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CONDENSED CONSOLIDATING FINANCIAL INFORMATION
12 Months Ended
Dec. 31, 2017
Disclosure of separate financial statements [text block] [Abstract]  
Disclosure of separate financial statements [text block]

NOTE 56: CONDENSED CONSOLIDATING FINANCIAL INFORMATION


The Company owns 100 per cent of the share capital of Lloyds Bank plc (Lloyds Bank), which intends to offer and sell certain securities in the US from time to time utilising a registration statement on Form F-3 filed with the SEC by the Company. This will be accompanied by a full and unconditional guarantee by the Company.


Lloyds Bank intends to utilise an exception provided in Rule 3-10 of Regulation S-X, which allows it to not file its financial statements with the SEC. In accordance with the requirements to qualify for the exception, presented below is condensed consolidating financial information for:


The Company on a stand-alone basis as guarantor;
   
Lloyds Bank on a stand-alone basis as issuer;
   
Non-guarantor subsidiaries of the Company and Lloyds Bank on a combined basis (Subsidiaries);
   
Consolidation adjustments; and
   
Lloyds Banking Group’s consolidated amounts (the Group).

Under IAS 27, the Company and Lloyds Bank account for investments in their subsidiary undertakings at cost less impairment. Rule 3-10 of Regulation S-X requires a company to account for its investments in subsidiary undertakings using the equity method, which would increase/(decrease) the results of the Company and Lloyds Bank in the information below by £1,408 million and £(1,140) million, respectively, for the year ended 31 December 2017; by £(1,072) million and £(851) million, respectively, for the year ended 31 December 2016; and by £(37) million and £(10,248) million, respectively, for the year ended 31 December 2015. The net assets of the Company and Lloyds Bank in the information below would also be increased/(decreased) by £5,682 million and £(9,962) million, respectively, at 31 December 2017; and by £4,780 million and £(8,268) million, respectively, at 31 December 2016.


INCOME STATEMENTS


For the year ended 31 December 2017  Company
£m
   Lloyds Bank
£m
   Subsidiaries
£m
   Consolidation
adjustments
£m
   Group
£m
 
Net interest (expense) income  (121)  5,829   5,360   (156)  10,912 
Other income  2,792   7,642   22,553   (9,662)  23,325 
Total income  2,671   13,471   27,913   (9,818)  34,237 
Insurance claims        (15,578)     (15,578)
Total income, net of insurance claims  2,671   13,471   12,335   (9,818)  18,659 
Operating expenses  (255)  (7,201)  (6,939)  2,049   (12,346)
Trading surplus  2,416   6,270   5,396   (7,769)  6,313 
Impairment     (462)  (281)  55   (688)
Profit before tax  2,416   5,808   5,115   (7,714)  5,625 
Taxation  (17)  (529)  (1,153)  (29)  (1,728)
Profit for the year  2,399   5,279   3,962   (7,743)  3,897 

                     
For the year ended 31 December 2016  Company
£m
   Lloyds Bank
£m
   Subsidiaries
£m
   Consolidation
adjustments
£m
   Group
£m
 
Net interest income  66   4,883   4,661   (336)  9,274 
Other income  3,618   5,489   30,349   (9,119)  30,337 
Total income  3,684   10,372   35,010   (9,455)  39,611 
Insurance claims        (22,344)     (22,344)
Total income, net of insurance claims  3,684   10,372   12,666   (9,455)  17,267 
Operating expenses  (221)  (7,722)  (6,380)  1,696   (12,627)
Trading surplus  3,463   2,650   6,286   (7,759)  4,640 
Impairment     (620)  (239)  107   (752)
Profit before tax  3,463   2,030   6,047   (7,652)  3,888 
Taxation  (328)  (77)  (1,815)  496   (1,724)
Profit for the year  3,135   1,953   4,232   (7,156)  2,164 

For the year ended 31 December 2015  Company
£m
   Lloyds Bank
£m
   Subsidiaries
£m
   Consolidation
 adjustments
£m
   Group
£m
 
