Notes to the accounts

For the year ended 31st December 2007

1 Dividends per share

The Directors have recommended the final dividends in respect of 2007 of 22.5p per ordinary share of 25p each and 10p per staff share of £1 each, amounting to a total of £1,485m, which will be paid on 25th April 2008. The financial statements for the year ended 31st December 2007 do not reflect these dividends, which will be accounted for in shareholders’ equity as an appropriation of retained profits in the year ending 31st December 2008. The financial statements to 31st December 2007 include the 2006 final dividend of £1,307m.

2 Net interest income

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										2007	2006		2005
										£m	£m		£m
Cash and balances with central banks										145	91		9
Available for sale investments										2,580	2,811		2,272
Loans and advances to banks										1,416	903		690
Loans and advances to customers										19,559	16,290		12,944
Other										1,608	1,710		1,317
Interest income										25,308	21,805		17,232
Deposits from banks										(2,720)	(2,819)		(2,056)
Customer accounts										(4,110)	(3,076)		(2,715)
Debt securities in issue										(6,651)	(5,282)		(3,268)
Subordinated liabilities										(878)	(777)		(605)
Other										(1,339)	(708)		(513)
Interest expense										(15,698)	(12,662)		(9,157)
Net interest income										9,610	9,143		8,075

Interest income includes £113m (2006: £98m, 2005: £76m) accrued on impaired loans.

Other interest income principally includes interest income relating to reverse repurchase agreements. Similarly, other interest expense principally includes interest expense relating to repurchase agreements and hedging activity.

Included in net interest income is hedge ineffectiveness as detailed in Note 14.

3 Net fee and commission income

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										2007	2006		2005
										£m	£m		£m
Fee and commission income
Brokerage fees										109	70		64
Investment management fees										1,787	1,535		1,250
Securities lending										241	185		151
Banking and credit related fees and commissions										6,363	6,031		4,805
Foreign exchange commissions										178	184		160
Fee and commission income										8,678	8,005		6,430
Brokerage fees paid										(970)	(828)		(725)
Fee and commission expense										(970)	(828)		(725)
Net fee and commission income										7,708	7,177		5,705

4 Principal transactions

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										2007	2006		2005
										£m	£m		£m
Rates related business										4,162	2,848		1,732
Credit related business										(403)	766		589
Net trading income										3,759	3,614		2,321
Net gain from disposal of available for sale assets										560	307		120
Dividend income										26	15		22
Net gain from financial instruments designated at fair value										293	447		389
Other investment income										337	193		327
Net investment income										1,216	962		858
Principal transactions										4,975	4,576		3,179

Net trading income includes the profits and losses arising both on the purchase and sale of trading instruments and from the revaluation to market value, together with the interest income and expense from these instruments and the related funding cost.

Of the total net trading income, a £756m loss (2006: £947m gain, 2005: £498m gain) was made on securities and £640m gain (2006: £480m, 2005: £340m) was earned in foreign exchange dealings.

The net gain on financial assets designated at fair value included within principal transactions was £78m (2006: £489m, 2005: £391m) of which losses of £215m (2006: £42m gain, 2005: £2m gain) were included in net trading income and gains of £293m (2006: £447m, 2005: £389m) were included in net investment income.

The net loss on financial liabilities designated at fair value included within principal transactions was £231m (2006: £920m, 2005: £666m) all of which was included within net trading income.

The net gain from widening of credit spreads relating to Barclays Capital issued notes held at fair value was £658m (2006: £nil, 2005: £nil).

