FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2019

FINANCIAL INSTRUMENTS (Tables) [Line Items]

Disclosure of measurement basis of financial assets and liabilities [text block]

The accounting policies in note 2 describe how different classes of financial instruments are measured, and how income and expenses, including fair value gains and losses, are recognised. The following table analyses the carrying amounts of the financial assets and liabilities by category and by balance sheet heading.

Mandatorily held at fair value through profit or loss

Derivatives designated as hedging instruments £m

Held for trading £m

Other £m

Designated at fair value through profit or loss £m

At fair value through other comprehensive income £m

Held at amortised cost £m

Insurance contracts £m

Total £m

At 31 December 2019

Financial assets

Cash and balances at central banks

–

–

–

–

–

55,130

–

55,130

Items in the course of collection from banks

–

–

–

–

–

313

–

313

Financial assets at fair value through profit or loss

–

17,982

142,207

–

–

–

–

160,189

Derivative financial instruments

1,236

25,133

–

–

–

–

–

26,369

Loans and advances to banks

–

–

–

–

–

9,775

–

9,775

Loans and advances to customers

–

–

–

–

–

494,988

–

494,988

Debt securities

–

–

–

–

–

5,544

–

5,544

Financial assets at amortised cost

–

–

–

–

–

510,307

–

510,307

Financial assets at fair value through other comprehensive income

–

–

–

–

25,092

–

–

25,092

Assets arising from reinsurance contracts held

–

–

–

–

–

–

23,567

23,567

Total financial assets

1,236

43,115

142,207

–

25,092

565,750

23,567

800,967

Financial liabilities

Deposits from banks

–

–

–

–

–

28,179

–

28,179

Customer deposits

–

–

–

–

–

421,320

–

421,320

Items in course of transmission to banks

–

–

–

–

–

373

–

373

Financial liabilities at fair value through profit or loss

–

13,955

–

7,531

–

–

–

21,486

Derivative financial instruments

1,105

24,674

–

–

–

–

–

25,779

Notes in circulation

–

–

–

–

–

1,079

–

1,079

Debt securities in issue

–

–

–

–

–

97,689

–

97,689

Liabilities arising from insurance contracts and participating investment contracts

–

–

–

–

–

–

111,449

111,449

Liabilities arising from non-participating investment contracts

–

–

–

–

–

–

37,459

37,459

Other

–

–

–

–

–

1,844

400

2,244

Subordinated liabilities

–

–

–

–

–

17,130

–

17,130

Total financial liabilities

1,105

38,629

–

7,531

–

567,614

149,308

764,187

Mandatorily held at fair value through profit or loss

Derivatives designated as hedging instruments £m

Held for trading £m

Other £m

Designated at fair value through profit or loss £m

At fair value through other comprehensive income £m

Held at amortised cost £m

Insurance contracts £m

Total £m

At 31 December 2018

Financial assets

Cash and balances at central banks

–

–

–

–

–

54,663

–

54,663

Items in the course of collection from banks

–

–

–

–

–

647

–

647

Financial assets at fair value through profit or loss

–

35,246

123,283

–

–

–

–

158,529

Derivative financial instruments

1,563

22,032

–

–

–

–

–

23,595

Loans and advances to banks

–

–

–

–

–

6,283

–

6,283

Loans and advances to customers

–

–

–

–

–

484,858

–

484,858

Debt securities

–

–

–

–

–

5,238

–

5,238

Financial assets at amortised cost

–

–

–

–

–

496,379

–

496,379

Financial assets at fair value through other comprehensive income

–

–

–

–

24,815

–

–

24,815

Assets arising from reinsurance contracts held

–

–

–

–

–

–

7,860

7,860

Total financial assets

1,563

57,278

123,283

–

24,815

551,689

7,860

766,488

Financial liabilities

Deposits from banks

–

–

–

–

–

30,320

–

30,320

Customer deposits

–

–

–

–

–

418,066

–

418,066

Items in course of transmission to banks

–

–

–

–

–

636

–

636

Financial liabilities at fair value through profit or loss

–

23,451

–

7,096

–

–

–

30,547

Derivative financial instruments

1,108

20,265

–

–

–

–

–

21,373

Notes in circulation

–

–

–

–

–

1,104

–

1,104

Debt securities in issue

–

–

–

–

–

91,168

–

91,168

Liabilities arising from insurance contracts and participating investment contracts