Net interest income   276    4,170    7,129    (257)   11,318 
Other income   983    16,057    10,035    (15,243)   11,832 
Total income   1,259    20,227    17,164    (15,500)   23,150 
Insurance claims           (5,729)       (5,729)
Total income, net of insurance claims   1,259    20,227    11,435    (15,500)   17,421 
Operating expenses   (290)   (8,994)   (6,948)   845    (15,387)
Trading surplus   969    11,233    4,487    (14,655)   2,034 
Impairment       (265)   (222)   97    (390)
Profit before tax   969    10,968    4,265    (14,558)   1,644 
Taxation   (72)   (57)   (803)   244    (688)
Profit for the year   897    10,911    3,462    (14,314)   956 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


For the year ended 31 December 2017  Company
£m
   Lloyds Bank
£m
   Subsidiaries
£m
   Consolidation
adjustments
£m
   Group
£m
 
Profit (loss) for the year   2,399    5,279    3,962    (7,743)   3,897 
Other comprehensive income                         
Items that will not subsequently be reclassified to profit or loss:                         
Post–retirement defined benefit scheme remeasurements:                         
Remeasurements before taxation       442    186        628 
Taxation       (110)   (36)       (146)
       332    150        482 
Gains and losses attributable to own credit risk:                         
Gains (losses) before taxation       (55)           (55)
Taxation       15            15 
        (40)           (40)
Items that may subsequently be reclassified to profit or loss:                         
Movements in revaluation reserve in respect of available-for-sale financial assets:                         
Change in fair value       231    38    34    303 
Income statement transfers in respect of disposals      (333)   (131)   18    (446)
Income statement transfers in respect of impairment           9    (3)   6 
Taxation       46    17        63 
        (56)   (67)   49    (74)
Movements in cash flow hedging reserve:                         
Effective portion of changes in fair value       15    (136)   (242)   (363)
Net income statement transfers       (436)   46    (261)   (651)
Taxation       130    23    130    283 
        (291)   (67)   (373)   (731)
Currency translation differences (tax: nil)       (5)   (27)       (32)
Other comprehensive income for the year, net of tax       (60)   (11)   (324)   (395)
Total comprehensive income for the year   2,399    5,219    3,951    (8,067)   3,502 
Total comprehensive income attributable to ordinary shareholders   1,984    4,946    3,740    (7,673)   2,997 
Total comprehensive income attributable to other equity holders   415    273    121    (394)   415 
Total comprehensive income attributable to equity holders   2,399    5,219    3,861    (8,067)   3,412 
Total comprehensive income attributable to non-controlling interests           90        90 
Total comprehensive income for the year   2,399    5,219    3,951    (8,067)   3,502 

For the year ended 31 December 2016  Company
£m
   Lloyds Bank
£m
   Subsidiaries
£m
   Consolidation
adjustments
£m
   Group
£m
 
Profit (loss) for the year   3,135    1,953    4,232    (7,156)   2,164 
Other comprehensive income                         
Items that will not subsequently be reclassified to profit or loss:                         
Post-retirement defined benefit scheme remeasurements:                         
Remeasurements before taxation       (682)   (666)       (1,348)
Taxation       184    136        320 
        (498)   (530)       (1,028)
Items that may subsequently be reclassified to profit or loss:                         
Movements in revaluation reserve in respect of available-for-sale financial assets:                         
Adjustment on transfer from held-to-maturity portfolio       1,544            1,544 
Change in fair value       268    84    4    356 
Income statement transfers in respect of disposals       (507)   (68)       (575)
Income statement transfers in respect of impairment       172    1        173 
Taxation       (269)   (32)       (301)
        1,208    (15)   4    1,197 
Movements in cash flow hedging reserve:                         
Effective portion of changes in fair value       1,290    125    1,017    2,432 
Net income statement transfers       (241)   (233)   (83)   (557)
Taxation       (258)   29    (237)   (466)
         791    (79)   697    1,409 
Currency translation differences (tax: nil)       19    44    (67)   (4)
Other comprehensive income for the year, net of tax       1,520    (580)   634    1,574 
Total comprehensive income for the year   3,135    3,473    3,652    (6,522)   3,738 
Total comprehensive income attributable to ordinary shareholders   2,723    3,354    3,450    (6,302)   3,225 
Total comprehensive income attributable to other equity holders   412    119    101    (220)   412 
Total comprehensive income attributable to equity holders   3,135    3,473    3,551    (6,522)   3,637 
Total comprehensive income attributable to non-controlling interests           101        101 
Total comprehensive income for the year   3,135    3,473    3,652    (6,522)   3,738 

