TIDM84LC
RNS Number : 2187R
Abbey National Treasury Servs PLC
20 September 2017
Abbey National Treasury Services plc
20 September 2017
Half Yearly Financial Report 2017
The Company announces that a copy of the above document has been
submitted to the National Storage Mechanism and will shortly be
available for inspection at www.Hemscott.com/nsm.do
In fulfilment of its obligations under the Disclosure and
Transparency Rules, Abbey National Treasury Services plc plc hereby
releases the unedited full text of its 2017 Half Yearly Financial
Report. Accordingly, page references in the text refer to page
numbers in the 2017 Half Yearly Financial Report.
A printer-friendly PDF version of the accounts will also be made
available on the Company's website:
Contacts
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020 7756
Bojana Flint Head of Investor Relations 6474
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020 7756
Andy Smith Head of Media Relations 4212
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For more information: www.aboutsantander.co.uk ir@santander.co.uk
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The full text of the accounts follows:
Abbey National Treasury Services plc
PART OF THE BANCO SANTANDER GROUP
Half Yearly Financial Report 2017
Introduction 2
Directors' responsibilities statement 3
Financial review 4
Risk review 5
Financial statements 8
Principal activities and business review
Abbey National Treasury Services plc (the Company) and its
subsidiaries (collectively, ANTS or the ANTS group) provides
corporate, wholesale banking and treasury services. ANTS provides
these services to UK clients and also to the wider Santander UK
group (comprising Santander UK plc and its subsidiaries), of which
ANTS is a significant part. ANTS provides certain treasury support
functions for the Santander UK group. In this regard, ANTS's role
is to provide access to certain financial markets and central bank
facilities in order to meet the Santander UK group's liquidity,
funding and balance sheet management requirements. The Company is
authorised and regulated by the Financial Conduct Authority (FCA)
and the Prudential Regulation Authority (PRA).
ANTS contains portions of a number of Santander UK's business
segments. The booking of transactions in ANTS or another Santander
UK group entity reflects historical or operational considerations
and does not necessarily reflect any particular business split.
The Company has given a full and unconditional guarantee in
respect of certain unsubordinated liabilities of Santander UK plc
(excluding debt securities) incurred prior to 31 December 2018
under a deed poll guarantee entered into by the Company on 11 May
2017 (the Upstream Guarantee). Santander UK plc has fully and
unconditionally guaranteed the unsubordinated liabilities of the
Company that have been or will be incurred before 31 December 2018
(the Downstream Guarantee). Because these guarantees are in place,
the results and creditworthiness of ANTS should not be viewed in
isolation. Account should also be taken of the position of the
Santander UK group into which the assets and liabilities of ANTS
are fully consolidated.
ANTS has also entered into agreements to provide capital and/or
liquidity to Santander UK plc and other members of the Santander UK
group, in order to facilitate efficient intercompany funding
arrangements under current regulations. For further details, see
Note 32 to the Consolidated Financial Statements in the 2016 Annual
Report.
Customer focused ring fencing model
Santander UK is progressing well with the implementation of a
'wide' ring-fence structure that will serve its retail, commercial
and corporate customers. We believe this model provides greater
certainty for our customers, while ensuring minimal disruption as
we implement the changes required. This also maintains longer-term
flexibility for Santander UK, while lowering the overall programme
implementation costs with the creation of the ring-fence now
involving the transfer of fewer customers.
The majority of Santander UK's customer loans and assets as well
as customer deposits and liabilities will remain within Santander
UK plc, Santander UK's principal ring-fenced bank. Prohibited
activities which cannot be transacted from within the ring-fence,
principally include our derivatives business with financial
institutions and certain corporates, elements of our short term
markets business, Santander UK plc's branches in Jersey and Isle of
Man, and our branch in the US.
Customers who cannot be served from and services which are not
permitted within a ring-fenced bank will be transferred to Banco
Santander SA, or its London branch. Santander UK intends to use a
Part VII Ring-Fence Transfer Scheme to transfer the majority of the
prohibited business of the Santander UK group to Banco Santander.
Santander UK is on track to complete the implementation in advance
of the legislative deadline of 1 January 2019, with implementation
subject to regulatory and court approvals and various other
authorisations.
Development and performance of our business in H117
Information on the development and performance of our business
in H117 is set out in the 'Income statement review' section of the
Financial review.
2017 outlook
We expect solid UK economic growth in 2017. However, we see
greater uncertainty in the outlook, with the concern that some
downside risks could materialise later this year and into 2018. The
labour market remains strong, but higher inflation, largely from
the lower value of sterling, is now reducing households' real
earnings. This is likely to result in lower consumer spending
growth which, when combined with a potentially more challenging
macro environment, adds a degree of caution to our outlook.
We have therefore deliberately controlled growth in certain
business areas and in particular those with higher margins and the
potential for higher risk. We believe that our proactive risk
management policies and low risk appetite will deliver resilient
performance going forward.
Our principal risks and uncertainties
Information on our principal risks and uncertainties is set out
in the Risk review by type of risk. Except where noted, there has
been no significant change to the description of these risks or key
mitigating actions as set out in the 2016 Annual Report.
Key performance indicators
The directors of the Company's ultimate UK parent, Santander UK
Group Holdings plc, manage the operations of the Santander UK Group
Holdings plc group (which includes the ANTS group) on a business
division basis. Key performance indicators are not set, monitored
or managed at the ANTS group level. As a result, the Company's
Directors believe that analysis using key performance indicators
for the Company is not necessary or appropriate for an
understanding of the development, performance or position of the
Company. The development and performance of the business of the
ANTS group is set out in the 'Income statement review' section of
the Financial review. The key performance indicators of the
Santander UK Group Holdings plc group can be found on page 4 of its
2017 Half Yearly Financial Report, which does not form part of this
report.
By Order of the Board
Juan Garrido Otaola
Director
19 September 2017
Directors' responsibilities statement
The Directors confirm that to the best of their knowledge these
Condensed Consolidated Interim Financial Statements have been
prepared in accordance with International Accounting Standard 34,
'Interim Financial Reporting', as adopted by the European Union,
and that the half-year management report herein includes a fair
review of the information required by Disclosure Guidance and
Transparency Rules 4.2.7R and 4.2.8R, namely:
- An indication of important events that have occurred
during the six months ended 30 June 2017 and their
impact on the Condensed Consolidated Interim Financial
Statements, and a description of the principal
risks and uncertainties for the remaining six
months of the financial year, and
- Material related party transactions in the six
months ended 30 June 2017 and any material changes
in the related party transactions described in
the last Annual Report.
