34 Contingent liabilities and commitments

Contingent liabilities and commitments

The following table summarises the nominal principal amount of contingent liabilities and commitments with off-balance sheet risk:

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											2007		2006
											£m		£m
Acceptances and endorsements											365		287
Guarantees and letters of credit pledged as collateral security											35,692		31,252
Other contingent liabilities											9,717		7,880
Contingent liabilities											45,774		39,419
Documentary credits and other short-term trade related transactions											522		414
Undrawn note issuance and revolving underwriting facilities:
Forward asset purchases and forward deposits placed											283		360
Standby facilities, credit lines and other											191,834		204,730
Commitments											192,639		205,504

Nature of instruments

In common with other banks, the Group conducts business involving acceptances, performance bonds and indemnities. The majority of these facilities are offset by corresponding obligations of third parties.

An acceptance is an undertaking by a bank to pay a bill of exchange drawn on a customer. The Group expects most acceptances to be presented, but reimbursement by the customer is normally immediate. Endorsements are residual liabilities of the Group in respect of bills of exchange, which have been paid and subsequently rediscounted.