–

–

–

–

–

–

98,874

98,874

Liabilities arising from non-participating investment contracts

–

–

–

–

–

–

13,853

13,853

Other

–

–

–

–

–

46

382

428

Subordinated liabilities

–

–

–

–

–

17,656

–

17,656

Total financial liabilities

1,108

43,716

–

7,096

–

558,996

113,109

724,025

Disclosure of financial liabilities [text block]

At 31 December 2019, the Group’s financial liabilities carried at fair value, excluding derivatives, comprised its financial liabilities at fair value through profit or loss and totalled £21,486 million (31 December 2018: £30,547 million). The table below analyses these financial liabilities by balance sheet classification and valuation methodology (level 1, 2 or 3, as described on page F-85). The fair value measurement approach is recurring in nature. There were no significant transfers between level 1 and 2 during the year.

	Level 1		Level 2		Level 3		Total
	£m		£m		£m		£m
At 31 December 2019
Financial liabilities at fair value through profit or loss
Liabilities designated at fair value through profit or loss		–		7,483		48		7,531
Trading liabilities:
Liabilities in respect of securities sold under repurchase agreements		–		11,048		–		11,048
Other deposits		–		98		–		98
Short positions in securities		2,781		28		–		2,809
		2,781		11,174		–		13,955
Total financial liabilities carried at fair value, excluding derivatives		2,781		18,657		48		21,486
At 31 December 2018
Financial liabilities at fair value through profit or loss
Liabilities designated at fair value through profit or loss		–		7,085		11		7,096
Trading liabilities:
Liabilities in respect of securities sold under repurchase agreements		–		21,595		–		21,595
Other deposits		–		242		–		242
Short positions in securities		1,464		150		–		1,614
		1,464		21,987		–		23,451
Total financial liabilities carried at fair value, excluding derivatives		1,464		29,072		11		30,547

Disclosure of significant adjustments to valuation obtained [text block]

The following table summarises the movement on this valuation adjustment account during 2018 and 2019:

	2019			2018
	£m			£m
At 1 January		562			521
Income statement charge (credit)		(134	)		47
Transfers		(5	)		(6	)
At 31 December		423			562

Disclosure Of Significant Adjustment Categories To Valuation Obtained, Explanatory

Represented by:

	2019		2018
	£m		£m
Credit Valuation Adjustment	278		409
Debit Valuation Adjustment	(27	)	(79	)
Funding Valuation Adjustment	172		232
	423		562

Disclosure of fair value measurement of assets [text block]

The table below analyses the fair values of the financial assets of the Group which are carried at amortised cost by valuation methodology (level 1, 2 or 3, as described on page F-85). Financial assets carried at amortised cost are mainly classified as level 3 due to significant unobservable inputs used in the valuation models. Where inputs are observable, debt securities are classified as level 1 or 2.