By Order of the Board
Juan Garrido Otaola
Chief Executive Officer
19 September 2017
INCOME STATEMENT REVIEW
SUMMARISED CONSOLIDATED INCOME STATEMENT
Half Half
year year
to to
30 June 30 June
2017 2016
GBPm GBPm
------------------------------------------- --------- ---------
Net interest income 145 106
Non-interest income(1) 206 135
------------------------------------------- --------- ---------
Total operating income 351 241
------------------------------------------- --------- ---------
Operating expenses before impairment
losses (152) (129)
------------------------------------------- --------- ---------
Impairment losses on loans and advances - (25)
Total operating impairment losses - (25)
------------------------------------------- --------- ---------
Profit before tax 199 87
------------------------------------------- --------- ---------
Tax on profit (59) (27)
------------------------------------------- --------- ---------
Profit after tax for the period 140 60
------------------------------------------- --------- ---------
(1) Comprised of Net fee and commission
income and Net trading and other income.
H117 compared to H116
Profit before tax increased by GBP112m to GBP199m in H117 (H116:
GBP87m). By income statement line, the movements were:
- Net interest income increased by GBP39m to GBP145m,
due to the release of interest accrued in relation
to a certain foreign tax liability and other
associated amounts, where the period to make
claim expired in H117.
- Non-interest income increased by GBP71m to GBP206m,
due to loan restructures and mark-to-market movements
on fair value accounted portfolios as well as
an increase in client activity in market-making
activities.
- Operating expenses before impairment losses,
provisions and charges increased by 18% to GBP152m,
due to an increase in staff costs, predominantly
relating to variable compensation and inflationary
increases, as well as increased depreciation
from higher investment in business systems.
- Impairment losses on loans and advances decreased
to GBPnil. In H116 there was an impairment of
a single loan in Global Corporate Banking that
moved to non-performance. Overall, corporate
loans continue to perform well.
- Tax on profit increased by GBP32m to GBP59m,
driven by higher profits. The effective tax rate
decreased to 30% from 31% due to the reduction
in the standard rate of UK corporation tax.
RISK GOVERNANCE
ANTS contains portions of a number of Santander UK's business
segments. The booking of transactions in ANTS or another Santander
UK group entity reflects historical or operational considerations
and does not necessarily reflect any particular business split.
Throughout the Risk review, except where we say otherwise,
references to Santander UK should be taken to include the ANTS
group (reflecting both the risks that we are directly exposed to
through our own activities and the risks arising elsewhere in the
Santander UK group that we are indirectly exposed to due to the
existence of the Upstream Guarantee. For more on the Upstream
Guarantee, see the 2016 Annual Report and Note 12 to the Condensed
Consolidated Interim Financial Statements.
As a financial services provider, managing risk is a core part
of our day-to-day activities. To be able to manage our business
effectively, it is critical that we understand and control risk in
everything we do. We aim to use a prudent approach and advanced
risk management techniques to help us deliver robust financial
performance and build sustainable value for our stakeholders.
We aim to keep a predictable medium-low risk profile, consistent
with our business model. This is key to achieving our strategic
objectives.
30 June 2017 compared to 31 December 2016
There were no significant changes in our risk governance as
described in the 2016 Annual Report.
CREDIT RISK
There were no significant changes in the way we manage credit
risk as described in the 2016 Annual Report.
Credit performance
The customer loans in the table below are presented differently
from the balances in the Condensed Consolidated Balance Sheet. The
main difference is that the customer loans below exclude
inter-company balances. We disclose inter-company balances
separately in the Notes to the Condensed Consolidated Interim
Financial Statements. In addition, customer loans below are
presented on an amortised cost basis.
Impairment
Customer NPL NPL Gross loss
loans(1) NPLs(2)(3) ratio coverage(4) write-offs(5) allowances
GBPbn GBPm % % GBPm GBPm
-------------------- ---------- ----------- ------- ------------- --------------- ------------
30 June 2017
Commercial Banking 6.6 36 0.55 78 6 28
Global Corporate
Banking 4.5 50 1.11 92 - 46
Corporate Centre 5.1 - - - - -
-------------------- ---------- ----------- ------- ------------- --------------- ------------
16.2 86 0.53 86 6 74
-------------------- ---------- ----------- ------- ------------- --------------- ------------
31 December 2016
Commercial Banking 6.6 112 1.70 31 - 35
Global Corporate
Banking 3.7 52 1.41 90 - 47
Corporate Centre 5.4 - - - - -
-------------------- ---------- ----------- ------- ------------- --------------- ------------
15.7 164 1.04 50 - 82
-------------------- ---------- ----------- ------- ------------- --------------- ------------
(1) Includes Social Housing loans and finance leases.
(2) We define NPLs in the 'Credit risk management'
section in the 2016 Annual Report.
(3) All NPLs continue accruing interest.
(4) Impairment loss allowances as a percentage of
NPLs. Impairment loss allowances relate to early
arrears and performing assets (i.e. the incurred
but not observed (IBNO) provision) as well as NPLs,
so the ratio can exceed 100%.
(5) 30 June 2017 reflects 6 months of gross write-offs
and 31 December 2016 reflects 12 months of gross
write-offs.
30 June 2017 compared to 31 December 2016
The NPL ratio for Commercial Banking decreased to
0.55% (2016: 1.70%), primarily due to the full repayment
of two impaired loans, as well as the write-off of
a pre-2009 Real Estate case.
In Global Corporate Banking, the NPL ratio decreased
to 1.11% (2016: 1.41%) driven by asset growth.
MARKET RISK
There were no significant changes in the way we manage market
risk as described in the 2016 Annual Report.
TRADING MARKET RISK
VaR
At 30 June 2017 the total correlated internal VaR exposure for
ANTS, using a time horizon of one day and a confidence level of
99%, remained stable at GBP3.3m (2016: GBP3.4m).
BANKING MARKET RISK
Interest rate risk
The table below shows how the Santander UK group (including
ANTS) base case income and valuation would be affected by a 50
basis point parallel shift (both upwards and downwards) applied
instantaneously to the yield curve at 30 June 2017 and 31 December
2016.
