

11

159

1

(70)

Reorg.n, customer remediation and other costs

-

-

8

(33)

40

(130)

(115)

Depreciation of operating lease assets

-

65

-

(65)

-

-

-

Profit on part sale and revaluation of subs

-

126

-

-

-

-

126

Hedging and other variances

57

(84)

-

-

-

-

(27)

(339)

80

190

(87)

199

(129)

(86)

Retail Banking

£m

Corporate Banking

£m

Markets

£m

Group Infrastructure

£m

Total

£m

Net interest income

396

-

-

-

396

Non-interest income/(expense)

52

-

-

(25)

27

Total trading income/(expense)

448

-

-

(25)

423

Administration expenses

(182)

-

-

-

(182)

Depreciation, amortisation and impairment

(11)

-

-

-

(11)

Total operating expenses excluding provisions and charges

(193)

-

-

-

(193)

Impairment losses on loans and advances

(159)

-

-

-

(159)

Provisions for other liabilities and charges

(1)

-

-

-

(1)

Total operating provisions and charges

(160)

-

-

-

(160)

Trading profit/(loss) before tax

95

-

-

(25)

70

2009

Retail

Banking

£m

Corporate Banking

£m

Markets

£m

Group

Infrastructure

£m

Total

£m

Adjustments

£m

Group Total

£m

Net interest income

2,746

359

-

236

3,341

71

3,412

Non-interest income

694

332

204

87

1,317

(33)

1,284

Total trading income

3,440

691

204

323

4,658

38

4,696

Administration expenses

(1,422)

(267)

(57)

(46)

(1,792)

(56)

(1,848)

Depreciation, amortisation and impairment

(132)

(17)

(3)

-

(152)

(108)

(260)

Total trading expenses

(1,554)

(284)

(60)

(46)

(1,944)

(164)

(2,108)

Impairment losses on loans and advances

(672)

(73)

-

(57)

(802)

(40)

(842)

Provisions for other liabilities and charges

-

-

-

-

-

(56)

(56)

Trading profit before tax

1,214

334

144

220

1,912

(222)

1,690

Adjust for:

- Reorg.n, customer remediation and other costs

(146)

-

-

(40)

(186)

- Hedging and other variances

(17)

-

-

(19)

(36)

- Capital and other charges

(47)

(34)

-

81

-

Profit before tax

1,004

300

144

242

1,690

Revenue from external customers

5,590

795

204

(1,931)

4,658

Inter-segment revenue

(2,150)

(104)

-

2,254

-

Total trading income

3,440

691

204

323

4,658

Customer assets

165,450

24,617

-

-

190,067

Total assets(1)

169,748

51,773

16,441

47,329

285,291

Customer deposits

119,399

24,491

-

-

143,890

Total liabilities

123,055

47,333

17,689

89,992

278,069

Average number of staff

18,375

2,087

141

118

20,721

2009

Net

interest income

£m

Non-

 interest

income

£m

Administration

expenses

£m

Depreciation,

 amortisation and impairment

£m

Impairment losses on loans and advances

£m

Provisions for other liabilities

and charges

£m

Profit

before

tax

£m

Reorg.n, customer remediation and other costs

-

-

(56)

(34)

(40)

(56)

(186)

Depreciation of operating lease assets

-

74

-

(74)

-

-

-

Hedging and other variances

71

(107)

-

-

-

-

(36)

71

(33)

(56)

(108)

(40)

(56)

(222)

Group

2011

£m

2010

£m

2009

£m

United Kingdom

5,124

4,989

4,625

Other

61

45

71

5,185

5,034

4,696

2011

£m

2010

£m

United Kingdom

3,796

3,954

Other

6

6

3,802

3,960

Group

2011

£m

2010

£m

2009

£m

Interest and similar income:

Loans and advances to banks

120

154

155

Loans and advances to customers

7,425

6,799

6,823

Other interest-earning financial assets

73

94

340

Total interest and similar income

7,618

7,047

7,318

Interest expense and similar charges:

Deposits by banks

(168)

(87)

(366)

Deposits by customers

(2,711)

(2,424)

(2,256)

Subordinated debt

(214)

(276)

(281)

Debt securities in issue

(694)

(360)

(905)

Other interest-bearing financial liabilities

(1)

(86)

(98)

Total interest expense and similar charges

(3,788)

(3,233)

(3,906)

Net interest income

3,830

3,814

3,412

Group

2011

£m

2010

£m

2009

£m

Fee and commission income:

Retail and corporate products

896

662

674

Insurance products

169

134

158

Asset management

73

106

154

Total fee and commission income

1,138

902

986

Fee and commission expense:

Other fees paid

(220)

(203)

(162)

Total fee and commission expense

(220)

(203)

(162)