					Valuation hierarchy
	Carrying value £m		Fair value £m		Level 1 £m		Level 2 £m		Level 3 £m
At 31 December 2019
Financial assets at amortised cost:
Loans and advances to customers: Stage 1		449,300		450,465		–		54,600		395,865
Loans and advances to customers: Stage 2		27,548		28,259		–		–		28,259
Loans and advances to customers: Stage 3		4,568		3,508		–		–		3,508
Loans and advances to customers: purchased or originated credit-impaired		13,572		13,572		–		–		13,572
Loans and advances to customers		494,988		495,804		–		54,600		441,204
Loans and advances to banks		9,775		9,773		–		1,555		8,218
Debt securities		5,544		5,537		–		5,526		11
Reverse repos included in above amounts:
Loans and advances to customers		54,600		54,600		–		54,600		–
Loans and advances to banks		1,555		1,555		–		1,555		–
At 31 December 2018
Financial assets at amortised cost:
Loans and advances to customers: Stage 1		441,006		440,542		–		40,483		400,059
Loans and advances to customers: Stage 2		24,351		25,516		–		–		25,516
Loans and advances to customers: Stage 3		4,188		3,289		–		–		3,289
Loans and advances to customers: purchased or originated credit-impaired		15,313		15,313		–		–		15,313
Loans and advances to customers		484,858		484,660		–		40,483		444,177
Loans and advances to banks		6,283		6,286		–		461		5,825
Debt securities		5,238		5,244		–		5,233		11
Reverse repos included in above amounts:
Loans and advances to customers		40,483		40,483		–		40,483		–
Loans and advances to banks		461		461		–		461		–

Disclosure of fair value measurement of liabilities [text block]

The table below analyses the fair values of the financial liabilities of the Group which are carried at amortised cost by valuation methodology (level 1, 2 or 3, as described on page F-85).

					Valuation hierarchy
	Carrying value £m		Fair value £m		Level 1 £m		Level 2 £m		Level 3 £m
At 31 December 2019
Deposits from banks		28,179		28,079		–		28,079		–
Customer deposits		421,320		421,728		–		416,493		5,235
Debt securities in issue		97,689		100,443		–		100,443		–
Subordinated liabilities		17,130		19,783		–		19,783		–
Repos included in above amounts:
Deposits from banks		18,105		18,105		–		18,105		–
Customer deposits		9,530		9,530		–		9,530		–
At 31 December 2018
Deposits from banks		30,320		30,322		–		30,322		–
Customer deposits		418,066		418,450		–		412,283		6,167
Debt securities in issue		91,168		93,233		–		93,233		–
Subordinated liabilities		17,656		19,564		–		19,564		–
Repos included in above amounts:
Deposits from banks		21,170		21,170		–		21,170		–
Customer deposits		1,818		1,818		–		1,818		–

Level 3 of fair value hierarchy [member]

FINANCIAL INSTRUMENTS (Tables) [Line Items]

Disclosure of movements in level 3 portfolio [text block]

The table below analyses movements in level 3 derivative assets and liabilities carried at fair value.

	2019						2018
	Derivative assets			Derivative liabilities			Derivative assets			Derivative liabilities
	£m			£m			£m			£m
At 1 January		927			(716	)		1,056			(804	)
Exchange and other adjustments		(27	)		4			7			(5	)
Losses (gains) recognised in the income statement within other income		81			(75	)		(84	)		49
Purchases (additions)		4			(4	)		–			(68	)
(Sales) redemptions		(19	)		47			(52	)		112
Transfers into the level 3 portfolio		415			(959	)		–			–
Transfers out of the level 3 portfolio		(518	)		336			–			–
At 31 December		863			(1,367	)		927			(716	)
Gains (losses) recognised in the income statement, within other income, relating to the change in fair value of those assets or liabilities held at 31 December		(14	)		18			(424	)		82

Disclosure of Sensitivity of Level 3 Valuations [text block]