30 June 2017 31 December 2016
---------------- -------------------
+50bps -50bps +50bps -50bps
GBPm GBPm GBPm GBPm
NIM sensitivity 241 (114) 240 (82)
EVE sensitivity 159 (270) 54 (30)
----------------- ------- ------- --------- --------
30 June 2017 compared to 31 December 2016
The movement in NIM and EVE sensitivities in H117 was largely
due to changes in our underlying models used for risk measurement
purposes. The models have been updated to better reflect the risks
inherent in the current low interest rate environment, including
the possibility of negative interest rates in the UK. On a
comparative basis against the year-end, there was no significant
change in the underlying risk position in H117.
LIQUIDITY RISK
There were no significant changes in the way we manage liquidity
risk as described in the 2016 Annual Report.
Eligible liquidity pool
This table shows the carrying value of the assets in our LCR
eligible liquidity pool held by the ANTS group and additional
liquid assets held by the rest of the Santander UK group (to which
the ANTS group has access through the intercompany guarantee and
DoLSub arrangements described in the liquidity risk section of the
Risk review in the 2016 Annual Report) at 30 June 2017 and 31
December 2016:
30 June 2017 31 December 2016
-------------------------------------------- --------------------------------------------
Held by ANTS Held elsewhere Total Held by ANTS Held elsewhere Total
in Santander UK in Santander UK
GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
-------------------------- -------------- ------------------ -------- -------------- ------------------ --------
LCR eligible liquidity
pool 23.4 26.7 50.1 18.6 32.1 50.7
-------------------------- -------------- ------------------ -------- -------------- ------------------ --------
CAPITAL RISK
There were no significant changes in the way we manage capital
risk as described in the 2016 Annual Report.
Regulatory capital resources
31 December
30 June 2017 2016
GBPm GBPm
-------------------------------- ------------- ------------
CET1 capital before regulatory
adjustments 3,889 3,757
Total regulatory adjustments
to CET1 capital (291) (229)
-------------------------------- ------------- ------------
CET1 capital 3,598 3,528
Total regulatory capital 3,598 3,528
-------------------------------- ------------- ------------
Independent review report to Abbey National Treasury Services
plc
Report on the Condensed Consolidated Interim Financial
Statements
Our conclusion
We have reviewed Abbey National Treasury Services plc's
condensed consolidated interim financial statements (the "interim
financial statements") in the Half Yearly Financial Report of Abbey
National Treasury Services plc for the 6 month period ended 30 June
2017. Based on our review, nothing has come to our attention that
causes us to believe that the interim financial statements are not
prepared, in all material respects, in accordance with
International Accounting Standard 34, 'Interim Financial
Reporting', as adopted by the European Union and the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority.
What we have reviewed
The interim financial statements comprise:
-- the consolidated balance sheet as at 30 June 2017;
-- the consolidated income statement and consolidated statement
of comprehensive income for the period then ended;
-- the consolidated cash flow statement for the period then ended;
-- the consolidated statement of changes in equity for the period then ended; and
-- the explanatory notes to the interim financial statements.
The interim financial statements included in the Half Yearly
Financial Report have been prepared in accordance with
International Accounting Standard 34, 'Interim Financial
Reporting', as adopted by the European Union and the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority.
As disclosed in Note 1 to the interim financial statements, the
financial reporting framework that has been applied in the
preparation of the full annual financial statements of the Group is
applicable law and International Financial Reporting Standards
(IFRSs) as adopted by the European Union.
Responsibilities for the Condensed Consolidated Interim
Financial Statements and the review
Our responsibilities and those of the directors
The Half Yearly Financial Report, including the interim
financial statements, is the responsibility of, and has been
approved by, the directors. The directors are responsible for
preparing the Half Yearly Financial Report in accordance with the
Disclosure Guidance and Transparency Rules sourcebook of the United
Kingdom's Financial Conduct Authority.
Our responsibility is to express a conclusion on the interim
financial statements in the Half Yearly Financial Report based on
our review. This report, including the conclusion, has been
prepared for and only for the company for the purpose of complying
with the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority and for no other
purpose. We do not, in giving this conclusion, accept or assume
responsibility for any other purpose or to any other person to whom
this report is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.
What a review of the Condensed Consolidated Interim Financial
Statements involves
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK) and,
consequently, does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
We have read the other information contained in the half yearly
financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the interim financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants
London
19 September 2017
ConDENSED CONsolidated interim financial Statements
Consolidated Income Statement (unaudited)
For the half year to 30 June 2017 and the half year to 30 June
2016
Half Half
year year
to to
30 30
June June
2017 2016
Notes GBPm GBPm
----------------------------------------- ------ ------ ------
Interest and similar income 247 678
Interest expense and similar charges (102) (572)
----------------------------------------- ------ ------ ------
Net interest income 145 106
----------------------------------------- ------ ------ ------
Net fee and commission income 63 64
Net trading and other income 3 143 71
----------------------------------------- ------ ------ ------
Total operating income 351 241
----------------------------------------- ------ ------ ------
Operating expenses before impairment
losses (152) (129)
----------------------------------------- ------ ------ ------
Impairment losses on loans and advances 4 - (25)
Total operating impairment losses - (25)
----------------------------------------- ------ ------ ------
Profit before tax 199 87
Tax on profit 5 (59) (27)
----------------------------------------- ------ ------ ------
Profit after tax for the period 140 60
----------------------------------------- ------ ------ ------
Attributable to:
Equity holders of the parent 140 60
----------------------------------------- ------ ------ ------
Consolidated Statement of Comprehensive Income (unaudited)
For the half year to 30 June 2017 and the half year to 30 June
2016
Half Half
year year
to to
30 June 30 June
2017 2016
GBPm GBPm
-------------------------------------------------- --------- ---------
Profit for the period 140 60
-------------------------------------------------- --------- ---------
Other comprehensive income:
Other comprehensive income that may be
reclassified to profit or loss subsequently:
Available-for-sale securities:
- Change in fair value 4 11
- Income statement transfers - 1
- Taxation (1) (2)
-------------------------------------------------- --------- ---------
