Five Year Summary
| 2007 £m | 2006 £m | 2005 £m | 2004 £m | 2003 £m | |
| Income Statement | |||||
| Net operating income | 21,291 | 22,714 | 23,617 | 16,563 | 8,946 |
| Operating expenses (5) | 14,070 | 15,571 | 17,244 | 11,304 | 3,968 |
| Impairment losses on loans and advances/provisions for bad and doubtful debts | 2,012 | 1,742 | 1,599 | 1,255 | 1,025 |
| Group underlying profit before tax/Group profit before tax and exceptional items (1) | 5,708 | 5,537 | 4,842 | 4,279 | 3,885 |
| Profit before taxation | 5,474 | 5,706 | 4,808 | 4,609 | 3,766 |
| Profit after taxation | 4,109 | 3,934 | 3,262 | 3,337 | 2,675 |
| Balance Sheet | |||||
| Total assets | 666,947 | 591,029 | 540,873 | 479,674 | 408,413 |
| Debt in issue (2) (6) | 230,773 | 203,342 | 178,215 | 150,967 | 112,740 |
| Equity share capital | 1,131 | 1,139 | 1,157 | 981 | 963 |
| Shareholders’ equity (excluding non-equity interests) | 21,849 | 20,685 | 18,265 | 16,522 | 15,225 |
| % | % | % | % | % | |
| Performance Ratios | |||||
| Post tax return on mean equity (3) (5) | 19.7 | 20.8 | 19.6 | 19.6 | 17.7 |
| Underlying cost:income ratio (1) (7) | 40.9 | 41.0 | 42.2 | 44.7 | 41.6 |
| Net interest margin (4) | 1.63 | 1.78 | 1.80 | 1.79 | 1.77 |
| per ordinary share | |||||
| pence | pence | pence | pence | pence | |
| Shareholder Information | |||||
| Dividends | 48.9 | 41.4 | 36.1 | 32.95 | 30.9 |
| Basic earnings | 106.2 | 100.6 | 82.2 | 79.7 | 63.6 |
| Underlying earnings (1) (5) | 106.2 | 100.5 | 86.4 | 78.0 | 68.5 |
The financial information for 2005 to 2007 is prepared in accordance with International Financial Reporting Standards (‘IFRS’) as adopted by the European Union at the date the financial statements were approved by the Board. IAS 32,
IAS 39 and IFRS 4 only became effective from 1 January 2005. In order to provide more meaningful comparative information, the 2004 financial information above has therefore been prepared on a ‘pro forma’ basis. This includes the impact of these standards with the exception of the income statement impact of derivative hedge accounting. Financial information
for 2003 is prepared in accordance with UK GAAP.
Notes relating to the 2004 to 2007 financial information
(1) References to underlying relate to the financial information for 2004 to 2007 and incorporate the following adjustments:
- Excluding regulatory provisions, the impact of the change in corporation tax rates, the profit on sale of Drive, goodwill impairment, policyholder tax payable, the impact of short term fluctuations and changes to economic assumptions for Long Term Assurance Business accounted for on an embedded value basis;
- Netting against income of operating lease depreciation, impairment on investment securities, changes in insurance and investment contract liabilities, change in unallocated surplus and net claims incurred on insurance contracts; and
- Including share of profits of associates and jointly controlled entities within underlying non-interest income.
(2) Debt in issue comprises debt securities in issue and other borrowed funds.
(3) Post tax return on mean equity is calculated by dividing underlying profit attributable to ordinary shareholders by the monthly average of ordinary shareholders’ funds.
(4) Net interest margin in 2007 reflects the sale of Drive in 2006. The equivalent margin for 2006 is 1.72%.
Notes relating to the 2003 financial information
(5) Excluding exceptional items.
(6) Debt in issue comprises debt securities in issue and subordinated liabilities.
(7) The underlying cost:income ratio is calculated excluding exceptional items and goodwill amortisation and after netting operating lease depreciation, amounts written off fixed asset investments and general insurance claims against operating income.