PARENT COMPANY DISCLOSURES

12 Months Ended

Dec. 31, 2018

Disclosure Of Parent Company Financial Statements Explanatory [Abstract]

Disclosure of parent company financial statements [text block]

NOTE 56: PARENT COMPANY DISCLOSURES

A COMPANY INCOME STATEMENT

	2018 £m			2017 £m			2016 £m
Net interest (expense) income		(173	)		(121	)		66
Other income		4,524			2,792			3,618
Total income		4,351			2,671			3,684
Operating expenses		(246	)		(255	)		(221	)
Trading surplus		4,105			2,416			3,463
Impairment		(3	)		–			–
Profit on ordinary activities before tax		4,102			2,416			3,463
Tax expense		(80	)		(17	)		(328	)
Profit for the year		4,022			2,399			3,135
Profit attributable to ordinary shareholders		3,589			1,984			2,723
Profit attributable to other equity holders1		433			415			412
Profit for the year		4,022			2,399			3,135

1 The profit after tax attributable to other equity holders of £433 million (2017: £415 million; 2016: £412 million) is offset in reserves by a tax credit attributable to ordinary shareholders of £82 million (2017: £79 million; 2016: £82 million).

B COMPANY BALANCE SHEET

	2018 £m		2017 £m
Assets
Non-current assets:
Investment in subsidiaries		46,725		44,863
Loans to subsidiaries		24,211		14,379
Deferred tax assets		9		22
		70,945		59,264
Current assets:
Derivative financial instruments		256		265
Financial assets at fair value through profit or loss		588		–
Other assets		955		961
Amounts due from subsidiaries		27		47
Cash and cash equivalents		57		272
Current tax recoverable		76		724
		1,959		2,269
Total assets		72,904		61,533
Equity and liabilities
Capital and reserves:
Share capital		7,116		7,197
Share premium account		17,719		17,634
Merger reserve		7,423		7,423
Capital redemption reserve		4,273		4,115
Retained profits		2,103		1,500
Shareholders’ equity		38,634		37,869
Other equity instruments		6,491		5,355
Total equity		45,125		43,224
Non-current liabilities:
Debt securities in issue		20,394		10,886
Subordinated liabilities		6,043		3,993
		26,437		14,879
Current liabilities:
Derivative financial instruments		209		327
Other liabilities		1,133		3,103
		1,342		3,430
Total liabilities		27,779		18,309
Total equity and liabilities		72,904		61,533

C COMPANY STATEMENT OF CHANGES IN EQUITY

	Share capital and premium £m			Merger reserve £m			Capital redemption reserve £m		Retained profits1 £m			Total shareholders’ equity £m			Other equity instruments £m		Total equity £m
Balance at 1 January 2016		24,558			7,633			4,115		785			37,091			5,355		42,446
Total comprehensive income1		–			–			–		3,135			3,135			–		3,135
Dividends paid		–			–			–		(2,014	)		(2,014	)		–		(2,014	)
Distributions on other equity instruments, net of tax2		–			–			–		(330	)		(330	)		–		(330	)
Redemption of preference shares		210			(210	)		–		–			–			–		–
Movement in treasury shares		–			–			–		(301	)		(301	)		–		(301	)
Value of employee services:
Share option schemes		–			–			–		141			141			–		141
Other employee award schemes		–			–			–		168			168			–		168
Balance at 31 December 2016		24,768			7,423			4,115		1,584			37,890			5,355		43,245
Total comprehensive income1		–			–			–		2,399			2,399			–		2,399
Dividends paid		–			–			–		(2,284	)		(2,284	)		–		(2,284	)
Distributions on other equity instruments, net of tax2		–			–			–		(336	)		(336	)		–		(336	)
Issue of ordinary shares		63			–			–		–			63			–		63
Movement in treasury shares		–			–			–		(277	)		(277	)		–		(277	)
Value of employee services:
Share option schemes		–			–			–		82			82			–		82
Other employee award schemes		–			–			–		332			332			–		332
Balance at 31 December 2017		24,831			7,423			4,115		1,500			37,869			5,355		43,224
Adjustment on adoption of IFRS 9		–			–			–		(2	)		(2	)		–		(2	)
Balance at 1 January 2018		24,831			7,423			4,115		1,498			37,867			5,355		43,222
Total comprehensive income1		–			–			–		4,022			4,022			–		4,022
Dividends paid		–			–			–		(2,240	)		(2,240	)		–		(2,240	)
Distributions on other equity instruments, net of tax2		–			–			–		(351	)		(351	)		–		(351	)
Issue of ordinary shares		162			–			–		–			162			–		162
Share buy-back programme		(158	)		–			158		(1,005	)		(1,005	)		–		(1,005	)
Issue of AT1 securities		–			–			–		(7	)		(7	)		1,136		1,129
Movement in treasury shares		–			–			–		(74	)		(74	)		–		(74	)
Value of employee services:
Share option schemes		–			–			–		53			53			–		53
Other employee award schemes		–			–			–		207			207			–		207
Balance at 31 December 2018		24,835			7,423			4,273		2,103			38,634			6,491		45,125