For the year ended 31 December 2015  Company
£m
   Lloyds Bank
£m
   Subsidiaries
£m
   Consolidation
adjustments
£m
   Group
£m
 
Profit (loss) for the year   897    10,911    3,462    (14,314)   956 
Other comprehensive income                         
Items that will not subsequently be reclassified to profit or loss:                         
Post-retirement defined benefit scheme remeasurements:                         
Remeasurements before taxation       31    (305)       (274)
Taxation       (1)   60        59 
        30    (245)       (215)
Items that may subsequently be reclassified to profit or loss:                         
Movements in revaluation reserve in respect of available-for-sale financial assets:                         
Change in fair value       (300)   (27)   9    (318)
Income statement transfers in respect of disposals       (14)   (37)       (51)
Income statement transfers in respect of impairment       1    38    (35)   4 
Taxation       (17)   2    9    (6)
        (330)   (24)   (17)   (371)
Movements in cash flow hedging reserve:                         
Effective portion of changes in fair value       294    183    60    537 
Net income statement transfers       (421)   (557)   22    (956)
Taxation       (76)   59    24    7 
        (203)   (315)   106    (412)
Currency translation differences (tax: nil)       (13)   52    (81)   (42)
Other comprehensive income for the year, net of tax       (516)   (532)   8    (1,040)
Total comprehensive income for the year   897    10,395    2,930    (14,306)   (84)
Total comprehensive income attributable to ordinary shareholders   503    10,395    2,834    (14,306)   (574)
Total comprehensive income attributable to other equity holders   394                394 
Total comprehensive income attributable to equity holders   897    10,395    2,834    (14,306)   (180)
Total comprehensive income attributable to non-controlling interests           96        96 
Total comprehensive income for the year   897    10,395    2,930    (14,306)   (84)

BALANCE SHEETS


At 31 December 2017  Company
£m
   Lloyds Bank
£m
   Subsidiaries
£m
   Consolidation
adjustments
£m
    Group
£m
 
Assets                      
Cash and balances at central banks     55,835   2,686      58,521 
Items in course of collection from banks     490   265      755 
Trading and other financial assets at fair value through profit or loss     43,977   126,864   (7,963)  162,878 
Derivative financial instruments  265    26,764   14,785   (15,980)  25,834 
Loans and receivables:                     
Loans and advances to banks     3,611   2,975   25   6,611 
Loans and advances to customers     170,804   294,463   7,231   472,498 
Debt securities     3,182   420   41   3,643 
Due from fellow Lloyds Banking Group undertakings  14,698    180,772   119,914   (315,384)   
Available-for-sale financial assets     42,566   1,582   (2,050)  42,098 
Goodwill        2,332   (22)  2,310 
Value of in-force business        4,590   249   4,839 
Other intangible assets     1,415   345   1,075   2,835 
Property, plant and equipment     3,252   9,526   (51)  12,727 
Current tax recoverable  724       26   (734)  16 
Deferred tax assets  22    1,995   2,285   (2,018)  2,284 
Retirement benefit assets     673   69   (19)  723 
Investment in subsidiary undertakings, including assets held for sale  44,863    40,500      (85,363)   
Other assets  961    1,117   12,107   (648)  13,537 
Total assets  61,533    576,953   595,234   (421,611)  812,109 
Equity and liabilities                     
Liabilities                     
Deposits from banks     7,538   22,268   (2)  29,804 
Customer deposits     234,397   183,830   (103)  418,124 
Due to fellow Lloyds Banking Group undertakings  2,168    112,769   179,952   (294,889)   
Items in course of transmission to banks     304   280      584 
Trading and other financial liabilities at fair value through profit or loss     51,045   53   (221)  50,877 
Derivative financial instruments  327    28,267   13,510   (15,980)  26,124 
Notes in circulation        1,313      1,313 
Debt securities in issue  10,886    66,249   15,847   (20,532)  72,450 
Liabilities arising from insurance contracts and participating investment contracts        103,434   (21)  103,413 
Liabilities arising from non-participating investment contracts        15,447      15,447 
Other liabilities  935    3,425   18,480   (2,110)  20,730 
Retirement benefit obligations     143   134   81   358 
Current tax liabilities     105   1,242   (1,073)  274 
Deferred tax liabilities        779   (779)   
Other provisions     2,593   2,865   88   5,546 
Subordinated liabilities  3,993    9,341   8,288   (3,700)  17,922 
Total liabilities  18,309    516,176   567,722   (339,241)  762,966 
Equity                     
Shareholders’ equity  37,869    57,560   25,470   (77,348)  43,551 
Other equity instruments  5,355    3,217   1,805   (5,022)  5,355 
Total equity excluding non-controlling interests  43,224    60,777   27,275   (82,370)  48,906 
Non-controlling interests        237     237 
Total equity  43,224    60,777   27,512   (82,370)  49,143 
Total equity and liabilities  61,533    576,953   595,234   (421,611)  812,109 

