37 Leasing

The Group is both lessor and lessee under finance and operating leases, providing asset financing for its customers and leasing assets for its own use. In addition, assets leased by the Group may be sublet to other parties. An analysis of the impact of these transactions on the Group balance sheet and income statement is as follows:

(a) As Lessor

Finance lease receivables

The Group specialises in asset-based lending and works with a broad range of international technology, industrial equipment and commercial companies to provide customised finance programmes to assist manufacturers, dealers and distributors of assets.

Finance lease receivables are included within loans and advances to customers.

The Group’s net investment in finance lease receivables was as follows:

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2007  2006 
Gross  Present value of  Gross  Present value of 
investment in  Future  minimum lease  Unguaranteed  investment in  Future  minimum lease  Unguaranteed 
finance lease  finance  payments  residual  finance lease  finance  payments  residual 
receivables  income  receivable  values  receivables  income  receivable  values 
£m  £m  £m  £m  £m  £m  £m  £m 
Not more than one year  3,657  (780) 2,877  213  3,650  (734) 2,916  166 
Over one year but not more 
than five years  7,385  (1,613) 5,772  374  5,824  (1,490) 4,334  334 
Over five years  3,476  (935) 2,541  14  3,790  (898) 2,892  15 
Total  14,518  (3,328) 11,190  601  13,264  (3,122) 10,142  515 

The allowance for uncollectable finance lease receivables included in the allowance for impairment amounted to £113m at 31st December 2007 (2006: £99m).

Operating lease receivables

The Group acts as lessor, whereby items of plant and equipment are purchased and then leased to third parties under arrangements qualifying as operating leases. The items purchased to satisfy these leases are treated as plant and equipment in the Group’s financial statements and are generally disposed of at the end of the lease term (see Note ).

The future minimum lease payments expected to be received under non-cancellable operating leases at 31st December 2007 were as follows:

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2007  2006 
Plant and  Plant and 
equipment  equipment 
£m  £m 
Not more than one year  29  18 
Over one year but not more than two years  24  5 
Over two years but not more than three years  22  3 
Over three years but not more than four years  20  3 
Over four years but not more than five years  11  3 
Over five years  10  7 
Total  116  39 

(b) As Lessee

Finance lease commitments

The Group leases items of property, plant and equipment on terms that meet the definition of finance leases. Finance lease commitments are included within other liabilities (see Note ).

Obligations under finance leases were as follows:

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2007  2006 
Total future  Total future 
minimum  minimum 
payments  payments 
£m  £m 
Not more than one year  12  6 
Over one year but not more than two years  14  21 
Over two years but not more than three years  13  11 
Over three years but not more than four years  12  14 
Over four years but not more than five years  15  9 
Over five years  17  31 
Net obligations under finance leases  83  92