1	Total comprehensive income comprises only the profit for the year.
2	Distributions on other equity instruments are shown net of tax of £82 million (2017: £79 million; 2016: £82 million) credited to retained profits.

D COMPANY CASH FLOW STATEMENT

	2018 £m			2017 £m			2016 £m
Profit before tax		4,102			2,416			3,463
Fair value and exchange adjustments and other non-cash items		(715	)		495			1,986
Change in other assets		(572	)		18			(50	)
Change in other liabilities and other items		7,538			8,431			(8,392	)
Dividends received		(4,000	)		(2,650	)		(3,759	)
Distributions on other equity instruments received		(324	)		(292	)		(119	)
Tax (paid) received		660			(197	)		(679	)
Net cash provided by (used in) operating activities		6,689			8,221			(7,550	)
Cash flows from investing activities
Return of capital contribution		9			77			441
Dividends received		4,000			2,650			3,759
Distributions on other equity instruments received		324			292			119
Acquisition of and capital injections to subsidiaries		(12,753	)		(320	)		(3,522	)
Return of capital		11,114			–			–
Amounts advanced to subsidiaries		(21,577	)		(8,476	)		(4,978	)
Repayment of loans to subsidiaries		12,602			475			13,166
Interest received on loans to subsidiaries		370			244			496
Net cash (used in) provided by investing activities		(5,911	)		(5,058	)		9,481
Cash flows from financing activities
Dividends paid to ordinary shareholders		(2,240	)		(2,284	)		(2,014	)
Distributions on other equity instruments		(433	)		(415	)		(412	)
Issue of subordinated liabilities		1,729			–			1,061
Interest paid on subordinated liabilities		(275	)		(248	)		(229	)
Share buy-back		(1,005	)		–			–
Issue of other equity instruments		1,129			–			–
Repayment of subordinated liabilities		–			–			(319	)
Proceeds from issue of ordinary shares		102			14			–
Net cash provided by financing activities		(993	)		(2,933	)		(1,913	)
Change in cash and cash equivalents		(215	)		230			18
Cash and cash equivalents at beginning of year		272			42			24
Cash and cash equivalents at end of year		57			272			42

E INTERESTS IN SUBSIDIARIES

The principal subsidiaries, all of which have prepared accounts to 31 December and whose results are included in the consolidated accounts of Lloyds Banking Group plc, are:

	Country of registration/ Incorporation	Percentage of equity share capital and voting rights held	Nature of business
Lloyds Bank plc	England	100%	Banking and financial services
Scottish Widows Limited	Scotland	100%1	Life assurance
HBOS plc	Scotland	100%1	Holding company
Bank of Scotland plc	Scotland	100%1	Banking and financial services
Lloyds Bank Corporate Markets plc	England	100%	Banking and financial services

1 Indirect interest.

The principal area of operation for each of the above subsidiaries is the United Kingdom.