3 10
-------------------------------------------------- --------- ---------
Cash flow hedges:
- Effective portion of changes in fair
value - 604
- Income statement transfers - (713)
- Taxation - 28
-------------------------------------------------- --------- ---------
- (81)
-------------------------------------------------- --------- ---------
Currency translation on foreign operations - (2)
-------------------------------------------------- --------- ---------
Net other comprehensive income that may
be reclassified to profit or loss subsequently 3 (73)
-------------------------------------------------- --------- ---------
Other comprehensive income that will not
be reclassified to profit or loss subsequently:
Own credit adjustment:
- Transfers (15) -
- Taxation 4 -
-------------------------------------------------- --------- ---------
(11) -
-------------------------------------------------- --------- ---------
Net other comprehensive income that will (11) -
not be reclassified to profit or loss
subsequently
-------------------------------------------------- --------- ---------
Total other comprehensive income for the
period net of tax (8) (73)
-------------------------------------------------- --------- ---------
Total comprehensive income for the period 132 (13)
-------------------------------------------------- --------- ---------
Attributable to:
Equity holders of the parent 132 (13)
-------------------------------------------------- --------- ---------
ConDENSED CONsolidated interim financial Statements
consolidated Balance Sheet (unaudited)
At 30 June 2017 and 31 December 2016
30 June 31 December
2017 2016
Notes GBPm GBPm
------------------------------------ ------ --------- ------------
Assets
Cash and balances at central banks 3,927 3,517
Trading assets 7 34,061 29,682
Derivative financial instruments 8 22,105 27,954
Financial assets designated at
fair value 1,886 1,854
Loans and advances to banks 9,387 10,046
Loans and advances to customers 9 15,242 15,135
Loans and receivables securities 267 219
Available-for-sale securities 476 476
Macro hedge of interest rate risk 618 705
Intangible assets 38 35
Property, plant and equipment 9 9
Deferred tax assets 11 8
Other assets 141 164
------------------------------------ ------ --------- ------------
Total assets 88,168 89,804
------------------------------------ ------ --------- ------------
Liabilities
Deposits by banks 10 25,937 25,326
Deposits by customers 3,352 3,169
Trading liabilities 11 21,490 15,560
Derivative financial instruments 8 23,840 31,620
Financial liabilities designated
at fair value 2,637 2,119
Debt securities in issue 6,659 7,895
Other liabilities 172 224
Provisions 15 15
Current tax liabilities 177 119
Total liabilities 84,279 86,047
------------------------------------ ------ --------- ------------
Equity
Share capital 2,549 2,549
Retained earnings 1,337 1,208
Other reserves 3 -
Total shareholders' equity 3,889 3,757
Total liabilities and equity 88,168 89,804
------------------------------------ ------ --------- ------------
ConDENSED CONsolidated interim financial Statements
Consolidated Cash Flow Statement (unaudited)
For the half year to 30 June 2017 and the half year to 30 June
2016
Half year Half year
to to
30 June 30 June
2017 2016
GBPm GBPm
------------------------------------------- ---------- ----------
Cash flows from operating activities
Profit for the period 140 60
Adjustments for:
Non-cash items included in profit 141 (300)
Change in operating assets 1,517 16,061
Change in operating liabilities (1,884) 22,531
Effects of exchange rate differences (23) 1,103
------------------------------------------- ---------- ----------
Net cash flows from operating activities (109) 39,455
------------------------------------------- ---------- ----------
Cash flows from investing activities
Purchase of property, plant and equipment
and intangible assets (7) (6)
Proceeds from sale and redemption
of available-for-sale securities 2 612
Net cash flows from investing activities (5) 606
------------------------------------------- ---------- ----------
Cash flows from financing activities
Issue of debt securities 1,222 3,645
Issuance costs of debt securities - (5)
Repayment of debt securities (950) (38,582)
Net cash flows from financing activities 272 (34,942)
------------------------------------------- ---------- ----------
Change in cash and cash equivalents 158 5,119
Cash and cash equivalents at beginning
of the period 17,341 10,192
Effects of exchange rate changes
on cash and cash equivalents (239) 948
------------------------------------------- ---------- ----------
Cash and cash equivalents at the
end of the period 17,260 16,259
------------------------------------------- ---------- ----------
Cash and cash equivalents consist of:
30 June 30 June
2017 2016
GBPm GBPm
---------------------------------------- -------- --------
Cash and balances at central banks 3,927 3,499
Less: regulatory minimum cash balances (39) (26)
---------------------------------------- -------- --------
3,888 3,473
Net trading other cash equivalents 6,774 5,440
Net non-trading other cash equivalents 6,598 7,346
---------------------------------------- -------- --------
Cash and cash equivalents 17,260 16,259
---------------------------------------- -------- --------
Consolidated Statement of Changes in EQUITY (unaudited)
For the half year to 30 June 2017 and the half year to 30 June
2016
Other reserves
-----------------------------------
Available- Cash Currency Retained
Share for-sale flow translation earnings Total
capital GBPm hedging GBPm GBPm GBPm
GBPm GBPm
-------------------------------------------------- --------- ----------- -------- ------------ --------- -------
1 January 2017 2,549 (5) - 5 1,208(1) 3,757
Profit for the period - - - - 140 140
Other comprehensive
income, net of tax:
* Available-for-sale securities - 3 - - - 3
* Own credit adjustment - - - - (11) (11)
Total comprehensive
income for the period - 3 - - 129 132
-------------------------------------------------- --------- ----------- -------- ------------ --------- -------
30 June 2017 2,549 (2) - 5 1,337 3,889
-------------------------------------------------- --------- ----------- -------- ------------ --------- -------
1 January 2016 2,549 (20) 81 6 1,027 3,643
Profit for the period - - - - 60 60
Other comprehensive
income, net of tax:
* Available-for-sale securities - 10 - - - 10
* Cash flow hedges - - (81) - - (81)
* Currency translation on foreign operations - - - (2) - (2)
Total comprehensive
income for the period - 10 (81) (2) 60 (13)
-------------------------------------------------- --------- ----------- -------- ------------ --------- -------
30 June 2016 2,549 (10) - 4 1,087 3,630
-------------------------------------------------- --------- ----------- -------- ------------ --------- -------
(1) The impact of the early adoption of IFRS 9 requirements
for the presentation of gains and losses on such
financial liabilities relating to own credit in other
comprehensive income as described in Note 1, was
GBP2m (net of tax).
1. Accounting policies
BASIS OF PREPARATION
The financial information in these Condensed Consolidated
Interim Financial Statements does not constitute statutory accounts
as defined in section 434 of the UK Companies Act 2006. Statutory
accounts for the year ended 31 December 2016 have been delivered to
the Registrar of Companies. The auditor's report on those accounts
was unqualified, did not draw attention to any matters by way of
emphasis and did not contain a statement under section 498(2) of
the UK Companies Act 2006.