5 Insurance premiums and insurance claims and benefits

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										2007	2006		2005
										£m	£m		£m
Gross premiums from insurance contracts										1,062	1,108		909
Premiums ceded to reinsurers										(51)	(48)		(37)
Net premiums from insurance contracts										1,011	1,060		872

										2007	2006		2005
										£m	£m		£m
Gross claims and benefits incurred on insurance contracts										520	588		694
Reinsurers’ share of claims incurred										(28)	(13)		(49)
Net claims and benefits incurred on insurance contracts										492	575		645

6 Other income

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										2007	2006		2005
										£m	£m		£m
Increase in fair value of assets held in respect of linked liabilities
to customers under investment contracts										5,592	7,417		9,234
Increase in liabilities to customers under investment contracts										(5,592)	(7,417)		(9,234)
Property rentals										53	55		54
Other income										135	159		93
Other income										188	214		147

Included in other income are sub-lease receipts of £18m (2006: £18m, 2005: £18m).

Included in other income in 2007 is a loss on the part disposal of Monument credit card portfolio and gains on reinsurance transactions in 2007 and 2006.

Notes to the accounts

For the year ended 31st December 2007

7 Impairment charges and other credit provisions

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										2007	2006		2005
										£m	£m		£m
Impairment charges on loans and advances
– New and increased impairment allowances										2,871	2,722		2,129
– Releases										(338)	(389)		(333)
– Recoveries										(227)	(259)		(222)
Impairment charges on loans and advances										2,306	2,074		1,574
Other credit provisions
Charge/(release) in respect of provision for undrawn
contractually committed facilities and guarantees provided										476	(6)		(7)
Impairment charges on loans and advances and other credit provisions										2,782	2,068		1,567
Impairment on available for sale assets										13	86		4
Impairment charges and other credit provisions										2,795	2,154		1,571

An analysis of the impairment charges by class of financial instrument is included in Note 47 ‘Credit risk’.

8 Staff costs

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										2007	2006		2005
										£m	£m		£m
Salaries and accrued incentive payments										6,993	6,635		5,036
Social security costs										508	502		412
Pension costs – defined contribution plans										141	128		76
Pension costs – defined benefit plans (Note 30)										150	282		271
Other post-retirement benefits (Note 30)										10	30		27
Other										603	592		496
Staff costs										8,405	8,169		6,318

Included in salaries and incentive payments is £551m (2006: £640m, 2005: £338m) arising from equity settled share-based payments, of which £60m (2006: £78m, 2005: £44m) is a charge related to options-based schemes. Also included is £8m (2006: £6m, 2005: £nil) arising from cash settled share-based payments.

The average number of persons employed by the Group worldwide during the year was 128,900 (2006: 118,600, 2005: 92,800).

9 Administration and general expenses

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										2007	2006		2005
										£m	£m		£m
Administrative expenses										3,978	3,980		3,443
Impairment charges
– property and equipment (Note 23)										2	14		–
– intangible assets (Note 22)										14	7		9
Operating lease rentals										414	345		316
Gain on property disposals										(267)	(432)		–
Administration and general expenses										4,141	3,914		3,768

Auditors’ remuneration

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2007

Audit

Taxation

Other

Audit

related

services

services

Total

£m

£m

£m

£m

£m

Audit of the Group’s annual accounts

7

–

–

–

7

Other services:

Fees payable for the audit of the Company’s associates pursuant to legislation

12

–

–

–

12

Other services supplied pursuant to such legislation

6

2

–

–

8

Other services relating to taxation

–

–

8

–

8

Services relating to corporate finance transactions entered into or proposed

to be entered into by or on behalf of the Company or any of its associates

–

–

–

5

5

Other

–

2

–

2

4

Total auditors’ remuneration

25

4

8

7

44

9 Administration and general expenses (continued)

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Auditors’ remuneration (continued)

2006

Audit

Taxation

Other

Audit

related

services

services

Total

£m

£m

£m

£m

£m

Audit of the Group’s annual accounts

7

–

–

–

7

Other services:

Fees payable for the audit of the Company’s associates pursuant to legislation

11

–

–

–

11

Other services supplied pursuant to such legislation

10

1

–

–

11

Other services relating to taxation

–

–

6

–

6

Services relating to corporate finance transactions entered into or proposed

to be entered into by or on behalf of the Company or any of its associates

–

–

–

4

4

Other

–

4

–

1

5

Total auditors’ remuneration

28

5

6

5

44

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2005

Audit

Taxation

Other

Audit

related

services

services

Total

£m

£m

£m

£m

£m

Audit of the Group’s annual accounts

6

–

–

–

6

Other services:

