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Fair values of financial assets and liabilities (Tables)
 6 Months Ended
Jun. 30, 2025
Financial Instruments [Abstract]  
Schedule of financial assets carried at fair value by valuation hierarchy The following tables provide an analysis of the financial assets and liabilities of the Group that are carried at fair
value in the Group’s consolidated balance sheet, grouped into levels 1 to 3 based on the degree to which the fair
value is observable. There were no significant transfers between level 1 and level 2 during the period.
Financial assets
Level 1
£m
Level 2
£m
Level 3
£m
Total
£m
At 30 June 2025
Financial assets at fair value through profit or loss:
Loans and advances to banks
–
3,094
–
3,094
Loans and advances to customers
–
3,193
5,905
9,098
Reverse repurchase agreements
–
20,655
–
20,655
Debt securities
14,211
32,059
2,368
48,638
Treasury and other bills
1
–
–
1
Contracts held with reinsurers
–
7,573
–
7,573
Equity shares
131,456
–
1,427
132,883
Total financial assets at fair value through profit or loss1
145,668
66,574
9,700
221,942
Financial assets at fair value through other comprehensive income:
Debt securities
19,306
14,165
49
33,520
Equity shares
–
–
368
368
Total financial assets at fair value through other comprehensive
income
19,306
14,165
417
33,888
Derivative financial instruments
61
22,343
539
22,943
Total financial assets carried at fair value
165,035
103,082
10,656
278,773
1Other financial assets mandatorily at fair value through profit or loss include assets backing insurance contracts and
investment contracts of £189,805 million.
Financial assets
Level 1
£m
Level 2
£m
Level 3
£m
Total
£m
At 31 December 2024
Financial assets at fair value through profit or loss:
Loans and advances to banks
–
2,787
–
2,787
Loans and advances to customers
–
3,039
6,010
9,049
Reverse repurchase agreements
–
20,466
–
20,466
Debt securities
10,564
26,854
2,528
39,946
Treasury and other bills
32
–
–
32
Contracts held with reinsurers
–
10,527
–
10,527
Equity shares
131,767
–
1,351
133,118
Total financial assets at fair value through profit or loss1
142,363
63,673
9,889
215,925
Financial assets at fair value through other comprehensive income:
Debt securities
16,298
14,019
48
30,365
Equity shares
–
–
325
325
Total financial assets at fair value through other comprehensive
16,298
14,019
373
30,690
Derivative financial instruments
103
23,221
741
24,065
Total financial assets carried at fair value
158,764
100,913
11,003
270,680
1Other financial assets mandatorily at fair value through profit or loss include assets backing insurance contracts and
investment contracts of £185,201 million.
Schedule of financial liabilities carried at fair value by valuation hierarchy
Financial liabilities
Level 1
£m
Level 2
£m
Level 3
£m
Total
£m
At 30 June 2025
Financial liabilities at fair value through profit or loss:
Debt securities in issue
–
4,344
18
4,362
Liabilities in respect of securities sold under repurchase agreements
–
22,051
–
22,051
Short positions in securities
2,326
15
–
2,341
Other
–
–
–
–
Total financial liabilities at fair value through profit or loss
2,326
26,410
18
28,754
Derivative financial instruments
82
19,510
287
19,879
Liabilities arising from non-participating investment contracts
–
52,285
–
52,285
Total financial liabilities carried at fair value
2,408
98,205
305
100,918
At 31 December 2024
Financial liabilities at fair value through profit or loss:
Debt securities in issue
–
4,608
22
4,630
Liabilities in respect of securities sold under repurchase agreements
–
20,564
–
20,564
Short positions in securities
2,400
17
–
2,417
Other
–
–
–
–
Total financial liabilities at fair value through profit or loss
2,400
25,189
22
27,611
Derivative financial instruments
79
21,175
422
21,676
Liabilities arising from non-participating investment contracts
–
51,228
–
51,228
Total financial liabilities carried at fair value
2,479
97,592
444
100,515
Schedule of movements in the level 3 financial assets portfolio The tables below analyse movements in the level 3 financial assets portfolio.