The Condensed Consolidated Interim Financial Statements have
been prepared in accordance with International Accounting Standard
(IAS) 34 'Interim Financial Reporting', as issued by the
International Accounting Standards Board (IASB) and adopted by the
European Union, and the Disclosure Guidance and Transparency Rules
of the Financial Conduct Authority (FCA). They do not include all
the information and disclosures normally required for full annual
financial statements and should be read in conjunction with the
Consolidated Financial Statements of the ANTS group for the year
ended 31 December 2016 which were prepared in accordance with
International Financial Reporting Standards as adopted by the
European Union. Those Consolidated Financial Statements were also
prepared in accordance with International Financial Reporting
Standards as issued by the IASB including interpretations issued by
the IFRS Interpretations Committee (IFRIC) of the IASB (together
IFRS). The ANTS group has also complied with its legal obligation
to comply with International Financial Reporting Standards as
adopted by the European Union as there are no applicable
differences between the two frameworks for the periods
presented.
In preparing the Condensed Consolidated Interim Financial
Statements management makes judgements, estimates and assumptions
which impact the application of accounting policies and the
reported amounts of assets, liabilities, income and expenses.
Because of the inherent uncertainty in making estimates, actual
results reported in future periods may differ. Management
continually evaluates the judgements, estimates and assumptions
applied, including expectations of future events that are believed
to be reasonable under the circumstances.
Except as noted below, the same accounting policies,
presentation and methods of computation are followed in these
Condensed Consolidated Interim Financial Statements as were applied
in the presentation of the ANTS group's 2016 Annual Report. Copies
of the ANTS group's 2016 Annual Report are available on the
Santander UK group's website or upon request from Investor
Relations, Santander UK plc, 2 Triton Square, Regent's Place,
London NW1 3AN.
The ANTS group designates certain financial liabilities at fair
value through profit or loss where they contain embedded
derivatives or where associated derivatives used to economically
hedge the risk are held at fair value. Following the endorsement of
IFRS 9 'Financial Instruments' by the EU in December 2016, the ANTS
group has elected to early apply from 1 January 2017 the
requirements for the presentation of gains and losses on such
financial liabilities relating to own credit in other comprehensive
income without applying the other requirements in IFRS 9. The own
credit component of the cumulative fair value adjustment on
financial liabilities designated at fair value through profit or
loss as at 1 January 2017 was GBP2m (net of tax) and is included in
opening retained earnings. Comparatives have not been restated.
Except as noted below, there have been no other significant
changes arising from new or revised standards and interpretations,
and amendments thereto, which have been issued but which are not
yet effective for the ANTS group as were set out in the 2016 Annual
Report.
Future accounting developments
IFRS 9 Financial Instruments - In the 2016 Annual Report, ANTS
provided detailed descriptions and explanations on how key IFRS 9
concepts will be implemented and included details of our proposed
approaches for classification and measurement of financial assets
and liabilities and hedge accounting and, in respect of the
expected credit loss (ECL) methodology, proposed modelling
techniques, judgements, and proposals for the incorporation of
forward-looking information and the determination of a significant
increase in credit risk.
ANTS continues to make progress on developing and testing our
ECL impairment models across the range of in-scope portfolios and
formalising the governance framework to support the new operating
model. A parallel-run will take place during H217 to provide
assurances on the accuracy and completeness of the modelling
process, whilst we implement the new operating model to ensure we
can meet our range of disclosures relating to IFRS 9. We are also
finalising the determination of the classification and measurement
of financial assets. We expect to continue to apply IAS 39 hedge
accounting until such time as further changes for macro hedge
accounting rules are applicable.
It is not yet practicable to quantify the effect of IFRS 9 on
these Condensed Consolidated Interim Financial Statements. ANTS
group expects to quantify the effect of IFRS 9 during H217 and by
no later than the end of the year.
IFRS 15 Revenue from Contracts with Customers - In the 2016
Annual Report, ANTS explained that revenue relating to lease
contracts, insurance contracts and financial instruments is outside
the scope of IFRS 15. In addition, a significant proportion of the
recognition of ANTS group's fee and commission income that is
within the scope of the standard is not expected to change. Whilst
the standard is not expected to have a significant impact on the
ANTS group's profitability, the impact of the standard is still
being assessed. It is not yet practicable to quantify the effect of
IFRS 15 on these Condensed Consolidated Interim Financial
Statements.
Going concern
The ANTS group's objectives, policies and processes for managing
its capital are described in the capital risk section of the Risk
review in the 2016 Annual Report. Details of the ANTS group's
financial risk management objectives, its financial instruments and
hedging activities; and its exposures to credit risk, interest rate
risk, liquidity risk, operational risk and other risks are set out
in the Risk review in the 2016 Annual Report.
The ANTS group is reliant on Santander UK plc and other
companies in the Santander UK group of companies for a proportion
of its funding. The Santander UK Board has confirmed that Santander
UK plc is a going concern, and that it will provide funding to the
ANTS group for the foreseeable future. In giving this commitment to
provide funding to the ANTS group, the Santander UK Board has
considered the uncertainties that affect the ANTS group when
preparing the forecasts and budgets of the combined business of
Santander UK.
The Company guarantees any unsubordinated liabilities of
Santander UK plc, which are not debt securities, incurred prior to
31 December 2018 under a deed poll guarantee entered into by the
Company on 11 May 2017. Santander UK plc guarantees all the
unsubordinated liabilities of the Company incurred prior to 31
December 2018.
The Company, Santander UK plc, and Cater Allen Limited, which
are the three PRA-regulated entities within the Santander UK group,
are party to a capital support deed dated 23 December 2015 (the
Capital Support Deed) with certain other non-regulated subsidiaries
of Santander UK plc and Santander UK Group Holdings plc. The
parties to the Capital Support Deed constitute a core UK group as
defined in the PRA Rulebook. Exposures of each of the three
regulated entities to other members of the core UK group are exempt
from large exposure limits that would otherwise apply. The purpose
of the Capital Support Deed is to facilitate the prompt transfer of
available capital resources from, or repayment of liabilities by,
the non-regulated parties to any of the regulated parties in the
event that one of the regulated parties has breached or is at risk
of breaching its capital resources requirements or risk
concentrations requirements. The core UK group permission expires
on 31 December 2018.
The Company, Santander UK plc, and Cater Allen Limited form the
Domestic Liquidity Sub-group (DoLSub) under the PRA's regulatory
liquidity rules. Each member of the DoLSub is required to support
the others by transferring surplus liquidity in times of
stress.
