NET INTEREST INCOME

12 Months Ended

Dec. 31, 2018

Disclosure of interest income (expense) [text block] [Abstract]

Disclosure of interest income (expense) [text block]

NOTE 5: NET INTEREST INCOME

	Weighted average effective interest rate
	2018 %			2017 %		2016 %		2018 £m			2017 £m			2016 £m
Interest and similar income:
Loans and advances to customers		3.17			3.16		3.32		15,078			14,712			15,190
Loans and advances to banks		0.84			0.40		0.46		565			271			381
Debt securities held at amortised cost		1.60			1.29		1.47		66			43			56
Held-to-maturity investments					—		1.44					—			231
Interest receivable on financial assets held at amortised cost		2.87			2.81		2.83		15,709			15,026			15,858
Financial assets at fair value through other comprehensive income		1.98							640
Available-for-sale financial assets					1.96		1.88					980			762
Total interest and similar income1		2.82			2.73		2.77		16,349			16,006			16,620
Interest and similar expense:
Deposits from banks, excluding liabilities under sale and
repurchase transactions		1.39			1.18		0.65		(117	)		(80	)		(68	)
Customer deposits, excluding liabilities under sale and
repurchase transactions		0.53			0.49		0.69		(1,813	)		(1,722	)		(2,520	)
Debt securities in issue2		0.27			0.37		0.94		(234	)		(266	)		(799	)
Subordinated liabilities		7.63			7.93		8.35		(1,388	)		(1,481	)		(1,864	)
Liabilities under sale and repurchase agreements		0.96			0.58		0.46		(245	)		(110	)		(38	)
Interest payable on liabilities held at amortised cost		0.79			0.79		1.07		(3,797	)		(3,659	)		(5,289	)
Amounts payable to unitholders in consolidated
open-ended investment vehicles		(6.07	)		9.15		10.85		844			(1,435	)		(2,057	)
Total interest and similar expense3		0.60			1.06		1.44		(2,953	)		(5,094	)		(7,346	)
Net interest income									13,396			10,912			9,274

1	Includes £31 million (2017: £12 million; 2016: £nil) of interest income on liabilities with negative interest rates.
2	The impact of the Group’s hedging arrangements is included on this line; excluding this impact the weighted average effective interest rate in respect of debt securities in issue would be 2.68 per cent (2017: 2.43 per cent; 2016: 2.70 per cent).
3	Includes £10 million (2017: £50 million; 2016: £51 million) of interest expense on assets with negative interest rates.

Included within interest and similar income is £227 million (2017: £179 million; 2016: £205 million) in respect of impaired financial assets. Net interest income also includes a credit of £701 million (2017: credit of £651 million; 2016: credit of £557 million) transferred from the cash flow hedging reserve (see note 41).