Net fee and commission income

918

699

824

Group

2011

£m

2010

£m

2009

£m

Net trading and funding of other items by the trading book

255

391

187

Income from operating lease assets

68

84

95

Income on assets designated at fair value through profit or loss

530

245

95

Expense on liabilities designated at fair value through profit or loss

(105)

(111)

(117)

(Losses)/gains on derivatives managed with assets/liabilities held at fair value through profit or loss

(458)

(154)

230

Share of profit from associate

1

25

5

Profit/(loss) on sale of available-for-sale assets

-

-

-

Profit on revaluation of associate (See Note 46)

-

87

-

Profit on sale of subsidiary undertakings

-

39

-

Loss on sale of property, plant and equipment and intangible fixed assets

(2)

(2)

-

Hedge ineffectiveness and other

148

(83)

(35)

437

521

460

Group

2011

£m

2010

£m

2009

£m

Staff costs:

Wages and salaries

608

508

552

Performance-related payments: - cash

111

126

145

- shares

21

15

5

Social security costs

77

65

71

Pensions costs: - defined contribution plans

30

42

20

- defined benefit plans

24

25

55

Other share-based payments

(1)

(3)

5

Bank payroll tax

-

-

15

Other personnel costs

86

57

52

956

835

920

Property, plant and equipment expenses

190

214

227

Information technology expenses

413

337

311

Other administration expenses

436

407

390

1,995

1,793

1,848

Costs recognised in 2011

Costs expected to be recognised in 2012 or later

Arising from awards in current year

Arising from awards in prior year

Total

Arising from awards in current year

Arising from awards in prior year

Total

£m

£m

£m

£m

£m

£m

Cash

2

1

3

3

1

4

Shares

7

10

17

9

9

18

Total

9

11

20

12

10

22

Expenses charged

in the year

Expenses deferred to future periods

Total

2011

£m

2010

£m

2011

£m

2010

£m

2011

£m

2010

£m

Cash award - not deferred

108

125

-

-

108

125

- deferred

3

1

4

2

7

3

Shares award - not deferred

4

-

-

-

4

-

- deferred

17

15

18

18

35

33

Total discretionary bonus

132

141

22

20

154

161

Group

2011

£m

2010

£m

2009

£m

Depreciation of property, plant and equipment

224

220

238

Amortisation and impairment of intangible assets

223

55

22

447

275

260

Group

2011

£m

2010

£m

2009

£m

Audit fees:

 - Fees payable to the Company's auditor for the audit of the Group's annual accounts

2.1

2.1

2.5

 - Fees payable to the Company's auditor and its associates for the audit of the Company's subsidiaries pursuant to legislation

1.6

1.7

2.3

Total audit fees

3.7

3.8

4.8

Non-audit fees:

Other assurance services

 - Other services pursuant to legislation

0.3

-

0.6

 - Tax compliance services

-

-

-

 - Other assurance

0.8

0.9

0.4

Total other assurance services

1.1

0.9

1.0

Other services

 - Tax services

0.5

0.5

0.7

 - Other services

-

0.1

-

Total other services

0.5

0.6

0.7

Total non-audit fees

1.6

1.5

1.7

Group

2011

£m

2010

£m

2009

£m

Impairment losses on loans and advances:

- loans and advances to customers (Note 18)

639

746

828

- loans and advances to banks (Note 17)

-

-

-

- loans and receivables securities (Note 23)

-

-

69

Recoveries of loans and advances (Note 18)

(74)

(34)

(55)

565

712

842

Impairment losses on available-for-sale financial assets (Note 22)

-

-

-

Provisions for other liabilities and charges: (Note 36)

- New and increased allowances

929

131

59

- Provisions released

(12)

(2)

(3)

917

129

56

Total impairment losses and provisions charged to the income statement

1,482

841

898

Group

2011

£m

2010

£m

2009

£m

Current tax:

UK corporation tax on profit of the year

232

185

124

Adjustments in respect of prior years

(3)

(33)

(117)

Total current tax

229

152

7

Deferred tax:

Origination and reversal of temporary differences

112

377

388

Change in rate of UK corporation tax

21

11

-

Adjustments in respect of prior years

(4)

2

50

Total deferred tax

129

390

438

Tax on profit for the year

358

542

445

Group

2011

£m

2010

£m

2009

£m

Profit before tax

1,261

2,125

1,690

Tax calculated at a tax rate of 26.5% (2010: 28%, 2009: 28%)

334

595

473

Non taxable gain on sale of subsidiary undertakings

-

(11)

(5)

Non deductible preference dividends paid

8

8

8

Non taxable gain on revaluation of investment in Santander Consumer (UK) plc

-

(24)

-

Non deductible UK Bank Levy

13

-

-

Other non-equalised items

(4)

-

51

Non-taxable dividend income

-

-

(4)

