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Cash Flow Statement
| For the year ended 31 December | Group 2008 £m | Group 2007 £m |
Company 2008 £m |
Company 2007 £m |
|---|---|---|---|---|
| Cash flows from operating activities | ||||
| Profit for the financial year | 18.2 | 93.2 | 232.9 | 38.2 |
| Adjustments to reconcile net profit to cash flow from/(used in) operating activities | ||||
| – Income tax charge | 116.1 | 32.8 | 136.3 | 2.6 |
| – Depreciation and amortisation | 19.3 | 22.6 | 13.3 | 12.2 |
| – Loan impairment loss | 509.0 | 29.3 | 268.5 | 4.6 |
| – Investment impairment loss | 191.6 | 94.4 | 191.6 | 94.4 |
| – Recoveries of loans and advances previously written off | (1.3) | (6.8) | (1.2) | (4.5) |
| – (Gain)/loss on sale of assets and liabilities | (216.3) | 58.0 | (433.9) | 58.0 |
| – Interest on subordinated liabilities and other capital instruments | 91.9 | 91.7 | 102.9 | 102.4 |
| – Net profit on sale of property, plant and equipment and intangible assets | (7.5) | (4.3) | (7.5) | (4.5) |
| – Gains less losses on sale of debt securities | 90.9 | (3.4) | 90.9 | (3.4) |
| Cash flows from operating activities before changes in operating assets and liabilities | 811.9 | 407.5 | 593.8 | 300.0 |
| Net (increase)/decrease in operating assets | ||||
| – Loans and advances to banks and customers | 425.8 | (3,395.3) | (7,348.9) | (12,774.0) |
| – Net proceeds from sale of assets | 645.9 | 3,294.8 | 645.9 | 3,294.8 |
| – Acquisitions of mortgage portfolios | (1,986.6) | (4,337.9) | – | – |
| – Debt securities | 1,339.0 | (119.3) | (6,260.1) | (1,063.3) |
| – Derivative financial instruments | (4,847.5) | (884.4) | (1,266.3) | (190.4) |
| – Prepayments and accrued income | 10.1 | (3.5) | 13.3 | (1.7) |
| – Other assets | 5.1 | (632.4) | 5.0 | (632.4) |
| Net increase/(decrease) in operating liabilities | ||||
| – Deposits by banks and other deposits | (16,047.5) | 2,396.0 | (6,838.2) | 7,299.7 |
| – Derivative financial instruments | 731.6 | 5.2 | 826.2 | 74.4 |
| – Debt securities in issue | 546.6 | (701.5) | 784.3 | 329.0 |
| – Other liabilities | (62.0) | (35.6) | (65.9) | (41.0) |
| – Accruals and deferred income | (136.4) | 210.1 | 4.9 | 171.9 |
| – Provisions | (20.5) | (35.1) | (33.8) | (35.1) |
| – Income taxes received/(paid) | 19.5 | (80.4) | 53.7 | (61.8) |
| – Other non-cash items | (852.7) | (165.9) | (1,880.6) | (165.6) |
| Net cash used in operating activities | (19,417.7) | (4,077.7) | (20,766.7) | (3,495.5) |
| Cash flows from investing activities | ||||
| – Proceeds from sale of savings related assets and liabilities | 612.0 | – | 612.0 | – |
| – Cash balances transferred on sale of savings business | (76.8) | – | (12.6) | – |
| – Purchase of property, plant and equipment and intangible assets | (23.9) | (34.3) | (19.2) | (26.9) |
| – Proceeds from sale of property, plant and equipment | 13.0 | 14.5 | 10.1 | 12.2 |
| – Realisation of investment in subsidiary undertaking | – | – | 100.0 | – |
| – Capital injection into subsidiary undertakings | – | – | (811.0) | – |
| Net cash from/(used in) investing activities | 524.3 | (19.8) | (120.7) | (14.7) |
| Cash flows from financing activities | ||||
| – Purchase of own shares held to satisfy employee share plans | – | (18.7) | – | (18.7) |
| – Purchase of own shares for cancellation | – | (58.6) | – | (58.6) |
| – Proceeds from disposal of own shares | 3.3 | 5.2 | 3.3 | 5.2 |
| – HM Treasury Working Capital Facility | 2,275.7 | – | 2,275.7 | – |
| – Statutory Debt | 18,413.9 | – | 18,413.9 | – |
| – Proceeds from rights issue | 400.9 | – | 400.9 | – |
| – Net proceeds from secured funding | 689.3 | 6,437.7 | 689.3 | 6,437.7 |
| – Repayments and purchases of secured funding | (2,850.4) | (1,374.2) | (2,516.8) | (1,254.6) |
| – Interest paid on subordinated liabilities and other capital instruments | (92.2) | (79.7) | (103.2) | (90.5) |
| – Dividends paid | (87.9) | (126.5) | (87.9) | (126.5) |
| Net cash from financing activities | 18,752.6 | 4,785.2 | 19,075.2 | 4,894.0 |
| Net (decrease)/increase in cash and cash equivalents | (140.8) | 687.7 | (1,812.2) | 1,383.8 |
| Cash and cash equivalents at beginning of year | 4,335.3 | 3,647.6 | 4,068.4 | 2,684.6 |
| Cash and cash equivalents at end of year | 4,194.5 | 4,335.3 | 2,256.2 | 4,068.4 |
| Represented by cash and assets with original maturity of three months or less within | ||||
| – Cash and balances at central banks | 17.3 | 21.0 | 17.3 | 21.0 |
| – Treasury bills | – | 185.0 | – | 185.0 |
| – Loans and advances to banks | 3,317.9 | 2,137.5 | 1,380.8 | 1,901.9 |
| – Debt securities | 859.3 | 1,991.8 | 858.1 | 1,960.5 |
| 4,194.5 | 4,335.3 | 2,256.2 | 4,068.4 | |
| Balances maintained with the Bank of England | 83.1 | 188.2 | 83.1 | 188.2 |
The Group maintains balances with the Bank of England as shown above. These balances are not included in cash and cash equivalents for the purposes of the Cash Flow Statement.
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