Fees payable for the audit of the Company’s associates pursuant to legislation

8

–

–

–

8

Other services supplied pursuant to such legislation

1

–

–

–

1

Other services relating to taxation

–

–

4

–

4

Services relating to corporate finance transactions entered into or proposed

to be entered into by or on behalf of the Company or any of its associates

–

–

–

3

3

Other

–

7

–

–

7

Total auditors’ remuneration

15

7

4

3

29

The figures shown in the above table relate to fees paid to PricewaterhouseCoopers LLP and its associates. Fees paid to other auditors not associated with PricewaterhouseCoopers LLP in respect of the audit of the Company’s subsidiaries were £2m (2006: £2m, 2005: £3m).

Fees payable for the audit of the Company’s associates pursuant to legislation comprise the fees for the statutory audit of the subsidiaries and associated pension schemes both inside and outside Great Britain and fees for the work performed by the associates of PricewaterhouseCoopers LLP in respect of the consolidated financial statements of the Company. The fees relating to the audit of the associated pension schemes were £0.3m (2006: £0.3m, 2005: £0.3m).

Other services supplied pursuant to such legislation comprise services in relation to statutory and regulatory filings. These includes audit services for the review of the interim financial information under the Listing Rules of the UK listing authority and fees paid for reporting under Section 404 of the US Sarbanes-Oxley Act (Section 404). In addition, other services include Section 404 advisory, IFRS advisory, securitisations and services relating to acquisition activities.

Taxation services include compliance services such as tax return preparation and advisory services such as consultation on tax matters, tax advice relating to transactions and other tax planning and advice.

Services relating to corporate finance transactions comprise due diligence related to transactions and accounting consultations and audits in connection with such transactions.

Notes to the accounts

For the year ended 31st December 2007

10 Tax

The charge for tax is based upon the standard UK corporation tax rate of 30% (2006: 30%, 2005: 30%) and comprises:

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										2007	2006		2005
										£m	£m		£m
Current tax charge
Current year										2,385	1,929		1,583
Adjustment for prior years										(11)	8		(59)
Total										2,374	1,937		1,524
Deferred tax (credit)/charge
Current year										(367)	(16)		(14)
Adjustment for prior years										(26)	20		(71)
Total										(393)	4		(85)
Tax charge										1,981	1,941		1,439

The effective tax rate for the years 2007, 2006 and 2005 is lower than the standard rate of corporation tax in the UK of 30% (2006: 30%, 2005: 30%). The differences are set out below:

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										2007	2006		2005
										£m	£m		£m
Profit before tax										7,076	7,136		5,280
Tax charge at standard UK corporation tax rate of 30% (2006: 30%, 2005: 30%)										2,123	2,141		1,584
Adjustment for prior years										(37)	24		(133)
Differing overseas tax rates										(77)	(17)		(35)
Non-taxable gains and income (including amounts offset by unrecognised tax losses)										(136)	(393)		(129)
Share-based payments										72	27		(12)
Deferred tax assets not previously recognised										(158)	(4)		(7)
Change in tax rates										24	4		3
Other non-allowable expenses										170	159		168
Overall tax charge										1,981	1,941		1,439
Effective tax rate										28%	27%		27%

11 Earnings per share

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										2007	2006		2005
										£m	£m		£m
Profit attributable to equity holders of parent										4,417	4,571		3,447
Dilutive impact of convertible options										(25)	(30)		(38)
Profit attributable to equity holders of parent including dilutive impact of convertible options										4,392	4,541		3,409

										2007	2006		2005
										million	million		million
Basic weighted average number of shares in issue										6,410	6,357		6,337
Number of potential ordinary shares										177	150		149
Diluted weighted average number of shares										6,587	6,507		6,486

										p	p		p
Basic earnings per share										68.9	71.9		54.4
Diluted earnings per share										66.7	69.8		52.6

The calculation of basic earnings per share is based on the profit attributable to equity holders of the parent and the number of basic weighted average number of shares excluding own shares held in employee benefits trusts and shares held for trading.