After making enquiries, the Directors have a reasonable
expectation that the ANTS group has adequate resources to continue
in operational existence for at least twelve months from the date
that the balance sheet is signed. For this reason, they continue to
adopt the 'going concern' basis of accounting for preparing the
Condensed Consolidated Interim Financial Statements.
Critical accounting policies and areas of significant management
judgement
The preparation of the Condensed Consolidated Interim Financial
Statements requires management to make estimates and judgements
that affect the reported amount of assets and liabilities at the
date of the Condensed Consolidated Interim Financial Statements and
the reported amount of income and expenses during the reporting
period. Management evaluates its estimates and judgements on an
ongoing basis. Management bases its estimates and judgements on
historical experience and on various other factors that are
believed to be reasonable under the circumstances. Actual results
may differ from these estimates under different assumptions or
conditions.
There have been no significant changes in the basis upon which
estimates have been determined, compared to that applied in the
2016 Annual Report.
2. Segments
The ANTS group's business is managed and reported on the basis
of the following segments: Commercial Banking, Global Corporate
Banking and Corporate Centre. The ANTS group's segments are
strategic business units that offer different products and
services. They are managed separately because each business
requires different technology and marketing strategies. There has
been no change to the descriptions of these segments and segmental
accounting as set out in Note 2 in the Consolidated Financial
Statements of the 2016 Annual Report.
Commercial Global Corporate
Banking Corporate Centre Total
Banking
Half year to 30 June 2017 GBPm GBPm GBPm GBPm
----------------------------- ----------- ----------- ---------- --------
Profit before tax 40 97 62 199
----------------------------- ----------- ----------- ---------- --------
Total assets 6,606 43,808 37,754 88,168
----------------------------- ----------- ----------- ---------- --------
Half year to 30 June 2016
----------------------------- ----------- ----------- ---------- --------
Profit/(loss) before tax 39 70 (22) 87
----------------------------- ----------- ----------- ---------- --------
31 December 2016
----------------------------- ----------- ----------- ---------- --------
Total assets 6,980 39,777 43,047 89,804
----------------------------- ----------- ----------- ---------- --------
3. Net trading and other income
Half Half
year year
to to
30 June 30 June
2017 2016
GBPm GBPm
------------------------------ --------- ---------
Net trading and other income 143 71
------------------------------ --------- ---------
In May 2016, as part of a liability management exercise, certain
debt instruments were purchased pursuant to a tender offer. This
had no significant impact on the income statement.
4. Impairment losses AND PROVISIONS
Half Half
year year
to to
30 June 30 June
2017 2016
GBPm GBPm
------------------------------------------ ---------- ---------
Impairment losses on loans and advances:
- Loans and advances to customers (Note
9) - 25
- 25
----------------------------------------------------- ---------
In H117 and H116, there were no impairment losses on loans and
advances to banks, loans and receivables securities and
available-for-sale securities, no recoveries of loans and advances,
and no provisions for other liabilities and charges.
5. Taxation
The tax on profit before tax differs from the theoretical amount
that would arise using the basic corporation tax rate of the
Company as follows:
Half year Half
to year
30 June to
2017 30 June
GBPm 2016
GBPm
---------------------------------------- ---------- ---------
Profit before tax 199 87
---------------------------------------- ---------- ---------
Tax calculated at a tax rate of 19.25%
(H116: 20%) 38 17
Bank surcharge on profits 16 7
Net disallowable items and non-taxable
income 3 (1)
Non-deductible UK Bank Levy 2 4
Tax charge 59 27
---------------------------------------- ---------- ---------
Interim period corporation tax is accrued based on the estimated
average annual effective corporation tax rate for the year of 29.6%
(2016: 31.0%).
The standard rate of UK corporation tax was 27.25% for banking
entities and 19.25% for non-banking entities (2016: 28% for banking
entities and 20% for non-banking entities) following the
introduction of an 8% surcharge to be applied to banking companies
from 1 January 2016. Taxation for other jurisdictions is calculated
at the rates prevailing in the relevant jurisdictions. The Finance
(No.2) Act 2015, introduced reductions in the corporation tax rate
from 20% to 19% in 2017 and 18% by 2020. Finance Act 2016, which
was substantively enacted on 6 September 2016, introduced a further
reduction in the standard rate of corporation tax rate to 17% from
2020. The effects of the changes in tax rates are included in the
deferred tax balances at 30 June 2017 and 31 December 2016.
6. Dividends
No dividends on the Company's ordinary shares were declared
during H117 and H116.
7. Trading assets
30 June 31 December
2017 2016
GBPm GBPm
-------------------------------------------------------------------------- -------- ------------
Loans and advances to banks - -securities
purchased under resale agreements 1,580 2,757
- other(1) 4,502 4,721
Loans and advances to customers -securities
purchased under resale agreements 14,315 7,955
- other(1) 1,768 2,368
Debt securities 4,507 6,248
Equity securities 7,389 5,633
-------------------------------------------------------------------------- -------- ------------
34,061 29,682
-------------------------------------------------------------------------- -------- ------------
(1) Total 'other' comprises short-term loans of GBP1,279m
(2016: GBP920m) and cash collateral of GBP4,991m
(2016: GBP6,169m).
A significant portion of the debt and equity securities are held
in our eligible liquidity pool. They comprise mainly of government
bonds and quoted stocks.