			At 31 December 2019							At 31 December 2018
					Effect of reasonably possible alternative assumptions2							Effect of reasonably possible alternative assumptions2
		Significant unobservable	Carrying value		Favourable changes		Unfavourable changes			Carrying value		Favourable changes		Unfavourable changes
	Valuation techniques	inputs1	£m		£m		£m			£m		£m		£m
Financial assets at fair value through profit or loss
Loans and advances to customers	Discounted cash flows	Interest rate spreads (bps) 47bps/108bps		10,912		401		(384	)		10,565		380		(371	)
Debt securities	Discounted cash flows	Credit spreads (bps) (1bps/2bps)		61		1		(1	)		274		92		(21	)
Equity and venture capital investments	Market approach	Earnings multiple (1.5//15.4)		1,948		89		(89	)		1,657		54		(55	)
	Underlying asset/net asset value (incl. property prices)3	n/a		935		89		(113	)		523		48		(57	)
Unlisted equities, debt securities and property partnerships in the life funds	Underlying asset/net asset value (incl. property prices), broker quotes or discounted cash flows3	n/a		1,052		19		(41	)		898		2		(45	)
				14,908							13,917
Financial assets at fair value through other comprehensive income
Asset-backed securities	Lead manager or broker quote/consensus pricing	n/a		181		6		(6	)		246		3		(5	)
Equity and venture capital investments	Underlying asset/net asset value (incl. property prices)3	n/a		227		7		(6	)		21		2		(2	)
				408							267
Derivative financial assets
Interest rate derivatives	Option pricing model	Interest rate volatility (14%/115%)		863		5		(6	)		927		7		(5	)
				863							927
Level 3 financial assets carried at fair value				16,179							15,111
Financial liabilities at fair value through profit or loss	Discounted cash flows	Interest rate spreads (+/–50bps)		48		1		(1	)		11		–		–
Derivative financial liabilities
Interest rate derivatives	Option pricing model	Interest rate volatility (14%/115%)		1,367		–		–			716		–		–
				1,367							716
Level 3 financial liabilities carried at fair value				1,415							727

1	Ranges are shown where appropriate and represent the highest and lowest inputs used in the level 3 valuations.
2	Where the exposure to an unobservable input is managed on a net basis, only the net impact is shown in the table.
3	Underlying asset/net asset values represent fair value.

Financial Assets, Excluding Derivatives [Member]

FINANCIAL INSTRUMENTS (Tables) [Line Items]

Disclosure of financial assets excluding derivatives [text block]

Valuation hierarchy

	Level 1		Level 2		Level 3		Total
	£m		£m		£m		£m
At 31 December 2019
Financial assets at fair value through profit or loss
Loans and advances to customers		–		10,164		10,912		21,076
Loans and advances to banks		18		2,381		–		2,399
Debt securities:
Government securities		18,618		236		–		18,854
Other public sector securities		–		2,071		55		2,126
Bank and building society certificates of deposit		52		932		–		984
Asset-backed securities:
Mortgage-backed securities		–		468		–		468
Other asset-backed securities		–		158		100		258
Corporate and other debt securities		–		16,381		1,835		18,216
		18,670		20,246		1,990		40,906
Treasury and other bills		19		–		–		19
Equity shares		93,766		17		2,006		95,789
Total financial assets at fair value through profit or loss		112,473		32,808		14,908		160,189
Financial assets at fair value through other comprehensive income
Debt securities:
Government securities		12,860		238		–		13,098
Bank and building society certificates of deposit		–		–		–		–
Asset-backed securities:
Mortgage-backed securities		–		–		121		121
Other asset-backed securities		–		–		60		60
Corporate and other debt securities		16		11,035		–		11,051
		12,876		11,273		181		24,330
Treasury and other bills		535		–		–		535
Equity shares		–		–		227		227
Total financial assets at fair value through other comprehensive income		13,411		11,273		408		25,092
Total financial assets carried at fair value, excluding derivatives		125,884		44,081		15,316		185,281

	Level 1		Level 2		Level 3		Total
	£m		£m		£m		£m
At 31 December 2018
Financial assets at fair value through profit or loss
Loans and advances to customers		–		27,285		10,565		37,850
Loans and advances to banks		–		3,026		–		3,026
Debt securities:
Government securities		17,926		169		–		18,095
Other public sector securities		–		2,064		–		2,064
Bank and building society certificates of deposit		84		1,021		–		1,105
Asset-backed securities:
Mortgage-backed securities		–		219		6		225
Other asset-backed securities		–		231		118		349
Corporate and other debt securities		–		16,840		1,470		18,310
		18,010		20,544		1,594		40,148
Treasury and other bills		20		–		–		20
Equity shares		75,701		26		1,758		77,485
Total financial assets at fair value through profit or loss		93,731		50,881		13,917		158,529
Financial assets at fair value through other comprehensive income
Debt securities:
Government securities		18,847		124		–		18,971
Bank and building society certificates of deposit		–		118		–		118
Asset-backed securities:
Mortgage-backed securities		–		–		120		120
Other asset-backed securities		–		5		126		131
Corporate and other debt securities		32		5,119		–		5,151
		18,879		5,366		246		24,491
Treasury and other bills		303		–		–		303
Equity shares		–		–		21		21
Total financial assets at fair value through other comprehensive income		19,182		5,366		267		24,815
Total financial assets carried at fair value, excluding derivatives		112,913		56,247		14,184		183,344