When calculating the diluted earnings per share, the profit attributable to equity holders of the parent is adjusted for the conversion of outstanding options into shares within Absa Group Limited and Barclays Global Investors UK Holdings Limited. The weighted average number of ordinary shares excluding own shares held in employee benefit trusts and shares held for trading, is adjusted for the effects of all dilutive potential ordinary shares, totalling 177 million (2006: 150 million, 2005: 149 million).

Of the total number of employee share options and share awards at 31st December 2007, none were anti-dilutive (2006: 5 million 2005: nil).

Subsequent to the balance sheet date, the Group continued to make on-market purchases of treasury shares under its various employee share schemes. No adjustment has been made to earnings per share in respect of these purchases.

12 Trading portfolio

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											2007		2006
											£m		£m
Trading portfolio assets
Treasury and other eligible bills											2,094		2,960
Debt securities											152,778		140,576
Equity securities											36,307		31,548
Traded loans											1,780		1,843
Commodities											732		940
Trading portfolio assets											193,691		177,867
Trading portfolio liabilities
Treasury and other eligible bills											(486)		(608)
Debt securities											(50,506)		(58,142)
Equity securities											(13,702)		(12,697)
Commodities											(708)		(427)
Trading portfolio liabilities											(65,402)		(71,874)

13 Financial assets designated at fair value

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Held on own account
											2007		2006
											£m		£m
Loans and advances											23,491		13,196
Debt securities											24,217		12,100
Equity securities											5,376		3,711
Other financial assets											3,545		2,792
Financial assets designated at fair value – held on own account											56,629		31,799

The maximum exposure to credit risk on loans and advances designated at fair value at 31st December 2007 was £23,491m (2006: £13,196m). The amount by which related credit derivatives and similar instruments mitigate the exposure to credit risk at 31st December was £2,605m (2006: £28m).

The net loss attributable to changes in credit risk for loans and advances designated at fair value was £401m in 2007 (2006: £nil; 2005; £nil). The gains or losses on related credit derivatives was £4m for the year (2006: £nil; 2005; £nil).

The cumulative net loss attributable to changes in credit risk for loans and advances designated at fair value since initial recognition is £401m at 31st December 2007 (2006: £3m; 2005: £3m). The cumulative change in fair value of related credit derivatives at 31st December 2007 is £4m (2006: £nil; 2005; £nil).

Held in respect of linked liabilities to customers under investment contracts/liabilities arising from investment contracts

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											2007		2006
											£m		£m
Financial assets designated at fair value held in respect of linked liabilities to customers under investment contracts											90,851		82,798
Cash and bank balances within the portfolio											1,788		1,839
Assets held in respect of linked liabilities to customers under investment contracts											92,639		84,637
Liabilities to customers under investment contracts											(92,639)		(84,637)

Held in respect of linked liabilities to customers under investment contracts/liabilities arising from investment contracts

A portion of the Group’s fund management business takes the legal form of investment contracts, under which legal title to the underlying investment is held by the Group, but the inherent risks and rewards in the investments are borne by the investors. In the normal course of business, the Group’s financial interest in such investments is restricted to fees for investment management services.

Due to the nature of these contracts, the carrying value of the assets is always the same as the value of the liabilities and any change in the value of the assets results in an equal but opposite change in the value of the amounts due to the policyholders.

The Group is therefore not exposed to the financial risks – market risk, credit risk and liquidity risk inherent in the investments and they are omitted from the disclosures on financial risks in Notes 46 to 48.

In the balance sheet, the assets are included as ‘Financial assets designated at fair value – held in respect of linked liabilities to customers under investment contracts’. Cash balances within the portfolio have been included in the Group’s cash balances. The associated obligation to deliver the value of the investments to customers at their fair value on balance sheet date is included as ‘Liabilities to customers under investment contracts’.