At 31 December 2016  Company
£m
   Lloyds Bank
£m
   Subsidiaries
£m
   Consolidation
adjustments
£m
   Group
£m
 
Assets                    
Cash and balances at central banks     44,595   2,857      47,452 
Items in course of collection from banks     512   194      706 
Trading and other financial assets at fair value through profit or loss     48,309   112,154   (9,289)  151,174 
Derivative financial instruments  461   36,714   18,737   (19,774)  36,138 
Loans and receivables:                    
Loans and advances to banks     4,379   22,498   25   26,902 
Loans and advances to customers     161,161   290,036   6,761   457,958 
Debt securities     2,818   528   51   3,397 
Due from fellow Lloyds Banking Group undertakings  7,021   152,260   104,314   (263,595)   
Available-for-sale financial assets     55,122   3,274   (1,872)  56,524 
Goodwill        2,343   (327)  2,016 
Value of in-force business        4,761   281   5,042 
Other intangible assets     893   314   474   1,681 
Property, plant and equipment     3,644   9,263   65   12,972 
Current tax recoverable  465   420   26   (883)  28 
Deferred tax assets  38   2,286   1,503   (1,121)  2,706 
Retirement benefit assets     254   86   2   342 
Investment in subsidiary undertakings, including assets held for sale  44,188   38,757      (82,945)   
Other assets  959   1,168   11,613   (985)  12,755 
Total assets  53,132   553,292   584,501   (373,132)  817,793 
Equity and liabilities                    
Liabilities                    
Deposits from banks     9,450   6,936   (2)  16,384 
Customer deposits     213,135   202,433   (108)  415,460 
Due to fellow Lloyds Banking Group undertakings  2,690   86,803   149,152   (238,645)   
Items in course of transmission to banks     292   256      548 
Trading and other financial liabilities at fair value through profit or loss     55,776   945   (2,217)  54,504 
Derivative financial instruments     38,591   16,107   (19,774)  34,924 
Notes in circulation        1,402      1,402 
Debt securities in issue  2,455   74,366   22,336   (22,843)  76,314 
Liabilities arising from insurance contracts and participating investment contracts        94,409   (19)  94,390 
Liabilities arising from non-participating investment contracts        20,112      20,112 
Other liabilities  413   3,295   27,668   (2,183)  29,193 
Retirement benefit obligations     399   420   3   822 
Current tax liabilities     3   1,390   (1,167)  226 
Deferred tax liabilities               
Other provisions     2,833   2,355   30   5,218 
Subordinated liabilities  4,329   10,575   10,648   (5,721)  19,831 
Total liabilities  9,887   495,518   556,569   (292,646)  769,328 
Equity                    
Shareholders’ equity  37,890   54,557   25,687   (75,464)  42,670 
Other equity instruments  5,355   3,217   305   (3,522)  5,355 
Total equity excluding non-controlling interests  43,245   57,774   25,992   (78,986)  48,025 
Non-controlling interests        1,940   (1,500)  440 
Total equity  43,245   57,774   27,932   (80,486)  48,465 
Total equity and liabilities  53,132   553,292   584,501   (373,132)  817,793 

