SUMMARY OF GROUP RESULTS
Summarised segmental analysis
| 2008 |
UK |
Insurance |
Wholesale |
Central |
Group |
Insurance |
Group |
|---|---|---|---|---|---|---|---|
| Net interest income |
4,110 |
(62) |
3,303 |
(293) |
7,058 |
651 |
7,709 |
| Other income |
1,766 |
1,749 |
829 |
(199) |
4,145 |
(3,624) |
521 |
| Total income |
5,876 |
1,687 |
4,132 |
(492) |
11,203 |
(2,973) |
8,230 |
| Insurance claims |
– |
(193) |
– |
– |
(193) |
3,052 |
2,859 |
| Total income, net of insurance claims |
5,876 |
1,494 |
4,132 |
(492) |
11,010 |
79 |
11,089 |
| Operating expenses |
(2,611) |
(591) |
(2,350) |
(30) |
(5,582) |
(69) |
(5,651) |
| Trading surplus (deficit) |
3,265 |
903 |
1,782 |
(522) |
5,428 |
10 |
5,438 |
| Impairment |
(1,472) |
(2) |
(1,508) |
(30) |
(3,012) |
– |
(3,012) |
| Profit (loss) before tax* |
1,793 |
901 |
274 |
(552) |
2,416 |
10 |
2,426 |
Volatility |
|||||||
– Insurance |
– |
(746) |
– |
– |
(746) |
– |
(746) |
– Policyholder interests |
– |
– |
– |
– |
- |
(471) |
(471) |
Provision in respect of certain historic |
– |
– |
(180) |
– |
(180) |
– |
(180) |
Provision for Financial Services Compensation Scheme levy |
(119) |
(3) |
– |
– |
(122) |
– |
(122) |
Goodwill impairment |
– |
– |
(100) |
– |
(100) |
– |
(100) |
Profit (loss) before tax |
1,674 |
152 |
(6) |
(552) |
1,268 |
(461) |
807 |
*Excluding volatility, a provision in respect of certain historic US dollar payments, the Financial Services Compensation Scheme levy and goodwill impairment.
**The Group’s income statement includes income and expenditure which are attributable to the policyholders of the Group’s long-term assurance funds. These items have no impact upon the profit attributable to equity shareholders. In order to provide a clearer representation of the underlying trends within the Insurance and Investments segment, these items are shown within a separate column in the segmental analysis above.
In the year ended 31 December 2008, the contribution from central group items was a negative £552 million compared to a negative contribution of £12 million in 2007. The result in 2008 has been significantly affected by the impact of yield curve volatility on the fair value of derivatives entered into for risk management purposes, after taking into account the effect of hedge accounting adjustments. In addition, there were increased central costs that were not recharged to the divisions in connection with professional advice received during the year and an impairment charge in respect of an available-for-sale investment.
| 2007† |
UK Retail |
Insurance |
Wholesale |
Central |
Group |
Insurance |
Group |
|---|---|---|---|---|---|---|---|
| Net interest income |
3,695 |
(106) |
2,380 |
(368) |
5,601 |
421 |
6,022 |
| Other income |
1,797 |
1,741 |
1,644 |
362 |
5,544 |
6,233 |
11,777 |
| Total income |
5,492 |
1,635 |
4,024 |
(6) |
11,145 |
6,654 |
17,799 |
| Insurance claims |
– |
(302) |
– |
– |
(302) |
(6,615) |
(6,917) |
| Total income, net of insurance claims |
5,492 |
1,333 |
4,024 |
(6) |
10,843 |
39 |
10,882 |
| Operating expenses |
(2,548) |
(611) |
(2,152) |
(6) |
(5,317) |
(13) |
(5,330) |
| Trading surplus (deficit) |
2,944 |
722 |
1,872 |
(12) |
5,526 |
26 |
5,552 |
| Impairment |
(1,224) |
– |
(572) |
– |
(1,796) |
– |
(1,796) |
| Profit (loss) before tax* |
1,720 |
722 |
1,300 |
(12) |
3,730 |
26 |
3,756 |
| Volatility |
|||||||
| – Insurance |
– |
(277) |
– |
– |
(277) |
– |
(277) |
| – Policyholder interests |
– |
– |
– |
– |
– |
(222) |
(222) |
| Discontinued businesses |
– |
145 |
28 |
– |
173 |
(11) |
162 |
| Profit on sale of businesses |
– |
272 |
385 |
– |
657 |
– |
657 |
| Settlement of overdraft claims |
(76) |
– |
– |
– |
(76) |
– |
(76) |
| Profit (loss) before tax |
1,644 |
862 |
1,713 |
(12) |
4,207 |
(207) |
4,000 |
*Excluding volatility, results of discontinued businesses, profit on sale of businesses and the settlement of overdraft claims.
**The Group’s income statement includes income and expenditure which are attributable to the policyholders of the Group’s long-term assurance funds. These items have no impact upon the profit attributable to equity shareholders. In order to provide a clearer representation of the underlying trends within the Insurance and Investments segment, these items are shown within a separate column in the segmental analysis above.
†Segmental analyses for 2007 have been restated as explained in note 4.