The increase/decrease in the value arising from the return on the investments and the corresponding increase/decrease in linked liabilities to customers is included in the Other income note in Note 6.

Notes to the accounts

For the year ended 31st December 2007

14 Derivative financial instruments

Financial instruments

The Group’s objectives and policies on managing the risks that arise in connection with derivatives, including the policies for hedging, are included in Note 45 to Note 48 under the headings ‘Financial Risks’, ‘Market Risk’, ‘Credit Risk’ and ‘Liquidity Risk’.

The notional amounts of certain types of financial instruments provide a basis for comparison with instruments recognised on the balance sheet but do not necessarily indicate the amounts of future cash flows involved or the current fair value of the instruments and, therefore, do not indicate the Group’s exposure to credit or price risks. The derivative instruments become favourable (assets) or unfavourable (liabilities) as a result of fluctuations in market rates or prices relative to their terms. The aggregate contractual or notional amount of derivative financial instruments on hand, the extent to which instruments are favourable or unfavourable and, thus the aggregate fair values of derivative financial assets and liabilities can fluctuate significantly.

The fair value of a derivative contract represents the amount at which that contract could be exchanged in an arms-length transaction, calculated at market rates current at the balance sheet date.

The fair values and notional amounts of derivative instruments held for trading are set out in the following table:

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										2007					2006
							Notional			Fair value				Notional	Fair value
							contract							contract
Year ended 31st December							amount			Assets		Liabilities		amount	Assets			Liabilities
Derivatives held for trading							£m			£m		£m		£m	£m			£m
Foreign exchange derivatives
Forward foreign exchange							1,041,781			11,381		(11,629)		767,734	8,074			(7,808)
Currency swaps							562,682			15,617		(14,676)		411,889	10,029			(10,088)
OTC options bought and sold							464,575			3,350		(3,995)		320,184	3,923			(3,849)
OTC derivatives							2,069,038			30,348		(30,300)		1,499,807	22,026			(21,745)
Exchange traded futures – bought and sold							139,199			–		–		852	–			–
Exchange traded options – bought and sold							132			–		–		115	–			–
Foreign exchange derivatives							2,208,369			30,348		(30,300)		1,500,774	22,026			(21,745)
Interest rate derivatives
Interest rate swaps							11,758,215			111,746		(110,680)		8,718,015	61,267			(61,510)
Forward rate agreements							1,960,106			755		(738)		1,335,594	337			(374)
OTC options bought and sold							3,776,600			27,337		(26,944)		2,301,239	13,977			(13,558)
OTC derivatives							17,494,921			139,838		(138,362)		12,354,848	75,581			(75,442)
Exchange traded futures – bought and sold							903,516			–		–		1,057,767	188			(256)
Exchange traded options – bought and sold							269,095			102		(64)		848,629	241			(156)
Exchange traded swaps							4,941,417			–		–		3,405,109	–			–
Interest rate derivatives							23,608,949			139,940		(138,426)		17,666,353	76,010			(75,854)
Credit derivatives
Swaps							2,472,249			38,696		(35,814)		1,224,548	9,275			(8,894)
Equity and stock index derivatives
OTC options bought and sold							145,399			11,293		(15,743)		114,227	11,171			(15,613)
Equity swaps and forwards							36,149			1,057		(1,193)		24,580	656			(846)
OTC derivatives							181,548			12,350		(16,936)		138,807	11,827			(16,459)
Exchange traded futures – bought and sold							31,519			–		–		30,159	154			(176)
Exchange traded options – bought and sold							30,930			848		(2,200)		30,473	161			(171)
Equity and stock index derivatives							243,997			13,198		(19,136)		199,439	12,142			(16,806)
Commodity derivatives
OTC options bought and sold							95,032			4,496		(4,720)		52,899	2,568			(2,443)
Commodity swaps and forwards							276,102			19,075		(18,039)		164,863	14,933			(13,497)
OTC derivatives							371,134			23,571		(22,759)		217,762	17,501			(15,940)
Exchange traded futures – bought and sold							228,465			–		–		68,710	13			(33)
Exchange traded options – bought and sold							66,732			1,197		(943)		9,169	306			(474)
Commodity derivatives							666,331			24,768		(23,702)		295,641	17,820			(16,447)
Derivative assets/(liabilities) held for trading							29,199,895			246,950		(247,378)		20,886,755	137,273			(139,746)