CASH FLOW STATEMENTS


For the year ended 31 December 2017  Company
£m
  Lloyds Bank
£m
  Subsidiaries
£m
  Consolidation
adjustments
£m
  Group
£m
Net cash (used in) provided by operating activities  8,221   (3,430)  (5,959)  (2,027)  (3,195)
Cash flows from investing activities                    
Dividends received from subsidiary undertakings  2,650   4,378      (7,028)   
Distributions on other equity instruments received  292   101      (393)   
Return of capital contributions  77         (77)   
Available-for-sale financial assets:                    
Purchases     (7,550)  (482)  170   (7,862)
Proceeds from sale and maturity     16,480   2,195      18,675 
Purchase of fixed assets     (1,155)  (2,500)     (3,655)
Proceeds from sale of fixed assets     85   1,359      1,444 
Additional capital lending to subsidiaries  (8,476)  (34)     8,510    
Capital repayments by subsidiaries  475         (475)   
Interest received on lending to Lloyds Bank  244         (244)   
Acquisition of businesses, net of cash acquired  (320)  (2,026)  (622)  1,045   (1,923)
Disposal of businesses, net of cash disposed     592   129   (592)  129 
Net cash flows from investing activities  (5,058)  10,871   79   916   6,808 
                     
Cash flows from financing activities                    
Dividends paid to equity shareholders  (2,284)  (2,650)  (4,378)  7,028   (2,284)
Distributions on other equity instruments  (415)  (273)  (120)  393   (415)
Dividends paid to non-controlling interests        (51)     (51)
Interest paid on subordinated liabilities  (248)  (668)  (700)  341   (1,275)
Proceeds from issue of subsordinated liabilities               
Proceeds from issue of ordinary shares  14            14 
Repayment of subordinated liabilities     (675)  (1,132)  799   (1,008)
Capital contributions received               
Changes in non-controlling interests               
Return of capital contribution     (77)     77    
Capital borrowing from the Company     8,476      (8,476)   
Capital repayments to parent company     (475)     475    
Interest paid on borrowing from the Company     (244)     244    
Net cash used in financing activities  (2,933)  3,414   (6,381)  881   (5,019)
                     
Effects of exchange rate changes on cash and cash equivalents     (1)  1       
Change in cash and cash equivalents  230   10,854   (12,260)  (230)  (1,406)
Cash and cash equivalents at beginning of year  42   45,266   17,122   (42)  62,388 
Cash and cash equivalents at end of year  272   56,120   4,862   (272)  60,982 

For the year ended 31 December 2016  Company
£m
  Lloyds Bank
£m
  Subsidiaries
£m
  Consolidation
adjustments
£m
  Group
£m
Net cash provided by (used in) operating activities  (7,550)  1,073   11,131   (2,580)  2,074 
Cash flows from investing activities                    
Dividends received from subsidiary undertakings  3,759   3,984      (7,743)   
Distributions on other equity instruments received  119         (119)   
Return of capital contributions  441         (441)   
Available-for-sale financial assets and held-to-maturity investments:                    
Purchases     (4,664)  (322)  56   (4,930)
Proceeds from sale and maturity     6,429   2,350   (2,444)  6,335 
Purchase of fixed assets     (1,122)  (2,638)     (3,760)
Proceeds from sale of fixed assets     19   1,665      1,684 
Purchase of other equity instruments issued by subsidiaries               
Capital lending to Lloyds Bank               
Capital repayments by Lloyds Bank               
Additional capital lending to subsidiaries  (4,978)        4,978    
Capital repayments by subsidiaries  13,166         (13,166)   
Interest received on lending to Lloyds Bank  496         (496)   
Additional capital injections to subsidiaries  (3,522)  (309)     3,831    
Acquisition of businesses, net of cash acquired        (20)     (20)
Disposal of businesses, net of cash disposed     231   5   (231)  5 
Net cash flows from investing activities  9,481   4,568   1,040   (15,775)  (686)
                     