Effect of non-UK profits and losses

(7)

(6)

(8)

Utilisation of capital losses for which credit not previously recognised

-

-

(3)

Effect of change in tax rate on deferred tax provision

21

11

-

Adjustment to prior year provisions

(7)

(31)

(67)

Tax expense

358

542

445

2011

Group

Before tax amount

£m

Total tax

£m

After tax amount

£m

Actuarial losses on retirement benefit obligations

(37)

9

(28)

Movements in available-for-sale financial assets:

- Losses due to changes in fair value

(3)

2

(1)

Other comprehensive income

(40)

11

(29)

2010

Group

Before tax amount

£m

Total tax

£m

After tax amount

£m

Actuarial gains on retirement benefit obligations

25

(9)

16

Movements in available-for-sale financial assets:

- Losses due to changes in fair value

(1)

-

(1)

- Gains transferred to profit or loss on sale

(2)

1

(1)

Other comprehensive income

22

(8)

14

2009

Group

Before tax amount

£m

Total tax

£m

After tax amount

£m

Actuarial losses on retirement benefit obligations

(606)

170

(436)

Movements in available-for-sale financial assets:

- Losses due to changes in fair value

(6)

1

(5)

- Gains transferred to profit or loss on sale

(2)

1

(1)

Exchange differences on translation of foreign operations

(4)

-

(4)

Other comprehensive income

(618)

172

(446)

Group

Company

2011

£m

2010

£m

2011

£m

2010

£m

Cash in hand

1,024

933

1,016

927

Balances with central banks

24,956

25,569

17,942

20,481

25,980

26,502

18,958

21,408

Group

Group

2011

Pence per

share

2010

Pence per

share

2009

Pence per

share

2011

£m

2010

£m

2009

£m

Ordinary shares (equity):

In respect of current year - first interim

1.37

1.29

2.07

425

400

500

In respect of current year - second interim

-

1.21

-

-

375

-

1.37

2.50

2.07

425

775

500

Group

2011

£m

2010

£m

Loans and advances to banks - securities purchased under resale agreements

3,056

5,775

- other(1)

3,088

2,506

Loans and advances to customers - securities purchased under resale agreements

6,338

8,652

- other(2)

349

7

Debt securities

8,711

17,821

Equity securities

349

700

21,891

35,461

Group

2011

£m

2010

£m

Issued by public bodies:

- Government securities

2,943

6,630

Issued by other issuers:

- Fixed and floating rate notes(1): Government guaranteed

5,666

10,586

- Fixed and floating rate notes(1): Other

102

315

- Bank and building society certificates of deposit: Other

-

290

8,711

17,821

Group

2011

£m

2010

£m

Debt securities:

- Listed in the UK

5,904

11,392

- Listed elsewhere

1,165

1,467

- Unlisted

1,642

4,962

8,711

17,821

Equity securities:

- Listed in the UK

335

698

- Listed elsewhere

14

2

349

700

> 

to create risk management solutions for customers;

> 

to manage the portfolio risks arising from customer business;

> 

to manage and hedge the Group's own risks; and

> 

to generate profits through sales activities.

> 

those used in sales activities; and

> 

those used for risk management purposes but, for various reasons, either the Group does not elect to claim hedge accounting for or they do not meet the qualifying criteria for hedge accounting. These consist of:

> 

non-qualifying hedging derivatives (known as "economic hedges"), whose terms match other on-balance sheet instruments but do not meet the technical criteria for hedge accounting, or which use natural offsets within other on-balance sheet instruments containing the same risk features as part of an integrated approach to risk management, and hence do not require the application of hedge accounting to achieve a reduction in income statement volatility;

> 

derivatives managed in conjunction with financial instruments designated at fair value (known as the "fair value option"). The fair value option is described more fully in the Accounting Policy "Financial assets" and Notes 16 and 32. The Group's business model is primarily structured to maximise use of the fair value option, rather than electing to apply hedge accounting, in order to reduce the administrative burden on the Group associated with complying with the detailed hedge accounting requirements of IAS 39;

> 

derivatives that do not meet the qualifying criteria for hedge accounting, including ineffective hedging derivatives and any components of hedging derivatives that are excluded from assessing hedge effectiveness; and

> 

derivative contracts that represent the closing-out of existing positions through the use of matching deals.

Activity

Risk

Type of derivative

Management of the return on variable rate assets financed by shareholders' funds and net non-interest-bearing liabilities.

Reduced profitability due to falls in interest rates.

Receive fixed interest rate swaps.

Management of the basis between administered rate assets and liabilities and wholesale market rates.

Reduced profitability due to adverse changes in the basis spread.

Basis swaps.

Management of repricing profile of wholesale funding.

Reduced profitability due to adverse movement in wholesale interest rates when large volumes of wholesale funding are repriced.