14 Derivative financial instruments (continued)

The fair values and notional amounts of derivative instruments held for risk management are set out in the following table:

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				2007							2006
				Notional			Fair value						Notional			Fair value
				contract									contract
				amount			Assets			Liabilities			amount			Assets				Liabilities
Year ended 31st December				£m			£m			£m			£m			£m				£m
Derivatives designated as cash flow hedges
Interest rate swaps				38,453			239			(437)			51,614			132				(312)
Equity options				54			41			–			–			–				–
Forward foreign exchange				2,256			178			–			–			–				–
Exchange traded interest rate swaps				14,529			–			–			12,077			–				–
Commodity swaps and forwards				–			–			–			204			–				(89)
Derivatives designated as cash flow hedges				55,292			458			(437)			63,895			132				(401)
Derivatives designated as fair value hedges
Currency swaps				4,299			81			(75)			1,454			–				(233)
Interest rate swaps				18,450			323			(195)			16,940			240				(152)
Equity options				1,203			58			(58)			1,029			58				(56)
Forward foreign exchange				–			–			–			66			–				–
Derivatives designated as fair value hedges				23,952			462			(328)			19,489			298				(441)
Derivatives designated as hedges of net investments
Forward foreign exchange				4,223			31			(57)			2,730			–				(78)
Currency swaps				8,397			187			(88)			9,320			650				(31)
Derivatives designated as hedges of net investment				12,620			218			(145)			12,050			650				(109)
Derivative assets/(liabilities) held for risk management				91,864			1,138			(910)			95,434			1,080				(951)

Interest rate derivatives, designated as cash flow hedges, primarily hedge the exposure to cash flow variability from interest rates of variable rate loans to banks and customers, variable rate debt securities held and highly probable forecast financing transactions and reinvestments.

Interest rate derivatives designated as fair value hedges primarily hedge the interest rate risk of fixed rate borrowings in issue, fixed rate loans to banks and customers and investments in fixed rate debt securities held.

Currency derivatives are primarily designated as hedges of the foreign currency risk of net investments in foreign operations.

The Group’s total derivative asset and liability position as reported on the balance sheet is as follows:

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				2007							2006
				Notional			Fair value						Notional			Fair value
				contract									contract
				amount			Assets			Liabilities			amount			Assets				Liabilities
Year ended 31st December				£m			£m			£m			£m			£m				£m
Total derivative assets/(liabilities) held for trading				29,199,895			246,950			(247,378)			20,886,755			137,273				(139,746)
Total derivative assets/(liabilities) held for risk management				91,864			1,138			(910)			95,434			1,080				(951)
Derivative assets/(liabilities)				29,291,759			248,088			(248,288)			20,982,189			138,353				(140,697)

Derivative assets and liabilities subject to counterparty netting agreements amounted to £199bn (2006: £102bn). Additionally, we held £17bn (2006: £8bn) of collateral against the net derivative assets exposure.

Notes to the accounts

For the year ended 31st December 2007

14 Derivative financial instruments (continued)

The Group has hedged the following forecast cash flows, which primarily vary with interest rates. These cash flows are expected to impact the income statement in the following periods, excluding any hedge adjustments that may be applied:

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2007

Between

Between

Between

Between

Up to

one to

two to

three to

four to

More than

Total

one year

two years

three years

four years

five years

five years

£m

£m

£m

£m

£m

£m

£m

Forecast receivable cash flows

4,329

1,593

987

903

535

254

57

Forecast payable cash flows

2,121

394

369

335

283

244

496

2006

Between

Between

Between

Between

Up to

one to

two to

three to

four to

More than

Total

one year

two years

three years

four years

five years

five years

£m

£m

£m

£m

£m

£m

£m

Forecast receivable cash flows

5,111

1,500

1,452

954

689

410

106

Forecast payable cash flows

1,280

704

349

121

73

30

3

The maximum length of time over which the Group hedges exposure to the variability in future cash flows for forecast transactions, excluding those forecast transactions related to the payment of variable interest on existing financial instruments, is 10 years (2006: 8 years).