8. Derivative financial instruments
30 June 31 December
2017 2016
---------- --------------------- ---------- ---------------------
Fair value Fair value
--------------------- ---------------------
Notional Assets Liabilities Notional Assets Liabilities
Derivatives held amount GBPm GBPm amount GBPm GBPm
for trading GBPm GBPm
------------------------- ---------- ------- ------------ ---------- ------- ------------
Exchange rate contracts 195,539 6,618 8,970 220,651 8,939 12,332
Interest rate contracts 1,020,785 13,963 13,118 1,098,792 17,361 17,133
Equity and credit
contracts 19,360 1,448 878 16,335 1,572 1,192
------------------------- ---------- ------- ------------ ---------- ------- ------------
Total derivatives
held for trading 1,235,684 22,029 22,966 1,335,778 27,872 30,657
------------------------- ---------- ------- ------------ ---------- ------- ------------
Derivatives held
for hedging
------------------------- ---------- ------- ------------ ---------- ---------------------
Derivatives designated
as fair value hedges:
Interest rate contracts 4,290 76 874 4,159 82 963
Total derivatives
held for hedging 4,290 76 874 4,159 82 963
------------------------- ---------- ------- ------------ ---------- ------- ------------
Total derivatives 1,239,974 22,105 23,840 1,339,937 27,954 31,620
------------------------- ---------- ------- ------------ ---------- ------- ------------
9. Loans and advances to customers
30 June 31 December
2017 2016
GBPm GBPm
----------------------------------------------- -------- ------------
Amounts due from Santander UK group
undertakings 101 102
Amounts due from Banco Santander subsidiaries
and joint ventures 17 18
Other loans and advances 15,198 15,097
----------------------------------------------- -------- ------------
Loans and advances to customers 15,316 15,217
Less: impairment loss allowances (74) (82)
----------------------------------------------- -------- ------------
Net loans and advances to customers 15,242 15,135
----------------------------------------------- -------- ------------
Movement in impairment loss allowances:
30 June 30 June
2017 2016
GBPm GBPm
-------------------------------- -------- --------
At 1 January 82 63
Charge to the income statement - 25
Write-offs (8) -
-------------------------------- -------- --------
At 30 June 74 88
-------------------------------- -------- --------
10. Deposits by banks
30 June 31 December
2017 2016
GBPm GBPm
------------------------------------------ -------- ------------
Amounts due to Santander UK subsidiaries 24,615 23,912
Securities sold under repurchase
agreements 220 664
Amounts due to Banco Santander 21 -
SA - other
Deposits held as collateral - 3
Other deposits 1,081 747
------------------------------------------ -------- ------------
25,937 25,326
------------------------------------------ -------- ------------
11. Trading liabilities
30 June 2017 31 December
GBPm 2016
GBPm
--------------------------------------------------- ------------- ------------
Deposits by banks - securities
sold under repurchase agreements 676 780
- other(1) 2,969 3,420
Deposits by customers - securities
sold under repurchase agreements 13,928 8,018
- other(1) 407 541
Short positions in securities and
unsettled trades 3,510 2,801
--------------------------------------------------- ------------- ------------
21,490 15,560
--------------------------------------------------- ------------- ------------
(1) Comprises cash collateral of GBP3,371m (2016:
GBP3,535m) and short-term deposits of GBP5m (2016:
GBP426m).
12. Contingent liabilities and commitments
30 31 December
June 2016
2017 GBPm
GBPm
--------------------------------------------- -------- ------------
Guarantees given on behalf of the Company's
immediate UK parent, fellow subsidiaries
and subsidiaries 218,944 218,049
Guarantees given to third parties 301 310
Formal standby facilities, credit lines
and other commitments 14,717 14,383
--------------------------------------------- -------- ------------
233,962 232,742
--------------------------------------------- -------- ------------
There have been no significant changes to the contingent
liabilities as set out in Note 32 to the Consolidated Financial
Statements in the 2016 Annual Report except as follows:
Guarantees given on behalf of the Company's immediate UK
parent
The Company has given a full and unconditional guarantee in
respect of certain unsubordinated liabilities of Santander UK plc
(excluding debt securities) incurred prior to 31 December 2018
under a deed poll guarantee entered into by the Company on 11 May
2017.
13. Financial instruments
a) Measurement basis of financial assets and liabilities
The ANTS group categorises assets and liabilities measured at
fair value within the fair value hierarchy based on the inputs to
the valuation techniques as described in Note 38(a) to the
Consolidated Financial Statements in the 2016 Annual Report.
b) Fair values of financial instruments carried at amortised
cost
The following table analyses the fair value of the financial
instruments carried at amortised cost at 30 June 2017 and 31
December 2016. It does not include fair value information for
financial assets and financial liabilities carried at amortised
cost if the carrying amount is a reasonable approximation of fair
value. Details of the valuation methodology of the financial assets
and financial liabilities carried at amortised cost can be found in
Note 38(c) to the Consolidated Financial Statements in the 2016
Annual Report.
30 June 2017 31 December
2016
------------------ ------------------
Fair Carrying Fair Carrying
value value value value
Balance GBPm GBPm GBPm GBPm
sheet category
----------------- ------------------------ ------- --------- ------- ---------
Assets
Loans and
advances
to banks 9,334 9,387 9,913 10,046
------- --------- ------- ---------
Loans and
advances
to customers Corporate loans 15,151 15,125 15,074 15,015
Other advances 117 117 120 120
15,268 15,242 15,194 15,135
------- --------- ------- ---------
Loans and
receivables
securities 265 267 217 219
------- --------- ------- ---------
Liabilities
Securities sold
Deposits under agreements
by banks to repurchase 228 220 675 664
Other deposits 25,731 25,717 24,669 24,662
------- --------- ------- ---------
25,959 25,937 25,344 25,326
------- --------- ------- ---------
Deposits Current and demand
by customers accounts 1,524 1,524 835 835
Wholesale funds
and deposits 1,828 1,828 2,334 2,334
3,352 3,352 3,169 3,169
------- --------- ------- ---------
Debt securities Bonds and medium-term
in issue notes 6,659 6,659 7,895 7,895
------------------ ----------------------- ------- --------- ------- ---------
c) Fair values of financial instruments measured at fair value
on a recurring basis
The following table summarises the fair values of the financial
assets and liabilities accounted for at fair value at 30 June 2017
and 31 December 2016, analysed by their levels in the fair value
hierarchy - Level 1, Level 2 and Level 3.
Transfers between levels of the fair value hierarchy
Transfers between levels of the fair value hierarchy are
reported at the beginning of the period in which they occur. During
H117 and 2016 there were no transfers of financial instruments
between Levels 1, 2 and 3 in the fair value hierarchy.