Cash flows from financing activities                    
Dividends paid to ordinary shareholders  (2,014)  (3,040)  (4,602)  7,642   (2,014)
Distributions on other equity instruments  (412)  (119)  (101)  220   (412)
Dividends paid to non-controlling interests        (29)     (29)
Interest paid on subordinated liabilities  (229)  (1,516)  (893)  951   (1,687)
Proceeds from issue of subordinated liabilities  1,061   2,753      (2,753)  1,061 
Repayment of subordinated liabilities  (319)  (13,200)  (4,952)  10,586   (7,885)
Proceeds from issue of other equity instruments     3,217   305   (3,522)   
Capital contribution received        309   (309)   
Return of capital contributions     (441)     441    
Capital borrowing from the Company               
Capital repayments to the Company     (3,387)  (1,198)  4,585    
Interest paid on borrowing from the Company     (496)     496    
Change in stake of non-controlling interests        (8)     (8)
Net cash used in financing activities  (1,913)  (16,229)  (11,169)  18,337   (10,974)
                     
Effects of exchange rate changes on cash and cash equivalents     2   19      21 
Change in cash and cash equivalents  18   (10,586)  1,021   (18)  (9,565)
Cash and cash equivalents at beginning of year  24   55,852   16,101   (24)  71,953 
Cash and cash equivalents at end of year  42   45,266   17,122   (42)  62,388 

For the year ended 31 December 2015  Company
£m
  Lloyds Bank
£m
  Subsidiaries
£m
  Consolidation
adjustments
£m
  Group
£m
Net cash provided by (used in) operating activities  (1,718)  8,302   7,472   2,316   16,372 
                     
Cash flows from investing activities                    
Dividends received from subsidiary undertakings  1,080   12,820      (13,900)   
Return of capital contributions  600         (600)   
Available-for-sale financial assets and held-to-maturity investments:                    
Purchases     (7,903)  (13,593)  2,142   (19,354)
Proceeds from sale and maturity     7,055   14,945      22,000 
Purchase of fixed assets     (1,279)  (2,138)     (3,417)
Proceeds from sale of fixed assets     61   1,476      1,537 
Additional capital injections to subsidiaries     (64)     64    
Purchase of other equity instruments issued by subsidiaries     (1,500)     1,500    
Capital lending to Lloyds Bank  (1,157)        1,157    
Capital repayments by Lloyds Bank  570         (570)   
Interest received on lending to Lloyds Bank  763         (763)   
Acquisition of businesses, net of cash acquired        (5)     (5)
Disposal of businesses, net of cash disposed     850   122   (5,043)  (4,071)
Net cash flows from investing activities  1,856   10,040   807   (16,013)  (3,310)
                     
Cash flows from financing activities                    
Dividends paid to ordinary shareholders  (1,070)  (1,080)  (12,820)  13,900   (1,070)
Distributions on other equity instruments  (394)           (394)
Dividends paid to non-controlling interests        (52)     (52)
Interest paid on subordinated liabilities  (129)  (1,755)  (956)  1,000   (1,840)
Proceeds from issue of subordinated liabilities  1,436         (1,098)  338 
Repayment of subordinated liabilities  (152)  (1,266)  (2,151)  370   (3,199)
Capital contributions received        165   (165)   
Return of capital contributions     (600)     600    
Capital borrowing from the Company     1,157      (1,157)   
Capital repayments to the Company     (1,155)     1,155    
Interest paid on borrowing from the Company     (763)     763    
Changes in non-controlling interests        1,459   (1,500)  (41)
Net cash used in financing activities  (309)  (5,462)  (14,355)  13,868   (6,258)
                     
Effects of exchange rate changes on cash and cash equivalents        2      2 
Change in cash and cash equivalents  (171)  12,880   (6,074)  171   6,806 
Cash and cash equivalents at beginning of year  195   42,972   22,175   (195)  65,147 
Cash and cash equivalents at end of year  24   55,852   16,101   (24)  71,953