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Notes to the Group accounts
15 Trading and other financial assets at fair value through profit or loss
Previous 14 Earnings per share | 16 Derivative financial instruments Next
| 2007 £m |
2006 £m |
|
|---|---|---|
| Trading assets | 4,663 | 5,756 |
| Other financial assets at fair value through profit or loss | 53,248 | 61,939 |
| 57,911 | 67,695 |
These assets are comprised as follows:
| 2007 | 2006 | |||||||
|---|---|---|---|---|---|---|---|---|
| Trading assets £m |
Other financial assets at fair value through profit or loss £m |
Trading assets £m |
Other financial assets at fair value through profit or loss £m |
|||||
| Loans and advances to banks | 29 | 1 | 34 | 3 | ||||
| Loans and advances to customers | 756 | 403 | 350 | 448 | ||||
| Debt securities: | ||||||||
| Government securities | 62 | 4,848 | 180 | 8,626 | ||||
| Other public sector securities | – | – | – | 44 | ||||
| Bank and building society certificates of deposit | – | 811 | – | 573 | ||||
| Mortgage backed securities | 87 | 70 | 451 | 87 | ||||
| Other asset backed securities | 122 | 1,805 | 595 | 861 | ||||
| Corporate and other debt securities | 3,607 | 13,564 | 4,146 | 13,170 | ||||
| 3,878 | 21,098 | 5,372 | 23,361 | |||||
| Equity shares: | ||||||||
| Listed | – | 23,598 | – | 29,275 | ||||
| Unlisted | – | 8,148 | – | 8,852 | ||||
| – | 31,746 | – | 38,127 | |||||
| 4,663 | 53,248 | 5,756 | 61,939 | |||||
At 31 December 2007 £55,729 million (2006: £65,122 million) of trading and other financial assets at fair value through profit or loss had a contractual residual maturity of greater than one year.
Other financial assets at fair value through profit or loss represent the following assets designated into that category:
(i) financial assets backing insurance contracts and investment contracts which are so designated because the related liabilities either have cash flows that are contractually based on the performance of the assets or are contracts whose measurement takes account of current market conditions and where significant measurement inconsistencies would otherwise arise;
(ii) certain loans and advances to customers which are economically hedged by interest rate derivatives which are not in hedge accounting relationships and where significant measurement inconsistencies would otherwise arise if the related derivatives were treated as trading liabilities and the loans and advances were carried at amortised cost; and
(iii) certain private equity investments that are managed, and evaluated, on a fair value basis in accordance with a documented risk management or investment strategy and reported to key management personnel on that basis.
The maximum exposure to credit risk at 31 December 2007 of the loans and advances to banks and customers designated at fair value through profit or loss was £404 million (31 December 2006: £451 million); the Group does not hold any credit derivatives or other instruments in mitigation of this risk. There was no significant movement in the fair value of these loans attributable to changes in credit risk; this is determined by reference to the publicly available credit ratings of the instruments involved.
The carrying value of assets that are subject to stock lending arrangements was £1,450 million at 31 December 2007 (2006: £1,781 million) all of which the secured party is permitted by contract or custom to sell or repledge.