Financial
assets at
fair value
through profit
or loss
£m
Financial
assets at
fair value
through other
comprehensive
income
£m
Derivative
assets
£m
Total
financial
assets
carried at
fair value
£m
At 1 January 2025
9,889
373
741
11,003
Exchange and other adjustments
(1)
2
12
13
Gains (losses) recognised in the income statement
within other income
213
2
(154)
61
Gains recognised in other comprehensive income
within the revaluation reserve in respect of financial
assets at fair value through other comprehensive
income
–
42
–
42
Purchases/increases to customer loans
137
–
8
145
Sales/repayments of customer loans
(482)
(2)
(4)
(488)
Transfers into the level 3 portfolio
12
–
1
13
Transfers out of the level 3 portfolio
(68)
–
(65)
(133)
At 30 June 2025
9,700
417
539
10,656
Gains (losses) recognised in the income statement,
within other income, relating to the change in fair
value of those assets held at 30 June 2025
120
3
(124)
(1)
At 1 January 2024
11,681
284
422
12,387
Exchange and other adjustments
2
(1)
–
1
Gains (losses) recognised in the income statement
within other income
55
–
(54)
1
Losses recognised in other comprehensive income
within the revaluation reserve in respect of financial
assets at fair value through other comprehensive
income
–
74
74
Purchases/increases to customer loans
335
–
6
341
Sales/repayments of customer loans
(1,923)
(1)
(22)
(1,946)
Transfers into the level 3 portfolio
32
–
–
32
Transfers out of the level 3 portfolio
(35)
–
–
(35)
At 30 June 2024
10,147
356
352
10,855
Gains (losses) recognised in the income statement,
within other income, relating to the change in fair
value of those assets held at 30 June 2024
54
–
(41)
13
Schedule of movements in the level 3 financial liabilities portfolio The tables below analyse movements in the level 3 financial liabilities portfolio.
Financial
liabilities
at fair value
through
profit or loss
£m
Derivative
liabilities
£m
Total
financial
liabilities
carried at
fair value
£m
At 1 January 2025
22
422
444
Exchange and other adjustments
–
6
6
Gains recognised in the income statement within other income
(2)
(134)
(136)
Additions
–
9
9
Redemptions
(2)
(16)
(18)
At 30 June 2025
18
287
305
Losses (gains) recognised in the income statement, within other income,
relating to the change in fair value of those liabilities held at 30 June
2025
(2)
(108)
(110)
At 1 January 2024
42
444
486
Exchange and other adjustments
–
–
–
Losses (gains) recognised in the income statement within other income
2
(43)
(41)
Additions
–
5
5
Redemptions
(2)
(33)
(35)
Transfers out of the level 3 portfolio
(19)
–
(19)
At 30 June 2024
23
373
396
Losses (gains) recognised in the income statement, within other income,
relating to the change in fair value of those liabilities held at 30 June
2024
2
(31)
(29)
Schedule of sensitivity of level 3 valuations The tables below set out the effects of reasonably possible alternative assumptions for categories of level 3
financial assets and financial liabilities.
Effect of reasonably
possible alternative
assumptions1
At 30 June 2025
Valuation
techniques
Significant unobservable
inputs2
Carrying
value
£m
Favourable
changes
£m
Unfavourable
changes
£m
Financial assets at fair value through profit or loss
Loans and advances to
customers
Discounted cash flows
Interest rate spreads
(-234bps/+167bps)
5,908
152
(154)
Debt securities
Discounted cash flows
Credit spreads (+/- 13%)
538
36
(47)
Equity and venture capital
investments
Market approach
Earnings multiple
(0.0/15.0)
2,273
136
(136)
Underlying asset/net
asset value (incl.
property prices)3
n/a
794
82
(86)
Unlisted equities, debt
securities and property
partnerships in the life funds
Underlying asset/net
asset value (incl.
property prices),
broker quotes or
discounted cash
n/a
187
1
(5)
9,700
Financial assets at fair value through other comprehensive income
Asset-backed securities
Lead manager or
broker quote/
consensus pricing
n/a
49
2
(2)
Equity and venture capital
investments
Underlying asset/net
asset value (incl.
property prices)3
n/a
368
40
(40)
417
Derivative financial assets
Interest rate options
Option pricing model
Interest rate volatility
(12%/171%)
263
6
(4)
Interest rate derivatives
Option pricing model
(+/- 8%) uncertainty of
recovery rates
276
22
(22)
Level 3 financial assets carried at fair value
10,656
Financial liabilities at fair value through profit or loss
Securitisation notes and
other
Discounted cash flows
Interest rate spreads
(+/-50 bps)
18
1
(1)
Derivative financial liabilities
Interest rate derivatives
Option pricing model
Interest rate volatility
(12%/171%)
287
16
(16)
Level 3 financial liabilities carried at fair value
305
1Where the exposure to an unobservable input is managed on a net basis, only the net impact is shown in the table.