Forward rate agreements.

Fixed rate lending and investments.

Sensitivity to increases in interest rates.

Pay fixed interest rate swaps.

Fixed rate retail and wholesale funding.

Sensitivity to falls in interest rates.

Receive fixed interest rate swaps.

Equity-linked retail funding.

Sensitivity to increases in equity market indices.

Receive equity swaps.

Management of other net interest income on retail activities.

Sensitivity of income to changes in interest rates.

Interest rate swaps.

Issuance of products with embedded equity options.

Sensitivity to changes in underlying index and index volatility causing option exercise.

Interest rate swaps combined with equity options.

Lending and investments.

Sensitivity to weakening credit quality.

Purchase credit default swaps and total return swaps.

Lending and issuance of products with embedded interest rate options.

Sensitivity to changes in underlying rate and rate volatility causing option exercise.

Interest rate swaps plus caps/floors.

Investment in, and issuance of, bonds with put/call features.

Sensitivity to changes in rates causing option exercise.

Interest rate swaps combined with swaptions(1) and other matched options.

> 

Marketing derivatives to end users and hedging the resulting exposures efficiently; and

> 

The management of trading exposure reflected on the Group's balance sheet.

2011

Derivatives held for trading

Group

Contract/notional amount

£m

Fair value assets

£m

Fair value liabilities

£m

Exchange rate contracts:

- Cross-currency swaps

89,457

1,556

1,077

- Foreign exchange swaps, options and forwards

19,866

155

253

109,323

1,711

1,330

Interest rate contracts:

- Interest rate swaps

475,853

20,625

20,221

- Caps, floors and swaptions(1)

62,907

3,485

3,523

- Futures

32,503

54

41

- Forward rate agreements

78,090

21

31

649,353

24,185

23,816

Equity and credit contracts:

- Equity index swaps and similar products

32,421

1,034

1,369

- Equity index options

43,708

407

1,240

- Credit default swaps and similar products

1,455

45

21

77,584

1,486

2,630

Commodity contracts:

- OTC swaps

542

12

11

542

12

11

Total derivative assets and liabilities held for trading

836,802

27,394

27,787

 2011

Derivatives held for fair value hedging

Group

Contract/notional amount

£m

Fair value assets

£m

Fair value liabilities

£m

Exchange rate contracts:

- Cross-currency swaps

7,992

1,094

61

Interest rate contracts:

- Interest rate swaps

46,447

2,292

1,332

Total derivative assets and liabilities held for fair value hedging

54,439

3,386

1,393

Total recognised derivative assets and liabilities

891,241

30,780

29,180

 2011

Derivatives held for trading

Company

Contract/notional amount

£m

Fair value assets

£m

Fair value liabilities

£m

Exchange rate contracts:

- Cross-currency swaps

915

44

33

- Foreign exchange swaps, options and forwards

386

7

6

1,301

51

39

Interest rate contracts:

- Interest rate swaps

59,612

3,952

939

- Caps, floors and swaptions(1)

2,190

21

21

61,802

3,973

960

Equity and credit contracts:

- Equity index swaps and similar products

309

20

208

- Credit default swaps and similar products

62

-

-

371

20

208

Total derivative assets and liabilities held for trading

63,474

4,044

1,207

2011

Derivatives held for fair value hedging

Company

Contract/notional amount

£m

Fair value assets

£m

Fair value liabilities

£m

Exchange rate contracts:

- Cross-currency swaps

1,496

1,259

-

Interest rate contracts:

- Interest rate swaps

3,398

698

-

Total derivative assets and liabilities held for fair value hedging

4,894

1,957

-

Total recognised derivative assets and liabilities

68,368

6,001

1,207

2010

Derivatives held for trading

Group

Contract/notional amount

£m

Fair value assets

£m

Fair value liabilities

£m

Exchange rate contracts:

- Cross-currency swaps

53,357

2,539

564

- Foreign exchange swaps, options and forwards

17,106

90

384

70,463

2,629

948

Interest rate contracts:

- Interest rate swaps

479,527

14,471

13,671

- Caps, floors and swaptions(1)

69,223

2,682

2,748

- Futures

39,840

3

10

- Forward rate agreements

37,479

8

18

626,069

17,164

16,447

Equity and credit contracts:

- Equity index swaps and similar products

41,482

1,033

2,557

- Equity index options

40,279

741

145

- Credit default swaps and similar products

3,114

384

293

84,875

2,158

2,995

Total derivative assets and liabilities held for trading

781,407

21,951

20,390

 2010

Derivatives held for fair value hedging

Group

Contract/notional amount

£m

Fair value assets

£m

Fair value liabilities

£m

Exchange rate contracts:

- Cross-currency swaps

6,729

906

108

Interest rate contracts:

- Interest rate swaps

46,081

1,520

1,907