33. Collateral
Securities repurchase agreements and lending transactions
The Group enters into securities repurchase agreements and securities lending transactions under which it receives or transfers collateral in accordance with normal market practice. Generally, the agreements require additional collateral to be provided if the value of the securities fall below a predetermined level.
Under standard terms for repurchase transactions in the UK and US markets, the recipient of collateral has an unrestricted right to sell or repledge it, subject to returning equivalent securities on settlement of the transaction.
Securities transferred under repurchase transactions included within securities on the balance sheet were as follows:
| 2006 £m |
2005 £m |
|
| Treasury and other eligible bills | 1,426 | 896 |
| Debt securities | 58,874 | 53,485 |
| 60,300 | 54,381 |
All of the above securities could be sold or repledged by the holder. Securities received as collateral under reverse repurchase agreements amounted to £124.7 billion (2005 – £105.6 billion), of which £107.2 billion (2005 – £85.6 billion) had been resold or repledged as collateral for the Group’s own transactions.
Other collateral given
| Assets charged as security for liabilities | 2006 £m |
20005 £m |
| Loans and advances to customers | 44,966 | 27,092 |
| Debt securities | 8,560 | 9,578 |
| Property, plant and equipment | 1,222 | 1,274 |
| Loans to banks | 469 | 60 |
| Other | 13 | 16 |
| 55,230 | 38,020 |
| Liabilities secured by charges on assets | 2006 £m |
20005 £m |
| Deposits by banks | 11,680 | 11,407 |
| Customer accounts | 7,095 | 6,761 |
| Debt securities in issue | 27,607 | 11,347 |
| Other liabilities | 45 | 20 |
| 46,427 | 29,535 |
Included in the above balances are loans and advances to customers of £15.8 billion (2005 – £16.2 billion) and debt securities of £1.5 billion (2005 – £ 2.5 billion) charged as security against Federal Home Loan Bank deposits of £10.5 billion (2005 – £11.1 billion).
© 2007