FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2018

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 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
Total financial assets	1,563	57,278	123,283	–	24,815	551,689	–	758,628
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
Unallocated surplus within insurance businesses	–	–	–	–	–	–	382	382
Subordinated liabilities	–	–	–	–	–	17,656	–	17,656
Total financial liabilities	1,108	43,716	–	7,096	–	558,950	113,109	723,979

At fair value through profit or loss

Derivatives designated as hedging instruments £m

Held for trading £m

Other £m

Available- for-sale £m

Held at amortised cost £m

Insurance contracts £m

Total £m

At 31 December 2017

Financial assets

Cash and balances at central banks

–

–

–

–

58,521

–

58,521

Items in the course of collection from banks

–

–

–

–

755

–

755

Financial assets at fair value through profit or loss

–

42,236

120,642

–

–

–

162,878

Derivative financial instruments

1,881

23,953

–

–

–

–

25,834

Loans and advances to banks

–

–

–

–

6,611

–

6,611

Loans and advances to customers

–

–

–

–

472,498

–

472,498

Debt securities

–

–

–

–

3,643

–

3,643

Financial assets at amortised cost

–

–

–

–

482,752

–

482,752

Available-for-sale financial assets

–

–

–

42,098

–

–

42,098

Total financial assets

1,881

66,189

120,642

42,098

542,028

–

772,838

Financial liabilities

Deposits from banks

–

–

–

–

29,804

–

29,804

Customer deposits

–

–

–

–

418,124

–

418,124

Items in course of transmission to banks

–

–

–

–

584

–

584

Financial liabilities at fair value through profit or loss

–

43,062

7,815

–

–

–

50,877

Derivative financial instruments

1,613

24,511

–

–

–

–

26,124

Notes in circulation

–

–

–

–

1,313

–

1,313

Debt securities in issue

–

–

–

–

72,450

–

72,450

Liabilities arising from insurance contracts

and participating investment contracts

–

–

–

–

–

103,413

103,413

Liabilities arising from non-participating investment

contracts

–

–

–

–

–

15,447

15,447

Unallocated surplus within insurance businesses

–

–

–

–

–

390

390

Subordinated liabilities

–

–

–

–

17,922

–

17,922

Total financial liabilities

1,613

67,573

7,815

–

540,197

119,250

736,448

Disclosure of financial liabilities [text block]

At 31 December 2018, the Group’s financial liabilities carried at fair value, excluding derivatives, comprised its financial liabilities at fair value through profit or loss and totalled £30,547 million (31 December 2017: £50,877 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-76). The fair value measurement approach is recurring in nature. There were no significant transfers between level 1 and 2 during the year.

	Level 1 £m		Level 2 £m		Level 3 £m		Total £m
At 31 December 2018
Financial liabilities at fair value through profit or loss
Liabilities held 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
At 31 December 2017
Financial liabilities at fair value through profit or loss
Liabilities held at fair value through profit or loss		3		7,812		–		7,815
Trading liabilities:
Liabilities in respect of securities sold under repurchase agreements		–		41,378		–		41,378
Other deposits		–		381		–		381
Short positions in securities		1,106		197		–		1,303
		1,106		41,956		–		43,062
Total financial liabilities carried at fair value, excluding derivatives		1,109		49,768		–		50,877

Disclosure of significant adjustments to valuation obtained [text block]

The following table summarises the movement on this valuation adjustment account during 2017 and 2018:

	2018 £m			2017 £m
At 1 January		521			744
Income statement charge (credit)		47			(260	)
Transfers		(6	)		37
At 31 December		562			521

Disclosure Of Significant Adjustment Categories To Valuation Obtained, Explanatory

Represented by:

	2018 £m			2017 £m
Credit Valuation Adjustment		409			408
Debit Valuation Adjustment		(79	)		(37	)
Funding Valuation Adjustment		232			150
		562			521

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-76). 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 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		–
At 31 December 2017
Financial assets at amortised cost:
Loans and advances to customers: unimpaired		467,670		467,276		–		16,832		450,444
Loans and advances to customers: impaired		4,828		4,809		–		–		4,809
Loans and advances to customers		472,498		472,085		–		16,832		455,253
Loans and advances to banks		6,611		6,564		–		771		5,793
Debt securities		3,643		3,586		–		3,571		15
Reverse repos included in above amounts:
Loans and advances to customers		16,832		16,832		–		16,832		–
Loans and advances to banks		771		771		–		771		–

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-76).