Recurring fair value measurement [member]

FINANCIAL INSTRUMENTS (Tables) [Line Items]

Disclosure of Derivatives by recurring fair value measurement [text block]

All of the Group’s derivative assets and liabilities are carried at fair value. At 31 December 2019, such assets totalled £26,369 million (31 December 2018: £23,595 million) and liabilities totalled £25,779 million (31 December 2018: £21,373 million). The table below analyses these derivative balances by valuation methodology (level 1, 2 or 3, as described on page F-85). The fair value measurement approach is recurring in nature. There were no significant transfers between level 1 and level 2 during the year.

	2019												2018
	Level 1			Level 2			Level 3			Total			Level 1			Level 2			Level 3			Total
	£m			£m			£m			£m			£m			£m			£m			£m
Derivative assets		50			25,456			863			26,369			93			22,575			927			23,595
Derivative liabilities		(54	)		(24,358	)		(1,367	)		(25,779	)		(132	)		(20,525	)		(716	)		(21,373	)

Financial Assets, Excluding Derivatives [Member]

FINANCIAL INSTRUMENTS (Tables) [Line Items]

Disclosure of movements in level 3 portfolio [text block]

The table below analyses movements in level 3 financial assets, excluding derivatives, carried at fair value (recurring measurement).

	2019									2018
	Financial assets at fair value through profit or loss			Financial assets at fair value through other comprehensive income			Total level 3 assets carried at fair value, excluding derivatives (recurring basis		)	Financial assets at fair value through profit or loss			Financial assets at fair value through other comprehensive income			Total level 3 assets carried at fair value, excluding derivatives (recurring basis		)
	£m			£m			£m			£m			£m			£m
At 1 January		13,917			267			14,184			14,152			302			14,454
Exchange and other adjustments		(85	)		(10	)		(95	)		87			(2	)		85
Gains recognised in the income statement within other income		794			–			794			439			–			439
(Losses) gains recognised in other comprehensive income within the revaluation reserve in respect of financial assets at fair value through other comprehensive income		–			12			12			–			(4	)		(4	)
Purchases/increases to customer loans		2,579			207			2,786			2,480			2			2,482
Sales		(2,807	)		(87	)		(2,894	)		(3,593	)		(95	)		(3,688	)
Transfers into the level 3 portfolio		644			19			663			815			348			1,163
Transfers out of the level 3 portfolio		(134	)		–			(134	)		(463	)		(284	)		(747	)
At 31 December		14,908			408			15,316			13,917			267			14,184
Gains (losses) recognised in the income statement, within other income, relating to the change in fair value of those assets held at 31 December		269			–			269			(104	)		–			(104	)

Financial liabilities, excluding derivatives [member]

FINANCIAL INSTRUMENTS (Tables) [Line Items]

Disclosure of movements in level 3 portfolio [text block]

The table below analyses movements in the level 3 financial liabilities portfolio, excluding derivatives.

	2019			2018
	£m			£m
At 1 January		11			–
Losses (gains) recognised in the income statement within other income		–			–
Redemptions		(5	)		–
Transfers into the level 3 portfolio		52			11
Transfers out of the level 3 portfolio		(10	)		–
At 31 December		48			11
Gains recognised in the income statement, within other income, relating to the change in fair value of those liabilities held at 31 December		–			–