All gains or losses on hedging derivatives relating to forecast transactions, which are no longer expected to occur, have been recycled to the income statement.

A loss of £66m on hedging instruments was recognised in relation to fair value hedges in net interest income (2006: £460m). A gain of £70m on the hedged items was recognised in relation to fair value hedges in net interest income (2006: £465m).

Ineffectiveness recognised in relation to cash flow hedges in net interest income was a gain of £21m (2006: loss of £23m). Ineffectiveness recognised in relation to hedges of net investment was a gain of £4m (2006: £13m).

15 Loans and advances to banks and customers

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											2007		2006
											£m		£m
Loans and advances to banks											40,123		30,930
Less: Allowance for impairment											(3)		(4)
Loans and advances to banks											40,120		30,926
Loans and advances to customers											349,167		285,631
Less: Allowance for impairment											(3,769)		(3,331)
Loans and advances to customers											345,398		282,300

16 Available for sale financial investments

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											2007		2006
											£m		£m
Debt securities											38,673		47,912
Treasury bills and other eligible bills											2,723		2,420
Equity securities											1,676		1,371
Available for sale financial investments											43,072		51,703

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											2007		2006
Movement in available for sale financial investments											£m		£m
At beginning of year											51,703		53,497
Exchange and other adjustments											1,499		(3,999)
Acquisitions and transfers											26,920		47,086
Disposals (through sale and redemption)											(37,498)		(44,959)
Gains from changes in fair value recognised in equity											486		162
Impairment											(13)		(86)
Amortisation of discounts/premium											(25)		2
At end of year											43,072		51,703

17 Securities borrowing, securities lending, repurchase and reverse repurchase agreements

Amounts included in the balance sheet and reported on a net basis where the Group has the intention and the legal ability to settle net or realise simultaneously were as follows:

Amounts advanced to counterparties under reverse repurchase agreements and cash collateral provided under stock borrowing agreements are treated as collateralised loans receivable. The related securities purchased or borrowed subject to an agreement with the counterparty to repurchase them are not recognised on balance sheet where the risks and rewards of ownership remain with the counterparty.

(a) Reverse repurchase agreements and cash collateral on securities borrowed

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											2007		2006
											£m		£m
Banks											86,710		85,336
Customers											96,365		88,754
Reverse repurchase agreements and cash collateral held on securities borrowed											183,075		174,090

(b) Repurchase agreements and cash collateral on securities lent

Securities that are not recorded on the balance sheet (for example, securities that have been obtained as a result of reverse repurchase and stock borrow transactions) may also be lent or sold subject to a commitment to repurchase – such securities remain off balance sheet. In both instances, amounts received from counterparty are treated as liabilities, which at 31st December were as follows:

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											2007		2006
											£m		£m
Banks											97,297		79,833
Customers											72,132		57,123
Repurchase agreements and cash collateral on securities lent											169,429		136,956

18 Other assets

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											2007		2006
											£m		£m
Sundry debtors											4,042		4,298
Prepayments											551		658
Accrued income											400		722
Reinsurance assets											157		172
Other assets											5,150		5,850

Included in the above are balances of £3,859m (2006: £5,065m) expected to be recovered within no more than 12 months after the balance sheet date; and balances of £1,291m (2006: £785m) expected to be recovered more than 12 months after the balance sheet date.

Other assets comprise £3,966m (2006: £4,097m) of receivables which meet the definition of financial assets.