30 June 2017 31 December 2016
--------------------------------- ----------------------------------
Level Level Level Total Level Level Level Total Valuation
1 2 3 1 2 3
Balance GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm technique
sheet category
-------------------- ------------ ------- ------- ------ ------- -------- ------- ------ ------- ----------
Assets
Loans and
Trading advances
assets to banks - 6,082 - 6,082 - 7,478 - 7,478 A
Loans and
advances
to customers 1,202 14,881 - 16,083 762 9,561 - 10,323 A
Debt securities 4,507 - - 4,507 6,248 - - 6,248 -
Equity
securities 7,389 - - 7,389 5,633 - - 5,633 -
Exchange
Derivative rate
assets contracts - 6,597 21 6,618 - 8,917 22 8,939 A
Interest A &
rate contracts - 14,024 15 14,039 - 17,424 19 17,443 C
Equity
and credit B &
contracts - 1,148 300 1,448 - 1,274 298 1,572 D
Financial
assets Loans and
designated advances
at fair to
value customers - 1,499 64 1,563 - 1,658 63 1,721 A
Debt securities - 323 - 323 - 133 - 133 A
Available-for-sale Debt
securities securities 476 - - 476 476 - - 476 -
Total assets
at fair
value 13,574 44,554 400 58,528 13,119 46,445 402 59,966
------- ------- ------ ------- -------- ------- ------ -------
Liabilities
Trading Deposits
liabilities by banks - 3,645 - 3,645 - 4,200 - 4,200 A
Deposits
by customers - 14,335 - 14,335 - 8,559 - 8,559 A
Short positions 3,510 - - 3,510 2,801 - - 2,801 -
Exchange
Derivative rate
liabilities contracts - 8,949 21 8,970 - 12,310 22 12,332 A
Interest A &
rate contracts - 13,985 7 13,992 - 18,085 11 18,096 C
Equity
and credit B &
contracts - 836 42 878 1 1,149 42 1,192 D
Financial
liabilities
designated Debt
at fair securities
value in issue - 1,828 - 1,828 - 1,593 - 1,593 A
Structured
deposits - 809 - 809 - 526 - 526 A
------- ------- ------ ------- -------- ------- ------ -------
Total liabilities
at fair
value 3,510 44,387 70 47,967 2,802 46,422 75 49,299
---------------------------------- ------- ------- ------ ------- -------- ------- ------ ------- ----------
d) Valuation techniques
The main valuation techniques employed in internal models to
measure the fair value of the financial instruments are disclosed
in Note 38(e) to the Consolidated Financial Statements in the 2016
Annual Report. The ANTS group did not make any material changes to
the valuation techniques and internal models it used during
H117.
e) Fair value adjustments
The internal models incorporate assumptions that the ANTS group
believes would be made by a market participant to establish fair
value. Fair value adjustments are adopted when the ANTS group
considers that there are additional factors that would be
considered by a market participant that are not incorporated in the
valuation model.
The ANTS group classifies fair value adjustments as either
'risk-related' or 'model-related'. The fair value adjustments form
part of the portfolio fair value and are included in the balance
sheet values of the product types to which they have been applied.
The majority of these adjustments relate to Global Corporate
Banking. The magnitude and types of fair value adjustment adopted
by Global Corporate Banking are listed in the following table:
30 June 31 December
2017 2016
GBPm GBPm
-------------------------------------------- -------- ------------
Risk-related:
- Bid-offer and trade specific adjustments 31 24
- Uncertainty 43 49
- Credit risk adjustment 33 41
- Funding fair value adjustment 10 20
117 134
-------- ------------
Model-related 2 1
Day One profit 1 4
120 139
-------------------------------------------- -------- ------------
Risk-related adjustments
Risk-related adjustments are driven, in part, by the magnitude
of the ANTS group's market or credit risk exposure, and by external
market factors, such as the size of market spreads. For further
details, see the 'Risk-related adjustments' in Note 38(f) to the
Consolidated Financial Statements in the 2016 Annual Report.
f) Internal models based on information other than market data
(Level 3)
Valuation techniques
There have been no significant changes to the valuation
techniques as set out in Note 38(i) to the Consolidated Financial
Statements in the 2016 Annual Report.
Reconciliation of fair value measurements in Level 3 of the fair
value hierarchy
The following table provides a reconciliation of the movement
between opening and closing balances of Level 3 financial
instruments, measured at fair value using a valuation technique
with significant unobservable inputs:
Assets Liabilities
Derivatives Fair Total Derivatives Fair Total
value value
through through
P&L P&L
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------- ------------ --------- ------ ----------------- --------- ------
At 1 January 2017 339 63 402 (75) - (75)
Total gains/(losses)
recognised in profit/(loss):
- Fair value movements 11 1 12 (7) - (7)
- Foreign exchange
and other movements (5) - (5) 5 - 5
Settlements (9) - (9) 7 - 7
At 30 June 2017 336 64 400 (70) - (70)
------------------------------- ------------ --------- ------ ----------------- --------- ------
Gains/(losses) recognised
in profit/(loss) relating
to assets and liabilities
held at the end of
the period 6 1 7 (2) - (2)
------------------------------- ------------ --------- ------ ----------------- --------- ------
At 1 January 2016 416 59 475 (111) (5) (116)
Total gains/(losses)
recognised in profit/(loss):
- Fair value movements 7 12 19 15 (1) 14
- Foreign exchange
and other movements 1 - 1 - (1) (1)
Settlements (18) - (18) 11 - 11
At 30 June 2016 406 71 477 (85) (7) (92)
------------------------------- ------------ --------- ------ ----------------- --------- ------
Gains/(losses) recognised
in profit/(loss) relating
to assets and liabilities
held at the end of
the period 8 12 20 15 (2) 13
------------------------------- ------------ --------- ------ ----------------- --------- ------
Total gains or losses are included in 'Net trading and other
income'.
Effect of changes in significant unobservable assumptions to
reasonably possible alternatives (Level 3)
As discussed above, the fair value of financial instruments are,
in certain circumstances, measured using valuation techniques that
incorporate assumptions that are not evidenced by prices from
observable current market transactions in the same instrument and
are not based on observable market data and, as such require the
application of a degree of judgement. Changing one or more of the
inputs to the valuation models to reasonably possible alternative
assumptions would change the fair values significantly. There has
been no significant change to the unobservable inputs and
sensitivities used in Level 3 fair values as set out in Note 38(i)
to the Consolidated Financial Statements in the 2016 Annual
Report.
14. RELATED PARTY DISCLOSURES
The financial position and performance of the ANTS group have
not been materially affected in H117 by any related party
transactions, or changes to related party transactions. These
transactions were made in the ordinary course of business and
substantially on the same terms as for comparable transactions with
third party counterparties and within limits acceptable to the PRA.
Such transactions do not involve more than the normal risk of
collectability or present any unfavourable features.
15. Events after the balance sheet date
There have been no significant events between 30 June 2017 and
the date of approval of these financial statements which would
require a change to or additional disclosure in the financial
statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BRGDCXXBBGRC
(END) Dow Jones Newswires
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