2Ranges are shown where appropriate and represent the highest and lowest inputs used in the level 3 valuations.
3Underlying asset/net asset values represent fair value.
Effect of reasonably
possible alternative
assumptions1
At 31 December 2024
Valuation
techniques
Significant
unobservable inputs2
Carrying
value
£m
Favourable
changes
£m
Unfavourable
changes
£m
Financial assets at fair value through profit or loss
Loans and advances to
customers
Discounted cash flows
Interest rate spreads
(-241bps/+131bps)
6,022
245
(231)
Debt securities
Discounted cash flows
Credit spreads (+/- 17%)
621
35
(55)
Equity and venture capital
investments
Market approach
Earnings multiple
(3.5/15.0)
2,267
150
(150)
Underlying asset/net
asset value (incl.
property prices)3
n/a
773
80
(84)
Unlisted equities, debt
securities and property
partnerships in the life funds
Underlying asset/net
asset value (incl.
property prices),
broker quotes or
discounted cash
n/a
206
–
(7)
9,889
Financial assets at fair value through other comprehensive income
Asset-backed securities
Lead manager or
broker quote/
consensus pricing
n/a
48
2
(2)
Equity and venture capital
investments
Underlying asset/net
asset value (incl.
property prices)3
n/a
325
33
(33)
373
Derivative financial assets
Interest rate options
Option pricing model
Interest rate volatility
(11%/183%)
394
4
(6)
Interest rate derivatives
Discounted cash flows
(+/-8%) uncertainty of
recovery rates
347
21
(21)
741
Level 3 financial assets carried at fair value
11,003
Financial liabilities at fair value through profit or loss
Securitisation notes and
other
Discounted cash flows
Interest rate spreads (+/-
50bps)
22
1
(1)
Derivative financial liabilities
Interest rate derivatives
Option pricing model
Interest rate volatility
(11%/183%)
422
17
(15)
Level 3 financial liabilities carried at fair value
444
1Where the exposure to an unobservable input is managed on a net basis, only the net impact is shown in the table.
2Ranges are shown where appropriate and represent the highest and lowest inputs used in the level 3 valuations.
3Underlying asset/net asset values represent fair value.
Schedule of carrying values and fair values of financial assets and liabilities Reasonably possible alternative assumptions
Valuation techniques applied to many of the Group’s level 3 instruments often involve the use of two or more
inputs whose relationship is interdependent. The calculation of the effect of reasonably possible alternative
assumptions included in the table above reflects such relationships and is unchanged from that described in note
17 to the Group’s financial statements for the year ended 31 December 2024.
The table below summarises the carrying values of financial assets and liabilities measured at amortised cost in the
Group’s consolidated balance sheet. The fair values presented in the table are at a specific date and may be
significantly different from the amounts which will actually be paid or received on the maturity or settlement date.
At 30 June 2025
At 31 December 2024
Carrying
value
£m
Fair
value
£m
Carrying
value
£m
Fair
value
£m
Financial assets
Loans and advances to banks
7,500
7,500
7,900
7,892
Loans and advances to customers
471,598
467,320
459,857
455,846
Reverse repurchase agreements
45,964
45,964
49,476
49,476
Debt securities
13,175
13,180
14,544
14,380
Financial liabilities
Deposits from banks
7,695
7,695
6,158
6,158
Customer deposits
493,932
494,798
482,745
483,568
Repurchase agreements at amortised cost
38,248
38,248
37,760
37,760
Debt securities in issue
68,301
68,673
70,834
70,894
Subordinated liabilities
10,661
12,149
10,089
10,419