					Valuation hierarchy
	Carrying value £m		Fair value £m		Level 1 £m		Level 2 £m		Level 3 £m
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		–
At 31 December 2017
Deposits from banks		29,804		29,798		–		29,798		–
Customer deposits		418,124		418,441		–		411,591		6,850
Debt securities in issue		72,450		75,756		–		75,756		–
Subordinated liabilities		17,922		21,398		–		21,398		–
Repos included in above amounts:
Deposits from banks		23,175		23,175		–		23,175		–
Customer deposits		2,638		2,638		–		2,638		–

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 financial assets, excluding derivatives, carried at fair value (recurring measurement).

				2018										2017
	Financial assets at fair value through profit or loss £m				At fair value through other comprehensive income £m			Available- for-sale £m			Total level 3 assets carried at fair value, excluding derivatives (recurring basis) £m			Financial assets at fair value through profit or loss £m			Available- for-sale £m			Total level 3 assets carried at fair value, excluding derivatives (recurring basis) £m
At 31 December 2017		3,686							696			4,382
Adjustment on adoption of IFRS 9 (note 54)		10,466				302			(696	)		10,072
At 1 January		14,152				302						14,454			3,806			894			4,700
Exchange and other adjustments		87				(2	)					85			(1	)		(24	)		(25	)
Gains recognised in the income statement within other income		439				–						439			202			–			202
(Losses) gains recognised in other comprehensive income within the revaluation reserve in respect of financial assets at fair value through other comprehensive income (2017: available-for-sale financial assets)		–				(4	)					(4	)		–			(117	)		(117	)
Purchases/increases to customer loans		2,480				2						2,482			774			41			815
Sales		(3,593	)			(95	)					(3,688	)		(1,005	)		(61	)		(1,066	)
Transfers into the level 3 portfolio		815				348						1,163			152			2			154
Transfers out of the level 3 portfolio		(463	)			(284	)					(747	)		(242	)		(39	)		(281	)
At 31 December		13,917				267						14,184			3,686			696			4,382
Gains (losses) recognised in the income statement, within other income, relating to the change in fair value of those assets held at 31 December		(104	)			–						(104	)		125			–			125

Disclosure of financial liabilities [text block]

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

	2018 £m		2017 £m
At 1 January		–		2
Losses (gains) recognised in the income statement within other income		–		(2	)
Redemptions		–		–
Transfers into the level 3 portfolio		11		–
Transfers out of the level 3 portfolio		–		–
At 31 December		11		–
Gains recognised in the income statement, within other income, relating to the change in fair value of those liabilities held at 31 December		–		–

Disclosure of assets and liabilities [text block]

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

	2018						2017
	Derivative assets £m			Derivative liabilities £m			Derivative assets £m			Derivative liabilities £m
At 1 January		1,056			(804	)		1,399			(960	)
Exchange and other adjustments		7			(5	)		24			(20	)
Losses (gains) recognised in the income statement within other income		(84	)		49			(208	)		215
Purchases (additions)		–			(68	)		103			(18	)
(Sales) redemptions		(52	)		112			(79	)		53
Transfers into the level 3 portfolio		–			–			33			(74	)
Transfers out of the level 3 portfolio		–			–			(216	)		–
At 31 December		927			(716	)		1,056			(804	)
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		(424	)		82			(208	)		213

Disclosure of Sensitivity of Level 3 Valuations [text block]

