Report Of The Directors Financial Review Capital Report

12 Months Ended

Dec. 31, 2019

Report Of The Directors Financial Review Capital Report [Abstract]

Disclosure of audited information included in report of directors financial review capital report

Own funds

Own funds disclosure
(Audited)
		At
		31 Dec		31 Dec
		2019		2018
Ref*		$m		$m
	Common equity tier 1 (‘CET1’) capital: instruments and reserves
1	Capital instruments and the related share premium accounts	22,873		22,384
	– ordinary shares	22,873		22,384
2	Retained earnings	127,188		121,180
3	Accumulated other comprehensive income (and other reserves)	1,735		3,368
5	Minority interests (amount allowed in consolidated CET1)	4,865		4,854
5a	Independently reviewed interim net profits net of any foreseeable charge or dividend	(3,381	)	3,697
6	Common equity tier 1 capital before regulatory adjustments	153,280		155,483
28	Total regulatory adjustments to common equity tier 1	(29,314	)	(34,461	)
29	Common equity tier 1 capital	123,966		121,022
36	Additional tier 1 capital before regulatory adjustments	24,453		26,180
43	Total regulatory adjustments to additional tier 1 capital	(60	)	(60	)
44	Additional tier 1 capital	24,393		26,120
45	Tier 1 capital	148,359		147,142
51	Tier 2 capital before regulatory adjustments	25,192		26,729
57	Total regulatory adjustments to tier 2 capital	(1,401	)	(633	)
58	Tier 2 capital	23,791		26,096
59	Total capital	172,150		173,238

* The references identify the lines prescribed in the European Banking Authority (‘EBA’) template, which are applicable and where there is a value.

Throughout 2019, we complied with the PRA’s regulatory capital adequacy requirements, including those relating to stress testing.

At 31 December 2019, our common equity tier 1 (‘CET1’) ratio increased to 14.7% from 14.0% at 31 December 2018.

CET1 capital increased during the year by $2.9bn, mainly as a result of:

• capital generation of $6.0bn through profits;

• a fall in the deduction for goodwill and other intangible assets of $4.9bn. This was primarily due to $7.3bn of goodwill impairment, partly offset by an increase in internally generated software;

• a $1.5bn increase in FVOCI reserve; and

• favourable foreign currency translation differences of $1.0bn.

These increases were partly offset by:

• dividends and scrip of $9.0bn;

• share buy-backs of $1.0bn; and

• an increase in the deduction for excess expected loss $0.7bn.

Our Pillar 2A requirement at 31 December 2019, as per the PRA’s Individual Capital Requirement based on a point-in-time assessment, was 3.0% of RWAs, of which 1.7% was met by CET1.