			At 31 December 2018							At 31 December 2017
					Effect of reasonably possible alternative assumptions2							Effect of reasonably possible alternative assumptions2
	Valuation techniques	Significant unobservable inputs1	Carrying value £m		Favourable  changes £m		Unfavourable changes £m			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	Gross interest rates, inferred spreads (bps) 97bps/208bps		10,565		380		(371	)		–		–		–
Debt securities	Discounted cash flows	Credit spreads (bps) (1bps/2bps)		274		92		(21	)		11		–		–
Equity and venture capital investments	Market approach	Earnings multiple (0.9/14.6)		1,657		54		(55	)		1,879		65		(65	)
	Underlying asset/net asset value (incl. property prices)3	n/a		523		48		(57	)		50		5		(5	)
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		898		2		(45	)		1,746		26		(76	)
				13,917							3,686
Financial assets at fair value through other comprehensive income/available-for-sale financial assets
Asset-backed securities	Lead manager or broker quote/consensus pricing	n/a		246		3		(5	)		92		–		(4	)
Equity and venture capital investments	Underlying asset/net asset value (incl. property prices)3	n/a		21		2		(2	)		604		83		(42	)
				267							696
Derivative financial assets
Interest rate derivatives	Option pricing model	Interest rate volatility (19%/80%)		927		7		(5	)		1,056		11		(3	)
				927							1,056
Level 3 financial assets carried at fair value				15,111							5,438
Financial liabilities at fair value through profit or loss				11		–		–			–		–		–
Derivative financial liabilities
Interest rate derivatives	Option pricing model	Interest rate volatility (19%/80%)		716		–		–			804		–		–
				716							804
Level 3 financial liabilities carried at fair value				727							804

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 £m		Level 2 £m		Level 3 £m		Total £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

	Level 1 £m		Level 2 £m		Level 3 £m		Total £m
At 31 December 2017
Financial assets at fair value through profit or loss
Loans and advances to customers		–		29,976		–		29,976
Loans and advances to banks		–		1,614		–		1,614
Debt securities:
Government securities		20,268		1,729		23		22,020
Other public sector securities		–		1,526		1		1,527
Bank and building society certificates of deposit		–		222		–		222
Asset-backed securities:
Mortgage-backed securities		3		348		49		400
Other asset-backed securities		5		229		787		1,021
Corporate and other debt securities		–		18,542		1,448		19,990
		20,276		22,596		2,308		45,180
Treasury and other bills		18		–		–		18
Equity shares		84,694		18		1,378		86,090
Total trading and other financial assets at fair value through profit or loss		104,988		54,204		3,686		162,878
Available-for-sale financial assets
Debt securities:
Government securities		34,534		174		–		34,708
Bank and building society certificates of deposit		–		167		–		167
Asset-backed securities:
Mortgage-backed securities		–		1,156		–		1,156
Other asset-backed securities		–		163		92		255
Corporate and other debt securities		229		4,386		–		4,615
		34,763		6,046		92		40,901
Equity shares		555		38		604		1,197
Total available-for-sale financial assets		35,318		6,084		696		42,098
Total financial assets carried at fair value, excluding derivatives		140,306		60,288		4,382		204,976

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 2018, such assets totalled £23,595 million (31 December 2017: £25,834 million) and liabilities totalled £21,373 million (31 December 2017: £26,124 million). The table below analyses these derivative balances by valuation methodology (level 1, 2 or 3, as described on page F-76). The fair value measurement approach is recurring in nature. There were no significant transfers between level 1 and level 2 during the year.

	2018												2017
	Level 1 £m			Level 2 £m			Level 3 £m			Total £m			Level 1 £m			Level 2 £m			Level 3 £m			Total £m
Derivative assets		93			22,575			927			23,595			246			24,532			1,056			25,834
Derivative liabilities		(132	)		(20,525	)		(716	)		(21,373	)		(587	)		(24,733	)		(804	)		(26,124	)